Match the Following Terms to Their Correct Definition

question 88

Multiple Choice

Match the following terms to their correct definition:
-Any voting stock not held by the parent in situations where consolidation is required because the investor acquires between 50% and 100% of the investee's stock

• A)equity security
• B)debt security
• C)passive
• D)significant influence
• E)control
• F)parent
• G)subsidiary
• H)trading securities
• I)available-for-sale securities
• J)held-to-maturity securities
• K)amortized cost method
• L)fair value method
• M)unrealized gains and losses
• N)equity method
• O)consolidation worksheet
• P)minority interest
• Q)business combination
• R)goodwill

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Definitions:

Letter of Credit

A financial document issued by a bank guaranteeing a buyer's payment to a seller in a transaction, effective in international trade.

Covenants

A promise by the firm, included in the debt contract, to perform certain acts. A restrictive covenant imposes constraints on the firm to protect the interests of the debtholder.

Payables

Short-term liabilities or money owed by a company to suppliers or creditors for goods and services received.

Rebate

A partial refund to someone who has paid too much money for tax, rent, or a utility, or an incentive payment to induce a particular purchase or behavior.