Question 1

A controlling influence over the investee is based on the investor owning voting stock exceeding:

Accepted Answer

A)  10%. 
B)  20%. 
C)  30%. 
D)  40%. 
E)  50%. 
A)  10%. 
B)  20%. 
C)  30%. 
D)  40%. 
E)  50%.

Question 2

Any unrealized gain or loss for the portfolio of available-for-sale securities is reported on the income statement in the other gain or loss section.

Accepted Answer

A) True 
 B)False

Question 3

An investing company that owns ________ of another (investee)company's voting stock (but not more than 50%)is presumed to have a significant influence over the investee.

Accepted Answer

The answer of An investing company that owns ________ of...

Question 4

________ securities reflect a creditor relationship while ________ securities reflect an owner relationship.

Accepted Answer

answers m

Question 5

Washington Corp.held 1,500 of Vashon Company 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 Washington's sale.

Accepted Answer

None

Question 6

Marjam Company owns 51,000 shares of MacKenzie Company's 100,000 outstanding shares of common stock.MacKenzie Company pays $25,000 in total cash dividends to its shareholders.Marjam's entry to record this transaction should include a:

Accepted Answer

A)  Debit to Dividend Revenue for $12,750. 
B)  Debit to Interest Revenue for $12,750. 
C)  Credit to Long-Term investments for $12,750. 
D)  Credit to Long-Term Investments for $25,000. 
E)  Credit to Dividend Revenue for $25,000. 
A)  Debit to Dividend Revenue for $12,750. 
B)  Debit to Interest Revenue for $12,750. 
C)  Credit to Long-Term investments for $12,750. 
D)  Credit to Long-Term Investments for $25,000. 
E)  Credit to Dividend Revenue for $25,000.

Question 7

Consolidated financial statements:

Accepted Answer

A)  Show the results of operations, cash flows, and the financial position of all entities under a parent's control, including all subsidiaries. 
B)  Show the results of operations, cash flows, and the financial position of the parent only. 
C)  Show the results of operations, cash flows, and the financial position of the subsidiary only. 
D)  Include the investments in the subsidiaries on the balance sheet. 
E)  Do not include a balance sheet. 
A)  Show the results of operations, cash flows, and the financial position of all entities under a parent's control, including all subsidiaries. 
B)  Show the results of operations, cash flows, and the financial position of the parent only. 
C)  Show the results of operations, cash flows, and the financial position of the subsidiary only. 
D)  Include the investments in the subsidiaries on the balance sheet. 
E)  Do not include a balance sheet.

Question 8

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:

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 9

If a long-term investment in an equity security gives the investor significant influence over the investee,the investment is classified as available-for-sale.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

Comprehens

Question 11

A company paid $37,800 plus a broker's fee of $525 to acquire 8% bonds with a $40,000 maturity value as a long-term investment.The company intends to hold the bonds to maturity.The correct entry to record the purchase of the bond investment is:

Accepted Answer

A)  Debit Long-Term Investments-HTM $37,800; credit Cash $37,800. 
B)  Debit Long-Term Investments-HTM $38,325; credit Cash $38,325. 
C)  Debit Cash $40,000; credit Long-Term Investments-HTM $40,000. 
D)  Debit Long-Term Investments-HTM $37,800; debit Investment Expense $525; credit Cash $38,325. 
E)  Debit Long-Term Investments-HTM $37,800; debit Loss on Investment $525; credit Cash $38,325. 
A)  Debit Long-Term Investments-HTM $37,800; credit Cash $37,800. 
B)  Debit Long-Term Investments-HTM $38,325; credit Cash $38,325. 
C)  Debit Cash $40,000; credit Long-Term Investments-HTM $40,000. 
D)  Debit Long-Term Investments-HTM $37,800; debit Investment Expense $525; credit Cash $38,325. 
E)  Debit Long-Term Investments-HTM $37,800; debit Loss on Investment $525; credit Cash $38,325.

