Question 1

What are the effects on the accounting equation from the recognition of an unrealized loss on trading securities?

Accepted Answer

A) Assets and stockholders' equity decrease. 
B) No effects; unrealized gains and losses should not be recorded. 
C) Assets and liabilities decrease. 
D) Stockholders' equity decreases and liabilities increase. 
A) Assets and stockholders' equity decrease. 
B) No effects; unrealized gains and losses should not be recorded. 
C) Assets and liabilities decrease. 
D) Stockholders' equity decreases and liabilities increase.

Question 2

An investor expects to receive payments of $3,000 every 6 months for the next 7 years. If the market rate of interest is 4% per year compounded semi-annually, what is the future value of these payments?

Accepted Answer

A) $22,302.84 
B) $23,694.87 
C) $47,921.82 
D) $54,875.73 
A) $22,302.84 
B) $23,694.87 
C) $47,921.82 
D) $54,875.73

Question 3

Mark would like to retire in 25 years. If he deposits $10,000 at the end of each of the next 25 years into an account earning 7% interest, how much will he have in this account at the end of 25 years?

Accepted Answer

A) $250,000 
B) $758,292.17 
C) $632,490.40 
D) $291,339.50 
A) $250,000 
B) $758,292.17 
C) $632,490.40 
D) $291,339.50

Question 4

The Allowance to Adjust Trading Securities to Market account is

Accepted Answer

A) an asset account. 
B) a contra asset account. 
C) a liability account. 
D) an unrealized gain or loss account. 
A) an asset account. 
B) a contra asset account. 
C) a liability account. 
D) an unrealized gain or loss account.

Question 5

Match the following terms to their correct definition:
-Method of accounting required for all passive investments in which the investment is valued at the price for which the investor could sell the asset in an orderly transaction between market participants

Accepted Answer

A) equity security 
B) debt security 
C) passive 
D) significant influence 
E) control
F)parent
G)subsidiary
H)trading securities
I)available-for-sale securities
J)held-to-maturity securities
K)amortized cost method
L)fair value method
M)unrealized gains and losses
N)equity method
O)consolidation worksheet
P)minority interest
Q)business combination
R)goodwill 
A) equity security 
B) debt security 
C) passive 
D) significant influence 
E) control
F)parent
G)subsidiary
H)trading securities
I)available-for-sale securities
J)held-to-maturity securities
K)amortized cost method
L)fair value method
M)unrealized gains and losses
N)equity method
O)consolidation worksheet
P)minority interest
Q)business combination
R)goodwill

Question 6

Match the following terms to their correct definition:
-Method of accounting for investments where the investor possesses significant influence (20% to 50% common stock ownership) over the operating and financial policies of the investee

Accepted Answer

A) equity security 
B) debt security 
C) passive 
D) significant influence 
E) control
F)parent
G)subsidiary
H)trading securities
I)available-for-sale securities
J)held-to-maturity securities
K)amortized cost method
L)fair value method
M)unrealized gains and losses
N)equity method
O)consolidation worksheet
P)minority interest
Q)business combination
R)goodwill 
A) equity security 
B) debt security 
C) passive 
D) significant influence 
E) control
F)parent
G)subsidiary
H)trading securities
I)available-for-sale securities
J)held-to-maturity securities
K)amortized cost method
L)fair value method
M)unrealized gains and losses
N)equity method
O)consolidation worksheet
P)minority interest
Q)business combination
R)goodwill

Question 7

You just won the lottery and have elected to receive 10 annual payments instead of the lump sum of $74,818.59. Calculate the amount of your annual payment assuming a 6% interest rate.

Accepted Answer

A) $17,178.90 
B) $10,165.44 
C) $18,000.00 
D) $10,832.11 
A) $17,178.90 
B) $10,165.44 
C) $18,000.00 
D) $10,832.11

Question 8

Eric is considering buying a car. He can either purchase the car outright or make 5 annual payments of $10,000 at the end of each year. If the interest rate is 7%, how much is the outright purchase price?

Accepted Answer

A) $14,025.50 
B) $7,129.90 
C) $41,002.00 
D) $57,863.70 
A) $14,025.50 
B) $7,129.90 
C) $41,002.00 
D) $57,863.70

Question 9

The Future Value is the amount to which an account may grow when interest is compounded.

Accepted Answer

A) True 
 B)False

Question 10

Any transaction or set of transactions that brings together two or more previously separate entities to form a single accounting entity is called a business combination.

Accepted Answer

A) True 
 B)False

Question 11

The _______________ treats the present value as a liability that will be paid through a series of equal payments.

