Question

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1. Heidi Aurora Imports issued shares of the company's Class B stock. Heidi Aurora Imports should report the stock in the company's statement of financial position:

Multiple Choice

As equity unless the shares are mandatorily redeemable.

As equity unless the shares are redeemable at the option of the issuer.

Among liabilities if the shares are mandatorily redeemable or redeemable at the option of the shareholder.

Among liabilities unless the shares are mandatorily redeemable.

2. Characteristics of the corporate form that have led to the growth of this form of business ownership include all of the following except:

Multiple Choice

Ease of ownership transfer.

Ease of raising capital.

Low government regulation.

Limited liability.

3. Retained earnings represent:

Multiple Choice

Earned capital.

Assets.

Net assets.

Cash.

4. When a property dividend is declared, the property to be distributed should be revalued to fair value as of the:

Multiple Choice

Date of declaration.

Date of distribution.

Announcement date.

Record date.

5. Net income and other comprehensive income can be reported in a single statement of comprehensive income using:

Multiple Choice

Neither U.S. GAAP nor IFRS.

Both U.S. GAAP and IFRS.

U.S. GAAP.

IFRS

Item2

Item 2

Answer 1

1) Heidi Aurora Imports issued shares of the company's Class B stock. Heidi Aurora Imports should report the stock in the company's statement of financial position

Solution: Among liabilities if the shares are mandatorily redeemable or redeemable at the option of the shareholder

Explanation: When the shares are mandatorily redeemable or redeemable at the option of the shareholder it must report the stock among liabilities in the company's statement of financial position

2) Characteristics of the corporate form that have led to the growth of this form of business ownership include all of the following except

Solution: Low government regulation.

Explanation: Government regulation does not influence this

3) Retained earnings represent

Solution: Earned capital

Explanation: Retained earnings are the company's profit that are reinvested in the business

4) When a property dividend is declared, the property to be distributed should be revalued to fair value as of the

Solution: Date of declaration

Explanation: The fair value on the date of declaration is used, when revaluing the property to be distributed when a property dividend is declared.

5) Net income and other comprehensive income can be reported in a single statement of comprehensive income using

Solution: Both U.S. GAAP and IFRS

Explanation: Revenue and expense items and components of other comprehensive income can be reported using both U.S. GAAP and IFRS a single statement of comprehensive income