Which of the Following Statements Is Incorrect When a Company

question 18

Multiple Choice

Which of the following statements is incorrect when a company chooses the fair value option for its receivables?

• A) Receivables are recorded at fair value in the statement of financial position.
• B) Unrealized holding gains and losses from fair value adjustments are reported as a component of comprehensive income.
• C) The International Accounting Standards Board believes that fair value measurement for financial instruments provides more relevant and understandable information than historical cost.
• D) An unrealized holding gain or loss is the net change in the fair value of the receivable from one period to another, exclusive of interest revenue recognized but not recorded.

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Definitions:

Biological Father

The male parent who has contributed the genetic material to a child.

Born out of Wedlock

Refers to a child born to parents who are not legally married to each other at the time of the child's birth.

Snob Effect

The phenomenon where the demand for a certain good increases as it becomes more exclusive or prestigious, independent of its price.

Elasticity

A measure of how much the quantity demanded or supplied of a good responds to a change in one of its determinants, such as price or income.