Which of the following would be considered an âOther Comprehensive
Incomeâ item?
a.
net income.
b.
extraordinary loss related to flood.
c.
gain on disposal of discontinued
operations.
d.
unrealized loss on available-for-sale
securities.
2. Which of the following is not a
part of comprehensive income?
a.
foreign currency items
b.
restructuring charges
c.
unrealized gains and losses
d.
pension liability adjustments
3. Companies may report comprehensive income on
each of the statements below except
a.
income statement
b.
separate statement of comprehensive
income
c.
statement of stockholdersâ equity
d.
retained earnings statement
4. An investor purchased 500 shares of common
stock, $25 par, for $21,750. Subsequently, 100 shares were sold for $49.50 per
share. What is the amount of gain or
loss on the sale?
a.
$12,750 gain
b.
$600 gain
c.
$600 loss
d.
$9,250 loss
5. During the current year, the Yankton Company
purchased 200 shares of in the Sorros Company for $13,000 as a temporary investment
(trading security). At the end of the year, the market value of the stock was
$11,000. The Yankton Company’s financial
statements for the current year should show
a.
a loss of $2,000 on the income
statement and a net trading investments (at fair value) of $13,000 on the
balance sheet
b.
no loss on the income statement and a
net trading investments (at fair value)s of $13,000 on the balance sheet
c.
a gain of $2,000 on the income
statement and a net trading investments (at fair value) of $11,000 on the
balance sheet
d.
a loss of $2,000 on the income
statement and a net trading investments (at fair value) of $11,000 on the
balance sheet
6. The account Unrealized Loss on
Available-for-Sale Investments in Stock should be included in the
a.
Income statement
b.
Balance sheet as an addition to
Temporary Investments in Stock
c.
Balance sheet as a deduction in
Stockholders’ Equity
d.
Statement of Retained Earnings
7. The equity method of accounting for
investments
a.
requires a year-end adjustment to
revalue the stock to lower of cost or market
b.
requires the investment to be
reported at its original cost
c.
requires the investment be increased
by the reported net income of the investee
d.
requires the investment be decreased
by the reported net income of the investee
8. Armando Company owns 15,000 of the 50,000
shares of common stock outstanding of Tito Company and exercises a significant
influence over its operating and financial policies. The investment should be accounted for by the
a.
equity method
b.
market method
c.
cost or market method
d.
cost method
9. Under the equity method, the receipt of cash
dividends on an investment in common stock of Vallerio Corporation is accounted
for as a debit to Cash and a credit to
a.
Investment in Vallerio
b.
Retained Earnings
c.
Dividend Revenue
d.
Dividend Receivables
10. Long-term investments are held for all of the
listed reasons below except
a.
their income
b.
long-term gain potential
c.
influence over another business entity
d.
meet current cash needs
11. When shares of stock held as an investment
are sold, the difference between the proceeds and the carrying amount of the
investment is recorded as a(n)
a.
prior period adjustment
b.
extraordinary gain or loss
c.
paid-in capital addition
d.
gain or loss
12. Investments such as Trading Securities &
Available-for-sale securities are
a.
recorded at cost but reported at fair
market value
b.
recorded at cost and reported at cost
c.
recorded at cost but reported at
lower of cost or fair market value
d.
recorded at fair market value and
reported at fair market value
13. Blanton Corporation purchased 17% of the
outstanding shares of common stock of Worton Corporation as a long-term
investment. Subsequently, Worton
Corporation reported net income and declared and paid cash dividends. What journal entry would Blanton Corporation
use to record the purchase of Worton Corporation common stock?
a.
debit Investment in Worton
Corporation; credit Cash
b.
debit Cash; credit Dividend Revenue
c.
debit Investment in Worton
Corporation; credit Income of Worton Corporation
d.
debit Cash; credit Investment in
Worton Corporation
14. Blanton Corporation purchased 17% of the
outstanding shares of common stock of Worton Corporation as a long-term
investment. Subsequently, Worton
Corporation reported net income and declared and paid cash dividends. What journal entry would Blanton Corporation
use to record dividends from Worton Corporation?
a.
debit Investment in Worton Corporation;
credit Cash
b.
