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 .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 - 2 .Which of the following will not affect Trial Balance

• Goods sold on credit not recorded in books.
• Overstating of sales register.
• Rent account credited instead of debit.
• Salary debited to the extent 1/2 the amount.

Q - 3 .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 - 4 .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 - 5 .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 - 6 .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 - 7 .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 - 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 .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 - 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 .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 - 12 .Depreciation on banks property is part of Operating Expenses. Some of the items included under this category are listed below. One of the expenses is wrongly included. Identify that item of expense.

• depreciation on motor cars
• depreciation on stationary and stamps
• depreciation on furniture
• depreciation on non-banking assets

Q - 13 .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 - 14 .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 - 15 .Money received in advance from shareholder before it is actually called up by the company is -----

• Debited to Calls in arrears Account
• Debited to Calls in Advance Account
• Credited to Calls in Advance Account
• Credited to Share Capital Account

Q - 16 .The investment under held to maturity should not exceed _____ of banks total investment

• 25%
• 75%
• 5%
• None of the above

Q - 17 .Acceptances, endorsements and guarantees are shown as_______

• other assets
• contingent liabilities
• advances
• other liabilities and provisions

Q - 18 .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 - 19 .Preliminary Expenses is-----

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

Q - 20 .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 - 21 .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 - 22 .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 - 23 .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 - 24 .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 - 25 .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 - 26 .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 - 27 .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 - 28 .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 - 29 .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 - 30 .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 - 31 .Due to heavy flooding a truck carrying consignment goods sinks. This loss is called

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

Q - 32 .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 - 33 .Any facts, observations, occurrences are called -----

• data
• record
• file
• system

Q - 34 .The list given below consists of various securities. Identify the security which is SLR security

• Securities issued by local authorities
• Shares
• Bonds
• subsidiaries

Q - 35 .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 - 36 .From the following ,find a sentence which is false in respect of partnership

• If the partnership is following the  Fixed Capital Account Method salary payable to a partner is credited to the partner s curr
• Drawings made by partners are never entered in the Profit and Loss Appropriation Account.
• In the  Fluctuating Capital Account Method the balance in the capital account always remains the same
• The capital account of a partner is required to be opened in both the Fixed Capital Account Method and Fluctuating Capital Account Method

Q - 37 .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 - 38 .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 - 39 .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 - 40 .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 - 41 .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 - 42 .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 - 43 .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 - 44 .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 - 45 .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 - 46 .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 - 47 .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 - 48 .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 - 49 .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 - 50 .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.

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