Chapter 2 - Accounting for Stock Investments Flashcards
1
Q
Fair Value Method definition and %
A
Less than 20% stake; inability to exert significant influence
2
Q
Equity Method definition and %
A
Between 20% - 50% and significant influence exists
3
Q
Dividends paid reduce investment for which acquisition method?
A
Equity Method
4
Q
AFS security unrealized gain/loss reported in _________
A
OCI/AOCI
5
Q
Trading securities unrealized gain/loss reported __________
A
on the income statement.
6
Q
Dividends with no significant influence
A
Cash $2,000
Dividend Income $2,000
7
Q
Earnings if no significant influence
A
no earnings recognized
8
Q
Dividends if significant influence exists
A
Cash $2,000
Investment in Son Corp. $2,000
9
Q
Earnings if significant influence exists
A
Investment in Son $2,000
Income from Son. $2,000
