Question 1

The amortization of discounts or premiums are recorded as part of interest income on the income statement.

Accepted Answer

A) True 
 B)False

Question 2

The account Unrealized Gain (Loss)on Trading Securities should be included in the

Accepted Answer

A) Income statement as Other Revenue (Expenses) 
B) Balance sheet as an adjustment to the asset account 
C) Balance sheet as an adjustment to Stockholders' Equity 
D) Statement of Retained Earnings 
A) Income statement as Other Revenue (Expenses) 
B) Balance sheet as an adjustment to the asset account 
C) Balance sheet as an adjustment to Stockholders' Equity 
D) Statement of Retained Earnings

Question 3

Journalize the entries to record the following selected transactions of Oliver Co.:

Accepted Answer

The answer of Journalize the entries to record the following...

Question 4

Interest revenue on bonds is reported

Accepted Answer

A) as an addition to the Investment in Bonds account 
B) as part of Comprehensive Income but not as part of Net Income. 
C) as part of other income 
D) as part of operating income 
A) as an addition to the Investment in Bonds account 
B) as part of Comprehensive Income but not as part of Net Income. 
C) as part of other income 
D) as part of operating income

Question 5

In general,consolidated financial statements should be prepared

Accepted Answer

A) when a corporation owns more than 20% and less than 40% of the common stock of another company 
B) when a corporation owns more than 50% of the common stock of another company 
C) only when a corporation owns 100% of the common stock of another company 
D) whenever the market value of the stock investment is significantly lower than its cost 
A) when a corporation owns more than 20% and less than 40% of the common stock of another company 
B) when a corporation owns more than 50% of the common stock of another company 
C) only when a corporation owns 100% of the common stock of another company 
D) whenever the market value of the stock investment is significantly lower than its cost

Question 6

Newville Corporation reported net income of $50,000 in 2015.They have 10,000 shares of $100 par,6% preferred stock and 50,000 shares of $2 common stock outstanding.During 2012 Newville paid the preferred stockholder's a $6 per share dividend and also paid $30,000 to common shareholders.The market value of Newville's stock is: Preferred - $105 and Common - $10.
(1)Calculate Newville's dividend yield.
(2)Why does the dividend yield vary widely across firms?

Accepted Answer

(1)Dividend yield = $0.60 ** / $10.00 =

Question 7

The equity method of accounting for investments

Accepted Answer

A) requires a year-end adjustment to revalue the stock to lower of cost or market 
B) requires the investment to be reported at its original cost 
C) requires the investment be increased by the reported net income of the investee 
D) requires the investment be increased by the dividends paid by the investee 
A) requires a year-end adjustment to revalue the stock to lower of cost or market 
B) requires the investment to be reported at its original cost 
C) requires the investment be increased by the reported net income of the investee 
D) requires the investment be increased by the dividends paid by the investee

Question 8

When the cost method is used to account for an investment,the carrying value of the investment is affected by

Accepted Answer

A) the dividend distributions of the investee. 
B) the periodic net income of the investee. 
C) the earnings and dividend distributions of the investee. 
D) neither the earnings nor the dividends of the investee. 
A) the dividend distributions of the investee. 
B) the periodic net income of the investee. 
C) the earnings and dividend distributions of the investee. 
D) neither the earnings nor the dividends of the investee.

Question 9

Which of the following is not a part of comprehensive income?

Accepted Answer

A) foreign currency items 
B) cash flows from stock investments 
C) unrealized gains and losses 
D) pension liability adjustments 
A) foreign currency items 
B) cash flows from stock investments 
C) unrealized gains and losses 
D) pension liability adjustments

Question 10

Yankton Company began the year without an investment portfolio.During the year they purchased investments classified as available-for-sale securities at a cost of $13,000.At the end of the year,the market value of the securities was $11,000.The Yankton Company's financial statements for the current year should show

Accepted Answer

A) a loss of $2,000 on the income statement and available-for-sale securities of $13,000 on the balance sheet 
B) no loss on the income statement and available-for-sale securities of $13,000 on the balance sheet 
C) no loss on the income statement,available-for-sale securities of $11,000 and an unrealized loss of $2,000 as a stockholders' equity adjustment on the balance sheet 
D) a loss of $2,000 on the income statement and temporary investments of $11,000 on the balance sheet 
A) a loss of $2,000 on the income statement and available-for-sale securities of $13,000 on the balance sheet 
B) no loss on the income statement and available-for-sale securities of $13,000 on the balance sheet 
C) no loss on the income statement,available-for-sale securities of $11,000 and an unrealized loss of $2,000 as a stockholders' equity adjustment on the balance sheet 
D) a loss of $2,000 on the income statement and temporary investments of $11,000 on the balance sheet

Question 11

The account Unrealized Gain (Loss)on Available-For-Sale Securities should be included in the

Accepted Answer

A) Income statement as Other Revenue (Expenses) 
B) Balance sheet as an adjustment to the asset account 
C) Balance sheet as an adjustment to Stockholders' Equity 
D) Statement of Retained Earnings 
A) Income statement as Other Revenue (Expenses) 
B) Balance sheet as an adjustment to the asset account 
C) Balance sheet as an adjustment to Stockholders' Equity 
D) Statement of Retained Earnings

Question 12

Jarvis Corporation makes an investment in 100 shares of Saxton Company's common stock.The stock is purchased for $45 a share plus brokerage fees of $280.The entry for the purchase is:

Accepted Answer

A) Cash 4,500 Stock Investments - Saxton Company 4,500 
B) Stock Investments - Saxton Company 4,780 Cash 4,780 
C) Stock Investments - Saxton Company 4,500 Brokerage Fee Expense 280
Cash 4,780 
D) Stock Investments - Saxton Company 4,500 Cash 4,500 
A) Cash 4,500 Stock Investments - Saxton Company 4,500 
B) Stock Investments - Saxton Company 4,780 Cash 4,780 
C) Stock Investments - Saxton Company 4,500 Brokerage Fee Expense 280
Cash 4,780 
D) Stock Investments - Saxton Company 4,500 Cash 4,500

Question 13

Prepare the journal entries for the following transactions for Batson Co.

