Chapter Review
15-7dDiscussion Questions
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Why might a business invest cash in temporary investments?
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When is the equity method the appropriate accounting for equity investments?
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How does the accounting for a dividend received differ for equity investments of less than 20% ownership and equity investments of between 20%–50% ownership?
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If an investor owns more than 50% of an investee, how is the investment treated on the investor’s financial statements?
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What causes a gain or loss on the sale of a bond investment?
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What is the major difference in the accounting for a portfolio of trading securities and a portfolio of available-for-sale securities?
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If Valuation Allowance for Trading Investments has a credit balance, how is it reported on the balance sheet?
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If Valuation Allowance for Available-for-Sale Investments has a debit balance, how is it reported on the balance sheet?
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How would a debit balance in Unrealized Gain (Loss) on Available-for-Sale Investments be reported on the financial statements?
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How are the balance sheet and income statement affected by fair value accounting for bond investments?