Flashcards in Deck17 Deck (17):
Investments in "Available for Sale" securities are valued at market price under what method?
Fair Value Method
On Available for Sale securities, "Unrealized" Changes(Gain/Loss) are recorded where?
For an investor's Security to be considered "Held to Maturity" it must have
1. Positive Intent and 2. Ability to hold the securities until Maturity
How are investments NOT held to security valued?
Fair Value (Whatever the market rate is)
The market price of a bond is :
The present value of all remaining payments(principle and interest) at the effective(market) interest rate.
A term bond matures on:
A single date
When do serial bonds mature?
According to a schedule
If a bond is issued at 97 plus accrued interest what does that mean?
It's issued at 97% of its face value. So a $1000 bond would be issued for $970.
When debt is issued at a discount, the interest expense equals the Cash Paid + ?
For Bonds, Interest is defined as:
The True Yield Rate x the Debt balance at the beginning of the interest Period.
Are the purchase of Cash Equivalents reported in the Statement of Cash Flows?
No, because the purchase of a Cash Equivalent makes the Cash Inflow go down by the same as the Cash Outflow
What is a difference between Managerial Accounting and Financial Accounting?
Managerial doesn't have to follow GAAP, while Financial does.
Which method is LEAST likely to be used to report an investment in a corporate Joint Venture? Equity Method or Fair Value method
When using LCM for Inventory, which results in the least inventory amount ($)? By Total Inventory, By Groups, or By Separate Items
Separate Items - In no case will market exceed cost
Which valuation method would NOT be used to value Inventory?
Present Value of Future Cash Flows
For a Company's 10-Q's, what does it have to file along with last month's Balance Sheet?
Balance Sheet from the fiscal Year before.