Multiple Choice
Which type of business sells primarily to retailers and provides a full range of services?
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1. Introduction to Accounting
Types of Accounting
Struggling with Financial Accounting?
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An insurance policy is an example of which of the following types of property?
A
Personal property
B
Real property
C
Intangible property
D
Tangible property
Verified step by step guidance1
Understand the concept of property types: Property can be classified into tangible property (physical assets like buildings, machinery, etc.), intangible property (non-physical assets like patents, trademarks, or insurance policies), personal property (movable assets like furniture, vehicles, etc.), and real property (immovable assets like land and buildings).
Identify the nature of an insurance policy: An insurance policy does not have a physical form that can be touched or moved. It represents a contractual right or benefit, making it non-physical.
Classify the insurance policy: Since the insurance policy is non-physical and represents a legal right or benefit, it falls under the category of intangible property.
Compare with other property types: Tangible property refers to physical assets, which an insurance policy is not. Real property refers to immovable assets like land, which an insurance policy is not. Personal property refers to movable physical assets, which an insurance policy is not.
Conclude the classification: Based on the analysis, an insurance policy is correctly classified as intangible property.
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