31. To be classified as a short-term investment, the investment must be readily marketable and intended to be converted into cash within the next year or operating cycle, whichever is longer.
32. An investment is readily marketable if it is management's intent to sell the investment.
a33.When a parent company acquires a wholly owned subsidiary for an amount in excess of the book value of the net assets acquired, the excess is always allocated to goodwill.
a34.A consolidated income statement will reflect only revenue and expense transactions between the consolidated entity and parties outside the affiliated group.
35. One of the reasons a corporation may purchase investments is that it has excess cash.
36. When recording bond interest, Interest Receivable is reported as a fixed asset in the statement of financial position.
37. Under the cost method, the investment is recorded at cost and revenue is recognized only when cash dividends are received.
38. Consolidated financial statements present a condensed version of the financial statements so investors will not experience information overload.
39. The unrealized gain or loss on non-trading securities is reported in the income statement.
40. "Intent to convert" does not include an investment used as a resource that will be used whenever the need for cash arises.