Which of the Following Is Not a Condition of Accounting

question 102

Multiple Choice

Which of the following is not a condition of accounting for hedge derivatives?

• A) The derivative is minimally effective in offsetting changes in the cash flows or fair value related to the hedged item.
• B) The derivative is properly documented as a hedge.
• C) The derivative is used to hedge a cash flow exposure to foreign exchange risk.
• D) The derivative is highly effective in offsetting changes in the cash flows or fair value related to the hedged item.
• E) The derivative is used to hedge a fair value exposure to foreign exchange risk.

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Definitions:

Accounts Payable Clerk

An Accounts Payable Clerk is responsible for managing the company's accounts payable records, including processing invoices, verifying financial data, and ensuring timely payments to vendors.

Petty Cash

A small amount of cash on hand that is used for paying small expenses in an organization.

Cash Short And Over

An accounting term that represents the discrepancies between the recorded amount of cash and the actual amount of cash available, indicating either a surplus or a shortfall.

Sales

Revenue generated from the selling of goods or services.