chapter 16 vocab Flashcards
available for sale securities
securities that are held with the intent of selling them sometime int he future
consolidated financial staements
Financial statements that present the assets and liabilities controlled by the parent company and the total revenues and expenses of the subsidiary companies.
controlling interest
Ownership of more than 50% of the common stock of another entity.
cost method
common stock is recorded at cost, and revenue is recognized only when cash dividends are received
debt investments
Investments in government and corporation bonds.
equity method
common stock is initially recorded at cost, and the investment account is then adjusted annually to show the investor’s equity in the investee.
fair value
Amount for which a security could be sold in a normal market.
held-to-maturity securities
Debt securities that the investor has the intent and ability to hold to their maturity date.
investment portfolio
A group of stocks and/or debt securities in different corporations held for investment purposes.
long-term investments
Investments that are not readily marketable or that management does not intend to convert into cash within the next year or operating cycle, whichever is longer.
parent company
A company that owns more than 50% of the common stock of another entity.
short-term investments
investments that are readily marketable and intended to be converted into cash within the next year or operating cycle
stock investments
Investments in the capital stock of other corporations
subsidiary company
A company in which more than 50% of its stock is owned by another company.
trading securities
Securities bought and held primarily for sale in the near term to generate income on short-term price differences.
