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.

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.

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter13: Auditing Debt, Equity, And Long-term Liabilities Requiring Management Estimates

Section: Chapter Questions

Problem 18RQSC

See similar textbooks

Similar questions

Directions: Please select the appropriate answer on the statement below;B - If the statement is trueS - When the statement is false or part of the statement is false Equity is the residual interest in the company's assets after deducting all liabilities
4. Financial liabilities other than FVPL liabilities are initiallymeasured at fair value plus transaction costs.5. Amortized cost financial liabilities are subsequently measuredat the present value of the cash outflows from the instrument.6. Financial liabilities may be subsequently reclassified betweenthe amortized cost and fair value measurement categories.7. Trade payables and other liabilities that are part of an entity'sworking capital may be presented as current liabilities even ifthey are expected to be settled beyond one year.8. According to PAS 1, a currently maturing debt that the entity'smanagement intends to refinance is presented as noncurrent.9. According to PFRS 15, if an entity expects that a portion of giftcertificates sold will not be redeemed, the entity recognizes theexpected breakage amount as revenue in proportion to thepattern of rights exercised by customers.10. Unearned revenue is revenue that is earned but not yet collected Please answer this all. Thank you
The Standard IAS 37 sets the criteria for recognition and measurement of Provisions; Contingent liabilities and Contingent assets; and requires several disclosures about these items to understand them better. Where do you find contingent liabilities in the financial statements? a.Notes to Accounts b.None of the options c.Current Liabilities d.Non-current Liabilities
23.1 What is the principal accounting for a compound financial instrument? a. The issuer shall classify a compound instrument as a liability in its entirety. b. The issuer shall classify a compound instrument as a liability in its entirety until converted into equity. c. The issuer shall classify a compound instrument as either liability or equity d. The issuer shall classify the liability and equity components of a compound instrument separately as a financial liability or equity instrument
1.The following is a current liability: a. A long-term debt with current maturity, which will be paid from cash held in separate funds. b. A debt with current long-term maturity, which will be retired by issuing new debt. c. A debt with current maturity, which will be converted into common shares. d. None of the above. 2. Debts (liabilities) refers to: a. Any account that maintains a credit balance after closing entries are made. b. Deferred credits that are recognized and measured in accordance with generally accepted accounting principles. c. Obligations to transfer in the future the participation of the owners' shares. d. Obligations arising from past transactions and which will be payable with assets or services rendered in the future.
34. The following statements are correct, except a. A liability will be reported at less than its maturity amount prior to the maturity date if the stated rate of interest on the liability is higher than the market rate of interest. b. A liability is created because of the acquisition of an asset, payment of another liability, incurrence of an expense, declaration of cash or property dividend, a loss, or a revenue collected in advance. In all cases, each of these “causes” usually provides the basis for measuring the liability. c. Accounts payable with customary term of 18 months is classified as current liability. d. Most liabilities have stated and effective interest rates that are the same; in such a situation the principal, face, and maturity amounts are all the same.
13 Under what circumstances under PFRS 9 can an entity classify financial assets that meet the amortized cost criteria as at FVTPL? Group of answer choices Where the instrument is held to maturity. Where the business model approach is adopted. Where the financial asset passes the contractual cash flow characteristics test. Not sure If doing so eliminates or reduces an accounting mismatch.
5.According to PFRS9 Financial Instruments, a financial instrument is recognized when the entity purchases investments in equity securities when the entity becomes a party to the contractual provisions of the instrument when the entity has a codified business model with an objective of holding assets in order to collect contractual cash flows all of these
All of the following are true of the effect of fair value accounting on the financial statements except: a. any difference between the original cost or the prior period’s fair value must be recorded b. changes in the fair value of trading securities are recognized on the income statement c. valuation allowance accounts are reported on the balance sheet d. changes in the fair value of available-for-sale securities are recognized on the income statement
For each case of a financial asset that is not related to one another, explain (must be accompanied by an explanation) whether meeting the contractual cash flow test consists of only principal and interest: 1) Investments in debt instruments in the form of bonds with a specified maturity date. The bonds have a predetermined principal payment and interest on the principal amount payable is linked to the stock equity index on the stock exchange 2) Investments in debt instruments in the form of bonds from toll road management companies, whose contractual cash flows from these financial assets change according to the number of motorized vehicles that use certain toll roads. 3) Investments in debt instruments with a specified maturity date. A variable interest rate which gives the borrower the option of choosing a market rate of three months LIBOR for three months or one month LIBOR for one month
40. When an entity breaches an undertaking under a long-term loan agreement on or before the balance sheet date with the effect that the liability becomes payable on demand, (choose the incorrect statement) a. The liability is classified as non-current, even if the lender has agreed, after the balance sheet date and before the authorization of the financial statements for issue, not to demand payment as a consequence of the breach b. The liability is classified as current because, at the balance sheet date, the entity does not have an unconditional right to defer its settlement for at least twelve months after that date. c. The liability is normally classified as current; however, the liability is classified as non-current if the lender agreed by the balance sheet date to provide a period of grace ending at least twelve months after the balance sheet date, within which the entity can rectify the breach and during which the lender cannot demand immediate repayment. d. The…
Which of the following statements is false?Select one:a. A contingent liability should be disclosed in the notes to the financial statements if there is a reasonable possibility that a loss (or expense) will occur.b. A contingent liability should be accrued if the loss is probable and the amount of the loss can be reasonably estimated.c. A contingent liability is a potential obligation that depends on the future outcome of past events.d. All contingent liabilities should be reported as liabilities on the financial statements, even those that are unlikely to occur.