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Match the Following Terms with the Appropriate Definitions

Question 217

Matching

Match the following terms with the appropriate definitions.

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

Correct Answer:

Debt securities that a company intends and is able to hold until maturity.
Debt securities not classified as trading or held-to-maturity.
Debt securities that a company intends to actively manage and trade for profit.
A corporation controlled by another company when the controlling company owns more than 50% of the investee's voting stock.
An accounting method for long-term investments in equity when the investor has significant influence over the investee.
A company that owns more than 50% controlling interest in a subsidiary.
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.
Change in fair value that is not yet realized through an actual sale.
A measure of financial performance,computed as net income divided by average total assets.
Financial statements that show the financial statements of all entities under the parent's control,including all subsidiaries.
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