Question 12

Available-for-sale debt securities are:

Accepted Answer

A)  Recorded at cost and remain at cost over the life of the investment. 
B)  Reported at historical cost, adjusted for the amortized amount of any difference between cost and maturity value. 
C)  Reported at fair value on the balance sheet. 
D)  Intended to be held to maturity. 
E)  Always classified as Long-Term Investments. 
A)  Recorded at cost and remain at cost over the life of the investment. 
B)  Reported at historical cost, adjusted for the amortized amount of any difference between cost and maturity value. 
C)  Reported at fair value on the balance sheet. 
D)  Intended to be held to maturity. 
E)  Always classified as Long-Term Investments.

Question 13

On October 31,Augustas Co.received cash dividends of $0.15 per share from its investment in Lamb Corp.'s common stock.Augustas owned 1,200 shares of Lamb Corp.'s stock on October 31.The investment is considered available-for-sale.Prepare the investor's journal entry to record the receipt of the cash dividends.

Accepted Answer

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Question 14

If the exchange rate for Canadian and U.S.dollars is 0.7382 to 1,this implies that 2 Canadian dollars can be purchased for $1.48 U.S.dollars.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Carpark Services began operations in 20X1 and maintains long-term investments in available-for-sale securities.The year-end cost and fair values for its portfolio of these investments follow.The year-end adjusting entry to record the unrealized gain/loss at December 31,20X1 is:
$\begin{array}{|l|l|r|}
\hline \text { Available-for-Sale Securities } & \text { Cost } & \text { Fair Value } \
\hline \text { December } 31,20 \mathrm{X} 1 & \$ 250,000 & \$ 241,000 \
\hline \text { December } 31,20 \mathrm{X} 2 & \$ 340,000 & \$ 350,000 \
\hline \text { December } 31,20 \mathrm{X} 3 & \$ 410,000 & \$ 415,00 \mathrm{0} \
\hline
\end{array}$

Accepted Answer

A)  Debit Unrealized Gain- Equity $9,000; Credit Fair Value Adjustment - Available-for-Sale (LT) $9,000. 
B)  Debit Unrealized Loss - Equity $9,000; Credit Fair Value Adjustment - Available-for-Sale (LT) $9,000. 
C)  Debit Unrealized Loss - Income $9,000; Credit Fair Value Adjustment - Available-for-Sale (ST) $9,000. 
D)  Debit Fair Value Adjustment - Available-for-Sale (LT) $9,000; Credit Unrealized Loss - Equity $9,000. 
E)  Debit Fair Value Adjustment - Available-for-Sale (LT) $9,000; Credit Unrealized Gain - Equity $9,000. 
A)  Debit Unrealized Gain- Equity $9,000; Credit Fair Value Adjustment - Available-for-Sale (LT) $9,000. 
B)  Debit Unrealized Loss - Equity $9,000; Credit Fair Value Adjustment - Available-for-Sale (LT) $9,000. 
C)  Debit Unrealized Loss - Income $9,000; Credit Fair Value Adjustment - Available-for-Sale (ST) $9,000. 
D)  Debit Fair Value Adjustment - Available-for-Sale (LT) $9,000; Credit Unrealized Loss - Equity $9,000. 
E)  Debit Fair Value Adjustment - Available-for-Sale (LT) $9,000; Credit Unrealized Gain - Equity $9,000.

Question 17

Investments in equity securities where the investor has a significant,but not controlling influence,are accounted for using the ________ method.

Accepted Answer

The answer of Investments in equity securities where the investor...

Question 18

The price of one currency stated in terms of another currency is called a(n):

Accepted Answer

A)  Foreign exchange rate. 
B)  Currency transaction. 
C)  Historical exchange rate. 
D)  International conversion rate. 
E)  Currency rate. 
A)  Foreign exchange rate. 
B)  Currency transaction. 
C)  Historical exchange rate. 
D)  International conversion rate. 
E)  Currency rate.

