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Match the Following Definitions to Their Terms

Question 83

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Match the following definitions to their terms

Premises:
A corporation controlled by another company when the parent owns more than 50% of the subsidiary's voting stock.
A company that owns a more than 50% controlling interest in a subsidiary.
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.
An accounting method for long-term investments in equity when the investor has significant influence over the investee.
Debt and equity securities not classified as trading or held-to-maturity.
Debt and equity securities that a company intends to actively manage and trade for profit.
A change in market value that is not yet realized through an actual sale.
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.
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.
Responses:
Long-term investments
Subsidiary
Unrealized gain or loss
Consolidated financial statements
Parent company
Available-for-sale securities
Held-to-maturity securities
Trading securities
Return on total assets
Equity method

Correct Answer:

A corporation controlled by another company when the parent owns more than 50% of the subsidiary's voting stock.
A company that owns a more than 50% controlling interest in a subsidiary.
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.
An accounting method for long-term investments in equity when the investor has significant influence over the investee.
Debt and equity securities not classified as trading or held-to-maturity.
Debt and equity securities that a company intends to actively manage and trade for profit.
A change in market value that is not yet realized through an actual sale.
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.
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.
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