ACC 202 Exam 3 (CH15 Investments) | Questions
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Terms in this set (57)
investor the owner of a bond or stock of a corporation
investee the corporation that issued the bond or stock
what can investors invest in? > debt securities (bond)
> equity securities (stock)
security > a share or interest representing financial value
> represented by a certificate
> commonly traded on an exchange
debt security > an investment in notes or bonds payable issued
by another company
> represent a credit relationship with another
company or governmental entity
> pay interest for a fixed period and a final payment
of face value at the end of the term
examples of debt security > U.S. government securities (treasury bills)
> municipal bonds
> corporate bonds
, equity security > an investment in stock ownership in another
company
> pays cash dividends or issues stock dividends
> have gain or loss
examples of equity security > common stock
> preferred stock
3 reasons why a company invests in > to generate investment income
debt or equity securities: > to pursue certain business strategy
> to get rid of short-term, excess cash
2 investment classifications > short-term investments
> long-term investments
short-term investments > investments in debt and equity securities that the
investor intends to sell in one year or less
> reported as current assets on the balance sheet
long-term investments debt and equity securities that the investor expects
to hold longer than one year
how are debt securities classified? based on HOW LONG THE INVESTOR INTENDS
TO HOLD the investment
3 debt security classifications: > trading
> held-to-maturity (HTM)
> available-for-sale (AFS)
trading debt investments > debt securities the investor intends to sell in the
very near future to earn a quick profit
> reported as current assets on the balance sheet
with 100% Correct Answers | Verified | Latest
Update 2026/2027
Save
Terms in this set (57)
investor the owner of a bond or stock of a corporation
investee the corporation that issued the bond or stock
what can investors invest in? > debt securities (bond)
> equity securities (stock)
security > a share or interest representing financial value
> represented by a certificate
> commonly traded on an exchange
debt security > an investment in notes or bonds payable issued
by another company
> represent a credit relationship with another
company or governmental entity
> pay interest for a fixed period and a final payment
of face value at the end of the term
examples of debt security > U.S. government securities (treasury bills)
> municipal bonds
> corporate bonds
, equity security > an investment in stock ownership in another
company
> pays cash dividends or issues stock dividends
> have gain or loss
examples of equity security > common stock
> preferred stock
3 reasons why a company invests in > to generate investment income
debt or equity securities: > to pursue certain business strategy
> to get rid of short-term, excess cash
2 investment classifications > short-term investments
> long-term investments
short-term investments > investments in debt and equity securities that the
investor intends to sell in one year or less
> reported as current assets on the balance sheet
long-term investments debt and equity securities that the investor expects
to hold longer than one year
how are debt securities classified? based on HOW LONG THE INVESTOR INTENDS
TO HOLD the investment
3 debt security classifications: > trading
> held-to-maturity (HTM)
> available-for-sale (AFS)
trading debt investments > debt securities the investor intends to sell in the
very near future to earn a quick profit
> reported as current assets on the balance sheet
