61) Which of the following are
excluded
from the numerator in the calculation of the acid-test ratio?
A) inventory and accounts receivable
B) prepaid expenses and cash
C) inventory and prepaid expenses
D) inventory and short-term investments
62) Cash collected from accounts receivable is shown on the cash flow statement as a(n):
A) operating activity
B) investing activity
C) financing activity
D) either as an operating activity or as a financing activity
63) Short-term investments are investments that a company plans to hold for one year or less.
64) All marketable securities are considered to be short-term investments.
65) Real Corporation purchased an investment in January for $15,000. If Real Corporation was to sell this investment on April 30th it would be worth $20,000. This is a realized gain.
66) Smart-T Corporation purchased an investment in April for $10,000. If Smart-T Corporation sold this investment on May 30th for $12,000. They would have a realized gain.
67) Zeep Company purchased shares of Zoop Inc on June 30, 2011 for $7,500. At the end of August these shares are now worth $6,500. Zeep has an unrealized loss on this investment.
68) Short term investment purchases are recorded at their cost.
69) Investments held by a corporation are always classified as current assets.
70) Accounting for a short term investment is the same as accounting for a note receivable.