Question 1

The consolidated financial statements carry the name of the parent company and the subsidiary company.

Accepted Answer

A) True 
 B)False

Question 2

Interest is the cost of using money.

Accepted Answer

A) True 
 B)False

Question 3

For a stock dividend, the investor records dividend revenue.

Accepted Answer

A) True 
 B)False

Question 4

A company that owns less than 20% of another company's stock may not use the consolidation method of accounting

Accepted Answer

A) True 
 B)False

Question 5

Under the equity method, the investor applies its percentage of ownership in recording its share of the investee's net income which increases the Investment account.

Accepted Answer

A) True 
 B)False

Question 6

All of the following are necessary to compute the future value of a single amount except the:

Accepted Answer

A)  interest rate. 
B)  number of periods. 
C)  principal. 
D)  maturity value. 
A)  interest rate. 
B)  number of periods. 
C)  principal. 
D)  maturity value.

Question 7

If a company acquires a 40% common stock interest in another company:

Accepted Answer

A)  the equity method is usually applicable. 
B)  all influence is classified as controlling. 
C)  the market value method is usually applicable. 
D)  significant influence over the activities of the investee do not exist. 
A)  the equity method is usually applicable. 
B)  all influence is classified as controlling. 
C)  the market value method is usually applicable. 
D)  significant influence over the activities of the investee do not exist.

Question 8

Stocks and bonds projected to be held for longer than one year are long-term investments.

Accepted Answer

A) True 
 B)False

Question 9

On January 1, 2012, Plymouth Company purchases $100,000, 6% bonds at a price of 90.4 and a maturity date of January 1, 2016. Interest is paid semiannually, on January 1 and July 1. Plymouth Company has a calendar year end. The entry to amortize the bond investment on July 1, 2012 would include a:

Accepted Answer

A)  debit to Cash for $ 200. 
B)  debit to Cash for $1,200. 
C)  debit to Long-Term Investment in Bonds for $ 200. 
D)  debit to Long-Term Investment in Bonds for $1,200. 
A)  debit to Cash for $ 200. 
B)  debit to Cash for $1,200. 
C)  debit to Long-Term Investment in Bonds for $ 200. 
D)  debit to Long-Term Investment in Bonds for $1,200.

The consolidated financial statements carry the name of the parent company and the subsidiary company.

Interest is the cost of using money.

For a stock dividend, the investor records dividend revenue.

A company that owns less than 20% of another company's stock may not use the consolidation method of accounting

Under the equity method, the investor applies its percentage of ownership in recording its share of the investee's net income which increases the Investment account.

All of the following are necessary to compute the future value of a single amount except the:

If a company acquires a 40% common stock interest in another company:

Stocks and bonds projected to be held for longer than one year are long-term investments.

On January 1, 2012, Plymouth Company purchases $100,000, 6% bonds at a price of 90.4 and a maturity date of January 1, 2016. Interest is paid semiannually, on January 1 and July 1. Plymouth Company has a calendar year end. The entry to amortize the bond investment on July 1, 2012 would include a:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Liabilities

Stockholders Equity

The Income Statement, the Statement of Comprehensive Income, the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 8: Long-Term Investments the Time Value of Money

The consolidated financial statements carry the name of the parent company and the subsidiary company.

Interest is the cost of using money.

For a stock dividend, the investor records dividend revenue.

A company that owns less than 20% of another company's stock may not use the consolidation method of accounting

Under the equity method, the investor applies its percentage of ownership in recording its share of the investee's net income which increases the Investment account.

All of the following are necessary to compute the future value of a single amount except the:

If a company acquires a 40% common stock interest in another company:

Stocks and bonds projected to be held for longer than one year are long-term investments.

On January 1, 2012, Plymouth Company purchases $100,000, 6% bonds at a price of 90.4 and a maturity date of January 1, 2016. Interest is paid semiannually, on January 1 and July 1. Plymouth Company has a calendar year end. The entry to amortize the bond investment on July 1, 2012 would include a:

The Financial Statements

Transaction Analysis

Accrual Accounting Income

Internal Control Cash

Short-Term Investments Receivables

Inventory Cost of Goods Sold

Plant Assets, Natural Resources, Intangibles

Liabilities

Stockholders Equity

The Income Statement, the Statement of Comprehensive Income, the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Filters