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FAR > FAR Chapter 5 Investments Statement of Cash flows And Income Taxes > Flashcards

FAR Chapter 5 Investments Statement of Cash flows And Income Taxes Flashcards

1
Q

Differentiate which equity securities are on the balance sheet as book value or fair value? HTM AFS and trading securities

A

HTM- at book value since it’s not planned to sell anytime soon

AFS- FV

Trading Securities- FV

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2
Q

What is appropriate retained earnings?

A

Appropriate RE is to reserve RE to not distribute to shareholders and has a separate line item
The JE should be

Dr-RE (unappropriated)
Cr- RE (Appropriated for purpose)

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3
Q

What are the requirements for held to maturity securities

A
  1. Ability to hold the security to maturity
  2. The security must be a debt security
  3. Positive intent
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FAR (9 decks)

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