Accounting for marketable securities Fill-in-the-blanks quiz
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securities are highly liquid securities such as stocks, short-term bonds, commercial papers and treasury bills.
Marketable securities are mostly classified as securities.
In balance sheet, marketable securiteis are listed immediately after .
When marketable securities are purchased for cash, account is debited and account is credited.
A company purchases 1,000 shares of another company for short-term investment at the rate of $10 per share on December 1, 2015. It also pays a brokerage commission of $100 for the purchase of these shares. The marketable securities account would be debited by .
The purchase of marketable securities for cash is reported under activities section of statement of cash flows.
According to US-GAAP, cash received as interest and dividend income is classified as cash flow.
Under , a company can classify dividend and interest cash inflow as operating, investing or financing cash flow.
Marketable securities are examples of assets.
According to mark-to-market principle, an item is shown in the balance sheet at its value.
Marketable securities are shown in the balance sheet using principle.
If marketable securities are sold for a price that is higher than their cost, the difference represents a on sale of marketable securities.
If marketable securities are sold for a price that is lower than their cost, the difference represents a on sale of marketable securities.
The inflow of cash resulting from sale of marketable securities is classified as cash flow.
Marketable securities are highly liquid investments and are shown in the balance sheet at their value.
The gain or loss on sale of marketable securities is reported in section of income statement.
Unrealized holding occurs when market value of marketable securities is higher than their cost.
Unrealized holding occurs when market value of marketable securities is lower than their cost.
When balance sheet is prepared, the unrealized holding gain is added to .
When balance sheet is prepared, the unrealized holding is deducted from stockholders' equity.
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