Question

How should acquisition costs be accounted for?

a.

Acquisition costs should be placed in the period in which they are incurred

b.

Acquisition costs should be placed at the end of the financial year

c.

Acquisition costs should not be accounted for

d.

Acquisition costs should be capitalized

Posted under IC 14 Regulations of Insurance Business

Answer: (a).Acquisition costs should be placed in the period in which they are incurred Explanation:Acquisition costs should be placed in the period in which they are incurred, according to insurance accounting standards.

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