Applicants Should Not Be Informed That Their References Will Be

question 76

True/False

Applicants should not be informed that their references will be checked until after the character investigation is completed.

Understand the equity method for accounting investments of 20-50% in another company's stock.

Differentiate between the fair value method and equity method of accounting for investments.

Recognize the implications of business combinations on financial statements.

Identify the methods for accounting for small stock investments and held-to-maturity securities.

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Definitions:

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily match its market value.

Common Stock

Equity securities representing ownership in a corporation, giving shareholders voting rights and a share in the company's profits through dividends.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, often receiving dividends before common shareholders.

Subscriptions Receivable-Common Stock

The amount owed to a company from subscribers who have committed to buy its common stock but have not yet paid.