Reference no: EM132733240

Problem 1: Which statement regarding investments in equity securities is incorrect?

A) Significant influence equity investments are always reported as long-term assets on the balance sheet.

B) Significant influence equity investments are consolidated into the investor's financial statements.

C) Investments in equity securities are classified into three specific types based on the investor's level of influence over the investee company.

D) Generally, no significant influence exists if there is an ownership interest of less than 20% of the investee's voting stock.

Problem 2: Which of the following will be classified as an available-for-sale debt investment?

A) debt securities which the investor intends to sell in the very near future

B) debt securities the investor intends to hold and has the ability to hold until they mature

C) all investments in Treasury bills

D) all debt securities that are not trading debt investments or held-to-maturity debt investment