Which of the Following Statements Is True Concerning Hedge Accounting

question 23

Multiple Choice

Which of the following statements is true concerning hedge accounting?

• A) Hedges of foreign currency firm commitments are used for future sales only.
• B) Hedges of foreign currency firm commitments are used for future purchases only.
• C) Hedges of foreign currency firm commitments are used for current sales or purchases.
• D) Hedges of foreign currency firm commitments are used for future sales or purchases.
• E) Hedges of foreign currency firm commitments are speculative in nature.

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Definitions:

Job Cost

The total expense calculated for a specific job or project, including materials, labor, and overhead.

Unit Product Cost

The total cost to produce one unit of product, including labor, materials, and overhead.

Predetermined Overhead Rate

A rate calculated prior to the accounting period that is used to allocate overhead costs to products or job orders, based on estimated overhead costs and an allocation base.

Job-Order Costing

A cost accounting system that accumulates costs according to specific jobs or orders, allowing for detailed cost tracking.