7/18/2014 6.5.1.

Investments in Equity and Debt Securities - Trading Securities Exercises

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LN-Theory of Accounts
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My home My courses LN-Theory of Accounts Accounting for Assets 6.5.1. Investments in Equity and Debt Securities - Trading
Securities Exercises
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At what amount is a financial asset or financial liability measured on initial recognition?
Select one:
A. The consideration paid or received for the financial liability
B. Fair value. For items that are not measured at fair value through profit or loss,
transaction costs are also included in the initial measurement
C. Zero
D. Acquisition cost. Acquisition cost is the consideration paid or received plus any
directly attributable transaction costs to the acquisition or issuance of the financial
asset or financial liability
Check
Ecru Co. has a portfolio of marketable equity securities which it does intend to sell in
the near term. How should Ecru classify these securities, and how should it report
unrealized gains and losses from these securities
Classify as Reported as
Select one:
A.
Trading
securities
Seperate component of
stockholder's equity
B.
Trading
securities
Component of income from
continuing operations
C.
Available-for-
sale securities
Component of income from
continuing operations
D.
Available-for-
sale securities
Seperate component of
stockholder's equity
Check
In accounting for investments in debt securities that are classified as trading
securities,
Select one:
A. a discount is reported separately.
B. any discount or premium is not amortized.
C. a premium is reported separately.
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7/18/2014 6.5.1. Investments in Equity and Debt Securities - Trading Securities Exercises
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LN-Theory of Accounts
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D. none of these.
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Are there any circumstances when a contract that is not financial instrument would be
accounted for as a financial instrument under PAS 32 and PAS 39?
Select one:
A. Yes. A contract for the future purchase or delivery of a commodity or other
nonfinancial item (e.g., gold, electricity, or gas) generally is accounted for as a
financial instrument if the contract for as a financial instrument if the contract can be
settled net
B. Yes. Gold, silver and other precious metals that are readily convertible to cash
are accounted for as financial instruments
C. Yes. An entity may designate any nonfinancial asset that can be readily
convertible to cash as a financial instrument
D. No. Only financial instruments are accounted for as financial instruments
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