13 An addition to or reduction in the beginning retained earnings balance in a statement of shareholders' equity is called what? A foreign currency translation adjustment holding gain or loss future period adjustment D prior period adjustment 0 0 14 The fair value option can be used when accounting for our company's investment in another company's bonds. If we use the fair value option, we account for the changes in market value as though the investment was a(n) A hold to maturity security B trading security held for sale security D equity security in which we own more than 20% of the other company's common stock 15 Our company has convertible bonds outstanding. When we began calculating the diluted earnings per share, we assumed the bonds were a dilutive security. But we soon discovered that if we included the bonds in the calculation, the earnings per share would be increased not decreased. So, what do we do with the convertible bonds information when calculating basic and diluted earnings per share? We do not include the convertible bonds information in the calculation of basic earnings per share, but we do use it in calculating diluted earnings per share We use the convertible bonds information in the calculation of both basic earnings per share and diluted earnings per share We do not include the convertible bonds information in the calculation of either basic or diluted earnings per share We use the convertible bonds information in the calculation of basic earnings per share, but not for diluted earnings per share B 17 Which of the following investments that our company could make could NOT result in holding gains or losses? Investment in bonds classed as a hold to maturity security Investment in bonds classed as a trading security Investment in bonds classed as an available for sale security Investment in stock of a company in which we do not have significant influence B D 18 + ABC Company has an investment in DEF Company common stock. The board of directors decides to distribute these shares of DEF Company to the stockholders of ABC Company. This is called what? cash dividend property dividend stock dividend stock split A B C D 19 Our company has net income this year of $725,000. We have convertible bonds payable outstanding. These bonds could have been converted by the holders of the bonds this year, but none were converted. What can we say about earnings per share? Under these circumstances, we would not calculate earnings per share for this year B Basic earnings per share and diluted earnings per share would be the same It is possible for diluted earnings per share to be less than basic earnings per share D it is possible for diluted earnings per share to be more than basic earnings per share A 20 Stock options are granted to certain employees of a company on January 1, 2022. These options can be exercised for 10 years after January 1, 2022, but not before March 15, 2026. What is the vesting date? January 1, 2022 B .March 15, 2026 C January 1, 2032 21 It is reasonably possible that a contingent liability will become a real liability in the future, and the amount is reasonable estimable. What is the accounting treatment? A a journal entry and a disclosure note a journal entry but no disclosure note a disclosure note only no disclosure required B D