1. According to PFRS 9, The amortized cost of a financial instrument is calculated using. A. The effective interest method. B. The straight line method C. A or b D. Choice a however, the straight line method can be used in some circumstances.
1. According to PFRS 9, The amortized cost of a financial instrument is calculated using.
A. The effective interest method.
B. The
C. A or b
D. Choice a however, the straight line method can be used in some circumstances.
2. The amortization of a discount on an investment in bonds measured at amortized cost
A. Increases the carrying amount of the investment
B. Is the excess of interest income over interest received or receivable.
C. Is recorded directly to the invesment account
D. All of these
3. Which of the following statements is correct for an investment in term bonds that was acquired at a premium?
A. The amortized cost of the bonds increases annually.
B. The current and non current portions of the bonds as of the reporting date are reported separately.
C. The interest income recognized each year is higher than the amount of interest received/ receivable.
D. The effective interest rate is lower than the stated rate of the bonds.
4. The rate used in computing for interest receivable on debt instruments measured at amortized cost is the
A. Nominal rate
B. Effective interest rate
C. Yield rate
D. Celeb rate
5. The transaction costs of acquiring an investment measured at amortized cost are
A. Included in the initial measurement of the investment and amortized to profit or loss using the effective interest method.
B. Initiallt deferred and recognized in profit or loss only when the aaset is derecognized or becomes impaired.
C. Initially deferred and recognized directly in equity when the asset is derecognized or becomes impaired.
D. Expensed immediately on acquisition date.
6. An entity acquired 10 year bonds at a premium. The investment is measured at amortized cost . Seven years after the acquisition, the entity sold 90% of the bonds at a discount. Which is the following is true?
A. Gain is realized on the sale.
B. The remaining 10% should be reclassified out of the amortized cost measument category.
C. Loss is realized on the sale.
D. B and C
7. There are no payments made during the life of this type of bond; both the principal and interest( computed on a compounded basis) are payable only at maturity date.
A. Zero coupon or strip bonds
B. No sufficient fund bonds
C. FVOCCI asset
D. Fair value asset.
9. A entity purchased bonds at a premium. The bonds are measured at anortized cost. Assume the fair
A. Less cash interest is received each year than interest revenue.
B. The ending valuation allowance account balance will depend on the ending market value and original cost.
C. The ending valuation allowance accountbalance will depend on the ending market value and original cost adjusted for premium amortization..
D. The carrying amout of the bonds decreases over the term of the bonds.
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