Effective Study Techniques for the SOFE AFE Exam

Who is responsible for accounting for customer remittance advices and the agent’s current account?

All operations under common control are combined, intercompany balances and transactions are eliminated and the effects of minority interests are recorded through:

is provided by original documents is more reliable than audit evidence provided by photocopies or facsimiles.

What is applied to the sale of all or a block of an entity’s insurance in force of another entity?

Risk retention group is:

With which standard, the auditor’s substantive procedures must include reconciling the financial statements to the accounting records and should include examining material adjustments made during the course of preparing the financial statements.

The balloon payment technique uses level payments of principal and interest but for a shorter period than is required to retire the loan fully during its term. For example, a loan with a 8.5 percent interest rate utilizing a 25-year amortization schedule with a 7-year maturity results in only $111 of each $l,000 principal being repaid. Thus, $889 of each $l,000 originally borrowed constitutes the balloon amount due at maturity.

At the end of each reporting period, unearned premiums are calculated and the change in unearned premiums is recorded as a change or debit to premium income.

The return on an instrument over a period of time is a combination of the cash flow it generates and the change in its value.

Fidelity bonds cover employees against dishonest acts by employees.