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

The investment gains from a universal life policy usually go toward:

Paying dividends to shareholders

Increasing the cash value of the policy

Funding the insurance company's general expenses

Reducing the face value of the policy

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Verified step by step guidance

Understand the concept of a universal life insurance policy: It is a type of permanent life insurance that includes an investment component, allowing policyholders to accumulate cash value over time.

Recognize that the cash value in a universal life policy grows based on investment gains, which are typically reinvested within the policy to increase its value.

Eliminate incorrect options: Dividends to shareholders are not directly related to the policyholder's investment gains, and funding the insurance company's general expenses is not the purpose of these gains.

Clarify that reducing the face value of the policy is not a standard use of investment gains in universal life policies. The face value typically remains fixed unless the policyholder opts for changes.

Conclude that the investment gains from a universal life policy are primarily used to increase the cash value of the policy, benefiting the policyholder by providing additional financial flexibility or future withdrawal options.