Question 1

At acquisition, debt securities are:

Accepted Answer

A)  Recorded at their cost, plus total interest that will be paid over the life of the security. 
B)  Recorded at the amount of interest that will be paid over the life of the security. 
C)  Recorded at cost. 
D)  Not recorded, because no interest is due yet. 
E)  Recorded at the amount of dividend income to be received. 
A)  Recorded at their cost, plus total interest that will be paid over the life of the security. 
B)  Recorded at the amount of interest that will be paid over the life of the security. 
C)  Recorded at cost. 
D)  Not recorded, because no interest is due yet. 
E)  Recorded at the amount of dividend income to be received.

Question 2

Savan Co. purchased 14,000 shares of Briton Corporation's 40,000 shares of common stock on December 31, 2012. This represented 35% of Briton's outstanding shares and gave Savan Co. significant influence over Briton's management and operations. On October 11, 2013, Briton declared and paid cash dividends of $30,000. On December 31, 2013, Briton reported net income of $125,000 for the year. Prepare the journal entries Savan Co. should record to account for its investment in Briton Corporation during 2013.

Accepted Answer

The answer of Savan Co. purchased 14,000 shares of Briton...

Question 3

Match between columns
                        Premises:  A corporation controlled by another company when the parent owns more than 50% of the subsidiary's voting stock.
 A company that owns a more than 50% controlling interest in a subsidiary.
 A measure of operating efficiency, computed as net income divided by average total assets.
 Debt securities that a company intends and is able to hold until maturity.
 An accounting method for long-term investments in equity when the investor has significant influence over the investee.
 Debt and equity securities not classified as trading or held-to-maturity.
 Debt and equity securities that a company intends to actively manage and trade for profit.
 A change in market value that is not yet realized through an actual sale.
 Investments in equity and debt securities that are not readily convertible to cash or are not intended to be converted to cash in the short term.
 Financial statements that show the financial position, results of operations and cash flows of all entities under the parent's control, including those of any subsidiaries.

Accepted Answer

The Answer of Long-term investments and Subsidiary and Unrealized gain is...

Question 4

A company's return on total assets equals 30%. If net income and net sales are $900,000 and $8,900,000 respectively, what is the amount of total assets?

Accepted Answer

A)  $2,670,000 
B)  $270,000 
C)  $29,666,667 
D)  $3,000,000 
E)  $2,940,000 
A)  $2,670,000 
B)  $270,000 
C)  $29,666,667 
D)  $3,000,000 
E)  $2,940,000

Question 5

A company had investments in long-term available-for-sale securities. At the end of the current year, the company's portfolio had a $162,000 cost and $164,000 market value. What is the current year's adjustment to market value given the following account balances at the end of the prior year?

Accepted Answer

A)    
B)    
C)    
D)    
E)    
A)    
B)    
C)    
D)    
E)

Question 6

A controlling investor is referred to as the parent and the investee company is referred to as the subsidiary.

Accepted Answer

A) True 
 B)False

Question 7

All companies desire a low return on total assets.

Accepted Answer

A) True 
 B)False

Question 8

On April 1 of the current year, a company paid $150,000 to purchase 7%, 10-year bonds that had a par value of $150,000 and paid interest semiannually each April 1 and October 1. The company intends to hold the bonds until they mature. Prepare the journal entry to record the receipt of the first semiannual interest payment on October 1 of the current year.

Accepted Answer

The answer of On April 1 of the current year,...

Question 9

Investments in trading securities:

Accepted Answer

A)  Include only equity securities. 
B)  Are reported as current assets. 
C)  Include only debt securities. 
D)  Are reported at their cost, no matter what their market value. 
E)  Are long-term investments. 
A)  Include only equity securities. 
B)  Are reported as current assets. 
C)  Include only debt securities. 
D)  Are reported at their cost, no matter what their market value. 
E)  Are long-term investments.

Question 10

Chung owns 40% of Lu's common stock. Lu pays $97,000 in total cash dividends to its shareholders. Chung's entry to record this transaction should include a:

Accepted Answer

A)  Debit to Dividends for $97,000. 
B)  Debit to Dividends for $38,800. 
C)  Debit to Long-Term investments for $97,000. 
D)  Credit to Long-Term Investments for $38,800. 
E)  Credit to Cash for $97,000. 
A)  Debit to Dividends for $97,000. 
B)  Debit to Dividends for $38,800. 
C)  Debit to Long-Term investments for $97,000. 
D)  Credit to Long-Term Investments for $38,800. 
E)  Credit to Cash for $97,000.

Question 11

What are the accounting basics for equity securities, including acquisition, dividends earned, and disposition?

Accepted Answer

Equity securities are recorded at their

Question 12

Marina, Inc., held 1,500 of Navia common stock with a cost of $36,900. These shares were classified as a long-term available-for-sale investment. It sold the shares on December 13 for $42,100. Prepare the necessary journal entry to record this sale.

Accepted Answer

The answer of Marina, Inc., held 1,500 of Navia common...

Question 13

Investments in held-to-maturity debt securities are always current assets.

Accepted Answer

A) True 
 B)False

Question 14

What are the accounting basics for debt securities, including recording their acquisition, interest earned and their disposal?

