IC46 GENERAL INSURANCE ACCOUNTS PREPARATION – 20


Que. 1 : Q1) The financial statements in general insurance business does not include

   1.  a) Revenue Account

   2.  b) Profit and Loss Account

   3.  c) Receipts and Payments Account

   4.  d) Trading Account

Que. 2 : Q2) Accounting policies of insurance companies must adhere to: i) All accounting standards issued by ICAI ii) All auditing standards issued by ICAI iii) All accounting policies mentioned under AS-1 issued by ICAI iv) All accounting standards issued by IAASB

   1.  a) (i) and (ii)

   2.  b) (i) and (iii)

   3.  c) (i) ,(ii) and (ii)

   4.  d) (i) and (iv)

Que. 3 : Q3) The Fire Department of ABC General Insurance Co Ltd gives the following details for 2009-10: i) Earned Premium is Rs.900 crore ii) Incurred Claim Net Rs.600 crore iii) Commission Net Rs.100 crore iv) Operating Expenses Rs.190 crore v) Investment Income on Policyholders’ Fund(fire) Rs.210 crore. Compute Underwriting Results.

   1.  a) 10 crores

   2.  b) 20 crores

   3.  c) 30 crores

   4.  d) 40 crores

Que. 4 : Q4) Sanjay bought a machine for Rs.20,000. He paid for the new machine by taking out a loan of Rs.12,000 and trading in his old machine. The old car originally cost Rs.12,500 and had been depreciated by Rs.6,500 at the time of the trade in. What is the gain on disposal of the old machine?

   1.  a) Rs.500

   2.  b) Rs.1000

   3.  c) Rs.1500

   4.  d) Rs.2000

Que. 5 : Q5) Which of the following does not cause a difference between the cash book and the bank statement?

   1.  a) Interest on bank overdraft debited in the bank account

   2.  b) Cheques received and entered in the cash book, but not yet paid in to the bank for collection

   3.  c) Cheques issued and presented for payment

   4.  d) A customer directly deposited a certain amount in to the bank