Which of the Following Is Not True

question 33

Multiple Choice

Which of the following is not true?

• A) The debt service activity of a government may be properly accounted for within the General Fund unless law mandates the use of a debt service fund.
• B) Debt service funds,unlike the General Fund and special revenue funds,do not use budgetary accounting procedures.
• C) Expenditures for interest on tax supported long-term debt are not accrued,even though debt service funds are accounted for on the modified accrual basis.
• D) At year-end,budgetary and operating statement accounts of a debt service fund are closed in the same manner as is true for a General Fund or special revenue funds.

Identify the differences between forward contracts and options, and their respective valuation mechanisms.

Understand the role and operation of swap dealers within the derivatives market.

Define and explain the concept of a perfect hedge and its implications for financial risk management.

Distinguish between call and put options and their strategic utilization in financial risk management.

---

Definitions:

Investment

Assets that are purchased with the expectation that they will generate income or appreciate in the future.

Condensed Balance Sheets

A simplified financial statement showing the summary of a company's financial position, including assets, liabilities, and equity at a specific point in time.

Excess Consideration

The amount by which the price paid for an acquisition exceeds the total fair value of its identifiable net assets.

Noncurrent Assets

Assets not expected to be converted into cash, sold, or consumed within one year or the operating cycle, such as property, plant, and equipment.