Client Business Risk Relating to Cash May Arise From

question 10

Multiple Choice

Client business risk relating to cash may arise from:

• A) handling of funds held in trust for others.
• B) inappropriate cash management policies.
• C) cash being more susceptible to theft than other types of investments.
• D) all of the above

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Definitions:

Contribution Margin

The difference between sales revenue and variable costs, which contributes towards covering fixed costs and earning profit.

Fixed Costs

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance premiums.

Units

A measure of quantity that indicates the count or quantity of a product or service.

High-Low Method

An approach to estimate fixed and variable costs using the highest and lowest levels of activity.