Match the Following Terms with the Appropriate Definitions

question 193

Short Answer

Match the following terms with the appropriate definitions.
A. Equity method
B. Available-for-sale securities
C. Subsidiary
D. Long-term investments
E. Parent company
F. Return on total assets
G. Consolidated financial statements
H. Held-to-maturity securities
I. Trading securities
J. Unrealized gain (loss)
________ (1) 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.
________ (2) A corporation controlled by another company when the controlling company owns more than 50% of the investee's voting stock.
(3) Change in market value that is not yet realized through an actual sale.
________ (4) Financial statements that show the financial position, results of operations, and cash flows of all entities under the parent's control, including those of any subsidiaries.
________ (5) A company that owns a more than 50% controlling interest in a subsidiary.
(6) Debt and equity securities not classified as trading or held-to-maturity.
________ (7) Debt securities that a company intends and is able to hold until maturity.
(8) Debt and equity securities that a company intends to actively manage and trade for profit.
(9) A measure of operating efficiency, computed as net income divided by average total assets.
________ (10)An accounting method for long-term investments in equity when the investor has significant influence over the investee.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, represented as interest payments on debt.

Premium on Bonds

The amount by which the selling or market price of a bond exceeds its face value or par value.

Face Value

The nominal value printed on a financial instrument like a bond or stock certificate, representing its value at issuance.

Retirement

The act of leaving one's job and ceasing to work, typically due to age or other personal reasons, often involving the receipt of a pension or other retirement benefits.