Question 1

Provision created for substandard is&#10;A)10%&#10;B)155&#10;C)20%&#10;D)none of these.

Accepted Answer

Provision for substandard goods is 10% of the cost of goods sold.

Question 2

Provision created for unsecured doubtful debt is&#10;A)50%&#10;B)75%&#10;C)100%&#10;D)none of these.

Accepted Answer

Provision for unsecured doubtful debt is typically created at 100% to fully cover the potential loss from debts that are unlikely to be recovered.

Question 3

General insurance policies are taken&#10;A)One year&#10;B)two year&#10;C)three year&#10;D)none of these

Accepted Answer

General insurance policies are typically taken for a period of one year, after which they need to be renewed.

Question 4

When policy matures on the death of the insured, it is expressed as&#10;A)With profit policy&#10;B)without profit policy&#10;C)whole life policy&#10;D)none of these

Accepted Answer

When a policy matures on the death of the insured, it is expressed as a with-profit policy. This is because the policyholder has paid premiums into the policy over time, and the insurance company has invested these premiums in order to generate a profit. When the policyholder dies, the insurance company pays out the death benefit to the beneficiary, plus any profits that have been generated on the investment of the premiums.

Question 5

In the revenue account bonus in reduction of premium is shown as&#10;A)Liability&#10;B)income&#10;C)expense&#10;D)none of these

Accepted Answer

The answer of In the revenue account bonus in reduction...

Question 6

The fixed assets of an insurance company are shown in&#10;A)Schedule 6&#10;B)schedule 7&#10;C)schedule 8&#10;D)none of these

Accepted Answer

The fixed assets of an insurance company are typically shown in Schedule 8, not in Schedule 6 or 7.

Question 7

Insurance regulation and development authorities act came into effect in&#10;A)1938&#10;B)1999&#10;C)2000&#10;D)none of these

Accepted Answer

The answer of Insurance regulation and development authorities act came...

Question 8

Which of the following of an insurance company does not fall under income from investment&#10;A)Interest and dividends&#10;B)profit on sale of investment&#10;C)share transfer fee&#10;D)none of these.

Accepted Answer

Share transfer fees are typically administrative fees or transaction costs associated with the transfer of shares from one party to another, rather than income generated from the investments themselves. Interest, dividends, and profits from the sale of investments are direct forms of investment income for an insurance company.

Question 9

Which of the following of an insurance company is included in other assets&#10;A)Loan to directors&#10;B)agents balance&#10;C)advance tax paid&#10;D)none of these

Accepted Answer

The answer of Which of the following of an insurance...

Question 10

Reserve for unexpired risk is shown under&#10;A)Reserve and surplus&#10;B)current liabilities&#10;C)provision&#10;D)none of these.

Accepted Answer

Reserve for unexpired risk is classified under provisions, as it is an amount set aside to cover the risks that have not yet expired. This is a common practice in insurance and risk management to ensure that there are sufficient funds to cover future claims.

Question 11

Which of the following is not an advantage of having a conceptual framework of accounting ?&#10;A)Development of accounting standards is subject less political pressure&#10;B)A consistent balance sheet or income statement approach is used to setting standards&#10;C)Considers the needs of all user&#10;D)Avoids a mixed up approach to setting standards

Accepted Answer

The answer of Which of the following is not an...

Question 12

A conceptual framework for accounting is &#8230;&#10;A)A set of financial statements&#10;B)A set of rules governing financial reporting&#10;C)A set of components of financial statements&#10;D)A set of principles underpinning financial reporting

Accepted Answer

The answer of A conceptual framework for accounting is &#8230;&#10;A)A...

Question 13

Which of the following relate to financial position in a set of financial statements?&#10;A)Assets , liabilities, income and expense&#10;B)Assets, liabilities, income and equity&#10;C)Income and expense&#10;D)Income, expense and liabilities

Accepted Answer

The answer of Which of the following relate to financial...

Question 14

The original cost at which an asset or liability is acquired is known as --------&#10;A)Amortization&#10;B)Replacement&#10;C)Historical cost&#10;D)Carrying cost

Accepted Answer

The answer of The original cost at which an asset...

Question 15

The international accounting standards committee was set up in -------------&#10;A)1982&#10;B)1976&#10;C)1967&#10;D)2009

Accepted Answer

The answer of The international accounting standards committee was set...

Question 16

The process of converting foreign - subsidiary financial statements into the home currency is known as------------&#10;A)Transmission&#10;B)Translation&#10;C)Consolidation&#10;D)Reconstruction

Accepted Answer

The answer of The process of converting foreign - subsidiary...

Question 17

&#8230;&#8230;&#8230;&#8230;&#8230;&#8230; is an artificial person created by law&#10;A)Firm&#10;B)Sole trader&#10;C)Company&#10;D)None of these

Accepted Answer

The answer of &#8230;&#8230;&#8230;&#8230;&#8230;&#8230; is an artificial person created by...

Question 18

The liability of shareholders of a company is &#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..&#10;A)Limited&#10;B)Unlimited&#10;C)Uncertain&#10;D)None of these

Accepted Answer

The answer of The liability of shareholders of a company...

Question 19

A company is managed by its&#8230;&#8230;&#8230;&#8230;&#8230;.&#10;A)Partners&#10;B)Auditor&#10;C)Board of Directors&#10;D)Debenture holder

Accepted Answer

The answer of A company is managed by its&#8230;&#8230;&#8230;&#8230;&#8230;.&#10;A)Partners&#10;B)Auditor&#10;C)Board of...

Question 20

. &#8230;&#8230;&#8230;&#8230;.company Is a company created by a special Act in Parliament&#10;A)Government&#10;B)Registered&#10;C)Chartered&#10;D)Statutory

Accepted Answer

The answer of . &#8230;&#8230;&#8230;&#8230;.company Is a company created by...

Question 21

A company registered with Registrar of Companies under Indian Companies Act is called as&#8230;&#8230;&#8230;..&#10;A)Government&#10;B)Registered&#10;C)Chartered&#10;D)Statutory

Accepted Answer

The answer of A company registered with Registrar of Companies...

Question 22

The company in which the liability of members is liable to pay the agreed amount at the time of winding up is called as &#8230;&#8230;&#8230;&#8230;..&#10;A)Unlimited Company&#10;B)Company limited by shares&#10;C)Company limited by guarantee&#10;D)Liquidating Company

Accepted Answer

The answer of The company in which the liability of...

Question 23

A company in which the transferability of share is restricted is called as &#8230;&#8230;&#8230;&#8230;..&#10;A)Government Company&#10;B)Private Company&#10;C)Public Company&#10;D)Foreign Company

Accepted Answer

The answer of A company in which the transferability of...

Deck 14: Insurance Provision and Accounting Standards