6. Short-term notes payable:

Cannot replace an account payable.

Can be issued in return for money borrowed from a bank.

Are not negotiable.

Are a conditional promise to pay.

Rarely involve interest charges.

12 . Advantages of a partnership include:

Limited life.

Mutual agency.

Unlimited liability.

Co-ownership of property.

Voluntary association.

14. Rights to purchase common stock at a fixed price over a specified period are:

Preferred stocks.

Class B stocks.

Stock options.

Stock restrictions.

Preemptive rights.

26. If a company owns more than 20% of the stock of another company and the stock is being held as a long-term investment, which method would the investor normally use to account for this investment?

Equity method.

Fair value method.

Historical cost method.

Cost with amortization method.

Effective method.

27. Held-to-maturity securities are:

Always classified as Short-Term Investments.

Always classified as Long-Term Investments.

Debt securities that a company intends and is able to hold to maturity.

Equity securities that a company intends and is able to hold to maturity.

Equity securities where significant influence involved.

28. Investments in trading securities:

Include only equity securities.

Are reported as current assets.

Include only debt securities.

Are reported at their cost, no matter what their market value.

Are long-term investments.