Admitted Assets Are Those Specifically Prescribed by the NAIC Accounting

question 146

Multiple Choice

Admitted assets are those specifically prescribed by the NAIC Accounting Practices and Procedures Manual or prescribed or permitted by the various jurisdictions. An admitted asset is defined as having probable future economic benefits. It also has three essential characteristics. Which one of the following is out of those characteristics?

• A) It embodies a probable future benefit which contributes to cash flow
• B) A particular entity can obtain this benefit
• C) The transaction giving rise to entity's right to control the benefit has already occurred
• D) All of these

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Definitions:

Variable Cost

Variable cost refers to expenses that fluctuate with the level of output or production, such as materials and labor costs.

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent or salaries.

Production Level

The quantity of goods or services that are produced within a given timeframe by a business.

Fixed Costs

Costs that do not change with the level of production or sales over a certain period.