tbch18 - CHAPTER 18 Derivatives,Contingencies,Business...

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C HAPTER 18 Derivatives,Contingencies,Business Segments, and Interim Reports M ULTIPLE C HOICE Q UESTIONS Theory/Definitional Questions 1 Definition of a price risk 2 Definition of a credit risk 3 Definition of a forward contract 4 Definition of a futures contract 5 Use of a futures contract 6 Definition of an option 7 Timing of option owner’s payment 8 Option protects owner against unfavorable price/rate movements 9 Effect of fair value hedges on net income 10 Definition of cash flow hedge 11 Disclosures on derivative contracts 12 Effect of an obligation contingent on the occurrence of a future event 13 Financial statement disclosure of a contingent loss 14 How firms identify reportable segments 15 Example of a call option 16 Reportable segments under FASB Statement No. 14 17 APB Opinion No. 28 and interim financial reporting 18 Hedge of an account payable 19 Hedge relating to equipment purchase 20 Interest rate swap and hedging 21 Accounting for a call option 22 Accounting for a call option 23 Accounting for a call option 24 Accounting for a call option 25 Accounting for a call option 26 Identifying business segments 27 Disclosures under disaggregated information standard 28 Reporting disaggregated information for interim periods 29 Interim reporting 30 Call option and hedging 31 Accounting for interim period inventory loss Computational Questions 171
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Chapter 18 Derivatives, Contingencies, Business Segments, and Interim Reports 32 Computation of payment on forward contract 33 Computation of payment on forward contract 34 Computation of accrued liability from a lawsuit 35 Computation of call option contract savings/loss 36 Computation of call option contract savings/loss 37 Computation of call option contract savings/loss 38 Computation of interest rate swap agreement settlement payments 39 Computation of interest rate swap agreement settlement payments * 40 Computation of interest rate swap agreement settlement payments 41 Computation of fair value on forward contract agreement 42 Computation of disclosed liability from litigation 43 Computation of disclosed liability from litigation 44 Computation of accrued liability from litigation P ROBLEMS 1 Journal entries on execution of futures contract and disclosure 2 Journal entries on execution of call option and disclosure 3 Journal entries on execution of interest rate swap 4 Litigation and required financial statement disclosures 5 Identifying the risks confronting an enterprise 6 Improving segment disclosures * This question requires the use of present value tables to solve . M ULTIPLE C HOICE Q UESTIONS a 1. Uncertainty about the future market value of an asset is referred to as LO2 a. price risk. b.
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This note was uploaded on 10/29/2010 for the course BUSINESS S 1 taught by Professor Vinc during the Spring '10 term at Georgian.

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tbch18 - CHAPTER 18 Derivatives,Contingencies,Business...

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