IC26 Mock Test Sample 2
These questions focus on insurance regulations, accounting, KYC norms, and financial management. Anti-money laundering (AML) guidelines prevent illegal fund flows. KYC norms require proper identification of customers to manage risk. A high current ratio may indicate inefficient fund utilization. In ULIPs, market risk is borne by policyholders, and they have a lock-in period. Value Added (VA) statements show a company’s contribution to national income. Excess provisions become reserves if unnecessary. Cash flow statements help assess liquidity. Life insurance profits are based on actuarial surplus. Proper accounting practices, endorsements, and investment tracking ensure transparency, while liberalization in 1999 led to IRDA formation and private sector entry.
1. Which guidelines prevent anti-social elements from sending funds through illegal channels?
a) Anti-black money guidelines
b) Anti-money laundering guidelines
c) Underwriting guidelines
d) Insurance guidelines
e) Investment guidelines
2. Identify a valid statement in relation to KYC norms:
a) No KYC norms are required for beneficiary
b) Contracts should be anonymous
c) Beneficiary can be anonymous
d) KYC norms are compulsory for new customers only
e) Correct measures must be taken for proper identification of customers
3. A very high Current Ratio indicates:
a) High operating efficiency
b) Low operating efficiency
c) Inefficient fund management
d) Ability to discharge obligations effectively
e) Better performance than competitors
4. Identify correct statements about ULIPs:
- Market risk is borne by insurer
- ULIPs are long-term with lock-in
- Investment linked to market
a) Both 1 and 2
b) Both 2 and 3
c) All 1, 2 and 3
d) Only 1
e) Only 3
5. VA statement contributes to national income by:
a) Reducing taxes
b) Providing investments
c) Showing company contribution
d) Increasing taxes
e) Determining salaries
6. Excess provision becomes reserve when:
a) Exceeds amount required
b) Less than liability
c) As per standards
d) Required by tax
e) Disclosed in statements
7. Excess of defined benefit asset should be:
a) Deducted from salary
b) Carried as asset
c) Recognized as expense
d) Refunded to government
e) None of the above
8. Significance of Cash Flow Statement:
a) Evaluate net assets
b) Assess liquidity & dividend policy
c) Classify activities
d) Show cash receipts & payments
e) None of the above
9. Life insurance profits under IT Act 1961 are:
a) Average actuarial surplus
b) Annual average surplus/deficit
c) TDS adjustment
d) Tax on profits
e) Exempt from TDS
10. KYC risk-based approach aims to:
a) Understand risk profile
b) Categorize occupation
c) Provide insurance
d) Build database trust
e) Verify salaried income
11. When car is purchased for cash, which account is debited?
a) Car account
b) Cash account
c) Seller account
d) Purchaser account
e) Debit account
12. Purpose of separate investment accounts in insurance:
a) Track revenue/expenses
b) Differentiate policies
c) Proper fund allocation
d) Facilitate audit
e) None
13. Dishonoured premium cheque entry debits:
a) Premium account
b) Deposit account
c) Bank account
d) Policy ledger
e) Cash outgo book
14. Purpose of Policy Stamps A/c:
a) Office expenses
b) Agent tracking
c) Purchase of stamps
d) Salary calculation
e) None
15. Main purpose of endorsement in policy:
a) Change insurer name
b) Record agreed changes
c) Fix premium
d) Issue new policy
e) Change period
16. Liability includes:
a) Only actual liabilities
b) Only contingent liabilities
c) All contracted & contingent liabilities
d) Board-approved liabilities only
e) Investment liabilities only
17. Short-term employee benefits should be:
a) Discounted expense
b) Undiscounted liability
c) Treated as asset
d) Deducted from salary
e) None
18. Impact of 1999 insurance liberalisation:
a) Formation of IRDA
b) Entry of private insurers
c) Expansion of LIC plans
d) 75% G-Sec investment
e) Restriction on innovation
19. Life insurance taxation falls under:
a) Part A
b) Part B
c) Part C
d) Part D
e) Part E
20. Low-risk KYC customers include:
a) NRIs & HNIs
b) Salaried & low-income individuals
c) Firms & trusts
d) Government entities
e) Charities & regulators
