Final answer:
The adjustment of the cost of short-term marketable securities to reflect market value is a practice related to fair value accounting, designed to make a company's financial position more relevant and accurately represented.
Step-by-step explanation:
The accounting concept or principle applied when the cost of short-term marketable securities is adjusted to market value is market value adjustment. This is neither objectivity, matching revenue and expense, original cost, nor consistency. Instead, it is a practice stemming from the accounting principle of fair value accounting, which states that assets and liabilities should be reported at their current values on the balance sheet.
When securities are traded in active markets, their market value can be easily determined, and thus their balance sheet value is adjusted to reflect this value. This practice ensures that the balance sheet provides a clear and up-to-date picture of a company's financial position, adhering to the relevance and faithful representation qualities that contribute to the usefulness of financial information.