nterest payable on debentures is: a. An appropriation of profits of the company b. A charge against profits of the company c. Not paid in case of inadequate profits d. Transferred to General Reserve Account
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- If the difference between the carrying value of the old obligation at the date of restructure and the discounted present value of cash flows of modified obligation is at least 10% of the carrying value of the original obligation, the transaction is accounted for as derecognition of the original obligation and recognition of a new obligation. A. The statement is true B. The statement is falseWhen convertible debt is retired by the issuer, any material difference between the cash acquisition price and the carrying amount of the debt should be ________. treated as a prior period adjustment treated as an adjustment of additional paid-in-capital reflected currently in incomeAny unamortized premium should be reported on the balance sheet of the issuing corporation as a. paid-in capital b. a direct deduction from the face amount of the bonds in the Liabilities section c. an addition to the face amount of the bonds in the Liabilities section d. a direct deduction from retained earnings
- Under which head is the ‘Debenture Redemption Reserve’ shown in the Balance Sheet?Which of the following is classified as nonmonetary? a. Warranty liability b. Accrued expense c. Unamortized discount on bonds payable d. Refundable depositRedeemable debentures can be described as__________ Select one: a. debenture secured by either movable or immovable assets. The debenture holder has the right to claim repayment from the proceeds of the sale of assets. b. debentures that are not secured by any asset. The debentures holders have the same rights as any other creditor on the case of liquidation. c. debenture holders have the option to convert their debenture into specific shares after a specified period. d. debentures may be redeemed prior to the maturing date.
- When the contractual cash flows of a financial asset are renegotiated or otherwise modified and the renegotiation or modification does not result in the derecognition of that financial asset in accordance with PFRS 9, an entity shall I. Recalculate the gross carrying amount of the financial asset as the present value of the renegotiated or modified contractual cash flows that are discounted at the financial asset's original effective interest rate. II. Recognize a modification gain or loss in profit or loss. A. I only. B. Neither I nor II. C. ll only. D. Both I and II.A contingency that need not be disclosed in the financial statements or in the notes thereto is: A. pending litigation B. possibility of strike. C. deficiency tax assessment. D. note receivable discounted. Of the following items, the one which should be classified as a current liability is: A. an accommodation endorsement. B. a cash dividend declared before the balance sheet date when the date of record is subsequent to the balance sheet date. C. unfunded past service cost of a pension plan. D. dividends in arrears on cumulative preferred stock. Which of the following statements is true concerning contingent liabilities? A. Such liabilities should include obligations of known existence but of unknown amount B. If the definite amount is involved, it is not a contingent liability. C. Such liabilities are generally reported and totaled with other liabilities to make up the liability section of most balance sheets. D. Such liabilities should include obligations known in amount but…Bond discount should be presented in the financial statements of the issue as a(n) Contra liability Contract asset Prepaid expense Deferred charge
- When the accounts receivable of a company are sold outright to acompany that normally buys accounts receivable of other companieswithout recourse, the accounts receivable have been: a. factoredb. assignedc. pledgedd. collateralizedInterest paid is classifi ed as an operating cash fl ow under: C . US GAAP but may be classifi ed as either operating or fi nancing cash fl ows under IFRS.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. 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…
