The Amount of Money Paid to Keep an Insurance Policy

question 40

Multiple Choice

The amount of money paid to keep an insurance policy in force is the

• A) premium.
• B) deductible.
• C) co-pay.
• D) co-insurance.

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Definitions:

GAAP Methods

GAAP methods refer to accounting principles and guidelines set by the Financial Accounting Standards Board in the United States for preparing financial statements.

MACRS

Stands for Modified Accelerated Cost Recovery System, which is a method of depreciation used in the United States for tax purposes, allowing for quicker cost recovery of property and equipment.

Useful Life

The estimated time period that an asset is expected to be used by a business or be productive.

Straight-Line Rate

A method of calculating the depreciation of an asset, which allocates an equal depreciation expense each year over the asset's useful life.