IC26 Mock Test Sample 19
These questions focus on accounting standards, insurance operations, and financial concepts. Topics include AS 15 employee benefits, fund flow statements, KYC norms, and double-entry systems. Key insurance concepts such as mortality tables, ULIPs, annuities, and premium structures are covered. Financial reporting elements like final accounts and Net Value Added are also highlighted. Regulatory aspects such as Section 115B and due diligence practices are included. The set emphasizes understanding of expenses, investment valuation, and taxation. Overall, it strengthens conceptual clarity in accounting principles, insurance mechanisms, and compliance requirements, making it useful for professional exams and practical financial decision-making.
1. When should profit-sharing and bonuses be recognized under AS 15?
A. Within six months of the end of the period
B. Within twelve months of the end of the period
C. Within two years of the end of the period
D. Whenever the company decides
2. When should past service cost be recognized under a defined benefit plan?
A. Over the entire service period
B. Only if it results in additional benefits
C. Immediately
D. After the employee retires
3. In a Funds Flow Statement, what is considered an application of funds?
A. Increase in reserve fund
B. Increase in long term loans
C. Increase in current liabilities
D. Decrease in assets
4. According to Rule 1 of Section 115B, how are profits from life insurance business computed?
A. Combined with other business profits
B. Excluded from overall profits
C. Computed separately from other business profits
D. Taxed at a flat rate
5. What is the purpose of applying KYC norms in a risk-based approach?
A. To identify high-risk customers
B. To verify source of funds
C. To understand risks in customer and product profile
D. To conduct independent enquiries
6. What is the distinguishing feature of the Double Entry system?
A. Receipt and disbursement
B. Purchase and payment
C. Debit and credit
D. Giver and receiver
7. What is the role of mortality tables in life insurance?
A. Determining premium based on age
B. Calculating investment returns
C. Estimating future losses
D. Tracking past claims
8. What measure helps establish 'source of funds' in due diligence?
A. Independent enquiries
B. Referring to database
C. Verifying source of income
D. Categorizing risk
9. Why is advance deposit collected with proposal form?
A. To cover administrative expenses
B. To create suspense account
C. To ensure commitment
D. To hold funds until acceptance/rejection
10. Which is a direct expense of ULIP?
A. Management fees
B. Incentives to marketing staff
C. Training expenses
D. Repairs and maintenance
11. What do final accounts include?
A. Balance sheet and marketing report
B. Profit & loss and sales report
C. Trading, P&L account and balance sheet
D. Cash flow and inventory list
12. Which formula computes Net Value Added (NVA)?
A. NVA = S + B + Dep
B. NVA = S - B + Dep
C. NVA = S - B - Dep
D. NVA = S + B
13. Which books are used for reconciliation and control accounts?
A. Cash and bank book
B. IBNR book
C. Deposit adjustment book
D. Claims book
14. In ULIPs, where does a growth fund mainly invest?
A. Gilt securities
B. Derivatives
C. Equities
D. Tax saving funds
15. Maximum lump sum withdrawal before annuity starts?
A. 100%
B. 1/2
C. 1/4
D. 1/3
16. Fixed periodic payments are called ______.
A. Premature redemptions
B. Survival benefits
C. Annuity payments
D. Maturity claims
17. Single Premium whole life policy means ______.
A. Limited premium then pension
B. Equal yearly premium
C. Lump sum premium once for lifetime cover
D. Limited premium with later coverage
18. Government levy on product/income/activity is called ______.
A. GST
B. VAT
C. Cess
D. Tax
19. AS 15 does not apply where obligations cannot be estimated – opinion?
A. Yes, agree
B. No, disagree
C. Depends on MOU/AOA
D. Depends on type of benefit
20. Which investments are measured at fair value in life insurance?
A. Derivatives
B. Redeemable preference shares
C. Listed equity shares
D. Both derivatives and listed equity shares
