Chapter 4 - Financial instruments Flashcards
1
Q
How do you class Redeemable preference shares?
A
Liability
2
Q
How do you class Irredeemable preference shares?
A
Equity
If paying dividend is a mandatory obligation = Liability
3
Q
How do you show dividends of Redeemable preference shares?
A
Finance cost
4
Q
How do you show dividends of Irredeemable preference shares?
A
R/E in SOCIE
5
Q
Financial ASSETS: What do you do with transaction (issue) costs?
A
ADD
6
Q
Financial LIABILITIES: What do you do with transaction (broker) costs?
A
MINUS
7
Q
What is a compound instrument/convertible bond?
A
Liability and Equity
8
Q
What are treasury shares?
A
buy own shares to make dividends or return excess capital to shareholders
9
Q
What is the double entry for treasury shares?
A
Dr treasury shares
Cr cash
