Reference no: EM132948976

Problem 1: Which of the following debt instruments would be reported on the balance sheet as a long-term investment?

Select one:
a. A debt instrument that matures in 5 years and the investor intends to hold to maturity for interest revenue.
b. A debt instrument that matures in 5 years but the investor intends to sell at a gain within 1 year.
c. A debt instrument that matures in 9 months and the investor intends to hold to maturity for interest revenue.
d. A debt instrument that matures in 6 months but the investor intends to sell at a gain within 3 months.

Problem 2: Which of the following statement(s) is/are correct regarding investments in equity?

Select one:
a. Strategic investments are further classified into investments with significant influence and investments with controlling influence.
b. Non-strategic equity investments are typically investments in shares where less than 20% of the common shares are owned by the investor.
c. All of the available choices.
d. A strategic investment means an investment of 20% or more of the common shares issued by an investee.