Question 1

A decrease in the fair value of a security that has not yet been realized through an actual sale of the security is called a(n) :

Accepted Answer

A)  Contingent loss.
B)  Realizable loss.
C)  Unrealized loss.
D)  Capitalized loss.
E)  Market loss.F) None of the above
G) A) and C)

Question 2

Investments in trading securities are accounted for using the equity method with consolidation.

Accepted Answer

A) True 
 B)False

Question 3

A U.S.Company's credit sale to an international customer allowing payment to be made in a foreign currency requires using the same exchange rate for the date of sale and the cash payment date.

Accepted Answer

A) True 
 B)False

Question 4

Long-term investments are usually held as an investment of cash for use in current operations.

Accepted Answer

A) True 
 B)False

Question 5

Return on total assets is computed by dividing ___________ by __________.

Accepted Answer

answers m...

Question 6

Long-term investments in available-for-sale securities are reported at fair value on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 7

All of the following statements regarding accounting for noninfluential securities under U.S.GAAP and IFRS are true except:

Accepted Answer

A)  Trading securities are accounted for using fair values with unrealized gains and losses reported in other comprehensive income.
B)  Trading securities are accounted for using fair values with unrealized gains and losses reported in net income.
C)  Available-for-sale securities are accounted for using fair values with unrealized gains and losses reported in other comprehensive income.
D)  Held-to-maturity securities are accounted for using amortized cost.
E)  Both systems examine held-to-maturity securities for impairment.F) A) and E)
G) B) and D)

Question 8

A company had net income of $43,000,net sales of $380,500,and average total assets of $220,000.Its profit margin and total asset turnover were,respectively:

Accepted Answer

A)  11.3%; 1.73.
B)  11.3%; 19.5.
C)  1.7%; 19.5.
D)  1.7%; 11.3.
E)  19.5%; 11.3.F) B) and C)
G) All of the above

Question 9

Breanna Boutique purchased on credit £50,000 worth of clothing from a British company when the exchange rate was $1.97 per British pound.At the year-end balance sheet date the exchange rate increased to $2.76.Breanna Boutique must record a:

Accepted Answer

A)  gain of $39,500.
B)  loss of $39,500.
C)  gain of $138,000.
D)  loss of $138,000.
E)  neither a gain nor loss.F) A) and B)
G) B) and E)

Question 10

_________________________ securities reflect a creditor relationship while ____________________ securities reflect an owner relationship.

Accepted Answer

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Question 11

Investments in trading securities:

Accepted Answer

A)  Include only equity securities.
B)  Are reported as current assets.
C)  Include only debt securities.
D)  Are reported at their cost, no matter what their market value.
E)  Are long-term investments.F) A) and B)
G) A) and C)

Question 12

Available-for-sale equity securities:

Accepted Answer

A)  Are recorded at cost when acquired.
B)  May earn dividends that are reported in that year's income statement.
C)  May be classified as either short-term or long-term securities.
D)  Are reported at market value on the balance sheet.
E)  All of the choices describe available-for-sale equity securities.F) A) and D)
G) B) and D)

Question 13

Long-term investments include investments in land or other assets not used in a company's operations.

Accepted Answer

A) True 
 B)False

Question 14

On February 15,Seacroft buys 7,000 shares of Kebo common stock at $28.53 per share plus a brokerage fee of $400.The stock is classified as available-for-sale securities.On March 15,Kebo declares a dividend of $1.15 per share payable to stockholders of record on April 15.Seacroft received the dividend on April 15 and ultimately sells half of the Kebo stock on November 17 of the current year for $29.30 per share less a brokerage fee of $250.The journal entry to record the sale of the stock on November 17 is:

Accepted Answer

A)  Debit Cash $102,300; credit Long-Term Investments-AFS $99,855; credit Gain on Sale of Long-Term Investments $2,445.
B)  Debit Cash $102,550; credit Long-Term Investments-Trading $99,855; debit Gain on Sale of Long-Term Investments $2,645.
C)  Debit Cash $102,550; credit Long-Term Investments-AFS $100,055; credit Gain on Sale of Long-Term Investments $2,495.
D)  Debit Cash $102,300; credit Long-Term Investments-AFS $100,055; credit Gain on Sale of Long-Term Investments $2,245.
E)  Debit Cash $102,550; credit Long-Term Investments-Trading $99,855; credit Gain on Sale of Long-Term Investments $2,645.F) B) and C)
G) A) and D)

Question 15

Consolidated statements are prepared as if a company is organized as one entity,with the amounts allocated for subsidiaries reported in the investment accounts.

