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Category: IC46 GENERAL INSURANCE ACCOUNTS PREPARATION – 05

IC46 GENERAL INSURANCE ACCOUNTS PREPARATION – 05

Que. 1 : Q1) Shivam Corporation purchased a machinery of Rs.50,000 on 1 January 2011 and incurred an installation charges of Rs.10,000. The depreciation is calculated at 10% on a straight line basis. On 30 June 2013, the machinery was sold for Rs.42,500. What will be the Loss or profit?

   1.  a) Rs.2,500 profit

   2.  b) Rs.5,500 loss

   3.  c) Rs.2,500 loss

   4.  d) Rs.4,500 loss

Que. 2 : Q2) In the liability side which amount is deducted from the Called-up and Paid-Up Capital?

   1.  a) Calls in – Arrear

   2.  b) Unclaimed Dividend

   3.  c) Proposed Dividend

   4.  d) Interim Dividend

Que. 3 : Q3) According to Section 68 OF Companies Act 2013, one of the conditions of buyback is:

   1.  a) The buy-back is equal to or less than 25% of the total paid up equity share capital and free reserves

   2.  b) The buy-back is more than 25% of the total paid up equity share capital and free reserves

   3.  c) The buy-back is equal to or less than 10% of the total paid up equity share capital and free reserves

   4.  d) The buy-back is more than 10% but less than 25% of the total paid up equity share capital and free reserves

Que. 4 : Q4) Which method has been developed to allow the ceding company to receive more commission when the treaty is profitable and to minimize the loss to the reinsurer in unprofitable years?

   1.  a) Sliding scale commission

   2.  b) Fixed Scale Commission

   3.  

   4.  

Que. 5 : Q5) Which of the following is correct about Fund Basis of accounting?

   1.  a) Better indicator of current profitability

   2.  b) Suitable for business where the information about claims is reasonably certain before the end of the reporting period

   3.  c) Underwriting results are determined each year at the end of the reporting period.

   4.  d) Not a better indicator of profitability as compared to annual basis