Which of the Following Is True

question 61

Multiple Choice

Which of the following is true?

• A) The futures market is primarily used by speculators while the forward market is primarily used for hedging.
• B) The futures market is primarily used for hedging while the forward market is primarily used for speculating.
• C) The futures market and the forward market are primarily used for speculating.
• D) The futures market and the forward market are primarily used for hedging.

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Definitions:

Inventory Shrinkage

The loss of products between purchase and sale, often due to theft, damage, or errors in counting.

Physical Count

The process of counting the actual number of items in inventory, typically to verify accounting records or when preparing financial statements.

Net Method

An accounting method that records purchases at the net price after deduction of any purchase discounts.

Perpetual Inventory System

An inventory accounting practice that instantly processes and records purchases or sales utilizing computerized point-of-sale systems alongside enterprise asset management software.