True-False: The following statements are either true or false. Place a (T) in th
ID: 2589428 • Letter: T
Question
True-False:
The following statements are either true or false. Place a (T) in the parentheses before each true statement and an (F) before each false statement.
1. ( ) Trading securities are either debt or equity securities that the company intends to actively trade for profit.
2. ( ) An investor who owns 20% or more of a corporation's voting stock is presumed to have significant influence over the investee.
3. ( ) An investment in a security available-for-sale is reported on the balance sheet at cost.
4. ( ) Unrealized holding gains and losses on investments in equity securities available-for-sale are reported in the stockholders' equity section of the balance sheet.
5. ( ) An unrealized gain on an investment classified as a trading security is reported on the income statement.
6. ( ) The equity method is used to account for investments in equity securities available-for-sale.
7. ( ) At acquisition, the purchase of equity securities is recorded at cost regardless of which method is used to account for the investment.
8. ( ) An investment in a bond classified as held-to-maturity is reported on the balance sheet at its fair (market) value.
9. ( ) Investments in equity securities available-for-sale are reported on the balance sheet at their market values.
Explanation / Answer
1.True.Debt and Equity are two major components of financing for a company
2.True.20% is the threhold limit to acquire voting power.
3.False.At Fair value
4.True . Trading securities gain or loss are reported in Income statement
5.True . Trading securities gain or loss are reported in Income statement
6.True .
7.True.Acquisition is usually at market value.
8.True. Investments are usually reported at fair value
9.True Investments are usually reported at fair value
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