IC46 GENERAL INSURANCE ACCOUNTS PREPARATION - 01
| Q1.When net claims ratios of the insurer exceed specified limits in a financial year, ____ becomes operational. |
| a) Quota share |
| b) Excess of the loss ratio |
| c) Pool arrangement |
| d) Treaties |
| Q2.What refers to the original value of your asset or the depreciable cost; the necessary amount expended to get an asset ready for its intended use? |
| a) Useful Life |
| b) Salvage value |
| c) Asset Cost |
| d) Placed in Service |
| Q3.What refers to the agreements between the ceding company(primary insurer) and the reinsurer containing terms and conditions on which risks shall be reinsured? |
| a) Treaties |
| b) Facultative reinsurance |
| c) Surplus reinsurance |
| d) Excess of the loss ratio |
| Q4.Not more than ___ of reinsurance premium is to be placed with one re-insurer. |
| a) 10% |
| b) 20% |
| c) 30% |
| d) 40% |
| Q 5. Transactions are recorded first in the primary books of accounts known as __ including Cash Book and then transferred to Ledgers in the form of Ledger Accounts. |
| a) Transactions |
| b) Journals |
| c) Ledger |
| d) None of these |
| Q6.The auditor shall express an opinion on i) True and Fair view of the financial position of the entity ii) The compliance of the terms and conditions of registration by the insurer iii) Selection of appropriate accounting policies by the insurer iv) The verification of cash balances v) Preparation of financial statements in accordance with regulations vi) Valuation of investments in accordance with regulations vii) The review of the management report |
| a) (i) , (ii) , (iv) and (v) |
| b) (i) , (iii) , (v) and (vi) |
| c) (ii) , (iv) , (vi) and (vii) |
| d) (iii) , (v) , (vi) and (vii) |
| Q7.Which of the following statements related to the recording of journal entries is correct? |
| a) For any given journal entry, credits must exceed debits |
| b) Usually, credits are recorded on the left side and debits on the right side |
| c) The chart of accounts discloses the amount taken to the debit and credit of the affected accounts |
| d) Journalisation is the process of converting transactions and events into a debit-credit format |
| Q8.The Fire Department of ABC General Insurance Co Ltd gives the following details for 2009-10: i) Earned Premium is Rs.600 crore ii) Incurred Claim Net Rs.380 crore iii) Commission Net Rs.50 crore iv) Operating Expenses Rs.150 crore v) Investment Income on Policyholders' Fund(fire) Rs.180 crore. Compute Revenue A/c surplus for Fire Department. |
| a) 100 crores |
| b) 200 crores |
| c) 300 crores |
| d) 400 crores |
| Q9. An _____ is a lease other than a finance lease. |
| a) Finance lease |
| b) Consideration lease |
| c) Operating lease |
| d) None of these |
| Q10.The Securities Premium Account is shown under |
| a) Share capital |
| b) Current liabilities |
| c) Current Assets |
| d) Reserves and Surplus |