Some Businesses Will Set Aside Money to Cover Routine Losses

question 35

Multiple Choice

Some businesses will set aside money to cover routine losses and buy "catastrophe" policies to cover big losses. This is an example of which of the following?

• A) avoiding the risk
• B) self-insuring against the risk
• C) reducing the risk
• D) loss-prevention program

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Definitions:

Accounts Receivable

Accounts Receivable refers to the money owed to a company by its customers for products or services delivered or used but not yet paid for.

Trial Balance

A bookkeeping report that lists the balances of all ledger accounts to verify that total debits equal total credits.

Asset

An economic resource owned or controlled by an individual or entity that is expected to produce future benefits.

Service Revenue

Income earned by a company for the services it has provided to its customers.