Changes in Accounting Estimates

question 103

Multiple Choice

Changes in accounting estimates:

• A) are not allowed under GAAP.
• B) are a prior period adjustment
• C) are reported for the current and future periods on the new basis.
• D) require prior financial statements to be restated.

Understand the three-stage model of memory storage.

Recognize the limitations and capacities of different memory types (e.g., short-term, sensory, working memory).

Identify characteristics and examples of different memory systems (e.g., procedural, declarative, episodic).

Analyze the mechanisms and processes involved in memory storage and recall, such as chunking and rehearsal.

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Definitions:

Credit Default Swaps

Financial derivative contracts that transfer the credit exposure of fixed income products between parties, used as a form of insurance against default on loans or bonds.

Interest Rate Risk

Interest rate risk is the potential for investment losses due to fluctuations in interest rates, affecting the value of fixed-income securities inversely.

Protection Sellers

Protection sellers in a financial context typically engage in credit derivatives markets, selling credit protection to hedge against the risk of default on underlying credit assets.

Protection Buyers

In derivatives trading, individuals or entities that purchase credit protection to hedge against potential losses from a credit event like default.