Investments in debt instruments are financial assets because they are A. Equity instruments of another entity. B. All of these. C. Contractual rights to receive cash or another financial asset from another entity. D. Cash equivalents.

Investments in debt instruments are financial assets because they are A. Equity instruments of another entity. B. All of these. C. Contractual rights to receive cash or another financial asset from another entity. D. Cash equivalents.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter1: Introduction To Business Activities And Overview Of Financial Statements And The Reporting Process

Section: Chapter Questions

Problem 11Q

See similar textbooks

Related questions

Q: When income is to be recognized on cash basis. by Safe Trust Bank, a distinction should be made…

A: In case of performing assets, the income should be recognised in accrual basis. However, in case of…

Q: 20. Which of the following types of financial assets represents a creditor relationship with an…

A: Any liquid asset which acquires its value from a contractual right or ownership claim is known as a…

Q: 7) In ____________, funds are transferred when one party purchases financial assets previously held…

A: Financial institutions are those institutions which help in the transfer of funds or assets between…

Q: If the value of an item can be measured and reasonably determined, this item can be recognized in…

A: An item can be recognized in the financial statement if it satisfies certain specified condition.…

Q: The assumption that requires that only those things that can be expressed in money are included in…

A: The generally accepted principles of accounting are called concepts.The concept guide the…

Q: Identify the asset from the following? A. Cash and Cash equivalents B. Creditors

A: Something that will or already has economic worth to a business is referred to as an asset. All…

Q: Transactions involving the purchase and sale of long-term assets, investing in equity securities,…

A: Business functions are a combination of various activities.

Q: 2. Which of the following is an appropriate aggregation? A. Cash and cash equivalents (Cash in bank…

A: A balance sheet is a financial statement that provides a snapshot of a company's financial position…

Q: Distinguish between financial liabilities and non-financial liabilities.

A: Liabilities are defined as the amount of money which is owed by a firm in exchange for goods and…

Q: Which of the following is not a category of financial assets under GAM? Group of answer choices…

A: Financial Assets are to be classified in the following four categories: 1. Financial Assets at fair…

Q: Financial system is important in balances the total financial assets to total liabilities. Explain.

A: A financial system is a collection of entities that allow the exchange of funds, such as banks,…

Q: These types of services may be reported as off-balance sheet items except: a. Intangible assets…

A: Off-balance sheet items are assets or liabilities that are not shown on a company's balance sheet…

Q: The amount borrowed from the financial institution is called: a. Amortization b. Deferred payments…

A: There are where terminologies used while borrowing money from financial institutions

Q: The acquisition of assets by issuing securities would be classified as an operating activity. an…

A: Issuing securities for the acquisition of assets doesn't involve any cash flows.

Q: Financing activities include a. lending money b. acquiring investments c. issuing debt d.…

A: Option (c) issuing debt

Q: Fair value is used to value which of the following balance sheet accounts? a. Prepaid expenses;…

A: The value of financial instruments, such as debt securities, that are traded or sold is sometimes…

Q: Investments in equity instruments are financial assets because they are Group of answer choices…

A: Solution: As per IAS, Financial assets are those assets that is: 1. Cash 2. an equity instrument of…

Q: investments in debt instruments are financial asset

A: First option is wrong because debt instruments are not equity instruments. Second option is wrong…

Q: Funds are transferred in ____________ when one party purchases financial assets previously held by…

A: A financial asset seems to be a liquid asset whose value is derived from a legal right or title…

Q: Assets and liablities are classified on the balance sheet into correct and long-term categories in…

A: A balance sheet is a statement that shows the financial positions of the business organization. The…

Q: Another term used for a financial asset is ________. a. debt financing b. equity financing c.…

A: Solution: Another term used for a financial asset is "financial instrument".

Q: Financial contracts are those which give simultaneous rise to the financial assets of one entity and…

A: Introduction: A financial contract is an arrangement in the form of an individually negotiated deal,…

Q: What is articulation of the financial statement means? Elaborate.

A: Financial statements are the statements which plays an important role for an effective investment…

Q: Financial assets refer to legal documents that provide evidence of ownership and claim”. Discuss…

A: What are financial assets and what are the different types? A financial asset is a liquid asset that…

Q: When a company borrows funds from creditors, it is considered a form of: Select one: A. equity…

A: Equity financing is done by the owners of the company and they have rights in the management in the…

Q: Net sales Cost of goods sold Depreciation Earnings before interest and taxes Interest paid Taxable…

A: Cash Flow Statement - Statement of Cash Flow is a financial statement that includes three…

Q: Which of the following statements are true regarding financial instruments? (i) Financial…

A: A primary instrument is a financial asset whose price is determined solely by its market value.…

Q: A formal obligation that entitles one party to receive payments and/or a share of assets from…

A: Sometimes at the time of purchase or sale of asset, one party exchanges something with another…

Q: Explain why it is important for entities to understand the impact of the classification of a…

A: Debt and equity are two fundamental types of financial instruments that companies can use to raise…

Question

Investments in debt instruments are financial assets because they are

A. Equity instruments of another entity.

B. All of these.

C. Contractual rights to receive cash or another financial asset from another entity.

D. Cash equivalents.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Investments in equity instruments are financial assets because they are Group of answer choices Cash equivalents. Contractual rights to receive cash or another financial asset from another entity. Equity instruments of another entity. Contractual rights to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to the entity.
Another term used for a financial asset is ________. a. debt financing b. equity financing c. financial system d. financial instrument
Transactions involving the purchase and sale of long-term assets, investing in equity securities, lending money, and collecting the principal on related loans are called a.investing activities. b.operating activities. c.buying and selling activities. d.financing activities.
Funds are transferred in ____________ when one party purchases financial assets previously held by another party a. Medium of exchange b. Financial Institutions c. Financial Markets d. Financial Instruments
7) In ____________, funds are transferred when one party purchases financial assets previously held by another party. a. Medium of exchange b. Financial instruments c. Financial markets d. Financial institutions
The amount borrowed from the financial institution is called: a. Amortization b. Deferred payments c. Amount financed d. Finance charge
Assets and liablities are classified on the balance sheet into correct and long-term categories in order to a. determine the value of the businessb. determine the cash flows of the businessc. yield information about liquidityd. distinguish them from extraordinary items
Financing activities include a. lending money b. acquiring investments c. issuing debt d. acquiring long-lived assets
2. Which of the following is an appropriate aggregation? A. Cash and cash equivalents (Cash in bank and sinking fund) B. Trade and other receivables (Accounts receivable and investment in bonds) C. Trade and other payables (Accounts payable and accruals) D. Provisions (Income tax payable and warranty liability)
Which of the following assertions is relevant to whether the cash balances reflect the true underlying economic value of those assets? a. Existence/occurrence. b. Completeness. c. Rights and obligations. d. Valuation or allocation. e. All of the above.
If the value of an item can be measured and reasonably determined, this item can be recognized in the financial statements as long as it O involves an exchange of cash and/or credit is granted. O provides some future economic benefit. meets the definition of an element of the financial statements. O has already occurred.
Distinguish between financial liabilities and non-financial liabilities.