If Errors Occur in the Recording Process, They

question 2

Multiple Choice

If errors occur in the recording process, they

• A)should be corrected as adjustments at the end of the period.
• B)should be corrected as soon as they are discovered.
• C)should be corrected when preparing closing entries.
• D)cannot be corrected until the next accounting period.

---

Definitions:

Firm-Specific Risk

Risk that affects only a single company

Market Risk

The possibility of an investor experiencing losses due to factors that affect the overall performance of the financial markets.

Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio to minimize the impact of any single asset's performance on the overall portfolio returns.

Rule Of 70

A quick formula used to estimate the number of years required for an investment or population to double, calculated by dividing 70 by the annual growth rate.