Which of the Following Would Not Be Accounted for Using

question 88

Multiple Choice

Which of the following would not be accounted for using the prospective approach?

• A)A change to LIFO from FIFO for inventory costing.
• B)A change in price indexes used under the LIFO method of inventory costing.
• C)Amortization of the transition amount under SFAS 109.
• D)A change from the cash basis to accrual accounting.

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Definitions:

Put Options

Financial contracts granting the holder the right to sell an asset at a predetermined price before a specified date.

Call Options

Financial contracts giving the buyer the right, but not the obligation, to buy an asset at a specified price within a specific time frame.

Underlying Asset

The financial instrument upon which derivative contracts, like options and futures, are based.

Covered Call

A combination of selling a call option together with buying the underlying asset.