Unformatted text preview: y. Dicker's December 31, 2013, balance sheet
and the 2013 income statement would show the following: A.
D. Option a
Option d 123.Which of the following is not an example of a derivative?
A. Interest rate swap.
C. Stock option.
D. Forward contract.
124.Which of the following is not true about derivatives?
A. Large losses on derivative investments have been reported in the press.
B. Derivatives are so named because their value is derived from some underlying measure.
C. Derivatives are useful instruments for managing risk.
D. Accounting for derivatives is fully resolved and no additional rules or interpretations are likely.
Respond to the following question with the presumption that the guidance provided by the new
Accounting Standards Update is being applied. 125.The journal entries for the _____________, ___________, and __________ approaches under the
proposed ASU correspond to those used for the held-to-maturity, trading security, and available-for-sale
approaches, respectively, in current GAAP.
A. FV-NI, FV-OCI, amortized cost
B. FV-OCI, amortized cost, FV-NI
C. Amortized cost, FV-NI, FV-OCI
D. The journal entries do not correspond.
126.Which of the following is not true about recognizing unrealized gains and losses on equity investments?
A. If the investor does not have significant influence over the investee, the equity investment is always
accounted for as FV-NI.
B.The investor can use the FV-OCI approach if the equity is held for purposes of maximizing return on
investment or managing risk.
C. The investor will recognize unrealized gains and losses in earnings in the period in which fair value of
the investment changes.
D. If the investor has significant influence but not control over the investee, the equity method is used.
127.Which of the following is a criterion for a debt instrument to be viewed as having a lending or customer
financing business purpose?
A. Debt instrument is held for the purpose of being sold.
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- Spring '09
- Balance Sheet, A. Securities