Which of the following is the best description of investments in trading securit
ID: 2499287 • Letter: W
Question
Which of the following is the best description of investments in trading securities?
Investments in bonds that management intends to hold to maturity.
Investments in stocks or bonds that are held primarily for the purpose of selling them in the near future.
Investments in more than fifty percent of the voting stock of another company.
d)Investments that provides the investor significant influence over the investee, but not control over the investee.
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Which of the following is the best description of investments in available-for-sale securities?
a)Investments in bonds that management intends to hold to maturity.
Investments in stocks or bonds that are held primarily for the purpose of selling them in the near future.
Investments in more than fifty percent of the voting stock of another company.
d)Investments in securities that are accounted for under the market value method other than trading securities and held-to-maturity investments.
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Which of the following items about the statement of cash flows is correct?
Non-cash expenses such as depreciation are deducted from net income with the indirect method in computing cash flows from operating activities.
Cash equivalents are highly liquid investments with maturities at the date of purchase of less than three months.
The acquisition of land by issuing bonds payable would not appear on the statement of cash flows.
Cash paid for interest would be classified as a financing cash flow.
a)Investments in bonds that management intends to hold to maturity.
b)Investments in stocks or bonds that are held primarily for the purpose of selling them in the near future.
c)Investments in more than fifty percent of the voting stock of another company.
d)Investments that provides the investor significant influence over the investee, but not control over the investee.
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Which of the following is the best description of investments in available-for-sale securities?
a)Investments in bonds that management intends to hold to maturity.
b)Investments in stocks or bonds that are held primarily for the purpose of selling them in the near future.
c)Investments in more than fifty percent of the voting stock of another company.
d)Investments in securities that are accounted for under the market value method other than trading securities and held-to-maturity investments.
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Which of the following items about the statement of cash flows is correct?
a)Non-cash expenses such as depreciation are deducted from net income with the indirect method in computing cash flows from operating activities.
b)Cash equivalents are highly liquid investments with maturities at the date of purchase of less than three months.
c)The acquisition of land by issuing bonds payable would not appear on the statement of cash flows.
d)Cash paid for interest would be classified as a financing cash flow.
Explanation / Answer
Answer
Option B
------The trading securities classification is used for those investments intended to be sold in short-run.
Answer is option D Available for securities are passive investments other then trading securities and held to maturity debt
Answer is option B
Cash equivalents are highly liquid investments and have maturities at the date of purchase of three months or less
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