Share Based Compensation, Stockholders' Equity,Employee Benefits

Select the best choice and please explain why? Thank you.

How many of the transactions below does not affect the balance of accumulated profits?

I. share split II. appropriation for plant expansion III. conversion of preference shares to ordinary shares where the original issue price of preference shares is greater than the aggregate par value of ordinary shares. IV. Retirement of treasury shares below par value*

A. 0

b. 1

C. 2

D. 3

E. 4

What does appropriation of retained earnings (R/E) and declaration of cash dividend have in common?

a. both increase the amount of appropriated R/E

b. both have the same consequences for shareholders

c. both result in a decrease in unappropriated R/E

d. both permanently reduce future ability to pay dividends

e. none of the above

Which statement is correct?

a. The primary purpose of quasi reorganization is to give an entity the opportunity to eliminate a deficit in accumulated profits.

b. Quasi reorganization thru revaluation does not change the share capital of the organization and the deficit is eliminated thru the use of revaluation surplus.

c. Quasi reorganization thru recapitalization changes the share capital structure of the organization and the deficit is eliminated thru the use of share premium.

d. all of the above

e. none of the above

Which statement is incorrect?

a. Share options are equity settled share based payment transaction and should be reported as expense using the fair value method on the date of grant.

b. Compensation expense is immediately recognized under PFRS 2 in circumstances when options are granted for prior service, and the options are immediately exercisable

c. In share-based compensation, the entry to record the compensation expense is a debit to salaries expense and a credit to Share Options Outstanding.

d.none of the above

In share-based compensation, who shall be included in determining total compensation expense?

a. employees who left the company during the period

b. Employees who will leave the company for the succeeding years

c. Employees who already retired during the period of computation

d. Employees who are hired during the period of computation

e. answer not given

Which statement is correct?

A. Defined contribution plan is a benefit plan in which an entity pays a fixed contribution into a separate fund and will have no legal or constructive obligation to pay further contribution if the fund becomes insufficient to pay employee benefits.

B. Actuarial assumptions are the entity's best estimates of the variables that will determine the ultimate cost of providing postemployment benefits.

C. In a defined benefit plan, if the fair value of plan assets is more than the projected benefit obligation, the plan is overfunded and there is prepaid benefit cost.

D. A and B

E. A, B and C

S1: If the actual return on plan assets is greater than the expected return, there is actuarial gain. S2: A decrease in projected benefit obligation is actuarial gain.

A. both are true

B. both are false

C. S1 is true

D. S2 is true

Which statement is incorrect?

A. PFRS mandates the use of projected unit credit method of determining the present value of the defined benefit obligation.

B. The discount rate used in making actuarial assumptions shall be determined by reference to the market yield on high quality bonds at the end of reporting period.

C. Current service cost is the increase in the present value of the defined benefit obligation resulting from employee service in the previous period.

D. In accounting for other long-term employee benefits, Current service cost, past service cost and any gain or loss on settlement are fully recognized through profit or loss.

E. none of the above