True or False on the date of declaration. 5. stock dividends of 45% of the outst

Question

True or False

on the date of declaration. 5. stock dividends of 45% of the outstanding shares of stock are valued at fair market value on the date of declaration. 6. If a company has cumulative preferred stock, the dividends in arears must be subtracted from the net income in the numerator of diluted earnings per share. 7. Cash dividends become a liability to the corporation when declared. Unrealized gains from Available for Sale securities are reported as other comprehensive income. 8. 9. Investments in bonds may be classified as trading securities, available-for-sale securities, and held-to-maturity securities. 10. Z Company has significant influence over G Company and owns 40% of the voting stock of G Company, Z Company needs to use the fair value method of accounting for the investment in G Company. 11. Unrealized gains and losses from trading securities that result from the change in fair value during the period must be reported on the income statement. 12. The temporary gains or losses from held-to-maturity must be reported in income for the current year. 13. The equity method of accounting requires that a company adjust Held-to-maturity securities are carried at fair value using the 15. Stock Appreciation rights are a form of compensation that allows 16. Stock options are a form of compensation which allows employees the cost of the investment to fair value at the end of each period. 14. effective interest method. employees to purchase shares at a specific price. to receive stock or cash for the difference between stated value and the market value.

Explanation / Answer

5) False  

6) True

7) True

8) True

9) False

10) False

11) True

12) False

13) False

14) True

15) True

16) False

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