Assume that your company purchases inventories from a Canadian supplier on November 3. The invoice specifies that payment is to be made on February 1 in Canadian dollars ($CAD) in the amount of $200,000 (CAD). Your company operates on a calendar year basis. Assume the following exchange rates: November 3 $0.77:CAD$1 December 31 $0.72:CAD$1 February 1 $0.74:CAD$1 Prepare the journal entries to record the purchase (assume perpetual inventory accounting), the required adjusting entry at December 31, and the payment on February 1. Date Description Debit Credit 11/3 Answer Answer Answer Answer Answer Answer 12/31 Answer Answer Answer Answer Answer Answer 2/1 Accounts payable

The condition that is present is one where you are D. accepting the risk.

Accepting risk means that one knows that there is a certain amount of risk in doing something and instead of avoiding it, finds a way to deal with the situation regardless of the risk involved.

This is more likely when the risk of something happening is always present such that the activity is hard to avoid.

The subject in this scenario has accepted that there will be risk in being involved in a motor vehicle accident by taking the I-5 but still decides to take the road anyway instead of avoiding it because they believe that they will find a way to avoid the accidents.

They are therefore accepting risk.

More information on risk acceptance in relation to a business can be found at