IC26 - ASSOCIATE - Life Insurance Finance - 6

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Q 1. When is an asset classified as sub-standard?

When it has been non-performing for up to 12 months.

When it has been non-performing for over 12 months.

When it has been non-performing for up to 6 months.

When it has identified losses but not completely written off.

None of the above.
 
Q 2. Where should the provision for the company's contribution to the Provident Fund and Pension Fund be included in the accounts?

Under outstanding expenses.

Under accrued liabilities.

Under staff expenses.

Under amounts due to trustees.

Under contingencies.
 
Q 3. Why did the need for Accounting Standards arise?

To ensure professional expertise in accounting work

To diversify into different businesses

To regulate financial reporting in foreign territories

To determine ownership in businesses

To issue shares to the public
 
Q 4. How is the current ratio calculated?

Total assets divided by total liabilities

Current assets divided by total liabilities

Current assets divided by current liabilities

C) Current assets divided by current liabilities

Total liabilities divided by current assets
 
Q 5. What does solvency for an insurance company relate to?

Payment of premiums

Payment of claims

Investment in real estate

Creation of reserves for shareholders

Liquidity of assets
 
Q 6. When should a person apply for the allotment of a Permanent Account Number (PAN)?

Only if their total income exceeds a specific threshold

If their total income is less than the amount not chargeable to tax

If their total income is equal to the amount not chargeable to tax

If their total income exceeds the amount not chargeable to tax, and they have not been allotted a PAN

Only if they are a business owner
 
Q 7. Which of the following is one of the key features of IFRS 4?

Compliance with IFRS 4

Compliance with IFRS 3

Compliance with IFRS 9

Compliance with IFRS 15

Compliance with IFRS 16
 
Q 8. If a transaction is recorded in exactly the reverse manner, which type of error is it?

Error of commission

Casting error

Posting error

Complete reversal of the entry

The error of prime entry
 
Q 9. Who is the Convertible whole life insurance plan suitable for?

Young individuals with high current income

Individuals with low income

Parents with minor children

Those in need of lump sum benefits at periodic intervals

Young individuals with the potential for higher income in the future
 
Q 10. How are outstanding death claims typically recorded in the books of accounts?

By debiting the Outstanding Death Paid Account and crediting the Bank Account

By debiting the Outstanding Death Paid Account and crediting the Outstanding Death Account

By debiting the Bank Account and crediting the Outstanding Death Account

By debiting the Bank Account and crediting the Outstanding Death Paid Account

By debiting Outstanding Death Account and crediting Outstanding Death Paid Account
 
Q 11. Which type of investments is excluded for funds about the Group Insurance Business in the context of pension and general annuity funds?

Government securities

Corporate bonds

Real estate properties

Other investments specified under Section 27A of the Insurance Act

Equity shares
 
Q 12. What is the purpose of preparing a schedule for advances made for the purchase of cycles in the context of finalizing accounts?

To reconcile the ledger balance with the schedule.

To obtain confirmation of the balances from the employees.

To mark subsequent adjustments in the schedule.

Adjust advances before closing accounts.

To provision for outstanding expenses.
 
Q 13. According to the text, what is the fundamental dichotomy in accounting practices?

Between human and non-human capital

Between financial and non-financial assets

Between tangible and intangible assets

Between current and non-current liabilities

Between income and expenses
 
Q 14. What is the main aim of financial statements?

To provide detailed information on tools and techniques of financial analysis.

To aid in decision-making through analysis and explanations.

To present comparative financial statements.

To calculate absolute and percentage changes.

To show changes in related items over some time.
 
Q 15. Which type of insurance plans offered by LIC during the pre-liberalization era came with a savings component?

Unit-linked insurance plans

Pension plans

Participating plans (endowment plans or money-back plans)

Health plans

Term insurance plans



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