Deck17 Flashcards
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?
Owner’s Equity
For an investor’s Security to be considered “Held to Maturity” it must have
- 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 $970.
When debt is issued at a discount, the interest expense equals the Cash Paid + ?
Plus Discount
For Bonds, Interest is defined as:
The True Yield Rate x the Debt balance at the beginning of the interest Period.
Are the purchase of Cash Equivalents reported in the Statement of Cash Flows?
No, because the purchase of a Cash Equivalent makes the Cash Inflow go down by the same as the Cash Outflow
What is a difference between Managerial Accounting and Financial Accounting?
Managerial doesn’t have to follow GAAP, while Financial does.
Which method is LEAST likely to be used to report an investment in a corporate Joint Venture? Equity Method or Fair Value method
Fair Value
When using LCM for Inventory, which results in the least inventory amount ($)? 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
