Discuss the concept of insurable interest. Indicate the difference between a buyer's and a seller's insurable interest
Closely related to identification and title is the idea of insurable interest. Anyone buying or selling expensive goods should make certain that the goods are insured. There are some limits, though, on who may insure goods, and when. If a person buying the insurance policy lacks a real interest in the thing insured, the law regards the insurance policy as a gambling contract and will consider it void. A buyer obtains an insurable interest when the goods are identified to the contract. The seller retains an insurable interest in goods as long as she has either title to the goods or a security interest in them.
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Indicate whether the statement is true or false
When a shopper purchases new shoes, he or she expects the shoes to cover his or her feet and allow him or her to walk unobstructed. This is an example of what level in the consumer-value hierarchy?
A) pure tangible good B) basic product C) augmented product D) potential product E) generic product
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According to generally accepted accounting principles, the proper accounting treatment of the cost of developing intangible assets is to
A) carry the cost as an asset indefinitely. B) amortize the cost over five years. C) amortize the cost over a reasonable life. D) write off the cost immediately.