Casualty actuarial science (Part I) — reserving, ratemaking and the mathematics behind general insurance pricing.
These are 5 of the 264 IC-47 questions in Certena, taken from across the paper. Every answer key has been checked against a source — a printed answer key, a textbook extract, or arithmetic — not guessed. Reveal the answer and the explanation below each question. No sign-up needed.
Answer: B. Rs. 53400
The prime consideration of an insurer is underwriting results. The result is calculated by deducting all costs from income. Cost includes incurred claim cost. Incurred claims are calculated by adding & subtracting the claims paid/ outstanding including claims on reinsurance. Claims paid 24000 + Claims on Reinsurance Accepted Rs. 4000 - Claims on Reinsurance Ceded Rs. 2600 + Outstanding claims at the end Rs. 28000 = Rs. 53400
Answer: A. The depreciation to be charged in the 3rd year will be Rs.9,000
Given: Total cost of two machines: Rs.50,000 Depreciation method: Reducing balance method Depreciation rate: 30% per annum
Answer: A. 1,2 and 3
The financial statement, including consolidated financial statement, if any, shall be approved by the Board of Directors before they are signed on behalf of the Board by the chairperson of the company where he is authorised by the Board or by two directors out of which one shall be managing director, if any, and the Chief Executive Officer, the Chief Financial Officer and the company secretary of the company, wherever they are appointed, or in the case of One Person Company, only by one director, for submission to the auditor for his report thereon.
Answer: B. An employee used postage stamps and reimbursed petty cash of Rs.10 but no voucher was made
On the basis of the information given: Imprest balance at the start: Rs.600. Payment vouchers in possession: Rs.565. Cash remaining in the petty cash box: Rs.25. Total accountability (vouchers + cash) = Rs.565 + Rs.25 = Rs.590. This reveals a shortfall of Rs.10 as compared to the imprest balance of Rs.600. The correct explanation for this shortfall is a. An employee used postage stamps and reimbursed petty cash of Rs.10 but no voucher was made. This scenario explains the difference since the reimbursement wasn't documented with a voucher, creating the mismatch.
Answer: C. Only 3
In business, separate registers are maintained for each and every class transaction for purchase, sales, receipts and payments. Such registers or books are called 'books of prime entry' or 'books of original entry' or 'subsidiary books'. Transactions are recorded in these initially. They are nothing but journals.
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