Croger Manufacturing Inc. makes an investment in securities that they intend to hold for a period of time that is unspecified. How will this investment be reported? Multiple Choice Fair value. Present value. Historical cost. Lower of cost or market.

Croger Manufacturing Inc. makes an investment in securities that they intend to hold for a period of time that is unspecified. How will this investment be reported? Multiple Choice Fair value. Present value. Historical cost. Lower of cost or market.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Which of the following is true regarding accounting for debt investments? A) The classification of…

A: D) All of the above. B) The fair value option must be elected for all such…

Q: Active secondary markets

A: Secondary Market: Secondary market is the market where the securities are bought or sold without the…

Q: IFRS requires companies to measure their financial assets at fair value except when based on:(a)…

A: International Financial Reporting Standards: IFRS (International Financial Reporting Standards) is…

Q: All investments in equity instruments and contracts on those instruments must be measured at fair…

A: Solution: All investments in equity instruments and contracts on those instruments must be measured…

Q: Investors will pay a premium to invest in risky assets. OA. True OB. False

A: Risk premium is the extra return that an investor receives for investing in risky assets.

Q: The market which deals with short term financial assets Select one: a. Commercial Market b. Primary…

A: Financial assets are a kind of liquid asset that generates its value from a contract that provides…

Q: Which of the following is a constrain for the investors? a. The mentality tontake the high risk b.…

A: Investing is a critical component of wealth growth. It enables the investor to fight inflation,…

Q: When comparing fi nancial statements prepared under IFRS with those prepared underUS GAAP, analysts…

A: IFRS and US GAAP follows similar accounting policies when it comes to realized losses and unrealized…

Q: When an investment in an available-for-sale debt security is transferred to trading because the…

A: Available for sale debt securities are those investment which is held by the entity not to hold till…

Q: The way in which the price of securities determined in Financial Markets is:

A: The correct answer is b. Through frequent interaction between investors.

Q: According to the market segmentation theory, short term-term investors will not normally switch to…

A: Market segmentation theory is also referred to as segmented markets theory.

Q: What is the effect of a company electing the fair value option with respect to a held-to-maturity…

A: Held-to-maturity security: The debt securities which are held by the investor with an intent to hold…

Q: An investor pays taxes on unrealized gains on equity investments options: True False

A: An unrealized gain could be a potential profit that exists on paper, resulting from an investment.…

Q: Dividend revenue is recognized for trading securities and available for sale securities even if held…

A: Solution Concept Dividend is recognized in income statement for trading securities if they are held…

Q: The realized gain (loss) on sale of debt investments with an objective of collecting contractual…

A: Realized Gain: When an investment is sold for a greater price than it was originally acquired, this…

Q: An underpriced stock provides an expected return which is _______________ the appropriate required…

A: In Assets pricing model the gives the required rate based on risk involved in the stock and stocks…

Q: Which is correct about security valuation? A. In an efficient market, several factors would affect…

A: The process that is used in order to determine the fair value of the security, as well as any type…

Q: According to the fair value principle, assets and liabilities should be reported Select answer from…

A: The fair value principle is an accounting concept that aims to provide a more accurate…

Q: 16. When the market value of a company's available-for-sale investments is lower than its cost, the…

A: When the market value of a company's available-for-sale investments is lower than its cost, the…

Q: What are the reasons why buyer would prefer to purchase asset rather than stock

A: In an asset purchase, the buyer agrees to purchase specific assets and liabilities. This means that…

Q: All investments in equity instruments and contracts on those instruments must be measured at fair…

A: Solution: Cost may be an appropriate estimate of fair value in the following: 1. Insufficient more…

Q: All investments in equity instruments and contracts on those instruments must be measured at fair…

A: Solution: All investments in equity instruments and contracts on those instruments must be measured…

Q: Which statement is not true?

A: In the above question, there are four statements; we must identify which of the four statements is…

Q: 1. How are passive investments accounted for under ASPE? a) Cost of amortized cost. b) FVTPL…

Q: Which of the following statements related to securities is not true: O Unrealized gains and losses…

A: The statement that is not true related to securities is given below

Q: Transaction costs are capitalized when acquiring investment in equity or debt securities, except…

A: Transaction costs are required costs incurred while sale or purchase of equity or debt security. In…

Q: When an acquirer chooses between cash offer or stock offer, which of the followings is the least…

A: Acquisition refers to obtaining the other company wholly or partially by paying the cash…

Q: Which of the below is NOT TRUE with respect to secondary markets A. Secondary markets assist…

