the following is true ?

Receipt of Rs. 1 Lac as award for the innovation is a

transaction
Increase in the market value of shares is a transaction
Receipt of certificate for the innovation is a
transaction
Increase in the prices of raw material is a transaction

Which one of the following is false ?

Death of a senior manager of the firm is a transaction
Receipt of Rs. 1 Lac as award for the innovation is a
transaction
Increase in the market value of shares is not a
transaction
Extending the period of a fixed deposit receipt is not a
transaction

Which one of the following is true ?

Increase in the market value of investment is a
transaction
Increase in the value of Rupee against US Dollar is a
transaction
Redemption of debentures issued by the company is a
transaction
Extending the period of a Fixed Deposit Receipt is a
transaction

Which one of the following is true ?

Increase in the market value of investment is a
transaction
Increase in the value of Rupee against US Dollar is a
transaction
Redemption of debentures issued by the company is a
transaction
Extending the period of a Fixed Deposit Receipt is a
transaction

Debit what comes in, Credit what goes out will represent ----Nominal accounts
Real accounts
Personal accounts
Artificial accounts

Balance sheet gives the position ----of the year

of the balances during the year
as on the last day of the year
Only for the last year

The bill of exchange is drawn on which party ?

Debtor

Creditor
Payee
Seller

A promissory note is written by ----Creditor

Debtor
Seller
Payee

Which of the following statements is true ?

A bill of exchange is not a negotiable instrument
A bill of exchange need not be dated
A bill of exchange must be accepted by the drawer
Amount of the bill is paid to the payee

Final accounts are prepared to show ----Business results

Financial position
Business results and financial position
Balances of general ledger

How the "Closing Stock" is shown in final accounts ?

Debit side of trading account and asset side of balance sheet
Credit side of the trading account and liabilities side of balance
sheet
Credit side of trading account and asset side of balance sheet
Credit side of trading account

Promotional expenditure of Rs.5,00,000/- for promoting export sales in a new country which
resulted in high success is ----Capital expenditure
Revenue expenditure
Deferred revenue expenditure

Discharge of liability

Balance sheet discloses ----Cash position of the business

Financial position of the business
Profit earning capacity of the business
Income position of the business

Bad debts recovered (written off in the same year) are recorded as ----Debtors account debit and bank account credit
Bank account debit and debtors account credit
Bank account debit and bad debts account credit
Debtors account debit and bad debts account credit

WAN denotes ----With area network

Wide area network
World area network
Without area network

When share applications are received, what accounting entry is recorded ?

Debit bank account and credit share capital account
Debit bank account and credit share allotment account
Debit bank account and credit share application account
Debit bank account and credit share adjustment account

Which of the conditions for issue of non-voting equity shares is applicable ?

Issue of non-voting equity shares
shall be authorised by the Articles of
Association of the company and
approved by the shareholders at their
general body meeting by passing a
special resolution
Such shareholders are entitled to all
rights and bonus shares but do not
enjoy voting rights
Only 25% of the paid-up capital of
the company can be issued as equity
shares without voting rights
All of the above

Accounting concepts are known as -----

Accounting conventions
GAPP
US - GAPP
Accounting records

A company may follow ----Cash basis of accounting

Mercantile basis of accounting
Hybrid method of accounting
None of these

Financial statements are prepared to know ----Assets of the business entity

Profit and loss of the business entity
Liabilities of the business entity
All of these

Accounting standards are issued by ----Institute of Costs and Works

Accountants of India
Institute of Company Secretaries of
India
Institute of Chartered Accountants of
India
Indian Institute of Management

A person whose assets exceed his liabilities is called ----Debtor

Solvent
Insolvent
Creditor

Classified details of particular transactions is called ----Cash book

Ledger
Journal
Trial balance

Dual concept results in accounting equation ----Capital + Liabilities = Assets

Capital = Assets
Revenue = Expenditure
Capital + Profit = Assets + Expenditure

Dual concept results in accounting equation ----Capital + Liabilities = Assets

Capital = Assets
Revenue = Expenditure
Capital + Profit = Assets + Expenditure

Which one of the following is false ?

Death of a senior manager of the firm is a transaction
Receipt of Rs. 1 Lac as award for the innovation is a
transaction
Increase in the market value of shares is not a
transaction
Extending the period of a fixed deposit receipt is not a
transaction

Indian Oil Company LTD. is ----- account.

