Which of the Following Instruments Satisfy the Conditions to Offset

question 38

Multiple Choice

Which of the following instruments satisfy the conditions to offset a financial asset and a financial liability?

• A) Several financial instruments that are passed as a single financial instrument, for example, a synthetic instrument
• B) Futures contract
• C) Financial assets that are pledged as collateral for a non-recourse liability
• D) Financial assets that are set aside in trust by a debtor for the purpose of discharging an obligation without these assets being accepted by the creditor in settlement of the obligation.
• E) None of the given answers

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Definitions:

Bank Reconciliation

The process of matching the balances in an entity’s accounting records for a cash account to the corresponding information on a bank statement.

Corrected Cash Balance

An adjustment made to a company's book balance of cash to reflect accurate amounts after reconciliation.

Bank Service Charges

Fees charged by banks for account maintenance, transactions, and other financial services provided to customers.

Book Balance

The amount of money a company reports in its financial statements, not necessarily reflecting the actual cash available.