All of the Following Statements Regarding Accounting for Derivatives Are

question 113

Multiple Choice

All of the following statements regarding accounting for derivatives are correct except that

• A) they should be recognized in the financial statements as assets and liabilities.
• B) they should be reported at fair value.
• C) gains and losses resulting from speculation should be deferred.
• D) gains and losses resulting from hedge transactions are reported in different ways, depending upon the type of hedge.

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Definitions:

Taxes

Required fiscal contributions or alternative kinds of dues enforced on taxpayers by governmental bodies aimed at raising funds for government activities and diverse public expenses.

Unemployment Benefits

Financial payments made by the government to individuals who are unemployed and meet certain eligibility requirements.

Income Taxes

Taxes levied by governments on the income generated by individuals or entities, which vary according to the level of income earned.

Federal Budget Surpluses

Occurs when a government's income exceeds its spending during a particular fiscal year.