IC46 GENERAL INSURANCE ACCOUNTS PREPARATION - 15

Que. 1 : Q1) Under which treaty is an automatic reinsurance whereby the ceding company is bound to part with a fixed percentage of every risk written by it and the same percentage is applied to each and every risk to determine cession in the class of insurance as reinsured?

   1.  a) Balanced portfolio

   2.  b) Facultative Reinsurance Accounting

   3.  c) Unbalanced portfolio

   4.  d) Quota Share Treaty and Reinsurance Accounting

Que. 2 : Q2) The excess price received over the par value of share, should be credited to:

   1.  a) Calls-in-advance account

   2.  b) Share Capital Account

   3.  c) Capital Reserve A/c

   4.  d) Securities Premium A/c

Que. 3 : Q3) Which of the following are limitations of financial accounting?

   1.  a) Does not provide classification of cost

   2.  b) Ignores important non-monetary information

   3.  c) Is influenced by personal judgements

   4.  d) All of the above

Que. 4 : Q4) Which column is for recording the nominal value of investments purchased, sold, bonus etc.,?

   1.  a) Cost/Capital column

   2.  b) Income/Interest Column

   3.  c) Nominal Column

   4.  d) None of these

Que. 5 : Q5) According to which of the following assumptions / concepts are transactions between the owner and business recorded separately?

   1.  a) Business entity

   2.  b) Historical cost

   3.  c) Accounting period

   4.  d) Accrual