A: Primary market - is the place where company sell new shares to the investors for the first time i.e…

Q: Which of the following is not a characteristic of a financial asset held for trading? a. It is…

A: Trading in financial instrument include assets such as stocks bonds mutual fund. the financial asset…

Q: nvestors choose deri tives

A: derivatives are financial instruments whose value is derived from an underlying asset such as bonds…

Q: A primary market is: -the financial market where new security is sold for the first time. -the…

A: Primary market is a type of capital market where securities will be issued for first time. The…

Q: A producer of asset S is going to sell it at future time T. Draw naked position revenues as a…

A: A naked contract is a financial agreement in which one party takes a position without any offsetting…

Q: Which of the following statements is not correct? Group of answer choices A)Purchasing fixed assets…

A: A)Purchasing fixed assets using cash decreases the current ratio. Purchasing fixed asset using cash…

Q: is a method of evaluating securities by iden

A: Explanation : Technical analysis can be understood as the way of appraising commodities that…

Q: Question 2) Issuing marketable securities is the primary way businesses finance their orperations.…

A: Marketable securities can be defined as those short term highly liquid securities which can be…

Q: Choose the correct answer: Equity security acquired for non-trading and the shares are not enough…

A: Solution Concept When there is no significant influence then the investment is financial asset Debt…

Q: designation s to whether the equity investment is at FVPL or OCI depends upon whether the securities…

A: There are many methods of the valuations and based on the valuation there are classifications of…

Q: Where non-current assets are held for sale, they are required to be measured using: the…

A: Non-current assets are held for sale - Non Current Assets are part of the assets in the balance…

Q: All investments in equity instruments and contracts on those instruments must be measured at fair…

A: Financial instruments: International financial reporting standard- 9 (IFRS 9) states or specifies…

Q: How reliable is the Capital Asset Pricing Model? Can we use it to determine whether to buy the stock…

A: Capital Asset Pricing Model - Under this model cost of equity can be calculated with the help of…

Question

Croger Manufacturing Inc. makes an investment in securities that they intend to hold for a period of time that is unspecified. How will this investment be reported?

Multiple Choice

Fair value.

Present value.

Historical cost.

Lower of cost or market.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

In relation to investments and fair value, what are the two categories of investments that companies would normally report?
Financial liabilities that are classified as amortized cost are subsequently measured at A. Partly at profit or loss and partly at other comprehensive income depending on the risk. B. Fair value with changes in value recognized in other comprehensive income. (FVPL) C. Fair value which changes in value recognized in profit or loss. (held for trading) D. The present value of the remaining cash flows of the instrument discounted at the original effective interest rate.
Financial assets include stocks and bonds. These are fairly simple securities that canoften be valued using quoted market prices. However, there are more complex financialinstruments that do not have quoted market prices. These complex securities must still bevalued on the balance sheet at fair value. Generally accepted accounting principles requirethat the reporting entity use assumptions in valuing investments when market prices or critical valuationinputs are unobservable. What are the ethical considerations in making subjective valuations of these complex financialinstruments?
How is the adjustment to fair value recorded differently for a cash flow hedge versus a fair value hedge? That is, how does the fair value adjustment of each type of hedge affect current period net income and the accounting equation?
A market where investors trade previously issued securities without the issuing companies involvement O Primary market O Secondary market O Stock market O Financial security market
The company could have taken the funds that it has invested in production equipment andinvested them in interest-bearing securities instead. The interest forgone on the securities is a(n)__________________________________
Marketable securities or cash equivalents (Choose the INCORRECT statement) a) are acquired with the purpose of being converted to cashb) are long term financial investmentsc) can be easily converted to cashd) are temporary investments
Which of the following is not an impairment indicator for investment securities? Group of answer choices decline in credit rating fluctuating stock prices adverse changes in the economy deterioration of earnings
What is the primary motivation of investors in performing security analysis? A-identify the best times to buy and sell securities B-Contribute to the efficiency of securities markets C-Identify securities whose insrinsic values are at or near their market values D-Identify mispriced stocks
Q.Regarding the concept of opportunity cost, one affirmation is false. Which one is it? a. is not relevant in fundamental analysis b. is the rate of return given up by an investor, in order to gain another rate of return c. can play both the role of a discount rate or a capitalizing rate d. is relevant in determining the fair value of derivatives and corporate bonds e. is always computed as a percentage indicator
Can I Dr. Investment also? (for Avaliable for sale securities?)
When an owner or creditor sells securities to another, the transaction takes place in the Blank_ market. Multiple choice question. secondary primary rudimentary underwriting