Chapter 07 Questions(1)

Chapter 07 Questions(1) - 1. When one company purchases...

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1. When one company purchases less than 50% of equity securities in a second company, which of the following statements is true ? a. The purchaser is referred to as the parent. b. The purchaser is referred to as the subsidiary. c. The company whose securities are purchased is the subsidiary. d. The company whose securities are purchased is the investee.
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Answer: D
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2. Why do businesses invest in short-term investments? a. They are trying to gain control over the activities of other companies. b. They are investing excess cash to meet future business operation or investment needs. c. They are lending money to companies that cannot obtain bank loans. d. More than one of the above is correct.
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Answer: B
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3. Matrix Corp. invested cash in a 6-month certificate of deposit (CD) on November 1, 2010. If Matrix Corp. has an accounting period that ends on December 31, 2010, when should Matrix recognize interest revenue from the CD? a. On December 31, 2010 only b. On May 1, 2011 only c. Both December 31, 2010 and May 31, 2011 d. On the date when its income tax return is
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Answer: C
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4. On January 15, 2010, the accounts receivable balance was $7,000 and the balance in the allowance for doubtful accounts was $700. That morning a $200
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This note was uploaded on 04/15/2011 for the course ACCT 2101 taught by Professor Christianwurst during the Spring '08 term at Temple.

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Chapter 07 Questions(1) - 1. When one company purchases...

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