Question $4(20$ marks$)$

a$.$ What is a legal obligation under IAS $37$ Provisions, Contingent Liabilities and Contingent Assets?

$(2$ marks$)$

b$.$ What is a constructive obligation under IAS $37?$

$(4$ marks$)$

c$.$ What is a provision? What conditions must be satisfied before a provision can be recognized?

$(4$ marks$)$

d$.$ What is a contingent liability?

$(7$ marks$)$

e$.$ How should an accountant reflect a contingent liability in the financial statements?

$(3$ marks$)$

Question $5(20$ marks$)$

a$.$ Explain the following Jamaica Stock Exchange rules for listed companies:

Quarterly Financial Statements

$(6$ marks$)$

Annual Report

$(4$ marks$)$

b$.$ Explain the term rights issue and indicate how a rights issue is accounted for in the accounts. $(5$ marks$)$

dr$.$ ordanyey

c$.$ Explain the term bonus issue and indicate how a bonus issue is accounted for in the accounts. $(5$ marks$)$