Social Science Business Insurance
3: Interpreting Insurer Financial Statements
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Assignment 8 - The Underwriting Fu... Practice Exam Section 1 AU 60 Missed Questions Chapter 1 Assignm
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The generally accepted accounting principles (GAAP) D. Helps businesses to accurately measure the profitability of their activities.s.
matching principle
Select one:
A. Requires businesses to match accounts due with
accounts receivable.
B. Allows businesses to compare the income statement
and balance sheet.
C. Helps businesses compare profitability of non-
identical enterprises.
D. Helps businesses to accurately measure the
profitability of their activities.s.
Under generally accepted accounting principles (GAAP), B. Policy acquisition costs
which one of the following expenses incurred by insurers
is matched to earned premiums?
Select one:
A. Administrative expenses
B. Policy acquisition costs
C. Unrealized loss on investments
D. Interest expense on outstanding debt
Which one of the following statements best describes an C. Equity investments are assets reported at fair value.
asset category on an insurer's balance sheet?
Select one:
A. Fixed maturity investments are assets reported at cost
plus accrued interest.
B. Short-term investments are assets reported at
amortized value.
C. Equity investments are assets reported at fair value.
D. Deferred policy acquisition costs are reported as
short-term liabilities.
, Home Housewares Inc. is a retail store applying for D. Home Houseware's financial position as of the balance sheet date.
commercial coverage with ABC Insurance. The
underwriter requested a copy of Home Houseware's
most recent financial statements. The underwriter will use
the balance sheet to determine
Select one:
A. Home Houseware's gross profit margin as of the
balance sheet date.
B. Home Houseware's sources of cash as of the balance
sheet date.
C. Dividend payments to shareholders as of the balance
sheet date.
D. Home Houseware's financial position as of the balance
sheet date.
The Financial Accounting Standards Board (FASB) D. Unrealized gains on securities.
requires organizations to report comprehensive income.
Comprehensive income includes an organization's net
income and
Select one:
A. Change in market value of stock issued by the
organization.
B. Additional capital contributions made by shareholders.
C. Write-down of goodwill due to impairment.
D. Unrealized gains on securities.
An insurer's overall combined ratio can be calculated A. The statement of income.
using information found in
Select one:
A. The statement of income.
B. A line of business report.
C. A reserve trend report.
D. Industry benchmarks.
The role of the policyholders' surplus is to A. Provide a cushion to ensure the insurer has enough resources to meet
Select one: obligations to the policyholders.
A. Provide a cushion to ensure the insurer has enough
resources to meet obligations to the policyholders.
B. Provide an estimate of the total losses that will be paid
for the insurance coverage sold.
C. Provide a meaningful valuation of the assets the
insurance company owns.
D. Provide a place on the balance sheet where the
insurer's income and expenses can be matched, and net
income recorded.
When premiums earned during any specific accounting B. Underwriting loss.
period are less than incurred losses plus underwriting
expenses there will be an
Select one:
A. Increase in surplus.
B. Underwriting loss.
C. Investment loss.
D. Underwriting gain.
3: Interpreting Insurer Financial Statements
Save
Students also studied
Assignment 8 - The Underwriting Fu... Practice Exam Section 1 AU 60 Missed Questions Chapter 1 Assignm
48 terms 61 terms 28 terms 20 terms
emily_spiteri Preview P kolbyslater Preview john_burkhalter9 Preview nad
The generally accepted accounting principles (GAAP) D. Helps businesses to accurately measure the profitability of their activities.s.
matching principle
Select one:
A. Requires businesses to match accounts due with
accounts receivable.
B. Allows businesses to compare the income statement
and balance sheet.
C. Helps businesses compare profitability of non-
identical enterprises.
D. Helps businesses to accurately measure the
profitability of their activities.s.
Under generally accepted accounting principles (GAAP), B. Policy acquisition costs
which one of the following expenses incurred by insurers
is matched to earned premiums?
Select one:
A. Administrative expenses
B. Policy acquisition costs
C. Unrealized loss on investments
D. Interest expense on outstanding debt
Which one of the following statements best describes an C. Equity investments are assets reported at fair value.
asset category on an insurer's balance sheet?
Select one:
A. Fixed maturity investments are assets reported at cost
plus accrued interest.
B. Short-term investments are assets reported at
amortized value.
C. Equity investments are assets reported at fair value.
D. Deferred policy acquisition costs are reported as
short-term liabilities.
, Home Housewares Inc. is a retail store applying for D. Home Houseware's financial position as of the balance sheet date.
commercial coverage with ABC Insurance. The
underwriter requested a copy of Home Houseware's
most recent financial statements. The underwriter will use
the balance sheet to determine
Select one:
A. Home Houseware's gross profit margin as of the
balance sheet date.
B. Home Houseware's sources of cash as of the balance
sheet date.
C. Dividend payments to shareholders as of the balance
sheet date.
D. Home Houseware's financial position as of the balance
sheet date.
The Financial Accounting Standards Board (FASB) D. Unrealized gains on securities.
requires organizations to report comprehensive income.
Comprehensive income includes an organization's net
income and
Select one:
A. Change in market value of stock issued by the
organization.
B. Additional capital contributions made by shareholders.
C. Write-down of goodwill due to impairment.
D. Unrealized gains on securities.
An insurer's overall combined ratio can be calculated A. The statement of income.
using information found in
Select one:
A. The statement of income.
B. A line of business report.
C. A reserve trend report.
D. Industry benchmarks.
The role of the policyholders' surplus is to A. Provide a cushion to ensure the insurer has enough resources to meet
Select one: obligations to the policyholders.
A. Provide a cushion to ensure the insurer has enough
resources to meet obligations to the policyholders.
B. Provide an estimate of the total losses that will be paid
for the insurance coverage sold.
C. Provide a meaningful valuation of the assets the
insurance company owns.
D. Provide a place on the balance sheet where the
insurer's income and expenses can be matched, and net
income recorded.
When premiums earned during any specific accounting B. Underwriting loss.
period are less than incurred losses plus underwriting
expenses there will be an
Select one:
A. Increase in surplus.
B. Underwriting loss.
C. Investment loss.
D. Underwriting gain.
