Description of this paper

23 MULTIPLE CHOICE QUESTIONS

Description

solution


Question

Question;Which of the following would be considered an ?Other Comprehensive;Income? item?;a.;net income.;b.;extraordinary loss related to flood.;c.;gain on disposal of discontinued;operations.;d.;unrealized loss on available-for-sale;securities.;2. Which of the following is not a;part of comprehensive income?;a.;foreign currency items;b.;restructuring charges;c.;unrealized gains and losses;d.;pension liability adjustments;3. Companies may report comprehensive income on;each of the statements below except;a.;income statement;b.;separate statement of comprehensive;income;c.;statement of stockholders? equity;d.;retained earnings statement;4. An investor purchased 500 shares of common;stock, $25 par, for $21,750. Subsequently, 100 shares were sold for $49.50 per;share. What is the amount of gain or;loss on the sale?;a.;$12,750 gain;b.;$600 gain;c.;$600 loss;d.;$9,250 loss;5. During the current year, the Yankton Company;purchased 200 shares of in the Sorros Company for $13,000 as a temporary investment;(trading security). At the end of the year, the market value of the stock was;$11,000. The Yankton Company's financial;statements for the current year should show;a.;a loss of $2,000 on the income;statement and a net trading investments (at fair value) of $13,000 on the;balance sheet;b.;no loss on the income statement and a;net trading investments (at fair value)s of $13,000 on the balance sheet;c.;a gain of $2,000 on the income;statement and a net trading investments (at fair value) of $11,000 on the;balance sheet;d.;a loss of $2,000 on the income;statement and a net trading investments (at fair value) of $11,000 on the;balance sheet;6. The account Unrealized Loss on;Available-for-Sale Investments in Stock should be included in the;a.;Income statement;b.;Balance sheet as an addition to;Temporary Investments in Stock;c.;Balance sheet as a deduction in;Stockholders' Equity;d.;Statement of Retained Earnings;7. The equity method of accounting for;investments;a.;requires a year-end adjustment to;revalue the stock to lower of cost or market;b.;requires the investment to be;reported at its original cost;c.;requires the investment be increased;by the reported net income of the investee;d.;requires the investment be decreased;by the reported net income of the investee;8. Armando Company owns 15,000 of the 50,000;shares of common stock outstanding of Tito Company and exercises a significant;influence over its operating and financial policies. The investment should be accounted for by the;a.;equity method;b.;market method;c.;cost or market method;d.;cost method;9. Under the equity method, the receipt of cash;dividends on an investment in common stock of Vallerio Corporation is accounted;for as a debit to Cash and a credit to;a.;Investment in Vallerio;b.;Retained Earnings;c.;Dividend Revenue;d.;Dividend Receivables;10. Long-term investments are held for all of the;listed reasons below except;a.;their income;b.;long-term gain potential;c.;influence over another business entity;d.;meet current cash needs;11. When shares of stock held as an investment;are sold, the difference between the proceeds and the carrying amount of the;investment is recorded as a(n);a.;prior period adjustment;b.;extraordinary gain or loss;c.;paid-in capital addition;d.;gain or loss;12. Investments such as Trading Securities;Available-for-sale securities are;a.;recorded at cost but reported at fair;market value;b.;recorded at cost and reported at cost;c.;recorded at cost but reported at;lower of cost or fair market value;d.;recorded at fair market value and;reported at fair market value;13. Blanton Corporation purchased 17% of the;outstanding shares of common stock of Worton Corporation as a long-term;investment. Subsequently, Worton;Corporation reported net income and declared and paid cash dividends. What journal entry would Blanton Corporation;use to record the purchase of Worton Corporation common stock?;a.;debit Investment in Worton;Corporation, credit Cash;b.;debit Cash, credit Dividend Revenue;c.;debit Investment in Worton;Corporation, credit Income of Worton Corporation;d.;debit Cash, credit Investment in;Worton Corporation;14. Blanton Corporation purchased 17% of the;outstanding shares of common stock of Worton Corporation as a long-term;investment. Subsequently, Worton;Corporation reported net income and declared and paid cash dividends. What journal entry would Blanton Corporation;use to record dividends from Worton Corporation?;a.;debit Investment in Worton Corporation;credit Cash;b.;debit Cash, credit Dividend Revenue;c.;debit Investment in Worton;Corporation, credit Income of Worton Corporation;d.;debit Cash, credit Investment in;Worton Corporation;15. Blanton Corporation purchased 35% of the;outstanding shares of common stock of Worton Corporation as a long-term;investment. Subsequently, Worton;Corporation reported net income and declared and paid cash dividends. What journal entry would Blanton Corporation;use to record its share of the earnings of Worton Corporation?;a.;debit Investment in Worton;Corporation Stock, credit Cash;b.;debit Cash, credit Dividend Revenue;c.;debit Investment in Worton;Corporation, credit Income of Worton Corporation;d.;debit Cash, credit Investment in;Worton Corporation;16. Parker Company owns 83% of the outstanding;stock of Tadeo Company. Parker Company;is referred to as the;a.;parent;b.;minority interest;c.;affiliate;d.;subsidiary;17. Gale Company owns 87% of the outstanding;stock of Leonardo Company. Leonardo;Company is referred to as the;a.;parent;b.;minority interest;c.;affiliate;d.;subsidiary;18. Financial statements in which financial data;for two or more companies are combined as a single entity are called;a.;conventional statements;b.;consolidated statements;c.;audited statements;d.;constitutional statements;19. In general, consolidated financial statements;should be prepared;a.;when a corporation owns more than 20%;of the common stock of another company;b.;when a corporation owns more than 50%;of the common stock of another company;c.;only when a corporation owns 100% of;the common stock of another company;d.;whenever the market value of the;stock investment is significantly lower than its cost;20. For accounting purposes, the method used to;account for investments in common stock is determined by;a.;the amount paid for the stock by the;investor.;b.;whether the acquisition of the stock;by the investor was "friendly" or "hostile.;c.;the extent of an investor's influence;over the operating and financial affairs of the investee (indicated by the share of;ownership possessed).;d.;whether the stock has paid dividends;in past years.;21. The company whose stock is owned by the;parent company is called the;a.;controlled company.;b.;investee company.;c.;subsidiary company.;d.;sibling company.;22. A company that owns more than 50% of the;common stock of another company is known as the;a.;parent company.;b.;management company.;c.;subsidiary company.;d.;in-charge company.;23. All of the following are disadvantages of;fair value use except;a.;fair values may not be readily;obtainable.;b.;fair values may cause more;fluctuations as change occurs from period to period.;c.;comparability between companies may;be impacted by different fair value measurement.;d.;fair values can only be reflected in;balance sheet accounts.;24.;Why do companies invest in other companies?

 

Paper#53033 | Written in 18-Jul-2015

Price : $23
SiteLock