Which Is Not an Example of a Biased Accrual

question 121

Multiple Choice

Which is not an example of a biased accrual?

• A)Accruals based on overly optimistic estimates.
• B)Accruals based on overly conservative estimates.
• C)Accruals based on achieving target level of revenues.
• D)Accruals based on applying professional judgment.

---

Definitions:

Contract Maturity

The predetermined date on which a financial contract, such as a bond or a futures contract, expires or is settled.

Stock Price

The monetary value at which a company’s stock is traded on the market, influenced by factors like company performance and market conditions.

Premium

The amount by which the price of a bond or other security exceeds its principal amount or face value.

American Put Option

An American put option is a financial derivative that gives the holder the right, but not the obligation, to sell a specified quantity of an asset at a predetermined price before or on the option's expiration date.