Please help me to answer (provide) a short or brief explanation for each answerAnswers:1. C2. C3. D Entity A, a manufacturing entity, obtains insurance against product liability from Entity B, aninsurance company. Entity B then cedes the insurance contact with Entity C, another insurancecompany.1. How does Entity B account for the insurance contract with Entity A?a. General modelb. Premium Allocation Approachc. a or bd. Not accounted for under PFRS 172. How does Entity C account for the insurance contract ceded by Entity B?a. General modelb. Premium Allocation Approachc. a or bd. Modification to general model for reinsurance contracts held3. How does Entity B account for the insurance contract ceded to Entity C?a. General modelb. Premium Allocation Approachc. a or bd. Modification to general model for reinsurance contracts held

SOLUTION- INSURANCE EXPENSE IS THE AMOUNT THAT A COMPANY PAYS TO GET AN INSURANCE CONTRACT AND ANY…

Answered: Entity A, a manufacturing entity,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Use the following information for the next three questions: Entity A, a manufacturing entity, obtains insurance against product liability from Entity B, an insurance company. Entity B then cedes the insurance contact with Entity C, another insurance company. 1. How does Entity B account for the insurance contract with Entity A? a. General model b. Premium Allocation Approach a or b d. Not accounted for under PFRS 17 2. How does Entity C account for the insurance contract ceded by Entity B? General model b. Premium Allocation Approach c. a or b d. Modification to general model for reinsurance contracts held 3. How does Entity B account for the insurance contract ceded to Entity C? a. General model b. Premium Allocation Approach C a or b d. Modification to general model for reinsurance contracts held OAD O 3)
Entity A obtains life insurance for its key employee from Entity B (an insurance company). Entity B cedes the insurance contract with Entity A to Entity C, another insurance company. How should Entity B account for the insurance contract with Entity C?A. using the modified version of the general model applicable for onerous insurance contractsB. using the general modelC. using a modified version of (a) or (b) applicable to reinsurance contracts heldD. using the premium allocation approach
_____ is a contract that involves compensation for specific potential future losses in exchange for periodic payments and that provides for the transfer of the risk of a loss, from one entity to another, in exchange for a premium. a.Spot contract b.Insurance c.Hedging d. Forward contract
Which of the following is not a condition in identifying the contract with the customer as per IFRS 15? The entity and the customer have approved the contract and are committed to perform their contractual obligations It is certain that the entity will collect the consideration to which it is entitled Each party's rights with regard to the goods or services concerned can be identified The payment terms can be identified EN 2时 6 l
Which statement/s is/are correct? S1 PFRS permits the introduction of an accounting policy that involves remeasuring designated insurance liabilities consistently in each period to reflect current market interest rate. S2 An insurer is not allowed to introduce the following accounting practice which includes using non-uniform accounting policies for the insurance liabilities of subsidiaries. S3 PFRS 17 provides discretionary participation features in the insurance contract recognized separately from the guaranteed elements, where the issuer of such contract shall classify that feature as either a liability or a separate component of equity.
Which of the following sections of a commercial general liability policy contains information about limits of insurance and premiums? Declaration Exclusion Condition Insuring agreement
15. If an entity gives a product warranty that has been issued directly by a manufacturer, dealer or retailer, which IFRS is likely to cover this warranty? a. IAS 32 Financial instruments - Presentation b. IAS 37 Provisions, contingent liabilities and contingent assets c. IFRS 17 Insurance contracts d. IFRS 9 Financial instruments 16. IFRS 17 provides that insurance contracts should a. Be covered by IAS 32 and IFRS 9 b. Comply with all existing IFRS c. Generally continue to be subject to existing accounting policies. d. Comply with the IFRS Framework document. 17. An insurance contract can contain both deposit and insurance elements. An example might be a reinsurance contract where the cedant receives a repayment of the premiums at a future date if there are no claims under the contract. Effectively this constitutes a loan by the cedant that will be repaid in the future. IFRS 17 requires that a. Each payment by the cedant is accounted for as loan advance and as payment for insurance…
Under PFRS 15, what is the measurement basis of revenue from contracts with customers? Select the correct letter: A. Revocable amount of the consideration received or receivable B. Book value of the consideration received or receivable C. Fair value of the consideration received or receivable D. Historical cost of the consideration received or receivable
Which of the following types of insurance does NOT involve a contract with an external party? a. self insurance b. directors and officers insurance c. property insurance d. life insurance
Which document typically triggers the process of recording a liability? a. purchase requisition b. purchase order c. receiving report d. supplier’s invoice
The new standard, Revenue from Contracts with Customers, recognizes revenue based on a(n): Revenue-Expense Approach Asset-Liability Approach O Asset-Equity Approach O Liability-Equity Approach
Which of the following is not a condition in identifying the contract with the customer as per IFRS 15? a- Each party's rights with regard to the goods or services concerned can be identified b- It is certain that the entity will collect the consideration to which it is entitled c- The entity and the customer have approved the contract and are committed to perform their contractual obligations d- The payment terms can be identified

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