IC26 - ASSOCIATE - Life Insurance Finance - 8

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Q 1. What type of assets are subject to depreciation in insurance accounting?

Cash and cash equivalents

Intangible assets

Fixed assets like furniture, office equipment, and vehicles

Current liabilities

None of the above

Q 2. What does the Management Report include regarding claim settlement time?

Certification of the total number of claims filed

Declaration of the average claim amount

Disclosure of trends in average claim settlement time over the preceding five years

Certification of the total amount paid for claims

Verification of the claims processing software used

Q 3. What are some useful diagnostic and predictive tools provided by VA based ratios?

VA / Payroll, Taxation / VA, VA / Sales, etc.

Sales revenue, Operating expenses, Personnel costs, etc.

Gross Value Added, Net Value Added, Operating profit, etc.

Depreciation, Dividend, Corporate tax, etc.

Direct income, Investment income, Extraordinary income, etc.

Q 4. Where should an enterprise disclose the amount of long-term employee benefits and defined contribution plans according to the Standard?

A. Balance Sheet

B. Statement of Cash Flows

C. Profit and Loss Account

D. In the accounting policy description

E. None of the above

Q 5. What is the role of financial institutions in providing capital for infrastructure projects and large industries?

Regulating the financial market

Managing private investments

Raising initial capital

Overseeing government projects

Promoting small-scale industries

Q 6. What is the tax rate for profits and gains of life insurance business according to section 115B of the Income Tax Act 1961?

10%

12.50%

8%

12%

None of the above

Q 7. What is the purpose of the Free Look Period in a Life Insurance Policy?

To allow customers to make changes to their policy details.

To provide a period for customers to ask questions about their policy.

To offer a period during which customers can terminate the policy without charges or fines.

To allow beneficiaries to claim death benefits.

To provide a period for customers to review the policy documents.

Q 8. Which step is NOT involved in the preparation of a trial balance?

Balancing all ledger accounts in the general ledger

Calculating the totals of the balances in debtors and creditors ledger accounts

Writing the names of all accounts in the trial balance

Totaling both the debit and credit columns in the trial balance

Q 9. What is the purpose of Actuarial Valuation in the insurance industry?

To estimate policy liabilities and compare them with assets.

To calculate future premiums receivable.

To determine the policy's surrender value.

To assess the policy's paid-up value.

To establish premium loadings.

Q 10. What entry is recorded when a proposer purchases a ULIP policy and submits application money?

Bank Account Dr. To Premium Deposit (Proposal) / Application Money

First Year Premium / Renewal Premium Dr. To Bank A/c

Unit Capital A/c Dr. To Unit Capital Premium A/c

Proposal Deposit (Premium) / Application Money Dr. To Bank A/c

Unit Capital Premium A/c Dr. To Premium Allocation Charges

Q 11. How are direct expenses like commission and medical expenses recorded in accounting entries?

As credits to the respective expense accounts

As debits to the respective expense accounts

As debits to income accounts

As credits to income accounts

As debits to the bank account

Q 12. What does the Management certify regarding the values in the Balance Sheet?

How values have been arrived at for investments and stocks

How values have been arrived at for liabilities

How values have been arrived at for revenue

How values have been arrived at for expenses

How values have been arrived at for assets

Q 13. How is Value Added Statement built on basic conceptual foundations?

It is based on balance sheets and income statements

It follows a unique conceptual framework

It emphasizes personnel costs over other expenses

It disregards the concept of going concern

It ignores the concept of substance over form

Q 14. What is a Business Segment according to Accounting Standard 17?

A. A component of an enterprise providing products or services in a particular economic environment

B. A component of an enterprise providing a distinguishable product or service with different risks and returns

C. A segment providing financial services

D. A segment involved in geographical operations

E. None of the above

Q 15. Which financial institutions were established by the Government of India to provide long-term funds for both government and private projects?

IDBI, IFCI, LIC, GIC, UTI, ICICI

SAIL, BHEL, ONGC, NTPC

SEBI, RBI, AMFI

NSDL, CSDL

BSE, NSE



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