IC46 GENERAL INSURANCE ACCOUNTS PREPARATION - 19
| Q 1. What refers to the expected time that the asset will be productive for its expected purpose? |
| a) Useful Life |
| b) Salvage value |
| c) Asset Cost |
| d) Placed in Service |
| Q2.Which of the following statements is incorrect? |
| a) Cash flow from operating activities can be calculated by using the direct as well as the indirect method |
| b) An increase in assets in cash inflow from investing activities |
| c) A decrease in liabilities in cash outflow from investing activities |
| d) Depreciation should be added back to the book profit so as to calculate the cash flow from operating activities under the indirect method |
| Q3.Which of the following are the main objectives of accounting? |
| a) Recording of financial transactions |
| b) Assessment and analysis of financial health of the enterprise |
| c) Preparation of financial statement as per the requirements of the relevant statutes |
| d) All of the above |
| Q4.Which of the following are reasons for differences in the balances between Cash Book and Pass Book? |
| a) unpresented cheques |
| b) Standing order |
| c) Direct debits |
| d) All of the above |
| Q5.PQR Company Ltd obtained a machine for Rs.300000 with its useful life of 4 years on 01.04.2006. The replacement was to be done after 4 years by setting up a Depreciation Fund. Interest rate is 4% p.a. Calculate annual investment/ Sinking Fund? |
| a) Rs.50247 |
| b) Rs.63648 |
| c) Rs.70647 |
| d) Rs.85248 |
| Q6.The main purpose of preparing ___ is to show a summary of income and expenditure relating to fire insurance, marine insurance, and miscellaneous insurance during an accounting period. |
| a) Trading account |
| b) Balance sheet |
| c) Revenue A/c |
| d) Profit and Loss Account |
| Q7.A Reserve specifically represented by earmarked investments shall be termed as ___. |
| a) Premium |
| b) Fund |
| c) Amount |
| d) Fixed money |
| Q8.A lease is classified as a ____ if it transfers substantially all the risks and rewards incident to ownership. |
| a) Finance lease |
| b) Operating lease |
| Q9.Which concept states that an entity will continue to carry on its business activities for an indefinite period of time and it means that transactions are recorded and financial statements are prepared on an assumption that the business entity has continuity of life and will not be dissolved in the near future? |
| a) Money Measurement concept |
| b) Going Concern Concept |
| c) Business Entity Concept |
| d) Accounting period Concept |
| Q10.Claim expenses generally amount to more than __ of premium income. |
| a) 60% |
| b) 70% |
| c) 80% |
| d) 90% |