All of the Following Statements About Life Insurance Company Investments

question 15

Multiple Choice

All of the following statements about life insurance company investments are true EXCEPT

• A)Funds for these investments are derived primarily from premium income,investment earnings,and maturing investments that must be reinvested.
• B)Income from these investments reduces the cost of insurance.
• C)A primary objective in making these investments is safety of principal.
• D)The majority of these investments are short-term investments.

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Definitions:

Supplies Expense

The cost associated with consumable items or supplies used during a company's operations within an accounting period.

Adjusting Entry

A journal entry made at the end of an accounting period to record any unrecognized income or expenses for that period.

Debit

An entry on the left side of an account, indicating an increase in assets or expenses or a decrease in liabilities, equity, or revenue.

Credit

The ability of a customer to obtain goods or services before payment, based on the trust that payment will be made in the future.