School of Distance Education IInd SEMESTER B COM (2017 ADMISSION)

FINANCIAL ACCCOUNTING – QUESTION BANK

1. Out Of The following, Direct Is A) Salaries b) carriage outward c) rent of office building d) carriage inward 2. is a a) Fixed b) current asset c) intangible asset d) fictitious asset 3. Income received in advance is a) An income b) a liability c) an asset d) a loss 4. Sales are equal to a) plus profit b) cost of goods sold minus gross profit c) gross profit minus cost of goods sold d) none of these 5. Interest on drawings is a) An expenditure for the business b) an expense for the business c) a gain for the business d) a loss for the business 6. Which of the following is not a fixed asset a) Motor cycles b) furniture c) inventory d) free hold property 7. Which of the following is a a) A five year bank b) workmen compensation fund c) bank overdraft d) dividend equalization 8. Which of the following is not an intangible asset a) Stock b) goodwill c) trade mark d) patents. 9. In the case of net worth method of single entry system, the net profit is ascertained by a) Preparing trading and profit and loss account b) comparing opening and closing capital c) preparing d) none of these 10. Capital at the beginning of the year is ascertained by preparing a) account b) opening statement of affairs c) total creditors account d) total debtors account. 11. The amount of opening stock can be ascertained by preparing a) Memorandum trading account b) total creditors account c) total debtors account d) opening statement of affairs. 12. The closing balance in the creditors account can be ascertained from the a) Cash account b) total creditors account c) closing statement of affairs d)none of these. 13. If the rate of G/P is 25% of sales and cost of goods sold is Rs. 150000, the amount of G/P will be a) 30000 b) 25000 c) 40000 d) 50000 14. the charged on an asset is debited to a) asset account b) depreciation account c) cash account d) none of these 15. in case of straight line method, the amount of deprecation a) fluctuate every year, b) decreases every year c) increases every year d) remains same every year 16. amortization is related to a) Tangible fixed asset b) intangible c) any fixed asset d) none of these. 17. Depletion method is more suitable for a) Service industry b) mining industry c) intangible assets d) all of these 18. Depletion is a process of a) Valuation b) allocation c) both valuation and allocation d) none of these.

Financial

Page 1 School of Distance Education 19. The main objective of providing depreciation is a) To calculate true profit b) to show the true financial position c) to reduce tax burden d) to provide fund for replacement of assets. 20. Under diminishing balance method, depreciation is calculated on a) Original cost b) written down value c) scrap value d) market value 21. Loss on sale of machinery should be written off against a) Security premium b) sales account c) depreciation fund account d) none of these 22. Loss on sale of asset is a) Debited to asset account b) debited to cash account c) credited to asset account d) debited to profit and loss account. 23. Depreciation arises because of a) Fall in market value of asset b) wear and tear c) recession d) none of these. 24. When provision for depreciation account is maintained, the amount of depreciation is debited to a) Asset account b) depreciation account c) provision for depreciation account d) none of these. 25. If original cost of an asset is rs. 60000 and its scrap value is Rs. 10000, its depreciable cost is a) 70000 b) 50000 c) 60000 d) none of these. 26. Under diminishing balance method, A) The rate of depreciation falls every year b) the amount on which deprecation is calculated falls every year c) the rate as well as amount of depreciation falls every year. D) the rate as well as amount of depreciation remains constant. 27. The term ‘depletion’ applies to decrease in value of a) Tangible asset b) intangible asset c) wasting asset d) current asset. 28. The term amortization applies to decrease in book value of a) Intangible fixed asset b) wasting assets c) tangible fixed assets d) current assets 29. For providing depreciation on lease hold property, the appropriate method is a) Revaluation method b) fixed installment method c) replacement method d) written down value method. 30. Accumulated depreciation is an example of a) An expense b) an unrecorded c) a liability d) a contra account. 31. Share application is classified as a) Real account b) personal account c) impersonal account d) nominal account 32. A newly established company cannot issue shares at par a) Par b) premium c) discount d) none of these 33. The minimum share application is a) 1% of the face value b) 5% of the face value c) 10% of the face value d) 25% of the face value. 34. The difference between subscribed capital and called up capital a) Paid up capital b) uncalled capital c) calls in advance d) calls in arrears. 35. The number of days required from the time of issue of the prospectus to the complete allotment should not exceed a) 30 days b) 60 days c) 90 days d) 120 days 36. The excess price received on the par value of shares should be credited to a) Calls in advance account b) reserve capital c) security premium account d) none of these 37. Which of the following should be deducted from the share capital to determine the paid up capital

