Which of the Following Statements Concerning Purchase Commitments Is True

question 43

Multiple Choice

Which of the following statements concerning purchase commitments is true?

• A)Canadian practice requires disclosure of all purchase commitments.
• B)Only anticipated losses require disclosure.
• C)Footnote disclosure is required if the contract has a material effect on the financial statements.
• D)Anticipated gains are recognized, if permanent and material.

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Definitions:

Annually Balancing

The process of adjusting or reconciling financial accounts or budgets to match or balance over a one-year period.

Cyclically Balanced Budget

A fiscal strategy where the government aims to balance its budget over the complete economic cycle, accumulating surpluses in boom periods and deficits during recessions.

Budget Deficits

A financial situation where a government's expenditures surpass its revenues.

Budget Surpluses

A situation where a government's revenue exceeds its expenditures over a specific period, indicating financial health.