IC46 - General Insurance A_c Preparation Mock Test 16
These questions cover important accounting and insurance accounting concepts. Topics include dividend received, transferor and transferee companies, sales day book, accounting obligations, employee benefit accounting, and calculation of net claims incurred. They also cover classification of tangible and intangible assets as real accounts, the realization concept, depreciation under the straight-line method, enterprise classification based on turnover, and the depletion method. Understanding these concepts is useful for insurance and financial accounting examinations. Candidates should focus on the treatment of claims, accounting principles, depreciation calculations, books of accounts, amalgamation terminology, and accounting standards related to enterprise obligations and employee benefits.
1. Which represents dividend received on company's investments in shares and if it is shown in Trial Balance is the net dividend amount received by the company?
a) Interest received
b) Proposed dividend
c) Dividends received
d) None of these
2. What means the company which is amalgamated into another company?
a) Transferor Company
b) Transferee Company
3. Which book records sales on a daily basis?
a) Bank receipts day book
b) Purchase day book
c) Cash book
d) Sales day book
4. For accounting and determination of value, the enterprise should do which of the following?
a) To account not only for its legal obligation under the formal terms, but also for any other obligation that arises from the enterprise's informal practices
b) To use Projected Unit Credit Method to measure its obligations and related costs
c) To recognize immediately actuarial gains and losses in the statement of profit and loss as income or expense
d) All of the above
5. The Fire Department of ABC General Insurance Co. Ltd gives the following details for 2009-10: Fire claims paid Rs.705 crore, Claims on Reinsurance Accepted Rs.144 crore, Claims on Reinsurance Ceded Rs.292 crore, Claims outstanding as on 01/04/2009 Rs.756 crore, and Claims outstanding as on 31/03/2010 Rs.800 crore. Calculate Claims Incurred Net shown in the Revenue Account for the year ended 31st March 2010.
a) 501
b) 601
c) 701
d) 801
6. Tangible assets and intangible assets are nature of which accounts?
a) Real accounts
b) Nominal accounts
c) Personal accounts
d) None of these
7. Which concept states that revenue from any business transaction should be included in the accounting records only when it is realized, and revenue is said to have been realized when cash is received or the right to receive cash has accrued on the sale of goods or services or both?
a) Dual Aspect Concept
b) Accounting Cost Concept
c) Realization Concept
d) Accrual Concept
8. A machine purchased for Rs.90,000 on 01.04.2005 is expected to have a life of ten years. Estimated salvage/scrap value after the expiry of ten years is Rs.30,000. Depreciation is considered under Straight Line Method. Calculate the rate of depreciation.
a) 6.66% p.a.
b) 15.68% p.a.
c) 22.26% p.a.
d) 38.68% p.a.
9. Under which level are all commercial, industrial and other business enterprises whose total turnover during the previous year exceeds Rs.40 lakhs but is within the limit of Rs.50 crores?
a) Level I Enterprises
b) Level II Enterprises
c) Level III Enterprises
d) None of these
10. Which method is also known as Unit Charging Method or Output Method?
a) Insurance Policy Method
b) Straight Line Method
c) Revaluation Method
d) Depletion Method
