1. a. What do you mean by Invoice price?
b. What do you mean by inter-branch transactions?
c. What is under insurance?
d. What is average clause? Why is it included in fire claims?
e. What is average clause in fire policy?
f. State any two advantages of convention.
g. State any two objectives of hire purchase system.
Answer (1)
a. What do you mean by Invoice price?
The invoice price refers to the amount the buyer pays to the seller for goods or services. It includes the cost of the product, shipping, handling fees, and sometimes taxes, without any discounts. This is the initial amount that appears on the invoice when the transaction is processed.
b. What do you mean by inter-branch transactions?
Inter-branch transactions are exchanges of goods, services, or financial resources between branches of the same company or organization. These transactions are often internal and help in tracking business performance across different branches, facilitating resource allocation, and financial reporting.
c. What is under insurance?
Under insurance occurs when a property or asset is insured for less than its actual value. This can lead to substantial financial losses for the insured if a claim is made, as the payout will be insufficient to fully cover the loss. It's important for policyholders to accurately assess the value of their assets to avoid this issue.
d. What is average clause? Why is it included in fire claims?
An average clause in insurance is a provision that reduces the payout on a claim if the insured property is underinsured. It's included in fire claims to ensure policyholders insure their properties at the correct value. If a property is underinsured, the average clause reduces the claim amount proportionately.
e. What is average clause in fire policy?
The average clause in a fire policy dictates that if the insured item is underinsured, the policyholder is responsible for a proportion of the loss. It enforces the correct valuation of insured properties by making sure that claims are reduced if the property is not fully insured.
f. State any two advantages of convention.
Standardization: Conventions provide a set of guidelines that standardize processes and practices, making it easier for businesses and individuals to interact.
Predictability: They offer a predictable framework that can be relied upon, which helps in planning and decision-making.
g. State any two objectives of hire purchase system.
Facilitating Asset Acquisition: The hire purchase system allows individuals or businesses to acquire assets (like machinery or vehicles) without needing the full amount upfront, spreading the cost over time.
Boosting Trade and Commerce: By making expensive goods more accessible, hire purchase aids in increasing sales and boosting economic activity.
