On October 5, 2020, Kappa Cloth Ltd

question 51

Multiple Choice

On October 5, 2020, Kappa Cloth Ltd. enters into a forward contract to purchase 10,000 metres of cotton fabric at $ 1 per metre, good until February 1, 2021. At December 31, 2020, the forward price for February 2021 delivery of cotton fabric has increased to $ 1.06 per metre. The adjusting entry at December 31, 2020 would be

• A) No entry required.
• B) Derivatives-Financial Assets/Liabilities    600
• Unrealized Gain or Loss (OCI)    600
• C) Derivatives-Financial Assets/Liabilities    600
• Gain or Loss on Derivatives    600
• D) Gain or Loss on Derivatives    600
• Derivatives-Financial Assets/Liabilities    600

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Definitions:

Extra Hours

Additional time worked beyond the regular scheduled working hours, often eligible for overtime compensation.

Employment Manual

A handbook provided by an employer to its employees containing company policies, procedures, and guidelines.

Employment Policies

Guidelines and rules established by organizations to govern work conditions, employee behaviors, and employment practices.

Performance Evaluations

The process of assessing an employee's job performance using various criteria to determine their effectiveness, strengths, and areas for improvement.