Homework answers / question archive / Bakersfield College ACG 2021 True/False Questions 1)Securities classified as held to maturity could be reported as either current or long-term in a classified balance sheet, depending upon their maturity dates

Bakersfield College ACG 2021 True/False Questions 1)Securities classified as held to maturity could be reported as either current or long-term in a classified balance sheet, depending upon their maturity dates

Accounting

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10. When available-for-sale securities are sold, the amount of gain or loss realized from the date of purchase is included in before-tax net income.

 

 

 

 

11. Companies must always use the equity method when they hold between 25% and 50% of the common stock of an investee.

 

 

 

 

12. The equity method is in many ways a partial consolidation.

 

 

 

 

13. Under the equity method of accounting for a stock investment, cash dividends received are considered a reduction of the investee's net assets.

 

 

 

 

14. When an equity method investment is sold, a gain or loss is recognized for the difference between its selling price and its cost.

 

 

 

 

15. If an investment is accounted for under the equity method, the investor reduces investment income and the investment account for amortization of goodwill acquired in the investment.

 

 

 

 

16. Selecting the fair value option for an available-for-sale investment is equivalent to reclassifying that investment as a trading security.

 

 

 

 

17. The fair value option cannot be elected for significant-influence investments because those must be accounted for under the equity method.

 

 

 

 

18. Under IAS No. 39, investments for which the investor lacks significant influence use basically the same reporting classifications as those used under U.S. GAAP.

 

 

 

 

19. Under IFRS No. 9, investments for which the investor lacks significant influence use basically the same reporting classifications as those used under U.S. GAAP.

 

 

 

 

20. Under IFRS No. 9, debt investments are classified as either “available for sale” or “fair value through profit and loss (FVPL).”

 

 

 

 

21. Under IFRS No. 9, debt investments are classified as either “amortized cost,” or “fair value through profit and loss (FVPL),” or “fair value through other comprehensive income (FVOCI).”