Which of the Following Statements Is True

question 58

Multiple Choice

Which of the following statements is true?

• A)Long-tail loss refers to a series of claims made after an initial claim has been made.
• B)Long-tail loss refers to a claim that is made some time after a policy was written.
• C)Short-tail loss refers to a series of claims made after an initial claim has been made.
• D)Short-tail loss refers to a claim that is made some time after a policy was written.

Understand how changes in owners' equity reflect on the firm's financial status.

Describe the operating capability and how it affects a company's performance.

Identify and classify current liabilities on a balance sheet.

Differentiate between short-term investments and long-term investments.

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Definitions:

Fair Value Option

An accounting choice giving companies the opportunity to measure financial assets and liabilities at their fair values with changes reflected in the income statement.

Net Income

Net income represents the total earnings of a company once all costs, expenses, and taxes are deducted from its total revenue.

Dividends

Dividends are a portion of a company's earnings distributed to shareholders, usually in the form of cash payments or additional stock.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and subsequently adjusted to reflect the investor's share of the net assets of the investee.