ACC 291 Week 3 Chapter 12 Practice - Quiz 1 | Documents and Forms | Research Papers

ACC 291 Week 3 Chapter 12 Practice - Quiz 1

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ACC 291 Week 3 Chapter 12 Practice - Quiz 1

Question 1


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

Question 2


Debt investments are initially recorded at:

Question 3


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:

Question 4


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:

Question 5


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:

Question 6


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:




Question 7


Using the information in question 6, what entry would Horicon make to record the receipt of the dividend from Sheboygan?


Question 8


You have a controlling interest if:



Question 9


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

Question 10


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:

Question 11


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:

Question 12


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

Question 13


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



Question 14


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:

Question 15


Which of the following statements about intercompany eliminations is true?


Question 16


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

A+ Grade Answers ACC 291 Week 3 Chapter 12 Practice - Quiz 1 Question 1 Which of the following is not a primary reason why corporations invest in debt and equity securities Question 2 Debt investments are initially recorded at: Question 3
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