In General, Entrepreneurs Prefer

question 7

Multiple Choice

In general, entrepreneurs prefer:

• A) more diversification, to reduce the risk of their ventures.
• B) more diversification, to increase the risk and payoff of their ventures.
• C) less diversification, to reduce the risk of their ventures.
• D) less diversification, to increase the risk and payoff of their ventures.

Distinguish between the types of expenses and their classifications in financial statements.

Understand the perpetual and periodic inventory systems and their journal entries.

Identify the components and calculation of net income.

Analyze the similarities and differences in financial statements between service and retail businesses.

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Definitions:

Definite-Term Lease

A lease agreement with a specific beginning and end date, distinguishing it from a periodic or at-will tenancy.

Periodic-Tenancy Lease

A rental agreement that automatically renews for successive periods (such as monthly or yearly) until either party terminates it.

Tenancy-At-Will Lease

A lease that may be terminated by the parties at any time.

Tenancy-At-Sufferance Lease

A lease that is created when a tenant who was lawfully in possession of a leased property remains in possession of that property unlawfully after the lease ends because the person with the power to evict him failed to do so.