IC46 GENERAL INSURANCE ACCOUNTS PREPARATION - 04
| Q1.On which basis where it is possible to determine the underwriting result of an insurance business written in an accounting period at the end of that period? |
| a) Annual Basis of accounting |
| b) Fund Basis of accounting |
| Q2.Capital, drawings, and individuals are examples of which account? |
| a) Personal accounts |
| b) Nominal accounts |
| c) Real accounts |
| d) None of these |
| Q3.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 Net Earnings Ratio? |
| a) 9.65% |
| b) 14.25% |
| c) 28.51% |
| d) 39.68% |
| Q4.Which of the following concepts states that a business entity will not be closed down in the near future? |
| a) Money measurement concept |
| b) Going concern concept |
| c) Accounting cost concept |
| d) Realization concept |
| Q5.Investment income, Rent, and Commission are examples of which account? |
| a) Personal accounts |
| b) Nominal accounts |
| c) Real accounts |
| d) None of these |
| Q6.Records of individuals' ledger accounts are kept in a book called Ledger. Say whether True or False. |
| a) True |
| b) False |
| Q7.What gives rise to an item of an asset usually enhancing earning capacity? |
| a) Capital expenditure |
| b) Capital receipt |
| c) Revenue expenditure |
| d) Revenue receipt |
| Q8.What is referred to as a condition or situation, the ultimate outcome of which, gain or loss, will be known or determined only on the occurrence, or non-occurrence, of one or more uncertain and anticipated future events? |
| a) Contingencies |
| b) Balance sheet |
| c) Disclosure |
| d) Depreciation |
| Q9.Following is one of the fundamental accounting assumptions as per Accounting Stand ard-I |
| a) Prudence |
| b) Substance over form |
| c) Materiality |
| d) Consistency |
| Q10.Which is one based on many similar and equivalent risks, balancing of portfolio losses collectively and distributing proportionately as per terms of the treaty? |
| a) Reinsurance accounting |
| b) Management accounting |
| c) Unbalanced portfolio |
| d) Balanced portfolio |