Comparing "Forward" and "Futures" Exchange Contracts, We Can Say That

question 71

Multiple Choice

Comparing "forward" and "futures" exchange contracts, we can say that

• A)they are both "marked-to-market" daily.
• B)their major difference is in the way the underlying asset is priced for future purchase or sale: futures settle daily and forwards settle at maturity.
• C)a futures contract is negotiated by open outcry between floor brokers or traders and is traded on organized exchanges, while forward contract is tailor-made by an international bank for its clients and is traded OTC.
• D)both b and c

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Equipment

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Accumulated Depreciation

The aggregate depreciation charged against a tangible asset over its useful life to represent wear and tear.

Income Summary

An account used in the closing process that summarizes the revenues and expenses for a fiscal period, determining the net income or loss.

Owner's Capital

The total value of equity that a business owner has invested in their company, which may increase through profits or additional contributions.