Bookworm Sales Have Been Down for the Last Year Due

question 15

Multiple Choice

Bookworm sales have been down for the last year due to new competition from a national chain and Waata is understandably concerned. He recently called his insurance agent to see if this downturn in sales was covered by his business policy. The agent, Will B. Safe, told Waata

• A) he could submit a claim and most likely the company would cover it.
• B) market risks are uninsurable and in fact, his business policy does not cover those.
• C) personal risks such as the decrease in his store's sales are not insurable.
• D) the company would definitely cover Waata's losses.

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Definitions:

Permanent Accounts

These are ledger accounts that carry their ending balances into the next accounting period, typically including asset, liability, and equity accounts.

Temporary

In accounting, temporary refers to accounts that are closed at the end of an accounting period, such as revenues, expenses, and dividends.

Forthcoming Year

The approaching or upcoming calendar year.

Long-term Debt

Debt obligations of a business that are due more than one year in the future, often used for large purchases or investments.