Question 1

Equity securities giving an investor significant influence over an investee are always considered short-term investments.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

An investor purchased $50,000 of 10-year bonds it intends to hold to maturity.The investor's journal entry to record the purchase is a debit to Long-Term Investments for $50,000 and a credit to Cash for $50,000.

Accepted Answer

A) True 
 B)False

Question 4

On May 1 of the current year,a company paid $200,000 cash to purchase 6%,10-year bonds with a par value of $200,000; interest is paid semiannually each May 1 and November 1.The company intends to hold these bonds until they mature.Prepare the journal entry to record the bond purchase.

Accepted Answer

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Question 5

A company had a profit margin of 10.5% and total asset turnover of 1.84.Its return on total assets was:

Accepted Answer

A)   5.71%
B)   8.66%
C)   12.34%
D)   13.61%
E)   19.32%F) A) and B)
G) All of the above

Question 6

On May 1 of the current year,a company paid $200,000 to purchase 7%,10-year bonds with a par value of $200,000; interest is paid semiannually on May 1 and November 1.The company intends to hold the bonds until they mature.Prepare the journal entries to record (1)the bond purchase, (2)the receipt of the first semiannual interest payment on November 1 of the current year, (3)the accrual of interest for year-end December 31,and (4)the receipt of the second semiannual payment on May 1.

Accepted Answer

None...

Question 7

Maroon Company sold supplies in the amount of €15,000 (euros)to a French company when the exchange rate was $1.15 per euro.At the time of payment,the exchange rate decreased to $1.12.Maroon must record a loss of $450.

Accepted Answer

A) True 
 B)False

Question 8

When consolidated financial statements are prepared,the parent company uses the equity method and reports the investment accounts for the subsidiaries on the balance sheet.

Accepted Answer

A) True 
 B)False

Exam 15: Investments

Correct Answer
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None...
View Answer

On May 1 of the current year,a company paid $200,000 cash to purchase 6%,10-year bonds with a par value of $200,000; interest is paid semiannually each May 1 and November 1.The company intends to hold these bonds until they mature.Prepare the journal entry to record the bond purchase.

Correct Answer
verified
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View Answer

An investor purchased $50,000 of 10-year bonds it intends to hold to maturity.The investor's journal entry to record the purchase is a debit to Long-Term Investments for $50,000 and a credit to Cash for $50,000.

Correct Answer
verified

A company had a profit margin of 10.5% and total asset turnover of 1.84.Its return on total assets was:

Correct Answer
verified

Maroon Company sold supplies in the amount of €15,000 (euros)to a French company when the exchange rate was $1.15 per euro.At the time of payment,the exchange rate decreased to $1.12.Maroon must record a loss of $450.

Correct Answer
verified

When consolidated financial statements are prepared,the parent company uses the equity method and reports the investment accounts for the subsidiaries on the balance sheet.

Correct Answer
verified

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

Correct Answer
verified

Equity securities giving an investor significant influence over an investee are always considered short-term investments.

Correct Answer
verified

Exam 15: Investments

Correct AnswerverifiedNone...View AnswerShow Answer

On May 1 of the current year,a company paid $200,000 cash to purchase 6%,10-year bonds with a par value of $200,000; interest is paid semiannually each May 1 and November 1.The company intends to hold these bonds until they mature.Prepare the journal entry to record the bond purchase.

Correct Answerverified\[\begin{array} { | l | c | c ...View AnswerShow Answer

An investor purchased $50,000 of 10-year bonds it intends to hold to maturity.The investor's journal entry to record the purchase is a debit to Long-Term Investments for $50,000 and a credit to Cash for $50,000.

Correct AnswerverifiedShow Answer

A company had a profit margin of 10.5% and total asset turnover of 1.84.Its return on total assets was:

Correct AnswerverifiedShow Answer

Maroon Company sold supplies in the amount of €15,000 (euros)to a French company when the exchange rate was $1.15 per euro.At the time of payment,the exchange rate decreased to $1.12.Maroon must record a loss of $450.

Correct AnswerverifiedShow Answer

When consolidated financial statements are prepared,the parent company uses the equity method and reports the investment accounts for the subsidiaries on the balance sheet.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Equity securities giving an investor significant influence over an investee are always considered short-term investments.

Correct AnswerverifiedShow Answer

Correct Answer
verified
None...
View Answer

Correct Answer
verified
\[\begin{array} { | l | c | c ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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