identification

Question 1

A __________ is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Answer 1

financial instrument

Question 2

A particular type of financial instrument which is popularly known business entities as _________

Answer 2

investment

Question 3

Financial instruments specifically _____ allow the holder to exercise financial flexibility and earn from other sources apart from its main source of income.

Answer 3

financial assets

Question 4

_______________ means being able to take advantage of other opportunities to earn from one’s extra resources.

Answer 4

Financial flexibility

Question 5

Financial instruments provides that a financial asset may be measure at _____________, _________________, _______

Answer 5

FVPL, FVOCI, FVAC

Question 6

The designation of a financial asset to any of the classificiations mentioned depends on two tests, namely, the ___________ and the __________

Answer 6

contractual cash test and the business model test

Question 7

The _______________ asks if an entity is holding a financial instrument solely for the collection of interest and dividends that may be received from its investment.

Answer 7

contractual cash flow test

Question 8

The ________ on the other hand simply asks the intention of an entity, which may only be determined by the decision of management personnel.

Answer 8

business model test.

Question 9

Asset classification: current, Measured at: fair value, Form of instrument: Equity and debt

Answer 9

Financial asset at FVPL

Question 10

Asset classification: non current , Measured at: fair value, Form of instrument: Equity and debt

Answer 10

FInancial asset at FVOCI

Question 11

Asset classification: non current , Measured at: amortized cost, Form of instrument: Debt only

Answer 11

Financial asset at ammortized cost.

Question 12

_______________ are shares of stocks bought by an investor from a corporation. The investment may be measured at fair value through profit or loss (FVPL).

Answer 12

Equity instruments

Question 13

Invemstments designated as FA_FVPL are intiall recognized at _________.

Answer 13

fair value

Question 14

The changes in the fair value are recognized on the ________________ statement.

Answer 14

profit or loss

Question 15

If the current fair value is higher than the previous fair value, the entity records an ____________ , otherwise it records an ___________.

Answer 15

unrealized gain and unrealized loss.

Question 16

the words unrealized means the investment is not yet _______.

Answer 16

sold

Question 17

If the selling price differs from the ___________. The sale is technically termed ___________ in financial accounting.

Answer 17

current fair value & derecognition.

Question 18

__________ investments designated as ____________ are initially recorded at _________ similar to FA FVPL.

Answer 18

Equity, FAFVOCI, face value

Question 19

Transactions costs ___________ expensed this time, but are included as part of the purchase price or fair value of the investment.

Answer 19

are not

Question 20

Transaction costs dirrectly attributable to the acquisition of this type of instrument are _______

Answer 20

expensed.

Question 21

FVOCI investments are subsequently recorded at _______, but the changes in fair values would be recorded as unrealized _______ or ______ on the statement of ______________ rather than the _____________- statement

Answer 21

fair value, gain or losses, comprehensive income, profit or loss.

Question 22

Furthermore the same intial change in fair values is also recorded as _______________ unrealized gain or loss on the equity side of the statement of financial position.

Answer 22

cumulative

Question 23

The new cumulative unrealized gain or loss is determined by getting the _____________________ of the investment and the _____________________.

Answer 23

the first fair value of the investment and the current year end fair value.

Question 24

This difference would be reflected on the ___________ side of the statement of ____________________.

Answer 24

equity and financial position.

Question 25

if the investment is finally sold 1: _____________________, 2:_________________ , 3: _____________________

Answer 25

1: its current carrying amount is recognized. 2: the latest balance of its cumulative unrealized gain or loss is closed to retained earnings. 3: The gain or loss from sale is closed to retained earnings as well.