Changes in the Fair Value of Derivative Instruments That Qualify

question 8

Multiple Choice

Changes in the fair value of derivative instruments that qualify as hedges should be reported as

• A)Gains or losses in the government-wide statement of activities.
• B)Deferred inflows or outflows of resources in fund and government-wide operating statements.
• C)Losses but not gains in general fund statements of revenues, expenditures, and changes in fund balance.
• D)Disclosures only.

Understand and explain the concept of heuristic thinking in decision making.

Identify and describe various heuristics, such as Anchoring with Adjustment, Loss and Risk Aversion, Representation, Simulation, Elimination by Aspect, Optimistic Bias, Satisficing, and Association.

Analyze the impact of heuristic thinking on judgments and decision making.

Explore the misapplications and potential errors in judgment arising from specific heuristics.

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Definitions:

Total Cost

The complete amount of expenses incurred by a business or individual in the production or acquisition of a good or service.

Manufacture Units

The individual items or goods produced by a manufacturing process.

High-low Method

A way of attempting to understand cost behavior by analyzing the difference in cost between the highest and lowest volume levels.

High-low Method

A technique used in managerial accounting to estimate variable and fixed cost components of a cost by analyzing the highest and lowest activity levels.