In this Question Paper given 50 questions for Legal & Regulatory Aspects of Banking, 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 . A simple mortgage need be registered when

• The Loan amount exceed Rs.100/-
• Value of mortgaged property exceeds Rs.100/-
• A or B whichever exceeds Rs.100/-
• Both A & B

Q - 2 .The following is not a chargeable current assets

• Book debt
• Spares
• Work in process
• Construction work in progress

Q - 3 .Issue of shares at a discount should be authorized by the members by passing a resolution in the general meeting and resolution of members should specify the rate of discount which should not exceed 10% of the face value of the shares Further this is subject to

• Obtention of sanction from Company Law Board
• These shares must be issued with in 2 months
• Both (a) and (b)
• None of the above

Q - 4 .A firm paid Rs.16 lacs for purchase of a business with machinery worth Rs.10 lacs and other assets worth Rs.4 lacs. In this case the difference of Rs.2 lacs is treated as

• P&L Loss on purchase of asset
• Goodwill Intangible Asset
• Fixed Asset by inflating the value of fixed asset
• Current Asset by inflating the value of current asset

Q - 5 .Investment in Shares of other companies can be classified as Current Asset only when the shares are

• Quoted
• Relate to trade investment
• A & B
• Shares cannot be classified as Current Assets

Q - 6 .The home currency price of one unit of a foreign currency is quoted eg USD 1 = Rs43.20

• Indirect quotation
• Exchange rate
• Rate of USD
• Direct quotation

Q - 7 .Liabilities that will arise on the happening of certain event

• Current liabilities
• Term Liabilities
• Contingent Liabilities
• None of the above

Q - 8 .The amount which the firm owe to outsiders

• Assets
• Capital
• Liabilities
• Intangible assets

Q - 9 .Creditors Velocity expresses the

• Maximum period for which credit is given
• Average period of credit enjoyed
• Minimum period of credit given
• Minimum period for which credit enjoyed

Q - 10 .Accounting software may be written in any one of the computer languages such as

• Windows, UNIX etc
• JAVA C+ etc
• COBOL, Foxpro etc
• None of the above

Q - 11 .Banking Ombudsman is appointed by

• Central Government / Ministry of Finance
• State Government
• IDBI
• RBI

Q - 12 .Hypothecation is defined in

• Hypothecation Act
• Indian Contract Act
• Transfer of Property Act
• SARFAESI Act

Q - 13 .The form of Balance sheet and Profit and loss account of a Banking Company is prescribed in forms A and B of _______ schedule of the Banking Regulation Act 1949

• Second
• Third
• First
• Fourth

Q - 14 .The charge by way of lien over goods belonging to a company must be registered with Registrar of Companies within a period of

• 30 days of creation of law
• This charge need not be registered as this is not hypothecation, mortgage etc
• 30 days of default in repayment
• A or C whichever is earlier

Q - 15 .The State Govt. wants to seize the goods pledged to bank as the borrower has defaulted in payment of tax. In this case,

• Govt dues enjoys priority over bank dues
• Bank dues enjoys priority over Government dues
• Both enjoys equal priority
• The Government cannot seize the goods

Q - 16 .For a large and medium units DSCR should be

• Maximum 2:1
• Maximum 1.5:1
• Minimum 2:1
• Minimum 1.5:1

Q - 17 .Profit and Loss Account is one of the Final Accounts prepared by a Company. What is the other one.

• Schedules to P&L accounts
• Balance sheet
• Trading Account
• None of the above

Q - 18 .Assignment of LIC policy is done as per section& & of & & . Act

• 132 of Transfer of Property Act
• 38, Indian Insurance Act 1938
• 138 of Contract Act
• NOA

Q - 19 .A computer Accounting system runs based on a set of instructions called the software programmes developed by a person who is a computer software professional and he is called ________

• Programmer
• Software Engineer
• IT man
• None of the above

Q - 20 .As per new guidelines both SLR and non SLR securities are to be classified into

• Held to maturity
• Available for sale
• Held for trading
• All the above

Q - 21 .Authorised capital is also known as

• Nominal or Registered Capital
• Equity capital
• Preference share capital
• All the above

Q - 22 .____is the value of an established business over and above the value represented by it s tangible assets

• Assets
• Liabilities
• Goodwill
• None of the above

Q - 23 .Who cannot file a complaint under Consumer Protection Act?

• Banks
• State Government
• Public Interest Litigation Group
• Persons receiving services free of charge

Q - 24 .If a sum of Rs10,000/accumulates to Rs16,000/after 3 years at simple Interest , what is the rate of Interest.

