The Cost of Insurance Is Considered an Expense

question 130

Multiple Choice

The cost of insurance is considered an expense:

• A)Only when the entire policy period has passed.
• B)Only when the policy is purchased.
• C)Only when the premium is paid.
• D)Evenly over the term of the policy.

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Definitions:

Pegging

In material requirements planning systems, tracing upward in the bill of material from the component to the parent item.

Part Requirement

Specification or quantity of a component necessary for completing a manufacturing process or assembling a final product.

Parent Component

In manufacturing or software development, a main component that includes or is linked to subordinate components within a product or system.

Safety Stock

Inventory kept on hand as a buffer against variability in demand or supply, ensuring that out-of-stock situations are minimized.