In a Contract of Insurance, the Offer Is Accepted When

question 32

Multiple Choice

In a contract of insurance, the offer is accepted when:

• A) The insurer sends the insured a proposal form (acceptance) following the insured's request (offer).
• B) The insured completes and submits (acceptance) the proposal form sent out by the insurer (offer).
• C) The insurer issues a cover note (acceptance) following the insured's request (offer).
• D) The insurer accepts the proposal (acceptance) submitted by the insured (offer).

---

Definitions:

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including but not limited to, utilities, depreciation, and salaries of non-direct labor.

Inventoriable Costs

Direct costs associated with the acquisition or production of goods that are capitalized as inventory and recognized as cost of goods sold when the inventory is sold.

Matching Principle

A fundamental accounting concept that requires expenses to be recorded in the same period as the revenues they helped generate.

Percentage-of-Completion

An accounting method that recognizes revenue and expenses of long-term projects as a percentage of work completed during the period.