During a Risk Assessment, Results Show That a Fire in One

question 1018

Multiple Choice

During a risk assessment, results show that a fire in one of the company's datacenters could cost up to $20 million in equipment damages and lost revenue. As a result, the company insures the datacenter for up to $20 million damages for the cost of $30,000 a year. Which of the following risk response techniques has the company chosen?

• A) Transference
• B) Avoidance
• C) Mitigation
• D) Acceptance

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Definitions:

Manual Systems

Traditional methods of processing data and managing information that do not rely on automated or computerized systems.

Special Journals

Accounting books used to categorize and record specific types of transactions such as sales, purchases, cash receipts, and cash disbursements, streamlining the accounting process.

Record and Post

The process of recording transactions in the journals and subsequently posting them to the ledger accounts.

Special Journals

Accounting journals designed for the repeated recording of specific types of transactions, such as sales or purchases, to streamline the accounting process.