Accounts of General Insurance Companies MCQs 2023
Meaning of General Insurance
Insurance contracts that do not come under the ambit of life insurance are called general insurance. The different forms of general insurance are fire, marine, motor, accident and other miscellaneous non-life insurance. The tangible assets are susceptible to damages and a need to protect the economic value of the assets is needed.
For this purpose, general insurance products are bought as they provide protection againstunforeseeable contingencies like damage and loss of the asset. Like life insurance, general insurance products come at a price in the form of premium.
1. The Indian Insurance Act was enacted in the
year:
a) 1938
b) 1956
c) 1972
d) 2002
Ans: a) 1938
2. General Insurance business was nationalized in
the year:
a) 1935
b) 1950
c) 1956
d) 1972
Ans: c) 1972
3. Insurance business in India is regulated by:
a) SEBI
b) RBI
c) IRDA
d)
Government
Ans: c) IRDA
4. General insurance contract is a contract of:
a)
Indemnity
b)
Guarantee
c) Both of
the above
d) None of
the above
Ans: a) Indemnity
5. Match the following in respect to General
Insurance Companies:
|
Schedule
1: Premium (Net) |
Premium
received after adjusting re-insurance premium and reserve for unexpired risk |
|
Schedule
2: Claims incurred |
All
claims incurred including surveyor fees, legal and other expenses |
|
Schedule
3: Commission |
All
commission after adjusting re-insurance commission |
|
Schedule
4: Operating expenses related to insurance business |
Office
expenses + legal and audit fees + adv. & publicity |
6. A general insurance business carrying on
more than one type of insurance business prepares
a) A
separate revenue account for each type of business.
b) A
separate profit and loss account for each type of business.
c) A
separate revenue account and a combined profit and loss account.
d)
Consolidated financial statements are prepared
Ans: c) A separate revenue
account and a combined profit and loss account.
7. In case of marine insurance the provision
against unexpired risk should be:
a) 40% of
the net premium
b) 50% of
the net premium
c) 60% of
the net premium
d) 100% of
the net premiums.
Ans: d) 100% of the net
premiums.
8. In case of fire insurance the provision against
unexpired risk should be:
a) 40% of
the net premium
b) 50% of
the net premium
c) 60% of
the net premium
d) 100% of
the net premiums.
Ans: b) 50% of the net premium
Also Read: Multiple Choice Questions and Answers
- Advanced Financial Accounting MCQs 2023
- Accounts of Banking Companies MCQs
- Accounts of Life Insurance Companies MCQs
- Accounts of General Insurance Companies MCQs
- MCQ on Investment Accounting
- Advanced Financial MCQs (Dibrugarh University 2013 to 2023)
9. According to Insurance Regulatory and Development
Authority (IRDA) Regulations, 2002, every general insurance company must
prepare its Financial Statements as per Schedule B/C/D.
10. General
insurance policies are normally issued for long terms. False, one year
11. Revenue
Account of a general insurance company has five Schedules. False, 4
12. General
insurance includes all types of insurance. false
13. General
insurance includes all types of insurance except life insurance.
14. IRDA was
set up in the year 1996.
15. Revenue
accounts of insurance companies are prepared under the provisions of IRDA Regulation’ 2002.
16. Provisions
for unexpired risk in respect of marine business = 100%
17. Provisions
for unexpired risk in respect of fire business = 50%
18. The
general insurance business was taken over by the Central Government with effect
from 1972.
19. FORM B – RA: Revenue
account of general insurance companies.
20. FORM B – PL: Profit and
loss account of general insurance companies.
21. FORM B – BS: Balance sheet
of general insurance companies.
FAQs
1. Which type of contract is general insurance?
Ans: General insurance is a contract of indemnity.
2. Which accounts are prepared by general insurance companies?
Ans: Final account of general insurance business is required to be prepared as per IRDA Regulations, 2002 which consist of: (a) Revenue Account (as per Form B-RA); (b) Profit and Loss Account (Form B-PL); (c) Balance Sheet (Form B-BS).
3. Where is the reserve for unexpired risk shown?
Ans: Reserve for unexpired risk is shown on the liabilities side of the balance sheet under Schedule 14 - Provisions.
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