Real
Personal
Nominal
Artificial real

Which of the following is not part of floating assets ?

Debtors
Copyrights
Land and building
Both (b) and ( c) above

When depreciation is charged on furniture, furniture account is ----Debited

Credited
No effect is given
Both debited and credited

The bill of exchange is drawn on which party ?

Debtor

Creditor
Payee
Seller

A promissory note is written by ----Creditor

Debtor
Seller
Payee

There are ----- parties in promissory note.

Three
Two
Four
One

Final accounts are prepared to show ----Business results

Financial position
Business results and
financial position
Balances of general
ledger

Balance sheet is
prepared to show
----Financial position
of the business
concern at the
point of time
Results of
business of over
a period of time
A statement
showing assets
and liabilities
Both (a) and ( c)
above

Which of the
following is true ?
Nominal account
cannot be
transferred to
balance sheet

Balance sheet is
an account
Carriage inward
is debited to
profit and loss
account
Closing stock is
always valued at
cost price

Payment of
Rs.35,000/- to Mr.
A for goods
purchased from him
on credit is ----Capital
expenditure
Revenue
expenditure
Deferred
revenue
expenditure
Discharge of
liability

Payment of lease
rent of Rs.90,000/for the factory for
current month is
----Capital
expenditure
Revenue
expenditure
Deferred
revenue
expenditure
Discharge of
liability

Receipt of
Rs.1,000/- on
account of sale old
tyers of the car is
----Capital receipt
Revenue receipt
Receipt against
dues
Deferred
revenue receipt

Bad debts
recovered (written
off in the same
year) are recorded
as ----Debtors account
debit and bank
account credit

Bank account
debit and
debtors account
credit
Bank account
debit and bad
debts account
credit
Debtors account
debit and bad
debts account
credit

LAN/WAN is used
by ----Single user
Double user
Multiple users
Limited users

When share
applications are
received, what
accounting entry is
recorded ?
Debit bank
account and
credit share
capital account
Debit bank
account and
credit share
allotment
account
Debit bank
account and
credit share
application
account
Debit bank
account and
credit share
adjustment
account

Which of the
conditions for issue
of non-voting
equity shares is
applicable ?
Issue of nonvoting equity
shares shall be
authorised by the
Articles of
Association of
the company and
approved by the
shareholders at
their general

body meeting by
passing a special
resolution
Such
shareholders are
entitled to all
rights and bonus
shares but do not
enjoy voting
rights
Only 25% of the
paid-up capital of
the company can
be issued as
equity shares
without voting
rights
All of the above

Which of the
following is not
part of "Fixed
Assets" in a
company balance
sheet ?
Goodwill
Stock in trade
Patents,
trademarks and
designs
Plant and
machinery

A company may
follow ----Cash basis of
accounting
Mercantile basis
of accounting
Hybrid method
of accounting
None of these

LEGAL
ASPECTS
A banking company can hold the immovable property beyond stipulate period if ----it is required for its own
use
it is for rental purpose
the property has good
development potential
property is acquired in
satisfaction of its claims

The Banking Ombudsman is instituted mainly for settling disputes -----

Between customers of
banks
Between banks
Between banks and the
customers
Between banks and
customers belonging to
weaker sections

A banker is entitled to debit the customers account in case of forgery of customers signature
on the cheque provided ----The banker does not doubt the bonafides of the bearer of the cheque
The banker examines the cheque under an ultra violet lamp
The signature though forged tallies in all respects
None of the above

A banking company can hold the immovable property beyond stipulate period if ----it is required for its own use
it is for rental purpose
the property has good development potential
property is acquired in satisfaction of its claims

The Banking Ombudsman is instituted mainly for settling disputes ----Between customers of
banks
Between banks
Between banks and the
customers
Between banks and
customers belonging to
weaker sections

Which one of the following statement is incorrect?

