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 .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 - 2 .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 - 3 .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 - 4 .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 - 5 .On the retirement of the partner, the profits on revaluation of assets should be credited to the accounts of-----

• All the partners in their profit sharing ratio
• The remaining partners in their new profit sharing ratio
• The remaining partners in their old profit sharing ratio
• None of the above

Q - 6 .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 - 7 .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 - 8 .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 - 9 .The two portion of each pair relating to retirement of a partner has got some relationship. However one of the pair is mismatch and has no relationship. Select this pair from the following

• Retirement - voluntary action
• Gain - retiring partner
• Share of goodwill - borne by continuing partners
• Reserve & surplus - belong to all partners

Q - 10 .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 - 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 .Preliminary Expenses is-----

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

Q - 13 .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 - 14 .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 - 15 .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 - 16 .Select the source which is not valid for issue of bonus shares

• Share premium
• Revaluation reserve created by revaluation of fixed assets
• Capital reserve
• Capital redemption reserve

Q - 17 .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 - 18 .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 - 19 .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 - 20 .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 - 21 .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 - 22 .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 - 23 .Any facts, observations, occurrences are called -----

• data
• record
• file
• system

Q - 24 .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 - 25 .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 - 26 .The investment under held to maturity should not exceed _____ of banks total investment

• 25%
• 75%
• 5%
• None of the above

Q - 27 .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 - 28 .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 - 29 .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 - 30 .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 - 31 .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 - 32 .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 - 33 .Opening balance of asset = Oi, Closing balance of asset = Oc, Depn. = D, Then addition to the asset during the year is

• Oc  D  Oi
• Oi + D  Oc
• Oc + D  Oi
• Oi  D  Oc

Q - 34 .Advances given to a staff by a bank as a employer should be included in-----

• other assets
• advances
• investments
• none of the above

Q - 35 .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 - 36 .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 - 37 .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 - 38 .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 - 39 .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 - 40 .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 - 41 .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 - 42 .Freight expenses for moving new machinery to factory is

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

Q - 43 .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 - 44 .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 - 45 .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 - 46 .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 - 47 .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 - 48 .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 - 49 .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 - 50 .Goods lost in transit is

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

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