Long Term Investments & International Operations

7 important questions on Long Term Investments & International Operations

What does a company mean when they have significant influence on another company?

The power to participate in the financial and operating policy decisions of the investee but is not in control or joint control over those policies. 

What are available-for-sale investments?

All other financial asset investments not classified as held-to-maturity or trading securities.

How to record a sale of an available-for-sale investment with a loss?

Debit Cash

Debit loss on sale of investment

Credit long-term investments (Cost)

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A controlling interest is ...

Ownership of more thatn 50% of an investee company's voting rights

 

Held-to-maturity investments are ...

bonds and notes that an investor wants to hold to maturity.

Two main factors that affect the price of a particular currency are ..

1. The ratio of a country's imports to its exports

2. The rate of return available in the country's capital markets

How to record a translation gain when using different currency's?

Debit cash

Credit accounts receivables

Credit translation gain

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