The Unearned Premium Reserve of an Insurer Is

question 47

Multiple Choice

The unearned premium reserve of an insurer is

• A)an asset representing the investments made with premium income.
• B)a liability representing the unearned portion of gross premiums on outstanding policies.
• C)a liability representing claims that have been filed,but not yet paid.
• D)the portion of the insurer's net worth belonging to policyowners.

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Definitions:

Long-Term Construction

A method in accounting that recognizes the revenues and expenses of long-term construction projects as progress is made on the project.

Completed Contract

A method in accounting where all revenue and expenses of a contract are recognized only when the contract is completed.

Percentage Of Completion

An accounting method that recognizes revenues and expenses of long-term projects as a percentage of the work completed during the period.

Inventory

Goods or materials that a business holds for the ultimate goal of resale, including raw materials, work-in-progress, and finished goods.