Forward Transactions

question 31

Multiple Choice

Forward transactions

• A)allow savers and borrowers to conduct a transaction now and settle in the future.
• B)allow savers and borrowers to postpone a transaction from now to the future.
• C)always involve increased risk compared with spot transactions.
• D)may not be conducted on organized exchanges.

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Definitions:

Sale of Equipment

The process of disposing or selling a company's equipment assets, which may result in a gain or loss reflected in the income statement.

Direct Method

A method of presenting the cash flow statement where cash receipts and cash payments from operating activities are disclosed, offering a clearer understanding of cash flows.

Statement of Cash Flows

An account that illustrates the impact of variations in income and balance sheet positions on cash and similar assets.

Indirect Method

A method for presenting cash flow from operations that begins with net income and makes adjustments for transactions that do not involve cash.