Explain how to account for available-for-sale debt securities at and after acquisition and how they are reported in financial statements.
What will be an ideal response?
Available-for-sale debt securities are recorded at cost when purchased. After acquisition they are reported on the balance sheet at their fair values with any unrealized holding gains or losses shown in the equity section of the balance sheet. Gains and losses realized on the subsequent sale of these investments are reported in the income statement.
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Guidelines established to convey what is perceived to be correct or incorrect by most people in a society refer to
a. collectivism. b. perception. c. ethical standards. d. semantic differences.
When seeking a desired after tax profit, the desired pretax profit is divided by the effective tax rate
Indicate whether the statement is true or false
A company has the choice of either selling 1,000 unfinished units as is or completing them. The company could sell the unfinished units as is for $4.00 per unit. Alternatively, it could complete the units with incremental costs of $1.00 per unit for direct materials, $2.00 per unit for direct labor, and $1.50 per unit for overhead, and then sell the completed units for $8.00 each. If the company completes the units, what is the impact on income?
A. Income will decrease by $500. B. Income will increase by $500. C. Income will increase by $4,000. D. Income will increase by $8,000. E. Income will decrease by $4,500.
Monopoly power is tested by determining how big the corporation is in terms of total assets
a. True b. False Indicate whether the statement is true or false