ECO 444 EPS Test Bank-No answers

ECO 444 EPS Test Bank-No answers - DILUTIVE SECURITIES AND...

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DILUTIVE SECURITIES AND EARNINGS PER SHARE MULTIPLE CHOICE —Dilutive Securities—Conceptual 1. Convertible bonds a. have priority over other indebtedness. b. are usually secured by a first or second mortgage. c. pay interest only in the event earnings are sufficient to cover the interest. d. may be exchanged for equity securities. 2. The conversion of bonds is most commonly recorded by the a. incremental method. b. proportional method. c. market value method. d. book value method. 3. Gains or losses on the early extinguishment of convertible debt should be considered an a. extraordinary item. b. ordinary item. c. unusual item. d. none of these. 4. The conversion of preferred stock may be recorded by the a. incremental method. b. book value method. c. market value method. d. par value method. 5. When the cash proceeds from a bond issued with detachable stock warrants exceeds the sum of the par value of the bonds and the fair market value of the warrants, the excess should be credited to a. additional paid-in capital from stock warrants. b. retained earnings. c. a liability account. d. premium on bonds payable. 6. Proceeds from an issue of debt securities having stock warrants should not be allocated between debt and equity features when a. the market value of the warrants is not readily available. b. exercise of the warrants within the next few fiscal periods seems remote. c. the allocation would result in a discount on the debt security. d. the warrants issued with the debt securities are nondetachable. 7. Stock warrants outstanding should be classified as a. liabilities. b. reductions of capital contributed in excess of par value. c. assets. d. none of these. Es addition contributed capital
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Test Bank for Intermediate Accounting, Eleventh Edition 8. The date on which to measure the compensation element in a stock option granted to a corporate employee ordinarily is the date on which the employee a. is granted the option. b. has performed all conditions precedent to exercising the option. c. may first exercise the option. d. exercises the option. 9. Compensation expense resulting from a compensatory stock option plan is generally a. recognized in the period of exercise. b. recognized in the period of the grant. c. allocated to the periods benefited by the employee's required service. d. allocated over the periods of the employee's service life to retirement. 10. The date on which total compensation expense is computed in a stock option plan is the date a. of grant. b. of exercise. c. that the market price coincides with the option price. c. that the market price exceeds the option price. 11. Which of the following is not a characteristic of a noncompensatory stock purchase plan? a.
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ECO 444 EPS Test Bank-No answers - DILUTIVE SECURITIES AND...

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