Question 1

IFRS requires uniform accounting policies to be used throughout the group
of consolidated subsidiaries.

Accepted Answer

A) True 
 B)False

Question 2

Net profit margin reflects the percent of net income in each dollar of net sales.

Accepted Answer

A) True 
 B)False

Question 3

Parris Corporation purchased 40% of Samitz Corporation for $100,000 on January 1.On November 17 of the same year,Samitz Corporation declared total cash dividends of $12,000.At year-end,Samitz Corporation reported net income of $60,000.The balance in the Parris Corporation's Long-Term Investment in Samitz Corporation at December 31 should be:

Accepted Answer

A) $80,800 
B) $100,000 
C) $95,200 
D) $119,200 
E) $124,000 
A) $80,800 
B) $100,000 
C) $95,200 
D) $119,200 
E) $124,000

Question 4

Chrono Co.held bonds of Ayrford Co.with a cost of $125,000 and a year-end market value of $123,700.Chrono also held 1,500 shares of Avian common stock with a cost of $25,000 and a year-end market value of $26,100.These are classified as long-term available-for-sale securities.Prepare the journal entry to record the market value of the investments as of its December 31 year-end.

Accepted Answer

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Question 5

Equity securities reflect a creditor relationship such as investments in notes,bonds,and certificates of deposit.

Accepted Answer

A) True 
 B)False

Question 6

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

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Question 7

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

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Question 8

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 9

A U.S.company's credit sale to an international customer to be paid in a foreign currency requires using the same exchange rate for the date of sale and the cash payment date.

Accepted Answer

A) True 
 B)False

Question 10

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 on October 1 and April 1.The company intends to hold the bonds until they mature.Prepare the journal entry to recognize accrued interest as of December 31 of the current year.

Accepted Answer

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Question 11

A long-term investment classified as equity securities with controlling influence implies that the investor can exert a controlling influence over the investee.

Accepted Answer

A) True 
 B)False

Question 12

Six months ago,a company purchased an investment in stock for $65,000.This investment is considered available-for-sale.The current market value of the stock is $68,500.The company should record a:

Accepted Answer

A) Debit to Unrealized Loss-Equity for $3,500. 
B) Credit to Unrealized Gain-Equity for $3,500. 
C) Debit to Investment Revenue for $3,500. 
D) Credit to Market Adjustment - Available-for-Sale for $3,500. 
E) Credit to Investment Revenue for $3,500. 
A) Debit to Unrealized Loss-Equity for $3,500. 
B) Credit to Unrealized Gain-Equity for $3,500. 
C) Debit to Investment Revenue for $3,500. 
D) Credit to Market Adjustment - Available-for-Sale for $3,500. 
E) Credit to Investment Revenue for $3,500.

Question 13

Trading securities,held-to-maturity debt securities,and equity securities giving an investor significant influence over an investee are always considered short-term investments.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

cost metho

Question 15

To prepare consolidated financial statements when a company has an international subsidiary,the international subsidiary's financial statements must be translated into U.S.dollars.

Accepted Answer

A) True 
 B)False

Question 16

Match between columns
                        Premises: Consolidated financial statements
Equity method
Subsidiary
Available-for-sale securities
Return on total assets
Parent company
Held-to-maturity securities
Unrealized gain or loss
Trading securities
Long-term investments

Accepted Answer

The Answer of A corporation controlled by another company when is...

Question 17

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

Accepted Answer

cost metho

Question 18

A company purchased $60,000 of 5% bonds on May 1.The bonds pay interest on February 1 and August 1.The amount of interest accrued on December 31 (the company's year-end) would be:

Accepted Answer

A) $250 
B) $500 
C) $1,250 
D) $2,500 
E) $3,000 
A) $250 
B) $500 
C) $1,250 
D) $2,500 
E) $3,000

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

IFRS requires uniform accounting policies to be used throughout the group of consolidated subsidiaries.

Net profit margin reflects the percent of net income in each dollar of net sales.

Equity securities reflect a creditor relationship such as investments in notes,bonds,and certificates of deposit.

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.

Long-term investments:

A U.S.company's credit sale to an international customer to be paid in a foreign currency requires using the same exchange rate for the date of sale and the cash payment date.

A long-term investment classified as equity securities with controlling influence implies that the investor can exert a controlling influence over the investee.

Six months ago,a company purchased an investment in stock for $65,000.This investment is considered available-for-sale.The current market value of the stock is $68,500.The company should record a:

Trading securities,held-to-maturity debt securities,and equity securities giving an investor significant influence over an investee are always considered short-term investments.

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

To prepare consolidated financial statements when a company has an international subsidiary,the international subsidiary's financial statements must be translated into U.S.dollars.

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

A company purchased $60,000 of 5% bonds on May 1.The bonds pay interest on February 1 and August 1.The amount of interest accrued on December 31 (the company's year-end) would be:

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

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

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Accounting for Partnerships

Accounting With Special Journals

Filters

Exam 15: Investments and International Operations

IFRS requires uniform accounting policies to be used throughout the group of consolidated subsidiaries.

Net profit margin reflects the percent of net income in each dollar of net sales.

Equity securities reflect a creditor relationship such as investments in notes,bonds,and certificates of deposit.

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.

Long-term investments:

A U.S.company's credit sale to an international customer to be paid in a foreign currency requires using the same exchange rate for the date of sale and the cash payment date.

A long-term investment classified as equity securities with controlling influence implies that the investor can exert a controlling influence over the investee.

Six months ago,a company purchased an investment in stock for $65,000.This investment is considered available-for-sale.The current market value of the stock is $68,500.The company should record a:

Trading securities,held-to-maturity debt securities,and equity securities giving an investor significant influence over an investee are always considered short-term investments.

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

To prepare consolidated financial statements when a company has an international subsidiary,the international subsidiary's financial statements must be translated into U.S.dollars.

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

A company purchased $60,000 of 5% bonds on May 1.The bonds pay interest on February 1 and August 1.The amount of interest accrued on December 31 (the company's year-end) would be:

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

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

Introducing Financial Accounting

Accounting System and Financial Statements

Adjusting Accounts for Financial Statements

Reporting and Analyzing Merchandising Operations

Reporting and Analyzing Inventories

Reporting and Analyzing Cash and Internal Controls

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Term Assets

Reporting and Analyzing Current Liabilities

Reporting and Analyzing Long-Term Liabilities

Reporting and Analyzing Equity

Reporting and Analyzing Cash Flows

Analyzing and Interpreting Financial Statements

Applying Present and Future Values

Accounting for Partnerships

Accounting With Special Journals

Filters