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Final Practice Exam - CPCU 540 Questions And Answers With Verified Solutions Already Passed!!!!
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Final Practice Exam - CPCU 540 Questions And Answers With Verified Solutions Already Passed!!!!
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Final Practice Exam - CPCU 540Questions And Answers With Verified
Solutions Already Passed!!!!
Sean owns a retail men's clothing store. After a recent fire, the insurance adjuster
requested copies of the store's most recent financial statements. The adjuster is
more likely to use the statements to - ANSWER✔✔ Estimate the inventory on
hand at the dat of the loss
Why is it so important for a corporation to adopt a code of ethics? - ANSWER✔✔
A code of ethics provides a means of actively managing ethics in the workplace
Current Assets include - ANSWER✔✔ Inventory
When accountants are able to ignore GAAP when recording some insignificant
items, they are following the - ANSWER✔✔ Materiality principle
Which one of the following best explains how unrealized capital gains have a
significant effect on a company's business operations? - ANSWER✔✔ They are a
part of the company's economic income and affect the company's net worth
The four primary types of financial statements include the balance sheet, the
statement of changes in shareholders' equity, the statement of cash flows, and
the - ANSWER✔✔ Income Statement
Home Housewares, Inc. is a retail store applying for commercial coverage with
ABC Insurance. The underwriter requested a copy of Home Houseware's more
recent financial statements. The underwriter will use the balance sheet to
,determine - ANSWER✔✔ Home Housewares financial position as of the balance
sheet date
The FASB requires organizations to report comprehensive income.
Comprehensive income includes an organization's net income and - ANSWER✔✔
Unrealized gains on securities available for sale
Which one of the following describes a section of the statement of cash flows? -
ANSWER✔✔ Cash flows from operating activities
An insurer's balance sheet lists unearned premium as - ANSWER✔✔ Liabilities
On an insurer's balance sheet, incurred but not reported (IBNR) losses are -
ANSWER✔✔ A category of reserves
CES Brokers is considering purchasing several shares of Tylo Industries to diversify
their investment portfolio. Prior to the purchase, CES would like detailed
information on long-term debt issued by Tylo that is nearing maturity. CES should
look for this information in the - ANSWER✔✔ Notes to the financial statements
Publicly traded companies must file a Form 10-K annually with the SEC. Which one
of the following best describes the information contained in the 10-K -
ANSWER✔✔ It is similar to the annual report but contains more detailed
information about the company
When evaluating the price of equities, the stock market relies on which one of the
following that is not assigned a value on the financial statements? - ANSWER✔✔
The entity's reputation int he marketplace
, Morgan Taylor is Vice President of Underwriting with Solid Rock Insurance
Company. The president of her company announced that he wants to reduce
expenses and will meet with the vice presidents of each area. In preparation for
her meeting with the president, Morgan calculated two ratios for the last five
years. First, she calculated underwriting expenses as a percentage of direct
premiums written. Second, she divided direct premiums written by the number of
underwriters. Over the last five years, underwriting expenses as a percentage of
direct premiums written have declined, while the direct premiums written per
underwriter has increased. The type of analysis Morgan performed is called -
ANSWER✔✔ Trend Analysis
Which one of the following statements about vertical analysis based on common-
size statements is true? - ANSWER✔✔ Its focus is on the relative size of each
reported item to a common item for each year considered
Which one of the following is an example of an efficiency ratio? - ANSWER✔✔
Accounts receivable turnover ratio
In financial statement analysis, leverage ratios measure which one of the
following? - ANSWER✔✔ The extent to which a company has borrowed money
An underwriter is conducting ratio analysis and determines that a company has a
current ratio of 1.2. Which one of the following adjustments to the calculation
should the underwriter make to ensure that the company is able to meet its
short-term obligations - ANSWER✔✔ Subtract the company's inventory from the
calculation
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