Solved

Match Each of the Following Investment Terms with the Appropriate

Question 112

Matching

Match each of the following investment terms with the appropriate definition below.

Premises:
Debt Securities
Business Combination
Equity Method
Available-for-sale Securities
Equity Securities
Investee
Held-to-maturity Securities
Investor
Trading Securities
Cost Method
Responses:
Debt investments that a company intends to keep until their maturity date.
The method of reporting an investment that represents less than 20% of the voting stock of another company.
Preferred and common stock that represent ownership in a company and do not have a fixed maturity date.
What occurs when a company purchases 50% or more of another company’s stock.
Notes and bonds that pay interest and have a fixed maturity.
When using this, dividends are treated as a reduction of the investment.
The company investing in another company’s stock.
The company whose stock is purchased by another entity.
Debt and equity securities purchased and sold to earn short-term profits from changes in the market price.
Securities not held for trading or to maturity or other strategic reasons.

Correct Answer:

Debt Securities
Business Combination
Equity Method
Available-for-sale Securities
Equity Securities
Investee
Held-to-maturity Securities
Investor
Trading Securities
Cost Method
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