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 .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 - 2 .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 - 3 .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 - 4 .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 - 5 .The financial statement of bank consists of ________ schedules

• 18 Schedules
• 16 Schedules
• 17 Schedules
• Schedules

Q - 6 .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

Q - 7 .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 - 8 .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 - 9 .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 - 10 .In banking company, matured term deposit to be shown under-----

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

Q - 11 .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 - 12 .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 - 13 .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 - 14 .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 - 15 .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 - 16 .Due to heavy flooding a truck carrying consignment goods sinks. This loss is called

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

Q - 17 .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 - 18 .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 - 19 .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 - 20 .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 - 21 .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 - 22 .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 - 23 .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 - 24 .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 - 25 .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 - 26 .One of the pairs given below is wrong. Select the wrong pair.

• Outstanding expenses - Nominal account
• Profit and Loss Account (Dr. balance)  Application of funds
• Net worth less reserves & surplus - Capital
• Balance sheet - Financial position

Q - 27 .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 - 28 .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 - 29 .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 - 30 .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 - 31 .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 - 32 .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 - 33 .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 - 34 .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 - 35 .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 - 36 .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 - 37 .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 - 38 .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 - 39 .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 - 40 .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 - 41 .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 - 42 .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 - 43 .If a share of Rs.10 issued at a premium of Rs.1 on which Rs.9 ( including premium) have been called and Rs.7( including premium) paid is forfeited, the capital account should be debited by_________

• Rs.8
• Rs.10
• Rs.9
• Rs.7

Q - 44 .One of the statements in respect of Profit & Loss Adjustment account is incorrect, rest are correct. Mark the incorrect sentence.

• The account is credited with closing balance of profit and loss account of last year
• The account is credited with current year s net profit
• The account is debited with provision for taxes
• The account is debited with provision for dividend

Q - 45 .Cost of goods sold is

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

Q - 46 .The investment under held to maturity should not exceed _____ of banks total investment

• 25%
• 75%
• 5%
• None of the above

Q - 47 .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 - 48 .Any facts, observations, occurrences are called -----

• data
• record
• file
• system

Q - 49 .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 - 50 .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

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