Answer: e
Page(s): 10
LO: 2
AACSB: Analytic
QD: Hard
Rationale: Alternatives a, b, and d would miss the target market. Alternative c would
reach many people not in the target market and thus is too costly per exposure. Alternative e is
the most effective
85.
_ is the most important work-related value for Protestants.
(p. 104)
A. Employer effectiveness
B. Consideration
C. ontinuity
C
D. ocial responsibility
S
E. Professional challenge
Religious beliefs and practices can have a profound effect on cross-cul
1-131 RELATIONSHIP MARKETING
APPLICATION
A business traveler joined the Starwood Preferred Guest Program in order to earn points each
time he stayed overnight in a Westin or Sheraton hotel. Once he has accumulated enough points,
he can trade his points in
90.
Based on Hofstede's research, _ reflects the extent to which people prefer
(p. 106)
structured versus unstructured situations.
A. power distance
B. individualism-collectivism
C. masculinity-femininity
D. uncertainty avoidance
E. long-term versus shor
Investment and Universal Life-Type Contracts
For investment contracts (including deferred annuities) and universal life-type policies, the
amounts collected from policyholders are considered deposits and are not included in revenue.
Instead, general accou
2.3 Revenue and Related Accruals
This section describes revenue recognition policies and revenue-related balance sheet accruals.
Revenue Recognition Policies
The accounting treatment for traditional insurance policies depends on their duration, with
diffe
Item
Insurance
contract
benefit
Contract
boundary
Current US GAAP
Indemnification
IASBs Exposure Draft
Compensation (broader notion
than indemnification)
FASBs Preliminary Views
Same as IASB
The period over which the
contract is expected to
remain in
Item
Composite
margin
Current US GAAP
Concept does not exist
IASBs Exposure Draft
Concept does not exist
IASBs risk adjustment and
residual margin building blocks,
whose total at inception is equal
to the FASBs composite margin,
are accounted for diffe
Item
Day one gain
Day one loss
Deferred
Acquisition
Costs (DAC)
DAC
reporting
Income
statement
presentation
Current US GAAP
Deferred
For short duration
contracts, the day one gain
is generally included in the
unearned premiums
liability
For long durati
Item
Shortduration
contracts definition
Shortduration
contracts
accounting
Current US GAAP
The period of short
duration is not explicitly
defined, but in practice it is
usually one year or less
Some similarities to the
IASB proposal, including:
- Proje
2.4 Deferred Policy Acquisition Costs and Related Expenses
Deferred policy acquisition costs (DAC) are incurred in connection with acquiring or renewing
insurance policies. They are comprised of the costs necessary to sell and issue a policy such as
broke
liability instead of recognizing DAC impairment. The calculation of premium deficiency for
long-duration contracts is discussed in the Section 2.3.
The guidance on deferred acquisition costs under IFRS (IFRS 4) is limited and is subject
to significant jud
2.5 Reinsurance
Reinsurance contracts that indemnify the ceding enterprise against loss or liability relating to
insurance risk are accounted for using reinsurance accounting. Other contracts with reinsurers
are generally accounted for as deposits. Reinsu
For short duration reinsurance contracts, prepaid reinsurance premiums are amortized
over the remaining contract period in proportion to the amount of insurance protection provided.
If the total cost of a reinsurance contract is subject to adjustment that
fair value of in-force contracts in a life insurance company acquisition, that is, the value of the
right to receive future cash flows from the business in-force. VOBA is based on actuarially
determined projections, by each block of business, of future po
guaranteed annuity options (GAOs) and guaranteed minimum death benefits (GMDBs), are
excluded from this requirement.
Additional recognition requirements of IFRS 4 include: (1) prohibition on recognizing
provisions for possible claims under contracts that
a. match its principal competitors highlighters prices.
b. charge $3.99 to $4.99 for a single Post-it Flag Highlighter or $5.99 to $7.99 for a three-pack,
which would give a reasonable bookstore price to students and an acceptable profit to
distributors a
3Ms place strategy made it convenient for _ to buy Post-it Flag Highlighters.
a. everyone
b. college students only
c. office workers only
d. college students and office workers
e. teachers
Answer: a
Page(s): 13-15
LO: 4
AACSB: Analytic
QD: Hard
Rationale:
1-141 ERAS OF U.S. BUSINESS HISTORY: PRODUCTION
KNOWLEDGE
With respect to the history of American business, the _ era covered the early years of
the United States up until the 1920s.
a. production
b. sales
c. marketing concept
d. customer relationship
e.
1-143 ERAS OF U.S. BUSINESS HISTORY: SALES
KNOWLEDGE
With respect to the history of American business, the _ era covered the years from the
1920s to the 1960s.
a. production
b. sales
c. marketing concept
d. customer relationship
e. market orientation
Answ
1-147 ERAS OF U.S. BUSINESS HISTORY: SALES
APPLICATION
In the movie Tin Men, two rival salesmen engaged in a variety of dishonest and unethical
practices in order to sell aluminum siding to homeowners in 1963. Their job was difficult, in part,
because the
Rationale: In the sales era from the 1920s to the 1960s, manufacturers found they could produce
more goods than buyers could consume. Competition grew. The usual solution was to hire more
salespeople to find new buyers. See Figure 1-5 in the textbook.
1-1
1-151 ERAS OF U.S. BUSINESS HISTORY: MARKETING CONCEPT
KNOWLEDGE
With respect to the history of American business, the _ era began in the late 1950s
when marketing became the motivating force among many firms.
a. production
b. sales
c. customer relationsh
a. the production era
b. the sales era
c. the market orientation era
d. the marketing concept era
e. the societal marketing era
Answer: d
Page(s): 15-16
LO: 5
AACSB: Analytic
QD: Medium
Rationale: Starting in the late 1950s, marketing became the motivatin
a. consumer-oriented
b. production-oriented
c. sales-oriented
d. society-oriented
e. competition-oriented
Answer: a
Page(s): 15-16
LO: 5
AACSB: Analytic
QD: Medium
Rationale: The marketing concept is the idea that an organization should strive to satisfy
c. the view that organizations should satisfy the needs of consumers in a way that provides for
societys well-being.
d. the process of identifying prospective buyers, understanding them intimately, and developing
favorable long-term perceptions of the org
a. production orientation.
b. sales orientation.
c. customer relationship orientation.
d. service orientation.
e. market orientation.
Answer: e
Page(s): 15
LO: 5
AACSB: Analytic
QD: Medium
Rationale: Firms such as General Electric, Marriott, and Facebook
An organization that focuses its efforts on: (1) continuously collecting information about
customers needs; (2) sharing this information across departments; and (3) using it to create
customer value is said to have a
a. product orientation.
b. customer or
b. the orientation of an organization that focuses its efforts on: (1) continuously collecting
information about customers needs; (2) sharing this information across departments; and (3)
using it to create customer value.
c. the belief that the buying env
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