You Sold a Futures Contract on Corn at a Futures

question 77

Multiple Choice

You sold a futures contract on corn at a futures price of 331, and at the time of expiration, the price was 343. What was your profit or loss?

• A) −$12.00
• B) $12.00
• C) −$600
• D) $600

Recognize the importance and application of purchase discounts and their accounting treatment.

Analyze the impact of paying an invoice within or outside the discount period using the gross method.

Understand the control features of a voucher system and how it strengthens internal control.

Comprehend the recording and approval processes in a voucher system and the preparation of related journal entries.

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Definitions:

Demand Payment

A request for the payment of money owed, usually in a formal or legal context.

Within Days

A phrase indicating that a specific action or event is to occur within a defined number of days from a certain point in time.

Partnership

A partnership is a legal form of business operation between two or more individuals who share management and profits.

Lease Agreement

A legal contract between a landlord and tenant, outlining the terms under which the tenant can rent property from the landlord.