Chapter 1
Accounting for
Intercorporate Investments
Learning Objectives – Coverage by question
Multiple Choice Exercises Problems
LO1 – Explain when the equity method
3, 8, 9, 18
should be used.
LO2 – Explain the mechanics of the
accounting for investments using 2, 4, 12
the equity method of accounting.
LO3 – Explain the amortization of 5, 11, 19-21,
excess assets, and the deferral 2, 3 1
of unrealized income. 25-28, 40
LO4 – Explain the process for deferral
13, 29-32, 39 4 3
of unrealized income.
LO5 – Explain the equity method of 1, 10, 11,
accounting for less than 100% 16-20, 24-26, 1-4, 6 1, 3, 4
ownership. 29-40
LO6 – Explain when the equity method
14 1
should be discontinued.
LO7 – Explain the accounting for
changes to and from the equity 6, 15, 22, 23 2
method.
LO8 – Explain the required disclosures
for equity method investments.
LO9 – Explain the criticisms of the
equity method of accounting.
©Cambridge Business Publishers, 2020
Test Bank, Chapter 1 1-1
Accounting for
Intercorporate Investments
Learning Objectives – Coverage by question
Multiple Choice Exercises Problems
LO1 – Explain when the equity method
3, 8, 9, 18
should be used.
LO2 – Explain the mechanics of the
accounting for investments using 2, 4, 12
the equity method of accounting.
LO3 – Explain the amortization of 5, 11, 19-21,
excess assets, and the deferral 2, 3 1
of unrealized income. 25-28, 40
LO4 – Explain the process for deferral
13, 29-32, 39 4 3
of unrealized income.
LO5 – Explain the equity method of 1, 10, 11,
accounting for less than 100% 16-20, 24-26, 1-4, 6 1, 3, 4
ownership. 29-40
LO6 – Explain when the equity method
14 1
should be discontinued.
LO7 – Explain the accounting for
changes to and from the equity 6, 15, 22, 23 2
method.
LO8 – Explain the required disclosures
for equity method investments.
LO9 – Explain the criticisms of the
equity method of accounting.
©Cambridge Business Publishers, 2020
Test Bank, Chapter 1 1-1
