Question 1

A company should report its portfolio of held-for-trading securities at its fair value.

Accepted Answer

A) True 
 B)False

Question 2

____________________________ are equity securities that a company intends to actively manage and trade for a profit.

Accepted Answer

Held-for-t...

Question 3

A company had net income of $76,000 in Year 1 and $88,000 in Year 2. Its net sales were $640,000 in Year 1 and $611,000 in Year 2. Its average total assets in Year 1 were $670,000 and $712,000 in Year 2. Calculate the profit margin, total asset turnover and return on total assets for both years. Comment on the results.

Accepted Answer

The company increased its profit margin,...

Question 4

Available-for-sale securities are:

Accepted Answer

A)   Recorded at cost and remain at cost over the life of the investment.
B)   Reported at historical cost, adjusted for the amortized amount of any difference between cost and maturity value.
C)   Reported at fair value on the balance sheet.
D)   Intended to be held to maturity.
E)   Always classified with Long-Term Liabilities.F) C) and E)
G) A) and E)

Question 5

Net profit margin reflects the percent of net income in each dollar of net sales.

Accepted Answer

A) True 
 B)False

Question 6

Unrealized gains and losses on trading securities are reported on the income statement.

Accepted Answer

A) True 
 B)False

Question 7

Long-term investments include:

Accepted Answer

A)   Investments in bonds and shares that are not readily convertible to cash.
B)   Investments in marketable shares that are intended to be converted into cash in the short-term.
C)   Investments in marketable bonds that are intended to be converted into cash in the short-term.
D)   Only investments readily convertible to cash.
E)   Investments intended to be converted to cash within one year.F) None of the above
G) A) and B)

Question 8

Explain how transactions (both sales and purchases) in a foreign currency are recorded and reported.

Accepted Answer

When a selling company makes a credit sa...

Question 9

Mian sells American gourmet foods to merchandisers in Singapore. Prepare the journal entries for Mian to record the following transactions. Include any year-end adjustments.

Accepted Answer

The answer of Mian sells American gourmet foods to merchandisers...

Question 10

All of the following statements regarding other comprehensive income are EXCEPT:

Accepted Answer

A)   Other comprehensive income includes unrealized gains and losses on available-for-sale securities.
B)   Other comprehensive income is not considered when calculating comprehensive income.
C)   Other comprehensive income is not the same as net income.
D)   Comprehensive income is shown in the statement of comprehensive income.
E)   Comprehensive income is the total of net income and other comprehensive income.F) A) and C)
G) All of the above

Question 11

Long-term investments are reported in the:

Accepted Answer

A)   Current asset section of the balance sheet.
B)   Intangible asset section of the balance sheet.
C)   Non-current section of the balance sheet called long-term investments.
D)   Plant assets section of the balance sheet.
E)   Equity section of the balance sheet.F) C) and E)
G) C) and D)

Question 12

If the exchange rate for Canadian and U.S. dollars is 0.82777 to 1, this implies that 3 Canadian dollars will buy ____ worth of U.S. dollars.

Accepted Answer

A)   $0.2759
B)   $0.82777
C)   $1.82777
D)   $2.48
E)   None of these.F) B) and E)
G) All of the above

Question 13

To prepare consolidated financial statements when a U. S. parent company has an international subsidiary, the international subsidiary's financial statements must be translated into U.S. dollars.

Accepted Answer

A) True 
 B)False

Question 14

A controlling investor is called the parent, and the investee company is called the subsidiary.

Accepted Answer

A) True 
 B)False

Question 15

On May 1, Franke Co. purchases 2,000 shares of Computech for $25,000. This investment is considered to be an available-for-sale securities. On July 31 (Franke's year-end), these shares had a market value of $28,000. Franke should record a credit to Gain on Investment for $3,000.

Accepted Answer

A) True 
 B)False

Question 16

NSC Corporation has invested in 10% of the outstanding shares of VC Corporation. NSC intends to actively manage this investment for profit. This investment is classified as:

Accepted Answer

A)   an available-for-sale security.
B)   a held-to-maturity security.
C)   a held-for-trading security.
D)   a significant influence security.
E)   a controlling influence security.F) A) and B)
G) B) and E)

Question 17

A company reported net sales of $900,000, net income of $100,000 and average total assets of $425,000. Calculate its return on total assets.

Accepted Answer

$100,000 /...

Question 18

Accounting for long-term investments in held-to-maturity securities requires companies to record interest revenue as it is earned.

Accepted Answer

A) True 
 B)False

Question 19

Explain how held-to-maturity debt securities are accounted for at acquisition and how to record the interest.

Accepted Answer

Held-to-maturity (HTM) debt securities a...

Question 20

All companies desire a low return on total assets.

Accepted Answer

A) True 
 B)False

Exam 15: Investments and International Operations

Unrealized gains and losses on trading securities are reported on the income statement.

Correct Answer
verified

Explain how held-to-maturity debt securities are accounted for at acquisition and how to record the interest.

Correct Answer
verified
Held-to-maturity (HTM) debt securities a...
View Answer

Correct Answer
verified
The company increased its profit margin,...
View Answer

____________________________ are equity securities that a company intends to actively manage and trade for a profit.

Correct Answer
verified
Held-for-t...
View Answer

A company should report its portfolio of held-for-trading securities at its fair value.

