4. List the 4 categories of securities? future? Which are purchased with the int

Question

4. List the 4 categories of securities? future? Which are purchased with the intent of selling in the near Which category includes only debt securities? 5. Changes in the fair value of secur ities are reported in the income statement for which type of security? 6. Changes in the fair value of securities are reported in the stockholders equity section for wh of security? 7. Cash dividends are recorded as when the investor uses the cost method to account for investments. 8. When property or services are exchanged for stock, what is the value of the new investment (a 9. When should the equity method of accounting for an investment in common stock of sset)? another company be used? 10. When the investor uses the equity m ethod to account for investments in common stock, cash dividends received by the investor should be recorded as a deduction to what account 11. When the investor uses the equity method to account for investments in co investor's share of the investee's net income will increase what account n are consolidated financial statements prepared? 13. If an investment in stock is reclassified from available -for-sale securities to trading securities, the stock should be recorded on the date it is reclassified at the at the date of reclassification

Explanation / Answer

Ans.4 four categories of securities are :

1) available for sale securities

2) marketable equity securities

3) held to maturity securities

4) trading securities

Trading securities are purchased with the intention to sell in near future.

Held to maturity securities include only debt securities.

Answer 5 Trading securities

Answer 6 available for sale securities

Answer 7 Cash dividend are recorded as dividend revenue .

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