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The company may invest for speculative reasons to increase the
value in pension funds.
The company may generate a significant portion of its earnings
from investment income.
The company may invest for the strategic reason of establishing a
presence in a related industry.
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Multiple Choice Question 115
The balance sheet presentation of an unrealized loss on a non-
trading security is similar to the statement presentation of
treasury stock.
discount on bonds payable.
prepaid expenses.
allowance for doubtful accounts.
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Multiple Choice Question 142
A company that acquires less than 20% ownership interest in
another company should account for the stock investment in that
company using
the significant method.
the equity method.
consolidated financial statements.
the cost method.
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