Company A buys 15% of common stocks of Company B. Company A provides financial support to Company B, which is unavailable to finance its activities. Company A should record its investment in Company B as: a. Available for sale investment b. Trading investment c. As Investment using the equity method d. As Investment preparing consolidated financial statements

Company A buys 15% of common stocks of Company B. Company A provides financial support to Company B, which is unavailable to finance its activities. Company A should record its investment in Company B as: a. Available for sale investment b. Trading investment c. As Investment using the equity method d. As Investment preparing consolidated financial statements

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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When a business has Available-for-Sale Securities, the account Unrealized Loss on Available-for-Sale Investments should be included in the: Statement of Retained Earnings Income statement Balance sheet as an addition to Long-Term Investments in Stock Balance sheet as a deduction in Stockholders' Equity
Accounting for Investments: Stocks, Bonds, and Derivatives Investments in stocks, bonds, and derivatives are common financial instruments held by companies and individuals for various purposes, including generating returns and diversifying investment portfolios. Accounting for these investments involves recording them on the balance sheet at fair value and recognizing any changes in value in the income statement. 1. Stocks (Equity Investments): Stocks represent ownership interests in a company. When a company purchases stocks of another company as an investment, it records the investment on its balance sheet as an asset at fair value. Changes in the fair value of the stocks are recorded in the income statement as gains or losses. 2. Bonds (Debt Investments): Bonds are debt securities issued by governments, municipalities, or corporations to raise capital. When a company invests in bonds, it records the investment on its balance sheet as an asset at fair value. The interest income…
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N1. Account
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ansser must be in table format or i will give down vote
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