Equity Investment classified at Fair Through Profit or loss (choose which of the following is false) Securities not held for trading for which the enterprise did not elect measurement at fair value through other comprehensive income Securities held for trading Initially measured at Fair value plus transaction costs Measured after initial recognition at Fair value

Equity Investment classified at Fair Through Profit or loss (choose which of the following is false) Securities not held for trading for which the enterprise did not elect measurement at fair value through other comprehensive income Securities held for trading Initially measured at Fair value plus transaction costs Measured after initial recognition at Fair value

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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true of false explain pls
Which of the following is not classified as an Investment Account -Investment in Subsidiary -Cash fund held for a long term purpose -Investment in Associates -Investment with a maturity period of 3 months and is also highly liquid 2. Financial Asset at Fair Value under OCI would have its gain or loss reported at what Financial Statement? -Changes in Owners Equity -Balance Sheet -Income Statement -Cash Flow 3. Debt Instrument investment can be classified under the following, Except? -Held to Maturity -At Amortized Cost -FAFVOCI -FAFVPL 4. When the Company Trades with an Investment in Associate, the Reported net income of the Parent Company should report the Intercompany transaction as? (1 Point) -As Inventory -An eliminated Entry -As Expense -As income
What accounting treatments are appropriate for investments in equity securities without readily determinable fair values?
Select the incorrect statement regarding capital markets a Capital markets make securities liquid b.These help in eliminating transaction costs Oc Capital markets facilitate the buying and selling of securities Od. None of the options
Why are unrealized gains and losses from available-for-sale securities not reported as a component of net income? Select one: a. Because goodwill exists that must be separately accounted for b. Because the investor has the ability to exercise significant influence over the investee c. Because consolidated financial statements must be prepared d. Because large swings in market value over which management has no control may distort current period performance as measured by net income
Long-term investments that involve the purchase of a significant portion of the stock of another company may be held for a strategic purpose, such as O a. the receipt of dividends O b. the receipt of interest revenue O c. the gains from the increase in market value O d. expansion into new markets
Reporting an investment at its fair value means adjusting its carrying amount for changes in fair value afterits acquisition (or since the last reporting date if it was held at that time). Such changes are called unrealizedholding gains and losses because they haven’t yet been realized through the sale of the security. If the security isclassified as available-for-sale, how are unrealized holding gains and losses typically reported?
An auditor’s analytical procedures indicate a lower than expected return on an equity methodinvestment. This situation most likely could have been caused bya. An error in recording amortization of the excess of the investor’s cost over the investment’s underlying book value.b. The investee’s decision to reduce cash dividends declared per share of its commonstock.c. An error in recording the unrealized gain from an increase in the fair value of availablefor sale securities in the income account for trading securities.d. A substantial fluctuation in the price of the investee’s common stock on a national stockexchange.
Negative net working capital, is when current assets exceed current liabilities True False Marketable securities are not part of the working capital True False
If the equity method is used to account for an investment in common shares O net income of the investee is ignored by the investor. O net income of the investee is recorded as realized gains, but dividends received are credited to the investment account. the investment account may be at times greater than the acquisition cost. O it is presumed that the investor has no significant influence on the investee.