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

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