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Net Interest income is (i) (ii) (iii) (iv) Interest earned on advances Interest earned on investments Total interest earned on advances and investment Difference between interest earned and interest paid
2. Interest rate risk is a type of (i) (ii) (iii) (iv) Credit risk Market risk Operational risk All the above
3. A bank suffers loss due to adverse market movement of a security. The security was however held beyond the defeasance period. What is the type of the risk that the bank has suffered ? (i) (ii) (iii) (iv) Market Risk Operational Risk Market Liquidation Risk Credit Risk
4.Which of the following is not a type of credit risk ? (i) (ii) (iii) (iv) Default risk Credit spread risk Intrinsic risk Basis risk
5. 8% Government of India security is quoted at RS 120/- The current yield on the security, will be---(i) (ii) (iii) (iv) 12% 9.6% 6.7% 8%
6. Decrease in the amount of creditors result in: (i)Decrease in cash (ii) Increase in assets (iii)No change in assets (iv)Increase in cash
7. A company declares RS 2/- dividend on the equity share of face value of RS 5/-. The share is quoted in the market at RS 80/- the dividend yield will be---(i) (ii) (iii) (iv) 20% 4% 40% 2.5%
8. The risk that arises due to worsening of credit quality is (i) (ii) (iii) (iv) Intrinsic Risk Credit spread Risk Portfolio risk Counterparty risk
9. A debenture of face value of As. 100 carries a coupon of 15%. If the current yield is 12.5%. What is the current market price ? (i) (ii) (iii) (iv) Rs.100 Rs.120 Rs.150 Rs.125
10. In order to develop an capability to actively manage an credit portfolio one must have in place the following: Credit Rating Model (or models for different categories of loans and advances) Develop and maintain necessary data on defaults of borrowers rating category wise, i.e., ‘Rating Migration’. (i) (ii) (iii) (iv) Both 1 and 2 are required Only 1 is required Only 2 is required None of the above
11. The rent paid to landlord is credited to:(i) cash A/C (ii)Rent A/c (iii) Londlord,s A/c (iv)None of the above
On Jan 20. A bank holds a security that is rated A+. The rating of the security migrates to A.12.The journal entry made on Jan 20 by Sunset to record this transaction includes:(i) A credit to the cash received account of Rs. What is the risk that the bank has faced ? (i) (ii) (iii) (iv) Market risk Operational risk Market liquidation risk Credit risk 14.2100 (ii) A credit the account receivable account of Rs2100 (iii) A debit to the cash account of Rs 1400 (iv)Adebit to the account recevvable account of Rs1400 3 . Growth Fund is a mutual fund that (i) (ii) (iii) (iv) assures growth in income invests in fixed income securities gives fixed return invests primarily in equities 16. A transaction where financial securities are issued against the cash flow generated from a pool of assets is called (i) (ii) (iii) (iv) Securitization Credit Default Swaps Credit Linked Notes Total Return Swaps 15. An increase in cash reserve ratio will cause yield curve to (i) (ii) (iii) (iv) Shift downward Remain unchanged Become steeper Become flatter 13. Sunset Torus has aRs 3500 account receivable from Mohan.the Rotary makes a paratial payment of Rs 2100 to Sunset Torus.
Which of the following is true ? (i) (ii) (iii) (iv) (v) All of them None of them (a) . For operational risk. The third consultative paper recommended for (a) Cause based classification (b) Effect based classification (c) Event based classification 21. (b) and (c) (a) . A decline in cash reserve ratio will cause the yield curve to (i) (ii) (iii) (iv) shift upward shift downward become flatter remain unchanged 20. After the preparation of ledgers the next step is preparation of (i)Trading A/C (ii) P and L A/C (iii) Trial Balance (iv) None of above 22. Which of the following is true (i) (ii) (iii) (iv) (a) None of them (c) (b) 4 . (b) and (e) 19.17 . Operational Risk arises from (i) Inadequate or failed internal processes (ii)People and systems (iii)External Events (iv)Defaults 18.
.. A fall in long term interest rates on Government securities will make the yield curve become (i) (ii) (iii) flatter steeper shift downward 27.133. If interest rates go down by 1%. the yield will be – (i) (ii) (iii) (iv) 11% 10% 9% None of these 5 .23. (i) (ii) (iii) (iv) Rs. 120 Rs. 140 24. 109 Rs.120. The Preparatiopn of Trial balance is for:(i) Locating errors of principle (ii Locating errors of commission (iii)Locating clerical errors (iv) All of the above 25. What is the risk that the bank is facing ? (i) (ii) (iii) (iv) Market risk Operational risk Asset Liquidation risk Market liquidity risk 28. the market price of the security will be.3 Rs. 110. 12% Government of India security is quoted at Rs. Rewards of proper management of operational risks are (a) Lesser risk capital (b) Cost reductions in operations (c) Competitive edge 26.A bank expects fall in price of a security if it sells it in the market.. 11% Government of India security is quoted at Rs..
