Winona was a person of average intelligence, education, and experience in business. She negotiated for the purchase of insurance and paid the premium. The policy was mailed to her, but before it arrived a loss was suffered. When the policy was read, Winona could not determine whether the loss was covered because the policy was too difficult to understand. The loss is:
A)not covered unless
expressly stated to be covered.
B)covered because the insurer had an obligation to word the policy in an understandable way.
C)not covered unless stated to be so in a rider.
D)covered if included in an express exception to the policy.
B
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Which of the following is an advantage of using the net price method for recording cash discounts on credit sales?
A) It eases communication with customers about their balances. B) It conservatively reflects current period sales revenue. C) It simplifies recording of sales returns and allowances. D) It requires less record keeping than the gross method.
Recording an expense to conceal fraud involves making a fictitious journal entry. A faulty journal entry is an example of which fraud symptom?
a. Accounting anomaly b. Internal control weakness c. Unusual behavior d. Analytical anomaly
Rigid operations standards and restriction on the choice of supplier characterizes _____
a. partnerships b. the professional manager system c. franchising d. the owner-manager system
A seldom used strategic approach to setting a company apart from rivals and achieving a sustainable competitive advantage is
A. outcompeting rivals on the basis of such differentiating features as higher quality, wider product selection, added performance, better service, more attractive styling, or technological superiority. B. focusing on a narrow market niche and winning a competitive edge by doing a better job than rivals of serving the special needs and tastes of buyers comprising the niche. C. striving to be the industry's low-cost provider, thereby aiming for a cost-based competitive advantage. D. developing competitively valuable resources and capabilities that rivals cannot easily match, copy, or trump with capabilities of their own. E. copying the attributes of a popular product or service.