Insurance Company a Representative from a Local Insurance Agency Selected

question 20

Essay

Insurance Company A representative from a local insurance agency selected a random sample of insured homeowners and recorded the number of claims made in the last three years, with the following results: {Insurance Company Narrative} What proportion of homeowners had no claims in the last three years?

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Definitions:

Bonus Method

An accounting method for recording partner investments and distributions where the new partner's capital is adjusted to reflect any bonus given to or received from the existing partners, affecting the capital accounts but not the reported income of the partnership.

Capital Balance

Capital balance refers to the amount of funds in an account or that an individual or company has invested, typically represented on the balance sheet as equity or net worth.

Bonus Method

An accounting method used in partnership accounting to reallocate partners' equity accounts when a new partner is admitted without changing the recorded values of the actual assets.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a basis for computing rates of return and evaluating its capital structure.