IC26 Mock Test Sample 18
These questions cover key concepts of insurance, accounting, and finance. Topics include income from house property, depreciation methods, budgeting, and financial reporting standards. Core principles such as trial balance accuracy, double-entry bookkeeping, and cash flow statements are highlighted. Insurance-related aspects like annuities, premiums, claims recognition, and IRDA regulations are also emphasized. The set tests understanding of financial analysis tools like ratios and ROCE, along with compliance requirements such as IFRS and accounting standards. Overall, it builds conceptual clarity in financial management, insurance operations, and regulatory frameworks essential for exams and practical applications.
1. Discuss the features of income from house property.
A. It is the only income that is charged to tax based on notional income.
B. Income from house property is always calculated based on actual rent received.
C. Repairs and maintenance expenses are not deductible when calculating income from house property.
D. Income from house property is applicable only to commercial properties.
2. Which method involves revaluing assets and writing off diminution in value as depreciation?
A. Sinking fund method
B. Production hour method
C. Sum of the years’ digit method
D. Straight-line method
3. What could be a reason for a fall in the percentage of gross profit to sales?
A. Efficient manufacturing processes
B. Reduction in price of finished goods
C. Proper inventory valuation
D. Low material costs
4. What is the primary difference between Immediate life annuity and whole life insurance?
A. Immediate life annuity provides periodic payments, while whole life insurance provides a lump sum on death
B. Immediate life annuity has premiums that cease at age 70
C. Whole life insurance requires a medical examination for the annuitant
D. Immediate life annuity requires evidence of health for the annuitant
5. What is the date for recognition of claims in the Revenue Account?
A. Date of intimation of death
B. Date of policy issuance
C. Date of maturity
D. Date of premium payment
6. What is the appropriate method for measuring defined benefit obligations?
A. Use any actuarial method
B. Use any financial assumptions
C. Use the Projected Unit Credit Method
D. Base it on the employee's age
7. Which part of the First Schedule deals with other insurance businesses?
A. Part A
B. Part B
C. Part C
D. Part D
8. What documentation should be obtained for large single premiums to establish source of funds?
A. Proof of residence
B. Income proofs
C. Government ID
D. Health records
9. What does management confirm regarding values of assets in Balance Sheet?
A. Assets are shown at their historical cost
B. Assets are shown at their market value
C. Assets are shown at their highest estimated value
D. Assets are shown at their lowest estimated value
10. How does reporting on Value Added improve employee attitude?
A. It increases salaries and bonuses
B. It reflects a broader view of company objectives and responsibilities
C. It reduces taxes for employees
D. It provides investment opportunities
11. What is the main purpose of a Cash Flow Statement?
A. To show sources and applications of funds
B. To evaluate changes in net assets
C. To provide information about cash receipts and payments
D. To assess liquidity
12. In pre-liberalisation era, what was the role of private sector?
A. Developing basic industries
B. Developing infrastructure
C. Developing co-operative and small-scale sectors
D. Developing government enterprises
13. In double-entry bookkeeping, how are transactions recorded?
A. Only debit entry
B. Only credit entry
C. Both debit and credit effects
D. Only revenue effect
14. What is the primary purpose of preparing a trial balance?
A. To prepare financial statements
B. To list ledger balances
C. To check arithmetical accuracy
D. To identify transactions
15. What does "level premium" mean?
A. Premium remains constant throughout policy term
B. Premium increases with age
C. Premium depends on investment returns
D. Premium covers only mortality
16. What is the purpose of accounting for outstanding premiums?
A. To calculate average premiums
B. To record premiums due
C. To provide for unpaid due premiums
D. To reconcile receipts
17. What is the purpose of amortizing direct expenses?
A. To reduce expenses
B. To spread expenses over years
C. To increase commission
D. To pay claims
18. Who announces roadmap for mandatory e-insurance?
A. IRDAI
B. CAMS Repository
C. Policyholders
D. Insurance companies
19. How is depreciation accounted in insurance industry?
A. Credited to depreciation account
B. Double declining method
C. Not accounted
D. Straight line method
20. What is the main intention behind IRDA regulations for financial statements?
A. Enhance disclosure quality
B. Ensure uniformity
C. Maximize profits
D. Reduce taxes
