Which of the Following Factors Is Not Considered When an Insurance

question 14

Multiple Choice

Which of the following factors is not considered when an insurance rate or premium is calculated?

• A) The cost of the actual losses
• B) The cost of the insurance salesman and other company expenses
• C) Investment earnings on prepaid premiums
• D) The decision by the U.S. Supreme Court in 1943

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, usually as a distribution of profits.

Income Statement

A financial statement that shows a company's revenues, expenses, and profits or losses over a specific period of time.

Trial Balance

A report that lists the balances of all general ledger accounts at a certain date, used to verify that the total of all debit balances equals the total of all credit balances.

Journalizing Transactions

The process of recording financial transactions in a company's accounting records, or journals, in chronological order.