ACCOUNTING PRINCIPLES-W/WILEYPLUS
14th Edition
ISBN: 9781119707158
Author: Weygandt
Publisher: WILEY
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Question
Chapter 16, Problem 1Q
To determine
Securities: Securities refers to the stocks or bonds traded in the secondary market. Price of securities changes with the change in demand and supply of securities. It is an asset of the holder.
To explain: Reasons the corporations invest in securities.
Expert Solution & Answer

Answer to Problem 1Q
Reasons the corporations invest in securities:
- To earn extra income from excess funds.
- To gain market share of a business.
- Since, securities have a ready market and can be considered as liquid assets.
- To get a regular income.
Explanation of Solution
- Corporations invest in securities to utilize the available funds and earn returns.
- Investment in securities provides an extra income to the corporate and an asset of the firm.
- Firm can sell the securities in the secondary market at any point of time.
Conclusion
Therefore, there are many reasons that the corporations invest in securities.
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Chapter 16 Solutions
ACCOUNTING PRINCIPLES-W/WILEYPLUS
Ch. 16 - Prob. 1QCh. 16 - Prob. 2QCh. 16 - Prob. 3QCh. 16 - Prob. 4QCh. 16 - 5. What is the cost of an investment in stock?
Ch. 16 - Prob. 6QCh. 16 - Prob. 7QCh. 16 - Prob. 9QCh. 16 - Prob. 10QCh. 16 - Prob. 11Q
Ch. 16 - Prob. 12QCh. 16 - Prob. 13QCh. 16 - Prob. 14QCh. 16 - Prob. 2BECh. 16 - Prob. 3BECh. 16 - Prob. 1ECh. 16 - Prob. 4ECh. 16 - Prob. 6ECh. 16 - E16-7 On January 1, Zabel Corporation purchased a...Ch. 16 - Prob. 8ECh. 16 - Prob. 9ECh. 16 - Prob. 1PSACh. 16 - P16-2A In January 2017, the management of Kinzie...Ch. 16 - Prob. 3PSACh. 16 - Prob. 4PSACh. 16 - Prob. 5PSA
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