Which of the Following Is NOT an Example of a Risk

question 22

Multiple Choice

Which of the following is NOT an example of a risk of ownership of an asset?

• A) Idle capacity.
• B) Gains on the eventual sale of the asset.
• C) Uninsured damage.
• D) Technical obsolescence.

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Definitions:

Bank Errors

Mistakes made by a bank in the recording of transactions, which can include discrepancies in account balances and unauthorized transactions.

Cash Account

A cash account refers to a brokerage account where the investor must pay the full amount for securities purchased, as opposed to buying on margin.

Unrecorded Charges

Expenses or financial obligations that have not been documented in the accounting records, potentially leading to discrepancies.

Bank Reconciliation

The process of matching up the balances in a company's accounting records for a cash account to the corresponding information on a bank statement.