IC26 - ASSOCIATE - Life Insurance Finance - 10

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Q 1. In case the sum assured is higher than the fund value of units for a death claim, which accounts are debited?

Repurchase of unit capital account and Repurchase of unit capital premium account

Claim outstanding on death unit fund

Claim by accidental Death

Repurchase of unit premium account

Claim outstanding on accidental death – Non Unit Fund

Q 2. What is a standard asset in the context of asset classification by IRDA?

An asset with no value

An asset with significant risk

An asset with normal risk and no problems

An asset with potential for high returns

An asset with no security

Q 3. What is the purpose of extracting a schedule of outstanding claims in the context of finalizing accounts?

To include all Maturity Claims with the date of maturity on the last day of the accounting year.

To tally the totals of the schedules with payments made.

To reconcile with the Death Claims and Maturity Claims Intimation registers.

To provision for outstanding expenses.

To reconcile with the Principal Ledger.

Q 4. What role does the Institute of Chartered Accountants of India (ICAI) play in formulating Accounting Standards?

It sets up the Accounting Standard Board (ASB)

It consults business bodies for inputs on standards

It issues shares to the public

It determines ownership in businesses

It regulates financial reporting in foreign territories

Q 5. Which category of financial ratios helps in assessing a company's ability to meet its debt obligations?

Cash position

Profitability

Liquidity

Capital Structure

Turnover

Q 6. What is the key characteristic of open-ended mutual funds?

They have a fixed maturity period

They are open for subscription for a short period

Investors can buy or sell units at any time at the prevailing NAV

They are listed on stock exchanges for trading

They primarily invest in equities

Q 7. What happens if tax is deposited without quoting the PAN?

The tax will be refunded

The tax will be credited to the taxpayer's account

The tax credit will not be given

The tax will be treated as a charitable donation

The tax will be doubled

Q 8. What is the objective of moving towards fair value accounting under IFRS 4?

To increase historical accounting

To decrease transparency in financial reporting

To record assets and liabilities at the amount for which they could be exchanged or settled

To reduce financial statement comparability

None of the above

Q 9. What type of error cannot be detected by preparing a trial balance?

Error of omission to record

Error of commission

Error of principle

Compensating error

Errors of prime entry

Q 10. What is a characteristic of Guaranteed annuity?

Payments continue for a fixed number of years whether the annuitant is alive or dead

Medical examination is required for such contract

Premiums are returned without interest if the annuitant dies before annuity starts

Payments depend on the continued existence of the annuitant

Payments are made during the subsequent life time of an annuitant

Q 11. When are old and outstanding claims written back to the revenue account?

When the claimant's address is not traceable

When the policyholder surrenders the policy

When the insured's death claim is repudiated

When the claim discharge forms are not received

When the annuitant dies before annuity payments begin

Q 12. What is the maximum allowable percentage of total investment in "Other Investments" for unit-linked business funds as per IRDA regulations?

10%

15%

25%

35%

50%

Q 13. What is the purpose of a "Provision for Outstanding Accounts and Bills of Capital Nature" in accounting?

To record outstanding expenses.

To record outstanding commission.

To provide for doubtful debts on accounts and bills of capital nature.

To calculate outstanding interest.

To record accrued salaries.

Q 14. How is the value of human resources computed using the Lev and Schwartz model?

Based on the market value of employee skills and expertise

Based on the present value of future earnings of employees

Based on the historical cost of employee compensation

Based on the inflation-adjusted cost of capital

Based on the total number of employees in the organization

Q 15. What are the three important things that must be known before the analysis of financial statements?

Purpose of the user, analysis of trends, and method of conversion.

Part of financial statements, method of analysis, and index year for comparison.

Purpose of the user, part of financial statements, and method or technique for analysis.

Part of financial statements, comparative financial statements, and absolute amount changes.

Method of analysis, calculation of index numbers, and percentage changes.



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