Financial Accounting

Page 2 School of Distance Education a) Calls in advance b) calls in arrears c ) security premium d) discount on issue of shares. 38. The security premium will be shown under the heading a) Share capital b) current liability c) current asset d) none of these. 39. As per Table A of the companies act, the interest on calls in advance is a) 5% b) 10% c)6% d) none of these. 40. The rate of interest a company can charge on calls in arrears according to Table A of the companies act is a) 10% b) 6% c) 5% d) none of these 41. The rate of discount on shares cannot exceed. a) 5% b) 10% c) 6% d) none of these 42. Premium on issue of shares can be used for a) Issue of bonus shares b) distribution of profit c) transferring to general reserve d) none of these. 43. When shares are forfeited the share capital account is debited by a) Paid up amount b) called up amount c) calls in arrears d) nominal value of such shares 44. Which of the following signifies the difference between par value and issue price below par value. a) Security premium b) discount on issue of shares c) calls in arrear. 45. When forfeited shares (which were originally issued at a discount ) are reused at a premium, the amount of such premium will be credited to a) Shares forfeiture account b) security premium account c) capital reserve account d) none of these. 46. When an existing company offers its shares for sale to the existing shareholders, it is known as a) Private placement b) bonus shares c) right issue d) offer for sale 47. Dividends are usually paid on a) Authorized capital b) issued capital c) called up capital d) paid up capital 48. Which of the following should be deducted from the shares capital to find out paid up capital a) Calls in advance b) calls in arrears c) shares forfeited account d) discount on issue of shares. 49. Interest on debenture is a) Adjustment of profit b) appropriation of profit c) charge on profit d) none of these 50. In the of a company, debentures are shown under which heading a) Secured loan b) unsecured loan c) provisions d) reserves and surplus 51. In the balance sheet of a company , the discount on issue of debentures is shown under which heading a) Fixed asset b) current asset c) investment d) miscellaneous expenditure 52. Interim dividend is always shown a) P/L appropriation account b) on the asset side of balance sheet c) on the liability side of the balance sheet d) none of these. 53. Unclaimed dividend is shown in the balance sheet under the head a) Current liability b) unsecured loan c) reserve and surplus d ) provision 54. Advance payment of tax is in the nature of a) Capital expenditure b) prepaid c) outstanding expenses d) revenue expenditure 55. Debentures are shown in the balance sheet under head a) Current asset and advances b) investments c) secured loan d) unsecured loan

Financial Accounting

Page 3 School of Distance Education 56. Preliminary expense Is an example of a) Fixed asset b) current asset c) investment d) fictitious asset 57. Divisible profit do not include a) Insurance fund b) reserve fund c) profit and loss account balance d) revaluation reserve 58. The transfer of profit to reserve should not exceed a) 5% of profit b) 10% of profit c)15% of profit d) 20% of profit 59. Loose tools are shown in the balance sheet under a) Fixed asset b) investment c) current asset d) miscellaneous expenditure 60. Discount on shares and debentures are shown in a) P/L Appropriation a/c b) asset side of the b/s c)liability side of the b/s d) none of these. 61. Calls in arrear Is a) Shown as current asset b) deducted from share capital c) shown as current liability d) shown under miscellaneous expenditure 62. The amount set aside to meet the loss of bad is a) Provision b) liability c) reserve d) contingent liability 63. When the proposed dividend exceeds 20% of the paid up capital, percentage of profit to be transferred to reserve is a) 10% b) 7.5% c) 2.5% d) 5% 64. In the case of joint stock company, goodwill is sown on the asset side under the head a) Fixed asset b) investment c) current asset d) miscellaneous expenditure 65. Advance payment of tax should be shown on the a) Debit side of P/L a/c b) debit side of P/L appropriation a/c c) asset side of the B/S d) liability side of the B/S 66. Which of the following items will be taken in the P/L a/c below the line a) Provision for taxation b) transfer to sinking fund c) contribution to PF d) preliminary expenses written off 67. Scrip dividend means a) Unclaimed dividend b) arrears of dividend c) dividend paid other than cash d) cash dividend 68. Which of the following would not appear in a limited company’s appropriation a/c a) Transfer to revaluation reserve b) proposed taxation c) interim dividend d) transfer to general reserve. 69. As per the rules framed under the companies Act, 1956, if the dividend proposed by a company is 12% of the paid up capital, the amount to be transferred to reserve must not be less than a) 5% of current year profit b) 7.5% of the current year profit c) 10% of the current year profit d) 2.5% of the current year profit. 70. Banks show the provision for income tax under the head a) Contingent assets b) contingent liabilities c) other liabilities and provisions d) borrowings. 71. Rebate on bills discounted is a) An item of income b) a liability c) income received in advance d) accrued income. 72. Which of the following does not include under the head “other asset” a) Silver b) interest accrued c) gold d) inter office adjustment 73. A non banking asset is

