Peter Jacobs Has Set Aside $5,000 in Case He Has

question 57

Multiple Choice

Peter Jacobs has set aside $5,000 in case he has an accident in his 2001 Honda Civic.He does not have collision insurance on this car.How is Peter managing his risk?

• A)Avoidance
• B)Reduction
• C)Assumption
• D)Shifting
• E)Creation

---

Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary accounts' balances to permanent accounts, thereby resetting the temporary accounts for the next period.

Revenue Accounts

Accounts that track the income a company generates from its normal business activities, such as sales of goods or services.

Retained Earnings

The portion of a company's profits that is kept or retained rather than paid out as dividends to shareholders, often used for reinvestment in the business.

Dividends Account

An account that records the amount of dividends declared by a company to be distributed to its shareholders.