Question 1

Consolidated financial statements show the financial position, results of operations, and cash flows of all entities under the parent's control.

Accepted Answer

A) True 
 B)False

Question 2

Rhone Importers purchases automotive parts from Germany. Prepare journal entries for the following transactions of Rhone.

Accepted Answer

The answer of Rhone Importers purchases automotive parts from Germany....

Question 3

Bond sinking funds are examples of short-term investments.

Accepted Answer

A) True 
 B)False

Question 4

Held-to-maturity securities are:

Accepted Answer

A)  Always classified as long-term liabilities. 
B)  Part of equity. 
C)  Debt securities that a company intends and is able to hold to maturity. 
D)  Equity securities that a company intends and is able to hold to maturity. 
E)  Equity securities that have a maturity value greater than cost. 
A)  Always classified as long-term liabilities. 
B)  Part of equity. 
C)  Debt securities that a company intends and is able to hold to maturity. 
D)  Equity securities that a company intends and is able to hold to maturity. 
E)  Equity securities that have a maturity value greater than cost.

Question 5

When using the equity method of accounting for investments in equity securities, the receipt of cash dividends is recorded as revenue.

Accepted Answer

A) True 
 B)False

Question 6

Columbia Corp. held 1,500 of Vianco common stock with a cost of $74,387. These shares were classified as a long-term available-for-sale investment. It sold the shares on December 13 for $55,275. Prepare the journal entry to record this sale.

Accepted Answer

The answer of Columbia Corp. held 1,500 of Vianco common...

Question 7

The cost method of accounting is used for long-term investments in equity securities with significant influence.

Accepted Answer

A) True 
 B)False

Question 8

Foreign exchange rates fluctuate due to many factors including changing political and economic conditions.

Accepted Answer

A) True 
 B)False

Question 9

Long-term investments include:

Accepted Answer

A)  Investments in bonds and stocks that are not marketable. 
B)  Investments in marketable stocks that are intended to be converted into cash in the short-term. 
C)  Investments in marketable bonds that are intended to be converted into cash in the short-term. 
D)  Only investments readily convertible to cash. 
E)  Investments intended to be converted to cash within one year. 
A)  Investments in bonds and stocks that are not marketable. 
B)  Investments in marketable stocks that are intended to be converted into cash in the short-term. 
C)  Investments in marketable bonds that are intended to be converted into cash in the short-term. 
D)  Only investments readily convertible to cash. 
E)  Investments intended to be converted to cash within one year.

Question 10

Long-term investments:

Accepted Answer

A)  Are current assets 
B)  Include funds earmarked for a special purpose such as bond sinking funds 
C)  Must be readily convertible to cash 
D)  Are expected to be converted into cash within one year 
E)  Include only equity securities 
A)  Are current assets 
B)  Include funds earmarked for a special purpose such as bond sinking funds 
C)  Must be readily convertible to cash 
D)  Are expected to be converted into cash within one year 
E)  Include only equity securities

Question 11

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

Accepted Answer

A)  Market value method with market adjustment to income. 
B)  Market value method with market adjustment to equity. 
C)  Cost method with amortization. 
D)  Cost method without amortization. 
E)  Equity method. 
A)  Market value method with market adjustment to income. 
B)  Market value method with market adjustment to equity. 
C)  Cost method with amortization. 
D)  Cost method without amortization. 
E)  Equity method.

Question 12

A company paid $500,000 for 12% bonds with a par value of $500,000. The bonds pay 6% interest semiannually on September 1 and March 1. The company intends to hold the bonds until they mature. Prepare the journal entries for the following dates and transactions related to this bond acquisition.
(1) Bonds purchased on September 1, 2012.
(2) Year-end adjusting entry, December 31, 2012.
(3) Receipt of semiannual interest March 1, 2013.
(4) Redemption of the bonds at maturity on August 31, 2019.

Accepted Answer

(1)
 @#IMG-DLM& (2)

Question 13

__________________________ are investments in securities that are not readily convertible to cash or are not intended to be converted to cash in the short-term.

Accepted Answer

Long-term

Question 14

Golden Age Co. exports Native American artwork to Japan. Prepare journal entries for the following transactions.

Accepted Answer

The answer of Golden Age Co. exports Native American artwork...

Question 15

Kramer Corporation had the following long-term investment transactions.
   Prepare the journal entries Kramer Corporation should record for these transactions and events.

Accepted Answer

The answer of Kramer Corporation had the following long-term investment...

Question 16

Acme owns 4,000 shares of XYZ. XYZ has 50,000 total shares of stock outstanding. XYZ paid $0.82 per share in cash dividends to its stockholders. Acme should record a:

Accepted Answer

A)  Debit to Dividends for $41,000. 
B)  Debit to Dividends for $3,280. 
C)  Debit to Cash for $3,280. 
D)  Debit to Long-Term Investments for $3,280. 
E)  Credit to Long-Term Investments for $3,280. 
A)  Debit to Dividends for $41,000. 
B)  Debit to Dividends for $3,280. 
C)  Debit to Cash for $3,280. 
D)  Debit to Long-Term Investments for $3,280. 
E)  Credit to Long-Term Investments for $3,280.

