Matching
54. Listed below are five terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term placing the letter designating the term in the space provided.
Terms:
a. Held-to-maturity securities
b. Trading securities
c. Available-for-sale securities
d. Equity method
e. Consolidation method
Phrases:
_____ Used when an investor has controlling influence.
_____ This category is not used for equity investments.
_____ Used when an investor has insignificant influence and does not expect to sell in the near future.
_____ Used when an investor has significant, but not controlling influence.
_____ Used when an investor expects to sell in the near future.
55. Listed below are five terms followed by a list of phrases that describe or characterize the terms. Match each phrase with the best term placing the letter designating the term in the space provided.
Terms:
a. Held-to-maturity securities
b. Trading securities
c. Available-for-sale securities
d. Equity method
e. Consolidation method
Phrases:
_____ This category is used only for debt securities.
_____ An investor owns 40% of the common voting shares in the company and can exercise significant influence.
_____ Common stock not held for immediate resale and the investor owns 2% of the outstanding shares.
_____ An investor owns over 50% of the common voting shares in the company.
_____ Common stock held for immediate resale.