Which of the following is NOT correct regarding trading securities * a. Unrealized holding gains or losses are reported in profit or loss b. Share in profit of the investee increases carrying value of the investment c. These are classified as current assets. d. Cash dividends shall be recognized as dividend income

Which of the following is NOT correct regarding trading securities * a. Unrealized holding gains or losses are reported in profit or loss b. Share in profit of the investee increases carrying value of the investment c. These are classified as current assets. d. Cash dividends shall be recognized as dividend income

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter13: Marketable Securities And Derivatives

Section: Chapter Questions

Problem 3Q

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Stockholders equity consists of which of the following? A. bonds payable B. retained earnings and accounts receivable C. retained earnings and paid-in capital D. discounts and premiums on bond payable
Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a stock dividend resides with shareholders. C. It does not affect total equity but transfers amounts between equity components. D. It creates a cash reserve for shareholders.
Which of the following would trigger a subtraction in the indirect operating section? A. gain on sale of investments B. depreciation expense C. decrease in accounts receivable D. decrease in bonds payable
For fi nancial assets classifi ed as trading securities, how are unrealized gains and losses refl ected in shareholders’ equity? B . Th ey fl ow through income into retained earnings.
For fi nancial assets classifi ed as trading securities, how are unrealized gains and losses refl ected in shareholders’ equity? C . Th ey are a component of accumulated other comprehensive income.
For investments in available-for-sale securities, a debit balance in the Unrealized Holding Gain/Loss account reflects a cumulative unrealized gain. is reported as a negative element in the accumulated other comprehensive income section of shareholders' equity. is reported as a positive element in the accumulated other comprehensive income section of shareholders' equity. is reported as a positive element in the assets section of the balance sheet.
Which is a correct statement below? A. Equity is the residual interest in the liabilities of the entity after deducting all of its assets.B. Subscriptions receivable shall preferably be reflected as a deduction from the related subscribed share capital.C. Share premium is also known as capital stock.D. A deficit is a credit balance in retained earnings.
Which is a component of stockholder's equity? a. Sinking funds b. Deferred charges c. Accumulated other comprehensive income d. Realized capital
3. Which of the following categories of investments are reported at their fair values on the balance sheet and have unrealized holding gains and losses included as a separate component of stockholders' equity? a. held-to-maturity debt securitiesb. marketable securitiesc. available-for-sale securitiesd. trading securities
Dividend revenue is recognized for trading securities and available for sale securities even if held at FVOCI. Gain on sale is the excess of the net selling price over the cost of the securities sold which is reported to profit or loss whether trading or available for sale securities held at FVOCI. a. Only the first statement is correct. b. Only the second statement is correct. c. Both statements are correct. d. Both statements are incorrect.
13. For available-for-sale equity securities, receipt of a cash dividend would be reported as a. a reduction from retained earningsb. an increase in the investments available for sale accountc. a reduction in the investments available for sale accountd. dividend revenue
Which of the following is not a financing activity: O Issuance of bonds payable Sale of investment Purchase of treasury stock O Issuance of common stock