58.
Maroon Company sold supplies in the amount of €15,000 (euros) to a French company
when the exchange rate was $1.15 per euro. At the time of payment, the exchange rate
decreased to $1.12. Maroon must record a loss of $450.
Multiple Choice Questions
59.
Long-term investments:
60.
Short-term investments:
61.
Long-term investments are reported in the:
62.
Long-term investments include:
63.
Strickland Corporation has invested in 10% of the outstanding stock of Nez Corporation.
Strickland intends to actively manage this investment for profit. This investment is
classified as:
64.
All of the following statements regarding equity securities are true
except
:
65.
All of the following are true about debt securities except:
66.
At acquisition, debt securities are:
67.
At the end of the accounting period, the owners of debt securities:
68.
A company has an investment in 9% bonds with a par value of $100,000 that pay interest
on October 1 and April 1. The amount of interest accrued on December 31 (the company’s
year-end) would be:
69.
Roe Corporation owns 2,000 shares of WRJ Corporation stock. WRJ Corporation has 25,000
shares of stock outstanding. WRJ paid $4 per share in cash dividends to its stockholders.
The entry to record the receipt of these dividends is:
70.
A company purchased $60,000 of 5% bonds on May 1 at par value. The bonds pay interest
on March 1 and September 1. The amount of interest accrued on December 31 (the
company’s year-end) would be:
71.
A company paid $37,800 plus a broker’s fee of $525 to acquire 8% bonds with a $40,000
maturity value. The company intends to hold the bonds to maturity. The cash proceeds the
company will receive when the bonds mature equal:
72.
A company paid $37,800 plus a broker’s fee of $525 to acquire 8% bonds with a $40,000
maturity value as a long-term investment. The company intends to hold the bonds to
maturity. The correct entry to record the purchase of the bond investment is:
73.
Kendall Corp. purchased at par value $75,000 of Shrem Company’s 8% bonds that mature
in three-years. The bonds pay interest semiannually on June 1 and December 1. Kendall
plans to hold the bonds until they mature. When the bonds mature, Kendall should prepare
the following journal entry:
74.
Kendall Corp. purchased at par value $160,000 of Barker Company’s 7% bonds that mature
in 10 months. The bonds pay interest semiannually on June 1 and December 1. Kendall
plans to hold the bonds until they mature. The journal entry to record Kendall’s purchase
of the bonds is:
75.
Barnes Company holds $50,000 of 8% bonds that mature in six years as a held-to-maturity
security. Which of the following is the correct journal entry to record the receipt of the
semiannual interest payment?
76.
Accounting for long-term investments in equity securities with controlling influence uses
the:
77.
The controlling investor is called the:
78.
The investee company in a long term investment with controlling interest is called the:
79.
A controlling influence over the investee is based on the investor owning voting stock
exceeding:
80.
Long-term investments cannot include:
81.
Consolidated financial statements:
82.
Comprehensive income includes all except:
83.
Short-term investments in held–to-maturity debt securities are accounted for using the:
84.
Long-term investments in held–to-maturity debt securities are accounted for using the:
85.
The price of one currency stated in terms of another currency is called a(n):
86.
All of the following statements relating to accounting for international operations are true
except
:
87.
Foreign exchange rates fluctuate due to changes in all but which of the following?
88.
The currency in which a company presents its financial statements is known as the:
89.
If the exchange rate for Canadian and U.S. dollars is 0.82777 to 1, this implies that 3
Canadian dollars will buy ____ worth of U.S. dollars.
90.
Kreighton Manufacturing purchased on credit £50,000 worth of production materials from
a British company when the exchange rate was $1.97 per British pound. At the year-end
balance sheet date the exchange rate increased to $2.76. If the liability is still unpaid at
that time, Kreighton must record a:
91.
Marshall Company sold supplies in the amount of €25,000 (euros) to a French company
when the exchange rate was $1.21 per euro. At the time of payment, the exchange rate
decreased to $0.82. Marshall must record a:
92.
Select the correct statement from the following:
93.
Cloverton Corporation had net income of $30,000, net sales of $1,000,000, and average
total assets of $500,000. Its return on total assets is: