Business Failure Risk Can Be Due to

question 58

Multiple Choice

Business failure risk can be due to

• A) A reduction in purchasing power.
• B) Changes in interest rates.
• C) Bad management and/or unsuccessful products.
• D) Political or social conditions.
• E) Predictable sources of income.

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Definitions:

Machine Hours

A measure of the amount of time a machine is operated, used in allocating manufacturing costs.

Journal Entry

A record in accounting that shows a business transaction and its effect on the financial statements, consisting of debit and credit entries.

Predetermined Overhead Rate

A method employed to distribute manufacturing overhead costs to specific production units, utilizing projected expenses and levels of activity.

Equipment Depreciation

The method of allocating the cost of physical assets over their useful life, reflecting the loss of value over time.