Match the Following Terms to Their Correct Definition

question 33

Multiple Choice

Match the following terms to their correct definition:
-result when the value of securities must be written up or down to fair market value at the balance sheet date,a process referred to as "marking to market"

• A)equity security
• B)debt security
• C)passive
• D)significant influence
• E)control
• F)parent
• G)subsidiary
• H)goodwill
• I)business combination
• J)minority interest
• K)fair value method
• L)unrealized gains and losses
• M)equity method
• N)consolidation worksheet

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Definitions:

Bad Debts Expense

An estimated expense that represents accounts receivable that a company does not expect to collect.

Normal Balance

Normal balance refers to the side of the accounting equation on which increases to an account are recorded, which is debits for asset and expense accounts, and credits for liability, equity, and revenue accounts.

Allowance for Doubtful Accounts

An account that offsets assets, designed to predict the amount of a company’s accounts receivable that is likely to be uncollectible.

Normal Balance

The side (debit or credit) of an account that is positive or increasing in nature, depending on the type of account.