1.When a debt investment at FVPL is reclassified to amortized cost, what is the new carrying amount at amortized cost?*

Present value of the contractual cash flows

Face amount of the debt investment

Original carrying amount of the debt investment

Fair value at reclassification rate

2.Bonds usually sell at a discount when investors are willing to invest in bonds*

At the stated interest rate

At rate lower than the stated interest rate

At rate higher than the stated interest rate

Because a capital gain is expected

3.Transfers of investments between categories*

Result in omitting recognition of fair value in the year of the transfer.

Are not recognized if investments are transferred from held for collection to fair value

Should always affect net income

Are accounted for at fair value for all transfers

4.When the interest payment dates of a bond are May 1 and November 1, and a bond is purchased on June 1, the amount of cash paid by the investor would be*

Increased by accrued interest from June 1 to November 1

Decreased by accrued interest from June 1 to November 1

Increased by accrued interest from May 1 to June 1

Decreased by accrued interest from May 1 to June 1

5.Which statement is true when a financial asset at FVOCI is reclassified to FVPL?*

All these statements are true.

The fair value at reclassification date becomes the new carrying amount.

The financial asset continues to be measured at fair value.

The cumulative gain or loss previously recognized in OCI is reclassified to profit or loss.

6.Debt investments reported at amortized cost are*

All of these are correct.

Held for collection debt investments

Trading debt investments

Managed and evaluated based on a documented risk management strategy

7.A transfer from investment property carried at fair value to owner-occupied property shall be accounted for at*

Fair value less cost of disposal

Historical cost

Carrying amount

Fair value, which becomes the deemed cost

8.Accrued interest o bonds that are purchased between interest dates*

Is recorded as a loss on the sale of the bonds

Is ignored by both the seller and the buyer

Increases the amount a buyer must pay

Decreases the amount a buyer must pay

9.Subsequent to initial recognition, the investment property shall be measured using*

Fair value model or revaluation model

Fair value through profit or loss model

Cost model or revaluation model

Cost model or fair value model

10. When a financial asset at FVPL is reclassified to FVOCI, the new carrying amount is equal to*

Present value of contractual cash flows

Original carrying amount

Present value of contractual cash flows representing principal

Fair value at reclassification date

11. The interest method of amortizing discount provides for*

Decreasing amortization and decreasing interest income

Decreasing amortization and increasing interest income

Increasing amortization and decreasing interest income

Increasing amortization and increasing interest income

12. A debt investment shall be measured at fair value through other comprehensive income*

When the debt investment is held for trading.

When the business model is to collect contractual cash flows that are solely payments of principal and interest and also to sell the financial asset.

By irrevocable designation

When the debt investment is not held for trading.

13. Which of the following statements best describes owner-occupied property?*

Property held to earn rentals

Property held for capital appreciation

Property held for sale in the ordinary course of business

Property held for use in the production and supply of goods or services and property held for administrative purposes

14. When a debt investment at amortized cost is reclassified to FVPL, the difference between the previous carrying amount and fair value at reclassification date is*

Included in retained earnings

Recognized in other comprehensive income

Recognized in profit or loss

Not recognized

15. A bond investment that satisfies the amortized cost measurement may be designated*

Revocably at fair value through profit or loss

Irrevocably at fair value through OCI

Irrevocably at amortized cost

Irrevocably at fair value through profit or loss