Which of the Following Is/are True

question 48

Multiple Choice

Which of the following is/are true?

• A)Subsequent to the acquisition of a derivative, the firm may report changes in fair value of derivatives in Other Comprehensive Income.
• B)Subsequent to the acquisition of a derivative, the firm may report changes in fair value of derivatives but they have no effect on any lines of the statement of cash flows.
• C)As the derivative transaction settles, some of the settlements involve net cash flow.
• D)As the derivative transaction settles, derivatives with cash settlement can involve cash flows even when the firm uses them as a hedge; often, however, the cash inflow or outflow from the derivative usually offsets another cash outflow or inflow from the other side of the hedge.
• E)all of the above

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Definitions:

Invoicing Error

A mistake in the billing process, often leading to disputes or discrepancies in financial accounts.

General Journal

The general journal is a comprehensive record of financial transactions over the life of a company, listed in chronological order.

Purchases Journal

An accounting record where all purchases of merchandise, inventory, and other supplies on credit are recorded, excluding cash purchases.

Cash Payments Journal

A journal used in accounting to record all cash outflows or payments made by a company.