Which statement is correct about accounting for financial instruments?

A) All financial instruments are accounted for at fair value through profit or loss.
B) All financial instruments are accounted for at amortized cost.
O C) All financial instruments are accounted for af fair value through OCl.

• D) All are accounted for in accordance to their economic substance.



2. Which statement best describes the "incremental method"?

A) Under this method of accounting, for a convertible bond, the issuing entity
would record a liability for the estimated value of the bond without the conversion feature.
B) Under this method of accounting, the common share component is
considered the most reliably measured amount.
c) Under this method of accounting, for a convertible bond, an estimate would
be made of the fair value of all components and allocated proportionally to all components.
D) Under this method of accounting, for a convertible bond, all of the bond value would be counted as a liability.

3. Which statement best explains the accounting for compound instruments?
A) Once separated, each component is accounted for at fair value with changes
recorded through income.
B) Once separated, each component is accounted for at amortized cost.
C) Once separated, each component is accounted for at historical cost.
b) Once separated, each component is accounted for in accordance with its substance.
4. Which statement is correct about the accounting for employee stock options?
A) The expense is recorded immediately upon grant date.
B) The expense is recorded over the period of vesting.
C) The expense is recorded over the period to expiry.
D) No expense is recorded for accounting purposes.

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