The company may have excess cash.
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.
9- 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. 10- 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.