A Financial Asset That Represents a Claim on Another Financial

question 55

Multiple Choice

A financial asset that represents a claim on another financial asset is classified as a(n) ________ asset.

• A)secondary
• B)optioned
• C)contracted
• D)derivative
• E)primary

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Definitions:

Normal Balances

The typical balance sides (debit or credit) for different types of accounts in accounting, determining how increases or decreases are recorded.

Accumulated Depreciation

Accumulated depreciation represents the total amount of depreciation expense that has been recorded against a fixed asset over its useful life to reflect its loss of value.

Liabilities

Financial obligations or debts that a company owes to external parties, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Payable

An accounting term for the amount of money a company owes to its creditors or suppliers for goods and services purchased on credit.