An entity has issued preferred shares. After one year from issuance, and at the option of the holders, the shares may be put back to the entity for $ per share. How would the entity classify the preferred shares on the balance sheet?
A Either as a liability or equity, upon a policy election by the entity
B As equity or temporary equity
C As equity
D As a liability
Which of the following conditions, by be accounted for as a sale, with the financial asset derecognized?
A Substantially all risks and rewards have been retained
B Substantially all risks and rewards have been transferred
C Control over the financial asset has been surrendered
D Contro over the financial asset has been retained
Which of the following best describes the accounting treatment of compound instruments those with both debt and equity characteristics
A Compound instruments are never split into separate components
B Compound instruments are typically split into separate components
C Compound instruments typically are not split into separate components unless specific criteria are met
D Compound instruments may be split into separate components based on a policy election
