Doug's BOP on His Fishing Guide Business Excludes Property Losses

question 1

Multiple Choice

Doug's BOP on his fishing guide business excludes property losses due to the wakes of other fishing boats. This is an example of the ____ approach to property insurance.

• A) foreseen risk
• B) reasonable-person standard
• C) named-peril
• D) insurance-to-value

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Definitions:

Total Liabilities

The combined debts and obligations that a company owes to outside parties at any given time.

Accrued Expenses

Expenses that have been incurred but not yet paid for, often recognized in accounting through an adjusting entry.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the consumption of the asset's value over time.

Record Depreciation Expense

The process of allocating the cost of tangible assets over their useful lives to accurately reflect their consumption and wear and tear.