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.

Please Note;- Negative mark will not be counted

First ques   1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50   of 50 Finish Last

Q - 1 .Which of the following is true for leasing and hire purchase

• Lessor and vendor can claim depreciation.
• Lessor and hirer can claim depreciation.
• Lessee and hirer can claim depreciation.
• Lessee and vendor can claim depreciation.

Q - 2 .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 - 3 .Select from the following , a statement which speaks about liabilities of an entity.

• The liabilities consist of claims of the owners
• The liabilities consist of claims of the owners and outsiders
• The liabilities consist of claims of the outsiders
• None of these

Q - 4 .The two portion of each pair relating to partnership accounts has got some relationship. However one of the pairs is a mismatch and has no relationship. Select this pair from the following

• Management of business - business may be run by one or some or all partner
• Treatment of losses - insolvency of a partner
• Loan from partners - No interest as partners are owners
• Goodwill - super profit method

Q - 5 .If a share of Rs.10 issued at a premium of Rs.1 on which Rs.9 ( including premium) have been called and Rs.7( including premium) paid is forfeited, the capital account should be debited by_________

• Rs.8
• Rs.10
• Rs.9
• Rs.7

Q - 6 .Which of the following is not true

• Depreciation is an expense charged to the P & L a/c.
• Depreciation is not a part of the operating costs.
• Assets that are depreciated are tangible assets.
• Depreciation is like an insurance expense.

Q - 7 .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 - 8 .If the partners capital accounts are fixed, where will you record (either debit side or credit side of which account ) the following transactions (i) Salary payable to partner (ii) Fresh capital introduced by a partner (iii) Drawing made by a partner (iv) Share of profit earned by a partner. The effect to one of the journal entries is wrongly given. Identify that account from the following

• Debit side of partner s capital account
• Credit side of partner s capital account
• Debit side of partner s current account
• Credit side of partner s current account

Q - 9 .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 - 10 .The liability side of the balance sheet of ABC International Ltd. is showing following position: Paid up share capital Rs.25 Lakh ( 25,000 shares of Rs.100 each fully paid up)Share premium Rs.5 Lakh, Capital Reserve Rs. 3 Lakh, General Reserve Rs. 15 Lakh and Profit & Loss account Rs. 15 Lakh .It was decided to use minimum free reserve for issue of 1:1 bonus shares.. The accounts and the amount with which the account is debited are given below in sets. One of the set is correct. Select the same.

• Share Premium Account (Rs.5 Lakh), Capital Reserve Account ( Rs. 1 Lakh), General Reserve Account (15 Lakh) & Profit & Loss Account by Rs. 4 Lakh
• Share Premium Account (Rs. Nil Lakh), Capital Reserve Account ( Rs. Nil Lakh), General Reserve Account (10 Lakh) & Profit & Loss Account by Rs. 15 Lakh
• Share Premium Account (Rs.5 Lakh), Capital Reserve Account ( Rs. 3 Lakh), General Reserve Account (15 Lakh) & Profit & Loss Account by Rs. 2 Lakh
• Share Premium Account (Rs.5 Lakh), Capital Reserve Account ( Rs. 1 Lakh), General Reserve Account (4 Lakh) & Profit & Loss Account by Rs. 15 Lakh

Q - 11 .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 - 12 .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 - 13 .Companies are required to transfer certain percentage of their profit after tax to reserves, to declare dividend. The various rates of transfer based on the rates of dividend are given below in pair. Select the wrong pair.

• Rate of dividend exceeds 10% but not 12.50- Transfer to reserve @ Nil%
• Rate of dividend exceeds 12.50% but not 15%- Transfer to reserve @ 5%
• Rate of dividend exceeds 15% but not 20%- Transfer to reserve @ 7.50%
• Rate of dividend exceeds 20% - Transfer to reserve @ 10%

Q - 14 .Read the following four journal entries which are passed to consider revaluation of assets and liabilities at the time of admission of a partner. One of the journal entries is wrong, choose the entry which is wrong.

