Question

Which of the following statements regarding insurance accounting is NOT correct?

a.

Premium is recognized as income over the contract period or the period of risk.

b.

Premium received in advance not relating to the current accounting period should be disclosed separately under the head "Current Liabilities".

c.

Acquisition costs are recognized in the period in which they are incurred.

d.

Claims under policies do not include those estimated or anticipated following a loss occurrence.

Posted under IC 14 Regulations of Insurance Business

Answer: (d).Claims under policies do not include those estimated or anticipated following a loss occurrence. Explanation:Claims under policies comprise the claims made for losses incurred, and those estimated or anticipated under the policies following a loss occurrence. Therefore, claims under policies do include those estimated or anticipated following a loss occurrence.

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Q. Which of the following statements regarding insurance accounting is NOT correct?
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