InAcc2

Statement 1: A deposit of cash with a bank or similar financial institution is a

financial asset.     Statement 2:  Investment in shares can be classified as

financial assets.

• Only statement 1 is correct. (True, False)

• Only statement 2 is correct. (False, True)

• Both statements are correct. (True, True)

• Both statements are incorrect. (False, False)

Statement 1: Financial assets at amortized cost include both equity securities

and debt securities.     Statement 2:  Equity securities include redeemable

preference shares.

• Only statement 1 is correct. (True, False)

• Only statement 2 is correct. (False, True)

• Both statements are correct. (True, True)

• Both statements are incorrect. (False, False)

Statement 1:  Dividends shall be recognized as revenue when the shareholder’s

 right to receive payment is established.     Statement 2:  Property dividends are

considered as income and recorded at carrying amount.

• Only statement 1 is correct. (True, False)

• Only statement 2 is correct. (False, True)

• Both statements are correct. (True, True)

• Both statements are incorrect. (False, False)

Statement 1: For investment in associate, when potential voting rights exist, the

investor’s share of profit or loss of the investee and of changes in the investee’s

equity is determined on the basis of the present ownership interest plus possible

exercise or conversion of potential voting rights.     Statement 2: The loss of

significant influence over an investee could occur when an associate becomes

subject to control of government, court, administrator or regulator.

• Only statement 1 is correct. (True, False)

• Only statement 2 is correct. (False, True)

• Both statements are correct. (True, True)

• Both statements are incorrect. (False, False)

Statement 1:  PAS 28, paragraph 22, provides that on the date the significant

influence is lost, the investor shall measure any retained investment in associate

at fair value.  Statement 2:  The investment in associate classified as held for sale

shall be measured at the lower of carrying amount and fair value less cost of

disposal.

• Only statement 1 is correct. (True, False)

• Only statement 2 is correct. (False, True)

• Both statements are correct. (True, True)

• Both statements are incorrect. (False, False)

Statement 1: The fair value approach should be followed when an associate is

acquired in stages.     Statement 2:  Upstream transactions are sales of assets

from the investor to an associate.

• Only statement 1 is correct. (True, False)

• Only statement 2 is correct. (False, True)

• Both statements are correct. (True, True)

• Both statements are incorrect. (False, False)

Statement 1: When bonds are acquired between interest dates, the purchase

price normally excludes the accrued interest.     Statement 2: Amortized cost is

the initial recognition amount of the investment minus repayments, less

amortization of discount, plus amortization of premium, and minus reduction fro

impairment  or uncollectibility.

• Only statement 1 is correct. (True, False)

• Only statement 2 is correct. (False, True)

• Both statements are correct. (True, True)

• Both statements are incorrect. (False, False)

Statement 1: For a bond investment measured at fair value through other

comprehensive income, om derecognition, the cumulative gain or loss shall be

reclassified to profit or loss.     Statement 2: For investment in bonds irrevocably

designated as financial assets measured at fair value, transaction cost incurred is

an outright expense.

• Only statement 1 is correct. (True, False)

• Only statement 2 is correct. (False, True)

• Both statements are correct. (True, True)

• Both statements are incorrect. (False, False)

Statement 1: All equity investments cannot be reclassified.      Statement 2: An

investment in bonds which is reclassified from FVOCI to amortized cost requires

a     new effective rate at reclassification date.

• Only statement 1 is correct. (True, False)

• Only statement 2 is correct. (False, True)

• Both statements are correct. (True, True)

• Both statements are incorrect. (False, False)

Statement 1: An owner-managed hotel is treated as an investment property.    

  Statement 2: If an inventory is transferred to investment property that is to be

carried at fair value, the remeasurement to fair value shall be included in profit or

loss.

• Only statement 1 is correct. (True, False)

• Only statement 2 is correct. (False, True)

• Both statements are correct. (True, True)

• Both statements are incorrect. (False, False)