• For increase in the value of assets-Debit Asset Account and Credit Revaluation Account.
• For decrease in the value of liabilities- Debit Liabilities Account and Credit Revaluation Account.
• For Profit on revaluation of assets and liabilities  Debit Old Partners Capital Account in old profit sharing ratio and Credit
• For decrease in the value of assets -Debit Revaluation Account and Credit Asset Account

Q - 15 .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 - 16 .Select the incorrect statement in respect of companies.

• A member of a company can enter into contract with a company
• It is compulsory to register a joint stock company
• If all but one member of a private company becomes insolvent ,it affects the existence of the organisation
• Shareholders are not liable for the acts of the company

Q - 17 .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 - 18 .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 - 19 .As per accounting standards which of the following is not a preferred method

• LIFO
• FIFO
• WACM
• All of them

Q - 20 .If a trader enjoys an overdraft facility, then

• His passbook will show debit balance.
• His cash book will show debit balance .
• excess of deposits over withdrawals
• None of the above

Q - 21 .Noting charges are

• Paid to bank for dishonour
• Paid to drawer for dishonour
• Paid to notary public for recording dishonour
• None of the above.

Q - 22 .In banking company, matured term deposit to be shown under-----

• demand deposits
• saving bank deposits
• term deposits
• other liabilities and provisions

Q - 23 .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 - 24 .The financial statement of bank consists of ________ schedules

• 18 Schedules
• 16 Schedules
• 17 Schedules
• Schedules

Q - 25 .Which of the following is true

• Bank Reconciliation Statement(BRS) is an account.
• BRS is prepared by the bank.
• BRS shows causes of disagreement between cash book & passbook.
• BRS shows only excess of cash book over passbook.

Q - 26 .One of the accounts is wrongly grouped under the head  Investments while preparing the balance sheet of the company. Single out

• Investments in government or trust securities
• Investments in shares ,debentures or bonds
• Immovable properties
• Interest accrued on investments

Q - 27 .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 - 28 .Select the incorrect statement in respect of utilization of share premium

• it is used for the purpose of buy back of shares
• it used for payment of dividend in case of inadequacy of profits
• it is used for writing off preliminary expenses
• it is used for issue of fully paid bonus shares

Q - 29 .On the retirement of the partner, the profits on revaluation of assets should be credited to the accounts of-----

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

Q - 30 .Suspense a/c is not used in which of the following cases.

• before trial balance.
• after trial balance.
• before final accounts.
• none of the above.

Q - 31 .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 - 32 .If Rs.10 share has been issued at a premium of Rs.5, on which entire amount has been called up, has been forfeited for non payme

• Rs.15
• Rs.10
• Rs.4
• Rs.6

Q - 33 .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 - 34 .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 - 35 .If the goodwill account is raised for Rs.50,000, the amount is debited to____

• The capital accounts of partners
• Goodwill account
• Cash account
• None of the above

Q - 36 .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 - 37 .O and P are two partners sharing profits in the ratio of 7:3. They admit Q into partnership as a partner from 1st April 2006 on 3/7th share in the profit. What is the new profit sharing ratio

• 14:06:14
• 07:03:03
• 02:02:03
• None of the above

Q - 38 .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 - 39 .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 - 40 .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 - 41 .The investment under held to maturity should not exceed _____ of banks total investment

• 25%
• 75%
• 5%
• None of the above

Q - 42 .Select the incorrect statement

• Authorized capital is the capital with which the company is registered
• Issued capital is equal to its authorized capital
• Authorized capital, issued capital, subscribed capital, called up capital and paid up capital cannot be same
• The amount which the company has asked its shareholders to pay is called up capital of the company.

Q - 43 .Goods lost in transit is

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

Q - 44 .Advances given to a staff by a bank as a employer should be included in-----

• other assets
• advances
• investments
• none of the above

Q - 45 .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 - 46 .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 - 47 .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 - 48 .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 - 49 .The two portion of each pair relating to retirement of a partner has got some relationship. However one of the pair is mismatch and has no relationship. Select this pair from the following

• Retirement - voluntary action
• Gain - retiring partner
• Share of goodwill - borne by continuing partners
• Reserve & surplus - belong to all partners

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

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

Prv Next Finish Test