The Prepaid insurance was not recognized in year 2021. What is the effect of its omission in Prepaid Insurance at December 31, 2022? O Understated O Overstated O Cannot be determined from the given information O No Effect
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- a. What amount should be reported as interest expense for 2021? b. If no correction is made, by what amount would interest expense for 2021 be understated?Which of the following is NOT true about a temporary insurance agreement? Select one: a. It can only cover life insurance and living benefits b. It expires the date the policy becomes effective c. The applicant will submit the premium with the application d. It can be provided if the agent believes the policy will be issuedIf a term life insurance policy isconvertible, it can be: Question38 options: a) revised as neededby the insurer. b) transferred tothe life of another person in thefuture. c) changed to health ordisability protection. d)exchanged for cash in the future.e) changed to a comparablewhole life policy in the future.
- 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 correctS1: 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 incorrectS1: The straight-line method computes the unearned premiums, policy by policy, on a pro-rata basis in respect of the unexpired periods of the respective insurance policies at the end of each period. 52: PFRS 17 exempts an insurer temporarily from some requirements of other PFRS in selecting accounting policies for insurance contract for liability adequacy test. S3: Insurers shall disclose the following information that identifies and explains the amounts in its financial statements arising from insurance contract which includes its accounting policies for insurance contract and related assets, liabilities, income and expenses. O Only S2 is incorrect O All statements are incorrect O Only S3 is incorrect Only S1 is correct Only S3 is correct O Only S1 is incorrect O Only S2 is correct O All statements are correct
- The payment of supplier's account is debited to accounts receivable. What is the effect of the error in the net income of the current period and in subsequent period? Cannot be determined based.on the given information Overstated O Understated O No effectS1: The straight-line method computes the unearned premiums, policy by policy, on a pro-rata basis in respect of the unexpired periods of the respective insurance policies at the end of each period. S2: PFRS 17 exempts an insurer temporarily from some requirements of other PFRS in selecting accounting policies for insurance contract for liability adequacy test. S3: Insurers shall disclose the following information that identifies and explains the amounts in its financial statements arising from insurance contract which includes its accounting policies for insurance contract and related assets, liabilities, income and 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 correctS1: 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. $2: 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. O Only S1 is incorrect O Only S2 is incorrect O Only S1 is correct O Only S3 is correct All statements are correct O Only S3 is incorrect Only S2 is correct All statements are incorrect
- How about these questions: 1. how much is the Net Income (Loss) in 2021? 2. assuming the collectability of the note is uncertain, how much is the Franchise Revenue to be recognized in 2021?What does the insurer agree to pay for in addition to covering losses in an insurance policy? Services such as investigating claims and defending the insured The entire policy limit Premium costs for the policy period Only losses below the deductibleTrue or False? 1. An insurance contract is derecognized when it is extinguished and when it is modified where the modification meets any of the conditions for derecognition. 2. The occurence of the event must be certain at the inception of the insurance contract.