In this Question Paper given 50 questions for Accounting & Finance for Bankers, You have to complete them within 60 minutes. After clicking on FINISH TEST button a result of your test will be displayed.

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Q - 1 .One of the accounts is wrongly debited to  Profit and Loss Appropriation A/c of a company. Name the wrong account debited

• Interim dividend
• Proposed dividend
• Provision for tax
• Capital redemption reserve

Q - 2 .A, B and C share profits as 3:2:1. C retires. Calculate the gain ratio of A and B

• 03:02
• 01:00
• 02:00
• None of the above

Q - 3 .In comparing lease & hire purchase (H P) Of the following which one is not true?

• In lease the user of the asset does not retain it, while in H P he does.
• In lease the user does not claim depreciation while he does in H P.
• Payment of rentals is on instalment basis in both.
• The users of assets in both lease & H P run the risk of obsolescence.

Q - 4 .Income for the year = I, Outstanding Income for previous year = Id, Outstanding Income of current year = Idi, then Receipts for the year is

• I - Idi + Id
• I + Idi - Id
• I + Idi + Id
• None of the above.

Q - 5 .Choose the incorrect statement in case of dissolution of partnership from the following statements

• On the dissolution of the firm , first creditors like wages outstanding etc. will have to be paid
• Goodwill will be raised in the books when a firm is dissolved
• The loan from the spouse of a partner is treated just like a loan from outside parties
• After the books are closed, no account will show any balance.

Q - 6 .The investment under held to maturity should not exceed _____ of banks total investment

• 25%
• 75%
• 5%
• None of the above

Q - 7 .The firm sells goods on credit for Rs.50000, the cost of the goods sold is Rs.30000.The effect of the transaction is that, the capital of the firm-----

• increases by Rs.50000
• reduces by Rs.40000
• increases by Rs. 20000
• reduces by Rs. 20000

Q - 8 .Reconciliation of overcasting on receipts side of cash book

• Increases the balance in the cash book.
• Increases the balance in the passbook.
• Decreases the balance in the cash book.
• Decreases the balance in the passbook.

Q - 9 .One of the pairs given below is wrong. Select the wrong pair.

• Outstanding expenses - Nominal account
• Profit and Loss Account (Dr. balance)  Application of funds
• Net worth less reserves & surplus - Capital
• Balance sheet - Financial position

Q - 10 .When a new partner gives cash for goodwill, the amount is credited to____

• Goodwill account
• Capital account of new partner
• Cash account
• None of the above

Q - 11 .Select the incorrect statement in respect of calls in advance

• The company may accept from shareholders , the uncalled amount on shares even before it is fallen due
• The article of association must permit such acceptance of advance call money
• Interest on calls in advance can be paid but the maximum is upto 6%
• The amount of calls in advance is part of the paid up share capital

Q - 12 .A and B are two partners in a firm sharing profits and losses as 2:1. they admitted C as a partner with 25% share in the profits of the firm. Hence , the new profit sharing ratio , after admission of C would be _______

• 15:15:10
• 20:10:10
• 03:01:01
• None of the above

Q - 13 .DT Ltd. issued shares of Rs.10 each at 10 % premium, payable on application Rs.2, on allotment Rs.3 (including premium), on first call Rs.2 and on final call Rs.4. One of the shareholders, applied for 100 shares but fail to pay allotment and first call money. At this stage, the said shares were forfeited. Select the account which was wrongly credited.

• Credit Forfeited shares Account by Rs.200
• Credit Share allotment Account by Rs.200
• Credit share premium Account by Rs.100
• Credit Share first call Account by Rs.200

Q - 14 .Which of the following is false

• Replacement of defective part of machinery is revenue expenditure
• Daily wages paid for erection /installing of machinery is capital expenditure
• Underwriting commission for issue of shares is revenue expenditure
• Excess of sale price of Machinery over its W D Value but less than cost price is treated as revenue receipt

Q - 15 .In the books of ABC Enterprises, a partnership firm, when Mr. C, a partner decided to resign from the firm, a revaluation of assets and liabilities was done and Revaluation account was prepared which showed the following position: At the credit side of Revaluation Account, Stock A/c Rs.25000, Premises A/c Rs.52000 and Creditors A/c Rs. 8000 were shown while at debit side of Revaluation Account Reserve for Doubtful Debts A/c. Rs.15000, As Capital A/c.Rs.20000, Bs Capital A/c. Rs.20,000 and Cs Capital A/c. Rs.20000 were shown. Accountant has interpreted the Revaluation Account as follows. One of the interpretations by him is incorrect. Select the incorrect sentence.

• Stock is revalued upwardly by Rs. 25000
• Creditors are revised upwardly by Rs.8000
• Premises are revised upwardly by Rs.52000
• A provision on debtors of Rs. 15,000 is made for doubtful debts

Q - 16 .Select the false statement in respect of banking

• A company accepting deposits for the purpose of lending or investment is a banking company
• A manufacturing company accepting deposits from the public and some portion of it is lending to its employees as home loans is a banking company
• A company besides accepting deposits and lending is dealing in goods in connection with the realisation of a security is a banking company
• A company besides accepting deposits and lending is in the business of collections or negotiating bills of exchange is a banking company.

