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

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

Q - 2 .A, B and C are three partner sharing profits in the ratio of 3:1:1. C retires and his share is purchased by B. the new profit sharing ratio shall be-----

• 03:01
• 07:03
• 03:02
• None of the above

Q - 3 .Liability for partially paid investments in respect of banking companies is grouped under the head________

• Investments
• Other assets
• Other liabilities and provisions
• Contingent liabilities

Q - 4 .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 - 5 .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 - 6 .Mr. Q and Mr. R were partners of a firm sharing profit and losses in the ratio of 3:2. They take S into partnership. It was agreed that S will pay Rs.1,00,000 as his share of goodwill which will be retained in business and also bring Rs.3,00,000 as capital for one fourth share in the future profits. The book value of the stock was 41,000 but was to be revalued at Rs.50,000, Accountant has passed following entries, but Mr. Q feels that one of the entry is wrong. Select the wrong entry from the following.

• Debit cash and credit Goodwill for Rs.1,00,000
• Debit cash and credit S s Capital for Rs.3,00,000
• Debit Goodwill for Rs.1,00,000 and credit Q s Capital by Rs. 60000 & R s Capital by Rs. 40,000
• Debit Stock and credit Profit & Loss Adjustment A/c by Rs.9,000

Q - 7 .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 - 8 .Receipts and payments statement shows

• Only revenue receipts and payments during a year.
• Only capital receipts & payments during a year.
• Both capital and revenue receipts during a year.
•  Cash Only transactions.

Q - 9 .Dividend are usually paid on

• Called up capital
• Paid up capital
• Authorised capital
• None of the above

Q - 10 .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 - 11 .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 - 12 .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 - 13 .Goods lost in transit is

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

Q - 14 .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 - 15 .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 - 16 .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 - 17 .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 - 18 .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 - 19 .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 - 20 .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 - 21 .Identify a pair which is mismatch from the following pairs in respect of Company Accounts

• Discount on issue of shares  Profit and Loss Account
• Bill discounted  contingent liabilities
• Interest accrued and due on debentures  Secured Loans
• Mortgage Loan  Secured Loans

Q - 22 .Machinery worth (WDV) 1000/- sold for 1200/- is entered in sales register. The rectification is

• Credit sales 1200/-, debit machinery 1000/- and debit P&L a/c 200/-.
• Debit sales 1200/- , credit machinery 1000/- and credit P&L a/c 200/-.
• Credit machinery 1200/-, debit sales 1000/- and debit P&L a/c 200/-.
• Debit machinery 1200/-, credit sales 1000/- and credit P&L a/c 200/-.

Q - 23 .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 - 24 .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 - 25 .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 - 26 .Preliminary Expenses is-----

• Fictitious Asset
• Current liability
• Current asset
• None of the above

Q - 27 .As per accounting standards which of the following is not a preferred method

• LIFO
• FIFO
• WACM
• All of them

Q - 28 .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 - 29 .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 - 30 .The two portion of each pair relating to admission of a partner has got some relationship. However one of the pairs is mismatch and has no relationship. Select this pair from the following

• Admission of a partner - gain ratio
• Reserves & surplus - Old partners
• Goodwill - new partner
• Revaluation of assets & liabilities - Profit & Loss adjustment account

Q - 31 .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 - 32 .While preparing the final accounts of the company, the adjustments [(i) to (iv)] are to be made by passing necessary entries. One of the entries passed is wrong entry. Select the wrong entry.(i) Depreciate plant ,WDV of which is Rs.3,30,000 at 15% (ii) Write off Rs.5,000 from Preliminary Expenses (iii) Half years debenture interest due (12% debentures of Rs. 3,00,000) (iv) a claim of Rs. 25,000 for workmens compensation is disputed by the company.

• Debit Depreciation on plant by Rs.49,500 credit plant by 49,500 AND Debit Profit & Loss Account by 49,500 and Credit Depreciation on plant by 49,500
• Debit Profit and Loss Account by Rs.5,000 and Credit Preliminary Expenses
• Debit Debenture Interest by Rs.18,000 & Outstanding Liability for Deb. Interest by 18,000 AND Debit Profit and Loss Account by Rs.18,000 and Credit Debenture Interest by Rs.18000
• Debit Wages by Rs.25,000 & Credit Outstanding Liability for Workers compensation AND Debit Profit and Loss Account by Rs.25,000 and Credit Wages by Rs.25,000

Q - 33 .Which of the following is not a deferred revenue expenditure

• Preliminary expenses for setting up a company.
• Amount raised through Rights issue.
• Huge sales promotion expenditure in launch of new product
• Cost of preparing project report

Q - 34 .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 - 35 .Select from the following a sentence which is wrong

• If assets increase and liabilities do not , the capital will increase
• If assets increase and liabilities also increase by same sum , the capital will remain same
• A reduction in the amount of assets will amount to equivalent reduction in the net worth
• An increase in the amount of liabilities with no corresponding increase in liabilities will increase the amount of capital

Q - 36 .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 - 37 .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 - 38 .The scheduled banks are required by RBI to transfer at least ______ of their disclosed profit after adjustment/provision towards bonus to staff

• 20%
• 15%
• 10%
• None of the above

Q - 39 .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 - 40 .Choose the wrong pair from the following. The information given in the pair is pertaining to banking companies

• Reserves & surplus - Share premium
• Time deposits - Matured time deposits
• Borrowings in India - Refinance from NABARD
• Other Liabilities & Provisions - Inter office/branch adjustments(net

Q - 41 .In sum of digits method for 5 years which of the following is the 1st year s allocation ratio

• 1/15
• 2/15
• 4/15
• 5/15

Q - 42 .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 - 43 .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 - 44 .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 - 45 .Below are some statements about partnership. One of them is correct, identify that statement.

• Partnership arises from reputation
• A partnership is formed only for a legal business
• The liability of partners is limited
• The business of the firm is conducted by two partners

Q - 46 .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 - 47 .One of the items is a misfit in a group namely  other income of a banking company. Select this item from the following

• Income on Investments
• Profit on sale of investments
• Profit on revaluation of investments
• Profit on exchange transactions

Q - 48 .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 - 49 .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 - 50 .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

Prv Next Finish Test