Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Which of the following accurately describes business interruption insurance?

It insures physical assets such as buildings and equipment against damage or theft.

It compensates a business for lost income and operating expenses during periods when operations are halted due to a covered event.

It protects investors from losses due to fraudulent financial reporting by investee companies.

It provides coverage for losses resulting from declines in the market value of investment securities.

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Verified step by step guidance

Step 1: Understand the concept of business interruption insurance. Business interruption insurance is designed to compensate a business for lost income and operating expenses during periods when operations are halted due to a covered event, such as a natural disaster or fire.

Step 2: Analyze the options provided in the question. The first option mentions insuring physical assets, which is typically covered under property insurance, not business interruption insurance.

Step 3: Evaluate the second option. It correctly describes business interruption insurance as compensating a business for lost income and operating expenses during halted operations due to a covered event.

Step 4: Review the third option. It refers to protecting investors from losses due to fraudulent financial reporting, which is unrelated to business interruption insurance and more aligned with financial fraud insurance or similar policies.

Step 5: Assess the fourth option. It discusses coverage for losses from declines in market value of investment securities, which is not the purpose of business interruption insurance. This type of coverage would fall under investment or market risk insurance.