A Logical First Step Toward Understanding of a Life and Health

question 225

Multiple Choice

A logical first step toward understanding of a life and health insurance company and the related financial reporting considerations is to review the manner in which different interested parties view the end result of the accounting process for capital and surplus transactions, for example, the adequacy of the resulting balances. Key interested parties include: • Policyholders • Agents • Stockholders • Insurance regulators • Rating agencies • Management

• A) The capital and surplus accounts
• B) Supplementary loan agreements
• C) Mortgage loans
• D) Risk-based capital investments

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Definitions:

Journal Entries

These are records of all the financial transactions of a business, recorded in the chronological order in which they occur.

Units Sold

The total quantity of products or goods a company has sold during a particular period.

Adjusting Entries

Journal entries made before the preparation of financial statements to ensure that revenues and expenses are recognized in the period they occur.

Employee Discrimination Lawsuit

A legal claim brought by employees against an employer alleging unlawful discrimination in the workplace.