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 company’s 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.