1. When a bond issuer offers some form of additional consideration (a "sweetener") to induce conversion, the sweetener is accounted for as a(n) a. equity item. b. expense. c. loss. d. None of these a are correct 2. Convertible preference shares a. Are compound instruments with both a liability and an equity component. b. Include an option for the holder to convert preference shares into a fixed number of ordinary shares. c. Use the "with-and-without" method to value the compound instrument. d. All of these answer choices are correct. 3. A mining company declared a liquidating dividend. The journal entry to record the declaration must include a debit to a. Retained Earnings. b. a paid-in capital account. c. Accumulated Depletion. d. Accumulated Depreciation. 4. Cash dividends are paid on the basis of the number of shares a suthorized. b. issued. c. outstanding. d. outstanding less the number of treasury shares. 5. Debt investments not held for collection are reported at a. amortized cost. b. fair value. c. the lower of amortized cost or fair value. a. must be applied to all instruments the company holds. b. may be selected as a valuation method by the company at any time during the first 2 years of ownership. c. reports all gains and losses in income. d. All of these answer choices are correct 7. Which of the following is not an accurate representation concerning revenue recognition? a. Revenue from selling products is recognized at the date of sale, usually interpreted to mean the date of delivery to customers. b. Revenue from services rendered is recognized when cash is received or when services have been performed. c. Revenue from permitting others to use enterprise assets is recognized as time passes or as the assets are used. d. Revenue from disposing of assets other than products is recognized at the date of sale. 8. The date on which total compensation expense is computed in a share option plan is the date a. of grant. b. of exercise. c. that the market price coincides with the option price. d. that the market price exceeds the option price. 9. The conversion of preference shares may be recorded by the a. incremental method. b. book value method. c. market value method. d. par value method. 10. Unrealized holding gains or losses on trading investments are reported in a. equity, b. net income. c. other comprehensive income. d. accumulated other comprehensive income