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Far MQ1
Far MQ1
Select one:
a. True
b. False
When bond investment is held for "trading" or measured at fair value through profit or loss,
it is necessary to amortize any premium or discount.
Select one:
a. True
b. False
Investments that are readily realizable and are intended to be held for not more than one
year
Select one:
a. Noncurrent investments
b. None of the choices
c. Investment
d. Current investments
Select one:
a. callable bonds
b. debenture bonds
c. indebenture bonds
d. junk bonds
Any contract that evidence a residual interest in the assets of an entity after deducting all of
its liabilities.
Select one:
a. Impartial instruments
b. Prejudice instruments
c. Equity instruments
Transaction costs directly attributable to the issuance of shares include following, except
Select one:
a. Documentary stamp tax and other percentage tax
b. Underwriting fee
c. Stock listing fee
Bonds payable issued with scheduled maturities at various dates are called
Select one:
a. Bearer Bonds
b. Serial bonds
c. None of the choices
d. Term bonds
On January 1, 2012, Jordan Inc. acquired 30% of Nico Corp. Jordan used the equity method
to account for the investment. On January 1, 2013, Jordan sold 2/3 of its investment in Nico.
It no longer had the ability to exercise significant influence over the operations of Nico. How
should Jordan have accounted for this change?
Select one:
a. Jordan should continue to use the equity method to maintain consistency in its financial
statements.
b. Jordan has the option of using either the equity method or the fair-value method for
2012 and future years.
c. Jordan should use the fair-value method for 2013 and future years but should not
make a retrospective adjustment to the investment account.
d. Jordan should restate the prior years' financial statements and change the balance in the
investment account as if the fair-value method had been used since 2012.
Trading on the equity is
Select one:
a. The "revaluation surplus" related to increases or decreases in items such as property,
plant, and equipment.
b. A return on assets that is higher than the cost of financing these assets.
c. The amount each share would receive if the entity were liquidated.
Select one:
a. a type of Futures Contract.
b. customized to meet the needs of the specific parties.
c. required an initial cash flow in the form of a margin.
Select one:
a. Current asset
b. Intangible asset
c. Noncurrent asset
Which of the following observations is not consistent with the cost method of accounting?
Select one:
a. Investee dividends from earnings since acquisition by investor are treated as
reduction of investment
b. Differential is not amortized or written off
c. It is consistent with the treatment normally accorded noncurrent assets