Evidence That a Firm Has High Business Risk Would Be

question 21

Multiple Choice

Evidence that a firm has high business risk would be provided by its volatile ____.

• A) Fixed costs.
• B) Profit after taxes.
• C) Operating profit.
• D) Sales.
• E) Employee turnover.

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Definitions:

Owner's Drawings

Withdrawals made by the owner of a sole proprietorship or partnership from the business for personal use.

Revenues

The total income generated from the sale of goods or services related to a company's primary operations.

Adjusting Entries

Entries recorded in journals at the conclusion of an accounting period to assign revenues and costs to the time frame in which they were genuinely incurred.

Source Documents

Source documents are original records that contain the details to support business transactions, such as receipts and invoices.