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Which one of the following characteristics of preferred stock would make the stock resemble a liability?

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6.Which one of the following characteristics of preferred stock would make the stock resemble a liability?;A)The preferred stock is callable.;B)The preferred stock is convertible.;C)The preferred stock has warrants attached.;D)The preferred stock is noncumulative.;E)The preferred stock is participating.;7.On January 1, 2003, Riley Corp. acquired some of the outstanding bonds of one of its subsidiaries. The bonds had a carrying value of $421,620, and Riley paid $401,937 for them. How should you account for the difference between the carrying value and the purchase price in the consolidated financial statements for 2003?;A)The difference is added to the carrying value of the debt.;B)The difference is deducted from the carrying value of the debt.;C)The difference is treated as a loss from the extinguishment of the debt.;D)The difference is treated as a gain from the extinguishment of the debt.;E)The difference does not influence the consolidated financial statements.;8.Which statement is true regarding a foreign currency option?;A)A foreign currency option gives the holder the obligation to buy or sell foreign currency in the future.;B)A foreign currency option gives the holder the obligation only sell foreign currency in the future.;C)A foreign currency option gives the holder the obligation to only buy foreign currency in the future.;D)A foreign currency option gives the holder the right but not the obligation to buy or sell foreign currency in the future.;E)A foreign currency option gives the holder the obligation to buy or sell foreign currency in the future at the spot rate.;9.A U.S. company sells merchandise to a foreign company denominated in the foreign currency. Which of the following statements is true?;A)If the foreign currency appreciates, a foreign exchange gain will result.;B)If the foreign currency depreciates, a foreign exchange gain will result.;C)No foreign exchange gain or loss will result.;D)If the foreign currency appreciates, a foreign exchange loss will result.;E)Any gain or loss will be included in comprehensive income.;10.Which accounts are remeasured using current exchange rates?;A)all revenues and expenses;B)all assets and liabilities;C)all monetary assets and liabilities;D)all current assets and liabilities;E)all noncurrent assets and liabilities

 

Paper#27313 | Written in 18-Jul-2015

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