Financial Accounting

Page 4 School of Distance Education a) An item of office equipment b) any asset required from the debtors in satisfaction of claim c) money at call and short notice d) furniture and fixtures 74. In a bank balance sheet, unclaimed dividend will be shown under the head a) Contingent liabilities b) other liabilities c) borrowings d) none of these. 75. With effect from 31/03/2005, a doubt full asset is none which has remained in the substandard category for a) 18 month b) 12 month c) 6 month d) none of these 76. Provision created for substandard is a) 10% b) 155 c) 20% d) none of these. 77. Provision created for unsecured doubtful debt is a) 50% b) 75% c) 100% d) none of these. 78. General insurance policies are taken a) One year b) two year c) three year d) none of these 79. When policy matures on the death of the insured, it is expressed as a) With profit policy b) without profit policy c) whole life policy d) none of these 80. In the revenue account bonus in reduction of premium is shown as a) Liability b) income c) expense d) none of these 81. The fixed assets of an insurance company are shown in a) Schedule 6 b) schedule 7 c) schedule 8 d) none of these 82. Insurance regulation and development authorities act came into effect in a) 1938 b) 1999 c) 2000 d) none of these 83. Which of the following of an insurance company does not fall under income from investment a) Interest and dividends b) profit on sale of investment c) share transfer fee d) none of these. 84. Which of the following of an insurance company is included in other assets a) Loan to directors b)agents balance c) advance tax paid d) none of these 85. Reserve for unexpired risk is shown under a) Reserve and surplus b) current liabilities c) provision d) none of these. 86. Which of the following is not an advantage of having a conceptual framework of accounting ? a) Development of accounting standards is subject less political pressure b) A consistent balance sheet or approach is used to setting standards c) Considers the needs of all user d) Avoids a mixed up approach to setting standards 87. A conceptual framework for accounting is … a) A set of financial statements b) A set of rules governing financial reporting c) A set of components of financial statements d) A set of principles underpinning financial reporting 88. Which of the following relate to financial position in a set of financial statements? a) Assets , liabilities, income and expense b) Assets, liabilities, income and c) Income and expense d) Income, expense and liabilities 89. GAAP stands for a) Generally accepted accounting principles b) Globally accepted accounting practices c) Generally allowable accounting principles d) Generally allowable accounting practices

Financial Accounting

Page 5 School of Distance Education 90. The convergence of the Indain Accounting standards with IFRS began in ---april 11 a) April 10 b) August 09 c) December 11 91. The global key professional accounting body is ----- a) Internal accounting standards board b) The institute of chartered of india c) The financial accounting standards board d) The international accounting standards committee 92. The original cost at which an asset or liability is acquired is known as ------a) Amortization b) Replacement c) d) Carrying cost 93. The international accounting standards committee was set up in ------a) 1982 b) 1976 c) 1967 d) 2009 94. The process of converting foreign – subsidiary financial statements into the home currency is known as------a) Transmission b) Translation c) Consolidation d) Reconstruction 95. Accounting in india is governed by the ------a) Income tax department b) Company law board c) Institute of chartered accountants of india d) Reserve bank of india 96 . ……………… is an artificial person created by law A. Firm B. Sole trader C. Company D. None of these 97. The liability of shareholders of a company is ……………….. A. Limited B. Unlimited C. Uncertain D. None of these 98. A company is managed by its……………. A. Partners B. Auditor C. Board of Directors D. Debenture holder 99.. ………….company Is a company created by a special Act in Parliament A. Government B. Registered C. Chartered D. Statutory 100. A company registered with Registrar of Companies under Indian Companies Act is called

