EQUITY INVESTMENTS

Debt securities include corporate bonds and convertible debt, but not U.S. government securities.

• TRUE

• FALSE

Trading securities are securities bought and held primarily for sale in the near term to generate income on short-term price differences.

• TRUE

• FALSE

Unrealized holding gains and losses are recognized in net income for available-for-sale debt securities.

• TRUE

• FALSE

A company can classify a debt security as held-to-maturity if it has the positive intent to hold the securities to maturity.

• TRUE

• FALSE

Companies do not report changes in the fair value of available-for-sale debt securities as income until the security is sold.

• TRUE

• FALSE

The Securities Fair Value Adjustment account has a normal credit balance.

• TRUE

• FALSE

Companies report trading securities at fair value, with unrealized holding gains and losses reported in net income.

• TRUE

• FALSE

Equity security holdings between 20 and 50 percent indicates that the investor has a controlling interest over the investee.

• TRUE

• FALSE

The Unrealized Holding Gain/Loss—Equity account is reported as a part of other compre hensive income.

• TRUE

• FALSE

Significant influence over an investee may be indicated by material intercompany trans actions and interchange of managerial personnel.

• TRUE

• FALSE