Amortized Cost Is the Initial Recognition Amount of the Investment

question 62

Multiple Choice

Amortized cost is the initial recognition amount of the investment minus

• A)repayments and net of any reduction for uncollectibility.
• B)cumulative amortization and net of any reduction for uncollectibility.
• C)repayments plus or minus cumulative amortization and net of any reduction for uncollectibility.
• D)repayments plus or minus cumulative amortization.

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Definitions:

Incontestability Clause

A provision in insurance policies that prevents the insurer from disputing the policy's validity after it has been in force for a specific period, usually two years, except under certain circumstances.

Material Misrepresentation

A false statement of a substantial fact that induces someone to enter into a contract or transaction.

Insurance Application

A formal request for coverage, providing necessary information for underwriting to evaluate and issue a policy.

Arbitration Clause

A provision in a contract that requires parties to resolve disputes through arbitration rather than through the court system.