Since return results must be calculated on a basis that includes the effect of leverage, return results must be restated to a(n) ________ basis.

Since return results must be calculated on a basis that includes the effect of leverage, return results must be restated to a(n) ________ basis.
A . margin
B . total asset
C . cash flow
D . all cash
E . multiple cash

View Answer

Answer: D

Explanation:

Return results must be calculated on a basis that includes the effect of leverage, return results must be restated to an all- cash basis when the portfolio used leverage and the same securities could have been purchased at the same prices if the portfolio has the cash to do so. Results should be restated to an all cash basis only when the necessary restatement can be based entirely on actual transactions and can be verified in accordance with applicable account standards.