Accepted Answer

At acquisition, debt securities are reco

Question 15

The controlling investor is referred to as the:

Accepted Answer

A)  Owner 
B)  Subsidiary 
C)  Parent 
D)  Investee 
E)  Senior entity 
A)  Owner 
B)  Subsidiary 
C)  Parent 
D)  Investee 
E)  Senior entity

Question 16

Explain the difference between short-term and long-term investments and give examples of each.

Accepted Answer

Short-term investments are securities ex

Question 17

The following information is available from the financial statements of Cosmotropolis:
   What is Cosmotropolis' return on total assets for 2013?

Accepted Answer

The answer of The following information is available from the...

Question 18

Short-term investments in held-to-maturity debt securities are accounted for using the ___________________________.

Accepted Answer

cost metho

Question 19

A company had net income of $2,660,000, net sales of $25,000,000, and average total assets of $8,000,000. Its return on total assets is equal to:

Accepted Answer

A)  3.01% 
B)  10.64% 
C)  32.00% 
D)  33.25% 
E)  300.75% 
A)  3.01% 
B)  10.64% 
C)  32.00% 
D)  33.25% 
E)  300.75%

Question 20

________________________ refers to all changes in equity for a period except for those due to investments and distributions to owners.

Accepted Answer

Comprehens

At acquisition, debt securities are:

A company's return on total assets equals 30%. If net income and net sales are $900,000 and $8,900,000 respectively, what is the amount of total assets?

A company had investments in long-term available-for-sale securities. At the end of the current year, the company's portfolio had a $162,000 cost and $164,000 market value. What is the current year's adjustment to market value given the following account balances at the end of the prior year?

A controlling investor is referred to as the parent and the investee company is referred to as the subsidiary.

All companies desire a low return on total assets.

Investments in trading securities:

Chung owns 40% of Lu's common stock. Lu pays $97,000 in total cash dividends to its shareholders. Chung's entry to record this transaction should include a:

What are the accounting basics for equity securities, including acquisition, dividends earned, and disposition?

Marina, Inc., held 1,500 of Navia common stock with a cost of $36,900. These shares were classified as a long-term available-for-sale investment. It sold the shares on December 13 for $42,100. Prepare the necessary journal entry to record this sale.

Investments in held-to-maturity debt securities are always current assets.

What are the accounting basics for debt securities, including recording their acquisition, interest earned and their disposal?

The controlling investor is referred to as the:

Explain the difference between short-term and long-term investments and give examples of each.

The following information is available from the financial statements of Cosmotropolis: What is Cosmotropolis' return on total assets for 2013?

Short-term investments in held-to-maturity debt securities are accounted for using the ___________________________.

A company had net income of $2,660,000, net sales of $25,000,000, and average total assets of $8,000,000. Its return on total assets is equal to:

________________________ refers to all changes in equity for a period except for those due to investments and distributions to owners.

Introducing Financial Accounting

Accounting for Transactions

Preparing Financial Statements

Accounting for Merchandising Operations

Accounting for Inventories

Accounting for Cash and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Accounting for Equity

Accounting for Cash Flows

Interpreting Financial Statements

Time Value of Money

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 15: Investments and International Operations

At acquisition, debt securities are:

A company's return on total assets equals 30%. If net income and net sales are $900,000 and $8,900,000 respectively, what is the amount of total assets?

A company had investments in long-term available-for-sale securities. At the end of the current year, the company's portfolio had a $162,000 cost and $164,000 market value. What is the current year's adjustment to market value given the following account balances at the end of the prior year?

A controlling investor is referred to as the parent and the investee company is referred to as the subsidiary.

All companies desire a low return on total assets.

Investments in trading securities:

Chung owns 40% of Lu's common stock. Lu pays $97,000 in total cash dividends to its shareholders. Chung's entry to record this transaction should include a:

What are the accounting basics for equity securities, including acquisition, dividends earned, and disposition?

Marina, Inc., held 1,500 of Navia common stock with a cost of $36,900. These shares were classified as a long-term available-for-sale investment. It sold the shares on December 13 for $42,100. Prepare the necessary journal entry to record this sale.

Investments in held-to-maturity debt securities are always current assets.

What are the accounting basics for debt securities, including recording their acquisition, interest earned and their disposal?

The controlling investor is referred to as the:

Explain the difference between short-term and long-term investments and give examples of each.

The following information is available from the financial statements of Cosmotropolis: What is Cosmotropolis' return on total assets for 2013?

Short-term investments in held-to-maturity debt securities are accounted for using the ___________________________.

A company had net income of $2,660,000, net sales of $25,000,000, and average total assets of $8,000,000. Its return on total assets is equal to:

________________________ refers to all changes in equity for a period except for those due to investments and distributions to owners.

Introducing Financial Accounting

Accounting for Transactions

Preparing Financial Statements

Accounting for Merchandising Operations

Accounting for Inventories

Accounting for Cash and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Accounting for Equity

Accounting for Cash Flows

Interpreting Financial Statements

Time Value of Money

Accounting for Partnerships

Accounting With Special Journals

Filters