Exam 13: Investments

If the investor holds 50% or more of the common stock of the investee, then the investor is referred to as the and the investee is referred to as the .

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Question 1

Correct Answer:

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parent
subsidiary

On January 1, 2011, P Company purchased all of the outstanding common stock of S Company. Which of the following represents the worksheet entry needed to consolidate the balance sheets of the two companies?

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(Multiple Choice)

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Question 2

Correct Answer:

Verified

Match the following terms to their correct definition: a.equity security j.held-to-maturity securities b.debt security k.amortized cost method c.passive l.fair value method d.significant influence m.unrealized gains and losses e.control n.equity method f.parent o.consolidation worksheet g.subsidiary p.minority interest h.trading securities q.business combination i.available-for-sale securities r.goodwill -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

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Question 3

Correct Answer:

Verified

Select the correct statement from the following:

(Multiple Choice)

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Question 4

If the investor holds 50% or more of the investee's outstanding common stock, then the investor is referred to as the parent and the investee is called the subsidiary.

(True/False)

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Question 5

If the investor holds 50% or more of the common stock of the investee, then the two corporations are no longer separate accounting entities and therefore must prepare ____________________ financial statements, which combine information about the two corporations as if they were a single company.

(Short Answer)

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Question 6

Held-to-maturity securities are equity and debt investments that management intends to sell in the future, but not necessarily in the near term.

(True/False)

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Question 7

Match the following terms to their correct definition: a.equity security j.held-to-maturity securities b.debt security k.amortized cost method c.passive l.fair value method d.significant influence m.unrealized gains and losses e.control n.equity method f.parent o.consolidation worksheet g.subsidiary p.minority interest h.trading securities q.business combination i.available-for-sale securities r.goodwill -Name given to an investor who owns over 50% of the outstanding common stock of the investee

(Short Answer)

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Question 8

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

(Multiple Choice)

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Question 9

The practice of adjusting the market value of securities that are accounted for using the fair value method is referred to as

(Multiple Choice)

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Question 10

A debt security exists when another entity owes the security holder some combination of interest and principal.

(True/False)

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Question 11

Match the following terms to their correct definition: a.equity security j.held-to-maturity securities b.debt security k.amortized cost method c.passive l.fair value method d.significant influence m.unrealized gains and losses e.control n.equity method f.parent o.consolidation worksheet g.subsidiary p.minority interest h.trading securities q.business combination i.available-for-sale securities r.goodwill -Name given to the investee when an investor owns over 50% of the investee's outstanding common stock

(Short Answer)

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Question 12

Tidewater Management, Inc. had no investments in short-term marketable securities prior to 2013. During 2013, the company engaged in the following investment transactions: At the end of 2013, the Toucan Taxi stock had a market value of $15 per share.

(Essay)

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Question 13

The excess of acquisition cost over the current value of the investee's identifiable net assets, referred to as goodwill, may not be recorded by the investor under current generally accepted accounting principles.

(True/False)

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Question 14

Match the following terms to their correct definition: a.equity security j.held-to-maturity securities b.debt security k.amortized cost method c.passive l.fair value method d.significant influence m.unrealized gains and losses e.control n.equity method f.parent o.consolidation worksheet g.subsidiary p.minority interest h.trading securities q.business combination i.available-for-sale securities r.goodwill -Represents an ownership interest in a corporation, usually common stock

(Short Answer)

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Question 15

Match the following terms to their correct definition: a.equity security j.held-to-maturity securities b.debt security k.amortized cost method c.passive l.fair value method d.significant influence m.unrealized gains and losses e.control n.equity method f.parent o.consolidation worksheet g.subsidiary p.minority interest h.trading securities q.business combination i.available-for-sale securities r.goodwill -Result when the value of securities must be written up or down to fair market value at the balance sheet date, a process referred to as "marking to market"

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Question 16

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.

