If an Applicant for Insurance Informs His Broker of All

question 39

True/False

If an applicant for insurance informs his broker of all material facts regarding the risk, and the broker does not pass those facts along to the insurer, it's possible that the insurer can legally deny any subsequent claim.

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Definitions:

Service Department Costs

Costs associated with the departments that do not directly produce goods but provide essential support services to production departments.

First-In, First-Out Method

An accounting method for valuing inventory where the oldest items are sold or used first.

Equivalent Units

A concept in process costing that converts partially completed units into a number of equivalent full units for the purpose of cost assignment.

Weighted-Average Method

An inventory valuation technique that calculates the cost of inventory by taking the average cost of all similar items present in the inventory.