Acct

Investments in equity securities where the investor does not have significant influence over the investees require percentage of ownership in the investees

75% or greater Less than 20% 20% to 50% 51% to 74%

Stock option

A financial instrument that gives the owner the right to acquire shares of commons stock at a future date for a specific price within a stated

Which of the following statements is true about investments in financial assets?>

All investments in financial assets are classified as long-term assets Investments in trading and available for sale debt securities are reported on the balance sheet at fair value Held to maturity debt securities are reported on the balance sheet at fair value All unrealized gains and losses affect net income

Which of the following accounts is debited over the vesting period for either a stock option or for restricted stock

Compensation expense Common stock Cash Apic- stock options

PBO is decreased by

Current service cost An increase in the average life expectancy of employees A return on plan assets that is higher than expected Payment of retirement benefits

Select the words that complete this sentence: For equity investments where the investor does not have significant influence, and the equity has a readily determinable fair market value, realized gains are reported as a in

Decrease; net income Increase; net income Increase; OCI Decrease; OCI

Which of the following statements regarding stock options is true

Employees earn stock options over the vesting period, which is usually contingent on the employee remaining with the employer for the entire vesting period An employee will exercise a stock option only when the market price of the stock on the exercise date is less than the option price Companies expense stock-based compensation based on the fair market value of the stock on the expected date of exercise Unexercised stock options may be sold or transferred in the open market

Which of the following statements regarding stock appreciation rights plans is false

Employees holding stock appreciation rights are required to purchase shares on the vesting date The liability for a SAR is measured as the difference between the stock price and a pre-established base price Stock appreciation rights are less dilutive relative to stock option plans An employee benefits from stock appreciation rights only if the stock price increases

When an investment is acquired, what is the initial reporting basis for all investments in equity securities

Equity value Cost Discounted present value Fair market value

In which of the following situations would a stock option be in the money

Exercise= 20, FMV at exercise date =18 Exercise= 10, FMV at exercise date =18 Exercise= 16, FMV at exercise date =14 Exercise= 20, FMV at exercise date =15

Which of the following statements about fair value adjustments is false

If the fair value of a company's investments are greater than their carrying value, the fair value adjustment account will have a credit balance. The balance in the fair value adjustment account must be evaluated and adjusted for any unrealized holding gains and losses that exist at the end of each reporting period If the fair value of a company's investments are greater than their carrying value, the fair value adjustment account will have a debt balance If the fair value of a company's investments are less than their carrying value, the fair value adjustment account will have a credit balance

The account name that represents current year unexpected gains and losses from a change in actuarial estimates

OCI-G/L

The account name that represents an estimate of the present value of the employer's defined-benefit retirement benefit obligation

PBO

The account name that represents the cash that the employer has contributed to fund a defined-benefit pension plan

Plan assets

Highball Investments purchased a bond investment on January 1, 2020 for $950. Highball held the bonds in an active trading account. On January 31, 2020, Highball sold the bonds to another investment firm for $980. What is the financial effect for the sale for Highball Investments?

Realized loss of $30, which decreases other comprehensive income Realized fain of $30, which increases OCI Realized loss of $30, which decreases the firm's net income Realized gain of $30, which increases the firm's net income

All of the following items affect a company's PBO, with the exception of which one

Service cost Cash contributions to plan assets Interest cost Actuarial gains or losses

Which of the following statements is true about investments in equity securities

The appropriate accounting method for equity investments depends on the investor's level of influence over the investee company Companies report equity investments with no significant influence on the balance sheet at their historical cost Significant influence is typically gained by an investor company owning more than 50% of the equity shares of the investee company Unrealized gains and losses from fair value adjustments for equity investments with no significant influence are reported in other comprehensive income

Exercise period

The length of time over which an option holder can exercise vested stock options

Vesting period

The length of time over which the option owner earns the right to acquire stock with a stock option

Strike price

The price per share that the option holder will pay on the exercise date if the option is exercised

Which of the following statements about pension is true

Under a defined-contribution pension plan, the employer's contribution is fixed but the benefits to the employee can vary In a year that a company amends its pension plan to provide retroactive benefits to its employees, the prior service costs increase pension expense for the full value of the plan amendment Under a defined contribution pension plan, the employer's contribution can vary but the benefits to the employee are fixed The increase in the PBO from employees working one additional year is called prior service cost

During 2019, a company's plan assets earn an actual return of 5000. The company expected the plan assets to earn a return of 4500. What is the amount of the company's unexpected return, and is an unexpected gain or loss

Unexpected gain of 500 Unexpected loss of 5000 Unexpected gain of 5000 Unexpected loss of 500

The term that represents the difference between the actual return and the expected return on plan assets

Unexpected return

Ryder Investments purchased common shares of A company and B Company for 10,000 and 10,000 respectively on December 15, 2019. Ryder intends to sell the securities within 30 days. On December 31, Ryder's investments in A Company and B Company, have a fair market value of $9000 and $18000, respectively. Ryder does not have significant influence over the investee companies. What is the unrealized gain or loss for these securities and how is it reported

Unrealized loss of 1000, Unrealized gain of 8000, reported in OCI Unrealized gain of 7000, reported in Net Income Realized loss of 1000, realized gain of 8000, reported in Net Income Unrealized gain of 7000, reported in OCI

Which of the following investments is not reported at fair value on the balance sheet

available for sale debt securities held to maturity debt investments trading debt securities All of these investments are reported at fair value on the balance sheet

Select the correct words that are needed to complete this sentence: For investments in debt securities that are classified as available for sale, unrealized holding gains are included in and they cause this account to

other comprehensive income; decrease other comprehensive income; increase net income; increase net income; decrease