According to Chapter 1, Investors Often Cite the ________ as Their

question 5

Multiple Choice

According to Chapter 1, investors often cite the ________ as their most important criterion in the decision to fund new ventures.

• A) financial position of the new venture
• B) strength of the industry the new firm is entering
• C) strength of the new venture's marketing plan
• D) strength of the business idea
• E) strength of the entrepreneur

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Definitions:

Bad Debts Expense

An expense account reflecting the cost of accounts receivable that a company does not expect to collect.

Direct Write-Off Method

The method of writing off uncollectibles when they occur and thus not using the Allowance for Doubtful Accounts. This method does not fulfill the matching principle of accrual accounting.

Income Statement Method

A technique used to create a company's income statement to report earnings and financial performance.