BSA 34

INVESTMENT IN EQUITY SECURITIES

1. Specifically, these securities represent ownership shares such as common stock,
preferred stock and other capital stock.
a. trading securities b. debt securities c. marketable securities d. equity
securities

2. When stock dividends of different class are received

a. No formal entry is made but only a memorandum
b. Cash is debited and dividend income is credited
c. A new investment account is debited and dividend income is credited
d. A new investment account is debited and the original investment account is credited

3. Liquidating dividends are credited to

a. Income b. Retained earnings c. Investment account d.
Share capital

4. Farmer Corporation owns 4,000,000 shares of stock in Baha Corporation. On

December 31, 2007, Farmer distributed these shares of stock as a dividend to its
stockholders. This is an example of a
a. property dividend. b. stock dividend c. liquidating dividend.
d. cash dividend.

5. Statement 1: financial assets are initially measured at cost plus transaction cost
that are directly attributable to the acquisition
Statement 2: on the derecognition of a financial asset, the difference between the
consideration received and the carrying amount of the asset shall be recognized in
other comprehensive income
a. True; True b. True; False c. False; True d. False;
False