Question
Question 11 An entity has outstanding ordinary shares and nonparticipating, noncumulative preference shares. The liquidation value of the preference shares is equal to the par
Question 11
An entity has outstanding ordinary shares and nonparticipating, noncumulative preference shares. The liquidation value of the preference shares is equal to the par value. The book value per ordinary share is unaffected by
Group of answer choices
The payment of a previously declared cash dividend on the ordinary shares.
The declaration of a share dividend on preference shares payable in preference shares when the market price of the preference share is equal to the par value.
A 2 for 1 split of the ordinary shares.
The declaration of a share dividend on ordinary shares payable in ordinary shares when the market price of the ordinary shares is equal to the par value.
Question 12
For share appreciation rights, the measurement date for computing compensation is the
Group of answer choices
date the rights mature.
date of grant.
date the share reaches a predetermined amount.
date of exercise.
Question 13
What is the correct treatment of a stock dividend issued in midyear when computing the weighted average number of ordinary shares outstanding for earnings per share purposes?
Group of answer choices
The stock dividend should be included in the weighted average number of shares outstanding only if the additional shares result in a decrease of three percent or more in earnings per share.
The stock dividend should be ignored since no additional capital was received.
The stock dividend should be weighted as if the additional shares were issued at the beginning of the year.
The stock dividend should be weighted by the length of time that the additional shares were outstanding during the period.
Question 14
Compensation expense resulting from a compensatory share option plan is generally
Group of answer choices
recognized in the period of exercise.
allocated over the periods of the employee's service life to retirement.
allocated to the periods benefited by the employee's required service.
recognized in the period of the grant.
Question 15
For cash settled share-based payment transactions, an entity shall measure the goods or services received and the liability incurred at
Group of answer choices
neither the fair value of the goods or services received nor the fair value of the liability.
fair value of the goods and services received.
fair value of the liability.
either the fair value of the goods or services received or the fair value of the liability.
Question 16
If share-based payment transaction provides that the employees have the right to choose the settlement whether in cash or shares, the entity is deemed to have issued
Group of answer choices
an equity instrument.
a liability instrument.
a compound financial instrument.
either an equity instrument or a liability instrument but not both.
Question 17
How should cumulative preference dividends in arrears be reported in the statement of financial position?
Group of answer choices
Increase in current liabilities for the amount expected to be declared within the year or operating cycle, and increase in noncurrent liabilities for the balance.
Increase in shareholders' equity.
Increase in current liabilities.
Note disclosure.
Question 18
Which of the following statements is true regarding the effect that dilutive convertible bonds have on the earnings per share computation?
Group of answer choices
The number of shares would be converted is substracted from the denominator and interest net of tax is subtracted from the numerator.
The number of share the bonds would be converted is added to the denominator and interest net of tax is added to the numerator.
The number of shares the bonds would be converted is added to the denominator and interest net of tax is subtracted from the numerator.
The number of share the bonds would be converted from the denominator and interest net of tax is added to the numerator.
Question 19
If there is an acceleration of vesting, any payment made to the employees on the cancellation or settlement of the grant shall be
Group of answer choices
accounted for as repurchase of equity interest.
recognized in retained earnings.
accounted for as repurchase of equity interest and any excess payment over the balance of share options outstanding shall be recognized as expense.
recognized as component of other comprehensive income.
Question 20
Options and warrants are dilutive if
Group of answer choices
the exercise price is equal to the average market price.
the exercise price is lower than the average market price.
the exercise price is higher than the average market price.
the option shares represent 20% of the ordinary shares actually outstanding.
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