Multiple Choice
Which of the following is NOT considered a type of accounting?
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1. Introduction to Accounting
Types of Accounting
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A person would look into buying life insurance for all of the following reasons except:
A
To accumulate savings for retirement
B
To comply with mandatory business accounting standards
C
To cover outstanding debts and funeral expenses
D
To provide financial security for dependents after their death
Verified step by step guidance1
Understand the purpose of life insurance: Life insurance is primarily designed to provide financial security for dependents, cover outstanding debts, and funeral expenses, and in some cases, accumulate savings for retirement.
Analyze the options provided in the question: Review each reason listed and determine whether it aligns with the primary purposes of life insurance.
Identify the incorrect option: Consider whether 'To comply with mandatory business accounting standards' is relevant to the purpose of life insurance. Note that life insurance is not related to business accounting standards, which are regulatory requirements for financial reporting.
Compare the incorrect option with the other valid reasons: Ensure that the other options, such as providing financial security for dependents, covering debts, and accumulating savings, align with the typical uses of life insurance.
Conclude that the correct answer is the option that does not align with the primary purposes of life insurance, which is 'To comply with mandatory business accounting standards.'
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