IC46 - General Insurance A_c Preparation Mock Test 09
This set of questions covers important concepts in financial and insurance accounting. It includes depreciation under the straight-line and written-down value methods, calculation of net book value, and accounting treatment of machinery. It also examines users of financial statements, audit reports prepared by branch or statutory auditors, and statutory limits on directors’ and managers’ remuneration. Insurance-related topics include IRDAI rules on agency commission for motor third-party insurance and investment regulations applicable to insurers. Other areas include deferred tax, reinsurance treaties such as aggregate excess and excess-of-loss arrangements, and disclosure requirements for outstanding trade receivables. These questions are useful for IC46 exam preparation and revision.
1. A equipment was bought by Neeta for Rs. 70,000. This equipment has a useful life of 5 years. The scrap value after 5 years will be Rs. 3,000. Calculate the net book value after two years if depreciation is to be provided on straight-line method.
A. Rs. 42,700
B. Rs. 43,000
C. Rs. 43,200
D. Rs. 43,900
E. Rs. 44,600
2. Shivam Corporation purchased a machinery of Rs. 50,000 on 1 January 2011 and incurred installation charges of Rs. 10,000. The depreciation is calculated at 10% on a straight-line basis. On 30 June 2013, the machinery was sold for Rs. 42,500. If the depreciation is calculated by written down value method, the book value of the machinery on 30 June 2013 will be more by:
A. Rs. 1,170
B. Rs. 3,000
C. Rs. 2,500
D. Rs. 2,430
3. Which of the following are users of financial statements?
A. Financial analysts
B. Tax authorities
C. Shareholders
D. All of the above
4. What are prepared and submitted by the Branch Auditor or Statutory Auditor keeping in view statutory, regulatory and auditing standards?
A. Director reports
B. Finance reports
C. Audit reports
D. None of these
5. The total remuneration payable to its directors and managers in respect of any financial year shall not exceed:
A. 11% of the net profits
B. 5% of the net profits
C. 3% of the net profits
D. None of the above
6. In accordance with the IRDAI circular prescribing agency and brokerage commission structure, agency commission payable for motor third-party insurance is:
A. 5.00%
B. 6.25%
C. 10.00%
D. None of the above
7. IRDAI Regulations on Investments and the Insurance Act, 1938, as amended by the __________ provide specific rules and norms for investment of funds by an insurance company.
A. Insurance Laws (Amendment) Act 2000
B. Insurance Laws (Amendment) Act 2007
C. Insurance Laws (Amendment) Act 2010
D. Insurance Laws (Amendment) Act 2015
8. The difference between tax on accounting income and taxable income is called __________.
A. Tax expenses
B. Deferred Tax
C. Current Tax
D. None of these
9. Which Treaties provide indemnity to reinsurers on an aggregate basis and the reinsurer pays when a single loss or series of losses arising from a single event exceeds a certain figure?
A. Per occurrence excess
B. Per Risk Excess Treaty
C. Aggregate excess
D. None of these
10. Aggregate amount of Trade Receivables outstanding for a period exceeding __________ from the date they are due for payment should be separately stated.
A. 6 months
B. 12 months
C. 18 months
D. 24 months
