CHAPTER 13 - INVESTMENTS AND FAIR
VALUE ACCOUNTING QUESTIONS WITH
CORRECT ANSWERS 2025
debtGsecuritiesG-GcorrectGanswer-areGnotesGandGbondsGthatGpayGinterestGandGhaveGaGfixedGmaturityGdate
equityGsecuritiesG-GcorrectGanswer-
areGpreferredGandGcommonGstockGthatGrepresentGownershipGinGaGcompanyGandGdoGnotGhaveGaGfixedGmatu
rityGdate
investmentsG(temporaryGinvestments)G-GcorrectGanswer-
investmentsGinGdebtGandGequityGsecuritiesGareGreportedGinGtheGCurrentGAssetsGSectionGofGtheGbalanceGshe
et
whatGareGtheGprimaryGobjectivesGofGinvestingGinGtemporaryGinvestments?G-GcorrectGanswer-
1.GearnGinterestGrevenue
2.GreceiveGdividends
3.GrealizeGgainsGfromGincreasesGinGtheGmarketGpriceGofGtheGsecurities
cashGandGcashGequivalentsG-GcorrectGanswer-
investmentsGinGcertificatesGofGdepositGandGotherGsecuritiesGthatGdoGnotGnormallyGchangeGinGvalueGareGdis
closedGonGtheGbalanceGsheetGasG_____________
reductionGofGcostG-GcorrectGanswer-
whenGoneGcompanyGbuysGanotherGcompany,GtheGcombinedGcompanyGmayGbeGableGtoGreduceGadministrat
iveGexpenses
replacementGofGmanagementG-GcorrectGanswer-
ifGtheGpurchasedGcompanyGhasGbeenGmismanaged,GtheGacquiringGcompanyGmayGreplaceGtheGcompany'sG
managementGand,Gthus,GimproveGoperationsGandGprofits
expansionG-GcorrectGanswer-
theGacquiringGcompanyGmayGpurchaseGaGcompanyGbecauseGitGhasGaGcomplementaryGproductGline,Gterritor
y,GorGcustomerGbase
VALUE ACCOUNTING QUESTIONS WITH
CORRECT ANSWERS 2025
debtGsecuritiesG-GcorrectGanswer-areGnotesGandGbondsGthatGpayGinterestGandGhaveGaGfixedGmaturityGdate
equityGsecuritiesG-GcorrectGanswer-
areGpreferredGandGcommonGstockGthatGrepresentGownershipGinGaGcompanyGandGdoGnotGhaveGaGfixedGmatu
rityGdate
investmentsG(temporaryGinvestments)G-GcorrectGanswer-
investmentsGinGdebtGandGequityGsecuritiesGareGreportedGinGtheGCurrentGAssetsGSectionGofGtheGbalanceGshe
et
whatGareGtheGprimaryGobjectivesGofGinvestingGinGtemporaryGinvestments?G-GcorrectGanswer-
1.GearnGinterestGrevenue
2.GreceiveGdividends
3.GrealizeGgainsGfromGincreasesGinGtheGmarketGpriceGofGtheGsecurities
cashGandGcashGequivalentsG-GcorrectGanswer-
investmentsGinGcertificatesGofGdepositGandGotherGsecuritiesGthatGdoGnotGnormallyGchangeGinGvalueGareGdis
closedGonGtheGbalanceGsheetGasG_____________
reductionGofGcostG-GcorrectGanswer-
whenGoneGcompanyGbuysGanotherGcompany,GtheGcombinedGcompanyGmayGbeGableGtoGreduceGadministrat
iveGexpenses
replacementGofGmanagementG-GcorrectGanswer-
ifGtheGpurchasedGcompanyGhasGbeenGmismanaged,GtheGacquiringGcompanyGmayGreplaceGtheGcompany'sG
managementGand,Gthus,GimproveGoperationsGandGprofits
expansionG-GcorrectGanswer-
theGacquiringGcompanyGmayGpurchaseGaGcompanyGbecauseGitGhasGaGcomplementaryGproductGline,Gterritor
y,GorGcustomerGbase