Debt securities: Debt securities are financing instrument which represents the loan taken from the creditor and usually these securities pay defined interest rate on the amount borrowed. The several types of debt instruments are bonds, certificate of deposits, preferred stock , corporate bonds etc. Equity securities: Equity securities are financing instrument issued by a company representing the share in the capital financed by the investor. These securities gives right of ownership in the share capital of the company. Equity share holders are paid dividend and share the retained earnings as well. Short-term investments: Short-term investments are investments which are hold for a period of one year or less and which are easily convertible into cash. Long-term investments: Long-term investments are investments which are to be hold for a period of more than one year which are not easily convertible into cash in short term. To choose: The reason why business purchases securities.

Question

Want to see the full answer?

Answer 1

Question

Chapter A2, Problem 3MCQ

To determine

Concept introduction:

Debt securities:

Debt securities are financing instrument which represents the loan taken from the creditor and usually these securities pay defined interest rate on the amount borrowed. The several types of debt instruments are bonds, certificate of deposits, preferred stock, corporate bonds etc.

Equity securities:

Equity securities are financing instrument issued by a company representing the share in the capital financed by the investor. These securities gives right of ownership in the share capital of the company. Equity share holders are paid dividend and share the retained earnings as well.

Short-term investments:

Short-term investments are investments which are hold for a period of one year or less and which are easily convertible into cash.

Long-term investments:

Long-term investments are investments which are to be hold for a period of more than one year which are not easily convertible into cash in short term.

To choose:

The reason why business purchases securities.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

I am trying to find the accurate solution to this general accounting problem with the correct explanation.

I need assistance with this general accounting question using appropriate principles.

I need help with this general accounting problem using proper accounting guidelines.

Answer 2

Question

Chapter A2, Problem 3MCQ

To determine

Concept introduction:

Debt securities:

Debt securities are financing instrument which represents the loan taken from the creditor and usually these securities pay defined interest rate on the amount borrowed. The several types of debt instruments are bonds, certificate of deposits, preferred stock, corporate bonds etc.

Equity securities:

Equity securities are financing instrument issued by a company representing the share in the capital financed by the investor. These securities gives right of ownership in the share capital of the company. Equity share holders are paid dividend and share the retained earnings as well.

Short-term investments:

Short-term investments are investments which are hold for a period of one year or less and which are easily convertible into cash.

Long-term investments:

Long-term investments are investments which are to be hold for a period of more than one year which are not easily convertible into cash in short term.

To choose:

The reason why business purchases securities.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter A2, Problem 3MCQ

To determine

Concept introduction:

Debt securities:

Debt securities are financing instrument which represents the loan taken from the creditor and usually these securities pay defined interest rate on the amount borrowed. The several types of debt instruments are bonds, certificate of deposits, preferred stock, corporate bonds etc.

Equity securities:

Equity securities are financing instrument issued by a company representing the share in the capital financed by the investor. These securities gives right of ownership in the share capital of the company. Equity share holders are paid dividend and share the retained earnings as well.

Short-term investments:

Short-term investments are investments which are hold for a period of one year or less and which are easily convertible into cash.

Long-term investments:

Long-term investments are investments which are to be hold for a period of more than one year which are not easily convertible into cash in short term.

To choose:

The reason why business purchases securities.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter A2, Problem 3MCQ

To determine

Concept introduction:

Debt securities:

Debt securities are financing instrument which represents the loan taken from the creditor and usually these securities pay defined interest rate on the amount borrowed. The several types of debt instruments are bonds, certificate of deposits, preferred stock, corporate bonds etc.

Equity securities:

Equity securities are financing instrument issued by a company representing the share in the capital financed by the investor. These securities gives right of ownership in the share capital of the company. Equity share holders are paid dividend and share the retained earnings as well.

Short-term investments:

Short-term investments are investments which are hold for a period of one year or less and which are easily convertible into cash.

Long-term investments:

Long-term investments are investments which are to be hold for a period of more than one year which are not easily convertible into cash in short term.

To choose:

The reason why business purchases securities.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter A2, Problem 3MCQ

To determine

Concept introduction:

Debt securities:

Debt securities are financing instrument which represents the loan taken from the creditor and usually these securities pay defined interest rate on the amount borrowed. The several types of debt instruments are bonds, certificate of deposits, preferred stock, corporate bonds etc.

Equity securities:

Equity securities are financing instrument issued by a company representing the share in the capital financed by the investor. These securities gives right of ownership in the share capital of the company. Equity share holders are paid dividend and share the retained earnings as well.

Short-term investments:

Short-term investments are investments which are hold for a period of one year or less and which are easily convertible into cash.

Long-term investments:

Long-term investments are investments which are to be hold for a period of more than one year which are not easily convertible into cash in short term.

To choose:

The reason why business purchases securities.

Answer 6

Chapter A2, Problem 3MCQ

To determine

Concept introduction:

Debt securities:

Debt securities are financing instrument which represents the loan taken from the creditor and usually these securities pay defined interest rate on the amount borrowed. The several types of debt instruments are bonds, certificate of deposits, preferred stock, corporate bonds etc.

Equity securities:

Equity securities are financing instrument issued by a company representing the share in the capital financed by the investor. These securities gives right of ownership in the share capital of the company. Equity share holders are paid dividend and share the retained earnings as well.

Short-term investments:

Short-term investments are investments which are hold for a period of one year or less and which are easily convertible into cash.

Long-term investments:

Long-term investments are investments which are to be hold for a period of more than one year which are not easily convertible into cash in short term.

To choose:

The reason why business purchases securities.

Answer 7

Chapter A2, Problem 3MCQ

To determine

Concept introduction:

Debt securities:

Debt securities are financing instrument which represents the loan taken from the creditor and usually these securities pay defined interest rate on the amount borrowed. The several types of debt instruments are bonds, certificate of deposits, preferred stock, corporate bonds etc.

Equity securities:

Equity securities are financing instrument issued by a company representing the share in the capital financed by the investor. These securities gives right of ownership in the share capital of the company. Equity share holders are paid dividend and share the retained earnings as well.

Short-term investments:

Short-term investments are investments which are hold for a period of one year or less and which are easily convertible into cash.

Long-term investments:

Long-term investments are investments which are to be hold for a period of more than one year which are not easily convertible into cash in short term.

To choose:

The reason why business purchases securities.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. A2 - How do long-term investments differ from...Ch. A2 - Prob. 2DQ Ch. A2 - Prob. 3DQ Ch. A2 - Prob. 4DQ Ch. A2 - Prob. 5DQ Ch. A2 - Prob. 6DQ Ch. A2 - Prob. 7DQ Ch. A2 - How does the equity method discourage the...Ch. A2 - Prob. 9DQ Ch. A2 - Prob. 10DQ

Solution Summary: The author explains that debt securities are financing instruments which represent the loan taken from the creditor and usually these securities pay defined interest rate on the amount borrowed. Short-term investments are investments which are held for a period of one year or

Concept explainers

Want to see the full answer?

Chapter A2 Solutions