The Ultimate Objective of ERM Does Not Include the Following

question 47

Multiple Choice

The ultimate objective of ERM does not include the following:

• A) hedge against a drop in the stock price of the firm
• B) eliminate product recalls
• C) minimize interruption in the firms supply chain
• D) survival of the company

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Definitions:

Bad Debts Expense

An expense reported on the income statement, accounting for the estimated amount of accounts receivable that are not expected to be collected.

Allowance Method

The allowance method is an accounting technique used to estimate and prepare for the amount of accounts receivable that may not be collectible.

Journal Entries

Records of financial transactions in the accounting system, detailing debits and credits to various accounts.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of a company's receivables that may not be collectible.