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- Question
The principle of diversification tells us that
Options- A. spreading an investment across many diverse assets will eliminate some of the total risk
- B. concentrating an investment in two or three large stocks will eliminate all of the unsystematic risk
- C. spreading an investment across five diverse companies will not lower the total risk
- D. concentrating an investment in three companies all within the same industry will greatly reduce the systematic risk
- Correct Answer
- spreading an investment across many diverse assets will eliminate some of the total risk
ExplanationThe principle of diversification tells us that spreading an investment across many diverse assets will eliminate some of the total risk.
- 1. Which of the following best describes term life insurance?
Options- A. The insured pays a premium for a specified number of years.
- B. The insured is covered during his or her entire lifetime.
- C. The insured pays the premium until his or her death.
- D. The insured can borrow or collect the cash value of the policy. Discuss
- 2. Is accounts receivable an asset or liability? Discuss
- 3. The APC is calculated as
Options- A. consumption/income
- B. change in income/change in consumption
- C. income/consumption
- D. change in consumption/change in income Discuss
- 4. Unearned revenue is classified as
Options- A. Liability
- B. Owner's equity
- C. Asset
- D. Income Discuss
- 5. Depreciation is a process of
Options- A. Allocation
- B. Valuation
- C. Both A & B
- D. Appropriation Discuss
- 6. when a purchase on account is made the invoice becomes
Options- A. debt
- B. credit
- C. both A & B
- D. None of the above Discuss
- 7. What type of account is accounts receivable?
Options- A. Asset
- B. Liability
- C. Expense
- D. Equity Discuss
- 8. Invoice is an example of
Options- A. Accounts Receivable
- B. Accounts Payable
- C. Both A & B
- D. None of the above Discuss
- 9. Bad debt expense is reported on the income statement as Discuss
- 10. Other things the same, when the interest rate rises
Options- A. people would want to lend less, making the supply of loanable funds decrease.
- B. people would want to lend less, making the quantity of loanable funds supplied decrease.
- C. people would want to lend more, making the supply of loanable funds increase.
- D. people would want to lend more, making the quantity of loanable funds supplied increase. Discuss
Accounting and Finance problems
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Correct Answer: The insured pays a premium for a specified number of years.
Correct Answer: Accounts receivable is the amount to be received by the seller from the customer Hence, it comes under asset
Correct Answer: consumption/income
Explanation:
The average propensity to consume (APC) is the ratio of consumption expenditures (C) to disposable income (DI), or APC = C / DI.
Hence, APC = consumption/income.
Correct Answer: Liability
Explanation:
Unearned revenue is the money or revenue earned for the product or the service that is not yet sold or provided to the customer. Hence, it comes under liabilities.
Correct Answer: Allocation
Explanation:
Depreciation is a process of cost allocation, not valuation. In accounting, the term depreciation refers to the allocation of cost of a tangible asset to expense to the periods in which the asset is expected to be used to obtain the economic benefit.
In brief, Depreciation is fall in the value of assets due to wear and tear over a period of time, it is a loss.
Correct Answer: debt
Correct Answer: Asset
Explanation:
Accounts receivable is listed as a current asset in the balance sheet, since it is usually convertible into cash in less than one year as it is the amount owed by the customer to the seller.
Correct Answer: Accounts Receivable
Correct Answer: Bad debts expense often refers to the loss that a company experiences because it sold goods or provided services and did not require immediate payment The loss occurs when the customer does not pay the amount owed In other words, bad debts expense is related to a company's current asset accounts receivable You have already recorded the Rs 100 in your accounts receivable, and you need to eliminate that amount As you use double-entry accounting, you must record a Rs 100 credit to your accounts receivable and a Rs 100 debit to your allowance for doubtful accounts or your bad debts expense column
Correct Answer: people would want to lend more, making the quantity of loanable funds supplied increase.
Explanation:
Other things the same, when the interest rate rises people would want to lend more, making the quantity of loanable funds supplied increase.
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