ACC 302 Ch 18 Quiz NO

ACC 302 Ch 18 Quiz NO - ACC 302 Quiz Chapter 18 Multiple...

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ACC 302 Quiz Chapter 18 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. A contract, traded on an exchange, that allows a company to buy a specified quantity of a commodity or a fin- ancial security at a specified price on a specified future date is referred to as a(n) a. interest rate swap. b. forward contract. c. futures contract. d. option. ____ 2. If a cannery wanted to lock in the price they would pay for peaches in August four months before harvest (in April of the same year), they would be most likely to enter into which kind of agreement? a. Interest rate swap b. Fixed commodities contract c. Futures contract d. Option ____ 3. In exchange for the rights inherent in an option contract, the owner of the option will typically pay a price a. only when a call option is exercised. b. only when a put option is exercised. c. when either a call option or a put option is exercised. d. at the time the option is received regardless of whether the option is exercised or not. ____ 4. When gains or losses on derivatives designated as fair value hedges exceed the gains or losses on the item be- ing hedged, the excess a. affects reported net income. b. is recognized as an equity adjustment. c. is recognized as part of comprehensive income. d. is not recognized. ____ 5.
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ACC 302 Ch 18 Quiz NO - ACC 302 Quiz Chapter 18 Multiple...

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