Match each of the definitions that follow with the appropriate investment term (a-j).
-Securities not held for trading or to maturity or other strategic reasons
A)Debt securities
B)Equity securities
C)Investor
D)Investee
E)Cost method
F)Trading securities
G)Available-for-sale securities
H)Held-to-maturity securities
I)Equity method
J)Business combination

Question

Quizplus · Accepted Answer

Available-for-sale securities are investments that are not held for trading, held to maturity, or strategic reasons.

Answer: A, B 
 Debt securities refer to fixed income investments, while equity securities refer to investments in stocks.

Answer: C 
 An investor is an individual or entity that puts money into an investment with the expectation of earning a profit.

Answer: D 
 An investee is the entity that receives the investment from the investor.

Answer: E 
 The cost method is a way of accounting for investments where the amount paid to acquire the investment is recorded as the cost of the investment.

Answer: F 
 Trading securities are investments that are bought and sold regularly, with the intent of earning a profit from short-term price fluctuations.

Answer: H 
 Held-to-maturity securities are investments that the investor intends to hold until they mature, with the expectation of earning a fixed return.

Answer: I 
 The equity method is a way of accounting for investments where the investor has significant influence over the investee, and the investment is reported on the investor's balance sheet at its proportionate share of the investee's net assets.

Answer: J 
 A business combination is a transaction where one entity acquires control over another entity. This could take the form of a merger, acquisition, or consolidation.

Match Each of the Definitions That Follow with the Appropriate