Briar Ltd Acquired Short-Term Investments for $100 000 on 31

Multiple Choice

Briar Ltd acquired short-term investments for $100 000 on 31 March 2016.By 30 June 2016 (balance sheet date) ,the market value had slipped to $85 000.Briar Ltd uses the lower of cost or net realisable value rule.How would the reduction in value of $15 000 be recorded in the accounts for year ended 30 June 2016?

A) As an expense
B) As a charge against retained profits
C) As a reduction in share capital
D) The transaction would not be recorded