A Calendar Spread Futures Position Comprises

question 15

Multiple Choice

A calendar spread futures position comprises

• A) A long position in a futures contract of one maturity and a short position in another futures contract of a different maturity.
• B) A contract on the difference between two different-maturity futures prices.
• C) A portfolio of long futures contracts of different maturities.
• D) A portfolio of futures contracts spanning more than one year.

Understand the concepts of prepaid expenses, unearned revenues, and accrued expenses.

Analyze the impact of adjusting entries on financial statements.

Distinguish between the cash basis and accrual basis of accounting.

Learn to prepare income statements and statements of changes in equity from adjusted trial balances.

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Definitions:

Maintenance Cost

The expenses incurred for keeping assets in their original operating condition without enhancing their capacity or efficiency.

Cost Formula

This is an equation used to predict the total costs associated with producing a certain number of units or providing a certain level of service.

Variable Costs

Expenses that vary directly with changes in production volume, including costs like raw materials and some labor expenses.

Fixed Costs

Costs that do not vary with the level of production or sales volume.