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Unformatted text preview: Libby/Libby/Short 6e Chapter 12 Multiple-Choice Quizzes 1 Which of the following is TRUE about the classification of investments in the equity securities of other companies? A) Significant influence exists when ownership is 20 to 50 percent of the voting stock. B) Passive investments exist when ownership is less than 20 percent of the voting stock. C) Control over the other company exists when ownership of the voting stock exceeds 50 percent. D) All of the above are true. Answer D 2 Debt securities are always A) considered to be passive investments. B) considered to be long-term investments accounted for under the equity method. C) considered to be investments to gain control. D) reported at fair market value. Answer A 3 The receipt of the periodic interest from a held-to-maturity investment in bonds, which was purchased at par, is recorded as a debit to Cash and credit to A) Interest Revenue....
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This note was uploaded on 01/19/2012 for the course ACC 211 taught by Professor Sicre during the Spring '07 term at University of Miami.
- Spring '07