All Insurance Is Subject to Several Basic Principles,including All of the Following

question 77

Multiple Choice

All insurance is subject to several basic principles,including all of the following except that

• A) the insured must provide full and accurate information to the insurance company.
• B) the insured is to profit as a result of insurance coverage.
• C) the loss must be quantifiable.
• D) there must be a relationship between the insured and the beneficiary.

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Definitions:

Increase in Income Taxes Payable

An accounting term referring to a rise in the amount of income taxes a company owes to the government, yet has not paid.

Direct Method

A cash flow statement preparation method that shows the specific sources of operating cash receipts and payments.

Indirect Method

A financial reporting approach used in cash flow statements where net income is adjusted for non-cash transactions, depreciation, and changes in working capital to determine cash flow from operating activities.

Direct Method

A cash flow statement preparation approach that itemizes actual cash inflows and outflows from operating activities, as opposed to estimating them through indirect adjustments.