Question 17

If a company owns more than 20% of the stock of another company and the stock is being held as a long-term investment, which method would the investor normally use to account for this investment?

Accepted Answer

A)  Equity method 
B)  Market value method 
C)  Historical cost method 
D)  Straight-line method 
E)  Effective method 
A)  Equity method 
B)  Market value method 
C)  Historical cost method 
D)  Straight-line method 
E)  Effective method

Question 18

Short-term investments:

Accepted Answer

A)  Are securities that management intends to convert to cash within one year or an operating cycle, whichever is longer. 
B)  Include funds earmarked for a special purpose such as bond sinking funds. 
C)  Include stocks not intended to be converted into cash. 
D)  Include bonds not intended to be converted into cash. 
E)  Include sinking funds not intended to be converted into cash. 
A)  Are securities that management intends to convert to cash within one year or an operating cycle, whichever is longer. 
B)  Include funds earmarked for a special purpose such as bond sinking funds. 
C)  Include stocks not intended to be converted into cash. 
D)  Include bonds not intended to be converted into cash. 
E)  Include sinking funds not intended to be converted into cash.

Question 19

Investments in equity securities where the investor has a controlling influence are accounted for using the ________________________________.

Accepted Answer

equity met

Question 20

A company had investments in long-term available-for-sale securities. At the end of the current year, the company's portfolio had a $731,000 cost and $730,000 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)

Consolidated financial statements show the financial position, results of operations, and cash flows of all entities under the parent's control.

Rhone Importers purchases automotive parts from Germany. Prepare journal entries for the following transactions of Rhone.

Bond sinking funds are examples of short-term investments.

Held-to-maturity securities are:

When using the equity method of accounting for investments in equity securities, the receipt of cash dividends is recorded as revenue.

Columbia Corp. held 1,500 of Vianco common stock with a cost of $74,387. These shares were classified as a long-term available-for-sale investment. It sold the shares on December 13 for $55,275. Prepare the journal entry to record this sale.

The cost method of accounting is used for long-term investments in equity securities with significant influence.

Foreign exchange rates fluctuate due to many factors including changing political and economic conditions.

Long-term investments include:

Long-term investments:

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

__________________________ are investments in securities that are not readily convertible to cash or are not intended to be converted to cash in the short-term.

Golden Age Co. exports Native American artwork to Japan. Prepare journal entries for the following transactions.

Kramer Corporation had the following long-term investment transactions. Prepare the journal entries Kramer Corporation should record for these transactions and events.

Acme owns 4,000 shares of XYZ. XYZ has 50,000 total shares of stock outstanding. XYZ paid $0.82 per share in cash dividends to its stockholders. Acme should record a:

If a company owns more than 20% of the stock of another company and the stock is being held as a long-term investment, which method would the investor normally use to account for this investment?

Short-term investments:

Investments in equity securities where the investor has a controlling influence are accounted for using the ________________________________.

A company had investments in long-term available-for-sale securities. At the end of the current year, the company's portfolio had a $731,000 cost and $730,000 market value. What is the current year's adjustment to market value given the following account balances at the end of the prior year?

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

Consolidated financial statements show the financial position, results of operations, and cash flows of all entities under the parent's control.

Rhone Importers purchases automotive parts from Germany. Prepare journal entries for the following transactions of Rhone.

Bond sinking funds are examples of short-term investments.

Held-to-maturity securities are:

When using the equity method of accounting for investments in equity securities, the receipt of cash dividends is recorded as revenue.

Columbia Corp. held 1,500 of Vianco common stock with a cost of $74,387. These shares were classified as a long-term available-for-sale investment. It sold the shares on December 13 for $55,275. Prepare the journal entry to record this sale.

The cost method of accounting is used for long-term investments in equity securities with significant influence.

Foreign exchange rates fluctuate due to many factors including changing political and economic conditions.

Long-term investments include:

Long-term investments:

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

__________________________ are investments in securities that are not readily convertible to cash or are not intended to be converted to cash in the short-term.

Golden Age Co. exports Native American artwork to Japan. Prepare journal entries for the following transactions.

Kramer Corporation had the following long-term investment transactions. Prepare the journal entries Kramer Corporation should record for these transactions and events.

Acme owns 4,000 shares of XYZ. XYZ has 50,000 total shares of stock outstanding. XYZ paid $0.82 per share in cash dividends to its stockholders. Acme should record a:

If a company owns more than 20% of the stock of another company and the stock is being held as a long-term investment, which method would the investor normally use to account for this investment?

Short-term investments:

Investments in equity securities where the investor has a controlling influence are accounted for using the ________________________________.

A company had investments in long-term available-for-sale securities. At the end of the current year, the company's portfolio had a $731,000 cost and $730,000 market value. What is the current year's adjustment to market value given the following account balances at the end of the prior year?

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