ACC2363_Assignment 8_Q #10 Issue of Common Shares

Indicate in which of the three categories Preferred shares issued for cash should appear and whether it is an inflow or an outflow of cash: Multiple Choice Operating inflow None of the other alternatives are correct Financing outflow Financing inflow Investing outflow X

Select all that apply Which of the following items are classified as noncash investing and financing activities? (Check all that apply.) Conversion of preferred stock to common stock Lease of assets in a long-term lease transaction Repayment of a note with cash Retirement of debt by issuing stock

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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

Interpretation No. 46R relates to the issue of whether an investing firm is the primary beneficiary in a variable-interest entity. When is an entity classified as a variable interest entity?   Starting with free cash flows from operations, discuss how an analyst would measure free cash flows to common equity shareholders.

Which of the following is a current liability? a. Preferred dividends in arrears. b. A dividend payable in the form of additional shares of stock. c. A cash dividend payable to preferred stockholders. d. All of these answers are correct.

Which one or more of the following would you not include within the heading Equity and Reserves in a company’s Statement of financial position: Revaluation reserve or Share premium account, or Redeemable Preference Shares or Dividend declared.

None

Accounting type Question: Bonus shares cannot be issued out of: A. Profit and Loss a/c B. Capital Redemption reserve C. General reserve D. Dividend equalisation fund

The cost of retained earnings is less than the cost of ordinary shares because of *a. the issuance cost.b. agency costs of free cash flow.c. the taxation on earnings.d. the trust fund doctrine.

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Which of the following is not a capital market instrument? a. Corporate stock b. Mortgages c. Corporate bonds d. Repurchase agreement

Which of the following statements is false?   A.   Mutual funds are pool investor funds to purchase financial instruments and thus reduce risks through diversification.   B.   Initial public offering (IPO) occurs when firm issues stock in the public market for the first time.   C.   The difference between current assets and non-current assets equals to working capital.   D.   Owner’s equity is the residual interest in assets that remains after subtracting an entity’s liabilities.

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

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