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PROBLEM 1: MULTIPLE CHOICE 1. During the period, an entity acquires an investment. The entity has a "hold to collect and sell" business model. The investment should be classified as a. investment measured at fair value through other comprehensive income. b. investment measured at amortized cost. investment measured at fair value through profit or loss. C. d. any of these 2. If an entity's business model's objective is to hold investments in order to collect contractual cash flows that are solebu payments for principal and interests, then investments should be classified as a. investment measured at fair value through other comprehensive income. b. investment measured at amortized cost. investment measured at fair value through profit or loss. of these C. d. any 3. A permanent decline in the fair value of an investment in equity securities that the entity made an irrevocable election at initial recognition to subsequently measure at FVOCI is recognized in a. profit or loss. b. other comprehensive income. c. either a or b d. not recognized

PROBLEM 1: MULTIPLE CHOICE 1. During the period, an entity acquires an investment. The entity has a "hold to collect and sell" business model. The investment should be classified as a. investment measured at fair value through other comprehensive income. b. investment measured at amortized cost. investment measured at fair value through profit or loss. C. d. any of these 2. If an entity's business model's objective is to hold investments in order to collect contractual cash flows that are solebu payments for principal and interests, then investments should be classified as a. investment measured at fair value through other comprehensive income. b. investment measured at amortized cost. investment measured at fair value through profit or loss. of these C. d. any 3. A permanent decline in the fair value of an investment in equity securities that the entity made an irrevocable election at initial recognition to subsequently measure at FVOCI is recognized in a. profit or loss. b. other comprehensive income. c. either a or b d. not recognized

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2. If an entity's business model's objective is to hold investments entity has a "hold to collect and sell" business model. The 1. During the period, an entity acquires an investment. The PROBLEMS PROBLEM 1: MULTIPLE CHOICE 1. During the period, an entity acquires an investment investment should be classified as a investment measured at fair value through O comprehensive income. b. investment measured at amortized cost. investment measured at fair value through profit or loss С. d. any of these in order to collect contractual cash flows that are solehy payments for principal and interests, then investments should be classified as а. investment measured at fair value through other comprehensive income. b. investment measured at amortized cost. C. c. investment measured at fair value through profit or loss. d. any of these 3. A permanent decline in the fair value of an investment in equity securities that the entity made an irrevocable election at initial recognition to subsequently measure at FVOCI is recognized in a. profit or loss. b. other comprehensive income. c. either a or b d. not recognized 4. Boss Co. purchased bonds at a discount in the open market as an investment. The bonds will be held in order to collect their contractual cash flows. Boss should account for these bonds at оpen a. Cost. b. Amortized cost. c. Fair value through OCI. d. Lower of cost or market. 5. According to PFRS 9, on initial recognition, the entity has e option of designating financial assets to be measured at FVPL
Transcribed Image Text:2. If an entity's business model's objective is to hold investments entity has a "hold to collect and sell" business model. The 1. During the period, an entity acquires an investment. The PROBLEMS PROBLEM 1: MULTIPLE CHOICE 1. During the period, an entity acquires an investment investment should be classified as a investment measured at fair value through O comprehensive income. b. investment measured at amortized cost. investment measured at fair value through profit or loss С. d. any of these in order to collect contractual cash flows that are solehy payments for principal and interests, then investments should be classified as а. investment measured at fair value through other comprehensive income. b. investment measured at amortized cost. C. c. investment measured at fair value through profit or loss. d. any of these 3. A permanent decline in the fair value of an investment in equity securities that the entity made an irrevocable election at initial recognition to subsequently measure at FVOCI is recognized in a. profit or loss. b. other comprehensive income. c. either a or b d. not recognized 4. Boss Co. purchased bonds at a discount in the open market as an investment. The bonds will be held in order to collect their contractual cash flows. Boss should account for these bonds at оpen a. Cost. b. Amortized cost. c. Fair value through OCI. d. Lower of cost or market. 5. According to PFRS 9, on initial recognition, the entity has e option of designating financial assets to be measured at FVPL
a. if doing so enhances the qualitative characteristic of financial information presented in the financial statements. b. if doing so significantly reduces or eliminates "accounting mismatch." c. if it is required by "shadow accounting. d. at the entity's management's absolute discretion.
Transcribed Image Text:a. if doing so enhances the qualitative characteristic of financial information presented in the financial statements. b. if doing so significantly reduces or eliminates "accounting mismatch." c. if it is required by "shadow accounting. d. at the entity's management's absolute discretion.
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