Test Bank For Financial Accounting Global Edition Robert Libby Patricia Libby 8th Edition
Appendix E:
Reporting and Interpreting Investments in Other Corporations
True / False Questions
| 1. | The extent of influence and control over another company is a critical factor in determining the proper method of accounting for an investment in the common stock of another company.
True    False |
| 2. | Investments other than held-to-maturity bond investments are reported on the balance sheet at fair value.
True    False |
| 3. | Investments in bonds intended to be sold before they reach maturity should be reported under the fair value method.
True    False |
| 4. | Management must have the intent and ability to hold a bond investment until maturity if it is to be classified as a held-to-maturity security.
True    False |
| 5. | Held-to-maturity bond investments must be reported on the balance sheet at fair value.
True    False |
| 6. | Passive investments other than held-to-maturity investments are reported on the balance sheet at fair value.
True    False |
