In a Hedge of a Forecasted Transaction, Gains or Losses

question 8

Multiple Choice

In a hedge of a forecasted transaction, gains or losses on derivative instruments prior to the occurrence of the actual transaction should be reported as

• A)​a component of stockholders' equity.
• B)​a component of other comprehensive income.
• C)​an extraordinary item.
• D)​income from continuing operations.

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Definitions:

Motive

An internal process that energizes, guides, and maintains behavior towards achieving a goal.

Stomach Contractions

The involuntary movements of the stomach muscles, often associated with the digestive process or sometimes with feelings of hunger.

Hunger

The physical sensation of needing food.

Fat Cells

Also known as adipocytes, these are cells that specialize in storing energy in the form of fat and play roles in regulating metabolism.