Financial Accounting

Page 6 School of Distance Education as……….. A. Government B. Registered C. Chartered D. Statutory 101. The company in which the liability of members is liable to pay the agreed amount at the time of winding up is called as ………….. A. Unlimited Company B. Company limited by shares C. Company limited by guarantee D. Liquidating Company 102. A company in which the transferability of share is restricted is called as ………….. A. Government Company B. Private Company C. Public Company D. Foreign Company 103. . ……….is the first stage in the formation of a public company A. Promotion B. Incorporation C. Capital Subscription D. Commencement 104. Authorised capital is called as…………… A. Reserve capital B. Nominal Capital C. Capital Reserve D. Subscribed capital 105. . …………..is that portion of capital which is called up only on winding up of the company. A. Authorised Capital B. Issued capital C. Subscribed capital D. Reserve capital 106. In case of ……………..preference shares, the arrears of dividend are carried forward and paid out of the profits of the subsequent years. A. Participating B. Convertible C. Cumulative D. Redeemable 107. . …………..shares are repayable after the expiry of the fixed period or at the option of the company. A. Participating B. Convertible C. Cumulative D. Redeemable 108. A bundle of fully paid shares is called…………….. A. Stock B. Sweat Equity C. Warrant D. None of these 109. IPO stands for ……………… A. Initial Private Offer B. International Public Offer C. Initial Public Offer D. International Private Offer 110. In …... the company offers the investors an opportunity to bid collectively. A. Private Placement B. Offer for sale C. Book building D. IPO 111. As per the companies Act, the interest on calls in advance is ………….. A. 10% B. 6% C. 5% D. 7% 112. The rate of interest on Calls in arrears as per Companies Act is ………… A. 10% B. 6% C. 5% D. 7% 113. The shares of a company can be issued at ………….. A. Par B. Premium C. Discount D. All of these 114. Share application account is a ……….. A. Real Account B. Nominal Account C. Impersonal Account. D. Personal Account 115. The rate of discount on shares cannot exceed ………. A. 10% B. 5% C. 6% D. 7% 116. A newly established company cannot issue shares at …… A. Par B. Premium C. Discount D. All of these 117. . ………..of total issued amount of capital is called minimum subscription. A. 75% B. 90% C. 95% D. 80% 118. The rate of discount should not exceed ……………. Of nominal vale of shares. A. 10% B. 5% C. 6% D. 7% 119. The minimum application money to be paid by an applicant must not be less than ……

Financial Accounting

Page 7 School of Distance Education as per Companies Act. A. 10% B. 5% C. 15% D. 20% 120. The excess price received on the par value of shares should be credited to …………. A. Calls in advance A/c B. Reserve Capital A/c C. Security Premium A/c D. None of these 121. Compulsory cancellation of shares by the company\y due to non‐payment of allotment Or call money is called ……………. A. Surrender of Shares B. Buy back of shares C. Forfeiture of shares D. All of these 122. The profit on reissue of forfeited shares is transferred to ……… A. General reserve B. Capital Redemption reserve C. Capital reserve D. Investment Allowance reserve 123. Preference shareholders are………… A. Debtors of the company B. Creditors of the company C. Owners of the company D. None of these 124. The shares firstly offered to the existing shareholders are called as …………. A. Right shares B. Bonus shares C. Ordinary shares D. None of these 125. The security premium account is shown in the balance sheet under the head………. A. Share capital B. Reserves & Surplus C. Secured loans D.Current liabilities 126. ………..should be deducted from the share capital to determine the paid up capital. A. Security premium B. Calls in advance C. Calls in arrears D. Discount on issue 127. The share capital account is debited with …………while forfeiting shares A. Calls in arrears B. Paid up capital C. Called capital D. Issued capital 128. On an equity share of Rs. 20, the company has called up Rs. 16 but Rs.14 has been received by the company, the share capital account should be credited by …… A. Rs. 20 B. Rs. 16 C. Rs. 14 D. Rs. 6 129. Balance of forfeited share is ……. A. Revenue Reserve B. Capital Reserve C. Secret Reserve D. Security Premium 130. When shares are issued at a price higher than their face value, it is called issue at………….. A. Par B. Premium C. Discount D. None of these 131. The shares of a company only can be forfeited after giving a ………days notice A. 21 B. 14 C. 7 D. 30 132. The forfeited shares can be reissued at ………… A. Par B. Premium C. Discount D. All of these 133. Preference shares cannot be redeemed at ……….. A. Par B. Premium C. Discount D. All of these 134. Which of the following is an example for capital profit? A. Capital Reserves B. Security premium C. Forfeited shares D. All of these. 135. The allotment of shares in case of oversubscription is called….. A. Pro‐rata allotment B. Private Placement C. Offer for sale D. None of these 136. Security premium account can be utilized for …………. A. Issuing fully paid bonus shares B. Write off preliminary expenses C. Write off underwriting commission D. All of these 137. . …………..is that portion of issued capital which is applied for by the public. A. Issued capital B. Subscribed capital C. Nominal Capital D. Paid up capital 138. . ……………is an instrument of acknowledgment of debt.

