📏CPA EXAM PREP

Investments

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Question

What does the residual excess of cost over book value become under the equity method?

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Answer

Goodwill.

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Question

How is realized gain or loss measured on sale of debt securities?

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Answer

Net proceeds minus amortized cost.

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Question

How is realized gain or loss measured on sale of equity securities?

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Answer

Net proceeds minus carrying or cost basis.

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Question

What is the key trap with OCI treatment for investment securities?

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Answer

Only AFS debt uses OCI.

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