Question

4) Which of the following investment securities held by Zoogle Inc. may be classified as held-to- maturity securities in its balance sheet?

A) Long-term debenture bonds B) Common stock. C) Callable preferred stock D) All of these answer choices are correct.

 

5) Which of the following investment securities held by Zoogle Inc. are not reported at fair value in its balance sheet?

A) Debt securities held as available for sale securities. B) Debt securities held to maturity C) Bonds held as trading securities D) All of these answer choices are reported at fair value.

 

6) For trading securities, unrealized holding gains and losses are included in eanings:

A) Only at the end of the fiscal year. B) On each reporting date. C) Only when they exceed 10% of the underlying investment. D) Based on a vote of the board of directors.

 

7) All investments in debt securities that don't fit the definitions of the other reporting categories are classified as:

A) Trading securities. B) Securities available for sale. C) Held-to-maturity securities. D) Consolidated securities.

 

8) GAAP regarding fair value accounting for investments in equity securities will generally apply to an investment when the percentage of ownership of another company is

A) Less than 20%. B) 20% to 50%. C) Over 50%. D) Exactly 100%.

 

9) If Pop Company owns 15% of the common stock of Son Company, then Pop Company typically

A) would record 15% of the net income of Son Company as investment income each year. B) would record dividends received from Son Company as investment revenue. C) would increase its investment account by 15% of Son Company income each year. D) All of these answer choices are correct.

Answer 1

Ans.4 Investment securities held by zoogle inc. may be classifield as held-to-maturity securities as a long-term debenture bonds in its balance sheet.

So correct answer is (A) Long -Term Debenture bonds

Ans.5 Investment securities held by zoogle inc. are not reported at fair value as a debt securities held to maturity in its balance sheet.  

So correct answer is (B) Debt securities held to maturity

Ans.6 For trading securities, unrealized holding gains and losses are included in earnings on each reporting date.

So correct answer is (B) On each reporting date

Ans.7 All investment in debt securities that don't fit the definitions of the other reporting categories are classified as a securities available for sale.

So correct answer is (B) Securities available for sale

Ans.8 GAAP regarding fair value accounting for investment in equity securities will generally apply to an investment when the percentage of ownership of another company is less than 20%

So correct answer is (A) Less than 20%

Ans.9 If Pop company owns 15% of the common stock of Son company, than Pop Company would record dividends received from Sun company as investment revenue.

So correct answer is (B) would record dividends received from son company as investment revenue