A Poor Teacher Who Grades on a Curve Introduces

question 6

Multiple Choice

A poor teacher who grades on a curve introduces:

• A) significant environment risk.
• B) significant ability risk.
• C) significant environment risk and significant ability risk.
• D) neither significant environment risk nor significant ability risk.

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Definitions:

Privately Held Corporation

A corporation that has only a few stockholders and whose stock is not available for sale to the general public.

Retained Earnings

The portion of a company's net income that is not distributed as dividends to shareholders but retained for reinvestment in the business or to pay off debt.

Paid-In Capital

The amount of money that a company receives from shareholders in exchange for shares of stock, exceeding the par value of the shares.

Drawings

Withdrawal of cash or other assets from an unincorporated business for the personal use of the owner(s).