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- Which is a correct statement below? A. Equity is the residual interest in the liabilities of the entity after deducting all of its assets.B. Subscriptions receivable shall preferably be reflected as a deduction from the related subscribed share capital.C. Share premium is also known as capital stock.D. A deficit is a credit balance in retained earnings.Q. Which of the following is within the scope of investments accounted for using the equity method of accounting?a) Investment in a wholly-owned or partly-owned subsidiaryb) Joint venture's debt or equity instruments traded in a public marketc) Investment in associate that meets the criteria to be classified as held forsaled) Investment in a financial asset, measured at fair value1. Under Application Guidance 36 of IAS 32, an entity’s own equity instruments also known as treasury shares shall be presented as Group of answer choices a. Financial asset b. Financial liability c. Deduction in the shareholder’s equity at par value or stated value d. Deduction in the shareholder’s equity at cost
- According to PAS 1, dividends declared by an entity are disclosed in thea. Statement of changes in equityb. Notesc. None of thesed. c or d The first line in the Statement of changes in owner’s equity isa. Profit or lossb. Beginning capitalc. Additional contributionsd. Drawings5. A gain or loss may arise from which of the following? a. The initial recognition of the debt and equity components of a compound financial instrument. b. The purchase, sale, issue or cancellation of the entity's own equity instruments. c. The conversion of bonds into the entity's own equity instrument. d. The settlement of a liability at an amount below or above its carrying amount. NOT FOR SALE! StuDOcucom respective authors.2. Each of the three categories of investments in debt and equity securities have similar accounting for all of the following transactions, except for a. initial recording of costb. recognition of dividend and interest incomec. recognition of realized gains or losses on salesd. recognition of unrealized holding gains and losses
- 13. Investments in equity instruments are financial assets because they are Group of answer choices Contractual rights to receive cash or another financial asset from another entity. Cash equivalents. Contractual rights to exchange financial assets or financial liabilities with another entity under conditions that are potentially favorable to the entity. Equity instruments of another entity.Q1 According to IAS 28, Investments in Associates and Joint Ventures, an investment classified as a joint venture should be equity accounted in the consolidated financial statements of the investor company. Which statement below can be used to describe the Equity accounting method? Select one: a. It is an accounting method whereby an investment is initially recorded at cost and is subsequently adjusted for post-acquisition changes in the investor’s share of the net assets of the investee. b. It is an accounting method whereby an investment is initially recorded at cost and is subsequently adjusted for amortization over an agreed period of time. c. It is an accounting method whereby an investment is initially recorded at fair value and is subsequently adjusted for post-acquisition changes in the investor’s share of the net assets of the investee. d. It is an accounting method whereby an investment is initially recorded at fair value and is subsequently adjusted for amortization over…Match each of the following terms with the correct definition: a. additional paid-in capitalb. issued and outstandingc. retained earningsd. treasury stocke. authorized share capitalf. par value Correct Definitions:A. The price at which each share is recorded in the company’s booksB. Held by investorsC. Cumulative amount of profits that have been plowed backD. The difference between the amount of cash raised by an equity issue and the par value of the issueE. The maximum number of shares that can be issued without shareholder approvalF. The amount that the company has spent buying back stock that it has not subsequently resold SELECTED FORMULAS PVIFA = PVIF = requity = rassets + (rassets – rdebt) PV of tax shield = = Tc *DWACC = (1-Tc) * *() + *()
- When an entity prepares separate financial statements, it shall account for investments in associates A. At cost. B. Any of the choices. C. In accordance with PFRS 9. D. Using the equity method as described in PAS 28.5. A gain or loss may arise from which of the following? a. The initial recognition of the debt and equity components of a compound financial instrument. b. The purchase, sale, issue or cancellation of the entity's own equity instruments. c. The conversion of bonds into the entity's own equity instrument. d. The settlement of a liability at an amount below or avo its carrying amount.Match each of the following terms with the correct definition: a. additional paid-in capitalb. issued and outstandingc. retained earningsd. treasury stocke. authorized share capitalf. par value Correct Definitions:A. The price at which each share is recorded in the company’s booksB. Held by investorsC. Cumulative amount of profits that have been plowed backD. The difference between the amount of cash raised by an equity issue and the par value of the issueE. The maximum number of shares that can be issued without shareholder approvalF. The amount that the company has spent buying back stock that it has not subsequently resold