Which Statement Is Correct About a Financial Instrument

question 76

Multiple Choice

Which statement is correct about a financial instrument?

• A)An arrangement where one party has the power to participate in the financial and operating policy decisions of another entity.
• B)An arrangement where one entity governs the financial and operating policies about another entity.
• C)A contractual arrangement whereby two or more parties share control over an economic activity and all strategic decisions requires unanimous consent by all parties.
• D)An arrangement that gives rise to a financial asset for one entity and a financial liability or equity instrument for another entity.

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Definitions:

Cash Disbursements

The total amount of money paid out by a company over a period, including expenses, investments, and debts.

Operating Expenses

Costs associated with the day-to-day functions of a business not directly tied to producing a product or service.

Sales

The total revenue earned from goods or services sold by a business within a specified period.

Accounts Receivable

Amounts owed to a business by its customers for goods or services delivered on credit.