1.Financial risk management strategies:
(a)have caused no problems for the accounting profession.
(b)have created questions about how risk management products and strategies should be handled for accounting reporting purposes.
(c)have been ignored by the accounting profession.
(d)have not resulted in new reporting guidelines being established.
2.Guidelines for foreign-currency hedges are contained in:
(a)FASB no. 1.
(b)FASB no. 2.
(c)FASB no. 52.
(d)FASB no. 109.
3.Guidelines for non-foreign-currency hedges are contained in:
(a)FASB no. 25.
(b)FASB no. 90.
(c)FASB no. 1000.
(d)FASB no. 80.
4.Guidelines for hedging foreign-currency exposure with options are contained in:
(a)EITF no. 90-17.
(b)FASB no. 52.
(c)FASB no. 80.
(d)FASB no. 8.
5.FASB no. 52 adopts a(n) __________approach toward hedging.
(a)enterprise
(b)transactions
(c)ambivalent
(d)speculative
6.FASB no. 80 adopts a(n) __________approach to hedging.
(a)enterprise
(b)transactions
(c)ambivalent
(d)speculative
7.Although there are exceptions, FASB no. 52:
(a)requires that all gains and losses on foreign-currency transactions for hedging purposes be excluded from net income.
(b)requires that all gains and losses on foreign-currency transactions for hedging purposes be included in net income.
(c)permits firms to ignore foreign-currency gains and losses associated with hedging purposes.
(d)prohibits firms from setting foreign-exchange hedges.
8.Accountants handle the accounting problems associated with hedging foreign-currency commitments by:
(a)ignoring them.
(b)deferring the gains and losses on the hedges to the period in which the commitments become transactions.
(c)deferring the gains and losses to cash.
(d)reporting them as a footnote.
9.A foreign-currency net investment hedge:
(a)would be accounted for under FASB no. 52, and such hedges are recommended by financial experts.
(b)would be accounted for under FASB no. 52, and such hedges are not recommended by financial experts unless they are designed to hedge actual cash flows.
(c)would be accounted for under FASB no. 80, and such hedges are recommended by financial experts.
(d)would be accounted for under FASB no. 80, and such hedges are not recommended by financial experts.
10.Requirements for disclosing information about financial instruments with off-balance-sheet risk of accounting loss, such as interest rate and currency swaps, is contained in:
(a)FASB no. 52.
(b)FASB no. 80.
(c)FASB no. 8.
(d)FASB no. 105.