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Q - 1 .Any facts, observations, occurrences are called -----

data
record
file
system

Q - 2 .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 - 3 .A and B sharing profits and losses in the ratio of 2:1. C is admitted as partner giving him 1/4 share. The new profit sharing ratio will be_____

02:01:01
04:04:02
03:03:02
None of the above

Q - 4 .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 - 5 .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 - 6 .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 - 7 .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 - 8 .Select the incorrect sentence

Whenever, there is no profit or inadequate profit, dividend cannot be declared
The right to claim dividend lapses when there is no profit in case of cumulative preference shares
When the company makes profit , arrears of preference dividend are cleared first
The Act prohibits the issue of any preference shares which are irredeemable

Q - 9 .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 - 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 most desirable 1000/- sold for 1200/- is entered in sales register. The rectification is

Pricing issue of goods to match current material costs
Overstating profits
Understating profits
none of the above

Q - 12 .Select the True statement from the following

Interest on drawing is an income to the partnership firm
Joint Venture is a permanent partnership firm
Goodwill is a tangible asset of the firm
In the absence of partnership agreement , partners share profit and loss in proportion to the capital contributed by the partners.

Q - 13 .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 - 14 .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 - 15 .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 - 16 .Dividend are usually paid on

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

Q - 17 .In banking company, matured term deposit to be shown under-----

demand deposits
saving bank deposits
term deposits
other liabilities and provisions

Q - 18 .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 - 19 .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 - 20 .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 - 21 .The list given below consists of various securities. Identify the security which is SLR security

Securities issued by local authorities
Shares
Bonds
subsidiaries

Q - 22 .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) Provide dividend 5% of paid up share capital (Share capital of Rs. 5,00,000 consisting of shares of Rs. 10 each fully paid) (ii) Insurance for unexpired period is Rs.2000 (iii) A provision of Rs. 25,000 is to be made for income tax (iv) a provision of Rs. 5000 is to be made for doubtful debts

Debit Dividend by Rs.25000 & Credit Bank by Rs.25000
Prepaid Insurance by Rs.2000 & Insurance by Rs.2000
Debit Profit & Loss Account by Rs.25,000 & Credit Provision for Tax by Rs.25,000
Debit Profit & Loss by Rs.5,000 & Credit Provision for doubtful debts by Rs.5,000

Q - 23 .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 - 24 .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 - 25 .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 - 26 .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 - 27 .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 - 28 .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 - 29 .The list given below provides the close relationship between the items of each pair. One of the pairs has no such close relationship. Identify this pair.

Banking company trustees and executors
Form B - Profit and Loss Account
Ledger book - Letter of credit register
Other liabilities and provisions - Schedule 5

Q - 30 .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 - 31 .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 - 32 .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 - 33 .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 - 34 .Cost of goods sold is

Opening stock + purchases + closing stock
Opening stock + purchases closing stock
Opening stock purchases + closing stock
None of above

Q - 35 .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 - 36 .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 - 37 .Select the incorrect statement in case of Share Capital and Reserves and Surplus as shown in the balance sheet.

Under share capital, the following order is maintained: Authorised capital, issued capital, subscribed capital
The called up amount per share is indicated and in the amount column total amount i.e. number of shares multiplied by amount called up per share is shown
The amount of unpaid calls is deducted from (b) above
The amount of forfeited shares account is shown under Reserves & surplus

Q - 38 .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 - 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 .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 - 41 .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 - 42 .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 - 43 .For an expense to be classified as revenue or capital depends on

Kind of expense
Duration of the benefit of the expenditure
Effect on revenue earning capacity
All of the above

Q - 44 .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 - 45 .A new company cannot issue shares-----

at par
at discount
at premium
none of the above

Q - 46 .Goods worth Rs.2000 sold to Vijay was entered in purchase account; The rectification is

Credit purchases and credit sales to the extent of Rs.2000 each & debit Vijay by Rs.2000
Debit purchases and debit sales to the extent of Rs.2000 each & credit Vijay.
Debit sales to the extent of Rs.4000.
Credit purchases to the extent of Rs.4000.

Q - 47 .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 - 48 .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 - 49 .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 - 50 .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

Online Tests for Accounting & Finance for Bankers

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