Problem Solving Survival Guide to accompany Financial Accounting, 8th Edition

EXERCISE 12-7

Purpose: (L.O. 1 thru 7) This exercise will quiz you about terminology used in this chapter.

A list of accounting terms with which you should be familiar appears below:

Consolidated financial statements	*Intercompany transactions
Controlling interest	Investment portfolio
Cost method	Long-term investments
Debt investments	Non-trading securities
Equity method	Parent company
Fair value	Short-term investments
Fair value	Stock investments
Held-for-collection securities	Subsidiary (affiliated) company
*Intercompany eliminations	Trading securities

^*These items appear in the Appendix 12A in the text.

Instructions

For each item below, enter in the blank the term that is described.

1. ___________________________________Investments that are readily marketable and intended to be converted into cash within the next year or operating cycle, whichever is longer.
2. ___________________________________Investments that are not readily marketable or that management does not intend to convert into cash within the next year or operating cycle, whichever is longer.
3. ___________________________________A group of stocks and bonds of different corporations held for investment purposes.
4. ___________________________________Investments in government and corporation bonds.
5. ___________________________________Investments in the capital stock of corporations.
6. ___________________________________An accounting method in which the investment in common stock is recorded at cost and revenue ...