A group of farmers agreed that if any farmer suffered a property loss, the loss would be spread over the entire group. In this way, each farmer is responsible for the average loss of the group rather than the actual loss that each farmer sustained
Which characteristic of insurance is embodied in this agreement?
A) pooling of losses
B) fortuitous losses
C) risk avoidance
D) indemnification
Answer: A
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Under international accounting standards, cash received from interest (associated with interest revenue) can be shown on the statement of cash flows as an
a. operating activity only. b. operating or financing activity. c. operating or investing activity. d. investing or financing activity.
The primary reason that managers impose a minimum cash balance in the cash budget is
a. because management needs discretionary cash for unforeseen business opportunities. b. managers lack discipline to control their spending. c. that it protects the organization from the uncertainty of the budgeting process. d. that it makes the financial statements look more appealing to creditors.
Transaction frequency refers to _______.
a. The rate at which funds are transferred after completion of a contract b. The number of people employed to negotiate a contract c. The number of products being transferred within a single contract d. None of the above
_______________ strategies are based on designing, producing, marketing, and delivering a product or service more efficiently than competitors.
a. Low cost b. Differentiation c. Latent d. Competitive