Essay on Acc 557 Wk 9 Chapter 12 Quiz - All Possible Questions

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ACC 557 WK 9 Chapter 12 Quiz - All Possible Questions
To Purchase Click Link Below: ACC 557 WK 9 Chapter 12 Quiz - All Possible Questions TRUE-FALSE STATEMENTS 1. Corporations purchase investments in debt or stock securities generally for one of two reasons. 2. A reason some companies purchase investments is because they generate a significant portion of their earnings from investment income.

3. The accounting for short-term debt investments and for long-term debt investments is similar.

4. When debt investments, are sold, the gain or loss is the difference between the net proceeds from the
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15. Consolidated financial statements are prepared in place of the financial statements for the parent and subsidiary companies.

16. Consolidated financial statements should be prepared only when a subsidiary company has a controlling interest in the parent company.

17. The valuation of non-trading securities is similar to the procedures followed for trading securities, except that changes in fair value are not recognized in current income.

18. An unrealized gain or loss on trading securities is reported as a separate component of stockholders' equity.

19. For non-trading securities, the unrealized gain or loss account is carried forward to future periods. 20. A decline in the fair value of a trading security is recorded by debiting an unrealized loss account and crediting the Fair value Adjustment account.

21. If the fair value of a non-trading security exceeds its cost, the security should be written up to fair value and a realized gain should be recognized.

22. The Fair Value Adjustment account can only have a credit balance or a zero balance.

23. To be classified as a short-term investment, the investment must be readily marketable and intended to be converted into cash within the next year or operating

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