101. Which of the following would most likely not be classified as Investment in Securities appearing between the Current Assets and the Property, Plant and Equipment sections of the balance sheet? 
A. United States Treasury Notes that the firm expects to hold for less than one year
B. investments in securities for the purpose of exerting significant influence over the investee's dividend payout policy
C. investments in securities for the purpose of exerting significant influence over the investee's day-to-day operations
D. all of the above
E. none of the above

102. Short-term marketable equity securities were acquired on July 1, Year 1 for $23,000, and classified as available-for-sale. On December 31, Year 1, the securities had a market value of $24,000, determined as follows:
 

What adjustment is required to reflect December 31, Year 1 fair value? 
A. unrealized holding gain on available-for-sale securities of $1,000, reported in other comprehensive income
B. unrealized holding gain on available-for-sale securities of $1,000, reported in the income statement
C. realized holding gain on available-for-sale securities of $1,000, reported in the income statement
D. realized holding gain on available-for-sale securities of $1,000, reported in other comprehensive income
E. realized holding gain on available-for-sale securities of $1,000, reported in retained earnings

103. Monahan Company

Information concerning Monahan Company's portfolio of debt securities at May 31, Year 6, and May 31, Year 7, is presented below. All of the debt securities were purchased by Monahan during June, Year 5. Prior to June, Year 5, Monahan had no investments in debt or equity securities.
 

(CMA adapted, Jun 97 #11) Refer to the Monahan Company example. Assuming that the above securities are properly classified as available-for-sale securities under U.S. GAAP, the unrealized holding gain or loss as of May 31, Year 7, would be 
A. recognized as a $8,005 unrealized holding gain on the income statement.
B. recognized as other comprehensive income with a year-end credit balance of $8,005 in the Unrealized Holding Gain/Loss account.
C. recognized as a $24,580 unrealized holding loss on the income statement.
D. recognized as a $24,580 unrealized holding loss in retained earnings.
E. recognized as other comprehensive income with a year-end credit balance of $8,005in retained earnings.

104. (CMA adapted, Jun 97 #12) Refer to the Monahan Company example. Assuming that the above securities are properly classified as held-to-maturity securities under U.S. GAAP, the unrealized holding gain or loss as of May 31, Year 7, would  
A. be recognized as a $8,005 unrealized holding gain on the income statement.
B. be recognized as other comprehensive income with a year-end credit balance of $8,005 in the Unrealized Holding Gain/Loss account.
C. be recognized as a $24,580 unrealized holding loss on the income statement.
D. be recognized as a $24,580 unrealized holding loss in retained earnings.
E. not be recognized.

105. According to U.S. GAAP, firms holding debt securities with a positive intent and ability to hold to maturity display such securities in the Investments section of the balance sheet at 
A. amortized acquisition cost .
B. market value.
C. maturity value.
D. future value  of future cash flows.
E. present value of future cash flows.

106. Which of the following would most likely be classified as Marketable Securities in the Current Assets section of the balance sheet? 
A. United States Treasury Notes that the firm expects to hold for less than one year
B. investments in securities for the purpose of exerting significant influence over the investee's dividend payout police
C. investments in securities for the purpose of exerting significant influence over the investee's licensing of a patent
D. investments in securities for the purpose of exerting control over the investee's day-to-day operations
E. none of the above

107. U.S. GAAP requires firms holding securities available-for-sale to value the securities on the balance sheet after acquisition at 
A. an amount based on acquisition cost.
B. market value, with changes in market value of securities held at the end of the accounting period reported each period in income.
C. market value, with changes in market value of securities held at the end of the accounting period not affecting reported income until the firm sells, or otherwise disposes of, the securities.
D. market value, with changes in market value of securities held at the end of the accounting period reported each period in retained earnings.
E. present value of future cash flows, with changes in market value of securities held at the end of the accounting period reported each period in retained earnings.

108. U.S. GAAP requires firms holding debt and equity securities, as well as derivatives, as trading securities to value the securities on the balance sheet after acquisition at 
A. an amount based on acquisition cost.
B. market value, with changes in market value of securities held at the end of the accounting period reported each period in income.
C. market value, with changes in market value of securities held at the end of the accounting period not affecting reported income until the firm sells, or otherwise disposes of, the securities.
D. present value of future cash flows, with changes in present value of future cash flows of securities held at the end of the accounting period reported each period in income.
E. present value of future cash flows, with changes in present value of future cash flows of securities held at the end of the accounting period not affecting reported income until the firm sells, or otherwise disposes of, the securities.

109. U.S. GAAP requires firms holding debt and equity securities as securities available-for-sale to treat unrealized holding gains or losses each period as 
A. an increase or decrease in Accumulated Other Comprehensive Income (a separate shareholder equity account).
B. as an increase or decrease in reported Net Income for the period.
C. as an increase or decrease in reported Retained Earnings for the period.
D. a separate footnote disclosure to the financial statements.
E. none of the above

110. U.S. GAAP requires firms holding minority, passive investments in debt and equity securities as securities available-for-sale that the firm intends to sell within one year to report them as 
A. Investments in Securities in the Current asset section of the balance sheet.
B. Investments in Securities in the Long-term asset section of the balance sheet.
C. Marketable Securities in the Current asset section of the balance sheet.
D. Marketable Securities in the Long-term asset section of the balance sheet.
E. none of the above