IMPORTANT THEORY

QUESTIONS
(From question papers- 2016
onwards)

Prepared by Ms.Veena Renjini S

Department of Commerce
 MODULE 1. ACCOUNTS OF INSURANCE COMPANIES
1. What is claims? (2 marks)
2. What is fire insurance?(2 marks)
3. What do you mean by the term Policy? (2 marks)
4. What is Double insurance? (2 marks)
5. What do you mean by with profit policy? (2 marks)
6. What is cash bonus? (2 marks)
7. What are the types of registers & books maintained by life insurance companies? (5 marks)
8. How will you prepare the profit and loss account of life insurance companies? (5 marks)
9. Explain the procedure for the preparation of final accounts of general insurance companies?
And distinguish between life insurance and general insurance? (15 marks)
10.What is Life insurance (2 marks)
11.What is Re-insurance premium accepted (2 marks)
12.What is consideration for annuities granted? (2 marks)
13.What is Bonus in reduction of premium? Explain the treatment of bonus in reduction of
premium in the revenue account? (5 marks)
14.Name the contingent liability of an insurance company (2 marks)
15.What is premium (2 marks)
16.What is Actuarial valuation? (2 marks)
17.How do you prepare valuation balance sheet? (5 marks)
18.What are the different types of general insurance policies? (5 marks)
 MODULE 2. ACCOUNTS OF BANKING COMPANIES

1. Give any four examples of schedule 12 of banking companies? (2 marks)

2. Describe the term Capital Adequacy Ratio. How it is calculated? (2 marks)
3. Distinguish between cash reserve ratio & statutory liquidity ratio? (2 marks)
4. Define unexpired discount and show journal entry. (2 marks)
5. What is rebate on bills discounted? (2 marks)
6. What are the books maintained by a bank? (5 marks)
7. Give the model form of balance sheet of a banking company with suitable schedules (use
imaginary figures) (5 marks)
8. Explain briefly the features of bank accounting. (5 marks)
9. What do you mean by Statutory reserve of a banking company?(2 marks)
10.Give any four examples of schedule 14 of bank’s final accounts. (2 marks)
11.What is SLR? (2 marks)
12.What is rebate on bills discounted? How it is treated in final accounts (5 marks)
13.What are Non-performing assets? (2 marks)
 MODULE 3. INTERNAL RECONSTRUCTION

1. State the various ways in which internal reconstruction can be carried out ?(2 marks)
2. What is alteration of share capital (2 marks)
3. What do you mean be internal reconstruction? (2 marks)
4. State the objectives of internal reconstruction? (2 marks)
5. What is subdivision of shares? (2 marks)
6. What is consolidation of shares? (2 marks)
7. Distinguish internal reconstruction from external reconstruction. (5 marks)
8. What is capital reduction account? (2 marks)
9. What is Internal reconstruction? Explain the procedure of internal reconstruction. (5 marks)
10.What is reorganisation of capital? (2 marks)
11. Difference between consolidation and sub-division of share capital (2 marks)
 MODULE 4 : AMALGAMATION, ABSORPTION AND EXTERNAL RECONSTRUCTION
1. What are the main objectives of External reconstruction? (2 marks)
2. What do you mean by Pooling of interest method? (2 marks)
3. Explain when the external reconstruction is taken place(2 marks)
4. Explain briefly AS-14.(2 marks)
5. Which accounting method is used in Amalgamation in the nature of merger? Why? (2 marks)
6. How to close Realisation Account? ( 2 marks)
7. What is External reconstruction? ( 2 marks)

7. What is purchase consideration? (2 marks)

8. Amalgamation is very essential to meet the modern business competition. Explain (5 marks)
9. The amalgamation process disappears the existence of one company. Is it a good practice?
Why and When? (5 marks)
10. External reconstruction is needed for the survival of a company nut absorption is for
strengthening the existing one- Critically comment. (5 marks)
11. What do you mean by amalgamation? Explain its main features ? (5 marks)
12. Pooling of interest method is used in the case of amalgamation in the nature of merger and
this involves many steps. Make a short note on this statement by explaining the steps of pooling
of interest method. (5 marks)
13. Amalgamation in the nature of purchase and absorption seem to be same, but they are
conceptually different. Substantiate. (5 marks)
14. Differentiate between Amalgamation and external reconstruction. (5 marks)
15. What are the methods of calculating purchase consideration? (5 marks)
16. What do you mean by Amalgamation in the nature of purchase? (2 marks)
17. Differentiate between Amalgamation and Absorption (2 marks)
18. Make a note on AS-14 and its components (5 marks)
19. What do you mean by business combinations? What are they? (2 marks)
20. Explain any two differences of Absorption and External reconstruction. (2 marks)
 MODULE 5. LIQUIDATION

1. Who is a Liquidator? (2 marks)

2. What is List A Contributory? (2 marks)
3. What is Liquidation? (2 marks)
4. What are the grounds of voluntary winding up (2 marks)
5. What is member’s voluntary winding up? (2 marks)
6. What are the powers entrusted with the liquidator? (2 marks)
7. What are the various modes of winding up ? (5 marks)
8. Explain preferential creditors of a company? (5 marks)
9. What are the order of payment of liabilities under liquidation? (5 marks)
10.Give a pro-forma of liquidator’s final statement of account with imaginary figures (15 marks)
11.What do you mean by winding up under the supervision of court? (2 marks)
12.Who is a contributory (2 marks)
13. Distinction between Liquidation and insolvency (5 marks)