1. The intrinsic value of cash flow hedge has increased since last balance sheet date. Which of the following accounting treatment is appropriate for this increased in value at the end of the current year, if the settlement date of the derivate contract for the cash flow hedge is at the end of next year? A. Do not record the increase in the value because it has not been realized in an exchange transaction. B. Record the increase in value to current earnings. C. Record the increase to Other Comprehensive Income. D. Record the increase to deferred income account. 2. What is the correct treatment of a stock dividend issued in mid-year when computing the weighted-average number of common shares outstanding for earnings per share purposes? A. The stock dividend should be weighted by the length of time that the additional number of shares are outstanding during the period. B. The stock dividend should be included in the weighted-average number of common shares outstanding only if the additional shares result in a decrease of 3 percent or more in earnings per share. C. The stock dividend should be ignored since no additional capital was received. D. The stock dividend should be weighted as if the additional shares were issued at the beginning of the year. 3. Of the following, select the incorrect statement concerning earnings per share. A. Under a simple capital structure, basic earnings per share and dilutive earnings per share would be identical. B. During a loss period, the amount of loss attributed to each share of common stock should be computed. C. During a period, changes in stock issued or reacquired by a company may affect earnings per share. D. Under a simple capital structure, no adjustment to shares outstanding is necessary for a stock split on the last day of the fiscal period