Term
| When using the equity method to account for an investment, cash dividends received by the inverstor from the investee should be recorded: |
|
Definition
| As a reduction in the investment account |
|
|
Term
Balance sheet:
Equipment 500,000
less accumulated deprication: 135,000
use strait-line depriciation over 10 years and estimates salvage value at 10% of cost. What is the average age of the equipment owned? |
|
Definition
|
|
Term
| When an impairment of an equity investment that is classified as available for sale occurs for a reason that is judged to be "other than temporary," the investment is written down to its fair value and the amount of the write-down is: |
|
Definition
|
|
Term
| The equity method of accounting for investments in voting common stock is appropriate when: |
|
Definition
| the investor can significantly influence the invetee |
|
|
Term
| Vega Corp. purchased a patent at a cost of 200,000. Legal filling fees of 50,000 were paid for the patent. 10 year useful life, strait line amortization. 40,000 for unsucessful defense. The amount charged to income related to the patent is: |
|
Definition
|
|
Term
|
Definition
| Could be the product cost or a period cost depending on the use of the asset. |
|
|
Term
| Consolidated financial statements are prepared when on company has: |
|
Definition
| control over another company |
|
|
Term
| which of the following types of subsequent expenditures normally are capitalized? |
|
Definition
| Additions, improvements, and rearrangements. |
|
|
Term
| All investment securities are initially recorded at: |
|
Definition
|
|
Term
| the income statement reports changes in fair value for which type of securities |
|
Definition
|
|
Term
Trading securities bought:
Cost: Fair value:
80,000 84,000
60,000 54,000
22,000 22,000
what amount will be reported on the balance sheet, and how will it be classified? |
|
Definition
|
|
Term
Purchased securties during 2011 and classifed as securities available for sale:
Cost: Fair value:
40,000 49,000
70,000 66,000
28,000 39,000
all decline are temporary. how much gain will be reported in the income statement? |
|
Definition
|
|
Term
| On 1/1Nana, paid 100,000 for 8,000 shares of Papa common stock. These securities were classified as trading securities. The ownership in Papa company is 10%. Papa reported net income of 52,000 for year ended 12/31. the fair value of Papa stock on that date was 45/share. what amount will be reported in the balance sheet of Nana company for the investment in papa at 12/31 |
|
Definition
|
|
Term
| If a company exercises significant influence over Son Company and owns 40% of its common stock, then pop company |
|
Definition
| would record 40% of the net income of SOn Company as investment each year. |
|
|
Term
| Accumulated other comprehensive income in the shareholders' equity section of the balance sheet reflects changes in the fair value of securities for which type of securities? |
|
Definition
| Securities available for sale |
|
|
Term
| the replacement of a major compontenet increased the productive capacity of production equipment from 10 units per hour to 18 units per hour. The expenditure should be debited to: |
|
Definition
|
|
Term
| When an equoty security is appropriately carried and reported as securities available for sale, a gain should be reported in the income statement: |
|
Definition
| Only when the security is sold. |
|
|
Term
| If the fair value of equity securities is not determinable and the equiy method is not appropriate, the securities should be reported at: |
|
Definition
|
|
Term
| Which of the following investment securities are not reported at fair value in its balance sheet? |
|
Definition
| Debt securities held to maturity. |
|
|
Term
| Securities that are purchased with the intent of selling them in the near future to take advantageshort-term price changes are classified as: |
|
Definition
|
|
Term
| Refer to the process of allocating the cost of long-term assets used in the business over future periods. |
|
Definition
| Deprication, depletion, and amortization. |
|
|
Term
| Which securities may be classified as held to maturity securities in its balance sheet? |
|
Definition
| Long-term debenture-bonds |
|
|
Term
| If common stock is classified as securities available for sale, cash dividends are classified by the investor as: |
|
Definition
|
|
Term
| Amortization of goodwill? |
|
Definition
|
|
Term
| Gains on the cash sales of fixed assets: |
|
Definition
| Are the excess of the cash proceeds over the book value of the assets. |
|
|
Term
| Assming an asset is used evenly over a four-year service life, which method of depriciation will always result in the largest amount of deprication in the first year? |
|
Definition
| Double-declining balance. |
|
|
Term
| A change in the estimated useful life and residual value pf machinery in the current year is handled as: |
|
Definition
| a prospective change from the current year though the remainder of its useful, using new estimates. |
|
|
Term
| Trading securities, by definition, are property classified in the balance sheet as: |
|
Definition
|
|
Term
| The investment category for which the investor's "positive intent and ability to hold" is important is: |
|
Definition
| Securities classified as held to maturity. |
|
|
Term
| Trading securities are most commonly found on the books of: |
|
Definition
|
|
Term
|
Definition
|
|
Term
| Changes in market value affect comprehensive income, but not net income. |
|
Definition
| Securities available for sale only |
|
|
Term
| Changes in market value affect net income. |
|
Definition
|
|
Term
| Reduces the investment account balance under the equity method |
|
Definition
|
|
Term
| Temporary declines in the fair value of an available for sale security |
|
Definition
|
|
