AFSB 151 UPDATED EXAMINERS 2026
QUESTIONS AND ANSWERS SURE A+
✔✔adverse selection - ✔✔the tendency for people with the greatest probability of loss
to be the ones most likely to purchase insurance
✔✔work program - ✔✔a listing of jobs, including bids and work in progress, at a given
time
✔✔status report - ✔✔a financial statement of current work in progress
✔✔continuity plan - ✔✔a statement that describes who will own and manage the
company when key individuals who are no longer involved, or involved to a lesser
degree, in the firm's operations as a result of death, disability, or retirement
✔✔key person life insurance - ✔✔life insurance designed to compensate a business
organization for the loss of a key person by paying a benefit to the organization upon a
key person's death
✔✔buy-sell agreement - ✔✔a contract under which owners of a business agree on
behalf of their estates to sell, and a purchaser agrees to buy, their interest in a business
at a specified or determinable price upon the occurrence of a stated event, such as the
owner's death, disability, or retirement
✔✔capital - ✔✔accumulated assets of a business or an owner's equity in a business
✔✔working capital - ✔✔a liquidity measure that is calculated as the difference between
current assets and current liabilities on the balance sheet
working capital = current assets - current liabilities
, ✔✔backlog, or work-on-hand - ✔✔the balance of work to be performed on uncompleted
contracts, or the estimated cost to complete the work outstanding, or the amount yet to
be billed. Alternatively referred to as unfinished work,
✔✔liquidated damages - ✔✔a reasonable estimation of actual damages, agreed to by
contracting parties and included in the contract, to be paid in the event of a breach or for
negligence
✔✔generally accepted accounting principles (GAAP) - ✔✔a common set of accounting
standards and procedures used in the preparation of financial statements to ensure
consistency of presentation and reported results
✔✔consideration - ✔✔something of value or bargained for and exchanged by the
parties to a contract
✔✔trade discounts and allowances - ✔✔reduction from the stated purchase price, given
by the supplier, for such reasons as purchasing in bulk or paying in a timely manner
✔✔remit of receipt of invoice (ROI) - ✔✔a credit arrangement that extends credit to the
buyer until the buyer is invoiced
✔✔on consignment - ✔✔a credit arrangement in which one party ships merchandise to
another party that acts as the consignor's agent in selling the goods to others
✔✔floor plan loan - ✔✔financing for the purchase price of goods for resale to third
parties
✔✔uniform commercial code (UCC) - ✔✔a model code that has been adopted in whole
or in part by each state and whose purpose is to provide consistent legal basis for
business transactions throughout the US and its territories
✔✔financing statement (UCC filing) - ✔✔the filed public notice to perfect, or legally
establish, a creditor's rights under the UCC
✔✔Chapter 11 (Bankruptcy Act) - ✔✔the general reorg chapter of the federal
Bankruptcy Act under which a bankrupt partnership or corporation can continue doing
business but must set up a plan for paying a portion, or possibly all, of the creditors of
the ongoing business
✔✔Bankruptcy Reform Act of 1978 - ✔✔legislation that defines creditors' rights and
provides relief to debtors who, with or without fault, have contracted debts beyond the
ability to pay
QUESTIONS AND ANSWERS SURE A+
✔✔adverse selection - ✔✔the tendency for people with the greatest probability of loss
to be the ones most likely to purchase insurance
✔✔work program - ✔✔a listing of jobs, including bids and work in progress, at a given
time
✔✔status report - ✔✔a financial statement of current work in progress
✔✔continuity plan - ✔✔a statement that describes who will own and manage the
company when key individuals who are no longer involved, or involved to a lesser
degree, in the firm's operations as a result of death, disability, or retirement
✔✔key person life insurance - ✔✔life insurance designed to compensate a business
organization for the loss of a key person by paying a benefit to the organization upon a
key person's death
✔✔buy-sell agreement - ✔✔a contract under which owners of a business agree on
behalf of their estates to sell, and a purchaser agrees to buy, their interest in a business
at a specified or determinable price upon the occurrence of a stated event, such as the
owner's death, disability, or retirement
✔✔capital - ✔✔accumulated assets of a business or an owner's equity in a business
✔✔working capital - ✔✔a liquidity measure that is calculated as the difference between
current assets and current liabilities on the balance sheet
working capital = current assets - current liabilities
, ✔✔backlog, or work-on-hand - ✔✔the balance of work to be performed on uncompleted
contracts, or the estimated cost to complete the work outstanding, or the amount yet to
be billed. Alternatively referred to as unfinished work,
✔✔liquidated damages - ✔✔a reasonable estimation of actual damages, agreed to by
contracting parties and included in the contract, to be paid in the event of a breach or for
negligence
✔✔generally accepted accounting principles (GAAP) - ✔✔a common set of accounting
standards and procedures used in the preparation of financial statements to ensure
consistency of presentation and reported results
✔✔consideration - ✔✔something of value or bargained for and exchanged by the
parties to a contract
✔✔trade discounts and allowances - ✔✔reduction from the stated purchase price, given
by the supplier, for such reasons as purchasing in bulk or paying in a timely manner
✔✔remit of receipt of invoice (ROI) - ✔✔a credit arrangement that extends credit to the
buyer until the buyer is invoiced
✔✔on consignment - ✔✔a credit arrangement in which one party ships merchandise to
another party that acts as the consignor's agent in selling the goods to others
✔✔floor plan loan - ✔✔financing for the purchase price of goods for resale to third
parties
✔✔uniform commercial code (UCC) - ✔✔a model code that has been adopted in whole
or in part by each state and whose purpose is to provide consistent legal basis for
business transactions throughout the US and its territories
✔✔financing statement (UCC filing) - ✔✔the filed public notice to perfect, or legally
establish, a creditor's rights under the UCC
✔✔Chapter 11 (Bankruptcy Act) - ✔✔the general reorg chapter of the federal
Bankruptcy Act under which a bankrupt partnership or corporation can continue doing
business but must set up a plan for paying a portion, or possibly all, of the creditors of
the ongoing business
✔✔Bankruptcy Reform Act of 1978 - ✔✔legislation that defines creditors' rights and
provides relief to debtors who, with or without fault, have contracted debts beyond the
ability to pay
