IC26 LIFE INSURANCE FINANCE -10
| Q1.Identify which of the below-listed activities are necessary for a budget: 1. Evaluation of the performance 2. Communication 3. Remedial action |
| Only 2 |
| Only 3 |
| Both 1 and 2 |
| All 1,2 and 3 |
| Both 1 and 3 |
| Q2.Based on IAS 17 which segments will be considered reportable if a company has three segments A, B, and C which account for 50%, 20%, and 8% of the total revenue respectively. |
| Only A |
| Only B |
| Only C |
| All A, B, and C |
| Only A and B |
| Q3.Select which of the given statements hold true for a life insurance company? 1. The acquisition cost for acquiring new business will be expensed in the period in which they are incurred 2. The Cash flow statement has to be prepared only under indirect method 3. Segment reporting is applicable to all insurance companies |
| Only statement 1 is correct |
| Only statement 2 is correct |
| Only statement 3 is correct |
| Only statements 1 and 2 are correct |
| Only statements 1 and 3 are correct |
| Q4.While recording a transaction the cost of goods purchased by cash was wrongly debited to the sales account and credited to the cash book. The rectification entry that needs to be passed is ____ |
| Dr. Purchase Account, Cr Sales Account |
| Dr. Bank Account, Cr Cash Account |
| Dr. Purchase Account, Cr Suspense Account |
| Dr. Cashbook, Cr Sales Account |
| Dr. Purchase Account, Cr Cashbook |
| Q5.Cash outflow arising from operating activities includes which of the following – |
| Sale of properties that have been in possession for a long period |
| Payments made to policyholders such as maturity claim |
| Payment to buy debentures |
| Payment to buy warrants, shares, etc. |
| Loans are given to companies |
| Q6.While drawing the statement of cash flow, which of the following will be included under the head of financing activities? 1. The bonus paid to policyholders 2. Repayment of borrowings 3. Issue of share capital 4. Money received from the sale of investments |
| Only 4 |
| Both 1 and 3 |
| Both 2 and 4 |
| Both 2 and 3 |
| Both 1 and 4 |
| Q 7. The right definition of Liability ratio is : |
| The ability to convert an asset to cash within a short time for a payout of short term liabilities |
| The ability to convert an asset to cash within a short time for the payout of long term liabilities |
| The ability to convert any cash to an asset within a long time for the payout of short term liabilities |
| The ability to convert any cash to an asset within a short time for a payout of long term liabilities |
| The ability to convert any cash to an asset within a short time to pay out of short term liabilities |
| Q 8. What are those mutual funds known as which invest a major portion of their money in Government Securities (G Secs) like Treasury Bills and/or Long Dated securities? |
| Money market schemes |
| Open-ended schemes |
| Balanced schemes |
| Debt schemes |
| Gilt schemes |
| Q9.In a balance sheet, what refers to everything the entity owes to the owners/shareholders and this includes the initial capital contributed by the owners and the profits generated by the business. |
| Equity |
| Stake |
| Gross Product |
| Liabilities |
| Assets |
| Q10.The 'Gross Value Added' (GVA) is affected by __. |
| Corporate Social Responsibility (CSR) Activities |
| The interest which is payable for the year |
| Money spent on advertising |
| Both 1 and 2 |
| Both 2 and 3 |