A)   Debt securities.

B)   Debt or equity securities.

C)   Equity securities.

Q2. SFAS No. 115 establishes different categories of securities with distinct ways of treating them on the financial       

   statements of the company. One category requires the securities to be carried at fair value on the balance sheet    

   with unrealized gains and losses excluded from the income statement. This category of security classification is called debt:

A)     securities held-to-maturity.

B)     and equity trading securities.

C)     and equity securities available-for-sale.

Q3. On January 9, 2006, Company X purchased $1,000,000 of government bonds and 100,000 shares of stock in Company S for    

   $2,000,000. They are the first marketable securities purchased in the company's history. The company intends on holding the  

  stock for the foreseeable future and holding the bonds to maturity. As of December 31, the bonds were valued at $900,000, and

  the stocks were valued at $2,200,000. The bonds paid $50,000 of interest and the stocks paid $20,000 of dividends. In 2006,   

  Company S had earnings per share of $0.90.

The marketable securities balance amount shown on the balance sheet is:

A)   $3,200,000.

B)   $3,000,000.

C)   $3,100,000.

Q4. The impact of the marketable securities on net income is:

A)   $270,000.

B)   $140,000.

C)   $70,000.

Q5. Which of the following statements is INCORRECT regarding the classification of debt and equity security  

   investments?

A)   If equity and debt securities are available-for-sale securities, any realized and unrealized gains and losses are reported in the income statement.

B)   If equity and debt securities are trading securities, any realized and unrealized gains and losses are reported in the income statement.

C)   Debt held-to-maturity is reported in the balance sheet at amortized cost.

答案和详解如下：

A)   Debt securities.

B)   Debt or equity securities.

C)   Equity securities.

Correct answer is A)

Debt securities, that a company has a positive intent and ability to hold to maturity, are most likely to be characterized as a held-to-maturity security.

Q2. SFAS No. 115 establishes different categories of securities with distinct ways of treating them on the financial       

   statements of the company. One category requires the securities to be carried at fair value on the balance sheet    

   with unrealized gains and losses excluded from the income statement. This category of security classification is called debt:

A)     securities held-to-maturity.

B)     and equity trading securities.

C)     and equity securities available-for-sale.

Correct answer is C)

According to SFAS No.115, if securities are designated as debt and equity securities available-for-sale they can be sold to meet the liquidity and other needs of the company. As such, the securities are to be carried at fair value on the balance sheet with unrealized gains and losses excluded from the income statement.

Q3. On January 9, 2006, Company X purchased $1,000,000 of government bonds and 100,000 shares of stock in Company S for    

   $2,000,000. They are the first marketable securities purchased in the company's history. The company intends on holding the  

  stock for the foreseeable future and holding the bonds to maturity. As of December 31, the bonds were valued at $900,000, and

  the stocks were valued at $2,200,000. The bonds paid $50,000 of interest and the stocks paid $20,000 of dividends. In 2006,   

  Company S had earnings per share of $0.90.

The marketable securities balance amount shown on the balance sheet is:

A)   $3,200,000.

B)   $3,000,000.

C)   $3,100,000.

Correct answer is A)

The bonds are classified as debt securities held-to-maturity and are valued at cost. The stocks are classified as debt and equity securities available for sale and are valued at market value.

Q4. The impact of the marketable securities on net income is:

A)   $270,000.

B)   $140,000.

C)   $70,000.

Correct answer is C)

The bonds are classified as debt securities held-to-maturity, and the income generated from them is $50,000. The stocks are classified as debt and equity securities available for sale, and although the increased value is reported as an asset, the gain is reported in the securities valuation account in the equity section and not on the income statement. The effect of the stocks on income is the $20,000 of dividends.

Q5. Which of the following statements is INCORRECT regarding the classification of debt and equity security  

   investments?

A)   If equity and debt securities are available-for-sale securities, any realized and unrealized gains and losses are reported in the income statement.

B)   If equity and debt securities are trading securities, any realized and unrealized gains and losses are reported in the income statement.

C)   Debt held-to-maturity is reported in the balance sheet at amortized cost.

Correct answer is A)

In the case of available-for-sale securities, unrealized gains and losses are excluded from the income statement and are reported as a component of shareholders' equity.

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