Deck 3: Insurance and Loss Assessment

Question 1

A business takes a……………insurance policy to cover the claims for loss of stocks and loss of profit.

A)Fire
B)Life insurance
C)Car insurance
D)health insurance

Answer 1

Fire

Question 2

The computation of loss by fire is very simple taken when a -------------- asset is destroyed

A)current
B)long-term
C)fire
D)intangible

Answer 2

current

Question 3

The value of stock on the date of fire can be ascertained more precisely by preparation of a…………… Account

A)Trading A/c
B)memorandum transaction A/c
C)Balance sheet
D)P & L A/c

Answer 3

memorandum transaction A/c

Question 4

……………..clause is applicable in case of under insurance

A)average
B)Normal
C)short sales
D)indemnity period

Question 5

…………………policy cover loss of gross profit sustained as a consequence of business interruption.

A)loss of profit
B)loss of stocks
C)average clause
D)loss of fixed assets

Question 6

The period for which a policy is taken known ……………….as period

A)indemnity
B)short sales
C)long
D)fixed

Question 7

A ---------- policy covers loss of stock, fixed asset, profit, expenses etc.

A)compact
B)comprehensive
C)horizontal
D)operating

Question 8

Insured standing charges are the --------------

A)fixed charges
B)horizontal charges
C)fluctuating
D)current charges

Question 9

……………… ratio indicates the relationship of gross profit to net sales in terms of percentage.

A)Gross profit
B)Net profit
C)debtors turnover
D)capital employed

Question 10

Due to the inclusion of average clause in the fire insurance policy , an insured becomes a……………….in the event of under insurance.

A)co-insurer
B)provision
C)profit
D)loss

Question 11

The Insurance Company cannot prevent the happening of risk but provide for losses at the happening of risk.

A)true
B)false
C)only a
D)a and b

Question 12

Insurance is a financial service for collecting the saving of the public and providing them with a risk of a coverage.

A)true
B)false
C)may be true
D)a and b

Question 13

A marine insurance policy is taken to cover the claims for loss of stock.

A)true
B)false
C)may be true
D)both a and b

Question 14

The amount paid by insured to insurer as a consideration is known as premium.

A)true
B)false
C)may be true
D)may be false

Question 15

General insurance business in India is transacted by Life Insurance Corporation of India.

A)true
B)false
C)may be true
D)may be false

Question 16

A memorandum trading account is to be prepared to ascertained the value of stock on the date of fire.

A)true
B)false
C)may be true
D)may be false

Question 17

A policy of fire insurance is intended to protect the assured against the loss caused by fire.

A)true
B)false
C)neither true nor false
D)may be false

Question 18

Gross profit must always be calculated as a percentage on purchase .

A)true
B)false
C)either true or false
D)may be false

Question 19

Average clause is applicable in case of under insurance.

A)true
B)false
C)only true
D)may be false

Question 20

A fire policy covers loss of or damaged to insured property.

A)true
B)false
C)may be true
D)only false

Question 21

If value of stock on date of fire is 429000, salvage is 1570000 then stock destroyed by fire will ………………

A)271500
B)270000
C)275000
D)none of the above

Question 22

If value of stock on date of fire is 420000, salvage is 1500000 then stock destroyed by fire will ………………

A)250000
B)255000
C)253000
D)251000

Question 23

If value of stock on date of fire is 420000, salvage is 10000 then stock destroyed by fire will ………………

A)410000
B)400000
C)450000
D)430000

Question 24

If Gross profit is 600000, sales is Rs. 15,00,000 then gross profit ratio will be …………..

A)40%
B)50%
C)-40%
D)- 50%

Question 25

If Gross profit is 54000 and sales is Rs. 180000 then gross profit ratio will be ….

A)30%
B)45%
C)15%
D)25%