IC46 - General Insurance A_c Preparation Mock Test 14

1. The Fire Department of ABC General Insurance Co. Ltd. gives the following details for 2009-10:

i) Gross Direct Premium Income: Rs. 781 crore
ii) Premium on Reinsurance Accepted: Rs. 243 crore
iii) Premium on Reinsurance Ceded: Rs. 337 crore
iv) Net Premium for 2008-09: Rs. 613 crore

Calculate Net Premium Account:

A. 600
B. 700
C. 800
D. 900

2. Which comes into existence when taxable income is more than accounting income and this is due to time difference?

A. Deferred Tax – Situations and Treatment
B. Deferred Tax Liability
C. Deferred Tax Assets
D. None of these

3. A firm purchased on 01.04.2004 certain machinery X for Rs. 1,16,400 and spent Rs. 3,600 on its erection. On 01.10.2004, new machinery costing Rs. 40,000 was purchased. On 1st October 2006, the machinery purchased on 01.04.2004 having become obsolete was auctioned for Rs. 57,200 and on the same date, fresh machinery was purchased at a cost of Rs. 80,000.

Depreciation was provided annually on 31st March every year @ 10% p.a. on WDV. In 2007-08, however, the firm changed this method of providing depreciation and adopted the method of providing 5% depreciation p.a. on the original cost of the machinery.

What amount is to be written back to the Profit and Loss Account to restore the WDV of two machines as on 31.03.2007 based on depreciation @ 5% p.a. on Straight Line Method?

A. Rs. 2,645
B. Rs. 4,859
C. Rs. 6,220
D. Rs. 8,456

4. Under which securities Government Securities, bonds, foreign government securities, debentures etc. are included, and in this type of scrip, the interest accrued from the date of the last payment to the date of the transaction is calculated?

A. Fixed-Income Bearing Securities
B. Variable Income Bearing Securities

5. What includes Cash Book also as it, like any other ledger account, displays cash or bank balance as on a particular date? Besides, all cash transactions are primarily recorded in the cash book.

A. Journals
B. Ledgers

6. __________ refers to the activities that involve identifying and assessing any and all relevant risks that the organisations may face while conducting their daily operations.

A. Risk Management
B. Bancassurance
C. Internal Audit
D. Underwriting

7. __________ are the acquisition and disposal of long-term assets and other investments not included in cash equivalents.

A. Financing Activities
B. Investing Activities
C. Cash Equivalents
D. Operating Activities

8. Director Report of an insurance Company is required to furnish which of the following information?

A. The state of affairs of the company
B. Audited Financial Statements
C. Comparative Performance Analysis
D. All of the above

9. Which of the following does not cause a difference between the cash book and the bank statement?

A. Interest on bank overdraft debited in the bank account
B. Cheques received and entered in the cash book, but not yet paid in to the bank for collection
C. Cheques issued and presented for payment
D. A customer directly deposited a certain amount into the bank

10. Which book records the return of goods purchased?

A. Purchase Return Book
B. Sales Return Book
C. Bills Payable Book
D. Bank Receipts Day Book