The Shifting of Risk to Someone Else Through a Contract

question 41

Multiple Choice

The shifting of risk to someone else through a contract is an example of what type of risk management strategy?

• A) risk avoidance
• B) risk transference
• C) risk retention
• D) risk acceptance

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Definitions:

Current Operating Liabilities

Short-term liabilities that are incurred as part of the normal operations of a business, due within a fiscal year.

Decreases

A reduction in quantity, size, or overall value of an asset, revenue, or other financial metric.

Decreases in Current Assets

The reduction in the value or amount of the assets that a company expects to convert into cash within one year.

Decreases in Current Assets

Reductions in the assets that a company expects to convert into cash, sell, or consume within one year or the operating cycle, whichever is longer.