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STATEMENTS

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0. Investment by one corporation in the controlling interest of another corporation is called a(n)

business combination

0. ____

1. Securities that represent ownership in the company are called

1. ____

2. Consolidated financial statements combine a parent company with its

2. ____

3–5. The three categories of securities that a company may own that affect their valuation on the balance sheet are:

3.

3. ____

4.

4. ____

5.

5. ____

6. The valuation allowance account is used to record

6. ____

7. Debt investments that a company plans to hold until maturity are classified as

7. ____

8. Debt and equity securities that a company has purchased to earn short-term profits are called

8. ____

9. Held-to-maturity investments are reported at _______ value on the balance sheet.

9. ____

10. Trading securities are reported at _______ value on the balance sheet.

10. ____

11. Equity and debt securities that are not classified as trading securities or held-to-maturity securities are classified as

11. ____

12. Excess cash can be invested until it is needed to earn

12. ____

13. Strategic investments, such as an acquisition, are considered to be _______-term investments.

13. ____

14. The accounting for an equity investment by an investor depends upon

14. ____

15. A company that owns between 20% and 50% of another company must use the _______ method.

15. ____

16. Dividends received from marketable securities are reported on the income statement as

16. ____

17. Dividends received from equity-method securities are recorded as

17. ____

18. The equity method records the investor’s share of the net income of the

18. ____