Aiaf - Study guides, Class notes & Summaries

FOB shipping point - ANSWER-Freight terms indicating that ownership of goods passes to the buyer when the shipping company accepts the goods from the seller. FOB destination - ANSWER-Freight terms indicating that ownership of goods remains with the seller until the goods reach the buyer. Net Revenue - ANSWER-a company's total revenues less any credit card or cash discounts, returns, and allowances How do credit card discounts appear in a journal entry? How do they affect cash? - ANSWER...

Financial Accounting Standards Board (FASB). - ANSWER-The primary accounting standard-setting body in the United States is the Securities and Exchange Commission (SEC) - ANSWER-the agency of the U.S. government that oversees U.S. financial markets and accounting standard-setting bodies. International Accounting Standards Board (IASB) International Financial Reporting Standards (IFRS). - ANSWER-countries outside of the United States have adopted the accounting standards convergenc...

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. Statutory Accounting Principles (SAP) The accounting principles and practices that are prescribed or permitted by an insurer's domiciliary state and that insurers must follow. The five basic assertions of accounting are that the financial information is: complete; valued correctly...

Schedule F in the NAIC Annual Statement for LIFE insurers concerns - ANSWER-Contested and compromised claims Premiums are recognized as revenue when due for - ANSWER-Traditional life and annuity contracts Which one of the following is an asset on the balance sheet of life insurers but not PC insurers - ANSWER-Contract loans Changes in life insurers' liability for future policy benefits are - ANSWER-Recognized as expenses in the period in which the changes occur Which one of the foll...

When premiums earned during any specific accounting period are less than incurred losses plus underwriting expenses incurred during the period, there will be an - ANSWER-Underwriting loss. A principal liability of insurers is the unearned premium reserve. Which one of the following statements best describes the unearned premium reserve? - ANSWER-The unearned premium reserve represents premiums paid but not yet earned Unrealized capital gains are not included in accounting income. Under sta...

A key accounting concept that an organization should be valued as if it will continue to operate indefinitely. This view is known as the - ANSWER-Going Concern Concept Statutory accounting adopts a conservative approach to valuing most assets and liabilities, resulting in a conservative statement of policyholders' surplus. This approach assigns values as if the insurer were to immediately cease operations. This approach is known as the - ANSWER-Liquidation Perspective Policyholders' surp...

Some premium payment plans may include additional payments that exceed the amount required if the premium was paid in full at the policy inception. Such additional payments that are a function of the amount of premium payment are treated under U.S. regulatory accounting as - ANSWER-Finance charges. Under U.S. regulatory accounting, the liability for extended reporting endorsements covering a definite period into the future is recorded as - ANSWER-Unearned premium reserves Retrospective pre...

The method most commonly used by PC insurers to recognize premium is - ANSWER--deferral-matching Deferral-Matching: Any prem charged on a policy before its effective date will be: - ANSWER--Deferred and not recognized as written premium until the effective date Deferral-Matching: Prem rev for a particular policy during a particular period equals: - ANSWER--writ prem during the period + beg UEP less the ending unearned prem liab Deferral-Matching: Actual Premium billing process - ANSWER-...

Non-admitted assets - ANSWER-Types of property, such as office furniture and equipment, that regulators do not allow insurers to show as assets on financial statements because these assets cannot readily be converted to cash at or near their market value Admitted Assets - ANSWER-Assets meeting minimum standards of liquidity that an insurer is allowed to report on its balance sheet in accordance with statutory accounting principles Unauthorized reinsurer - ANSWER-A reinsurer that is not lic...