Which of the Following Is Done When Accounting for a Cash

question 25

Multiple Choice

Which of the following is done when accounting for a cash flow hedge, but is not done when accounting for a fair value hedge?

• A) The hedged asset or liability is adjusted to fair value.
• B) Foreign exchange gains or losses on the hedged asset or liability are recorded in net income.
• C) Increases or decreases in a derivative's fair value are recorded in accumulated other comprehensive income.
• D) Gains or losses resulting from adjusting the fair value of a derivative are recorded in net income.

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Definitions:

Replacement Rate

Replacement rate is a demographic term describing the number of births needed per woman to maintain a population's size over time, typically considered to be approximately 2.1 children per woman in developed countries.

Economically Advanced Nations

Countries with highly developed economies, characterized by high per capita income, diversified industries, and advanced technological infrastructure.

Ethnically Homogenous

Describing a population that shares a common ethnicity or cultural background.

Traditional Moral Values

Cultural, ethical, and moral standards and norms that have been historically upheld and transmitted within a society or community.