[Solved] Which of the following is an application of the principle of moral hazard? A) People build homes in areas subject to severe flood damage when federally-subsidized insurance is available. B) Inappropriate lyrics are available for downloading through the Internet when regulations are not enforced. C) Actions by one individual have an impact on innocent bystanders. D) None of the above. Balance Sheet Columns: Columns typically found in a balance sheet used to report a company's financial position at a certain point in time, showing assets, liabilities, and shareholders' equity. Income Statement Columns: The segments in an income statement (profit and loss statement) that categorize financial data into revenues, expenses, and net income over a specific period. Net Income: The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue, indicating the company's profitability. Prepaid Insurance: An asset account that represents the amount of insurance premiums paid in advance for coverage that extends beyond the current accounting period.