Question 1

For available-for-sale equity securities,the Unrealized Loss on Long-Term Investments account should be reported as a(n)

Accepted Answer

A) realized loss item on the income statement. 
B) prior period adjustment. 
C) contra-asset on the balance sheet. 
D) other comprehensive income (loss). 
A) realized loss item on the income statement. 
B) prior period adjustment. 
C) contra-asset on the balance sheet. 
D) other comprehensive income (loss).

Question 2

Held-to-maturity securities are valued on the balance sheet at

Accepted Answer

A) original cost. 
B) fair value. 
C) maturity value. 
D) cost adjusted for the effects of interest. 
A) original cost. 
B) fair value. 
C) maturity value. 
D) cost adjusted for the effects of interest.

Question 3

Using the cost-adjusted-to-market method of accounting for a long-term investment in stock,the journal entry to record the receipt of dividends involves a debit to Dividend Income.

Accepted Answer

A) True 
 B)False

Question 4

For available-for-sale equity securities,the Allowance to Adjust Long-Term Investments to Market account should be reported as a(n)

Accepted Answer

A) realized loss item on the income statement. 
B) prior period adjustment. 
C) contra-asset on the balance sheet. 
D) other comprehensive income (loss) 
A) realized loss item on the income statement. 
B) prior period adjustment. 
C) contra-asset on the balance sheet. 
D) other comprehensive income (loss)

Question 5

The equity method generally should be used to account for an investment in stock when the level of ownership is

Accepted Answer

A) between 20 and 50 percent. 
B) 10 percent or more. 
C) less than 20 percent. 
D) between 10 and 40 percent. 
A) between 20 and 50 percent. 
B) 10 percent or more. 
C) less than 20 percent. 
D) between 10 and 40 percent.

Question 6

As long as an investment can be sold within a short period of time,it must be classified as a current asset.

Accepted Answer

A) True 
 B)False

Question 7

All of the following are ways one corporation could affect the operating and financial policies of another corporation except

Accepted Answer

A) analysis of data regarding profitability. 
B) material transactions between the companies. 
C) representation on the board of directors. 
D) exchange of managerial personnel. 
A) analysis of data regarding profitability. 
B) material transactions between the companies. 
C) representation on the board of directors. 
D) exchange of managerial personnel.

Question 8

Company A purchases U.S.Treasury bills for $23,700.This investment will be held to maturity.The bills will mature in 90 days at $24,000.The entry to record the initial investment will include a

Accepted Answer

A) credit to Short-Term Investments for $23,700. 
B) debit to Short-Term Investments for $23,700. 
C) debit to Short-Term Investments for $24,000. 
D) credit to Interest Receivable for $300. 
A) credit to Short-Term Investments for $23,700. 
B) debit to Short-Term Investments for $23,700. 
C) debit to Short-Term Investments for $24,000. 
D) credit to Interest Receivable for $300.

Question 9

At year-end,a company's trading portfolio appears as follows:   The adjusting entry will include

Accepted Answer

A) a debit to Allowance to Adjust Short-Term Investments to Market of $50. 
B) a credit to Allowance to Adjust Short-Term Investments to Market of $50. 
C) a debit to Unrealized Loss on Short-Term Investments of $100. 
D) none of these,since no adjusting entry is necessary. 
A) a debit to Allowance to Adjust Short-Term Investments to Market of $50. 
B) a credit to Allowance to Adjust Short-Term Investments to Market of $50. 
C) a debit to Unrealized Loss on Short-Term Investments of $100. 
D) none of these,since no adjusting entry is necessary.

Question 10

Another term for short-term investments is marketable securities.

Accepted Answer

A) True 
 B)False

Question 11

Foltz Corporation purchased 3,000 shares of Craver Corporation common stock for $160 per share on January 1,2013,as a long-term investment.Craver reported net income of $140,000 and $180,000 for 2013 and 2014,respectively,and paid dividends of $50,000 and $60,000 during 2013 and 2014,respectively.Craver has a total of 10,000 shares outstanding.Compute the following amounts:
a.Investment income recognized by Foltz Corporation during 2013
b.Balance of Investment in Craver Corporation account at end of 2013
c.Amount of investment income recognized by Foltz Corporation during 2014
d.Balance of Investment in Craver Corporation account at end of 2014

Accepted Answer

a.$42,000 (140,000 ´ 0.3)
b.$5

Question 12

Use this information to answer the following question.These facts concern the long-term stock investments of DeBord Corporation:   
-The entry to adjust the Allowance to Adjust Long-Term Investments to Market in 2015 is:

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

For available-for-sale equity securities,the Unrealized Loss on Long-Term Investments account should be reported as a(n)

Held-to-maturity securities are valued on the balance sheet at

Using the cost-adjusted-to-market method of accounting for a long-term investment in stock,the journal entry to record the receipt of dividends involves a debit to Dividend Income.

For available-for-sale equity securities,the Allowance to Adjust Long-Term Investments to Market account should be reported as a(n)

The equity method generally should be used to account for an investment in stock when the level of ownership is

As long as an investment can be sold within a short period of time,it must be classified as a current asset.

All of the following are ways one corporation could affect the operating and financial policies of another corporation except

Company A purchases U.S.Treasury bills for $23,700.This investment will be held to maturity.The bills will mature in 90 days at $24,000.The entry to record the initial investment will include a

At year-end,a company's trading portfolio appears as follows: The adjusting entry will include

Another term for short-term investments is marketable securities.

Use this information to answer the following question.These facts concern the long-term stock investments of DeBord Corporation: -The entry to adjust the Allowance to Adjust Long-Term Investments to Market in 2015 is:

Uses of Accounting Information and the Financial Statements

Measurement Concepts: Recording Business Transactions

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Filters

Exam 28: Accounting for Investments

For available-for-sale equity securities,the Unrealized Loss on Long-Term Investments account should be reported as a(n)

Held-to-maturity securities are valued on the balance sheet at

Using the cost-adjusted-to-market method of accounting for a long-term investment in stock,the journal entry to record the receipt of dividends involves a debit to Dividend Income.

For available-for-sale equity securities,the Allowance to Adjust Long-Term Investments to Market account should be reported as a(n)

The equity method generally should be used to account for an investment in stock when the level of ownership is

As long as an investment can be sold within a short period of time,it must be classified as a current asset.

All of the following are ways one corporation could affect the operating and financial policies of another corporation except

Company A purchases U.S.Treasury bills for $23,700.This investment will be held to maturity.The bills will mature in 90 days at $24,000.The entry to record the initial investment will include a

At year-end,a company's trading portfolio appears as follows: The adjusting entry will include

Another term for short-term investments is marketable securities.

Use this information to answer the following question.These facts concern the long-term stock investments of DeBord Corporation: -The entry to adjust the Allowance to Adjust Long-Term Investments to Market in 2015 is:

Uses of Accounting Information and the Financial Statements

Measurement Concepts: Recording Business Transactions

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Job Order Costing

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Filters