Question 1

An investment is readily marketable if it is management's intent to sell the investment.

Accepted Answer

A) True 
 B)False

Question 2

Match between columns
                        Premises: The value at a future date of a given amount invested.
Return on principal for two or more periods
The sum of all the payments or receipts plus the accumulated compound interest on them.
Value today of a series of future amounts to be received or paid.
The value today of a future amount to be received or paid.

Accepted Answer

The Answer of Future value of an annuity and Present is...

Question 3

Deutsche Corporation's trading portfolio at the end of the year is as follows:   At the end of the year, Deutsche Corporation should

Accepted Answer

A)  set up a Fair Value Adjustment account for Common Stock B. 
B)  set up a Fair Value Adjustment account for the portfolio. 
C)  recognize an Unrealized Gain or Loss-Income for $6,000. 
D)  report a loss on the income statement for $6,000 under "Other Expenses and Losses." 
A)  set up a Fair Value Adjustment account for Common Stock B. 
B)  set up a Fair Value Adjustment account for the portfolio. 
C)  recognize an Unrealized Gain or Loss-Income for $6,000. 
D)  report a loss on the income statement for $6,000 under "Other Expenses and Losses."

Question 4

In order to compute the present value of an annuity, it is necessary to know the
1) discount rate.
2) number of discount periods and the amount of the periodic payments or receipts.

Accepted Answer

A)  1. 
B)  2. 
C)  Both 1 and 2. 
D)  Something in addition to 1 and 2. 
A)  1. 
B)  2. 
C)  Both 1 and 2. 
D)  Something in addition to 1 and 2.

Question 5

Which of the following is the correct matching concerning an investor's influence on the operations and financial affairs of an investee?

Accepted Answer

The answer of Which of the following is the correct...

Question 6

If an investor owns between 20% and 50% of an investee's common stock, it is presumed that the investor has significant influence on the investee.

Accepted Answer

A) True 
 B)False

Question 7

The future value of an annuity factor for 2 periods is equal to

Accepted Answer

A)  1 plus the interest rate. 
B)  2 plus the interest rate. 
C)  2 minus the interest rate. 
D)  2. 
A)  1 plus the interest rate. 
B)  2 plus the interest rate. 
C)  2 minus the interest rate. 
D)  2.

Question 8

On January 1, Vega Company purchased as an investment a $1,000, 8% bond for $1,000. The bond pays interest on January 1 and July 1. The bond is sold on October 1 for $1,080 plus accrued interest. Interest has not been accrued since the last interest payment date. What is the entry to record the cash proceeds at the time the bond is sold?

Accepted Answer

The answer of On January 1, Vega Company purchased as...

Question 9

If you are able to earn a 6% rate of return, what amount would you need to invest to have $6,500 one year from now?

Accepted Answer

A)  $6,011.79 
B)  $6,132.10 
C)  $5,817.50 
D)  $6,190.47 
A)  $6,011.79 
B)  $6,132.10 
C)  $5,817.50 
D)  $6,190.47

Question 10

At the end of an accounting period, if the fair value of the trading portfolio is less than its cost, then the company should recognize an ______________ that is reported on the _________________.

Accepted Answer

unrealized

Question 11

Beaufort Company issued $400,000, 10%, 2-year bonds that pay interest semiannually. Compute the amount at which the bonds would sell if investors required a rate of return of 8%.

Accepted Answer

The answer of Beaufort Company issued $400,000, 10%, 2-year bonds...

Question 12

Pension funds and mutual funds are corporations that regularly invest for strategic reasons.

Accepted Answer

A) True 
 B)False

Question 13

On January 1, 2014, the Express Corporation purchased 30% of the common stock outstanding of the Bangor Corporation for $200,000. During 2014, the Bangor Corporation reported net income of $80,000 and paid cash dividends of $20,000. The balance of the Stock Investments-Bangor account on the books of Express Corporation at December 31, 2014, is

Accepted Answer

A)  $200,000. 
B)  $220,000. 
C)  $280,000. 
D)  $218,000. 
A)  $200,000. 
B)  $220,000. 
C)  $280,000. 
D)  $218,000.

Question 14

Discounting may be done on an annual basis or over shorter periods of time such as semiannually.

Accepted Answer

A) True 
 B)False

Question 15

Trading securities are valued on the balance sheet at market value.

Accepted Answer

A) True 
 B)False

Question 16

Trafton Company had the following transactions pertaining to debt securities held as an investment.
Jan. 1  $\quad $Purchased 60, 8%, $1,000 Hammond Company bonds for $60,000 cash. Interest is payable semiannually on July 1 and January 1.
July 1  $\quad $Received semiannual interest on Hammond Company bonds.
Sept. 1  $\quad $Sold 30 Hammond Company bonds for $32,000 plus accrued interest.
Instructions
(a) Journalize the transactions.
(b) Prepare the adjusting entry for the accrual of interest on December 31.

