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Match the Following Terms with the Appropriate Definitions

Question 96

Matching

Match the following terms with the appropriate definitions:

Premises:

Responses:

Consolidated financial statements

A corporation controlled by another company when the parent owns more than 50% of the subsidiary's voting stock.

Equity method

Debt securities that a company intends and is able to hold until maturity.

Subsidiary

Debt and equity securities that a company intends to actively manage and trade for profit.

Available-for-sale securities

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.

Return on total assets

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.

Parent company

A change in market value that is not yet realized through an actual sale.

Held-to-maturity securities

Debt and equity securities not classified as trading or held-to-maturity.

Unrealized gain or loss

A company that owns a more than 50% controlling interest in a subsidiary.

Trading securities

A measure of operating efficiency, computed as net income divided by average total assets.

Long-term investments

An accounting method for long-term investments in equity when the investor has significant influence over the investee.