Term
| Why invest in securities by other companies? |
|
Definition
1. Earn high rate of return
2. Secure certain operating or financing arrangements with another company |
|
|
Term
|
Definition
| Represents a creditor relationship with another entity |
|
|
Term
| What are held-to-maturity securities? |
|
Definition
Debt securities that the company has
1. the positive intent
2. The ability to hold to maturity. |
|
|
Term
|
Definition
| Debt securities bought and held primarily for sale in the near term to generate income on short-term price differences |
|
|
Term
| Available-for-sale define |
|
Definition
| Debt securities not classified as held-to-maturity or trading securities |
|
|
Term
| What kind of securities can be classified as held-to-maturity? |
|
Definition
|
|
Term
| What are held-to-maturity securities accounted for at? (amortized cost or fair value) |
|
Definition
|
|
Term
| What are the 5 examples of debt securities? |
|
Definition
U.S. Government securities
Municipal Securities
Corporate Bonds
Convertible Debts
Commercial Paper |
|
|
Term
| How do companies report available-for-sale securities? is it on the BS or the Income Statement? When is it realized |
|
Definition
| They record it on the Balance sheet, and then only on the income statement when it is realized. |
|
|
Term
| What statement (income or equity) is adjusted when using available for sale? |
|
Definition
| The equity of UNREALIZED HOLDINGS GAIN OR LOSS - EQUITY |
|
|
Term
| What statement (income or equity) is adjusted when using trading securities? |
|
Definition
| The equity of UNREALIZED HOLDINGS GAIN OR LOSS - INCOME |
|
|
Term
| What are Available-for-sale securities accounted for at? |
|
Definition
|
|
Term
| What are Trading securities accounted for at? |
|
Definition
|
|
Term
| While having a 20% investment in another corporation what method do you use to report investments in equity securities? |
|
Definition
| Use the Fair Value method |
|
|
Term
| While having a 20%-50% investment in another corporation what method do you use to report investments in equity securities? |
|
Definition
|
|
Term
| While having a 50+% investment in another corporation what method do you use to report investments in equity securities? |
|
Definition
|
|
Term
| When a corporation owns more than 50% of a another corporation what is it called? |
|
Definition
|
|
Term
| When a corporation is owned by another corporation with more than 50% control over them what are they called? |
|
Definition
|
|
Term
| Where are investments reported on the books at? |
|
Definition
| The parent company's long-term investments |
|
|
