Matching
Match the following terms with the appropriate definitions.
Premises:
A company that owns a more than 50% controlling interest in a subsidiary.
A corporation controlled by another company when the parent owns more than 50% of the subsidiary's voting stock.
Debt and equity securities that a company intends to actively manage and trade for profit.
Debt securities that a company intends and is able to hold until maturity.
Debt and equity securities not classified as trading or held-to-maturity.
Financial statements that show the financial position, results of operations, and cash flows of all entities under the parent's control, including those of any subsidiaries.
Investments in equity and debt securities that are not readily convertible to cash or are not intended to be converted to cash in the short term.
A measure of operating efficiency, computed as net income divided by average total assets.
An accounting method for long-term investments in equity when the investor has significant influence over the investee.
Change in market value that is not yet realized through an actual sale.
Responses:
Equity method
Available-for-sale securities
Trading securities
Parent company
Subsidiary
Held-to-maturity securities
Return on total assets
Unrealized gain (loss)
Consolidated financial statements
Long-term investments
Correct Answer:
Premises:
Responses:
A company that owns a more than 50% controlling interest in a subsidiary.
A corporation controlled by another company when the parent owns more than 50% of the subsidiary's voting stock.
Debt and equity securities that a company intends to actively manage and trade for profit.
Debt securities that a company intends and is able to hold until maturity.
Debt and equity securities not classified as trading or held-to-maturity.
Financial statements that show the financial position, results of operations, and cash flows of all entities under the parent's control, including those of any subsidiaries.
Investments in equity and debt securities that are not readily convertible to cash or are not intended to be converted to cash in the short term.
A measure of operating efficiency, computed as net income divided by average total assets.
An accounting method for long-term investments in equity when the investor has significant influence over the investee.
Change in market value that is not yet realized through an actual sale.
Premises:
A company that owns a more than 50% controlling interest in a subsidiary.
A corporation controlled by another company when the parent owns more than 50% of the subsidiary's voting stock.
Debt and equity securities that a company intends to actively manage and trade for profit.
Debt securities that a company intends and is able to hold until maturity.
Debt and equity securities not classified as trading or held-to-maturity.
Financial statements that show the financial position, results of operations, and cash flows of all entities under the parent's control, including those of any subsidiaries.
Investments in equity and debt securities that are not readily convertible to cash or are not intended to be converted to cash in the short term.
A measure of operating efficiency, computed as net income divided by average total assets.
An accounting method for long-term investments in equity when the investor has significant influence over the investee.
Change in market value that is not yet realized through an actual sale.
Responses:
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