Question 1

_________________________ securities reflect a creditor relationship while ____________________ securities reflect an owner relationship.

Accepted Answer

answers m

Question 2

All of the following statements regarding accounting for noninfluential securities under U.S.GAAP and IFRS are true except:

Accepted Answer

A) Trading securities are accounted for using fair values with unrealized gains and losses reported in other comprehensive income. 
B) Trading securities are accounted for using fair values with unrealized gains and losses reported in net income. 
C) Available-for-sale securities are accounted for using fair values with unrealized gains and losses reported in other comprehensive income. 
D) Held-to-maturity securities are accounted for using amortized cost. 
E) Both systems examine held-to-maturity securities for impairment. 
A) Trading securities are accounted for using fair values with unrealized gains and losses reported in other comprehensive income. 
B) Trading securities are accounted for using fair values with unrealized gains and losses reported in net income. 
C) Available-for-sale securities are accounted for using fair values with unrealized gains and losses reported in other comprehensive income. 
D) Held-to-maturity securities are accounted for using amortized cost. 
E) Both systems examine held-to-maturity securities for impairment.

Question 3

A decrease in the fair value of a security that has not yet been realized through an actual sale of the security is called a(n):

Accepted Answer

A) Contingent loss. 
B) Realizable loss. 
C) Unrealized loss. 
D) Capitalized loss. 
E) Market loss. 
A) Contingent loss. 
B) Realizable loss. 
C) Unrealized loss. 
D) Capitalized loss. 
E) Market loss.

Question 4

Investments in trading securities:

Accepted Answer

A) Include only equity securities. 
B) Are reported as current assets. 
C) Include only debt securities. 
D) Are reported at their cost, no matter what their market value. 
E) Are long-term investments. 
A) Include only equity securities. 
B) Are reported as current assets. 
C) Include only debt securities. 
D) Are reported at their cost, no matter what their market value. 
E) Are long-term investments.

Question 5

Available-for-sale equity securities:

Accepted Answer

A) Are recorded at cost when acquired. 
B) May earn dividends that are reported in that year's income statement. 
C) May be classified as either short-term or long-term securities. 
D) Are reported at market value on the balance sheet. 
E) All of the choices describe available-for-sale equity securities. 
A) Are recorded at cost when acquired. 
B) May earn dividends that are reported in that year's income statement. 
C) May be classified as either short-term or long-term securities. 
D) Are reported at market value on the balance sheet. 
E) All of the choices describe available-for-sale equity securities.

Question 6

Long-term investments in available-for-sale securities are reported at fair value on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 7

On February 15,Seacroft buys 7,000 shares of Kebo common stock at $28.53 per share plus a brokerage fee of $400.The stock is classified as available-for-sale securities.On March 15,Kebo declares a dividend of $1.15 per share payable to stockholders of record on April 15.Seacroft received the dividend on April 15 and ultimately sells half of the Kebo stock on November 17 of the current year for $29.30 per share less a brokerage fee of $250.The journal entry to record the sale of the stock on November 17 is:

Accepted Answer

A) Debit Cash $102,300; credit Long-Term Investments-AFS $99,855; credit Gain on Sale of Long-Term Investments $2,445. 
B) Debit Cash $102,550; credit Long-Term Investments-Trading $99,855; debit Gain on Sale of Long-Term Investments $2,645. 
C) Debit Cash $102,550; credit Long-Term Investments-AFS $100,055; credit Gain on Sale of Long-Term Investments $2,495. 
D) Debit Cash $102,300; credit Long-Term Investments-AFS $100,055; credit Gain on Sale of Long-Term Investments $2,245. 
E) Debit Cash $102,550; credit Long-Term Investments-Trading $99,855; credit Gain on Sale of Long-Term Investments $2,645. 
A) Debit Cash $102,300; credit Long-Term Investments-AFS $99,855; credit Gain on Sale of Long-Term Investments $2,445. 
B) Debit Cash $102,550; credit Long-Term Investments-Trading $99,855; debit Gain on Sale of Long-Term Investments $2,645. 
C) Debit Cash $102,550; credit Long-Term Investments-AFS $100,055; credit Gain on Sale of Long-Term Investments $2,495. 
D) Debit Cash $102,300; credit Long-Term Investments-AFS $100,055; credit Gain on Sale of Long-Term Investments $2,245. 
E) Debit Cash $102,550; credit Long-Term Investments-Trading $99,855; credit Gain on Sale of Long-Term Investments $2,645.

