Question : 81. Which of the following is/are true? A. Subsequent to the acquisition of : 1245792

81. Which of the following is/are true? A. Subsequent to the acquisition of a derivative, the firm may report changes in fair value of derivatives in Other Comprehensive Income.B. Subsequent to the acquisition of a derivative, the firm may report changes in fair value of derivatives but they have no effect on any lines of the statement of cash flows. C. As the derivative transaction settles, some of the settlements involve net cash flow. D. As the derivative transaction settles, derivatives with cash settlement can involve cash flows even when the firm uses them as a hedge; often, however, the cash inflow or outflow from the derivative usually offsets another cash outflow or inflow from the other side of the hedge. E. all of the above

82. Which of the following is not true regarding the fair value option for marketable securities and derivatives? A. Subsequent to the acquisition of a derivative, the firm may report changes in fair value of derivatives in Other Comprehensive Income.B. Subsequent to the acquisition of a derivative, the firm may report changes in fair value of derivatives, but they have no effect on any lines of the statement of cash flows. C. Firms using the fair value option mark the carrying value of the asset to fair value each period.  D. If the change in fair value increases carrying value, then the firm reports a gain in income equal to the amount of the increase in carrying value during the current period. E. The cash flow from operations section shows an addition for the amount of the gain equal to the amount of the increase in carrying value of a derivative during the current period.

83. Which of the following is/aretrue regarding the fair value option for marketable securities and derivatives? A. Subsequent to the acquisition of a derivative, the firm may report changes in fair value of derivatives in Other Comprehensive Income.B. Subsequent to the acquisition of a derivative, the firm may report changes in fair value of derivatives, but they have no effect on any lines of the statement of cash flows. C. Firms using the fair value option mark the carrying value of the asset to fair value each period.  D. If the change in fair value of the derivative decreases carrying value, then the firm reports the amount of that decrease as a loss during the current period. E. all of the above

84. In U.S. GAAP, which of the following accurately describes the effects of transactions involving investments on the statement of cash flows using the fair value method for securities available for sale and cash flow hedges? A. Realized gains and losses appear in Retained Earnings. Unrealized gains and losses appear in net income. B. Realized gains and losses appear in Other Comprehensive Income. Unrealized gains and losses appear in net income. C. Realized gains and losses appear Shareholders’ equity. Unrealized gains and losses appear in Other Comprehensive Income. D. Realized gains and losses appear in Retained Earnings. Unrealized gains and losses appear in Other Comprehensive Income. E. Realized gains and losses appear in net income. Unrealized gains and losses appear in Other Comprehensive Income.

85. Which of the following is not true regarding the fair value option for marketable securities and derivatives? A. Subsequent to the acquisition of a derivative, the firm may report changes in fair value of derivatives in Other Comprehensive Income.B. Subsequent to the acquisition of a derivative, the firm may report changes in fair value of derivatives, but they have no effect on any lines of the statement of cash flows. C. Firms using the fair value option mark the carrying value of the asset to fair value each period.  D. If the change in fair value of the derivative decreases carrying value, then the firm reports the amount of that decrease as a loss during the current period. E. If the change in fair value of the derivative decreases carrying value, then the cash flow from operations sections shows a subtraction for the loss.

86. In U.S. GAAP, which of the following accurately describes the effects of transactions involving investments on the statement of cash flows using the fair value method for trading securities and fair value hedges? A. Realized gains and losses appear in net income. Unrealized gains and losses appear in Other Comprehensive Income. B. Realized gains and losses appear in Other Comprehensive Income. Unrealized gains and losses appear in net income. C. Realized gains and losses appear in Retained Earnings. Unrealized gains and losses appear in Other Comprehensive Income. D. Realized gains and losses appear in Retained Earnings. Unrealized gains and losses appear in net income. E. Both realized and unrealized gains and losses appear in net income.

87. In U.S. GAAP, which of the following accurately describe(s) the effects of transactions involving investments on the statement of cash flows? A. When using the fair value method for trading securities and fair value hedges, both realized and unrealized gains and losses appear in net income. B. Dividends received from investee included in investor’s cash flow from operations. C. When using the indirect method, add back realized holding losses, and subtract realized holding gains included in income for the period to derive cash flow from operations. D. All proceeds of sale of trading securities appear as [dis-]investing source of cash. E. all of the above

88. In U.S. GAAP, which of the following accurately describe(s) the effects of transactions involving investments on the statement of cash flows? A. If investor acquired the debt at a price below par, then cash flow from operations includes only the interest coupon received. B. If the holder acquired the debt at a price below par, then cash flow from operations will include the amount of interest revenue for the period, with source of the remainder of the cash received appearing as a [dis-]investing activity, the same as the proceeds of selling an investment. C. When using the indirect method, add back realized holding losses, and subtract realized holding gains included in income for the period to derive cash flow from operations. D. Investor’s cash flow from operations increases by only the amount of dividends received. In the indirect method, deduct the investor’s share of the undistributed earnings of the investee. E. all of the above

89. The effect of patent amortization on cash flow is conceptually identical to that of A. common stock.B. preferred stock.C. depreciation.D. research and development.E. treasury stock.

90. To avoid understating the amount of cash flow from operations, the accountant A. subtracts the loss from net income.B. adds back the loss to retained earnings.C. adds back the loss to net income.D. subtracts the loss from retained earnings.E. none of the above