Special audit may be conducted only in the case of fraud
Special audit may relate to any transaction
Special audit may relate to any class of transactions
Special audit may relate to any period specified by the Reserve Bank

The capital of the State bank of India is held ----By Central government alone
Mainly by Reserve bank
By the subsidiary banks
The government and the public only

A co-operative bank includes -----

A primary credit society

A primary agricultural
credit society
An urban/primary cooperative bank
A land mortage bank

A banker is entitled to debit the customers account in case of forgery of customers signature
on the cheque provided ----The banker does not doubt the bonafides of the bearer of the cheque
The banker examines the cheque under an ultra violet lamp
The signature though forged tallies in all respects
None of the above

A banker can claim protection in respect of payment of cheque under ----Banking Regulation Act
Negotiable Instruments Act
SEBI Act
All of the above

Payment in due course means ----Payment in accordance with the

apparent tenor of the instrument
Payment in good faith without
negligence
Payment to the person in
possession of the instrument
without having reason to believe
that such person is not entitled to
the amount mentioned in the
instrument
All of the above

he term Material Alteration in the case of a negotiable instrument means ----Any alteration to the instrument
Any alteration of an instrument which
varies the rights, liabilities or legal
position of the parties
Only alteration which either increases
the amount or extends the date
Only alteration that changes the payees
name

In a cheque, the signature and writing were forged, and forgery was so perfect that it was not
possible to detect it with the naked eyes. The bank can plead that the payment was made ----under mistake
because forgery was very perfect
in good faith

None of the above

In Bank guarantees the bank makes payment on ----Being convinced that the beneficiary has incurred loss
On being sued by the beneficiary
On invocation of guarantee and after seeking concurrence of
the debtor
Merely on demand by the beneficiary

Banks can issue ----financial guarantee

performance guarantee
Deferred payment guarantee
All of the above

The Advising Bank is also called the ----Confirming Bank

Notifying Bank
Reimbursing Bank
None of the above

An usance bill is a bill payable ----Only on demand by the holder

At a specific date mentioned therein
Payable only to the holder of the bill
Where the payment is in a foreign currency

Hypothecation is ----Pledge
Mortgage of movable property
Both (a) and (b) above
None of the above

A contract by a bank to lend money to an individual will be governed by which of the following
laws ?
Reserve Bank of India Act
Indian Contract Act
Banking Regulation Act
Money Lenders Act

The bank can lend money to ----minor for business activity

minor for personal gain
minor for purchasing necessaties of life
None of the above

On what ground the complaint for deficiency in banking service can be filed with the Banking
Ombudsman ?
Refusal to open deposit accounts without any valid reason for refusal
Non sanction of loan
Not accepting the compromise proposal in NPA account
Banks taking possession of security and sale thereof

A proposes to sell the house to B. The proposal is complete ----When A sends his proposal
When B receives letter
Both (a) and (b) above
None of the above

A person signed without reading the contents of standard format of document, he is ----Bound by the terms of the document
Not bound by the terms of the document
Entitled to outrightly reject the document
None of the above

The delivery of goods to the Bailee means ----An act, the effect of which is putting the goods in the possession of intended bailee
Delivering cash to the intended Bailee
Delivering immovable property to the intended Bailee
None of the above

'A' promises to paint a picture for B by certain day at certain price. A dies before that day
without painting the picture. In that event ----As representatives can be forced to paint the picture
'B' can get decree for specific performance of Contract
(a) and (b) above
none of the above

There were two co-sureties. The release of one of the co-sureties -----

Will discharge the other

Does not discharge the other
Will give new cause of action
None of the above

A guarantees to C payment for iron to be supplied by him to B to the amount of 2000 tons. B
and C have privately agreed that B should pay 5 rupees per ton beyond the market price. Such
excesses had to be applied in liquidation of old debt. This agreement is concealed from A.
Therefore A ----Is liable as a surety
Is partly liable as a surety
Is not liable as a surety
None of the abov

In a Contract of Bailment Bailor is bound to disclose the defects in the goods bailed to Bailee
----of which the Bailor is aware
which materially interferes with the use of them
which exposes the Bailee to the extraordinary risks
all of the above

Principles and banking

LC is a popular product of banks. This is
a funding facility called letter of credit
it is funded facility called line of credit
it is a non-fund facility called line of credit
none of the above

CIBIL is an organization which is engaged in

collecting and distributing information to banks
collecting application details and submitting applications to banks
collecting and recommending loans to banks and guaranteeing the same
collecting and maintaining credit record of both individual and business customers for the benefit of
banks

CIBIL is an organization which is engaged in

collecting and distributing information to banks
collecting application details and submitting applications to banks

collecting and recommending loans to banks and guaranteeing the same

collecting and maintaining credit record of both individual and business customers for the benefit of
banks

Valuation of inventory is done using various methods. One such is FILO. The full form of this is
first in lost out
first in last out
firm in lest out
none of the above

