Given That Measuring a Firm's Financial Health Is Important to Its

question 167

Multiple Choice

Given that measuring a firm's financial health is important to its survival, which of the following strategies is good advice for a person just starting a business?

• A) Create a method for keeping your books that makes sense to you. Outside agencies such as creditors and suppliers will not evaluate you by the way you keep books.
• B) All transactions are important. Separating transactions only serves to create a perception that some transactions are of lesser importance than others.
• C) Accounting systems used by big business are not suitable for small businesses.
• D) Select an accounting system that helps you make decisions, and helps you report information to others outside your firm.

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Definitions:

Consumer Type

A classification of individuals based on their consumption patterns, preferences, or demographic characteristics.

Willingness To Pay

The maximum amount a consumer is prepared to pay for a good or service.

Communications Network

A system of interconnected electronic devices or nodes that can exchange data.

Consumer Type

A category that reflects the preferences, income level, and purchasing habits of an individual consumer.