In a Small Business,because It Is Often Cost-Prohibitive to Hire

question 122

Multiple Choice

In a small business,because it is often cost-prohibitive to hire extra employees,the lack of certain separations of duties can best be overcome by

• A)bonding the employees.
• B)getting the owner actively involved.
• C)hiring only honest employees.
• D)holding one person responsible for a given set of transactions.

---

Definitions:

Retained Earnings

The portion of net income that is retained by a company rather than distributed to its shareholders as dividends.

Capital Stock

The original amount the owners paid into the company plus any additional paid-in capital to purchase stock in the company.

Long-Term Debt

An obligation for debt that is due to be repaid in more than 12 months.

5-Year Bank Loan

A financial agreement where a bank lends money to a borrower, to be repaid with interest over a five-year period.