Matching
Match each of the definitions that follow with the appropriate investment term.
Premises:
debt and equity securities purchased and sold to earn short-term profits from changes in the market price
preferred and common stock that represent ownership in a company and do not have a fixed maturity date
the method of reporting an investment that represents less than 20% of the outstanding stock of another company
when using this, dividends are treated as a reduction of the investment
notes and bonds that pay interest and have a fixed maturity
debt investments that a company intends to keep until their maturity date
securities not held for trading or to maturity or other strategic reasons
the company investing in another company’s stock
what occurs when a company purchases 50% or more of another company’s stock
the company whose stock is purchased by another entity
Responses:
debt securities
equity securities
investor
investee
fair value method
trading securities
available-for-sale securities
held-to-maturity securities
equity method
business combination
Correct Answer:
Premises:
Responses:
debt and equity securities purchased and sold to earn short-term profits from changes in the market price
preferred and common stock that represent ownership in a company and do not have a fixed maturity date
the method of reporting an investment that represents less than 20% of the outstanding stock of another company
when using this, dividends are treated as a reduction of the investment
notes and bonds that pay interest and have a fixed maturity
debt investments that a company intends to keep until their maturity date
securities not held for trading or to maturity or other strategic reasons
the company investing in another company’s stock
what occurs when a company purchases 50% or more of another company’s stock
the company whose stock is purchased by another entity
Premises:
debt and equity securities purchased and sold to earn short-term profits from changes in the market price
preferred and common stock that represent ownership in a company and do not have a fixed maturity date
the method of reporting an investment that represents less than 20% of the outstanding stock of another company
when using this, dividends are treated as a reduction of the investment
notes and bonds that pay interest and have a fixed maturity
debt investments that a company intends to keep until their maturity date
securities not held for trading or to maturity or other strategic reasons
the company investing in another company’s stock
what occurs when a company purchases 50% or more of another company’s stock
the company whose stock is purchased by another entity
Responses:
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