IC26 LIFE INSURANCE FINANCE - 07
| Q1.A company purchases a machine for Rs 50000 and this has a life of 10 years. At the end of 10 years, this machine can be sold off at appx. Rs 5000. Using straight-line depreciation, how much depreciation is shown in the accounts solely for the first two years of this period? |
| 5000 |
| 9000 |
| 4500 |
| 7500 |
| 10000 |
| Q2.One of the below options is an example of ‘Posting on the wrong side of the correct account’. Select the right one. |
| The ledger balance of ‘bad debts’ of Rs 2000 was carried forward by Neeta wrongly as Rs 3000 to the trial balance |
| Ashish sold goods of Rs 5000, Rs 8000, and Rs 2000 to three clients. These amounts were entered correctly in the sales day book. However, when Ashish totaled the monthly sales, he came to Rs 20000 instead of Rs 15000 |
| Manoj sold goods of Rs 5000, Rs 8000, and Rs 2000 to three clients. These amounts were entered correctly in the sales day book. However, when Manoj totaled the monthly sales, he came to Rs 10000 instead of Rs 15000 |
| Bharat had to make an entry in the debit side of the ledger, but instead made an entry on the credit side of the correct ledger account |
| Rohit is an accountant with XYZ Insurance Company. When he made an entry in the ledger, the amount was wrongly entered as Rs 1000 instead of the correct amount of Rs 2000. |
| Q3.Which type of error has been committed when the following entry is passed - Machinery purchased for Rs 10000 has been entered in 'Purchase Book'. |
| Posting |
| Commission |
| Casting |
| Omission |
| Principle |
| Q4.According to American Accounting Association, Human Resource Accounting is “the process of ___ and ___ data about human resources and communicating this information to interested parties” |
| Identifying and Measuring |
| Analyzing and Measuring |
| Gathering and Analyzing |
| Analyzing and Identifying |
| Identifying and Accounting |
| Q5.With respect to a Term Insurance Policy - which of the below statement(s) is/are INCORRECT? 1. The term of the policy can be a maximum of 10 years 2. Interest is payable on the premium 3. In case the insured lives beyond the policy term, no benefit is payable to him /her 4. In case the insured dies during the policy term, no benefit is payable to him /her |
| Only statement 3 is incorrect |
| Only statement 4 is incorrect |
| Statements 1,3 and 4 are incorrect |
| Statements 1,2 and 4 are incorrect |
| Statements 1,2 and 3 are incorrect |
| Q6.When a person wants to apply for a loan against his life insurance policy, the status of the policy is reviewed by the insurance company with respect to ___. 1. What is the age of the policyholder 2. Whether the policy is in force 3. Whether there is sufficient surrender value |
| Only 1 and 2 |
| Only 2 and 3 |
| Only 1 |
| Only 2 |
| Only 3 |
| Q7.What is the minimum amount of advance tax payable on or before 15 June by a company assessed ? |
| 5% |
| 10% |
| 15% |
| 25% |
| 30% |
| Q8.For what duration are Career Agents given training and paid stipends? |
| 6 months |
| 1 year |
| 18 months |
| 2 years |
| 3 years |
| Q9.With respect to ledgers in the accounting process, which of the following statement(s) is/are true? 1. Ledgers are also known as books of final entry 2. Ledger is the main basis of preparing the final accounts 3. The debit balance and credit balance of a ledger account is always the same at any given point |
| Only 1 and 2 |
| Only 2 and 3 |
| Only 1 and 3 |
| Only 1 |
| Only 2 |
| Q10.In one instance, the cost of goods purchased by cash was wrongly debited to the sales account and credited to the cash book. The rectification entry that needs to be passed is ___ |
| Dr. Purchase Account, Cr Suspense Account |
| Dr. Purchase Account, Cr Sales Account |
| Dr. Cashbook, Cr Sales Account |
| Dr. Purchase Account, Cr Cash book |
| Dr. Bank Account, Cr Cash Account |