Exam (elaborations)
Chapter 9 ACAF
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Exam of 7 pages for the course Chapter 9 ACAF at Chapter 9 ACAF (Chapter 9 ACAF)
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CHAPTER 9 ACAF 100% SOLVEDQUESTIONS AND ANSWERS
j Question 1
The two main types of investments are:
-Entry field with correct answer
-equity instruments and inventory.
-cash and property,plant and equipment.
-debt instruments and equity instruments.
-debt instruments and cash. - debt instruments and equity instruments.
Practice Question 2
There are many different motivations that companies have for investing in debt and equity instruments
issued by other companies, including all of the following except:
-to earn interest, dividends, or capital appreciation.
-to control the operations of another company.
-to raise funds for repayment of short-term liabilities.
-to obtain a special relationship with a supplier or customer. - to raise funds for repayment of short-term
liabilities.
Practice Question 3
The three major models of accounting for investments include all of the following except:
cost/amortized cost model.
, replacement value model.
fair value through net income model.
fair value through other comprehensive income model. - replacement value model.
Practice Question 4
When one corporation acquires control of another entity, the investor corporation is referred to as the
parent and the investee corporation as the:
child.
joint venture.
subsidiary.
associate. - subsidiary.
Practice Question 9
Application of the cost model to the investment one company makes in another entity's shares is
straightforward and includes all of the following except:
recognize the cost of the investment at the fair value of the shares acquired.
unless impaired, report the investment at its fair value at each balance sheet date.
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