In a bank guarantee issued to customer bank assumes the role of

principal
beneficiary
guarantor
none of the above

Bill discounting is done by banks in case of only

after sight bills
demand bills
after sight usance bills
after date bills

Documents of title to goods do not include

railway receipt
motor transport receipt
bill of lading
none of the above

DRT Act is the popular name for

Debt rehabilitation trust
Recovery of Debts due to banks and FIs
Debt rehabilitation tribunal

None of the above

ATMs are typically deployed by banks for

wholesale banking
merchant banking
retail banking
all the above

Savings accounts contain some restrictions regarding

Number of withdrawals per quarter
Amount of withdrawals per transaction in ATM
Number of deposits into the account per quarter
Both (a) and (b) above

A banks Fixed Deposits is characterized by

Fixed/Floating interest rate as agreed with the customer at the time of the
deposit
Fixed period of the deposit
Periodical Repayment of interest
All the above

Know Your Customer (KYC) guidelines are intended to

Establish identity with residence proof of the customers
Prevent fictitious or Benami transactions
Protect the bank from the risk of not acting in good faith
All the above

In banking transactions, a customer is recognized by his/ her

Signature on record with the bank
Photograph
Hand writing
Voice

Mr.A is not maintaining the minimum balance in his account and is in the habit of issuing
cheques without maintaining sufficient balance.,His account has become an undesireable
account due to unsatisfactory operations.He does not agree to close the account even after
repeated oral requests .In this case,the bank has
right to close the account once cheque book gets exhausted

b. right to close the account after serving notice and can close the account on
expiry of the notice period
c. right to close the account after giving public notice in the notice board of the
bank
no right to close the account under the Banking Ombudsman scheme

ABC Bank Ltd filed a suit exclusively against the guarantor and did not opt to proceed against
the borrower.In this case,which of the following is correct?
Guarantor is a favoured debtor and the banks action is legally not tenable
the bank has no right to proceed against the guarantor without concurrently
proceeding against the borrower
the bank can not proceed against the surety as surety stands discharged by such
action of the bank
the bank can proceed against the quarantor and the banks action is certainly
tenable

An actionable claim is assigned in favour of more than one assignee at different points of
time.The priority of charge is determined with reference to the date of
execution of notice of assignment
execution of the written instrument for assignment
receipt of notice of assignment
receipt of written instrument for assignment

Mr.A has given his residential building in mortgage to a bank for a housing loan.As he has
defaulted for payment of Income Tax,the Income Tax Authorities sold the building for recovering
the dues.In this case,
Bank loan has precedence over income tax dues
Income tax dues are Government dues and hence they enjoy priority
Both bank and Income Tax Department can have pro rata claim
Bank will have precedence only if it is a registered mortgage

The document to be verified to ascertain the borrowing powers of directors is

Memorandum of Association
Articles of Association
Certificate of incorporation
Board Resolution

A full-fledged ATM can offer the following services to customers 1. Cash Dispensing 2. Deposit of
Cash/Cheques 3. Utility Payments like telephone bills, electricity bills etc 4. Issue of Cheque
books Choose the most appropriate answer from the following
Statement 1,2,3 and 4 are true
Statement 1,2 and 3 are true
Statement 2,3 and 4 are true
Statement 1,3 and 4 are true

The following is not a feature of RTGS[Real Time Gross Settlement System]

Instruction Processing
Settlement Processing
Liquidity Management
Profitability Management

PIN in Smart Card is called --Permanent Index Number

Personal Identification Number
Personal Index Number
Permanent Identification Number

MICR technology used for clearance of cheques by banks refers to ----Magnetic Ink Character Recognition
Magnetic Intelligence Character Recognition
Magnetic Information Cable Recognition
Magnetic Insurance Cases Recognition

The term HTML connotes

Hyper Text Markup Language
Hyper Transcription Markup Language
High Text Markup Language
High Terminal Markup Language

Fixed deposits cannot be

Renewed for a further period on maturity date
Transferred to third parties
Pre-paid before the maturity date
All the above

Nomination is not applicable in the case of

Account of an individual
Joint account of two or more individuals
Account of Hindu Undivided Family (HUF)
Account of a company

For Internet Banking a customer requires

Personal Computer and telephone link
Personal Computer, telephone line, modem and Internet Service Provider

Personal Computer, telephone link and modem

Personal Computer, telephone link and Internet Service Provider