Question
ACME Refinery buys a call on oil for $10,000. At the end of the accounting period, the price of oil has fallen, and the value
ACME Refinery buys a call on oil for $10,000. At the end of the accounting period, the price of oil has fallen, and the value of the call has decreased to $6,000. ACME uses derivative accounting to account for the call.
- What accounting entry does ACME make for the purchase of the call for $10,000?
- What accounting entry does ACME make at the end of the accounting period when the value of the call has decreased to $6,000?
- Discuss a common exception to derivative accounting used in the upstream oil and gas business.
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Purchasing Audit
Authors: ISMAIL LAMHAMDI
1st Edition
6203507563, 978-6203507560
