TRUE OR FALSE

1. ____ To keep things simpler for financial statement users, all investments are accounted for the same way.

2. ____ If the owner of trading securities is paid a dividend, it should be recorded as revenue and shown on the income statement.

3. ____ If a company owns 35 percent of another, it should use the equity method to account for the investment, regardless of whether or not it has any influence.

4. ____ The higher a companys ROA, the more efficiently the company is using its assets.

5. ____ Gains and losses on available-for-sale securities do not affect net income until the securities are sold

6. ____ All investments in other companies should be reported at the cost of the investment.

7. ____ When a company owns more than 50 percent of another, the financial statements of the two companies should be consolidated.

8. ____ Equity method investments are reported at their fair value on the balance sheet.

9. ____ Trading securities are defined as those that are held for a short time.

10. ____ Net income and comprehensive income are the same thing.