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    Question

    If a long-term investment suffers a permanent decline in

    value, how should it be accounted for under AS 13?
    A The investment should be reclassified as a short-term investment. Correct Answer Incorrect Answer
    B The loss should be ignored. Correct Answer Incorrect Answer
    C The carrying amount should be reduced and charged to the Profit and Loss Account Correct Answer Incorrect Answer
    D The loss should be adjusted against retained earnings. Correct Answer Incorrect Answer

    Solution

    The correct answer is C

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