All the Following Are Direct Losses Except

question 35

Multiple Choice

All the following are direct losses except:

• A) a house is burglarized
• B) a store loses $200,000 in sales because a fire closes it down for two weeks
• C) a corporation must pay $1 million in ransom when its CEO is kidnapped
• D) an delivery truck needs $15,000 in repairs after a collision

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Definitions:

Owner's Equity

The residual interest in the assets of a business after all liabilities are deducted, essentially the owner's share of the company's net assets.

Revenues

The total amount of money received by the company for goods sold or services provided during a specific time period before any expenses are subtracted.

Closing Entries

Entries recorded at the close of an accounting period to move balances from temporary accounts to permanent ones.

Owner's Equity Account

An account on a company's balance sheet that represents the total amount invested by the owners plus any retained earnings or losses.