Which of the Following Is Not True

question 102

Multiple Choice

Which of the following is not true?

• A)Most derivative acquisitions represent marketable securities held as current assets.
• B)The cash flow from operations section shows a subtraction for the increase in the current asset accounts in an amount equal to the firm's expenditure to acquire the derivative.
• C)If the firm classifies the derivative as a nonoperating asset, then the cash outflow appears in the investing section of the statement of cash flows.
• D)Subsequent to acquisition, the firm may report changes in the fair value of the derivative in income.
• E)Firms engage in transactions involving derivatives and for the most part, the complex parts of these transactions occur before the firm has acquired the derivative.

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Definitions:

Economic Rent

Income earned from the use of a resource, above that which is economically or socially necessary, often associated with limited supply or monopoly conditions.

Federal Minimum Wage

The lowest legal hourly pay for many workers, as mandated by federal law.

Manufacturing

The process of turning raw materials into finished products through various methods, including human labor, machinery, and chemical processing.

CPI

The Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, calculated by taking price changes for each item in the predetermined basket of goods and averaging them.