Accepted Answer

A) True 
 B)False

Exam 15: Investments and International Operations

_____ securities reflect a creditor relationship while securities reflect an owner relationship.

Correct Answer
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View Answer

A U.S.Company's credit sale to an international customer allowing payment to be made in a foreign currency requires using the same exchange rate for the date of sale and the cash payment date.

Correct Answer
verified

Investments in trading securities are accounted for using the equity method with consolidation.

Correct Answer
verified

All of the following statements regarding accounting for noninfluential securities under U.S.GAAP and IFRS are true except:

Correct Answer
verified

Investments in trading securities:

Correct Answer
verified

Available-for-sale equity securities:

Correct Answer
verified

Consolidated statements are prepared as if a company is organized as one entity,with the amounts allocated for subsidiaries reported in the investment accounts.

Correct Answer
verified

A decrease in the fair value of a security that has not yet been realized through an actual sale of the security is called a(n) :

Correct Answer
verified

Long-term investments include investments in land or other assets not used in a company's operations.

Correct Answer
verified

Long-term investments are usually held as an investment of cash for use in current operations.

Correct Answer
verified

A company had net income of $43,000,net sales of $380,500,and average total assets of $220,000.Its profit margin and total asset turnover were,respectively:

Correct Answer
verified

Long-term investments in available-for-sale securities are reported at fair value on the balance sheet.

Correct Answer
verified

Return on total assets is computed by dividing _ by .

Correct Answer
verified
answers m...
View Answer

Breanna Boutique purchased on credit £50,000 worth of clothing from a British company when the exchange rate was $1.97 per British pound.At the year-end balance sheet date the exchange rate increased to $2.76.Breanna Boutique must record a:

Correct Answer
verified

Correct Answer
verified

Exam 15: Investments and International Operations

_________________________ securities reflect a creditor relationship while ____________________ securities reflect an owner relationship.

Correct Answerverified answers m...View AnswerShow Answer

A U.S.Company's credit sale to an international customer allowing payment to be made in a foreign currency requires using the same exchange rate for the date of sale and the cash payment date.

Correct AnswerverifiedShow Answer

Investments in trading securities are accounted for using the equity method with consolidation.

Correct AnswerverifiedShow Answer

All of the following statements regarding accounting for noninfluential securities under U.S.GAAP and IFRS are true except:

Correct AnswerverifiedShow Answer

Investments in trading securities:

Correct AnswerverifiedShow Answer

Available-for-sale equity securities:

Correct AnswerverifiedShow Answer

Consolidated statements are prepared as if a company is organized as one entity,with the amounts allocated for subsidiaries reported in the investment accounts.

Correct AnswerverifiedShow Answer

A decrease in the fair value of a security that has not yet been realized through an actual sale of the security is called a(n) :

Correct AnswerverifiedShow Answer

Long-term investments include investments in land or other assets not used in a company's operations.

Correct AnswerverifiedShow Answer

Long-term investments are usually held as an investment of cash for use in current operations.

Correct AnswerverifiedShow Answer

A company had net income of $43,000,net sales of $380,500,and average total assets of $220,000.Its profit margin and total asset turnover were,respectively:

Correct AnswerverifiedShow Answer

Long-term investments in available-for-sale securities are reported at fair value on the balance sheet.

Correct AnswerverifiedShow Answer

Return on total assets is computed by dividing ___________ by __________.

Correct Answerverified answers m...View AnswerShow Answer

Breanna Boutique purchased on credit £50,000 worth of clothing from a British company when the exchange rate was $1.97 per British pound.At the year-end balance sheet date the exchange rate increased to $2.76.Breanna Boutique must record a:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

_____ securities reflect a creditor relationship while securities reflect an owner relationship.

Correct Answer
verified
answers m...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Return on total assets is computed by dividing _ by .

Correct Answer
verified
answers m...
View Answer

Correct Answer
verified

Correct Answer
verified