IC26 LIFE INSURANCE FINANCE - 08
| Q1.A company bought equipment for Rs 25000 on 1st Jan 2014. The expected life of this equipment is 5 years the residual value is determined at Rs 3500. If depreciation is charged at 30% on the Reducing Balance method, what will be the carrying amount of this equipment at the end of two years? |
| Rs. 8950 |
| Rs. 13500 |
| Rs. 16320 |
| Rs. 12250 |
| Rs. 9575 |
| Q2.Select which of the given options can be selected as a money market instrument? |
| Collateralized Borrowing and Lending Obligations |
| Treasury bill |
| G Sec |
| Both 1 and 2 |
| Both 2 and 3 |
| Q3.Which of the following budgets gives a summary of all the functional budgets and the projected profit and loss account? |
| Financial Budget |
| Capital budget |
| Fixed budget |
| Master budget |
| Variable budget |
| Q4.In insurance accounting terminology, CASTING means ___. |
| Placing in the right accounting head |
| Rounding up |
| Adding up |
| Transposing |
| Hiding |
| Q5.Based on the entries in the Receipts and Payments account, the amount of salaries paid appears as Rs 258000. The outstanding salaries at the beginning of the year were Rs 35000 and at the end of the year was Rs 36500. The number of salaries to be shown under the head of income and expenditure account is ___. |
| Rs. 259500 |
| Rs. 256500 |
| Rs. 256500 |
| Rs. 329500 |
| Rs. 275800 |
| Q6.The purpose of a budget is to ____. 1. Motivating the management 2. Finalizing long-term objectives 3. Planning operations 4. Establishing strategic options |
| Only statement 1 |
| Statements 1 and 2 |
| Statements 1 and 3 |
| Statements 2 and 3 |
| Statements 3 and 4 |
| Q7.Mehta Trading purchases the majority of its goods on credit with a list price of Rs 25000. Owing to the long trading history the supplier gives a trade discount of 10% and also offers a cash discount of 5% for payment within 30 days. What is the amount Mehta Trading will debit to his purchase account? |
| Rs. 24060 |
| Rs. 23550 |
| Rs. 22700 |
| Rs. 21375 |
| Rs. 20650 |
| Q8.With respect to Balanced Fund which of the following is true - |
| It invests mostly in stocks of companies that have a balanced view |
| It invests mostly in Treasury bonds |
| This fund is for investors who want to take moderate risk |
| This fund maintains surplus cash |
| It invests mostly in Government securities |
| Q9.Which journal entry would you pass to record the accounting for year-end stock of policy stamps? |
| Stock A/c To Other outstanding expenses A/c |
| Stamps on hand (Policy Stamps) A/c To Policy Stamps A/c |
| Policy Stamps A/c To Other outstanding expenses A/c |
| Policy Stamps A/c To cash A/c |
| Other outstanding expenses A/c To Policy Stamps A/c |
| Q10.With a net income of Rs 500000, Mercury Ltd had paid income taxes of Rs 50000 and had incurred interest expenses of Rs 19000. Given this information calculate the Debt service coverage ratio of Mercury ltd. |
| 29.94 |
| 15.77 |
| 20.52 |
| 11.69 |
| 32.18 |