Question
1. At what level of investment ownership is significant influence often presumed? Greater than 20% of the voting stock of the investee Between 20% and
1. At what level of investment ownership is significant influence often presumed?
| Greater than 20% of the voting stock of the investee | ||
| Between 20% and 50% of the voting stock of the investee | ||
| Greater than 50% of the voting stock of the investee | ||
| Greater than 20% of the voting stock or of the fair value of the investee |
2.
Under which section of a statement of cash flows would the proceeds received from the sale of long-term depreciable assets most likely appear?
| Operating cash flows | ||
| Investing cash flows | ||
| Financing cash flows | ||
| Long-term assets |
3.
Under the equity method, which of the following does not cause a decrease in the investment account?
| The losses of the investee | ||
| Dividends paid by the investee | ||
| Declines in the fair value of the investment | ||
| All of the choices would decrease the investment account |
4.
Which of the following does not affect the current liabilities section of the balance sheet?
| Purchase of inventory on credit | ||
| Wages owed to employees but not yet paid | ||
| Insurance bill to be paid next month | ||
| Sale of goods on credit | ||
| A probable legal obligation, due within 12 months |
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