Preparation and Presentation of Financial Statements MCQs

Welcome to our comprehensive collection of Multiple Choice Questions (MCQs) on Preparation and Presentation of Financial Statements, a fundamental topic in the field of IC 89 Management Accounting. Whether you're preparing for competitive exams, honing your problem-solving skills, or simply looking to enhance your abilities in this field, our Preparation and Presentation of Financial Statements MCQs are designed to help you grasp the core concepts and excel in solving problems.

In this section, you'll find a wide range of Preparation and Presentation of Financial Statements mcq questions that explore various aspects of Preparation and Presentation of Financial Statements problems. Each MCQ is crafted to challenge your understanding of Preparation and Presentation of Financial Statements principles, enabling you to refine your problem-solving techniques. Whether you're a student aiming to ace IC 89 Management Accounting tests, a job seeker preparing for interviews, or someone simply interested in sharpening their skills, our Preparation and Presentation of Financial Statements MCQs are your pathway to success in mastering this essential IC 89 Management Accounting topic.

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Preparation and Presentation of Financial Statements MCQs | Page 8 of 11

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Q71.
What information should be provided in the profit and loss account by way of a note regarding the value of imports?

a.

Only the total value of all imported goods.

b.

Separately for raw materials, components and spare parts, and capital goods.

c.

Only for raw materials.

d.

Only for capital goods.

Discuss
Answer: (b).Separately for raw materials, components and spare parts, and capital goods. Explanation:The profit and loss account should provide, by way of a note, the value of imports separately for raw materials, components and spare parts, and capital goods.
Q72.
What are the primary legislations providing the legal framework for insurance accounting in India?

a.

The Companies Act, 2013

b.

The Insurance Regulatory and Development Authority Act, 1999

c.

The Insurance Act, 1938 and the IRDA Act, 1999

d.

The General Insurance Business (Nationalisation) Act, 1972

Discuss
Answer: (c).The Insurance Act, 1938 and the IRDA Act, 1999 Explanation:The primary legislations providing the legal framework for insurance accounting in India are The Insurance Act, 1938, and the IRDA Act, 1999.
Q73.
According to Section 11 of the Insurance Act, 1938, what financial statements are insurers required to prepare at the expiration of each financial year?

a.

Only a Balance Sheet

b.

A Balance Sheet, a Profit and Loss account, a separate Account of Receipts and Payments (Cash Flow Statement), and Revenue Accounts

c.

Only a Profit and Loss account

d.

A Profit and Loss account and a Cash Flow Statement

Discuss
Answer: (b).A Balance Sheet, a Profit and Loss account, a separate Account of Receipts and Payments (Cash Flow Statement), and Revenue Accounts Explanation:According to Section 11 of the Insurance Act, 1938, insurers are required to prepare a Balance Sheet, a Profit and Loss account, a separate Account of Receipts and Payments (Cash Flow Statement), and Revenue Accounts at the expiration of each financial year.
Q74.
What is the requirement for insurers regarding the maintenance of separate accounts?

a.

Separate accounts are not required.

b.

Separate accounts are required only for policyholders.

c.

Separate accounts are required for funds of shareholders and policyholders.

d.

Separate accounts are required only for shareholders.

Discuss
Answer: (c).Separate accounts are required for funds of shareholders and policyholders. Explanation:According to Section 11 of the Insurance Act, 1938, insurers are required to maintain separate accounts relating to funds of shareholders and policyholders.
Q75.
Which of the following is NOT listed as a major consideration for accounting and financial management for insurance companies in India?

a.

The Companies Act, 2013

b.

The Life Insurance Corporation Act, 1956

c.

The General Insurance Business (Nationalisation) Act, 1972

d.

The Banking Regulation Act, 1949

Discuss
Answer: (d).The Banking Regulation Act, 1949 Explanation:The Banking Regulation Act, 1949, is not listed as a major consideration for accounting and financial management for insurance companies in India.
Q76.
According to IRDA (Preparation of Financial Statements and Auditor's Report of Insurance Companies) Regulations, 2002, which schedule provides the requirements for preparing financial statements for an insurer carrying on life insurance business?

a.

Schedule 'A'

b.

Schedule 'B'

c.

Schedule 'C'

d.

Schedule 'D'

Discuss
Answer: (a).Schedule 'A' Explanation:An insurer carrying on life insurance business is required to comply with the requirements of Schedule 'A' according to IRDA (Preparation of Financial Statements and Auditor's Report of Insurance Companies) Regulations, 2002.
Q77.
For an insurer carrying on general insurance business, which schedule of the IRDA Regulations specifies the requirements for preparing financial statements?

a.

Schedule 'A'

b.

Schedule 'B'

c.

Schedule 'C'

d.

Schedule 'D'

Discuss
Answer: (b).Schedule 'B' Explanation:An insurer carrying on general insurance business is required to comply with the requirements of Schedule 'B' according to IRDA (Preparation of Financial Statements and Auditor's Report of Insurance Companies) Regulations, 2002.
Q78.
What is the purpose of Schedule 'C' in the context of IRDA Regulations for insurance companies?

a.

It specifies the accounting standards applicable to insurers.

b.

It provides guidelines for the preparation of Cash Flow Statements.

c.

It outlines the requirements for the Auditor's Report on Financial Statements.

d.

It details the reporting requirements for revenue accounts.

Discuss
Answer: (c).It outlines the requirements for the Auditor's Report on Financial Statements. Explanation:Schedule 'C' in the context of IRDA Regulations provides the requirements for the Auditor's Report on Financial Statements for insurers.
Q79.
Which of the following Accounting Standards is NOT applicable to insurers according to IRDA Regulations?

a.

Accounting Standard 3: Cash-flow Statement

b.

Accounting Standard 13: Accounting for Investment

c.

Accounting Standard 17: Segment reporting

d.

Accounting Standard 2: Valuation of Inventories

Discuss
Answer: (b).Accounting Standard 13: Accounting for Investment Explanation:Accounting Standard 13: Accounting for Investment is not applicable to insurers according to IRDA Regulations.
Q80.
In the context of life insurance business, what are the specified forms for preparing Financial Statements according to the IRDA Regulations?

a.

Form B, Form C, and Form D

b.

Form A-RA, Form A-Pl, and Form A-BS

c.

Schedule 'A', Schedule 'B', and Schedule 'C'

d.

Part III, Part IV, and Part V

Discuss
Answer: (b).Form A-RA, Form A-Pl, and Form A-BS Explanation:For life insurance business, the specified forms for preparing Financial Statements are Form A-RA (Revenue Account), Form A-Pl (Profit and Loss Account), and Form A-BS (Balance Sheet) as per Part V in Schedule A of the IRDA Regulations.
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