12. Select the statement that is incorrect concerning the appropriations of retained earnings. a. Appropriations of retained earnings do not change the total amount of shareholders' equity. O b. Appropriations of retained earnings reflect funds set aside for a designated purpose, such as plant expansion. c. Appropriations of retained earnings can be made as a result of contractual requirements. O d. Appropriations of retained earnings can be made at the discretion of the board of directors.
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- Gem Company classifies a portion of its retained earnings as appropriated for loss contingencies. Consequently, the company Group of answer choices A.) May transfer to income a part of said retained earnings so appropriated. B.)Should not identify said appropriation as an appropriation of retained earnings. C.) Should show the said appropriation of retained earnings within the stockholders' equity section of the balance sheet D.)Could charge costs or losses to the said appropriated retained earnings.30. The following statements are incorrect, except: a. Issued instruments are classified as liabilities or equity in accordance with the legal form of the contractual arrangement and the definitions of the financial liability and an equity instrument. b. A preference share that will be redeemed by the issuer for cash on a future date is a financial liability. c. IAS 37 prescribes the accounting and disclosure for all provisions, contingent liabilities and contingent assets, and those resulting from financial instruments that are carried at fair value. d. Issued instruments are classified as liabilities or equity in accordance with the management’s designation of the contractual arrangement.PFRS 9 permits an entity to make an irrevocable election to present in other comprehensive income changes in the fair value of an investment in an equity instrument. Amounts presented in other comprehensive income May be subsequently transferred to profit or loss. Shall be subsequently transferred to retained earnings. Neither 1 or 2 either 1 or 2 1 2
- PFRS 9 permits an entity to make an irrevocable election to present in other comprehensive income changes in the fair value of an investment in an equity instrument. Amounts presented in other comprehensive income May be subsequently transferred to profit or loss. Shall be subsequently transferred to retained earnings. a. Neither 1 nor 2 b. 1 only c. Either 1 or 2 d. 2 only12. Which of the following is correct regarding the use of terminology under IAS 1 Presentation of Financial Statements? a. Entities are required by IAS 1 to use the terms “other comprehensive income,” “profit or loss” and “total comprehensive income.” The use of the term “net income” is prohibited. b. Entities may use the terms “balance sheet,” “net income,” “income statement,” and “cash flow statement” to describe their financial statements and other terms provided they are not misleading. c. Entities are required by IAS 1 to use the term “statement of cash flows” in presenting the sources and uses of cash for a period. The use of the term “cash flow statement” is prohibited. d. Entities are required by IAS 1 to use the term “statement of financial position” in presenting its assets, liabilities and equity as of a given point of time. The use of the term “balance sheet” is prohibited.If a companys board of directors designates a portion of earnings for a particular purpose due to legal or contractual obligations, they are designated as ________. A. retained earnings payable B. appropriated retained earnings C. cumulative retained earnings D. restricted retained earnings
- In the case of grants related to income, which of these accounting treatments is prescribed by IAS 20? (a) Credit the grant to “general reserve” under shareholders’ equity. (b) Present the grant in the income statement as “other income”’ or as a separate line item, or deduct it from the related expense. (c) Credit the grant to “retained earnings” on the balance sheet. (d) Credit the grant to sales or other revenue from operations in the income statement.Which of the following statements about Accounting Changes is incorrect? When retrospective application is impracticable, the entity shall apply the new policy as at the beginning of the earliest period for which restatement is practicable, which may be the current period. A corresponding adjustment to each affected component of equity affected shall be made. Retrospective application is applying the new policy to the transactions, other events and conditions occurring after the date as at which the policy is changed and recognizing the effect of the change in the accounting estimate in the current and future periods affected by the change. An entity shall correct material prior period errors retrospectively in the first set of financial statements authorized for issue after their discovery by restating the comparative amounts for the prior period(s) presented in which the error occurred. Changes in accounting policies do not include applying an…Which of the following statements is consistent with the principle of control as defined by IFRS 10 Consolidated Financial Statements? a. The investor must be exposed to a return from the investee. b. The investor has the ability to use its power over the investee to affect the amount of the returns from the investee. c. An investor yet to direct the relevant activities of an investee has no power over the investee. d. An investor cannot have control over an investee if another investor has existing rights to participate in the direction of the relevant activities.
- Appropriations of retained earnings are proper a. When required by contractual agreements b. All of the other choices c. When BOD voluntarily designates a portion of retained earnings for future expenses or contingencies d. When required by law36. Which of the following would result to an increase or decrease in the revenue reported by a government entity in its statement of financial performance? Impairment loss on amount already recognized as revenue Receipt of a pledge Receipt of donation in the form of service in kind The repayment of loan payable is forgivenWhich of the following regarding GAAP is true?a. GAAP is an abbreviation for generally appliedaccounting principles.b. Changes in GAAP always affect the amount of incomereported by a company.c. GAAP is the abbreviation for generally acceptedaccounting principles.d. Changes to GAAP must be approved by the SenateFinance Committee.