Financial Accounting

Page 8 School of Distance Education A. Equity share B. Preference Share C. Debenture D. All of these 139. Debenture represents ………. Of a company A. Borrowed capital B. Owned capital C. Hybrid capital D. None of these 140. Debenture holders will get …….. A. Dividend B. Interest C. Profit D. All of these 141. Debenture holders are the ……….of a company A. Debtors B. Owners C. Creditors D. Borrowers 142. A charge created not on specific assets but generally on all assets is known as…………. A. Fixed charge B. Floating charge C. Mortgage D. None of these 143. . …………..debentures can be transferred only with the knowledge of the company. A. Naked B. Mortgage C. Registered D. Bearer 144. . ………..debentures are transferable by mere delivery A. Naked B. Mortgage C. Registered D. Bearer 145. . …………debentures are secured by the assets of the company A. Naked B. Mortgage C. Registered D. Bearer 146. . Unsecured debentures are called as ……………….debentures A. Naked B. Mortgage C. Registered D. Bearer 147. FCD stands for …………… A. Fixed Charge Debentures B. Floating Charge Debentures C. Fully Convertible Debentures D. None of these 148. Discount or loss on issue of debenture is a …………. A. Capital Profit B. Revenue Receipt C. Capital Loss D.Revenue Expense 149. Debentures can be redeemed out of ………. A. Fresh issue B. Capital C. Profit D. All of these 150. Interest on debenture is ………. A. Adjustment of profit B. Appropriation of Profit. C. Charge on profit D. None of these 151. Debentures are shown in the balance sheet under the head ……….. A. Secured loans B. Unsecured loans C. Provisions D.Current liabilities 152. After realizing all the investments, the balance in the sinking fund account is transferred to ………… A. Profit and Loss A/c B. Debenture Account C. Sinking fund A/c D. Capital reserve 153. When own debentures are cancelled, any profit on cancellation is transferred to …….. A. General Reserve B. Capital Reserve C. Profit and Loss A/c D. Debenture A/c 154. If the purchase price of debentures includes interest for the expired period, the quotation is said to be ………….. A. Ex‐interest B. Cum‐interest C. Co‐interest D. None of these 155. If the purchase price of debentures excluding interest for the expired period, the quotation is said to be ………….. A. Ex‐interest B. Cum‐interest C. Co‐interest D. None of these. 156. As per ………..it is the statutory obligation of companies to prepare their final accounts. A. Sec 210 B. Sec 211 C. Sec 212 D. Sec 214 157. The Balance sheet of Companies are prepare in the form ………. A. Part I of Schedule V B. Part I of Schedule VI C. Part II of Schedule V D. Part II of Schedule VI 158. The Profit and Loss Account of companies is prepared in the form …………. A. Part I of Schedule V B. Part I of Schedule VI

