Exam 2 Security Reporting

Question 1

Equity Securities - The investor has control over the investee.

Answer 1

Not recognized or recorded.

Question 2

Equity Securities - The investor has influence over the investee.

Answer 2

Not recognized or recorded.

Question 3

Equity Securities - The investor has no control or influence over the investee.

Answer 3

Recognized and recorded in net income.

Question 4

Debt Securities - Available for sale

Answer 4

Recognized and recorded in owner’s equity, other comprehensive income.

Question 5

Debt Securities - Trading

Answer 5

Recognized and recorded in net income.

Question 6

Debt Securities - Held-to-Maturity

Answer 6

Not recognized or recorded.

Question 7

Permanent declining.

Answer 7

Both equity and debt recognize and record in net income.

Question 8

Best method of accounting for Held-to-Maturity securities?

Answer 8

Amortized Cost

Question 9

Best method for accounting for Trading securities?

Answer 9

Fair Value

Question 10

Best method for accounting for Available for Sale securities?

Answer 10

Fair value

Question 11

All deferred tax assets and liabilities are always classified as current or noncurrent??

Answer 11

Noncurrent

Question 12

Using the Completed Contract method, when you close out CIP with a CR, what do you DR?

Answer 12

Construction Expense

Question 13

Using the Percentage-to-Completion method, when you close out CIP with a CR, what do you DR?

Answer 13

Billings on CIP

Question 14

Using the Completed Contract method, when recording Revenue on Long-term Contracts, what is the DR side?

Answer 14

Billings on CIP

Question 15

Using the Percentage-to-Completion method, when recording Revenue on Long-term Contracts, what is the DR side?

Answer 15

Construction Expense

Question 16

Equity Securities - Available for sale

Answer 16

Recognized and recorded in net income.