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 .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 - 2 .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 - 3 .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 - 4 .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 - 5 .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 - 6 .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 - 7 .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 - 8 .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 - 9 .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 - 10 .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 - 11 .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 - 12 .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 - 13 .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 - 14 .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 - 15 .Goods lost in transit is

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

Q - 16 .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 - 17 .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 - 18 .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 - 19 .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 - 20 .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 - 21 .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 - 22 .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 - 23 .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 - 24 .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 - 25 .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 - 26 .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 - 27 .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 - 28 .The list given below consists of various securities. Identify the security which is SLR security

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

Q - 29 .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 - 30 .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 - 31 .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 - 32 .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 - 33 .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 - 34 .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 - 35 .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 - 36 .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 - 37 .If the net worth of the business is Rs.500, fixed assets are Rs. 500, current assets Rs.300, investments Rs.300, current liabilities Rs. Nil, what is the amount of claim to outsiders?

• Rs. Nil
• Rs. 1100
• Rs.500
• Rs.600

Q - 38 .In banking company, matured term deposit to be shown under-----

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

Q - 39 .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 - 40 .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 - 41 .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 - 42 .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 - 43 .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 - 44 .Cost of goods sold is

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

Q - 45 .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 - 46 .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 - 47 .Any facts, observations, occurrences are called -----

• data
• record
• file
• system

Q - 48 .Freight expenses for moving new machinery to factory is

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

Q - 49 .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 - 50 .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

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