The Most Common Types of Derivatives Include All of the Following

question 1

Multiple Choice

The most common types of derivatives include all of the following EXCEPT:

• A) futures and forward contracts
• B) options
• C) kafalah contract
• D) swaps

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Definitions:

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, indicating the side which increases the account.

Allowance Method

A financial method that estimates the value of debts unlikely to be collected by determining uncollectible accounts each period's end.

Allowance for Doubtful Accounts

A contra asset account that represents the estimated proportion of accounts receivable that may not be collectable.

Direct Write-off Method

An accounting approach where uncollectible accounts receivable are directly written off against income at the time they are deemed unrecoverable.