• 16%
• 25%
• 23%
• 20%

Q - 25 .What is the formula for charging compound interest with Annual Compounding

• I = Pnr
• P+I
• A = P( 1+r)n
• Any of the 3

Q - 26 .An operation by which one can make risk free profits making use of the interest differentials between two places is called

• Open market operation
• Profitability
• Free market
• Arbitrage

Q - 27 .The following is not usually classified as Other Non Current Assets

• Advance given to Directors
• Tender Deposit
• Receivable outstanding beyond 12 months
• Preliminary and Pre operative expenses

Q - 28 .The long term use is 120% of long term source. This indicates the unit has

• CR 1.2
• Negative TNW
• Low Capital
• Negative NWC

Q - 29 .A borrower need not bring any matching contribution from long term sources in respect of

• Export Receivables
• Finished goods produced for a specific export order
• Adhoc limits
• A & B

Q - 30 .Total Current Asset of a unit is Rs.300 lacs. Other Current Liabilities is Rs.200 lacs. The MPBF as per Ist Method & 2nd method can be

• 75 and 25 lacs
• 25 lacs and 75 lacs
• Rs.100 lacs & Rs.150 lacs
• Rs.20 lacs & Rs.80 lacs

Q - 31 .The formation of a company is governed by the rules and regulations as contained in

• Indian Companies Act
• RBI act
• BR Act
• None of the above

Q - 32 .When shares are issued at higher than the face value of the shares they are said to be issued at a

• Discount-
• Par-
• Premium
• None of the above

Q - 33 .What is the minimum period to be allowed to drawee to decide on acceptance / rejections of a usance bill

• 2 Days
• 48 Hours
• 48 Hrs including public holidays
• 48 hrs excluding public holidays

Q - 34 .Variable Cost and Sale Price remaining the same, a rise in fixed cost result in

• High BEP ( High Break even point)
• Low BEP
• High Margin of Safety
• B & C

Q - 35 .As per NABARD guidelines the minimum Internal Rate of Return for Agricultural Project is

• 15%
• 25%
• 30%
• 18%

Q - 36 .Financial leverage means

• use leveraged lease to plan tax liability
• High degree of solvency
• Law bank finance
• Use of more debt capital to increase profit

Q - 37 .Under the ____________ capital method two accounts are maintained for each partner viz current account and capital account

• Fixed Capital Method
• Fluctuating capital method
• Equity capital Method
• Preference share capital

Q - 38 . Assets minus original capital = Liability

• True
• 0
• can be accepted
• None of the above

Q - 39 .A Customer Service Meet should be organized at every Branch

• Once in a Fortnight
• Once in a Quarter
• Once in a Month
• Once in a Half-Year

Q - 40 .Interest charged in advance accounts as per RBI directive can not be subject to scrutiny by court. This is provided in

• Section 35A of BR Act
• Section 21(A) of BR Act
• Of BR Act
• Section 26 of RBI Act

Q - 41 .The Net Working Capital refers to

• Liquid surplus
• Borrowers Contributions from long term source to short term use
• Excess Current Asset over Current Liability
• All the above

Q - 42 .The duration of an operating cycle in 30 days. The operating cycle in this case repeats_________ times a year

• 30 times
• 12 times
• 10 times
• 52 times

Q - 43 . A Bridge finance is extended for overcoming

• Delay in getting of the public issue
• Delay in disbursement of term loan
• Delay in disbursement of working capital for completing the documentation
• For A & B

Q - 44 .A company has a networth of Rs.5 lacs. Term liability Rs.10 lacs, Fixed Asset of Rs.16 lacs and Current Asset Rs.25 lacs. There is no intangible asset or ONCA. It's net working capital is

• Rs. 10 lakhs
• Rs. 1 lakh
• Rs. 9 lakh
• Rs. (-) 1 lakh

Q - 45 .If a firm borrows money its capital would be reduced

• This statement is false
• This statement is true
• The same is acceptable
• None of the above

Q - 46 .The balance sheet represents an expansion of the equation as Assets = Liabilities +Capital This statement is

• Cannot be relied
• 0
• Not acceptable
• 1

Q - 47 .A Mortgage of the mortgaged property is called

• Sub-mortgage
• Second Mortgage
• Re-mortgage
• Fraudulent Mortgage

Q - 48 .Holding period of Receivables is calculated with reference to

• Cost of Sales
• Cost of Production
• Gross Sales
• NOA

Q - 49 .The amount which the owner of the business has invested in the firm and can claim from the firm is known as ___________

• Capital
• Loan
• Term Loan
• Fixed Asset

Q - 50 .Diversion means

• Diversifying to activities not related to main business
• Retrenching employees
• Use of Current Assets for payment of Term Liability
• Use of Current Liabilities for long term use

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