IC26 Mock Test Sample 7
These questions cover accounting errors, trial balance, taxation, insurance accounting, AML/CFT compliance, employee benefits, and financial reporting concepts. Errors of commission do not prevent trial balance agreement, and differences are transferred to suspense account. Money laundering is hardest to trace at integration stage. Home loan deductions include interest and principal limits under Income Tax Act. Insurance companies earn mainly through premiums. Policy ledgers maintain individual accounts. Printing and stationery relate to operational expenses. PCO monitors AML compliance. Net Value Added is Gross Value Added minus depreciation. ULIPs allow fund-based investment, and gratuity/pension fall under post-employment benefits with structured financial reporting standards.
Q1. Errors of commission do not permit
A) Correct totalling of the balance sheet
B) Correct totalling of the trial balance
C) The trial balance to agree
D) None of the above
Q2. After preparing the trial balance, debit side is short by Rs 1,500. Difference will be
A) Credited to suspense account
B) Debited to suspense account
C) Adjusted to any of the debit balance account
D) Adjusted to any of the credit balance account
Q3. Integration stage is most difficult to trace illegal money
A) TRUE
B) FALSE
Q4. Maximum deduction for home loan repayment is
A) Up to Rs. 1,50,000 interest only
B) Up to 2,00,000 interest + 1,50,000 principal
C) Up to Rs. 1,00,000 principal only
D) 30% of net annual value of property
Q5. Ledger account columns are
A) Name of account, Date, Particulars, Amount
B) Debit, Credit, Date, Particulars, Amount
C) Date, Particulars, Folio, Amount
D) Receipt, Payment, Discount Allowed, Discount Received
Q6. Primary source of income of insurance company
A) Sum Assured
B) Premiums
C) Policy Value
D) Interest and Dividends
Q7. Sub-ledger for policyholders is maintained in
A) Statutory books
B) Deposit Cash Book
C) Premium Cash Book
D) Policy-ledgers
Q8. Printing and stationery A/c includes
A) Employee salaries
B) Office equipment expenses
C) Printing and stationery expenses
D) Medical expenses
Q9. PCO responsibility in AML/CFT program
A) Overseeing marketing campaigns
B) Monitoring compliance of agents
C) Handling customer inquiries
D) Managing financial transactions
Q10. Management report confirms
A) Number of shares issued
B) Share price trend
C) Shareholding pattern compliance
D) Dividend declaration
Q11. Net Value Added (NVA) =
A) Gross Value Added − Depreciation
B) Gross Value Added + Depreciation
C) Gross Value Added − Tax
D) Gross Value Added + Interest
Q12. Discount rate for defined benefit obligation is determined by
A) Market yields at balance sheet date
B) Any convenient rate
C) Employee decision
D) Fixed government rate
Q13. Premium invested as per options is in
A) Endowment plans
B) Term plans
C) Money back plans
D) Unit linked insurance plans
Q14. Main cause of corruption, smuggling, tax evasion
A) Government regulations
B) Money laundering
C) Insurance policies
D) Economic development
Q15. Life insurance regulation act of 1912
A) Indian Life Insurance Companies Act 1912
B) Insurance Regulation Act 1956
C) LIC Act 1956
D) Insurance Companies Act 1956
Q16. Late fees adjusted when
A) Excess received
B) Advance received
C) After grace period
D) After due date
Q17. Gratuity and pension fall under
A) Short-term employee benefits
B) Post-employment benefits
C) Long-term benefits
D) Non-monetary benefits
Q18. Rule 2 purpose in life insurance taxation
A) Exclude actuarial surplus/deficit
B) Shareholder profit calculation
C) Tax rate determination
D) Average profit calculation
Q19. Financial reporting purpose
A) Record transactions
B) Prove transactions
C) Prepare & present financial statements
D) Categorize expenses
Q20. Depreciation in insurance industry
A) Reserve method
B) Double declining method
C) Not accounted
D) Straight line method
