[The Following Information Applies to the Questions Displayed Below

question 36

Multiple Choice

[The following information applies to the questions displayed below.]

Riley Company borrowed $36,000 on April 1, Year 1 from Titan Bank. The note issued by Riley carried a one-year term and a 7% annual interest rate. Riley earned cash revenues of $1,700 during Year 1 and $1,400 during Year 2. Assume no other transactions.

-Based on this information alone,what are the amounts of total liabilities that would appear on Riley's December 31 balance sheets for Year 1 and Year 2,respectively?

• A)$36,000 and $0
• B)$37,890 and $0
• C)$37,890 and $38,520
• D)$1,890 and $630

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Definitions:

Stand-alone Risk

Stand-alone risk refers to the risk associated with investing in a single asset or project, without considering the diversity or portfolio effects.

Risk Impacts

The potential negative consequences that uncertain events or conditions may have on an organization's ability to achieve its objectives.

Market Risk

Market risk is the potential for an investor to experience losses due to factors that affect the overall performance of the financial markets.

Business-specific Risk

The risk associated with the particular circumstances of a specific business, including its industry, market position, and management.