Explain What Is Meant by an Insurable Interest and What

question 143

Essay

Explain what is meant by an insurable interest and what impact the existence of this principle has on the right to collect on an insurance claim.

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Definitions:

Operating Activities

These include the primary revenue-generating activities of a business, such as manufacturing, distributing, marketing, and selling a product or service.

Cash Dividend

A payout to shareholders from a company's earnings in the form of cash.

Comparative Balance Sheet

A financial statement presenting the assets, liabilities, and equity of an entity at two or more points in time to facilitate comparative analysis.

Direct Method

An approach to preparing the cash flow statement where actual cash flow information from the company's operations is used directly.