A Revenue Account

question 4

Multiple Choice

A revenue account

• A)is increased with a debit.
• B)is not considered to be an item on the income statement.
• C)is reported on the balance sheet at the end of the accounting period.
• D)when offset with expenses ultimately leads to net income and an increase to retained earnings.

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Definitions:

Expiration Date

In finance, this term often refers to the date on which a derivative contract, such as an option or futures contract, becomes void and ceases to trade.

Option Contract

A financial derivative contract that grants the buyer the right, but not the obligation, to buy or sell an asset at a specified price on or before a certain date.

Exercise Price

The price at which the holder of an option can buy or sell the underlying security.

European Calls

Options contracts that allow the buyer to purchase a stock or asset at a specific price on or before the expiration date, but only on that date.