The Customary Delivery Procedure at the Expiration of a Commodity

question 4

Multiple Choice

The customary delivery procedure at the expiration of a commodity futures contract is:

• A) delivering the commodity to the futures buyer.
• B) delivering the commodity to the futures exchange.
• C) offsetting the initial futures position and settling in cash.
• D)adding the profit or loss to your margin account and continuing to trade.

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Definitions:

Ledger

A book or other collection of financial accounts of a particular type.

Prepaid Insurance

The portion of insurance premiums that have been paid in advance and are recorded as an asset on the balance sheet until the coverage period expires.

Umbrella Insurance Policy

An insurance policy designed to provide additional coverage beyond the limits of the insured's homeowners, auto, and watercraft personal insurance policies. It supplements existing insurance by offering protection against claims that may exceed other policies' limits.

Adjusting Entries

Bookkeeping entries made at the end of an accounting period to update accounts for accruals and deferrals.