Question 1

Payments made on claims should be:

Accepted Answer

A)   always treated as an expense for the period in which the payment is made.
B)   only treated as an expense in the period if the claim is also settled in that period.
C)   used to reduce the liability for claims settled in previous periods.
D)   only treated as an expense in the period if the claim is also settled in that period and used to reduce the liability for claims settled in previous periods.

Question 2

There have been numerous criticisms of AASB 1023 since it became operative in 1992.The criticisms have mainly come from:

Accepted Answer

A)   policy holders.
B)   government policy advisers.
C)   general insurers.
D)   professional accounting bodies.

Question 3

In accordance with AASB 1023,what types of expected future payments in relation to insurance claims are required to be disclosed in the statement of financial position?
 Explain how each type is measured.

Accepted Answer

In accordance with AASB 1023, the types ...

Question 4

In the situation that at year end an insurer is aware that there has been flooding in an area in which it has insured policy holders against flooding,the insurer should estimate the probable claims and treat them as an expense of the current period even though the claims have not yet been made.

Accepted Answer

A) True 
 B)False

Question 5

You are an accountant for Chance Insurance Ltd and are asked to assess the adequacy of unearned premium liability.You are able to access the following information:
I.present value of expected future cash flows relating to future claims based on current insurance contracts
II.unearned premium liability (before liability adequacy test) 
III.risk margin
IV.related deferred acquisition cost
V.related intangible assets
Which of the following combinations best fits the liability adequacy test as prescribed in AASB 1023?

Accepted Answer

A)   (I+III)  - II
B)   (I+III)  - (II - IV - V) 
C)   (I-III)  - II
D)   (I+III)  - (II+IV+V)

Question 6

An unearned premium liability is:

Accepted Answer

A)   a premium that has been recognised previously in the statement of comprehensive income but not yet claimed against.
B)   to meet costs, including the claims handling costs.
C)   required to be recognised in the statement of financial position.
D)   to meet costs, including the claims handling costs and required to be recognised in the statement of financial position.

Question 7

Which of the following is within the scope of AASB 1023 General Insurance Contracts?

Accepted Answer

A)   fixed fee service contracts
B)   life insurance contracts
C)   weather derivatives
D)   product warranties

Question 8

Part of the insurance premium is a charge levied by government on the insured party.These amounts are to be treated as a liability by the insurer.

Accepted Answer

A) True 
 B)False

Question 9

AASB 1023 General Insurance Contracts requires premium revenue to be recognised in the statement of comprehensive income from attachment date using which basis?

Accepted Answer

A)   straight-line basis over the duration of the insurance contract
B)   consistent with the use of economic benefits
C)   systematic basis consistent with the pattern of the incidence of risk
D)   on expiry date of the insurance contract

Question 10

Which of the following are considered income arising from insurance contracts?

Accepted Answer

A)   direct premium revenue
B)   inward reinsurance premium revenue
C)   unearned premium revenue
D)   direct premium revenue and inward reinsurance premium revenue

Question 11

AASB 1023 General Insurance Contracts states that the pattern of the incidence of risk for many direct insurance contracts will be:

Accepted Answer

A)   straight-line basis over the duration of the insurance contract.
B)   consistent with the business cycle.
C)   driven by economic forces.
D)   reduced over the life of the contract.

Question 12

Discuss 'expected future payments' as referred to in AASB 1023 General Insurance Contracts.

Accepted Answer

AASB 1023 General Insurance Contracts de...

Question 13

Unclosed business is defined as business written close to the reporting date for which the date of attachment of the risk is before the end of the reporting date.

Accepted Answer

A) True 
 B)False

Exam 21: Accounting for General Insurance Contracts

Which of the following are considered income arising from insurance contracts?

Correct Answer
verified

Discuss 'expected future payments' as referred to in AASB 1023 General Insurance Contracts.

Correct Answer
Answered by ExamLex AI
AASB 1023 General Insurance Contracts de...
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There have been numerous criticisms of AASB 1023 since it became operative in 1992.The criticisms have mainly come from:

Correct Answer
verified

Part of the insurance premium is a charge levied by government on the insured party.These amounts are to be treated as a liability by the insurer.

Correct Answer
verified

Unclosed business is defined as business written close to the reporting date for which the date of attachment of the risk is before the end of the reporting date.

Correct Answer
verified

Which of the following is within the scope of AASB 1023 General Insurance Contracts?

Correct Answer
verified

In the situation that at year end an insurer is aware that there has been flooding in an area in which it has insured policy holders against flooding,the insurer should estimate the probable claims and treat them as an expense of the current period even though the claims have not yet been made.

Correct Answer
verified

An unearned premium liability is:

Correct Answer
verified

Correct Answer
verified

AASB 1023 General Insurance Contracts requires premium revenue to be recognised in the statement of comprehensive income from attachment date using which basis?

Correct Answer
verified

AASB 1023 General Insurance Contracts states that the pattern of the incidence of risk for many direct insurance contracts will be:

Correct Answer
verified

Payments made on claims should be:

Correct Answer
verified

In accordance with AASB 1023,what types of expected future payments in relation to insurance claims are required to be disclosed in the statement of financial position? Explain how each type is measured.

Correct Answer
Answered by ExamLex AI
In accordance with AASB 1023, the types ...
View Answer

Exam 21: Accounting for General Insurance Contracts

Which of the following are considered income arising from insurance contracts?

Correct AnswerverifiedShow Answer

Discuss 'expected future payments' as referred to in AASB 1023 General Insurance Contracts.

Correct AnswerAnswered by ExamLex AIAASB 1023 General Insurance Contracts de...View AnswerShow Answer

There have been numerous criticisms of AASB 1023 since it became operative in 1992.The criticisms have mainly come from:

Correct AnswerverifiedShow Answer

Part of the insurance premium is a charge levied by government on the insured party.These amounts are to be treated as a liability by the insurer.

Correct AnswerverifiedShow Answer

Unclosed business is defined as business written close to the reporting date for which the date of attachment of the risk is before the end of the reporting date.

Correct AnswerverifiedShow Answer

Which of the following is within the scope of AASB 1023 General Insurance Contracts?

Correct AnswerverifiedShow Answer

In the situation that at year end an insurer is aware that there has been flooding in an area in which it has insured policy holders against flooding,the insurer should estimate the probable claims and treat them as an expense of the current period even though the claims have not yet been made.

Correct AnswerverifiedShow Answer

An unearned premium liability is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

AASB 1023 General Insurance Contracts requires premium revenue to be recognised in the statement of comprehensive income from attachment date using which basis?

Correct AnswerverifiedShow Answer

AASB 1023 General Insurance Contracts states that the pattern of the incidence of risk for many direct insurance contracts will be:

Correct AnswerverifiedShow Answer

Payments made on claims should be:

Correct AnswerverifiedShow Answer

In accordance with AASB 1023,what types of expected future payments in relation to insurance claims are required to be disclosed in the statement of financial position? Explain how each type is measured.

Correct AnswerAnswered by ExamLex AIIn accordance with AASB 1023, the types ...View AnswerShow Answer

Correct Answer
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Correct Answer
Answered by ExamLex AI
AASB 1023 General Insurance Contracts de...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
Answered by ExamLex AI
In accordance with AASB 1023, the types ...
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