Financial Statement Presentation of Securities & Investments


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question 1 of 3

Identify the correct accounting for trading securities.

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1. Select the required accounting when your company owns over 50% of the outstanding voting shares of another company.

2. Suppose your company owns 25% of the outstanding voting shares of another company. Determine the proper accounting for this investment.

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About This Quiz & Worksheet

Confirm your understanding of accounting methods used for securities and investments in financial statements. The quiz and worksheet are multiple choice and can be completed in very little time.

Quiz & Worksheet Goals

Taking this quiz will assess what you know about the following:

  • Accounting used for trading securities
  • Required accounting when a parent-subsidiary relationship with the owned company exists
  • Proper accounting when a company has significant influence over the activities of the owned company
  • Correct accounting for AFS and HTM securities

Skills Practiced

  • Knowledge application - use your knowledge to answer questions about securities and investments in financial statements
  • Interpreting information - verify that you can read information about HTM securities and interpret it correctly
  • Information recall - access the knowledge you've gained about accounting used for trading securities

Additional Learning

To continue your studies on this topic, be sure to review the related lesson titled Financial Statement Presentation of Securities & Investments. Here's the type of information you'll find in this lesson:

  • Meaning of 'non-influential investments'
  • Instances when special accounting rules apply
  • Reason why HTM securities can only be debt securities