Your document headline

a. An investment in an unquoted debt instrument.
b. An investment in a quoted equity instrument.
c. A quoted derivative financial asset.
d. An investment in a quoted debt instrument.
5. All of the following are characteristics of financial assets classified as loan and receivables except
a. They have fixed or determinable payments.
b. The holder can recover substantially all of its investment (unless there has been credit deterioration).
c. They are not quoted in an active market.
d. The holder has a demonstrated positive intention and ability to hold them to maturity.
6. What is the principle for recognition of a financial asset or a financial liability in IAS 39?
a. A financial asset is recognized when, and only when, it is probable that future economic benefits will flow to the entity and the cost or value of the instrument
can be measured reliably.
b. A financial asset is recognized when, and only when, the entity obtains control of the instrument and has the ability to dispose of the financial asset
independent of the actions of others.
c. A financial asset is recognized when, and only when, the entity obtains the risks and rewards of ownership of the financial asset and has the ability to dispose
of the financial asset.
d. A financial asset is recognized when, and only when, the entity becomes a party to the contractual provisions of the instrument.
7. In which of the following circumstances is derecognition of a financial asset not appropriate?
a. The contractual rights to the cash flows of the financial assets have expired.
b. The financial asset has been transferred and substantially all the risks and rewards of ownership of the transferred asset have also been transferred.
c. The financial asset has been transferred and the entity has retained substantially all the risks and rewards of ownership of the transferred asset.
d. The financial asset has been transferred and the entity has neither retained nor transferred substantially all the risks and rewards of ownership of the transferred
asset. In addition, the entity has lost control of the transferred asset.
8. Which of the following transfers of financial assets qualify for derecognition?
a. A sale of a financial asset where the entity retains an option to buy the asset back at its current fair value on the repurchase date.
b. A sale of a financial asset where the entity agrees to repurchase the asset in one year for a fixed price plus interest.
c. A sale of a portfolio of short-term accounts receivables where the entity guarantees to compensate the buyer for any losses in the portfolio.
d. A loan of a security to another entity (i.e., a securities lending transaction).
9. Which of the following is not a relevant consideration when evaluating whether to derecognize a financial liability?
a. Whether the obligation has been discharged.
b. Whether the obligation has been canceled.
c. Whether the obligation has expired.
d. Whether substantially all the risks and rewards of the obligation have been transferred.
10. At what amount is a financial asset or financial liability measured on initial recognition?
a. The consideration paid or received for the financial asset or financial liability.
b. Acquisition cost. Acquisition cost is the consideration paid or received plus any directly attributable transaction costs to the acquisition or issuance of the
financial asset or financial liability.
c. Fair value. For items that are not measured at fair value through profit or loss, transaction costs are also included in the initial measurement.
d. Zero.
11. In addition to financial assets at fair value through profit or loss, which of the following categories of financial assets is measured at fair value in the statement of
financial position?
a. Available-for-sale financial assets.
b. Held-to-maturity investments.
c. Loans and receivables.
d. Investments in unquoted equity instruments.
12. What is the best evidence of the fair value of a financial instrument?
a. Its cost, including transaction costs directly attributable to the purchase, origination, or issuance of the financial instrument.
b. Its estimated value determined using discounted cash flow techniques, option pricing models, or other valuation techniques.
c. Its quoted price, if an active market exists for the financial instrument.
d. The present value of the contractual cash flows less impairment.
13. Is there any exception to the requirement to measure at fair value, financial assets classified as at fair value through profit or loss or available for sale?
a. No. Such assets are always measured at fair value.
b. Yes. If the fair value of such assets increases above cost, the resulting unrealized holding gains are not recognized but deferred until realized.
c. Yes. If the entity has the positive intention and ability to hold assets classified in those categories to maturity, they are measured at amortized cost.
d. Yes. Investments in unquoted equity instruments that cannot be reliably measured at fair value (or derivatives that are linked to and must be settled in such
unquoted equity instruments) are measured at cost.
14. What is the effective interest rate of a bond or other debt instrument measured at amortized cost?
a. The stated coupon rate of the debt instrument.
b. The interest rate currently charged by the entity or by others for similar debt instruments (i.e., similar remaining maturity, cash flow pattern, currency, credit
risk, collateral, and interest basis).
c. The interest rate that exactly discounts estimated future cash payments or receipts through the expected life of the debt instrument or, when appropriate, a
shorter period to the net carrying amount of the instrument.
d. The basic, risk-free interest rate that is derived from observable government bond prices.