Ga state license practice exam (7)

Please answer the multiple choice questions below:   1. One possible solution to adverse selection problem is to offer warranty, as it would be
viewed as a signal of quality. 'Signalling' refers to?
 i) Actions ofthe 'Informed party'in the adverse selection problem ii) Actions of the 'less informed partyin the adverse selection problem ii) Actions of an Insurance company to gather information.   
A) i Only B) Both iand i C) Both iand ii D) Both i and ii   2. Which of the following is NOT an example of non-deposit taking financial institution (NDFI)? i) Insurance companies ii) Unit Trusts iii) Building Societies iv) Leasing Companies A) All the above (i, ii, iii and iv) B) Both i and ii C) iii Only D) Both iii and iv   3. Which of the following is not TRUE for financial ratio analysis? Select one: A) The ratios are not exhaustive. B) Comparisons with other firms can only be made with firms of the same size and activity. C) Generally one year’s figures are sufficient. D) Ratios don’t…

S1: One characteristic of an insurance contract is to transfer insignificant risk from the policyholder to the issuer. S2: Under the general model of PFRS 17, a group of insurance contract is initially measured at the fulfillment cash flows and the contractual service margin.A. Both statements are correctB. Only S1 is correctC. Both statements are incorrectD. Only S1 is incorrect

S1: PFRS 17 allows and insurer to change its accounting policies for insurance contract only if, as a result of its financial statements present information that is more relevant. S2: Outward Reinsurance is where the premium and commission shall be accounted for in the different accounting period original policy to which the reinsurance relates. S3: Premiurn deficiency arises when the unearned premium reserve is less than the estimated claims related expenses.   a. Only S3 is incorrectb. All statements are correctc. Only S2 is correctd. Only S3 is correcte. Only S1 is incorrectf. Only S2 is incorrectg. All statements are incorrecth. Only S1 is correct

S1: PFRS 17 allows and insurer to change its accounting policies for insurance contract only if, as a result of its financial statements present information that is more relevant. S2: Outward Reinsurance is where the premium and commission shall be accounted for in the different accounting period original policy to which the reinsurance relates. $3: Premium deficiency arises when the unearned premium reserve is less than the estimated claims related expenses. Only S3 is correct O All statements are correct Only S1 is correct Only S1 is incorrect Only S2 is correct Only S3 is incorrect All statements are incorrect Only S2 is incorrect

Contract terms: Multiple Choice confer the rights and obligations of the borrower. depend on data in financial statements that are issued before the contract is executed. cannot be designed to eliminate or reduce conflicting incentives. do not use financial accounting numbers to monitor compliance with contract terms.

Which of the following statements is NOT true regarding gift card revenue recognition? O When a gift card is sold, the seller establishes a liability on its balance sheet. O Breakage can only be recognized as revenue to the extent that it is probable a reversal will not be necessary. O Breakage refers to the unused portion of gift cárd balances. O The amount received from the sale of gift cards is required to be recognized as revenue when the gift cards are sold.

Which of the following is NOT an example of a contingency? Salaries payable to top management Potential expense related to repair or replace products sold under warranty Note receivable sold with recourse An amount potentially payable to settle a lawsuit All the other alternatives are contingencies

TRUE OR FALSE. explaination is not necessary

There are areas of differences between IFRS and GAAP definition recognition measurements allowing alternatives for recognition and measurement lack of requirements presentation of items in financial statements disclosure in the notes of Financial Statements Please explain and analyze the effects of the differences mentioned above on the Financial Statements with regard to the following: Current liabilities Provisions Employee benefits Share-based payment Income Taxes Revenue Financial Instruments Leases For example, you can explain how IFRS and GAAP define "Current liabilities." Then how do they recognize and measure "Current liabilities", do both standards have alternative ways of recognition and measurement? If yes, how does this impact the financial statements? Also, do both standards lack some requirements about "Inventories," and do they differ in presentation and disclosure in the notes of the financial statements?  so the same should apply on the rest i.e. Provisions,…

Pls help ASAP

The new revenue recognition standard does not apply to Leases. Insurance contracts. Financial instruments. All of these choices.