IC46 GENERAL INSURANCE ACCOUNTS PREPARATION - 18

Q1.While auditing debt securities, in order to confirm the correctness of the valuation, the auditor confirms that securities have been measured.
  a) At a historical cost less accumulated depreciation and impairment loss
  b) At historical cost subject to amortization
   c) At fair value as at the balance sheet date
  d) At a historical cost
 
Q 2.Which column is for recording the costs of acquisition or purchase of investments and sale proceeds of the investments sold and the profit or loss on sale of investments?
   a) Cost/Capital column
   b) Income/Interest Column
   c) Nominal Column
   d) None of these
 
Q3.A machine purchased for Rs.50000 on 01.04.2005 is expected to have a life of three years. The estimated salvage/scrap value after the expiry of three years is Rs.7,500. Depreciation is considered under the Straight Line Method. Calculate Annual depreciation Amount?
   a) Rs.5,000
   b) Rs.8,000
   c) Rs.11,000
   d) Rs.14,000
 
Q4.In which case, only part of an issue has been underwritten, or where there are a number of underwriters, a difficulty may arise in determining the liability of each of the underwriters, such a difficulty may arise in deciding the basis on which the unmarked applications?
   a) Complete underwriting
   b) Firm underwriting
   c) Partial underwriting
   d) Marked underwriting
 
Q5.Parmar Group of Industries, which has a calendar year accounting period purchased a new machine for Rs.1,20,000 on April 1, 2006. At that time Parmar Group of Industries expected to use the machine for nine years and then sell it for Rs.12,000. The machine was sold for Rs.66,000 on 30 September 2011. Assuming straight-line depreciation, no depreciation in the year of acquisitions, and a full year of depreciation of withdrawal, the gain to be recognized at the time of sale would be:
   a) Rs.12,000
   b) Rs.9,000
   c) Rs.6,000
   d) NIL
 
Q6.Which of the following is the importance of the Bank Reconciliation Statement?
  a) It helps to detect any discrepancies and irregularities in financial transactions apart from the reconciliation of the two balances due to mere time difference or errors of omission or commission
   b) When mistakes are deliberate or intentional, the difference between the two balances may be due to financial irregularities and fraud
   c) Proper bank reconciliation is the first and foremost tool to detect and control fraud.
   d) All of the above
 
Q7.What is a price in a binding sale agreement in arm's length transaction, adjusted for incremental costs that would be directly attributable to the disposal of the asset?
   a) Net selling price
   b) Cost price
   c) Accounting price
   d) Selling price
 
Q8.The objective of which standard is to prescribe the appropriate accounting policies, procedures, and disclosures in respect of finance leases and operating leases to be followed by losses and lessors?
  a) Accounting Standard AS 9
   b) Accounting St and ard AS 11
   c) Accounting Standard AS 15
   d) Accounting Standard AS 19
 
Q 9. Which of the following are objectives of Accounting policies?
   a) To ensure reliability
   b) To maintain Consistency
  c) To ensure full, fair, and adequate disclosure
   d) All of the above
 
Q10.What is something that a company owes to others and it can be obligations or payments due to others?
   a) Liability
   b) Income
   c) Expense
   d) Asset

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