A bond may only be issued on an interest payment date. If the market rate is gre

Question

A bond may only be issued on an interest payment date. If the market rate is greater than the coupon rate, bonds will be sold at a discount. True no-par stock should be carried in the accounts at issue price without any additional in capital reported. The cost method records all transactions in treasury shares at their cost and reports the treasury stock as a deduction from capital stock. When a corporation sells treasury stock below its cost, it usually debits die difference between cost and selling price to Paid-in Capital from Treasury Stock. When stock dividends or nock splits occur, companies must restate the shares outstand after the stock dividend or split, in order to compute the weighted-average number of shares. Companies do not report changes in the fair value of available-for-sale debt securities as income until the security is sold. The Unrealized Holding Gain/Loss Equity account is reported as a part of Other comprehensive income. A deferred tax liability represents the increase in taxes payable in future years as a result of taxable temporary differences existing at the end of the current year. Companies compute the vested benefit obligation using only vested benefits, at future salary levels. The FASB encourages the use of the indirect method over the direct method. The primary purpose of the statement of cash flows is to provide cash-basis information about the company's operating, investing, and financing activities. Under the accrual basis of accounting, net income is usually the same as net cash flow from operating activities. Noncash investing and financing activities are disclosed either in a separate schedule or in separate note to the financial statements.

Explanation / Answer

Ans 52 FALSE A bond may be issue at a time other than interest payment Date. Ans 53 TRUE If the market rate is greater than the coupon Rate ,Bond will be sold at discount Ans 54 TRUE No-Par stock should be carried in the accounts at issue price without any additional paid up capital reported. Ans 55 TRUE Cost method record all the transactions in treasury shares and report it as a deduction from equity Ans 56 FALSE debited to Additional paid in capital /Retained earninggs Ans 57 FALSE Weighted average no of shares are not restated. Ans 58 FALSE Reported in other comprehensive income Ans 59 TRUE The unrealized loss/gain on AFS is reported in other comprehensive income Ans 60 TRUE Ans 61 TRUE `Vested benefits calculate only vested where as projected benefit unit credit method calculates all. Ans 62 TRUE Indirec method is preferred because of compatibility with P&L Ans 63 TRUE Ans 64 FALSE Ans 65 TRUE

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