Financial Accounting

Page 9 School of Distance Education C. Part II of Schedule V D. Part II of Schedule VI 159. The dividend declared between two annual general meeting is called ………. A. Proposed Dividend B. Final Dividend C. Interim Dividend D. None of these 160. The dividend recommended by the Board of Directors is called……… A. Proposed Dividend B. Final Dividend C. Interim Dividend D. None of these 161. Unclaimed dividend is shown in the balance sheet under the head …….. A. Reserves and Surplus B. Current Liabilities c. Loans and Advances D. Current Assets 162. . ……..is a charge against profit of the company A. Provision B. Reserves C. Surplus D. All of these 163. An item which may or may not be the liability of the company due to happening of certain event is………… A. Current Liability B. Fixed Liability C. Contingent Liability D. None of these 164. Advance tax paid is shown in the balance sheet under the head………. A. Current Liabilities B. Loans and Advances C. Fixed Assets D. None of these 165. Preliminary expenses not written off are shown in the balance sheet under the head… A. Current Assets B. Investments C. Current Liabilities D. Miscellaneous Expenditure 166. Which of the following is not a statutory reserve? A. General reserve B. Development rebate reserve C. Investment allowance reserve D. Workmen compensation fund 167. Realisation Account is a ………….. A. Real Account B. Personal Account C. Nominal Account D. Suspense Account 168. Trade liabilities include ……….. A. Creditors B. Debentures C. Bank overdraft D. All of these 169. . ……..is called a factory of credit. A. Company B. Firm C. Bank D. None of these 170. Banking companies are governed in India by ………. A. Banking Regulation Act B. Indian Companies Act C. Reserve Bank of India Act D. All of these 171. CRR stands for ………… A. Current Reserve Ratio B. Capital Reserve Ratio C. Cash Reserve Ratio D. Capital Redemption Ratio 172. SLR stands for …………… A. Savings Level Ratio B. Statutory Liquidity Ratio C. Standard Liquidity Ratio D. None of these 173. The method of rapidly posting entries in the books of banks is called as ………. A. Single Entry B. Cash Method C. Slip System D. None of these 174. The P&L A/c of Banking Companies are prepared as per ………of Banking Regulation Act. A. Form A of Schedule III B. Form B of Schedule III C. Form A of Schedule VI D. Form B of Schedule VI 175. . …….of profit is transferred to statutory reserves. A. 10% B. 20% C. 25% D. 30% 176. Banks show the provision for income tax under the head ………. A. Contingent liabilities B. Deposits C. Other liabilities and provisions D. Borrowings 177. Rebate on bills discounted is ………..

Financial Accounting

Page 10 School of Distance Education A. An income accrued but not received B. A liability C. An expense D. Income received in advance 178. NPA stands for…………. A. Non‐ Performing Assets B. Normal Performing Assets C. National Performing Asset D. None of these 179. Schedule 1 is concerned with …………. A. Cash and balance with RBI B. Capital C. Reserves and Surplus D. Investments 180. . ………… is shown under Schedule 15. A. Interest earned B. Profit C. Interest Expended D. Appropriations 181. Acceptance, endorsements and other obligations come under the head… A. Provisions and Contingencies B. Contingent liabilities C. Deposits D. Borrowings 182. Assets are NPAs for a period not exceeding 12 months are called …………. A. Standard Assets B. Substandard Assets C. Doubtful Assets D. Loss Assets 183. Assets are NPAs for a period exceeding 12 months are called …………. A. Standard Assets B. Substandard Assets C. Doubtful Assets D. Loss Assets 184. . ………is a form of agreement between two parties in which one party agrees to make good for loss of another. A. Contract B. Insurance C. Banking D. Mutual fund 185. The agreement of insurance is called as ……….. A. Policy B. Premium C. Annuity D. None of these 186. The consideration in insurance for covering the risk is called …………. A. Claim B. Premium C. Annuity D. None of these 187. . ……………is the party who undertakes the risk in insurance. A. Insurer B. Assurer C. Underwriter D. All of these 188. The party whose risk is covered in insurance is known as ………. A. Insurer B. Insured C. Underwriter D. None of these 189. In …………., the insurer agrees to pay a certain sum of money to the policyholder either on his death or a certain age, which ever is less. A. Fire Insurance B. Marine Insurance C. Burglary Insurance D. Life Insurance 190. General Insurance includes ……………. A. Fire Insurance B. Marine Insurance C. Burglary Insurance D. All of these 191. LIC was nationalized in ………….. A. 1935 B. 1950 C. 1956 D. 1964 192. Insurance business in India is regulated by …………. A. LIC B. IRDA C. RBI D. SEBI 193. Under …………., the sum assured is given to the beneficiary only on death of policyholder. A. Whole Life Policy B. Endowment Policy C. Annuity D. None of these 194. . ………..is the amount payable to the insured on the happening of event. A. Premium B. Annuity C. Claim D. Policy 195. An annual payment which an insurer guarantees to pay for lump sum money received in the beginning is called …………. A. Premium B. Annuity C. Claim D. Policy 196. The amount given to the policyholder due to his inability of paying further premium is called …………..

