Sarah Wants to Buy an Expensive Car, but She's Concerned

question 32

Multiple Choice

Sarah wants to buy an expensive car, but she's concerned about how her relatives will react. They are more frugal, and she's concerned that they might think less of her for spending so much money. Which type of risk is this?

• A) financial risk
• B) social risk
• C) performance risk
• D) physical risk
• E) time risk

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Definitions:

Cash Collections

The process of gathering all cash receipts and payments, including from sales, financing, or investment activities.

Credit Customers

Customers who purchase goods or services on credit, with an agreement to pay at a later date.

Cash Disbursements

The outflow of cash for the purpose of payment, often documented for accounting purposes.

Direct Materials

Raw materials that are directly used in the manufacturing of a product and can be easily traced to the product.