Some States Have a Law That Requires Payment of the Face

question 40

Multiple Choice

Some states have a law that requires payment of the face amount of insurance to the insured if a total loss to real property occurs from a peril specified in the law.These laws are called

• A)agreed amount laws.
• B)replacement cost laws.
• C)homestead laws.
• D)valued policy laws.

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Definitions:

Voucher System

An accounting system that involves preparing and using vouchers—documents that authorize and detail the payment of a liability to a supplier.

Cash Receipts

The total amount of cash and cash equivalents received by a company during a given period, including sales, refunds, and other cash inflows.

Liabilities

Financial obligations or debts that a company owes to others, which are expected to be settled through the transfer of assets, provision of services, or other economic benefits.

Income Statement Account

A financial account that shows the company's revenues, expenses, and net income over a specific period.