Questions -
Q1. Which of the following is correct concerning financial statement disclosure of accounting policies?
Disclosure of accounting policies is an integral part of the financial statements.
The format and location of accounting policy disclosures are fixed by generally accepted accounting principles.
Disclosures should be limited to principles and methods peculiar to the industry in which the company operates.
Disclosures should duplicate details disclosed elsewhere in the financial statements.
Q2. The following information pertains to Flint Co.'s sale of 10,000 foreign currency units under a forward contract dated November 1, 2004, for delivery on January 31, 2005:
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11/1/04
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12/31/04
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Spot rates
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$0.80
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$0.83
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30-day future rates
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$0.79
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$0.82
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90-day future rates
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$0.78
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$0.81
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Flint entered into the forward contract in order to speculate in the foreign currency. In Flint's income statement for the year ended December 31, 2004, what amount of loss should be reported from this forward contract?
$300
$400
$0
$200