Question
The following ledger balances were extracted from the books of the Oman Qatar Insurance Company (OQIC) as of 31 March 2019. Particulars Amount OMR Particulars
The following ledger balances were extracted from the books of the Oman Qatar Insurance Company (OQIC) as of 31 March 2019.
Particulars | Amount OMR | Particulars | Amount OMR |
Life assurance fund at the beginning of the year | 3,307,500 | Income tax on interest and dividends | 6,750 |
Freehold premises | 45,000 | Retained earnings | 30,000 |
Claims by accident | 173,250 | Claims by maturity | 126,000 |
Premium | 571,500 | Bonus paid in cash | 45,000 |
Commission to agents | 56,250 | Interest and dividend received | 121,500 |
Other Assets | 225,000 | Surrenders | 49,500 |
Annuities | 67,500 | Audit fees | 22,500 |
Deposits at bank | 210,000 | Statutory Reserve | 210,000 |
Bonus in reduction to premium | 11,250 | Claims outstanding | 180,000 |
Office rent | 49,500 | Share capital 90,000@ 10 each | 900,000 |
Government securities | 3,150,000 | Loan on mortgage property | 1,026,000 |
Cash at bank | 4,500 | Re-insurance premium | 72,000 |
Salaries to employees | 45,000 | Commission on reinsurance ceded | 49,500 |
Agent balance | 30000 | Share premium | 45000 |
Following are the year-end adjustments that were required to be considered:
Claims have been recorded in ledger accounts but claims by death covered under reinsurance at the end of the period 31st March 2019 have not been included for OMR 27,000; also outstanding salaries were OMR 22,500. The company provided bonuses in the reduction of premium of OMR 6,750 and the outstanding premium yet to be collected was OMR 18,000. Lastly, it was observed that interest accrued was OMR 27,000 at the ending of the period.
Question 31
Which of the following will be listed among the operating expenses of an Insurance company?
a. Premiums
b. Depreciation
c. Commission on reinsurance ceded
d. Interest and Dividend received
Question 32
Validate the following statements
(i) Commission on reinsurance ceded is treated as an expense in the revenue account
(ii) Consideration for annuities is an income for insurance company
a. Statement (i) is true and (ii) is false
b. Statement (i) is false and (ii) is true
c. Both statements are false
d. Both statements are true
Question 33
Question text
Insurance provides security against ________
a. Losses
b. Both (a) & (b)
c. Risk
d. None of the given options
Question 34
Question text
Getting the present cash value of the policy before its maturity is called
a. Surrender value
b. Claim
c. Premium
d. Annuity
Question 35
Question text
What is the total amount of salaries shown in the revenue account of Oman Qatar Insurance Company?
a. RO 90,000
b. RO 67,500
c. RO 22,500
d. RO 45,000
Question 36
Question text
Calculate the amount of bonus shown in the revenue account of Oman Qatar Insurance company?
a. RO 18,000
b. RO 63,000
c. RO 49,500
d. RO 45,000
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