Accepted Answer

The answer of The _______________ treats the present value as...

Question 12

A transaction that brings together two or more previously separate entities to form a single legal entity is called

Accepted Answer

A) stock acquisition. 
B) debt acquisition. 
C) asset acquisition. 
D) business acquisition. 
A) stock acquisition. 
B) debt acquisition. 
C) asset acquisition. 
D) business acquisition.

Question 13

If the investor owns over 50% of the outstanding common stock, the investor is deemed to have control over the operating and financial policies of the investee.

Accepted Answer

A) True 
 B)False

Question 14

____________________ securities are equity or debt investments that are bought and sold frequently and are typically owned for less than one month.

Accepted Answer

The answer of ____________________ securities are equity or debt investments...

Question 15

Match the following terms to their correct definition:
-Debt investments that management intends to hold until the debt contract requires the borrower to repay the debt in its entirety

Accepted Answer

A) equity security 
B) debt security 
C) passive 
D) significant influence 
E) control
F)parent
G)subsidiary
H)trading securities
I)available-for-sale securities
J)held-to-maturity securities
K)amortized cost method
L)fair value method
M)unrealized gains and losses
N)equity method
O)consolidation worksheet
P)minority interest
Q)business combination
R)goodwill 
A) equity security 
B) debt security 
C) passive 
D) significant influence 
E) control
F)parent
G)subsidiary
H)trading securities
I)available-for-sale securities
J)held-to-maturity securities
K)amortized cost method
L)fair value method
M)unrealized gains and losses
N)equity method
O)consolidation worksheet
P)minority interest
Q)business combination
R)goodwill

Question 16

In transactions involving the borrowing or lending of money, as interest is paid, the balance in the liability account of the borrower

Accepted Answer

A) decreases. 
B) increases. 
C) remains unchanged. 
D) is transferred to interest income 
A) decreases. 
B) increases. 
C) remains unchanged. 
D) is transferred to interest income

Question 17

The equity method of accounting is used if the investor owns between 20-50% of another company and the investor is able to exert influence over the other company.

Accepted Answer

A) True 
 B)False

Question 18

When a contract establishes a relationship between an amount borrowed and one or more future cash flows, the initial amount is known as

Accepted Answer

A) future value. 
B) present value. 
C) an annuity. 
D) interest rate. 
A) future value. 
B) present value. 
C) an annuity. 
D) interest rate.

Question 19

Tom is saving for an engagement ring. If he deposits $500 payments into an account (one at the end of each year) that earns 6% interest compounded annually, how much will he have saved by the end of the 10th year?

Accepted Answer

A) $895.42 
B) $13,435.18 
C) $6,590.39 
D) $6,554.39 
A) $895.42 
B) $13,435.18 
C) $6,590.39 
D) $6,554.39

Question 20

Match the following terms to their correct definition:
-Equity and debt investments that management intends to sell in the future, but not necessarily in the near term

Accepted Answer

A) equity security 
B) debt security 
C) passive 
D) significant influence 
E) control
F)parent
G)subsidiary
H)trading securities
I)available-for-sale securities
J)held-to-maturity securities
K)amortized cost method
L)fair value method
M)unrealized gains and losses
N)equity method
O)consolidation worksheet
P)minority interest
Q)business combination
R)goodwill 
A) equity security 
B) debt security 
C) passive 
D) significant influence 
E) control
F)parent
G)subsidiary
H)trading securities
I)available-for-sale securities
J)held-to-maturity securities
K)amortized cost method
L)fair value method
M)unrealized gains and losses
N)equity method
O)consolidation worksheet
P)minority interest
Q)business combination
R)goodwill

What are the effects on the accounting equation from the recognition of an unrealized loss on trading securities?

An investor expects to receive payments of $3,000 every 6 months for the next 7 years. If the market rate of interest is 4% per year compounded semi-annually, what is the future value of these payments?

Mark would like to retire in 25 years. If he deposits $10,000 at the end of each of the next 25 years into an account earning 7% interest, how much will he have in this account at the end of 25 years?

The Allowance to Adjust Trading Securities to Market account is

Match the following terms to their correct definition: -Method of accounting required for all passive investments in which the investment is valued at the price for which the investor could sell the asset in an orderly transaction between market participants

Match the following terms to their correct definition: -Method of accounting for investments where the investor possesses significant influence (20% to 50% common stock ownership) over the operating and financial policies of the investee

You just won the lottery and have elected to receive 10 annual payments instead of the lump sum of $74,818.59. Calculate the amount of your annual payment assuming a 6% interest rate.