Correct Answer
verified

All companies desire a low return on total assets.

Correct Answer
verified

All of the following statements regarding other comprehensive income are EXCEPT:

Correct Answer
verified

Net profit margin reflects the percent of net income in each dollar of net sales.

Correct Answer
verified

Long-term investments include:

Correct Answer
verified

If the exchange rate for Canadian and U.S. dollars is 0.82777 to 1, this implies that 3 Canadian dollars will buy ____ worth of U.S. dollars.

Correct Answer
verified

To prepare consolidated financial statements when a U. S. parent company has an international subsidiary, the international subsidiary's financial statements must be translated into U.S. dollars.

Correct Answer
verified

Long-term investments are reported in the:

Correct Answer
verified

A controlling investor is called the parent, and the investee company is called the subsidiary.

Correct Answer
verified

Explain how transactions (both sales and purchases) in a foreign currency are recorded and reported.

Correct Answer
verified
When a selling company makes a credit sa...
View Answer

Mian sells American gourmet foods to merchandisers in Singapore. Prepare the journal entries for Mian to record the following transactions. Include any year-end adjustments.

Correct Answer
verified

NSC Corporation has invested in 10% of the outstanding shares of VC Corporation. NSC intends to actively manage this investment for profit. This investment is classified as:

Correct Answer
verified

On May 1, Franke Co. purchases 2,000 shares of Computech for $25,000. This investment is considered to be an available-for-sale securities. On July 31 (Franke's year-end), these shares had a market value of $28,000. Franke should record a credit to Gain on Investment for $3,000.

Correct Answer
verified

Available-for-sale securities are:

Correct Answer
verified

A company reported net sales of $900,000, net income of $100,000 and average total assets of $425,000. Calculate its return on total assets.

Correct Answer
verified
$100,000 /...
View Answer

Accounting for long-term investments in held-to-maturity securities requires companies to record interest revenue as it is earned.

Correct Answer
verified

Exam 15: Investments and International Operations

Unrealized gains and losses on trading securities are reported on the income statement.

Correct AnswerverifiedShow Answer

Explain how held-to-maturity debt securities are accounted for at acquisition and how to record the interest.

Correct AnswerverifiedHeld-to-maturity (HTM) debt securities a...View AnswerShow Answer

Correct AnswerverifiedThe company increased its profit margin,...View AnswerShow Answer

____________________________ are equity securities that a company intends to actively manage and trade for a profit.

Correct AnswerverifiedHeld-for-t...View AnswerShow Answer

A company should report its portfolio of held-for-trading securities at its fair value.

Correct AnswerverifiedShow Answer

All companies desire a low return on total assets.

Correct AnswerverifiedShow Answer

All of the following statements regarding other comprehensive income are EXCEPT:

Correct AnswerverifiedShow Answer

Net profit margin reflects the percent of net income in each dollar of net sales.

Correct AnswerverifiedShow Answer

Long-term investments include:

Correct AnswerverifiedShow Answer

If the exchange rate for Canadian and U.S. dollars is 0.82777 to 1, this implies that 3 Canadian dollars will buy ____ worth of U.S. dollars.

Correct AnswerverifiedShow Answer

To prepare consolidated financial statements when a U. S. parent company has an international subsidiary, the international subsidiary's financial statements must be translated into U.S. dollars.

Correct AnswerverifiedShow Answer

Long-term investments are reported in the:

Correct AnswerverifiedShow Answer

A controlling investor is called the parent, and the investee company is called the subsidiary.

Correct AnswerverifiedShow Answer

Explain how transactions (both sales and purchases) in a foreign currency are recorded and reported.

Correct AnswerverifiedWhen a selling company makes a credit sa...View AnswerShow Answer

Mian sells American gourmet foods to merchandisers in Singapore. Prepare the journal entries for Mian to record the following transactions. Include any year-end adjustments.

Correct AnswerverifiedShow Answer

NSC Corporation has invested in 10% of the outstanding shares of VC Corporation. NSC intends to actively manage this investment for profit. This investment is classified as:

Correct AnswerverifiedShow Answer

On May 1, Franke Co. purchases 2,000 shares of Computech for $25,000. This investment is considered to be an available-for-sale securities. On July 31 (Franke's year-end), these shares had a market value of $28,000. Franke should record a credit to Gain on Investment for $3,000.

Correct AnswerverifiedShow Answer

Available-for-sale securities are:

Correct AnswerverifiedShow Answer

A company reported net sales of $900,000, net income of $100,000 and average total assets of $425,000. Calculate its return on total assets.

Correct Answerverified$100,000 /...View AnswerShow Answer

Accounting for long-term investments in held-to-maturity securities requires companies to record interest revenue as it is earned.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Held-to-maturity (HTM) debt securities a...
View Answer

Correct Answer
verified
The company increased its profit margin,...
View Answer

Correct Answer
verified
Held-for-t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
When a selling company makes a credit sa...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$100,000 /...
View Answer

Correct Answer
verified