Which of the Following Liability Risks Would Be Adequately Managed

question 44

Multiple Choice

Which of the following liability risks would be adequately managed by errors and omissions insurance?

• A) liabilities arising from the performance of obligations of corporate directors and officers
• B) liabilities arising from negligence in the provision of professional services
• C) the insured's portion of the loss that is insured against out of his or her own assets
• D) the cost of the environmental cleanup of the insured's property arising from business activities

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Definitions:

Weighted-Average Method

An inventory costing method that assigns a cost to inventory on the basis of the average cost of all similar goods available during the period.

Conversion Costs

The combined costs of direct labor and manufacturing overhead involved in transforming raw materials into finished goods.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated as beginning inventory plus purchases less cost of goods sold.

Conversion Costs

are the costs required to convert raw materials into finished goods, comprising direct labor and manufacturing overhead.