True/False Questions (3 points each 1. Purchases and sales of securities are always reported as investing activities in a statement of cash flows. A) True B) False 2. I f the fair value of a held to maturity or available for sale debt investment declines below the amortized cost of the investment and is deemed to be other-than-temporary (OTT), a co loss in earnings. A) True B) False mpany recognizes an OTT impairment 3. Long-term debt that is callable by the creditor in the upcoming year should be classified as a current liability only if the debt is expected to be called. A) True B) False 4. Under IFRS, the term "probable" indicates a threshold of probability that is substantially more than a 50 percent chance of occurrence. A) True B) False 5. Straight-line amortization of bond discount or premium provides the same total amount of interest expense over the life of the bond issue as does the effective interest method. A) True B) False 6. If a company chooses the option to report its bonds at fair value, then it reports changes in fair value in its income statement unless the changes are attributable to changes in credit risk. A) True B) False