A fall in interest rates will make prices of Government Securities (i) (ii) (iii) (iv) Go down Go up Remain unchanged None of these 31. Principal book 32.130 6 .500. 1 day VaR of a portfolio is Rs.122. Subsidiary book (iv) Principal book.110.000 with 95% confidence level. Subsidiary book (iii)Subsidiary book. then the yield curve will became:(i) (ii) (iii) Steeper Flatter Shift downward 34. Systemic risk the risk of (i) (ii) (iii) (iv) Failure of a bank.109 Rs. of India security is quoted at Rs. If the yield on long dated Govt. If the interest rates go down by 1% the market price of the security will be (i) (ii) (iii) (iv) Rs.29.110 Rs. securities falls.500. Principal book (ii) Principal book.000 ? (i) (ii) (iii) (iv) 4 days 5 days 6 days 7 days 30. 11% Govt. Cash book is type of _____but can also treated as part of ____ (i)Subsidiary book. which is not adhering to regulations Failure of two banks simultaneously due to bankruptcy of one bank Where a group of banks fail due to contagion effect Failure of entire banking system 33.2 Rs. In a period of six months (125 working days) how many times the loss on the portfolio may exceed Rs.
Under advanced IRB approach. Back testing is done to (i) (ii) (iii) (iv) Test a model Compare model results and actual performance Record performance None of the above 38. Capital requirement under the accord is (i) (ii) (iii) (iv) The maximum Capital that is required to be maintained The minimum Capital that is required to be maintained The capital as specified by the regulatory authority is required to be maintained None of the above 39. Interest on investment received from UTI:(i) Capital receipt (ii) Revenue receipt (iii)Capital expenditures (iv) Revenue expenditures 37. Capital charge for credit risk requires input for PD. who provide the input for LGD. LGD. EAD and M. Balanced fund is a mutual fund that (i) (ii) (iii) (iv) Assures income Invests in debt and equity Assure growth Gives fixed returns 36. A fall in the interest rates causes Govt.35. Securities to (i) (ii) (iii) Remain stable Fall Rise 40. (i) (ii) (iii) (iv) Bank Supervisor Function provided by BCBS None of the above 7 . Under Basel II.
70 crores and net profit after tax of Rs.50. The going concern concept is the underlying basis for :(i) Stating fixed assets at their historical cost (ii) Disclosing the market value of securities (iii) Disclosing the sales and other operating information in the income statement (iv) Nona of the above 46.10/. The current yield on this debenture will be (i) (ii) (iii) (iv) 13.50 crores (Face Value of Rs.25 crores. If the short term interest rates are temporarily higher than the long term interest rates. A debenture of Rs. A company with equity capital of Rs. the yield curve will be (i) (ii) (iii) (iv) Sloping upward Inverted Zigzag Horizontal 44.100 carrying 15% coupon rate is quoted in the market at Rs.per share) makes gross profit of Rs. Premature payment of a term loan will result in interest rate risk of type (i) (ii) (iii) (iv) Basis risk Yield curve risk Embedded option risk Mismatch risk 45.5% 15% 11. the PE ratio will be (i) (ii) (iii) (iv) 50 5 10 20 8 . Investment in Post Office time deposit is (i) (ii) (iii) (iv) Zero risk investment Low risk investment Medium risk investment High risk investment 43.41. If the market price of its equity share is Rs.135/-.11% 10% 42.
If call money rates are temporarily higher than the long term interest rates. Equity oriented mutual funds (i) (ii) (iii) (iv) Assure income Assure growth Invest in debentures Invest in shares 9 .which of the methods will not show greatest value of cost of goods sold? (i) FIFO (ii)LIFO (iii)Weighted Average (iv)Both a and c 52.? (i) (ii) (iii) (iv) All the statements are correct Statements 1 and 2 are correct Statements 2 and 3 are correct Statements 3 and 1 are correct 51.47. Daily volatility of a stock is 1%. Under inflationary conditions . Which of the following is true. What is its 10 days volatility approximately ? (i) (ii) (iii) (iv) 3% 10% 1% 4% 48. the yield curve will be (i) (ii) (iii) (iv) Slopping upwards Zigzag Inverted Horizontal 49. Capital charge component of pricing accounts for 1) Cost of capital 2) Internal generation of capital 3) Loss provision 50.
