Solved

Match the Following Terms with the Appropriate Definitions

Question 186

Matching

Match the following terms with the appropriate definitions:

Premises:
Consolidated financial statements
Equity method
Subsidiary
Available-for-sale securities
Return on total assets
Parent company
Held-to-maturity securities
Unrealized gain or loss
Trading securities
Long-term investments
Responses:
A corporation controlled by another company when the parent owns more than 50% of the subsidiary's voting stock.
Debt securities that a company intends and is able to hold until maturity.
Debt and equity securities that a company intends to actively manage and trade for profit.
Financial statements that show the financial position, results of operations and cash flows of all entities under the parent's control, including those of any subsidiaries.
Investments in equity and debt securities that are not readily convertible to cash or are not intended to be converted to cash in the short term.
A change in market value that is not yet realized through an actual sale.
Debt and equity securities not classified as trading or held-to-maturity.
A company that owns a more than 50% controlling interest in a subsidiary.
A measure of operating efficiency, computed as net income divided by average total assets.
An accounting method for long-term investments in equity when the investor has significant influence over the investee.

Correct Answer:

Consolidated financial statements
Equity method
Subsidiary
Available-for-sale securities
Return on total assets
Parent company
Held-to-maturity securities
Unrealized gain or loss
Trading securities
Long-term investments
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