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

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

Q - 2 .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 - 3 .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 - 4 .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 - 5 .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 - 6 .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 - 7 .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 - 8 .The investment under held to maturity should not exceed _____ of banks total investment

• 25%
• 75%
• 5%
• None of the above

Q - 9 .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 - 10 .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 - 11 .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 - 12 .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 - 13 .As per accounting standards which of the following is not a preferred method

• LIFO
• FIFO
• WACM
• All of them

Q - 14 .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 - 15 .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 - 16 .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 - 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 .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 - 19 .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 - 20 .Which of the following is true

• Total lease rent = cost of asset - total finance income + residual value
• Total finance income = total lease rent  cost of asset + residual value
• Total finance income = cost of asset  total lease rent + residual value
• Cost of the asset = total lease rent + residual value + total finance income

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 .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 - 23 .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 - 24 .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 - 25 .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 - 26 .Which of the following is true

• Trial balance ensures arithmetical accuracy.
• Trial balance errors are not located then the difference is sent to suspense a/c.
• Trial balance is base for final accounts.
• All of the above.

Q - 27 .Preliminary Expenses is-----

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

Q - 28 .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 - 29 .Due to heavy flooding a truck carrying consignment goods sinks. This loss is called

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

Q - 30 .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 - 31 .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 - 32 .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 - 33 .Choose the correct treatment for premium paid on  Joint Life Policy when premium paid is treated as an expense.

• Premium amount is debited to P & L account every year and when claim becomes due then to be shared by all partners
• Every year amount debited to Joint Life Policy Account and balance is shown on asset side at surrender value . The difference between surrender value and premium paid is written off to Profit and Loss account
• Joint Life Policy and Joint Life reserve Account are adjusted to bring them down to surrender value of policy.
• None of the above.

Q - 34 .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 - 35 .Freight expenses for moving new machinery to factory is

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

Q - 36 .Dividend are usually paid on

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

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

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