Investments, Accounting

Investments

Question: Debit investments are initially recorded at:
A
cost.

B
cost plus accrued interest.

C
fair value.

D
None

Note: Not available
1. Report
Question: Hanes Company sells debt investments costing $26,000 for $28,000, plus accured interest that has been recorded. In journalizing the sale, credits are to:
A
Debt Investment and Loss on Sales of Debet Investments.

B
Debt Investment, Gain on Sales of Debt Investment and Bond Inerest Receivable.

C
Stock Investment and Bond Interest Receivable.

D
No correct answer given.

Note: Not available
1. Report
Question: Pryor Company receives net proceeds of $42,000 on the sale of stock investments that cost of $39,000. This transaction will result in reporting in the income statement a:
A
loss of $2,500 under "other expenses and losses".

B
loss of $2,500 under "operation expenses".

C
gain of $2,500 under "other revenues and gains".

D
gain of $2,500 under "operating revenues".

Note: Not available
1. Report
Question: The equity method of accounting for long-term investments in stock should be used when the investor has significant influence over an investee and owns:
A
between 20% and 50% of the investee's common stock.

B
20% or more of the investee's common stock.

C
more than 50% of the investee's common stock.

D
less than 20% of the investee's common stock.

Note: Not available
1. Report
Question: At the end of the first year of operations, the total cost of the trading securities portfolio is $120,000. Total fair value is $115,000. The financial statement should show :
A
a reduction of an asset of $5,000 and a realized loss of $5000.

B
a reduction of an asset of $5000 and an unrealized loss of $5000 in the stockholder equity section.

C
a reduction of an asset of $5000 in the current assets section and a unrealized loss of $5000 in "other expense and losses".

D
a reduction of an asset of $5000 in the current assets section and a realized loss of $5000 in "other expenses and losses".

Note: Not available
1. Report
Question: Which of the following statements is not true? Consolidated financial statements are useful to:
A
determine the profitability of specific subsidiaries.

B
determine the total profitability of enterprises under common control.

C
determine the breadth of a parent company's operations.

D
determine the full extend of total obligations of enterprise under common control.

Note: Not available
1. Report
Question: In the balance sheet, Unrealized Loss - Equity is reported as a:
A
contra asset account.

B
contra stockholders' equity account.

C
loss in the income statement.

D
loss in the retained earnings statement.

Note: Not available
1. Report
Question: Short term debit investments must be readily marketable and be expected to be sold within:
A
3 month from the date of purchase.

B
the next year or operation cycle, whichever is shorter.

C
the next year or operating cycle, whichever is longer.

D
the operating cycle.

Note: Not available
1. Report

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Question: Debit investments are initially recorded at:

Question: Hanes Company sells debt investments costing $26,000 for $28,000, plus accured interest that has been recorded. In journalizing the sale, credits are to:

Question: Pryor Company receives net proceeds of $42,000 on the sale of stock investments that cost of $39,000. This transaction will result in reporting in the income statement a:

Question: The equity method of accounting for long-term investments in stock should be used when the investor has significant influence over an investee and owns:

Question: At the end of the first year of operations, the total cost of the trading securities portfolio is $120,000. Total fair value is $115,000. The financial statement should show :

Question: Which of the following statements is not true? Consolidated financial statements are useful to:

Question: In the balance sheet, Unrealized Loss - Equity is reported as a:

Question: Short term debit investments must be readily marketable and be expected to be sold within: