CHAPTER 13 - INVESTMENTS AND FAIR f f f f f
VALUE ACCOUNTING QUESTIONS WITH
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CORRECTANSWERS2025
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debt securities - correct answer-are notes and bonds that pay interest and have a fixed maturity date
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equity securities - correct answer- f f f f
are preferred and common stock that represent ownership in a company and do not have a fixed matu rity date
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investments (temporary investments) - correct answer- f f f f f
investments in debt and equity securities are reported in the Current Assets Section of the balance she et
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what are the primary objectives of investing in temporary investments? - correct answer-
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1. earn interest revenue f f
2. receive dividends f
3. realize gains from increases in the market price of the securities
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cash and cash equivalents - correct answer-
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investments in certificates of deposit and other securities that do not normally change in value are dis closed
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on the balance sheet as
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reduction of cost - correct answer- f f f f f
when one company buys another company, the combined company may be able to reduce administrat ive
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expenses
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replacement of management - correct answer- f f f f f
if the purchased company has been mismanaged, the acquiring company may replace the company's management
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and, thus, improve operations and profits
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expansion - correct answer- f f f
the acquiring company may purchase a company because it has a complementary product line, territor y, or
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customer base
f f
VALUE ACCOUNTING QUESTIONS WITH
f f f f
CORRECTANSWERS2025
f f f
debt securities - correct answer-are notes and bonds that pay interest and have a fixed maturity date
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equity securities - correct answer- f f f f
are preferred and common stock that represent ownership in a company and do not have a fixed matu rity date
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investments (temporary investments) - correct answer- f f f f f
investments in debt and equity securities are reported in the Current Assets Section of the balance she et
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what are the primary objectives of investing in temporary investments? - correct answer-
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1. earn interest revenue f f
2. receive dividends f
3. realize gains from increases in the market price of the securities
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cash and cash equivalents - correct answer-
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investments in certificates of deposit and other securities that do not normally change in value are dis closed
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on the balance sheet as
f f f f f f
reduction of cost - correct answer- f f f f f
when one company buys another company, the combined company may be able to reduce administrat ive
f f f f f f f f f f f f f f f
expenses
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replacement of management - correct answer- f f f f f
if the purchased company has been mismanaged, the acquiring company may replace the company's management
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and, thus, improve operations and profits
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expansion - correct answer- f f f
the acquiring company may purchase a company because it has a complementary product line, territor y, or
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customer base
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