All of the Following Statements About the Businessowners Policy Are

question 35

Multiple Choice

All of the following statements about the businessowners policy are true EXCEPT

• A)Coverage for business personal property includes coverage for leased personal property which the named insured has a contractual responsibility to insure.
• B)The amount of insurance on the buildings increases by a stated percentage each year.
• C)Additional coverages include pollutant cleanup and removal.
• D)The policy must be written with a deductible of at least $2,000 for property losses.

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Definitions:

Timing Difference

Timing difference refers to the difference that arises between taxable income and accounting income due to different recognition times of revenue and expenses.

Investment Revenue

Refers to the income earned from investing in assets like stocks, bonds, real estate, or other investment vehicles.

Equity Method

An accounting technique used for recording investments in which the investor has significant influence over the investee but does not control it outright.

MACRS Depreciation

The Modified Accelerated Cost Recovery System, a method of depreciation in the U.S. that allows for faster depreciation of assets over time for tax purposes.