A ________ Is a Derivative Security That Gives the Owner

question 36

Multiple Choice

A ________ is a derivative security that gives the owner the right,but not the obligation,to buy an asset at a fixed price for a specified period of time.

• A)futures contract
• B)call option
• C)put option
• D)swap
• E)forward contract

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Definitions:

Prepaid Expenses

Items such as supplies that will be used in the business in the future.

Current Assets

Assets that a company expects to convert into cash, sell, or consume within one year or during its operating cycle, whichever is longer.

Post-closing Trial Balance

A summary listing of all company accounts that remain after closing entries have been made, serving as a check that debits equal credits.

Owner's Capital Account

An equity account on the balance sheet representing the total amount of investment made by the owner(s) in the company, including profits retained in the business.