After a company reaches the breakeven point

Which of the following is not true about liability risks?

A) Liability risk is where the firm may be legally responsible for the harm it causes to another person. B) Liability risks are sometimes overlooked due to their intangible nature. C) Only a breach of contract and criminal acts can lead to liability risk for a firm. D) A tort can lead to a liability risk.

Match each of the following terms with the appropriate definition. Use each term only once

a. monetary-unit assumption b. historical-cost principle c. going-concern assumption d revenue-recognition principle e. matching principle f. accrual accounting g. accruals h. deferrals i. cash-basis accounting j. detective controls k. corrective controls l. preventive controls _____ 1. Procedures to find errors _____ 2. Transactions in which the revenue is earned or the expense is incurred before the exchange of cash _____ 3. An accounting principle which requires that revenue should be recognized when it is earned _____ 4. An accounting assumption which requires that financial statement items be measured in monetary units _____ 5. An accounting method in which revenues are recognized when earned and expenses recognized when incurred _____ 6. Transactions in which the exchange of cash takes place before the revenue is earned or the expense incurred. _____ 7. An accounting principle which requires that financial statement items should be reported at their costs at the time of the transaction _____ 8. An accounting method in which revenues are recognized when cash is collected and expenses are recognized when cash is disbursed _____ 9. An accounting principle which requires that expenses should be recognized in the same period as the revenue they helped generate _____ 10. An accounting assumption which assumes that a company will continue to be in business in the future _____ 11. Controls designed to fix errors _____ 12. Controls designed to prevent an error or irregularity