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Reasons Why a Peril May Be Considered Uninsurable and Therefore

question 1

Multiple Choice

Reasons why a peril may be considered uninsurable and therefore excluded from insurance contracts include which of the following?
I.The losses from the occurrence of the peril may be due to a predictable decline in value.
II.The losses from the occurrence of the peril may be incalculable and catastrophic.

Definitions:

Work in Process Account

An account used to record the costs associated with goods that are partially completed in manufacturing but not yet ready for sale.

Job Order Cost System

An accounting system used to track costs associated with specific jobs or orders, including materials, labor, and overhead.

Cost Performance

A measure of the efficiency of budget management, comparing the budgeted cost of work performed with the actual cost.

Factory Overhead

Costs associated with operating a factory that are not directly tied to a specific product or activity, such as maintenance, utilities, and salaries for management.