Chapter 17 Homework - Chapter17:Investments Homework...

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Chapter 17: Investments Tiffany Watt Homework March 7, 2011 AC 302 – 01   Questions 1) Distinguish between a debt security and an equity security. Debt securities represent a creditor relationship with another entity. Equity securities represent ownership interests. 4) Identify and explain the three types of classifications for investments in debt securities. Companies group investments in debt securities into three separate categories for accounting and reporting purposes: I. Held-to-maturity: Debt securities that the company has the positive intent and ability to hold to maturity. II. Trading: Debt securities bought and held primarily for sale in the near term to generate income on short-term price differences. III. Available-for-sale: Debt securities not classified as held-to-maturity or trading securities. 15) Distinguish between the accounting treatment for available-for- sale equity securities and trading equity securities. The accounting treatment for available-for-sale equity securities differs from
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This note was uploaded on 09/01/2011 for the course BUSINESS 101 taught by Professor - during the Spring '11 term at Mississippi Valley State University.

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Chapter 17 Homework - Chapter17:Investments Homework...

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