Appendix D – Investments
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Page 31
c.
may be reported as current or noncurrent assets
d.
all of these
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.21 – Corporate Investments Accounting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:16 PM
DATE MODIFIED:
10/9/2017 4:15 PM
77. Yankton Company began the year without an investment portfolio. During the year, it purchased investments
classified as trading securities at a cost of $13,000. At the end of the year, the market value of the securities was $11,000.
Yankton Company’s financial statements for the current year should show
a.
an unrealized loss of $2,000 on the income statement and net trading securities of $13,000 on the balance sheet
b.
no unrealized loss on the income statement and net trading securities of $13,000 on the balance sheet
c.
no unrealized loss on the income statement; net trading securities of $11,000 and an unrealized loss of $2,000
as a stockholders’ equity adjustment on the balance sheet
d.
an unrealized loss of $2,000 on the income statement and temporary investments of $11,000 on the balance
sheet
ANSWER:
RATIONALE:
POINTS:
DIFFICULTY:
QUESTION TYPE:
HAS VARIABLES:
ACCREDITING STANDARDS:
DATE CREATED:
DATE MODIFIED:
78. The account Unrealized Gain (Loss) on Available-for-Sale Investments should be included on the
a.
income statement as other revenue (expense)
b.
balance sheet as an adjustment to the asset account
c.
balance sheet as an adjustment to stockholders’ equity
d.
statement of stockholder‘s equity
ANSWER:
c
POINTS:
1
DIFFICULTY:
Easy
Appendix D – Investments
Copyright Cengage Learning. Powered by Cognero.
Page 35
b.
their fair value
c.
their historical cost
d.
their market value
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.02 – GAAP
ACCT.ACBSP.APC.21 – Corporate Investments Accounting
ACCT.AICPA.FN.03 – Measurement
ACCT.AICPA.FN.04 – Reporting
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:16 PM
DATE MODIFIED:
10/9/2017 5:40 PM
QUESTION TYPE:
Matching
HAS VARIABLES:
False
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.21 – Corporate Investments Accounting
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 5:16 PM
DATE MODIFIED:
10/9/2017 5:40 PM
87. debt and equity securities purchased and sold to earn short-term profits from changes in the market price
ANSWER:
f
POINTS:
1
88. preferred and common stock that represent ownership in a company and do not have a fixed maturity date
ANSWER:
b
POINTS:
1
a.
debt securities
b.
equity securities
c.
d.
e.
fair value method
trading securities
g.
available-for-sale securities
h.
equity method
business combination
DIFFICULTY:
Easy
Bloom’s: Remembering
Matching
False
89. the method of reporting an investment that represents less than 20% of the outstanding stock of another company
ANSWER:
e
POINTS:
1
90. when using this, dividends are treated as a reduction of the investment
ANSWER:
i
POINTS:
1
91. notes and bonds that pay interest and have a fixed maturity
ANSWER:
a
POINTS:
1
92. debt investments that a company intends to keep until their maturity date
ANSWER:
h
POINTS:
1
93. securities not held for trading or to maturity or other strategic reasons
ANSWER:
g
POINTS:
1
94. the company investing in another company’s stock
ANSWER:
c
POINTS:
1
95. what occurs when a company purchases 50% or more of another company’s stock
ANSWER:
j
POINTS:
1
96. the company whose stock is purchased by another entity
ANSWER:
d
POINTS:
1