Insurance accounting

Q1. The following financial transactions are related with a General Takaful Product:

i.An amount of SAR 6,200 received as advanced contribution from new participants.

ii.An amount of SAR 4,500 received as a contribution from new participants.

iii.Contribution renewal received from participants SAR 5,500.

You are required to prepare necessary journal entries.

Q2. Discuss the three primary methods used by Guaranty Fund to assess property and liability insurance using your own words.

Sample Solution