According to AASB 132 Financial Instruments: Presentation, Which of the Following

question 3

Multiple Choice

According to AASB 132 Financial Instruments: Presentation, which of the following items would be regarded as a financial liability?

• A) Ordinary shares held in another entity.
• B) A contractual right to exchange under potentially favourable conditions, an option to purchase shares below the market price.
• C) The right of a depositor to obtain cash from a financial institution with which it has deposited cash.
• D) A contract that is a non-derivative for which the entity is obliged to deliver a variable number of its own equity instruments.

---

Definitions:

Competitive Market

A market structure in which many firms offer products or services that are similar, allowing consumers to have choices, leading to lower prices due to competition.

Long-Run

A period in which all factors of production and costs are variable, allowing for full adjustment to any changes.

Market Demand

The total quantity of a good or service that all consumers are willing and able to purchase at various price levels within a given market, at a specific time.

Short Run

A time period during which at least one input, such as plant size or capital, is fixed and cannot be changed.