Which of the Following Is a Fundamental Purpose of the Principle

question 12

Multiple Choice

Which of the following is a fundamental purpose of the principle of indemnity?

• A)to reduce moral hazard
• B)to minimize physical hazards
• C)to settle property insurance losses on a replacement cost basis
• D)to require deductibles in all property insurance policies

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Definitions:

Product Line

A group of related products marketed by a company, often sharing a common theme, technology, or target market.

Activity-Based Costing System

A costing methodology that assigns costs to products or services based on the activities required to produce them, considering the resources consumed by each activity.

Activity Cost

The cost associated with a specific activity or process, used in activity-based costing to more accurately allocate overhead costs to products or services based on the activities required to produce them.

Assembly

The process in manufacturing where various components or parts are put together to form a final product.