53 A bank funds its assets from a pool of composite liabilities.2. it faces (i) (ii) (iii) (iv) Basis risk Mismatch risk Market risk Liquidity risk 54. Risk mitigation measures result in 1) Reducing downside variability 2) Reducing upside potential which of the following is true (i) Both the statements are correct 10 . A branch sanctions Rs.4 and 5 only 1.1 core loan to a borrower. A rise in Government securities prices will make yield curve – (i) (ii) (iii) (iv) Slope upward Shift downward Remain stable Shift upward 57. which of the following risks the branch is taking 1) 2) 3) 4) 5) (i) (ii) (iii) (iv) (v) Liquidity risk Interest rate risk Market risk Credit risk Operational risk All of them 1.2 and 3 only 1. Apart from credit and operational risks.4 and 5 only 55.the depletion method is adopted? (i) Plant and machinery (ii) land and building (iii) goodwill (iv) wasting assets like mines and quarries 56. For charging depreation on which of the following assets .
Strategic Risk is a type of (i) (ii) (iii) (iv) Interest Rate Risk Operation Risk Liquidity Risk None of the above 63. Objective of liquidity management is to: (i) (ii) (iii) (iv) Ensure profitability Ensure liquidity Either of two Both 11 .3% 60.5% 13.Sales are equal to (i) cost of goods sold-gross profit (ii) cost of goods sold+ gross profit (iii)gross profit. The current yield on the security will be – (i) (ii) (iii) (iv) 12% 9% 7. Written down value method of depreciation machinery year after year due to (i) Comparability (ii) convenience (iii)consistency (iv) all of the above 62.(ii) (iii) (iv) Both the statements are not correct Statement 1 is correct Statement 2 is correct 58. 9% Government of India security is quoted at Rs.120.cost of goods sold (iv) cost of goods sold + Net profit 59. Financial Risk is defined as (i) (ii) (iii) (iv) Uncertainties resu1ting in adverse variation of profitability or outright losses Uncertainties that result in outright losses Uncertainties in cash flow Variations in net cash flows 61.
Also Write off Rs.16 65. 500 as bad debts.an asset (c). Profit made on sale of fixed asset is debited to _________ a). a liability (b). Statement of profit or Loss b).50. a). The amount of provision for Bad and Doubtful debts at5% will be ________ a).Rectifying the error of a credit purchase of goods worth #10000 recorded as credit sale to Mr A.16 and Rs. capital of a business is ascertained by preparing. A mutual fund charges 1% entry load and no exit load.16 and Rs. 2525 b). Small traders b). Its NAV is Rs.64.15. In complete records are generally used by a). profit and loss a/c b).government 71. Company c).84 and Rs. Statement of Affairs. its sale and repurchase price will ----(i) (ii) (iii) (iv) Rs.16 Rs.500.15. Rs.16. Trial balance as on 31.Rent outstanding is ________________ (a).16.15. Depreciation A/C 12 . Trading A/C. Under Single entry system. Fixed asset A/c c). c).84 Rs.05 shows sundry debtors as Rs. 2600 c). discovered 2 month later will be in: (i)Journal Proper (ii)sales book (iii)cash book (iv)Purchase book 66. 68.80 Rs.16.16 and Rs.03. Rs. Rs. an income. Banks need liquidity to: (i) (ii) (iii) (iv) Meet deposit withdrawal Fund loan demands Both of them None of them 67. 2500 69. 70.
money b). at the time of admission of a new partner. 45. Decrease in the value of liabilities. 35. All profitability ratios are expressed in terms of a). proportion b). Budget is expressed in terms of ______________ a).000 and the estimated cash payments are Rs. Rs. Under Written down Value Method. The opening balance of cash in February will be ____________ a). Proportion. 79. c). Purchases of office furniture Rs.000 c). 81. Money and physical units. undistributed profit or loss is transferred to __________ a). 10.000 78. 73. Old partners only c).A/C.1200 has been debited to General Exp. increase every year b). 20. decrease 75.000. The new partner does not bring in cash for his share of goodwill under ___________ a). 77. Times c).000 b).It is:(i) Clerical error (ii) error of principle (iii) error of omission (iv) compensating error 80. All solvency rations are expressed in terms of _____________ a).000. 25. results in ____________ to old partners a). loss c). memorandum revaluation method. all the partners. percentage b). new partners only b). is constant every year every year. In admission. The opening balance of cash in January is Rs. Percentage. 13 . depreciation _____________ a).The total of the purchases day book is posted periodically to the debit of:(i) Purchase book (ii) cash book (iii)journal proper (iv) nona of these 76..profit b). Revalution method b). expenses. premium method c). 74. 15. Physical units c). Times c). Rs.72. The estimated cash receipts are Rs.
