All the Following Are Arguments That Surety Bonding Is Not

question 21

Multiple Choice

All the following are arguments that surety bonding is not the same as insurance except:

• A)three parties in the surety bonding contract instead of two for insurance
• B)fraud on the part of the principal does not relieve an insurer of liability under a bond, whereas it does relieve the insurer of liability in an insurance contract
• C)the surety bonding contract is only lending financial backing
• D)both the bonding contract and insurance contract are issued by licensed insurance companies

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Definitions:

Underapplied Manufacturing Overhead

Refers to the situation where the actual manufacturing overhead costs are greater than the overhead costs applied to production.

Allocation

The process of distributing resources or costs among various departments, products, or activities based on specific criteria or formulas.

Journal Entry

A record in accounting that represents a transaction, showing the accounts affected and the amounts debited and credited.

Overapplied Balance

A situation in cost accounting where the amount of overhead applied to products or services exceeds the actual overhead costs incurred.