ACC2363_Assignment 8_Q #10 Purchase of Company's Own Shares

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.

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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.

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 a capital market instrument? a. Corporate stock b. Mortgages c. Corporate bonds d. Repurchase agreement

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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

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

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

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Dhapa

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Which of the following is classified as a financing activity? Receipt of dividend income   Receipt of interest on loan receivable   Payment of dividends   Investment in another company’s stock