Post Utme Greenfield University 2022 Commerce Question 5

Practice objective / multiple choice question 5 from the 2022 Post Utme Greenfield University Commerce examination.

Post Utme Greenfield University 2022 Commerce Objective / Multiple Choice
Question 5 POST_UTME_GREENFIELD_UNIVERSITY • 2022 • COMMERCE • objective

A company purchases a liability insurance policy for ₦1 million. The policy covers losses up to ₦2 million. Discuss the concept of 'indemnity' and its impact on the company's financial statements.

Answer Options

Correct Answer A. The insurance policy provides full indemnity, and the company's financial statements will show a decrease in liabilities.
B. The insurance policy provides partial indemnity, and the company's financial statements will show a decrease in liabilities.
C. The insurance policy provides no indemnity, and the company's financial statements will show an increase in liabilities.
D. The insurance policy provides full indemnity, but the company's financial statements will show no change in liabilities.
Correct Answer
A
Correct Option:
The insurance policy provides full indemnity, and the company's financial statements will show a decrease in liabilities.

About This Question

This is Post Utme Greenfield University 2022 Commerce Question 5. It is one of the objective questions from the 2022 Post Utme Greenfield University Commerce examination.

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