ACC 312 WORKSHOP 4.2 QUESTIONS FOR REVIEW
Download Q 12-1: All investments in debt securities and investments in equity securities for which the investor lacks significant influence over the operation and financial policies of the investee are classified for reporting purposes in one of three categories, and can be accounted for differently depending on the classification. What are these three categories? Q 12-5: Reporting an investment at its fair value means adjusting its carrying amount for changes in fair value after its acquisition (or since the last reporting date if it was held at that time). Such changes are called unrealized holding gains and losses because they haven’t yet been realized through the sale of the security. If the security is classified as available-for-sale, how are unrealized holding gains and losses reported if they are not viewed as giving rise to an other-than-temporary impairment? Q 12-6: What is “comprehensive income”? Its composition varies from company to company but may include which investment-related items that are not included in net income? Q 12-12: What is the effect of a company electing the fair value option with respect to a held-tomaturity investment or an available-for-sale investment? Q 14-2: As a general rule, how should long-term liabilities be reported on the debtor’s balance sheet? Q 14-3: How are bonds and notes the same? How do they differ? Q 14-6: How is the price determined for a bond (or bond issue)? Q 14-12: Mandatorily redeemable shares obligate the issuing company to buy back the shares in exchange for cash or other assets. Where in the balance sheet are these securities reported?