IC26 LIFE INSURANCE FINANCE -15
| Q1.The sub-standard asset is the one that has been classified as a Non-Performing Asset for a period of more than __. |
| 6 months |
| 12 months |
| 18 months |
| 24 months |
| 36 months |
| Q 2.____ is not a component of the financial statements of an insurance company. |
| Receipts and payments A/c |
| Statement of Changes in Equity |
| Balance Sheet |
| Revenue A/c |
| Profit and Loss A/c |
| Q3.Which is the INCORRECT statement in relation to 'Accounting Equation? |
| If a transaction is debited in one account then it is credited to another account |
| Sum total of all debit amounts and all credit amounts are equal |
| Total assets are equal to total liabilities in the Balance Sheet |
| Liabilities will have a debit balance |
| The net result of all incomes and expenses is considered as profit and is added to the capital |
| Q4.____ expenses are included in the expenses of management for an insurance company. 1. Medical fees 2. Depreciation 3. Remuneration to the auditor |
| Only 1 and 3 |
| Only 2 and 3 |
| Only 3 |
| Only 2 |
| All 1, 2 and 3 |
| Q5.The purpose of a budget is to __. 1. Establishing strategic options 2. Finalizing long-term objectives 3. Planning operations 4. Motivating the management |
| Statements 1 and 2 |
| Statements 3 and 4 |
| Statements 1 and 3 |
| All 1, 2, 3 and 4 |
| Only 2 |
| Q6.Identify the INCORRECT statement with respect to a Sales Budget - 1. It is expressed in quantitative terms as well as monetary terms 2. The volume of sales demand and price of the product influence the sales budget 3. The sales budget is the foundation of all functional budgets |
| Only 1 |
| Only 2 |
| Only 3 |
| Both 1 and 3 |
| Both 2 and 3 |
| Q7.In which of these statements a POSTING error has been made? |
| The ledger balance of ‘bad debts’ of Rs 2000 was carried forward by Neeta wrongly as Rs 3000 to the trial balance |
| Rohit is an accountant with XYZ Insurance Company. When he made an entry in the ledger, the amount was wrongly entered as Rs 1000 instead of the correct amount of Rs 2000. |
| Bharat had to make an entry on the debit side of a journal, but instead made an entry on the credit side of the journal |
| Manoj sold goods of Rs 5000, Rs 8000, and Rs 2000 to three clients. These amounts were entered correctly in the sales day book. However, when Manoj totaled the monthly sales, he came to Rs 10000 instead of Rs 15000 |
| Ashish sold goods of Rs 5000, Rs 8000, and Rs 2000 to three clients. These amounts were entered correctly in the sales day book. However, when Ashish totaled the monthly sales, he came to Rs 20000 instead of Rs 15000 |
| Q8.For a life insurance company, on what basis is the Catastrophe Reserve maintained? |
| 5% of the premium collected |
| 10% of the premium collected |
| 12.5% of the premium collected |
| 20% of the premium collected |
| As per IRDA, no such reserve need to be maintained |
| Q9.The layering stage of money laundering consists of ___. |
| Separation of proceeds from the source |
| Provision of apparent legitimacy to the funds |
| Physical disposal of cash |
| Withdrawing clean money from the system |
| Concealing the origin of the funds |
| Q10.The ' Error of Principle' is committed at which stage of an accounting transaction? |
| Posting stage |
| Balancing stage |
| Pre-recording stage |
| Preparation of the trial balance |
| Recording stage |