2.1000. b) Credit purchases to the extent of Rs.1000 87.500 c). The rectification is a) Debit sales to the extent of Rs.2000 each & credit Vijay.2000 sold to Vijay was entered in purchase account. b) Overstating of sales register. 83. The discount on reissue of forfeited share is Rs. c) Debit sales to the extent of Rs. 4.2000.4000.Sales return of amount Rs. Rs.Which of the following will not affect Trial Balance a) Goods sold on credit not recorded in books. d) Salary debited to the extent ½ the amount. The rectification is a) Credit purchases and credit sales to the extent of Rs. debit sales and purchases to the extent Rs.82. 1500. Capital Reserve is shown on the __________ side of the balance sheet. 14 .A withdrawal of cash from business by the proprietor should be credited to:(i) Drawing A/C (ii) Capital A/C (iii) cash A/C (iv) purchase A/C 88.2000 b) Debit purchases and debit sales to the extent of Rs. Rs. 86.2000 each & debit Vijay by Rs.2000. asset c). 3.Which of the following method the cost of the asset is spread over in equal proportion during its useful economic life:(i) straight line method (ii) written down value method (iii)units of production method (iv)all above 85. liability b).4000.1000 and credit purchases by Rs. 84.2000 c) Credit Vijay Rs. Rs. each. capital Reserve will be ____________ a). d) Credit purchases to the extent of Rs. a).1000 from Vijay was wrongly entered in purchase book.500. both. The amount credited to share forfeiture account is Rs.000. d) Debit sales return by Rs. 1. c) Rent account credited instead of debit.500 b).Goods worth Rs.
c) Huge sales promotion expenditure in launch of new product d) Cost of preparing project report 95. 91. Which of the following is not a deferred revenue expenditure a) Preliminary expenses for setting up a company. Technique of finding the net balance of an a/c after considering the total of both debits and credits appearing in the a/c is known as:(i) posting (ii) purchase (iii)balancing of an a/c (iv) Arithmetically accuracy test 93. b) after trial balance. Suspense a/c is not used in which of the following cases. b) Amount raised through Rights issue. d) none of the above. Which of the following is false a) Replacement of defective part of machinery is revenue expenditure b) Daily wages paid for erection /installing of machinery is capital expenditure c) Underwriting commission for issue of shares is revenue expenditure d) Excess of sale price of Machinery over its W D Value but less than cost price is treated as revenue receipt 94. Freight expenses for moving new machinery to factory is a) Revenue expenses b) Deferred revenue expenditure c) Capital expenditure d) None of the above 92. Salaries due for the month of march will appear (i) on the receipt side of the cash book (ii)on the payment side of the cash book (iii) as a contra entry (iv) nowhere in cash book 15 . In purchases book the record is in respect of:(i) cash purchase of good (ii) credit purchase of goods dealt in (iii)All purchases of goods 90. c) before final accounts. a) before trial balance.89.
96.which was received from a debtor in full settlement for a claim of Rs 1100 is dishonoured:(i) Purchase return book (ii)Bills receivable book (iii) Purchase book (iv) journal book 101. In FIFO method of inventory valuation a) Closing stock is at latest price b) Issue of stocks to production is at earliest price c) Both a) & b) d) Neither a) nor b) 102.Which of the following is most desirable a) Pricing issue of goods to match current material costs b) Overstating profits c) Understating profits d) none of the above 16 .1000. Cost of goods sold is a) Opening stock + purchases + closing stock b) Opening stock + purchases – closing stock c) Opening stock – purchases + closing stock d) None of above 99. For an expense to be classified as revenue or capital depends on a) Kind of expense b) Duration of the benefit of the expenditure c) Effect on revenue earning capacity d) All of the above 97.Under statement of closing work in closing WIP in period will:(i) Understate cost of goods manufactured in that period (ii)overstate current assets (iii) overstate gross prifit from sales in that period (iv) understate net income in that period 98. In LIFO method of inventory valuation a) Issue of stocks to production is at latest price b) Closing stock is at latest price c) Both a) & b) d) Neither a) nor b) 100.Bills receivable of Rs.
