Which of the Following Techniques Is NOT Generally Useful to Smooth

question 6

Multiple Choice

Which of the following techniques is NOT generally useful to smooth income?

• A)Using fair value accounting.
• B)Varying the provision for warranties.
• C)Hedging of financial instruments.
• D)None of the above,they could all be used to smooth income.

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Definitions:

Monthly Salary

A fixed amount of money or compensation paid to an employee by an employer for services rendered during a month.

Commission

A fee paid to an agent or employee for transacting a piece of business or performing a service, often a percentage of the transaction.

Appliances

Electrical or mechanical machines that perform domestic functions, such as refrigerators or washing machines.

Net Proceeds

The final amount of money received from a transaction after deducting all associated costs and expenses.