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Quiz_3.docx - Which of the following is notshowing page 1 out of 1

1.
Which of the following is
not
a debt security?
a.
Convertible bonds
b.
Commercial paper
c.
Loans
receivable
d.
All of these are debt securities.
2.
A correct valuation for debt
securities is
a.
available-for-sale at amortized cost.
b.
held-to-maturity
at
amortized
cost.
c.
held-to-maturity at fair value.
d.
None of these answers are correct.
3.
Securities which could be classified as held-to-maturity are
a.
redeemable preferred stock.
b.
warrants.
c.
municipal
bonds.
d.
treasury stock.
4.
Unrealized holding gains or losses which are recognized in income are from
debt securities classified as
a.
held-to-maturity.
b.
available-for-sale.
c.
trading.
d.
None of these answers are
correct.
5.
When an investor's accounting period ends on a date that does not
coincide with an interest receipt date for bonds held as an investment, the
investor must
a.
make
an
adjusting
entry
to
debit
Interest
Receivable
and
to
credit
Interest
Revenue
for
the
amount
of
interest
accrued
since
the
last
interest
receipt
date.
b.
notify the issuer and request that a special payment be made for the
appropriate portion of the interest period.
c.
make an adjusting entry to debit Interest Receivable and to credit
Interest Revenue for the total amount of interest to be received at the
next interest receipt date.
d.
do nothing special and ignore the fact that the accounting period does
not coincide with the bond's interest period.