It Seems Pointless to Distinguish Between Different Types of Hedges,as

question 46

True/False

It seems pointless to distinguish between different types of hedges,as the accounting treatment is the same for all hedging,that is,all changes in fair values of hedging instruments are recognised in profit or loss.

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Definitions:

Adjusting Entry

Journal entries made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Direct Write-Off Method

An accounting method used to recognize bad debts only when specific receivables are deemed uncollectible, without maintaining an allowance account.

Allowance Method

An accounting technique that estimates and sets aside a portion of accounts receivable that may not be collectible, reflecting potential losses.

Credit Sales

Sales in which the payment is deferred to a future date, typically allowing the buyer to receive goods or services immediately but pay later.