Which of the Following Statements About the Use of Deductibles

question 6

Multiple Choice

Which of the following statements about the use of deductibles is (are) true?
I.They represent risk retention by insurance purchasers.
II.They tend to increase the cost of adjusting small claims.

• A)I only
• B)II only
• C)both I and II
• D)neither I nor II

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Definitions:

Discontinued Operations

Parts of a company's core business or product lines that have been discontinued or sold.

Income Tax Expense

The amount of expense that a business or individual incurs due to the taxes on its taxable income.

Disposal

The method of eliminating an asset or waste, which may include selling, recycling, or throwing away.

Times Interest Earned

A financial ratio that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes to its interest expenses.