(True/False)

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Question 17

Match the following terms to their correct definition: a.equity security j.held-to-maturity securities b.debt security k.amortized cost method c.passive l.fair value method d.significant influence m.unrealized gains and losses e.control n.equity method f.parent o.consolidation worksheet g.subsidiary p.minority interest h.trading securities q.business combination i.available-for-sale securities r.goodwill -Equity or debt investments that management intends to sell in the near term, typically within a single month

(Short Answer)

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Question 18

Match the following terms to their correct definition: a.equity security j.held-to-maturity securities b.debt security k.amortized cost method c.passive l.fair value method d.significant influence m.unrealized gains and losses e.control n.equity method f.parent o.consolidation worksheet g.subsidiary p.minority interest h.trading securities q.business combination i.available-for-sale securities r.goodwill -Method of accounting for all investments in debt securities that are classified as held-to-maturity securities

(Short Answer)

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Question 19

Business combinations can occur through either an asset or ____________________ acquisition.

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Question 20

Showing 1 - 20 of 73

If the investor holds 50% or more of the common stock of the investee, then the investor is referred to as the and the investee is referred to as the .

On January 1, 2011, P Company purchased all of the outstanding common stock of S Company. Which of the following represents the worksheet entry needed to consolidate the balance sheets of the two companies?

Select the correct statement from the following:

If the investor holds 50% or more of the investee's outstanding common stock, then the investor is referred to as the parent and the investee is called the subsidiary.

If the investor holds 50% or more of the common stock of the investee, then the two corporations are no longer separate accounting entities and therefore must prepare ____________________ financial statements, which combine information about the two corporations as if they were a single company.

Held-to-maturity securities are equity and debt investments that management intends to sell in the future, but not necessarily in the near term.

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

The practice of adjusting the market value of securities that are accounted for using the fair value method is referred to as

A debt security exists when another entity owes the security holder some combination of interest and principal.

Tidewater Management, Inc. had no investments in short-term marketable securities prior to 2013. During 2013, the company engaged in the following investment transactions: At the end of 2013, the Toucan Taxi stock had a market value of $15 per share.

The excess of acquisition cost over the current value of the investee's identifiable net assets, referred to as goodwill, may not be recorded by the investor under current generally accepted accounting principles.

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.

Business combinations can occur through either an asset or ____________________ acquisition.

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 Equity

The Statement of Cash Flows

Financial Statement Analysis

Time Value of Money

Filters

Exam 13: Investments

If the investor holds 50% or more of the common stock of the investee, then the investor is referred to as the ____________________ and the investee is referred to as the ____________________.

On January 1, 2011, P Company purchased all of the outstanding common stock of S Company. Which of the following represents the worksheet entry needed to consolidate the balance sheets of the two companies?

Select the correct statement from the following:

If the investor holds 50% or more of the investee's outstanding common stock, then the investor is referred to as the parent and the investee is called the subsidiary.

If the investor holds 50% or more of the common stock of the investee, then the two corporations are no longer separate accounting entities and therefore must prepare ____________________ financial statements, which combine information about the two corporations as if they were a single company.

Held-to-maturity securities are equity and debt investments that management intends to sell in the future, but not necessarily in the near term.

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

The practice of adjusting the market value of securities that are accounted for using the fair value method is referred to as

A debt security exists when another entity owes the security holder some combination of interest and principal.

Tidewater Management, Inc. had no investments in short-term marketable securities prior to 2013. During 2013, the company engaged in the following investment transactions: At the end of 2013, the Toucan Taxi stock had a market value of $15 per share.

The excess of acquisition cost over the current value of the investee's identifiable net assets, referred to as goodwill, may not be recorded by the investor under current generally accepted accounting principles.

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.

Business combinations can occur through either an asset or ____________________ acquisition.

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 Equity

The Statement of Cash Flows

Financial Statement Analysis

Time Value of Money

Filters

If the investor holds 50% or more of the common stock of the investee, then the investor is referred to as the and the investee is referred to as the .