IC46 - General Insurance A_c Preparation Mock Test 12
This set covers important topics in corporate law, insurance accounting, financial accounting, and auditing. It includes provisions of the Companies Act, 2013 relating to Corporate Social Responsibility and the CSR Committee. Insurance audit functions and the role of the Audit Committee are also examined. The questions cover premium income, classification of personal accounts, and Ind AS 115 concerning revenue from contracts with customers. Depreciation calculations using the straight-line method and excess-of-loss reinsurance arrangements are included. Stock valuation methods, particularly weighted average costing, and the universally practiced double-entry accounting system are also discussed. The set concludes with financial performance analysis through the Net Earnings Ratio.
1. Which Section of the Act provides that the Board's report under sub-section (3) of Section 134 shall disclose the composition of the Corporate Social Responsibility Committee, which shall be constituted as per Section 135(1) of the Act, 2013?
A. Section 92(3)
B. Section 134(1)
C. Section 135(2)
D. Section 177(8)
2. Which of the following provides direction and oversees the operations of the total audit function in insurance, and the total audit functions include organisation, operation and quality control of internal audit?
A. Audit Committee of Board
B. Revenue Audit
C. EDP Audit
D. Audit Compliance Cell
3. Premium income is the consideration received from the insured by the insurance company in accordance with the contract of insurance. Say whether True or False.
A. True
B. False
4. Which account relates to transactions of human beings such as Ram A/c, John A/c?
A. Artificial personal accounts
B. Natural personal accounts
C. Representative personal accounts
D. None of these
5. Ind AS 115 notified by MCA deals with:
A. First-time Adoption of Indian Accounting Standards
B. Revenue from Contracts with Customers
C. Intangible Assets
D. Interim Financial Reporting
6. A machine purchased for Rs. 60,000 on 01.04.2005 is expected to have a life of five years. Estimated salvage/scrap value after the expiry of five years is Rs. 10,000. Depreciation is considered under Straight Line Method. Calculate Annual Depreciation Amount.
A. Rs. 10,000
B. Rs. 12,000
C. Rs. 15,000
D. Rs. 20,000
7. What refers to an arrangement wherein the reinsurer steps in only if there is a loss that exceeds the specified limit?
A. Pool arrangement
B. Quota share
C. Retrocession
D. Excess of loss
8. Under which method of stock valuation, to determine the cost per unit, total cost of production during the year is divided by total units?
A. Weighted Average Method
B. FIFO (First In First Out)
C. Specific Identification Method
D. Standard Cost Method
9. Which of the following accounting systems of recording transactions is being practiced universally?
A. Single entry system
B. Double entry system
C. Balance sheet method
D. Profit and loss account method
10. Which of the following is a correct formula of Net Earnings Ratio?
A. Net Profit / Net Premium × 100
B. Net Profit / Closing Shareholders' Funds × 100
C. Incurred Claims + Expenses / Gross Direct Premium × 100
D. Operating Profit / Net Premium × 100
