Which of the Following Is True in Relation to Insurable

question 135

Multiple Choice

Which of the following is true in relation to insurable interest?

• A)Shareholders do not have a sufficient interest in the assets of a corporation to take out insurance on them and receive compensation if they are damaged or destroyed.
• B)If Chuck takes out insurance on his ex-wife's home and it burns down,he will be able to collect from the insurance company.
• C)If Joe has an insurable interest in property,he will likely enjoy an insurance windfall in the event of a loss of that property.
• D)If Sam arranges a comprehensive,all-risk insurance policy,this will guarantee that he holds an insurable interest in the insured property.
• E)If Mr.Cole takes out the proper insurance on his home and it burns down,he will be able to collect from the insurance company.

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Definitions:

Related-Party Transactions

Transactions occurring between parties where one is able to exert significant influence over the operations of the other, such as between a parent company and its subsidiary.

Affiliated Entities

Affiliated entities are companies that are related through common ownership or control, potentially impacting financial statements and disclosures.

Report Form

A layout of financial statements where the balance sheet is presented vertically, with assets listed first, followed by liabilities and equity.

Account Form

A presentation format for balance sheets where assets are listed on the left side and liabilities and equity on the right side.