Question
01] When the cash proceeds from bonds issued with detachable shares warrants exceeds the sum of the issue value of the bonds and the market
01] When the cash proceeds from bonds issued with detachable shares warrants exceeds the sum of the issue value of the bonds and the market value of the warrants, the excess should be
Select one:
a. credited to contributed surplus from shares warrants.
b. credited to retained earnings.
c. credited to the premium on warrants account.
d. debited to premium on bonds payable.
e. credited to premium on bonds payable.
02] A company should accrue a loss contingency only if the likelihood that a liability has been incurred is:
Select one:
a. likely and the amount is known.
b. more likely than not and the amount of the loss can be reasonably estimated.
c. at least reasonably possible and the amount of the loss is known.
d. At least reasonably possible and the amount of the loss can be reasonably estimated.
e. none of the above.
03] Which of the following statements is INCORRECT regarding the recording of the related increase or accretion in the carrying amount of an asset retirement obligation (ARO)?
Select one:
a. Under IFRS , it is recognized as interest expense.
b. Under ASPE, it is recognized as accretion expense (but not as interest expense).
c. Under ASPE, it is recognized as interest expense.
d. The amount should be calculated using the same discount (interest rate) as was used to calculate the initial present value of the ARO.
e. None of the above.
04] Derivatives should be valued at
Select one:
a. discounted cost.
b. incremental cost.
c. acquisition cost.
d. historical cost.
e. fair value
05] Which of the following situations would require that long-term liabilities be reported as current liabilities on a classified balance sheet?
Select one:
a. The long-term debt is callable by the creditor.
b. The creditor has the right to demand payment due to a covenant violation which has occurred.
c. The long-term debt matures within the upcoming year.
d. All of the three situations as stated above require the current classification.
e. receive cash dividends before they are distributed to preferred shareholders
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