Q - 17 .Select the incorrect statement in respect of  financial Statements of Banks

• a banking company is not required to prepare financial statements in accordance with Schedule VI of the Companies Act , 1956.
• The Act prescribes special forms of balance sheet and profit and loss account for the preparation of its final accounts
• These are set out in form A and form B of the first schedule to the Banking regulation Act, 1949
• Form A gives format of a balance sheet and form  B gives the format of a profit and loss account

Q - 18 .From the account given below, select the account which is wrongly included in Profit & Loss Appropriation Account at the debit side

• Drawings Account
• Partners Salary Account
• Interest on Loan Account
• Commission to Partners Account

Q - 19 .Which of the following are true

• Nominal accounts always have credit balances.
• Real accounts always have debit balances.
• Debit balance in ledger account is credit balance in trial balance.
• P&L a/c appears in trial balance.

Q - 20 .Investments, Advances, Fixed Assets and other Assets are part of Schedule Nos.--respectively

• 6,7,8,9
• 7,8,9,10
• 8,9,10,11
• 9,10,11,12

Q - 21 .Choose the wrong pair from the following. The information given in the pair is pertaining to banking companies

• The company is an artificial person
• A member of a company may bind the company by its actions.
• The shareholders are not liable for the acts of the company
• The premium received on shares may be distributed among shareholders.

Q - 22 .Mr. X was issued 100 shares of Rs.10 each. He failed to pay call money of Rs. 5 per share. The shares were forfeited and re-issued to Mr. Y at Rs.9. When the entry recording the re-issue of shares was passed in all, four accounts were affected. The debit and credit effect of these four accounts is given below. One of the accounts is given wrong effect. Select that account from the following.

• Debit bank account by Rs.900
• Debit forfeited shares by Rs.500
• Credit share capital by Rs.1000
• Credit forfeited shares by Rs.400

Q - 23 .Select the incorrect statement in respect of form of balance sheet of companies ( Asset side).

• Live Stock is grouped under the head  current Asset
• Balance of unutilized monies raised by issue is grouped under the head  Investments
• Interest paid out of capital during construction is grouped under the head  Miscellaneous Expenditure
• Vehicles are grouped under the head  Fixed Asset

Q - 24 .Choose the sentence which speak about illegal association

• The unregistered association of 10 persons to do banking business
• The unregistered association of 50 persons to do non banking business
• The unregistered association of 20 persons to do business other than banking
• The unregistered association of 10 persons to do business other than banking

Q - 25 .Following are the journal during the process of application to allotment stage . One of the entries is wrong. Select the wrong entry.

• Debit bank account and credit share application account ( when application money is received)
• Debit share application account and credit share capital account (application transferred to share capital account)
• Debit share capital and credit share allotment account ( for recording allotment money being fallen due )
• Debit bank account and credit share allotment account ( for receipt of allotment money)

Q - 26 .In operating lease the period is

• Less than the useful life of the asset.
• Greater than the useful life of the asset.
• Equal to the useful life of the asset.
• None of above

Q - 27 .Goods lost in transit is

• Nominal loss
• Abnormal loss
• Casual loss
• Conditional loss

Q - 28 .Select the false statement in respect of assets

• a banking company is allowed to acquire assets for its own use
• a banking company is allowed to grant loans against the security of assets belonging to its customers
• a banking company is allowed to take possession of such assets in case of default committed by the borrower
• a banking company is not allowed to sale the assets against the security of which it has granted loans

Q - 29 .The name of the accounts with the coverage of various items in building that account is given below. One of the items covered in on of the accounts is wrong. Select this account

• Closing balance of provisions held towards NPA -
• Interest Earned - interest on advances plus income on investments plus interest on deposit with RBI plus income earned by way of dividends from subsidiaries plus discount on bills less unexpired discount
• Reserves & surplus - Opening balance plus additions during the year less deductions during the year
• Term deposits - from banks and from Others

Q - 30 .In respect of asset side of the balance sheet one of the items is presented in a proper order, rests are disorderly. Select the orderly presented item from the following.

• Investments, Fixed Assets, Current Assets & Loan Advances, Profit & Loss Account(Dr. balance), Miscellaneous Expenditure
• Fixed Assets, Investments, Current Assets & Loan Advances, Profit & Loss Account(Dr. balance) , Miscellaneous Expenditure
• Fixed Assets, Investments, Current Assets & Loan Advances, Miscellaneous Expenditure, Profit & Loss Account(Dr. balance)
• Fixed Assets, Current Assets & Loan Advances, Profit & Loss Account(Dr. balance), Miscellaneous Expenditure

Q - 31 .Sales return of amount Rs.1000 from Vijay was wrongly entered in purchase book. The rectification is

• Debit sales to the extent of Rs.2000.
• Credit purchases to the extent of Rs.2000
• Credit Vijay Rs.2000, debit sales and purchases to the extent Rs.1000, each.
• Debit sales return by Rs.1000 and credit purchases by Rs.1000

