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Q - 1 .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 - 2 .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 - 3 .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 - 4 .Select the incorrect statement

Authorized capital is the capital with which the company is registered
Issued capital is equal to its authorized capital
Authorized capital, issued capital, subscribed capital, called up capital and paid up capital cannot be same
The amount which the company has asked its shareholders to pay is called up capital of the company.

Q - 5 .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 - 6 .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 - 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 .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 - 9 .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 - 10 .The investment under held to maturity should not exceed _____ of banks total investment

25%
75%
5%
None of the above

Q - 11 .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 - 12 .One of the accounts is wrongly grouped under the head Investments while preparing the balance sheet of the company. Single out

Investments in government or trust securities
Investments in shares ,debentures or bonds
Immovable properties
Interest accrued on investments

Q - 13 .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 - 14 .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 - 15 .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 - 16 .The firm sells goods on credit for Rs.50000, the cost of the goods sold is Rs.30000.The effect of the transaction is that, the capital of the firm-----

increases by Rs.50000
reduces by Rs.40000
increases by Rs. 20000
reduces by Rs. 20000

Q - 17 .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 - 18 .Preliminary Expenses is-----

Fictitious Asset
Current liability
Current asset
None of the above

Q - 19 .Any facts, observations, occurrences are called -----

data
record
file
system

Q - 20 .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 - 21 .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 - 22 .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 - 23 .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 - 24 .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 - 25 .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 - 26 .Cost of goods sold is

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

Q - 27 .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 - 28 .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 - 29 .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 - 30 .The liability side of the balance sheet of ABC International Ltd. is showing following position: Paid up share capital Rs.25 Lakh ( 25,000 shares of Rs.100 each fully paid up)Share premium Rs.5 Lakh, Capital Reserve Rs. 3 Lakh, General Reserve Rs. 15 Lakh and Profit & Loss account Rs. 15 Lakh .It was decided to use minimum free reserve for issue of 1:1 bonus shares.. The accounts and the amount with which the account is debited are given below in sets. One of the set is correct. Select the same.

Share Premium Account (Rs.5 Lakh), Capital Reserve Account ( Rs. 1 Lakh), General Reserve Account (15 Lakh) & Profit & Loss Account by Rs. 4 Lakh
Share Premium Account (Rs. Nil Lakh), Capital Reserve Account ( Rs. Nil Lakh), General Reserve Account (10 Lakh) & Profit & Loss Account by Rs. 15 Lakh
Share Premium Account (Rs.5 Lakh), Capital Reserve Account ( Rs. 3 Lakh), General Reserve Account (15 Lakh) & Profit & Loss Account by Rs. 2 Lakh
Share Premium Account (Rs.5 Lakh), Capital Reserve Account ( Rs. 1 Lakh), General Reserve Account (4 Lakh) & Profit & Loss Account by Rs. 15 Lakh

Q - 31 .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 - 32 .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 - 33 .For an expense to be classified as revenue or capital depends on

Kind of expense
Duration of the benefit of the expenditure
Effect on revenue earning capacity
All of the above

Q - 34 .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 - 35 .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 - 36 .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 - 37 .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 - 38 .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 - 39 .Read the following four journal entries which are passed to consider revaluation of assets and liabilities at the time of admission of a partner. One of the journal entries is wrong, choose the entry which is wrong.

For increase in the value of assets-Debit Asset Account and Credit Revaluation Account.
For decrease in the value of liabilities- Debit Liabilities Account and Credit Revaluation Account.
For Profit on revaluation of assets and liabilities Debit Old Partners Capital Account in old profit sharing ratio and Credit
For decrease in the value of assets -Debit Revaluation Account and Credit Asset Account

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 .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 - 42 .As per accounting standards which of the following is not a preferred method

LIFO
FIFO
WACM
All of them

Q - 43 .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 - 44 .The financial statement of bank consists of ________ schedules

18 Schedules
16 Schedules
17 Schedules
Schedules

Q - 45 .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 - 46 .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 - 47 .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 - 48 .The list given below consists of various securities. Identify the security which is SLR security

Securities issued by local authorities
Shares
Bonds
subsidiaries

Q - 49 .Freight expenses for moving new machinery to factory is

Revenue expenses
Deferred revenue expenditure
Capital expenditure
None of the above

Q - 50 .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

Online Tests for Accounting & Finance for Bankers

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