IC46 - General Insurance A_c Preparation Mock Test 17
These questions cover fundamental accounting principles, accounting standards, insurance regulations, amalgamation, depreciation, and reinsurance. Important concepts include the matching concept, amalgamation consideration, the composition of an insurer’s Investment Committee, and the authority responsible for accounting standards in India. AS 20 deals with Earnings Per Share, while AS 25 relates to Interim Financial Reporting. The questions also examine trial balance balances, changes in depreciation methods, and the accounting process for financial transactions. In reinsurance, different commissions such as ceding, brokerage, and profit commissions are important. Candidates should understand these concepts, regulatory requirements, accounting standards, and numerical depreciation adjustments for examination preparation.
1. Which concept states that the revenue and the expenses incurred to earn the revenue must belong to the accounting period?
a) Realization concept
b) Accrual concept
c) Matching concept
d) Dual Aspect Concept
2. Q13) __________ for the amalgamation means the aggregate of the shares and other securities issued and the payment made in the form of cash or other assets by the transferee company to the shareholders of the transferor company.
a) Disclosure
b) Consideration
c) Description
d) Acceptance
3. As per Regulation 13A of IRDAI (Investment) (Fifth Amendment) Regulations 2013, every insurer shall constitute an Investment Committee. Suggest the minimum number of non-executive directors required in the committee.
a) One
b) Two
c) Three
d) Four
4. Which body is responsible for issuing the Accounting Standards in India?
a) IRDAI (Insurance Regulatory and Development Authority)
b) ICAI (Institute of Chartered Accountants of India)
c) Ministry of Corporate Affairs
d) Institute of Company Secretaries of India (ICSI)
5. Accounting Standard AS 20 deals with?
a) Related Party Disclosures
b) Accounting for Investments
c) Accounting for the Effects of Change in Foreign Exchange Rates
d) Earnings Per Share
6. Which of the following items would appear in the trial balance as a credit balance?
a) Carriage inwards
b) Carriage outwards
c) Returns inwards
d) Returns outwards
7. Accounting Standard AS 25 deals with?
a) Accounting for Investments
b) Accounting for the Effects of Change in Foreign Exchange Rates
c) Interim Financial Reporting
d) Earnings Per Share
8. A firm purchased on 01.04.2004 certain machinery X for Rs.116,400 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 and adopted 5% depreciation p.a. on the original cost of the machinery. What amount should be written back to the Profit and Loss Account to restore the WDV of the two machines as on 31.03.2007 based on depreciation @ 5% p.a. under the Straight Line Method?
a) Rs.2,645
b) Rs.4,859
c) Rs.6,220
d) Rs.8,456
9. What is the process of recording and reporting financial transactions, including the origination of the transaction, its recognition, processing, and summarisation in the financial statements?
a) Management
b) Accounting
c) Banking
d) Insurance
10. Which of the following are the commissions involved in a reinsurance transaction?
(i) Ceding commission
(ii) Brokerage commission
(iii) Settlement commission
(iv) Profit commission
a) (i), (ii) and (iv)
b) (i), (ii) and (iii)
c) (i) and (ii)
d) Only (i)
