1. Debt securities that a company intends to hold to maturity should be reported on the Balance Sheet ____________________.
Answers: • at acquisition cost
2. An elimination entry for the parent company's Investment account would typically NOT include debits to which of the following accounts?
Answers: • Equity of Earnings of Subsidiary Company (Parent Company)
3. According to generally accepted accounting principles, which of the following methods must be used to account for investment in common stock of 20 percent to 50 percent?
Answers: • Market value method
4. A lease must be accounted for as a capital lease if it meets any one of four conditions. Which of the following is NOT one of those conditions?
Answers: • The lease contains a bargain purchase price option.
5. A _____________ is a financial instrument designed to help companies cope with various kinds of risk.
Answers: • derivative instrument
6. A derivative acquired to reduce risks involving fluctuations in a market value is called a __________________.
Answers: • unfair value hedge
Answers: • at acquisition cost
2. An elimination entry for the parent company's Investment account would typically NOT include debits to which of the following accounts?
Answers: • Equity of Earnings of Subsidiary Company (Parent Company)
3. According to generally accepted accounting principles, which of the following methods must be used to account for investment in common stock of 20 percent to 50 percent?
Answers: • Market value method
4. A lease must be accounted for as a capital lease if it meets any one of four conditions. Which of the following is NOT one of those conditions?
Answers: • The lease contains a bargain purchase price option.
5. A _____________ is a financial instrument designed to help companies cope with various kinds of risk.
Answers: • derivative instrument
6. A derivative acquired to reduce risks involving fluctuations in a market value is called a __________________.
Answers: • unfair value hedge
