Chapter 13 Flashcards
Equity securities
Preferred and common stock that represented ownership in a company and do not have a fixed maturity date
Debt securities
Notes and bonds that pay interest and have a fixed maturity
Investments
Debt and equity securities purchased primarily to earn additional revenue
The company investing in another company’s stock
Investor
The company whose stock is purchased
Investee
The accounting method for investments of less than 20% of the investees outstanding stock
Cost method
The section of the income statement in which a gain or loss on a debt or stock investment is reported
Other income (loss)
A purchase of more than 50% ownership of the outstanding stock of another company
Business combination
A corp owning all or a majority of the voting stock of another corp
Parent company
A corp whose majority of stock is owned by another corp
Subsidiary company
The combined financial statements of a parent and subsidiary corp
Consolidated financial statements
Debt and equity securities that are purchased and sold to earn short term profits from changes in their market prices
Trading securities
The rice that would be received for selling an asset or paying off a liability
Fair value
The change unfair value of the portfolio (group) of trading securities
Unrealized gain or loss
Debt investments such as notes or bonds that a company intends to hold until their maturity date
Held to maturity securities
