Which of the Following Statements Is (Are)true with Respect to the Differences

question 14

Multiple Choice

Which of the following statements is (are) true with respect to the differences between insurance and surety bonds?
I.Insurance is a two-party contract;surety involves three parties.
II.Insurers usually do not have the right to recover a loss payment from an insured,while a surety does have the legal right to recoup a loss payment.

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

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Definitions:

Allocation

The process of assigning a cost or an income to various accounts, departments, or periods as part of accounting efforts.

Transaction Price

The amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer.

Principal/Agent

A relationship in which one party (the agent) is authorized to act on behalf of another party (the principal) in conducting transactions.

Commission

A fee paid to an agent or employee for facilitating a sale or service, typically a percentage of the sale price.