IC26 Mock Test Sample 20
These questions cover important concepts in insurance, accounting, and financial management. Topics include money laundering stages, budgeting, financial ratios, and accounting principles like consistency and gross profit calculation. Insurance-related areas such as policy types, ULIP expenses, and contract documentation are also included. Banking functions and financial decision-making tools like options are highlighted. The set emphasizes understanding of liquidity, solvency, and budgeting constraints. Practical applications such as cost calculation and foreign funding sources are also tested. Overall, it strengthens conceptual clarity and analytical skills required for finance and insurance exams, focusing on real-world financial operations and regulatory understanding.
1. At which stage in money laundering is money introduced into the financial system?
A. Placement
B. Conversion
C. Layering
D. Integration
2. On what is the Production Budget dependent?
A. Only Cash budget
B. Only Purchase budget
C. Only Sales budget
D. Both Purchase and Sales budget
3. Cash payments made to employees are classified as which activity?
A. Social activity
B. Financing activity
C. Investing activity
D. Operating activity
4. Best way to meet foreign exchange requirement for capital expenditure?
A. Issue of Non-Convertible Debentures
B. Private placement
C. IPO
D. External commercial borrowing
5. Suitable plan for savings + protection (age 40)?
A. Jeevan Anand
B. Endowment policy
C. Whole life policy
D. Term insurance policy
6. Most commonly used ratio in life insurance industry?
A. Fixed to worth
B. Quick ratio
C. Percentage of renewal commission to renewal premium
D. Interest cover
7. Which HR accounting model capitalizes only training costs?
A. Flamholtz Model
B. Lev and Schwartz Model
C. Hekimian and Jones Model
D. Historical Cost Model
8. Which option is used to buy an asset?
A. Arbitrage
B. Short
C. Call
D. Put
9. Two prime functions of banks include:
A. Opening branches & loans
B. Investment & speculation
C. Deposit collection & investment
D. Collecting deposits & giving loans
10. Key feature of money back policy?
A. Only death benefits
B. No loan facility
C. Loan can be taken
D. Both no loan & loan possible
11. Document describing insurance contract terms:
A. Memorandum of Understanding
B. Insurance
C. Policy
D. Premium
12. Primary aim of accounting?
A. Prepare P&L and Balance Sheet
B. Prepare ledger accounts
C. Provide financial information
D. Both A and C
13. Direct expense of ULIP?
A. Training expenses
B. Policy expenses
C. Stamps
D. Repairs and maintenance
14. Total cost for 30,000 units (given budget)?
A. Rs. 32250
B. Rs. 26750
C. Rs. 23440
D. Rs. 37410
15. Limiting factor in budgeting?
A. Sales
B. Capital
C. Labour problems
D. Raw materials
16. Income from house property if not let out?
A. Nil
B. Potential rent
C. Actual rent
D. Municipal value
17. Formula for Gross Profit:
A. Net Sales – Cost of Goods Sold
B. Gross Sales – Returns
C. Opening stock + Purchases – Closing stock
D. Net sales – Returns
18. Consistency concept implies:
A. Same accounting policies every period
B. Frequent policy changes
C. Based on legal form
D. Based on substance
19. Current ratio indicates:
A. Immediate payment ability
B. Short-term liquidity position
C. Long-term solvency
D. Expense coverage
20. Difference between Solvency and Liquidity:
A. Solvency = short-term, Liquidity = long-term
B. Solvency = covering liabilities, Liquidity = cash availability
C. Solvency = profitability, Liquidity = health
D. Solvency = efficiency, Liquidity = solvency
