An Inter-Ocean Transfer cargo ship was forced to jettison some cargo in heavy seas. The various interests in the voyage at the time the property was jettisoned were If $400,000 worth of iron ore was jettisoned, for how much of this amount would Inter-Ocean Transfer be responsible under general average? A) nothing B) $160,000 C) […]
Based on the information in Table 4-2, the average collection period is A) 127 days. B) 70 days. C) 89 days. D) 81 days. ANSWER D
Rick is risk manager of Herald News, a daily newspaper in a competitive market. Rick wants to make sure that if Herald’s printing facility is damaged or destroyed, the paper will continue to be published. What type of insurance can Rick purchase to cover the added cost of continuing to print the paper after a […]
In terms of the costs to organize each, which of the following sequences is correct, moving from highest to lowest cost? A) sole proprietorship, general partnership, corporation, limited partnership B) general partnership, sole proprietorship, limited partnership, corporation C) sole proprietorship, general partnership, limited partnership, corporation D) corporation, limited partnership, general partnership, sole proprietorship […]
One type of commercial property insurance excludes perils that are covered by the basic coverages. Some businesses buy this coverage to fill coverage gaps, including flood and earthquake, and to cover property in other countries. This type of insurance is called A) protection and indemnity insurance. B) building and personal property coverage form. C) difference […]
Which of the following statements about the businessowners policy is (are) true? I. It is designed to meet the insurance needs of large manufacturing firms. II. It is a package policy designed to meet the basic property and liability needs of an insured in a single contract. A) I only B) II only C) both […]
Use the following information to calculate the change in the company’s cash balance for the year. Credit Sales $800,000 Cash Sales $500,000 Operating Expenses on Credit $200,000 Cash Operating Expenses $700,000 Accounts Receivable (Beg. of Year) $50,000 Accounts Receivable (End of Year) $80,000 Accounts Payable (Beg. of Year) $50,000 Accounts Payable (End of Year) $100,000 […]
Ultimate ________ of a firm depends on who owns the major portion of the common shares and thus controls the direction of the firm through voting power. A) managerial control B) creditor control C) shareholder control D) government control ANSWER C Explanation: A)
A firm wishing to insure a single shipment of merchandise sent by a common carrier would purchase a(n) A) annual transit policy. B) trip transit policy. C) bailee’s liability policy. D) equipment floater. ANSWER Answer: B
Frank’s property insurance requires periodic reporting of inventory values. Frank believes he can save money by under-reporting the inventory. Last period, Frank reported $200,000 when the value was really $400,000. Shortly after filing the report, when the value was $500,000, the inventory was destroyed. Ignoring any deductible, how much will Frank’s insurer pay? A) nothing, […]
