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

Answer rating: 100% (QA)

Question 31 Which of the following will be listed among the operating expenses of an Insurance compa... View the full answer