Exam 15: Investments and International Operations

When a U.S. company makes a credit sale to an international customer and the sale terms are for payment in a foreign currency, the foreign exchange rate used to record the sale is the exchange rate:

(Multiple Choice)

4.8/5

(30)

Question 81

A company had net income of $40,000, net sales of $300,000, and average total assets of $200,000. Its profit margin and total asset turnover were respectively:

(Multiple Choice)

4.9/5

(30)

Question 82

The controlling investor is called the:

(Multiple Choice)

4.8/5

(29)

Question 83

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:

(Multiple Choice)

4.8/5

(35)

Question 84

Long-term investments include investments in land or other assets not used in a company's operations.

(True/False)

4.8/5

(42)

Question 85

On March 15, Alan Company purchased 10,000 shares of Cameo Corp. stock for $35,000. The investment is classified as available-for-sale securities. This is the company's first and only investment in available-for-sale securities. On June 30, the stock had a fair value of $34,000. Alan should do which of the following:

(Multiple Choice)

4.7/5

(31)

Question 86

Match the appropriate definitions with terms.

Debt and equity securities not classified as trading or held-to-maturity.

Held-to-maturity securities

A company that owns a more than 50% controlling interest in a subsidiary.

Return on total assets

Change in market value that is not yet realized through an actual sale.

Consolidated financial statements

Correct Answer:

Verified

Debt and equity securities not classified as trading or held-to-maturity.

A company that owns a more than 50% controlling interest in a subsidiary.

Change in market value that is not yet realized through an actual sale.

A corporation controlled by another company when the controlling company owns more than 50% of the investee's voting stock.

An accounting method for long-term investments in equity when the investor has significant influence over the investee.

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.

Debt and equity securities that a company intends to actively manage and trade for profit.

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.

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.

(Matching)

4.8/5

(32)

Question 87

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

(Multiple Choice)

4.8/5

(37)

Question 88

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.

(Multiple Choice)

4.7/5

(33)

Question 89

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 equals:

(Multiple Choice)

4.9/5

(31)

Question 90

Held-to-maturity securities are equity securities a company intends and is able to hold until maturity.

(True/False)

4.7/5

(35)

Question 91

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:

(Multiple Choice)

4.9/5

(28)

Question 92

The investee company in a long term investment with controlling interest is called the:

(Multiple Choice)

4.9/5

(33)

Question 93

A company received dividends of $0.35 per share on 300 shares of stock it holds as an investment. The journal entry to record this transaction would be to debit Cash for $105 and credit Dividend Revenue for $105.

(True/False)

4.9/5

(28)

Question 94

Landmark Corp. buys $300,000 of Schroeter Company's 8%, 5-year bonds payable at par value on September 1. Interest payments are made semiannually. Landmark plans to hold the bonds for the 5-year life. The journal entry to record the purchase should include:

(Multiple Choice)

4.8/5

(38)

Question 95

The price of one currency stated in terms of another currency is called a foreign exchange rate.

(True/False)

4.9/5

(35)

Question 96

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:

(Multiple Choice)

5.0/5

(33)

Question 97

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

(True/False)

4.7/5

(25)

Question 98

Cash equivalents are investments that are readily converted to known amounts of cash and mature within three months.

(True/False)

4.7/5

(28)

Question 99

All of the following are true about debt securities except:

(Multiple Choice)

4.9/5

(43)

Question 100

Showing 81 - 100 of 160

When a U.S. company makes a credit sale to an international customer and the sale terms are for payment in a foreign currency, the foreign exchange rate used to record the sale is the exchange rate:

A company had net income of $40,000, net sales of $300,000, and average total assets of $200,000. Its profit margin and total asset turnover were respectively:

The controlling investor is called the:

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:

Long-term investments include investments in land or other assets not used in a company's operations.

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

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.

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 equals:

Held-to-maturity securities are equity securities a company intends and is able to hold until maturity.

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:

The investee company in a long term investment with controlling interest is called the:

A company received dividends of $0.35 per share on 300 shares of stock it holds as an investment. The journal entry to record this transaction would be to debit Cash for $105 and credit Dividend Revenue for $105.

Landmark Corp. buys $300,000 of Schroeter Company's 8%, 5-year bonds payable at par value on September 1. Interest payments are made semiannually. Landmark plans to hold the bonds for the 5-year life. The journal entry to record the purchase should include:

The price of one currency stated in terms of another currency is called a foreign exchange rate.

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:

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

Cash equivalents are investments that are readily converted to known amounts of cash and mature within three months.

All of the following are true about debt securities except:

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resoures, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Filters