Accepted Answer

The answer of Trafton Company had the following transactions pertaining...

Question 17

Stocks traded on the New York Stock Exchange are considered readily marketable.

Accepted Answer

A) True 
 B)False

Question 18

When a year-end adjustment is made to reduce the available-for-sale securities portfolio to market, what effect, if any, will the adjustment have on the balance sheet and the income statement?

Accepted Answer

There would be no effect on the income s

Question 19

Cost and fair value data for the trading securities of Beltway Company at December 31, 2014, are $100,000 and $84,000, respectively. Which of the following correctly presents the adjusting journal entry to record the securities at fair value?

Accepted Answer

The answer of Cost and fair value data for the...

Question 20

Under the equity method of accounting for investments in common stock, when a dividend is received from the investee company

Accepted Answer

A)  the Dividend Revenue account is credited. 
B)  the Stock Investments account is increased. 
C)  the Stock Investments account is decreased. 
D)  no entry is necessary. 
A)  the Dividend Revenue account is credited. 
B)  the Stock Investments account is increased. 
C)  the Stock Investments account is decreased. 
D)  no entry is necessary.

An investment is readily marketable if it is management's intent to sell the investment.

Deutsche Corporation's trading portfolio at the end of the year is as follows: At the end of the year, Deutsche Corporation should

In order to compute the present value of an annuity, it is necessary to know the 1) discount rate. 2) number of discount periods and the amount of the periodic payments or receipts.

Which of the following is the correct matching concerning an investor's influence on the operations and financial affairs of an investee?

If an investor owns between 20% and 50% of an investee's common stock, it is presumed that the investor has significant influence on the investee.

The future value of an annuity factor for 2 periods is equal to

If you are able to earn a 6% rate of return, what amount would you need to invest to have $6,500 one year from now?

At the end of an accounting period, if the fair value of the trading portfolio is less than its cost, then the company should recognize an that is reported on the ___.

Beaufort Company issued $400,000, 10%, 2-year bonds that pay interest semiannually. Compute the amount at which the bonds would sell if investors required a rate of return of 8%.

Pension funds and mutual funds are corporations that regularly invest for strategic reasons.

Discounting may be done on an annual basis or over shorter periods of time such as semiannually.

Trading securities are valued on the balance sheet at market value.

Stocks traded on the New York Stock Exchange are considered readily marketable.

When a year-end adjustment is made to reduce the available-for-sale securities portfolio to market, what effect, if any, will the adjustment have on the balance sheet and the income statement?

Cost and fair value data for the trading securities of Beltway Company at December 31, 2014, are $100,000 and $84,000, respectively. Which of the following correctly presents the adjusting journal entry to record the securities at fair value?

Under the equity method of accounting for investments in common stock, when a dividend is received from the investee company

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Filters

Exam 14: Understanding Investments and Acquisitions in Accounting

An investment is readily marketable if it is management's intent to sell the investment.

Deutsche Corporation's trading portfolio at the end of the year is as follows: At the end of the year, Deutsche Corporation should

In order to compute the present value of an annuity, it is necessary to know the 1) discount rate. 2) number of discount periods and the amount of the periodic payments or receipts.

Which of the following is the correct matching concerning an investor's influence on the operations and financial affairs of an investee?

If an investor owns between 20% and 50% of an investee's common stock, it is presumed that the investor has significant influence on the investee.

The future value of an annuity factor for 2 periods is equal to

If you are able to earn a 6% rate of return, what amount would you need to invest to have $6,500 one year from now?

At the end of an accounting period, if the fair value of the trading portfolio is less than its cost, then the company should recognize an ______________ that is reported on the _________________.

Beaufort Company issued $400,000, 10%, 2-year bonds that pay interest semiannually. Compute the amount at which the bonds would sell if investors required a rate of return of 8%.

Pension funds and mutual funds are corporations that regularly invest for strategic reasons.

Discounting may be done on an annual basis or over shorter periods of time such as semiannually.

Trading securities are valued on the balance sheet at market value.

Stocks traded on the New York Stock Exchange are considered readily marketable.

When a year-end adjustment is made to reduce the available-for-sale securities portfolio to market, what effect, if any, will the adjustment have on the balance sheet and the income statement?

Cost and fair value data for the trading securities of Beltway Company at December 31, 2014, are $100,000 and $84,000, respectively. Which of the following correctly presents the adjusting journal entry to record the securities at fair value?

Under the equity method of accounting for investments in common stock, when a dividend is received from the investee company

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Filters

At the end of an accounting period, if the fair value of the trading portfolio is less than its cost, then the company should recognize an that is reported on the ___.