IC46 - General Insurance A_c Preparation Mock Test 10

1. Which of the following items represents income?

A. Interest received
B. Share capital
C. Cash received from sale of machinery
D. Salaries and wages paid to employees

2. Parmar Group of Industries, which has a calendar year accounting period, purchased a new machine for Rs. 1,50,000 on April 1, 2006. At that time Parmar Group of Industries expected to use the machine for nine years and then sell it for Rs. 15,000. The machine was sold for Rs. 85,000 on 30 September 2011.

Assuming straight-line depreciation, no depreciation in the year of acquisition, and a full year of depreciation of withdrawal, the gain to be recognized at the time of sale would be:

A. Rs. 5,000
B. Rs. 10,000
C. Rs. 12,000
D. Rs. 15,000

3. Bookkeeping is the foundation of financial accounting. Say whether True or False.

A. True
B. False

4. Select the month and enter the year the asset started being used for its intended purpose refers to?

A. Useful Life
B. Salvage Value
C. Asset Cost
D. Placed in Service

5. General insurance includes:

A. Life insurance, marine insurance and fire insurance
B. Marine insurance and fire insurance
C. Marine insurance, fire insurance and miscellaneous insurance
D. Only miscellaneous insurance

6. Which book records only cash receipts and cash payments?

A. Double column cash book
B. Simple Cash Book
C. Triple column cash book
D. None of these

7. Audit reports are prepared and submitted by Branch Manager. Say whether True or False.

A. True
B. False

8. What is the statement prepared by an entity that reconciles the difference between the bank balance shown by the pass book and the cash book balance?

A. Balance Sheet Statement
B. Financial Statement
C. Bank Reconciliation Statement
D. None of these

9. Purchase Return Book is also referred to as?

A. Returns Inward Book
B. Returns Indoor Book
C. Returns Outward Book
D. Returns Outdoor Book

10. Under which basis is it possible to determine the underwriting result of an insurance business written in an accounting period at the end of that period?

A. Annual Basis of Accounting
B. Fund Basis of Accounting