If You Have a $2,000 Claim Resulting from a Fire

question 75

Multiple Choice

If you have a $2,000 claim resulting from a fire in your home and your policy stipulates that your deductible is $500, then the insurance company will pay you

• A)$2,000
• B)$1,500
• C)$1,000
• D)$500
• E)$2,500

---

Definitions:

Relevant Range

The range of activity within which the assumptions about fixed costs and variable unit costs are valid for purposes of budgeting and decision-making.

Direct Costs

Expenses that can be directly traced to the production of specific goods or services, such as raw materials and labor.

Period Costs

Expenses that are not directly associated with the production process and are expensed in the period they are incurred.

Financial Reporting

The process of producing statements that disclose an organization's financial status to management, investors, and regulators.