IC46 GENERAL INSURANCE ACCOUNTS PREPARATION - 02
| Q 1. A machine purchased for Rs.30000 on 01.04.2005 is expected to have a life of two years. The estimated salvage/scrap value after the expiry of two years is Rs.5,000. Depreciation is considered under the Straight Line Method. Calculate the rate of depreciation? |
| a) 35.62% p.a |
| b) 41.66% p.a |
| c) 58.26% p.a |
| d) 62.33% p.a |
| Q2.Which of the following options contains matters found in Long-form reports(FAR)? i) Cases of cheques dishonored where the relevant risks covered have not been canceled from inception ii) Status of large Outstand ing claims--- with cause-wise and year-wise analysis Comments on the adequacy of provision made for all outstanding claims at the year-end iii) Certification that all the dues payable to the statutory authorities have been duly paid iv) Confirmation that the required solvency margins have been maintained v) Adequacy of Internal Audit and Control System. |
| a) (ii) ,(iii) ,(iv) and (v) |
| b) (iii) ,(iv) ,(v) and (vi) |
| c) (i) ,(ii) ,(iii) and (vi) |
| d) (i) ,(iii) ,(v) and (vi) |
| Q3.Which underwriting provides for a definite commitment of the underwriters to accept a specified number of shares irrespective of the number of shares subscribed by the public? |
| a) Firm underwriting |
| b) Partial underwriting |
| c) Marked underwriting |
| d) Complete underwriting |
| Q4.The amount of retention of a Direct Insurer is also referred to as: |
| a) Cession |
| b) Retrocession |
| c) Line |
| d) None of the above |
| Q5.Identify the method of charging depreciation, under which the amount of depreciation charged every year remains constant. (i) Reducing Balance Method (ii) Revaluation Method (iii) Straight Line Method |
| a) (i) and (ii) |
| b) (ii) and (iii) |
| c) (i) and (iii) |
| d) Only (iii) |
| Q6.__ containing the closing balances of assets and liabilities at the close of the year shows the state of affairs at the end of the accounting year. |
| a) Trading account |
| b) Balance sheet |
| c) Revenue A/c |
| d) Profit and Loss Account |
| Q7.Section I of Schedule deals with: |
| a) Remuneration payable by companies having profits |
| b) Remuneration payable by companies having no profits |
| Q8.The financial statements prepared by the management must adhere to the provisions of i) The Companies Act, 2013 ii) The Insurance Laws(Amendment) Act 2015 iii) The IRDAI(preparation of financial statements and audit report) regulations 2002 iv) The applicable accounting standards passed by the ICAI. |
| a) (i) , (iii) and (iv) |
| b) (i) , (ii) and (iii) |
| c) (ii) , (iii) and (iv) |
| d) (i) to (iv) |
| Q9.Which of the following statements is correct about Current investments? Statement 1: Readily realizable and intended to hold for not more than one year Statement 2: Carried in the financial statements at lower cost and fair value. |
| a) Statement 1 is correct |
| b) Statement 2 is correct |
| c) Both Statements 1 and 2 are correct |
| d) Both Statements 1 and 2 are wrong |
| Q10.From the above date, compute the following accounting ratios for analysis of financial statements vis-a-vis performance analysis for 2005-06 ABC General insurance company. Calculate Technical Reserves to Net Premium? |
| a) 150.24% |
| b) 166.25% |
| c) 177.31% |
| d) 193.45% |