All of the Following Are Defects Which Limit the Usefulness

question 61

Multiple Choice

All of the following are defects which limit the usefulness of the human life value approach in determining the correct amount of life insurance to purchase EXCEPT

• A)The effects of inflation are ignored.
• B)Other sources of income for survivors are ignored.
• C)Earnings are assumed to remain constant.
• D)Earnings during the individual's productive lifetime are ignored.

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Definitions:

Outstanding Checks

Checks that have been issued and recorded in an entity's accounting system but have not yet been cashed or cleared by the bank.

Bank Statement Adjustment

The process of modifying the balance shown in a bank statement to match the adjusted balance in the ledger accounts, usually due to timing differences in recording transactions.

Company Books Adjustment

The process of making changes to the financial records to correct errors or update accounting information.

Deposit In Transit

A banking term that refers to checks or other forms of payment that have been received and recorded by a company, but not yet processed or credited by the bank.