ACC 291 Week 3 Chapter 12 Practice - Quiz 1

Which of the following is not a primary reason why corporations invest in debt and equity securities

Debt investments are initially recorded at:

Hanes Company sells debt investments costing $26,000 for $28,000, plus accrued interest that has been recorded. In journalizing the sale, credits are to:

Pryor Company receives net proceeds of $42,000 on the sale of stock investments that cost $39,500. This transaction will result in reporting in the income statement a:

The equity method of accounting for long-term investments in stock should be used when the investor has significant influence over an investee and owns:

Assume that Horicon Corp acquired 25% of the common stock of Sheboygan Corp. on January 1, 2011, for $300,000. During 2011 Sheboygan Corp. reported net income of $160,000 and paid total dividends of $60,000. If Horicon uses the equity method to account for its investment, the balance in the investment account on December 31, 2011, will be:

Which of the following statements is not true? Consolidated financial statements are useful to:

At the end of the first year of operations, the total cost of the trading securities portfolio is $120,000. Total fair value is $115,000. The financial statements should show:

At December 31, 2011, the fair value of available-for-sale securities is $41,300 and the cost is $39,800. At January 1, 2011, there was a credit balance of $900 in the Market Adjustment—Available-for-Sale account. The required adjusting entry would be:

In the balance sheet, a debit balance in Unrealized Gain or Loss—Equity is reported as a:

Short-term debt investments must be readily marketable and be expected to be sold within:

Pate Company pays $175,000 for 100% of Sinko's common stock when Sinko's stockholders' equity consists of Common Stock $100,000 and Retained Earnings $60,000. In the worksheet for the consolidated balance sheet, the eliminations will include a:

Which of the following statements about intercompany eliminations is true?

Which one of the following statements about consolidated income statements is false?