debit Cash; credit Dividend Revenue
c.
debit Investment in Worton
Corporation; credit Income of Worton Corporation
d.
debit Cash; credit Investment in
Worton Corporation
15. Blanton Corporation purchased 35% of the
outstanding shares of common stock of Worton Corporation as a long-term
investment. Subsequently, Worton
Corporation reported net income and declared and paid cash dividends. What journal entry would Blanton Corporation
use to record its share of the earnings of Worton Corporation?
a.
debit Investment in Worton
Corporation Stock; credit Cash
b.
debit Cash; credit Dividend Revenue
c.
debit Investment in Worton
Corporation; credit Income of Worton Corporation
d.
debit Cash; credit Investment in
Worton Corporation
16. Parker Company owns 83% of the outstanding
stock of Tadeo Company. Parker Company
is referred to as the
a.
parent
b.
minority interest
c.
affiliate
d.
subsidiary
17. Gale Company owns 87% of the outstanding
stock of Leonardo Company. Leonardo
Company is referred to as the
a.
parent
b.
minority interest
c.
affiliate
d.
subsidiary
18. Financial statements in which financial data
for two or more companies are combined as a single entity are called
a.
conventional statements
b.
consolidated statements
c.
audited statements
d.
constitutional statements
19. In general, consolidated financial statements
should be prepared
a.
when a corporation owns more than 20%
of the common stock of another company
b.
when a corporation owns more than 50%
of the common stock of another company
c.
only when a corporation owns 100% of
the common stock of another company
d.
whenever the market value of the
stock investment is significantly lower than its cost
20. For accounting purposes, the method used to
account for investments in common stock is determined by
a.
the amount paid for the stock by the
investor.
b.
whether the acquisition of the stock
by the investor was “friendly” or “hostile.”
c.
the extent of an investor’s influence
over the operating and financial affairs of the investee (indicated by the share of
ownership possessed).
d.
whether the stock has paid dividends
in past years.
21. The company whose stock is owned by the
parent company is called the
a.
controlled company.
b.
investee company.
c.
subsidiary company.
d.
sibling company.
22. A company that owns more than 50% of the
common stock of another company is known as the
a.
parent company.
b.
management company.
c.
subsidiary company.
d.
in-charge company.
23. All of the following are disadvantages of
fair value use except:
a.
fair values may not be readily
obtainable.
b.
fair values may cause more
fluctuations as change occurs from period to period.
c.
comparability between companies may
be impacted by different fair value measurement.
d.
fair values can only be reflected in
balance sheet accounts.
24.
Why do companies invest in other companies?
🇦🇺 Writing for Australian Universities
- AGLC4 (law), APA 7th, Harvard (Business), Vancouver (Health Sciences)
- Grading: HD (85-100%), D (75-84%), C (65-74%), P (50-64%)
- UniMelb, UNSW, ANU, Monash, UQ, UWA standards covered
- Australia uses British English spelling conventions
- Turnitin is widely used — all work is checked before delivery
Australia Pricing Guide
How It Works — 3 Simple Steps
Fill In Your Order Form
Provide your topic, academic level, deadline, referencing style, and any specific instructions or rubric criteria.
Get Matched with a Writer
We assign the best-qualified expert in your subject, familiar with Australia university requirements.
Receive & Review
Download your plagiarism-free paper, review it, and request any free revisions within 14 days if needed.
Frequently Asked Questions
Is this service plagiarism-free?
Yes. Every paper is written from scratch by a human expert to your specific instructions. We run all papers through professional plagiarism detection software and can include a Turnitin-equivalent report on request.
Do your writers know Australia academic standards?
Yes. Our writers are familiar with Australia's university systems, citation styles, and marking conventions. You'll get a paper that meets your institution's exact expectations.
What citation styles do you support for Australia?
We support all major citation styles required by Australia universities, including APA 7th, Harvard, Chicago/Turabian, MLA, OSCOLA, Vancouver, and IEEE.
Can you write just one chapter of my dissertation?
Yes. We write individual dissertation chapters — literature reviews, methodology, data analysis, introductions, conclusions — or the full manuscript from proposal to defence-ready submission.