Financial Instruments Are Separated into Two Categories

question 1

Multiple Choice

Financial instruments are separated into two categories. They are:

• A) financial and non-financial
• B) derivative and non-derivative
• C) primary and secondary
• D) primary and derivative

---

Definitions:

Monetary Unit Assumption

An accounting assumption that requires that financial reports be expressed in a single monetary unit, or currency.

Economic Data

Statistical information reflecting the condition of an economy, such as GDP, employment rates, and inflation, used for analysis and policy-making.

Total Assets

The sum of everything of value owned by a business, including cash, securities, equipment, and real estate.

Liabilities

Liabilities are financial obligations or debts owed by a business or an individual to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.