Accounting, Accounting Basics

1. For what reasons do corporations purchase the stock of other corporations?

2. Explain how marketable securities should be classified in the balance sheet.

3. Describe the valuation bases used for marketable equity securities.

4. Under what circumstances is the equity method used to account for stock investments?

5. Explain briefly the accounting for stock dividends and stock splits from the investor''s point of view.

6. Of what significance is par value to the investing corporation?

7. What is the purpose of preparing consolidated financial statements?

8. Under what circumstances must consolidated financial statements be prepared?

9. Why is it necessary to make elimination entries on the consolidated statement work sheet? Are these elimination entries also posted to the accounts of the parent and subsidiary? Why or why not?

10. Why might a corporation pay an amount in excess of the book value for a subsidiary''s stock? Why might it pay an amount less than the book value of the subsidiary''s stock?
Posted Date: 10/29/2015 6:43:59 AM | Location :

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