All of the Following Are Defects Which Limit the Usefulness

question 61

Multiple Choice

All of the following are defects which limit the usefulness of the human life value approach in determining the correct amount of life insurance to purchase EXCEPT

• A)The effects of inflation are ignored.
• B)Other sources of income for survivors are ignored.
• C)Earnings are assumed to remain constant.
• D)Earnings during the individual's productive lifetime are ignored.

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Definitions:

Timeliness

The quality of being done at the appropriate or advantageous time, particularly in the context of information being available when it is needed.

Verifiability

An accounting principle that ensures all information reported is backed by evidence and can be confirmed by independent observers.

GAAP

Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction.

Reliability

In accounting, it refers to the accuracy and consistency of financial reporting, ensuring that information faithfully represents the entity's financial condition.