Accepted Answer

(a)
 @#IMG-DLM& (b)

Question 14

Growth firms generally pay regular dividends to stockholders.

Accepted Answer

A) True 
 B)False

Question 15

Comprehensive income does not affect net income or retained earnings.

Accepted Answer

A) True 
 B)False

Question 16

Following is data for the available-for-sale securities held by AdBrand Company as of December 31,2012.
   
Required:
(1)Complete the table above to find the total cost and fair value for the company's available-for-sale securities portfolio.
(2)Calculate and record the required December 31,2012 adjustment.
(3)Explain how the adjustment from step (2)is reported on AdBrand's 2012 financial statements.

Accepted Answer

@#IMG-DLM& @#IMG-DLM& (3)The unrealized loss will be shown a

Question 17

Temporary investments are recorded at their cost which would include broker's commissions.

Accepted Answer

A) True 
 B)False

Question 18

If the bonds are purchased between interest dates,the purchase price includes accrued interest since the last interest payment.

Accepted Answer

A) True 
 B)False

Question 19

The cost method of accounting for stock

Accepted Answer

A) recognizes dividends as income 
B) is only appropriate as part of a consolidation 
C) requires the investment be increased by the reported net income of the investee 
D) requires the investment be decreased by the reported net income of the investee 
A) recognizes dividends as income 
B) is only appropriate as part of a consolidation 
C) requires the investment be increased by the reported net income of the investee 
D) requires the investment be decreased by the reported net income of the investee

Question 20

Purchased $400,000 of ABC Co.5% bonds at 100 plus accrued interest of $4,500.Sold $250,000 of bonds at 97.The journal entry for the purchase would include:

Accepted Answer

A) a credit to Interest Receivable for $4,500 
B) a credit to Interest Revenue for $4,500 
C) a debit to Interest Receivable for $4,500 
D) a debit to Interest Revenue for $4,500 
A) a credit to Interest Receivable for $4,500 
B) a credit to Interest Revenue for $4,500 
C) a debit to Interest Receivable for $4,500 
D) a debit to Interest Revenue for $4,500

The amortization of discounts or premiums are recorded as part of interest income on the income statement.

The account Unrealized Gain (Loss)on Trading Securities should be included in the

Journalize the entries to record the following selected transactions of Oliver Co.:

Interest revenue on bonds is reported

In general,consolidated financial statements should be prepared

The equity method of accounting for investments

When the cost method is used to account for an investment,the carrying value of the investment is affected by

Which of the following is not a part of comprehensive income?

The account Unrealized Gain (Loss)on Available-For-Sale Securities should be included in the

Jarvis Corporation makes an investment in 100 shares of Saxton Company's common stock.The stock is purchased for $45 a share plus brokerage fees of $280.The entry for the purchase is:

Prepare the journal entries for the following transactions for Batson Co.

Growth firms generally pay regular dividends to stockholders.

Comprehensive income does not affect net income or retained earnings.

Temporary investments are recorded at their cost which would include broker's commissions.

If the bonds are purchased between interest dates,the purchase price includes accrued interest since the last interest payment.

The cost method of accounting for stock

Purchased $400,000 of ABC Co.5% bonds at 100 plus accrued interest of $4,500.Sold $250,000 of bonds at 97.The journal entry for the purchase would include:

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Statement of Cash Flows

Financial Statement Analysis

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Exam 13: Investments and Fair Value Accounting

The amortization of discounts or premiums are recorded as part of interest income on the income statement.

The account Unrealized Gain (Loss)on Trading Securities should be included in the

Journalize the entries to record the following selected transactions of Oliver Co.:

Interest revenue on bonds is reported

In general,consolidated financial statements should be prepared

The equity method of accounting for investments

When the cost method is used to account for an investment,the carrying value of the investment is affected by

Which of the following is not a part of comprehensive income?

The account Unrealized Gain (Loss)on Available-For-Sale Securities should be included in the

Jarvis Corporation makes an investment in 100 shares of Saxton Company's common stock.The stock is purchased for $45 a share plus brokerage fees of $280.The entry for the purchase is:

Prepare the journal entries for the following transactions for Batson Co.

Growth firms generally pay regular dividends to stockholders.

Comprehensive income does not affect net income or retained earnings.

Temporary investments are recorded at their cost which would include broker's commissions.

If the bonds are purchased between interest dates,the purchase price includes accrued interest since the last interest payment.

The cost method of accounting for stock

Purchased $400,000 of ABC Co.5% bonds at 100 plus accrued interest of $4,500.Sold $250,000 of bonds at 97.The journal entry for the purchase would include:

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Statement of Cash Flows

Financial Statement Analysis

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