The __________ Control Strategy Attempts to Shift Risk to Other

question 103

Multiple Choice

The __________ control strategy attempts to shift risk to other assets, other processes, or other organizations.

• A) transference
• B) defense 
• C) acceptance
• D) mitigation

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Definitions:

Bad Debt Expense

An expense reported on the income statement, reflecting the cost of accounts receivable that are not expected to be collected.

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable and adjust for bad debts.

Direct Write-Off Method

An accounting practice that involves directly writing off an outstanding receivable if deemed uncollectible, impacting earnings directly.

Adjusting Entry

Journal entries made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.