In Which of the Following Situations Is a Gain or Loss

question 38

Multiple Choice

In which of the following situations is a gain or loss recorded on a commitment asset or liability which would not otherwise be recorded?

• A) A speculative forward contract.
• B) A fair value hedge of a firm commitment.
• C) A fair value hedge of a recognized monetary item.
• D) A cash flow hedge of a forecasted transaction.

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Definitions:

Objectives

Clearly defined goals or outcomes that an individual, team, or organization aims to achieve within a specific timeframe.

Organizational Control

Mechanisms or systems used by an organization to regulate behavior, processes, or outcomes to achieve its goals.

Feedforward Control

A management strategy that focuses on regulating inputs (rather than outputs) to manage future performance and prevent problems.

Concurrent Control

A management technique wherein monitoring and adjustments occur simultaneously with the implementation of activities to ensure objectives are met.