Accounting Multiple Choice Question – 26 November 2024

Which of the following sequences represents the order in which an organisation should respond to risk?

Select ONE answer:

1. Reduction, avoidance, sharing (or transfer), acceptance (or retention)
2. Avoidance, reduction, sharing (or transfer), acceptance (or retention)
3. Reduction, sharing (or transfer), avoidance, acceptance (or retention)
4. Avoidance, sharing (or transfer), reduction, acceptance (or retention)

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Notcorrect
2. Correct == > First the company should see if the risk can be avoided; if not, it should try to reduce it; having reduced it as far as is feasible, it should explore the possibilities for sharing the risk (e.g. using insurance). Finally, it must accept the remaining risk.
3. Not correct
4. Not correct

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