All of the Following Are Typical Business Uses of Life

question 54

Multiple Choice

All of the following are typical business uses of life insurance except:

• A) protect the business against loss caused by the death of a key person
• B) provide a means of rewarding and retaining valuable employees
• C) provide severance pay to employees when jobs are terminated
• D) protect the value of the partnership at the death of an owner/insured

---

Definitions:

Asset

Resources owned or controlled by a business that are expected to generate future economic benefits.

Fair Value Principle

Assets and liabilities should be reported at fair value (the price received to sell an asset or settle a liability).

Investment Securities

Investment securities are financial instruments that individuals or institutions buy and intend to hold for profit, such as stocks, bonds, or mutual funds.

Current Assets

Current assets refer to all assets that a company expects to convert into cash or use up within one year or one operating cycle, whichever is longer, including cash, inventory, and accounts receivables.