Eric is considering buying a car. He can either purchase the car outright or make 5 annual payments of $10,000 at the end of each year. If the interest rate is 7%, how much is the outright purchase price?

The Future Value is the amount to which an account may grow when interest is compounded.

Any transaction or set of transactions that brings together two or more previously separate entities to form a single accounting entity is called a business combination.

The _______________ treats the present value as a liability that will be paid through a series of equal payments.

A transaction that brings together two or more previously separate entities to form a single legal entity is called

If the investor owns over 50% of the outstanding common stock, the investor is deemed to have control over the operating and financial policies of the investee.

____________________ securities are equity or debt investments that are bought and sold frequently and are typically owned for less than one month.

Match the following terms to their correct definition: -Debt investments that management intends to hold until the debt contract requires the borrower to repay the debt in its entirety

In transactions involving the borrowing or lending of money, as interest is paid, the balance in the liability account of the borrower

The equity method of accounting is used if the investor owns between 20-50% of another company and the investor is able to exert influence over the other company.

When a contract establishes a relationship between an amount borrowed and one or more future cash flows, the initial amount is known as

Tom is saving for an engagement ring. If he deposits $500 payments into an account (one at the end of each year) that earns 6% interest compounded annually, how much will he have saved by the end of the 10^th year?

Match the following terms to their correct definition: -Equity and debt investments that management intends to sell in the future, but not necessarily in the near term

Accounting and The Financial Statements

The Accounting Information System

Accrual Accounting

Internal Control And Cash

Sales And Receivables

Cost Of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long Term Liabilities

Stockholders Apos Equity

The Statement Of Cash Flows

Financial Statement Analysis

Filters

Exam 13: Finance and Stock Market Equilibrium

What are the effects on the accounting equation from the recognition of an unrealized loss on trading securities?

An investor expects to receive payments of $3,000 every 6 months for the next 7 years. If the market rate of interest is 4% per year compounded semi-annually, what is the future value of these payments?

Mark would like to retire in 25 years. If he deposits $10,000 at the end of each of the next 25 years into an account earning 7% interest, how much will he have in this account at the end of 25 years?

The Allowance to Adjust Trading Securities to Market account is

Match the following terms to their correct definition: -Method of accounting required for all passive investments in which the investment is valued at the price for which the investor could sell the asset in an orderly transaction between market participants

Match the following terms to their correct definition: -Method of accounting for investments where the investor possesses significant influence (20% to 50% common stock ownership) over the operating and financial policies of the investee

You just won the lottery and have elected to receive 10 annual payments instead of the lump sum of $74,818.59. Calculate the amount of your annual payment assuming a 6% interest rate.

Eric is considering buying a car. He can either purchase the car outright or make 5 annual payments of $10,000 at the end of each year. If the interest rate is 7%, how much is the outright purchase price?

The Future Value is the amount to which an account may grow when interest is compounded.

Any transaction or set of transactions that brings together two or more previously separate entities to form a single accounting entity is called a business combination.

The _______________ treats the present value as a liability that will be paid through a series of equal payments.

A transaction that brings together two or more previously separate entities to form a single legal entity is called

If the investor owns over 50% of the outstanding common stock, the investor is deemed to have control over the operating and financial policies of the investee.

____________________ securities are equity or debt investments that are bought and sold frequently and are typically owned for less than one month.

Match the following terms to their correct definition: -Debt investments that management intends to hold until the debt contract requires the borrower to repay the debt in its entirety

In transactions involving the borrowing or lending of money, as interest is paid, the balance in the liability account of the borrower

The equity method of accounting is used if the investor owns between 20-50% of another company and the investor is able to exert influence over the other company.

When a contract establishes a relationship between an amount borrowed and one or more future cash flows, the initial amount is known as

Tom is saving for an engagement ring. If he deposits $500 payments into an account (one at the end of each year) that earns 6% interest compounded annually, how much will he have saved by the end of the 10th year?

Match the following terms to their correct definition: -Equity and debt investments that management intends to sell in the future, but not necessarily in the near term

Accounting and The Financial Statements

The Accounting Information System

Accrual Accounting

Internal Control And Cash

Sales And Receivables

Cost Of Goods Sold and Inventory

Operating Assets

Current and Contingent Liabilities

Long Term Liabilities

Stockholders Apos Equity

The Statement Of Cash Flows

Financial Statement Analysis

Filters

Tom is saving for an engagement ring. If he deposits $500 payments into an account (one at the end of each year) that earns 6% interest compounded annually, how much will he have saved by the end of the 10^th year?