AU 60 FINAL EXAM 2 ACTUAL LATEST QUESTIONS

AU 60 FINAL EXAM 2 (ACTUAL LATEST QUESTIONS

WITH DETAILED 100% VERIFIED ANSWERS (GRADED A+)

Heritage Planners Ltd is a consulting group that provides company cars to management. The fleet of vehicles was recently sold for a gain of $5,000. The gain should be classified on the income statement as - ---answers---Other income and expenses

The income statement provides a detailed explanation of the results of the organization's operations. Net income is found on the income statement as well as the - ---answers--- Statement of changes in shareholders' equity.

How is the value of an insurer's reputation typically reflected on its balance sheet? - ---answers---Not recorded

Which one of the following items may not be fairly represented on an entity's financial statements due to the cost principle of accounting? - ---answers---Inventory

Sean is a general partner in a small employment business. The general public is unaware of Sean's interest as a partner. Sean is a - ---answers---Secret partner.

Which one of the following alternative forms of business ownership provides owners with the limited liability of a 1 / 3

corporation and the tax advantage of a partnership? - --- answers---Limited liability company

Contractors often form which one of the following alternative forms of business ownership to perform a large construction project? - ---answers---Joint Venture

A building owner has hired a roofing contractor to replace the roof of a building located on a busy urban street. The building owner wants to be protected for any claims resulting from the roofing contractor's work on his property. Which one of the following methods would be most beneficial to the building owner? - ---answers---A separate owners and contractors protective liability policy in the name of the building owner

Which one of the following sources of underwriting information provides a hazard index by line of insurance for the various classifications? - ---answers---Best's Underwriting Guide

Laura is reviewing a commercial auto application for a company that owns a large fleet of local delivery trucks. Which one of the following pieces of underwriting information would be desirable, but not essential? - ---answers---Motor vehicle reports on drivers

Which one of the following is the primary benefit of using the services of an independent contractor who specializes in risk 2 / 3

control work to inspect properties, rather than the insurer's risk control representative? - ---answers---Quicker response

Most insurers have some system for keeping previous applications for which they declined to write insurance. These files can be valuable in evaluating new business because they

• ---answers---Document earlier decisions and can greatly

reduce the amount of work the new application requires.

When underwriters want someone other than the producer submitting an application to make a physical inspection of an account, they usually - ---answers---Request a risk control report.

Which one of the following Dun & Bradstreet report scores shows how promptly the company pays its bills relative to terms? - ---answers---Paydex

Which one of the following external sources of underwriting information is more likely to be used by an underwriter in the pricing phase, than in risk-selection decisions? - ---answers- --Insurance advisory organizations

Johanna is a commercial lines underwriter. She has received a new business application for Hallbinger Trucking (Hallbinger). The application indicates that the trucks travel a maximum radius of 100 miles. When she accesses Hallbinger's Web site, Johanna notices that they service areas that are over 100 miles away. Which one of the following would be a reliable

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