MCQ Review 15 Flashcards
1
Q
Under IFRS, what criterion permits the derecognition of a financial asset?
A
- A financial asset is derecognized if the rights to its cash flows have expired.
- If they have not, one of the conditions for derecognition is transfer of the contract rights to the cash flows from the financial asset.
- If, in addition, substantially all risks and rewards of ownership have been transferred, the asset is derecognized.
- If the entity neither transfers nor retains all of the risks and rewards of ownership, the entity derecognizes the asset if it does not retain control. If control is retained, the asset is recognized to the extent of the entity’s continuing involvement.
2
Q
should be disclosed in an entity’s financial statements related to deferred taxes?
A
- I.The types and amounts of existing temporary differences
- III.The nature and amount of each type of operating loss and tax credit carryforward.
3
Q
How is a stock dividend issued fewer than 20-25% recorded?
A
- Debit retained earning for the FV amount of stock
- A stock dividend in which the number of shares issued is fewer than 20 to 25% of those outstanding is recorded as a debit to retained earnings for the fair value of the stock issued and a credit to the capital stock accounts
4
Q
How is a stock dividend issued greater than 20-25% recorded?
A
- Debit retained earning for the Par value amount of stock
- a share distribution that is greater than 20 to 25% of the outstanding shares, requires a debit to retained earnings at least equal to the legal requirement in the state of incorporation (usually the par or stated value of the shares).
