Other comprehensive income is found on the income statement

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Reference no: EM131205103

True/False

1. Fair Value/Cost may be possible even with a 22% ownership stake.

2. Unrecognized profits in trading securities are reported Other Comprehensive Income

3. Dividends paid out of Common Stock at Par are reported as income

4. Other Comprehensive Income is found on the Income Statement

5. A 40% equity stake in a major supplier would best be classified as an Available for Sale security holding

6. Cash held in Treasury Bills would be best classified as a Trading Security

7. Your 80% stake in a supplier in bankruptcy must be reported on a consolidated basis.

8. Consolidated financials provide the financial statement user with in-depth detail about the activities and health of each reporting unit of a firm.

9. Firm’s can exert control with less than a 50% ownership stake in a Special Purpose Entity (SPE).

10. By design, a firm does not need to report its minority interest in an SPE.

11. A diverse shareholder base may compel a firm to report its 12% ownership stake in a supplier on an equity basis.

12. A transition from Fair Value to Equity reporting with increasing ownership need only be done on a prospective basis.

13. If your losses in a subsidiary that you account for on an equity basis exceed your investment, you must continue to report those additional losses in net income every year.

Reference no: EM131205103

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