Test 2 Quiz 3 - B. Pro-rata share of investees earnings...

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Test 2 Quiz 3 1. Trading Marketable Securities: A. Are considered non-current assets B. Are recorded at amortized cost C. Are marketed to the lower of cost or market each account period D. Are market to market each accounting period. Answer D 2. The classification of marketable equity securities as trading or available for sale is determined by A. Managements intent regarding the disposition of the securities B. When the securities mature C. Whether the current assets are greater or less than the current liabilities D. Whether management wants to mark them to market or not Answer A 3. The equity method of accounting for investments requires: A. Investment should be market to market each accounting period
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Unformatted text preview: B. Pro-rata share of investees earnings should be recorded as investment income C. Company should not have significant influence over investee D. Goodwill related to purchase of investee stock to be recorded separately on the balance sheet. Answer B 4. Held-to-Market securities are equity securities that management intends and has the ability to hold to maturity. Answer: False (debt not equity) 5. When using the current rate method to record foreign subsidiary results, all assets and liabilities are translated at a rate, in effect as of the statement date. Answer: True...
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This note was uploaded on 07/04/2011 for the course FINA 470 taught by Professor Austin during the Spring '11 term at South Carolina.

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