Given That Measuring a Firm's Financial Health Is Important to Its

question 167

Multiple Choice

Given that measuring a firm's financial health is important to its survival, which of the following strategies is good advice for a person just starting a business?

• A) Create a method for keeping your books that makes sense to you. Outside agencies such as creditors and suppliers will not evaluate you by the way you keep books.
• B) All transactions are important. Separating transactions only serves to create a perception that some transactions are of lesser importance than others.
• C) Accounting systems used by big business are not suitable for small businesses.
• D) Select an accounting system that helps you make decisions, and helps you report information to others outside your firm.

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Definitions:

Macro-level

A broad view or approach that examines large-scale social structures, processes, and systems, often used in the context of sociology and economics.

Demographic

Relating to the statistical characteristics of human populations, such as age, race, gender, and income, used especially for identifying consumer markets.

Individual-level Variables

Factors or characteristics that pertain to, or can be measured at, the level of the individual person.

Matrimony

The state of being married, also referred to as the institution of marriage.