Question 19

Canberry Corporation had net income of $80,000,beginning total assets of $640,000 and ending total assets of $580,000.Its return on total assets is:

Accepted Answer

A)  13.1% 
B)  12.5% 
C)  13.8% 
D)  800% 
E)  725% 
A)  13.1% 
B)  12.5% 
C)  13.8% 
D)  800% 
E)  725%

Question 20

Investments in debt and equity securities that the company actively manages and trades for profit are referred to as short-term investments in:

Accepted Answer

A)  Available-for-sale securities. 
B)  Held-to-maturity securities. 
C)  Trading securities. 
D)  Realizable securities. 
E)  Liquid securities. 
A)  Available-for-sale securities. 
B)  Held-to-maturity securities. 
C)  Trading securities. 
D)  Realizable securities. 
E)  Liquid securities.

A controlling influence over the investee is based on the investor owning voting stock exceeding:

Any unrealized gain or loss for the portfolio of available-for-sale securities is reported on the income statement in the other gain or loss section.

An investing company that owns ________ of another (investee)company's voting stock (but not more than 50%)is presumed to have a significant influence over the investee.

securities reflect a creditor relationship while securities reflect an owner relationship.

Washington Corp.held 1,500 of Vashon Company 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 Washington's sale.

Marjam Company owns 51,000 shares of MacKenzie Company's 100,000 outstanding shares of common stock.MacKenzie Company pays $25,000 in total cash dividends to its shareholders.Marjam's entry to record this transaction should include a:

Consolidated financial statements:

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:

If a long-term investment in an equity security gives the investor significant influence over the investee,the investment is classified as available-for-sale.

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

A company paid $37,800 plus a broker's fee of $525 to acquire 8% bonds with a $40,000 maturity value as a long-term investment.The company intends to hold the bonds to maturity.The correct entry to record the purchase of the bond investment is:

Available-for-sale debt securities are:

If the exchange rate for Canadian and U.S.dollars is 0.7382 to 1,this implies that 2 Canadian dollars can be purchased for $1.48 U.S.dollars.

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

Investments in equity securities where the investor has a significant,but not controlling influence,are accounted for using the ________ method.

The price of one currency stated in terms of another currency is called a(n):

Canberry Corporation had net income of $80,000,beginning total assets of $640,000 and ending total assets of $580,000.Its return on total assets is:

Investments in debt and equity securities that the company actively manages and trades for profit are referred to as short-term investments in:

Accounting in Business

Analyzing for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash, fraud, and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Partnership Accounting

Filters

Exam 15: Investments

A controlling influence over the investee is based on the investor owning voting stock exceeding:

Any unrealized gain or loss for the portfolio of available-for-sale securities is reported on the income statement in the other gain or loss section.

An investing company that owns ________ of another (investee)company's voting stock (but not more than 50%)is presumed to have a significant influence over the investee.

________ securities reflect a creditor relationship while ________ securities reflect an owner relationship.

Washington Corp.held 1,500 of Vashon Company 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 Washington's sale.

Marjam Company owns 51,000 shares of MacKenzie Company's 100,000 outstanding shares of common stock.MacKenzie Company pays $25,000 in total cash dividends to its shareholders.Marjam's entry to record this transaction should include a:

Consolidated financial statements:

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:

If a long-term investment in an equity security gives the investor significant influence over the investee,the investment is classified as available-for-sale.

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

A company paid $37,800 plus a broker's fee of $525 to acquire 8% bonds with a $40,000 maturity value as a long-term investment.The company intends to hold the bonds to maturity.The correct entry to record the purchase of the bond investment is:

Available-for-sale debt securities are:

If the exchange rate for Canadian and U.S.dollars is 0.7382 to 1,this implies that 2 Canadian dollars can be purchased for $1.48 U.S.dollars.

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

Investments in equity securities where the investor has a significant,but not controlling influence,are accounted for using the ________ method.

The price of one currency stated in terms of another currency is called a(n):

Canberry Corporation had net income of $80,000,beginning total assets of $640,000 and ending total assets of $580,000.Its return on total assets is:

Investments in debt and equity securities that the company actively manages and trades for profit are referred to as short-term investments in:

Accounting in Business

Analyzing for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash, fraud, and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Time Value of Money

Partnership Accounting

Filters

securities reflect a creditor relationship while securities reflect an owner relationship.