A Transaction Gain or Loss on a Forward Contract Entered

question 23

Multiple Choice

A transaction gain or loss on a forward contract entered into as a hedge of an identifiable foreign currency commitment may be:

• A) included as a separate item in the stockholders' equity section of the balance sheet.
• B) recognized currently in the determination of net income.
• C) deferred and included in the measurement of the related foreign currency transaction.
• D) none of these.

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Definitions:

Industry Concentration

Industry concentration is the degree to which a small number of firms dominate the total output, sales, or employment in an industry.

Bell-Shaped-Curve

A graphical representation of a normal distribution in statistics, where the apex represents the highest point or the mean, and the curve tapers equally on both sides.

Market Structures

The classification of markets based on the competition level and the nature of product differentiation among firms within an industry.

Retained Earnings

are the portion of a company's profits that are held back and not distributed to shareholders as dividends, often reinvested in the business.