Homework Answers
The answer is
B. NO SIGNIFICANT INFLUENCE
Reason : Why other 3 options are not right answer :
Held to maturity : Equity ownership doesn't have specific maturity date as Debt instrument. Equity shares can be held forever (till liquidation) or can be sold anytime. Hence this option doesn't satisfy classification of equity shares.
Controlling Interest : This situation is when investor holds more than 50% of ownership in voting rights. This is also called as holding majority of shares of entity. This option also doesn't satisfy classification of equity shares as per question.
SignificantIInfluence : If a investor holds more than 20% ownership in voting rights, it is called as 'Significant influence'. Significant influence is power to participate in decisions of financial and operational policy. This option also doesn't satisfy classification of equity shares as per question.
Thus a investor who holds less than 20% shares called as 'No significant influence'. These holdings are classified as 'Investment'.
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Equity securities in which the investor owns less than 20% ownership in the voting stock of...
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________ are equity securities in which the investor owns 20% or more, but less than 50%, of the investee's voting stock. Held-to-maturity investments Significant interest investments Available-for-sale investments Controlling interest investments
2. Equity securities in which the investor... 2. Equity securities in which the investor lacks the...
2.
Equity securities in which the investor...
2. Equity securities in which the investor lacks the ability to participate in the decisions of the investee company are classified as investments. A) controlling interest equity B) no significant influence equity C) significant influence equity D) available-for-sale equity
are equity securities in which the investor owns between 20% and 50% of the investee's voting...
are equity securities in which the investor owns between 20% and 50% of the investee's voting stock. 5-Securities are represented by a certificate and are commonly traded on an exchange. • • True False 6-When a company receives interest revenue on a bond investment, total stockholders' equity remains unchanged. • • True False 7-When a company collects the face value of a bond investment at maturity, total assets increase. • • True False 8-Creditors invest in a company and hope...
Question 1 Trading investments include ob equity securities in which the investor holds less than 20...
Question 1 Trading investments include ob equity securities in which the investor holds less than 20 percent of the voting stock and that the investor plans to sell in the very near future debt and equity securities that the investor expects to hold longer than one year or debt or equity securities that are not readily marketable investments in debt securities that the investor intends to hold until they mature investments in debt and equity securities that are highly liquid...
Jerome has insignificant influence of Melina Corporation because it owns less than 20% of the voting...
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Long-term investments cannot include: Multiple Choice Held-to-maturity debt securities. Securities with maturity dates within three months....
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Which of the following observations is NOT consistent with the accounting for investments in equity securities...
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Question 6 If the cost method is used to account for a long-term investment in common...
Question 6 If the cost method is used to account for a long-term investment in common stock, dividends received should be credited to the Dividend Revenue account. debited to the Stock Investments account. recorded only when 20% or more of the stock is owned. credited to the Stock Investments account. Question 7 If 10% of the common stock of an investee company is purchased as a long-term investment, the appropriate method of accounting for the investment is determined by agreement...
All of the following statements regarding accounting for stock investments with insignificant influence under U.S. GAAP...
All of the following statements regarding accounting for stock investments with insignificant influence under U.S. GAAP are true except: Multiple Choice When an investor owns less than 20% of voting stock, the investor is presumed to have insignificant influence. Stock investments with insignificant influence are reported at fair value. The investment account equals the acquisition cost plus the share of investee income plus the share of investee dividends. Stock investments with insignificant influence are classified as either short or long...
requires explanation Videos Account for equity Securities within for equity securities with insignificant L O Required...
requires explanation
Videos Account for equity Securities within for equity securities with insignificant L O Required information Knowledge Check 01 Jerome has insignificant influence of Melina Corporation because it owns less than 20% of the voting stock. The cost of the Melina stock is $5,000 and has a fair value of $6,000 on December 31 at the end of the first year it held the securities. Complete the necessary adjusting entry selecting the account names from the pull-down menus and...
2.
Equity securities in which the investor...
2. Equity securities in which the investor lacks the ability to participate in the decisions of the investee company are classified as investments. A) controlling interest equity B) no significant influence equity C) significant influence equity D) available-for-sale equity
are equity securities in which the investor owns between 20% and 50% of the investee's voting stock. 5-Securities are represented by a certificate and are commonly traded on an exchange. • • True False 6-When a company receives interest revenue on a bond investment, total stockholders' equity remains unchanged. • • True False 7-When a company collects the face value of a bond investment at maturity, total assets increase. • • True False 8-Creditors invest in a company and hope...
Question 1 Trading investments include ob equity securities in which the investor holds less than 20 percent of the voting stock and that the investor plans to sell in the very near future debt and equity securities that the investor expects to hold longer than one year or debt or equity securities that are not readily marketable investments in debt securities that the investor intends to hold until they mature investments in debt and equity securities that are highly liquid...
requires explanation
Videos Account for equity Securities within for equity securities with insignificant L O Required information Knowledge Check 01 Jerome has insignificant influence of Melina Corporation because it owns less than 20% of the voting stock. The cost of the Melina stock is $5,000 and has a fair value of $6,000 on December 31 at the end of the first year it held the securities. Complete the necessary adjusting entry selecting the account names from the pull-down menus and...
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