One Way Businesses Try to Overcome the Risk Associated with New

question 65

True/False

One way businesses try to overcome the risk associated with new customers is to access a credit scoring report that will predict the probability of a customer causing credit problems in the future.

Calculate and record unrealized gains and losses for investments classified as trading purposes.

Know the processes for recording the receipt and amortization of interest from bond investments.

Understand the fundamental characteristics and rights of preferred and common shares.

Recognize the separation and autonomy of a corporation as an entity distinct from its shareholders.

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Definitions:

Worksheet

A worksheet is an informal document used by accountants for organizing and adjusting financial information before preparing financial statements.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns to check the accuracy of the accounts.

Annual Accounting Period

A 12-month period over which a company reports its financial performance, often aligned with the calendar year or fiscal year.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts and prepare the ledger for the next period.