Author name: Administrator

137. Which of the below group would not be eligible for a group health insurance policy?

A) Employees of a company
B) Credit card holders of an organisation
C) Professional association members
D) Group of unrelated individuals formed for the purpose of availing group health insurance
✅ ANSWER: D
Group of unrelated individuals formed for the purpose of availing group health insurance would not be eligible for a group health insurance policy.

140. All of the following are determinants of demand except

A) Tastes and preferences
B) Quantity supplied
C) Income
D) Price of related goods
✅ ANSWER: B
All of the following are determinants of demand except Quantity supplied. The Five Determinants of Demand Prices of related goods or services. These are either complementary, those purchased along with a particular good or service, or substitutes, those purchased instead of a certain good or service. Tastes or preferences of consumers. Expectations.

143. Sales budget variance is subtracted from flexible budget amount to calculate

A) static budget amount
B) unstated amount
C) constant amount
D) variable amount
✅ ANSWER: A
Sales budget variance is subtracted from flexible budget amount to calculate static budget amount. A static budget is a type of budget that incorporates anticipated values about inputs and outputs that are conceived before the period in question begins.

146. An example of fixed cost ________.

A) property tax
B) rent for building
C) direct material cost
D) direct wages
✅ ANSWER: B
An example of fixed cost rent for building. A fixed cost is a cost that does not change with an increase or decrease in the amount of goods or services produced or sold.

149. An income available for shareholders after deducting expenses and taxes from revenues is classified as

A) net income
B) net earnings
C) net expenses
D) net revenues
✅ ANSWER: A
An income available for shareholders after deducting expenses and taxes from revenues is classified as net income. Net income represents the amount of money remaining after all operating expenses, interest, taxes and preferred stock dividends (but not common stock dividends) have been deducted from a company’s total revenue.

152. State which is correct out of the following

A) A Term Insurance policy cannot be convered into any other policy during its duration
B) Term policy is available both a separate policy and as a rider in another policy
C) Term policy can be issued with lifelong renewability option
D) All Term covers will have a disability rider
✅ ANSWER: B
Term policy is available both a separate policy and as a rider in another policy.

155. Which of the following is untrue as per IRDA’s regulations on non-par policies?

A) The benefits shall be stated at the outset
B) The benefits shall be linked to some index
C) The additional benefit under these policies shall be laid out at the outset
D) The return shall be stated at the beginning of the contract itself
✅ ANSWER: B
The benefits of an insurance policy are not linked to any index. Hence, option (2) is the correct answer.

158. In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’s price is below the firm’s own ______________.

A) Fixed Cost
B) Variable Cost
C) Total Cost
D) Prime Cost
✅ ANSWER: B
In ‘make or buy’ decision, it is profitable to buy from outside only when the supplier’s price is below the firm’s own Variable Cost. A variable cost is a corporate expense that changes in proportion to production output. Variable costs increase or decrease depending on a company’s production volume; they rise as production increases and fall as production decreases.

94. A materials requirements planning (MRP) system is an example of ______.

A) spot purchasing
B) a multi-tier supply chain
C) a legacy computer system
D) electronic data interchange
✅ ANSWER: C
A materials requirements planning (MRP) system is an example of a legacy computer system. Material requirements planning (MRP) is a system for calculating the materials and components needed to manufacture a product. It consists of three primary steps: taking inventory of the materials and components on hand, identifying which additional ones are needed and then scheduling their production or purchase.

13. A company purchased a vehicle for Rs.6000. It will be used for 5 years and its residual value is expected to be Rs.1000. What is the annual amount of depreciation using straight line method of depreciation?

A) Rs. 1000
B) Rs. 2000
C) Rs. 3000
D) Rs. 5000
✅ ANSWER: A
Cost of the asset = Rs. 6,000
Salvage Value = Rs. 1,000
Total Depreciation Cost = Cost of asset – Salvage Value = 6000 – 1000 = Rs. 5000
Useful life of the asset = 5 years
Thus, annual depreciation cost = (Cost of asset – Salvage Cost)/Useful Life = 5000/5 = Rs. 1000.
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