Significant Accounting Policies May Not Be

question 32

Multiple Choice

Significant accounting policies may not be

• A) Selected on the basis of judgment
• B) Selected from existing acceptable alternatives
• C) Unusual or innovative in application
• D) Omitted from financial statement disclosure on the basis of judgment

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Definitions:

Interest Rates

The amount charged, expressed as a percentage of the principal, by a lender to a borrower for the use of assets.

Variable Rate Loan

A loan with an interest rate that can change, based on a benchmark interest rate or index, affecting monthly payment amounts.

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a specified amount of an underlying asset at a set price within a specified time.

Put Option

An agreement in finance that allows the owner to sell a certain quantity of a basic asset at an agreed-upon price before a certain deadline, without being required to do so.