Term
| When there is less than 50% ownership |
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Definition
| an investor must use the equity method when a significant influence is exercised over the investee |
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Term
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Definition
| significant influence- equity method |
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Term
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Definition
| no significant influence use cost or market value |
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Term
| an investor may have ownership > 20% and have no significant influence because |
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Definition
| no voting influence, hostile takeover, unsuccessful election of board members, unsuccessful gathering of detailed accounting information |
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Term
| For stock options, rights, and warrants use the |
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Definition
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Term
| for convertible debt and convertible preffered stock use the |
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Definition
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Term
| two approaches for the conversion of bonds payable to common stock are |
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Definition
| market value and book value approach |
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Term
| market value method-how is common stock issued recorded? |
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Definition
| paid in at the market price of the stock at the date of conversion |
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Term
| Under the market value method a gain or loss on the conversion is recognized as a |
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Definition
| difference between the carrying value of the bonds and he market price of the stock issued |
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Term
| When recording the conversion of Preferred stock to common stock what method is used |
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Definition
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Term
| when convertible debt is issued with nondetachable warrants, no portion of the proceeds should be recognized as |
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Definition
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Term
| stock warrants outstanding should be classified as |
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Definition
| additional paid in capital |
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Term
| any compensation expense recorded for a compensatory stock option plan is generally |
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Definition
| allocated to the periods benefitted by the employees required service |
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Term
| In determining earnings per share, dividends on nonconvertible cumulative preferred stock should be |
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Definition
| deducted from net income whether declared or not |
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Term
| Treatment of trading(debt and equity) |
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Definition
B/S- Shown at fair value; Current Assett
I/S- Interest and Dividends-Revenue; Unrealized holding gains and losses are included in income |
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Term
| Treatment of Available-for Sale (debt and equity securities) |
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Definition
B/S- Shown at Fair Value; Current or Long term Asset
-unrealized gains and losses are a separate component of stockholders equity and comprehensive income
I/S- Interest and Dividends-Revenue, unrealized holding gains and losses are not included in net income |
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Term
| Held-to Maturity (debt securities) |
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Definition
B/S- Amortized Cost; Current or Long-term Asset
I/S- interest recongized as revenue |
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Term
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Definition
B/S- investments are carried at acquisition cost
I/S- Dividends and interst are recognized as revenue |
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Term
| Treatment of Equity Method |
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Definition
B/S- Recorded at cost and periodically adjusted by the investors net share of the investees earning or losses; decreased by all dividends received from the investee; long term
I/S- revenue is recongized to the extent of the investees earnings or losses reported subsequent to the date of investment; adjusted by amortization of the difference b/t cost and bv |
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