The Building and Personal Property Coverage Form Provides Several Optional

question 27

Multiple Choice

The building and personal property coverage form provides several optional coverages.Under one optional coverage,no deduction is taken for depreciation when settling a covered loss.This optional coverage is called

• A)extra expense.
• B)agreed value.
• C)replacement cost.
• D)inflation guard.

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Definitions:

Commercial Substance

A characteristic of a transaction indicating that it will result in a significant change in the economic circumstances of a business.

Future Cash Flows

The amount of money that is expected to be received or paid out by a business in the future.

Exchange of Assets

Transactions where businesses or individuals trade assets of similar value, such as property, equipment, or securities.

Units-Of-Production Method

A depreciation method allocating the cost of an asset over its useful life based on its level of activity or production.