If a Risk-Averse Small Business Owner Can't Reduce the Level

question 10

Multiple Choice

If a risk-averse small business owner can't reduce the level of risk to where they are comfortable,they can either insure against future losses or ________.

• A) spread the risk among other people or businesses
• B) ignore regulatory changes and enforcement
• C) choose a source of capital investment
• D) prepare to declare bankruptcy in the case of a natural disaster

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Definitions:

Extraordinary Gains

Unusual and infrequent gains that are reported separately from regular income because they result from events that are not part of the company's usual business activities.

Footnote Disclosure

Additional information provided at the bottom of financial statements, offering more detail on specific figures or accounting policies.

Statement of Retained Earnings

A financial statement that outlines the changes in a company's retained earnings over a specific period.

Expense Recognition

The accounting principle that expenses should be recognized in the period in which they contribute to revenue, following the matching principle.