School of Distance Education

IInd SEMESTER B COM (2017 ADMISSION)

FINANCIAL ACCCOUNTING – QUESTION BANK

1. Out Of The following, Direct Expense Is

A) Salaries b) carriage outward c) rent of office building d) carriage inward
2. Goodwill is a
a) Fixed asset 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) Cost of goods sold 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 current liability
a) A five year bank loan 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) Cash 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 depreciation 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 assets 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.

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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 revenue 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

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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 balance sheet 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 expenses c) outstanding expenses d) revenue
expenditure
55. Debentures are shown in the balance sheet under head
a) Current asset loans and advances b) investments c) secured loan d) unsecured loan

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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 debt 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

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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 income statement 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 equity
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

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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 accountants 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) Historical cost
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

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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 ……

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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.

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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

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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 ………..

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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
…………..

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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

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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.

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