A2 Chapter 14 Test Review

Under the equity method, which of the following is true?

The book value of stock

A bond is a type of marketable equity security.

In a stk split, the investor does not recognize revenue, but reduces the cost per share of stk.

Intercompany debt would be eliminated on the books of both the parent and the subsidiary.

What is the % of ownership dividing line at which consolidated F/S must be prepared?

Accting treatment of 1 corp investing in others can differ depending on the size of investment.

Goodwill

Elimination entries take place on what statement?

All short-term investments are carried at cost, even if they increase in value.

Company that has 20% - 50% of its stock purchased by another company as a long-term investment

Dividend per share of c-stk / current market price per share

Cost method is used when a corp. makes a lg-term investment of less than 20% & no real control

Intercompany receivables & payables must be eliminated in the prep of consolidated F/S.

The carrying value of stock investments recorded under the cost method can be + over time cause

Under the equity method, the investment account always reflects only the

Intercompany transactions are financial transactions involving a parent and

A consolidated statement work sheet is

A corporation that owns more than 50% of the outstanding voting c-stk of another corporation.

When using the cost method for investments in c- stock, receipt of stock dividends or splits

A subsidiary's creditors have a claim against the parent company.

When preparing consolidated financial statements, elimination entries are made on the

Trading securites are

Dividend yield is based on per share

Intercompany transactions involve a parent & one of its subsidiaries or two of the subsidiaries