Q - 32 .L,K and P are partners. The following differences as listed at (i) to (iv) have arisen due to misunderstanding. The answer to each point is given at (a) to (d). One of the solutions is incorrect. Identify the wrong solution. (i) L used Rs.25,000 belonging to the firm and made a profit of Rs.4,000. K wants the amount to be given to the firm (ii) P used Rs.10,000 belonging to the firm and suffered a loss of Rs. 3000. He wants the firm to bear the loss (iii) L & K wishes to appoint S as new partner. P does not agree (iv) L has given loan of Rs. 50,000 to the firm, he wants interest at 6% ( there is no partnership deed)

• K is right .L must pay Rs.29,000 to the firm
• P is right . Firm should bear profit as well as losses.
• P is right. No new partner can be admitted without the consent of all.
• L is right. He is entitled for interest at 6% in the absence of partnership agreement.

Q - 33 .A company wishes to pay dividend on shares. State which of the following may be used for the purpose.

• Premium of shares
• Profit on re-issue of forfeited shares
• General Reserve
• None of the above

Q - 34 .If the adjustment in the values of assets at the time of the admission of a partner shows a profit, it should be credited to the capital accounts of-----

• The old partners in their new profit-sharing ratio
• All partners in their new profit sharing ratio
• The old partners in their old profit sharing ratio
• None of the above

Q - 35 .The provisional requirement for standard asset is-----

• 0.40%(revised) of total outstanding
• 10%(revised) of total outstanding
• 40%(revised) of total outstanding
• 100%(revised) of total outstanding

Q - 36 .A firm earns Rs.10,000 as its normal profits. The rate of normal return being 10%. The assets of the firm amount to Rs.72,000 and liabilities to Rs.24,000. Find out the value of goodwill.

• Rs.52,000
• Rs.1,00,000
• Rs.28,000
• Nil

Q - 37 .Identify a pair which is mismatch from the following pairs in respect of Company Accounts

• Miscellaneous Expenditure  Preliminary Expenses
• Contingent Liabilities  footnote to balance sheet
• Debentures  Unsecured Loans
• Outstanding Expenses  Current Liabilities

Q - 38 .In case any sum has been written off on a reduction of capital or revaluation of assets, each balance sheet subsequent to such reduction or revaluation must show the reduced figures and date of reduction for a period of _________

• 1 year thereafter
• 2 years thereafter
• 3 years thereafter
• 5 year thereafter

Q - 39 .Choose the wrong pair from the following. The information given in the pair is pertaining to banking companies

• Demand Deposits -
• rebate on bills discounted - unexpired discount
• Operating Expenses
• Other Income - Profit on sale of investments less loss on sale of investments

Q - 40 .Freight expenses for moving new machinery to factory is

• Revenue expenses
• Deferred revenue expenditure
• Capital expenditure
• None of the above

Q - 41 .Which of the following is true

• Total lease rent = cost of asset - total finance income + residual value
• Total finance income = total lease rent  cost of asset + residual value
• Total finance income = cost of asset  total lease rent + residual value
• Cost of the asset = total lease rent + residual value + total finance income

Q - 42 .Opening balance of asset = Oi, Closing balance of asset = Oc, Depn. = D, Then addition to the asset during the year is

• Oc  D  Oi
• Oi + D  Oc
• Oc + D  Oi
• Oi  D  Oc

Q - 43 .One of the statements in respect of Profit & Loss Adjustment account is incorrect, rest are correct. Mark the incorrect sentence.

• The account is credited with closing balance of profit and loss account of last year
• The account is credited with current year s net profit
• The account is debited with provision for taxes
• The account is debited with provision for dividend

Q - 44 .For a Non- Trading Organization, a P & L A/c called an Income & Expenditure A/c because.

• They often make losses.
• They are forbidden by statute to make profits
• By object of their association they are non profit making bodies.
• Their income & expenditure statement are a combination of capital & revenue receipts.

Q - 45 .Select the correct statement in respect of doubtful debts

• Which has remained NPA for a period not exceeding 18 months?
• Which has remained NPA for a period exceeding 18 months
• Which is considered uncollectible by bank/ internal auditor or RBI Inspection
• None of the above

Q - 46 .In LIFO method of inventory valuation

• Issue of stocks to production is at latest price
• Closing stock is at latest price
• Both a and b
• Neither a nor b

Q - 47 .Direct deposit by a customer in the bank

• Shows a higher passbook balance than cash book.
• Shows a lesser passbook balance than cash book.
• Shows no difference.
• None of the above.

Q - 48 .Which of the following is true

• Trial balance ensures arithmetical accuracy.
• Trial balance errors are not located then the difference is sent to suspense a/c.
• Trial balance is base for final accounts.
• All of the above.

Q - 49 .Select the incorrect statement in respect of form of balance sheet of companies(Liabilities side).

• sinking fund is shown under unsecured loans
• Loans and Advances from banks are grouped under the head Secured Loans
• Unclaimed Dividend is grouped under the head current liabilities
• Proposed dividend is grouped under provisions.

Q - 50 .Due to heavy flooding a truck carrying consignment goods sinks. This loss is called

• contingent loss
• Nominal loss
• Abnormal loss
• Casual loss

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