Question 8

A company had net income of $43,000,net sales of $380,500,and average total assets of $220,000.Its profit margin and total asset turnover were,respectively:

Accepted Answer

A) 11.3%; 1.73. 
B) 11.3%; 19.5. 
C) 1.7%; 19.5. 
D) 1.7%; 11.3. 
E) 19.5%; 11.3. 
A) 11.3%; 1.73. 
B) 11.3%; 19.5. 
C) 1.7%; 19.5. 
D) 1.7%; 11.3. 
E) 19.5%; 11.3.

Question 9

Breanna Boutique purchased on credit £50,000 worth of clothing from a British company when the exchange rate was $1.97 per British pound.At the year-end balance sheet date the exchange rate increased to $2.76.Breanna Boutique must record a:

Accepted Answer

A) gain of $39,500. 
B) loss of $39,500. 
C) gain of $138,000. 
D) loss of $138,000. 
E) neither a gain nor loss. 
A) gain of $39,500. 
B) loss of $39,500. 
C) gain of $138,000. 
D) loss of $138,000. 
E) neither a gain nor loss.

Question 10

Return on total assets is computed by dividing ___________ by __________.

Accepted Answer

answers m

Question 11

Investments in trading securities are accounted for using the equity method with consolidation.

Accepted Answer

A) True 
 B)False

Question 12

Long-term investments include investments in land or other assets not used in a company's operations.

Accepted Answer

A) True 
 B)False

Question 13

Consolidated statements are prepared as if a company is organized as one entity,with the amounts allocated for subsidiaries reported in the investment accounts.

Accepted Answer

A) True 
 B)False

Question 14

Long-term investments are usually held as an investment of cash for use in current operations.

Accepted Answer

A) True 
 B)False

Question 15

A U.S.Company's credit sale to an international customer allowing payment to be made in a foreign currency requires using the same exchange rate for the date of sale and the cash payment date.

Accepted Answer

A) True 
 B)False

_____ securities reflect a creditor relationship while securities reflect an owner relationship.

All of the following statements regarding accounting for noninfluential securities under U.S.GAAP and IFRS are true except:

A decrease in the fair value of a security that has not yet been realized through an actual sale of the security is called a(n):

Investments in trading securities:

Available-for-sale equity securities:

Long-term investments in available-for-sale securities are reported at fair value on the balance sheet.

A company had net income of $43,000,net sales of $380,500,and average total assets of $220,000.Its profit margin and total asset turnover were,respectively:

Breanna Boutique purchased on credit £50,000 worth of clothing from a British company when the exchange rate was $1.97 per British pound.At the year-end balance sheet date the exchange rate increased to $2.76.Breanna Boutique must record a:

Return on total assets is computed by dividing _ by .

Investments in trading securities are accounted for using the equity method with consolidation.

Long-term investments include investments in land or other assets not used in a company's operations.

Consolidated statements are prepared as if a company is organized as one entity,with the amounts allocated for subsidiaries reported in the investment accounts.

Long-term investments are usually held as an investment of cash for use in current operations.

A U.S.Company's credit sale to an international customer allowing payment to be made in a foreign currency requires using the same exchange rate for the date of sale and the cash payment date.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

Filters

Exam 15: Investments and International Operations

_________________________ securities reflect a creditor relationship while ____________________ securities reflect an owner relationship.

All of the following statements regarding accounting for noninfluential securities under U.S.GAAP and IFRS are true except:

A decrease in the fair value of a security that has not yet been realized through an actual sale of the security is called a(n):

Investments in trading securities:

Available-for-sale equity securities:

Long-term investments in available-for-sale securities are reported at fair value on the balance sheet.

A company had net income of $43,000,net sales of $380,500,and average total assets of $220,000.Its profit margin and total asset turnover were,respectively:

Breanna Boutique purchased on credit £50,000 worth of clothing from a British company when the exchange rate was $1.97 per British pound.At the year-end balance sheet date the exchange rate increased to $2.76.Breanna Boutique must record a:

Return on total assets is computed by dividing ___________ by __________.

Investments in trading securities are accounted for using the equity method with consolidation.

Long-term investments include investments in land or other assets not used in a company's operations.

Consolidated statements are prepared as if a company is organized as one entity,with the amounts allocated for subsidiaries reported in the investment accounts.

Long-term investments are usually held as an investment of cash for use in current operations.

A U.S.Company's credit sale to an international customer allowing payment to be made in a foreign currency requires using the same exchange rate for the date of sale and the cash payment date.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

Filters

_____ securities reflect a creditor relationship while securities reflect an owner relationship.

Return on total assets is computed by dividing _ by .