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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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