Consider the following: 01/04 Opening stock of 1000 units at Rs.@ Rs. 11/. Bills receivable a) Bill accepted by ‘A’ b) Bill accepted by ‘ B’ c) Bill retired by ‘B’ d) None of the above a/c is debited and B’s a/c is credited. As per accounting standards which of the following is not a preferred method a) LIFO b) FIFO c) WACM d) All of them 105. Bills payable a/c is debited and bank account is credited a) Bill accepted by ‘B’ b) Bill retired by ‘B’ c) Bill dishonoured by ‘B’ d) Bill sent by ‘A’ for payment 17 .Read the following and answer : Drawer is ‘A’ Drawee is ‘B’ Endorsee is ‘C’ In the books of ‘A’. 9.@ Rs.each 16/04 Purchases of 300 units at Rs.10/.@ Rs.each 10/04 Purchases of 500 units at Rs. then In the books of B .Subsidy os $ 40000 received from the govt.89/Closing stock @ Rs.89/ 106. 9/. 9.@ Rs. by a manufacturing concern can be best treated as :(i) capital receipt (ii) Revenue receipt (iii)capital expenditures (iv) Revenue expenditures 104.103. 10/. 10/.each 18/04 Goods of 300 units released to production 31/04 Books closed Answer the following: under LIFO under FIFO under WACM Goods released to production @ Rs 11/. 11/.
This loss is called a) contingent loss b) Nominal loss c) Abnormal loss d) Casual loss 111.107. Which of the following is not true a) there is no difference in appearance between trade and accommodation bill.Which of the following is true a) Total lease rent = cost of asset . d) Lessee and vendor can claim depreciation. but had been correctly entered in the suppliers a/c the total of the trial balance would be:(i) credit side to be Rs84 more than debit side (ii) debit side to be Rs84 more than credit side (iii)debit side to be Rs168 more than credit side (iv)cresit side to be Rs168 more than debit side 110. b) Lessor and hirer can claim depreciation.total finance income + residual value b) Total finance income = total lease rent – cost of asset + residual value c) Total finance income = cost of asset – total lease rent + residual value 18 .Noting charges are a) Paid to bank for dishonour b) Paid to drawer for dishonour c) Paid to notary public for recording dishonour d) None of the above.Due to heavy flooding a truck carrying consignment goods sinks. Goods lost in transit is a) Nominal loss b) Abnormal loss c) Casual loss d) Conditional loss 109. c) Lessee and hirer can claim depreciation. b) A bill of exchange must be accepted c) Drawee is maker of a bill d) Accommodation bill is for an imaginary transaction 108. If purchase return of Rs 84 has been wrongly posted to the debit of sales return a/c. Which of the following is true for leasing and hire purchase a) Lessor and vendor can claim depreciation. 112. 26.
Under written down value method of Depn. 114. d) The users of assets in both lease & H P run the risk of obsolescence.Trading Organization. c) Payment of rentals is on instalment basis in both. Interest charged on overdue accounts. (b) Depreciation is not a part of the operating costs.Receipts and payments statement shows a) Only revenue receipts and payments during a year. 116. Of the following which one is not true? a) In lease the user of the asset does not retain it.In comparing lease & hire purchase (H P) there are differences & similarities. 115. 118. For a Non. c) Equal to the useful life of the asset.In operating lease the period is a) Less than the useful life of the asset. Which of the following is not true (a) Depreciation is an expense charged to the P & L a/c. (c) Assets that are depreciated are tangible assets. while in H P he does. b) Greater than the useful life of the asset. (b) They are forbidden by statute to make profits (c) By object of their association they are non profit making bodies. Discount received D. (d) Depreciation is like an insurance expense. b) In lease the user does not claim depreciation while he does in H P. (a) They often make losses. Cash received B.Which of the following items would not appear in a debtors control account? A. 117. a P & L A/c called an Income & Expenditure A/c because. the W D V of the asset is always a) equal to zero b) < zero c) > zero 119. 19 . c) Both capital and revenue receipts during a year.d) Cost of the asset = total lease rent + residual value + total finance income 113. d) ‘Cash Only’ transactions. Returns inwards C.. (d) Their income & expenditure statement are a combination of capital & revenue receipts. b) Only capital receipts & payments during a year.
122. D. added to the cash book balance. added to the bank statement balance.In a bank reconciliation. The weighted average method C. Which of the following records is not a book of prime entry? A. LIFO method D. C. deposits in transit are: A. D. deducted from the cash book balance.Wages and salaries payable are classified as a: A. B. None of these options. B. Non-current liability. does not recommend the following method of stock valuation for incorporating its value in financial statements. B. A. Journal D. Intangible liability. 121. Sales returns day book.120. None of the Above 123. C. FIFO method B. Petty cash book C. Long-term liability. C. deducted from the bank statement balance. IAS-2. straight-line method. units-of-activity method. Bank statements B. Current liability. 124. D. 20 . The method that ignores scrap value in determining the amount of depreciation is the: A. declining-balance method.
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