What are the reasons to invest in debt or equity securities of other companies.

2. Financial Investment Assets are classified as follows. Define these accounts.

(1) Trading Securities

(2) Available for Sales Securities

(3) Held-to-Maturity Securities

3. Explain and compare the following subsequent methods for the investment securities.

(1) Fair Value methods (2) Amortized cost methods

4. Distinguish how to record unrealized gain/loss in investing Trading, Available for Sales, and Held to Maturity securities respectively.

5. Explain and compare the following elements of a Bond.

(1) Par value VS. Present value

(2) Coupon rate (%) VS. Market rate (%)

6. Explain and compare Par Bond, Discount Bond, Premium Bond. How are they different?

7. Explain how to calculate Coupon Payment and Interest Revenue. How are they recorded in journal entry in Par Bond, Discount Bond, Premium Bond respectively?

8. Explain how an HTM Bond cost is amortized throughout the years until maturity?

9. [Financial Statement Analysis] Explain the following Liquidity ratios in terms of (1) equation (2) meaning (3) how company and investors use the ratios.

a. Current ratio

b. Quick ratio

c. Accounts Receivable Turnover

d. Days in Accounts Receivable

10. [Financial Statement Analysis] Explain the following Efficiency ratios in terms of (1) equation (2) meaning (3) how company and investors use the ratios.

a. Inventory Turnover

b. Days in Inventory

c. Accounts Payable Turnover

d. Days in Accounts Payable

e. Asset Turnover