Question 1

Which of the following accounting problems does not involve a present value calculation?

Accepted Answer

A) The determination of the market price of a bond. 
B) The determination of the declining-balance depreciation expense. 
C) The determination of the amount to report for long-term notes payable. 
D) The determination of the amount to report for lease liability. 
A) The determination of the market price of a bond. 
B) The determination of the declining-balance depreciation expense. 
C) The determination of the amount to report for long-term notes payable. 
D) The determination of the amount to report for lease liability.

Question 2

Some companies attempt to generate investement income through speculative investements.

Accepted Answer

A) True 
 B)False

Question 3

Present value is based on

Accepted Answer

A) the dollar amount to be received. 
B) the length of time until the amount is received. 
C) the interest rate. 
D) All of these answers are correct. 
A) the dollar amount to be received. 
B) the length of time until the amount is received. 
C) the interest rate. 
D) All of these answers are correct.

Question 4

Pension funds and mutual funds are corporations that regularly invest for strategic reasons.

Accepted Answer

A) True 
 B)False

Question 5

Trading securities are valued on the balance sheet at market value.

Accepted Answer

A) True 
 B)False

Question 6

On January 1, 2022, Valentine Corporation purchased 25% of the common stock outstanding of Betz Corporation for $200,000.During 2022, Betz Corporation reported net income of $80,000 and paid cash dividends of $48,000.The balance of the Stock Investments-Betz account on the books of Valentine Corporation at December 31, 2022, is

Accepted Answer

A) $200,000. 
B) $208,000. 
C) $220,000. 
D) $192,000. 
A) $200,000. 
B) $208,000. 
C) $220,000. 
D) $192,000.

Question 7

Which of the following is not a true statement about the accounting for long-term debt investments?

Accepted Answer

A) The investment is initially recorded at cost. 
B) The cost includes any brokerage fees. 
C) Debt investments include investment in government and corporation bonds. 
D) The cost includes any accrued interest. 
A) The investment is initially recorded at cost. 
B) The cost includes any brokerage fees. 
C) Debt investments include investment in government and corporation bonds. 
D) The cost includes any accrued interest.

Question 8

Hardin Park Company had these transactions pertaining to stock investments Feb.1 Purchased 5,000 shares of Raley Company (10%) for $89,000 cash.
June 1 Received cash dividends of $1 per share on Raley stock.
Oct)1 Sold 2,000 shares of Raley stock for $39,000.
Dec)1 Received cash dividends of $2 per share on Raley stock.
The entry to record the sale of the stock would include a

Accepted Answer

A) debit to Cash for $35,600. 
B) credit to Gain on Sale of Stock Investments for $1,360. 
C) debit to Stock Investment for $35,600. 
D) credit to Gain on Sale of Stock Investments of $3,400. 
A) debit to Cash for $35,600. 
B) credit to Gain on Sale of Stock Investments for $1,360. 
C) debit to Stock Investment for $35,600. 
D) credit to Gain on Sale of Stock Investments of $3,400.

Question 9

Hardin Park Company had these transactions pertaining to stock investments Feb.1 Purchased 5,000 shares of Raley Company (10%) for $89,000 cash.
June 1 Received cash dividends of $1 per share on Raley stock.
Oct)1 Sold 2,000 shares of Raley stock for $39,000.
Dec)1 Received cash dividends of $2 per share on Raley stock.
The entry to record the receipt of the dividends June 1 would include a

Accepted Answer

A) debit to Stock Investments of $5,000. 
B) credit to Dividend Revenue of $5,000. 
C) debit to Dividend Revenue of $5,000. 
D) credit to the Stock Investments of $5,000. 
A) debit to Stock Investments of $5,000. 
B) credit to Dividend Revenue of $5,000. 
C) debit to Dividend Revenue of $5,000. 
D) credit to the Stock Investments of $5,000.

Which of the following accounting problems does not involve a present value calculation?

Some companies attempt to generate investement income through speculative investements.

Present value is based on

Pension funds and mutual funds are corporations that regularly invest for strategic reasons.

Trading securities are valued on the balance sheet at market value.

Which of the following is not a true statement about the accounting for long-term debt investments?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Filters

Exam 14: Understanding Investments in Debt and Equity Securities

Which of the following accounting problems does not involve a present value calculation?

Some companies attempt to generate investement income through speculative investements.

Present value is based on

Pension funds and mutual funds are corporations that regularly invest for strategic reasons.

Trading securities are valued on the balance sheet at market value.

Which of the following is not a true statement about the accounting for long-term debt investments?

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Merchandising Operations and the Multiple-Step Income Statement

Reporting and Analyzing Inventory

Fraud, Internal Control, and Cash

Reporting and Analyzing Receivables

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities

Reporting and Analyzing Stockholders Equity

Statement of Cash Flows

Financial Analysis: The Big Picture

Filters