ACCOUNTING PRINCIPLES V1 6/17 >C<
ACCOUNTING PRINCIPLES V1 6/17 >C<
3rd Edition
ISBN: 9781323761434
Author: Horngren
Publisher: PEARSON C
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Chapter 15, Problem S15.1SE
To determine

Investments classification:

Investments can be classified into two types from the point of view of the period of holding the investment. These types are short term and long term. A short-term investment is usually made for period of less than a year and a long-term investment is made for the longer period.

1. Reason for investment in debt or equity securities

To identify: The reason for investment in debt or equity securities.

Solution: G H may choose to invest in debt or equity security because it would need the cash back in short term.

To determine

2. Classification of investment

To identify: The Classification of investment

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Capitalisation method
Subject: financial accounting
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