Author name: Administrator

289. Which one of the following is NOT true about capital expenditure?

Creates future benefits
Incurred to acquire fixed assets
Incurred to increase the economic life of existing fixed assets
Reduce the profit of the concern
✅ The correct answer is D.
Capital expenditure does not reduce the profit of the concern. Capital expenditures refer to funds that are used by a company for the purchase, improvement, or maintenance of long-term assets to improve the efficiency or capacity of the company.

3026. Which of following is an example of purchasing costs?

incoming freight
storage costs
insurance
spoilage
✅ The correct answer is C.
Insurance is an example of purchasing costs. It is important when you decide to buy a home that you have a full understanding of the costs associated with your purchase.

3027. A policy taken with critical illness rider benefit is being assigned. Which type of assignment would suit the intended purpose because if the life insured is diagnosed with a critical illness, he only should receive the critical illness rider claim?

Absolute assignment
Conditional assignment
Loan assignment
Collateral assignment
✅ The correct answer is B.
A policy taken with critical illness rider benefit is being assigned. Conditional assignment would suit the intended purpose because if the life insured is diagnosed with a critical illness, he only should receive the critical illness rider claim.

3028. State the incorrect statement

In the event of loss of policy document, no fresh proposal needed
The insurer will in such an event issue a duplicate policy without making any change in the contract
No fresh underwriting is involved for issue of a duplicate policy
The assured has to approach a competent court of law and obtain an order directing the insurer to issue a duplicate policy
✅ The correct answer is D.
The assured does not have to approach a competent court of law and obtain an order directing the insurer to issue a duplicate policy.

3029. Stockholders that do not get benefits even if company’s earnings grow are classified as

preferred stockholders
common stockholders
hybrid stockholders
debt holders
✅ The correct answer is A.
Stockholders that do not get benefits even if company’s earnings grow are classified as preferred stockholders. Preferred shareholders have priority over common stockholders when it comes to dividends, which generally yield more than common stock and can be paid monthly or quarterly.

3030. _________ is equal to (common shareholders’ equity/common shares outstanding).

book value per share
liquidation value per share
market value per share
Tobin’s Q
✅ The correct answer is A.
Book value per share is equal to (common shareholders’ equity/common shares outstanding). The term “book value” is a company’s assets minus its liabilities and is sometimes referred to as stockholder’s equity, owner’s equity, shareholder’s equity, or simply equity.

3032. Under Variable life insurance, if the cash value became zero, the policy would _________

Continue
Converted into term ins
Surrender
Terminate
✅ The correct answer is D.
Under Variable life insurance, if the cash value became zero, the policy would Terminate. Variable life insurance is a permanent life insurance product with separate accounts comprised of various instruments and investment funds, such as stocks, bonds, equity funds, money market funds, and bond funds.

290. Petty cash is used for payment of

Salaries & wages of the staff
For purchase of assets
Small expenses relating to postage’s and conveyance etc.
All of the above
✅ The correct answer is C.
Petty cash is used for payment of Small expenses relating to postage’s and conveyance etc. Petty Cash is a current asset account; it is part of a company’s cash.
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