Financial Accounting

Page 11 School of Distance Education A. Annuity B. Bonus C. Surrender value D. Claim 197. . …………..is an agreement between two insurance companies whereby one transfers a part of risk to other. A. Reinsurance B. Sub insurance C. Shared Policy D. None of these 198. Revenue Account is also called …………. A. Shareholders’ Account B. Policyholders’ Account C. Creditors’ Account D. None of these 199. Valuation balance sheet is prepared by ……………business. A. Fire Insurance B. Marine Insurance C. Life Insurance D. All of these 200. The commission earned by insurance companies from others for giving them business under reinsurance is called ………………… A. Commission on reinsurance accepted B. Agents’ commission C. Commission on reinsurance ceded D. None of these 201. The commission given by insurance companies to others for receiving business under reinsurance is called ………………… A. Commission on reinsurance accepted B. Agents’ commission C. Commission on reinsurance ceded D. None of these 202. Profit and Loss Account of General Insurance Companies are prepared in ………… A. Form A‐PL B. Form B‐RA C. Form B‐PL D. Form B‐BS 203. The principle of subrogation is applicable to…………… A. Fire Insurance B. Marine Insurance C. Burglary Insurance D. All of these Q. No Answer Q. No Answer Q. No Answer Q. No Answer Q. No Answer 1 D 41 B 81 D 121 C 161 B 2 C 42 A 82 A 122 C 162 A 3 B 43 B 83 C 123 B 163 C 4 A 44 B 84 B 124 A 164 B 5 C 45 B 85 C 125 B 165 D 6 C 46 C 86 C 126 C 166 A 7 C 47 D 87 D 127 C 167 C 8 A 48 B 88 B 128 B 168 A 9 C 49 C 89 A 129 B 169 C 10 B 50 A 90 A 130 B 170 A 11 A 51 D 91 A 131 B 171 C 12 B 52 A 92 C 132 D 172 B 13 D 53 A 93 C 133 C 173 C 14 B 54 B 94 B 134 D 174 B 15 D 55 C 95 C 135 A 175 C 16 B 56 D 96 C 136 D 176 C 17 B 57 D 97 A 137 B 177 D 18 B 58 B 98 C 138 C 178 A 19 A 59 C 99 D 139 A 179 B 20 B 60 B 100 B 140 B 180 C 21 C 61 B 101 C 141 C 181 B

Financial Accounting

Page 12 School of Distance Education 22 D 62 A 102 B 142 B 182 B 23 B 63 A 103 A 143 C 183 C 24 B 64 A 104 B 144 D 184 B 25 B 65 C 105 D 145 B 185 A 26 B 66 C 106 C 146 A 186 B 27 C 67 C 107 D 147 C 187 D 28 A 68 B 108 A 148 C 188 B 29 B 69 D 109 C 149 D 189 D 30 D 70 C 110 C 150 C 190 D 31 A 71 C 111 B 151 A 191 C 32 C 72 C 112 C 152 D 192 B 33 B 73 B 113 D 153 B 193 A 34 B 74 B 114 D 154 B 194 C 35 D 75 B 115 A 155 A 195 B 36 C 76 A 116 C 156 A 196 C 37 B 77 C 117 B 157 B 197 A 38 D 78 A 118 A 158 D 198 B 39 C 79 A 119 B 159 C 199 C 40 C 80 C 120 C 160 A 200 C

Q. No Answer 201 A 202 C 203 D

Prepared by

Sri. Rajan P, Asst. professor of Commerce, SDE, University of Calicut.

Financial Accounting

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