Advanced Financial Accounting

MCQ question bank for reference

1. by the foreign operation, itis

a. An integral ForeignOperation
b. A Non-Integral ForeignOperation
c. Either (a) or(b)
d. Neither (a) nor(b)

2. Iftransactionswiththereportingenterprisearenotahighproportionofthe foreign
operations activities, itis
a. An integral ForeignOperation
b. A Non-Integral ForeignOperation
c. Either (a) or(b)
d. Neither (a) nor(b)

3. If the activities of the foreign operation are financed mainly from its own
operations or local borrowings rather than from reporting enterprise, itis
a. An integral ForeignOperation
b. A Non-Integral ForeignOperation
c. Either (a) or(b)
d. Neither (a) nor(b),

4. If the foreign operation’s sales are mainly in currencies other thanthe

reporting currency itis
a. An integral ForeignOperation
b. A Non-Integral ForeignOperation
c. Either (a) or(b)
d. Neither (a) nor(b),

5. If the Foreign operation’s sales are mainly in currencies other thanthe

reporting currency, itis
a. An integral ForeignOperation
b. A Non-Integral ForeignOperation
c. Either (a) or(b)
d. Neither (a) nor(b)

6. AS 11 classifies the foreign branchesinto

a. (i) Integral Foreign Operation and (ii) Non-integralOperation
b. Branches following (i) Debtors method and (ii) Stocks anddebtors
method
c. Branches receiving goods at (i) cost and (ii) Invoiceprice
7. Monetary items of integral Foreign Operation at the balancesheet are
translatedat
a. Exchange rate at the date oftransaction
b. Closing exchangerate
c. Average exchange rate during theyear
d. Exchange rate on date of valuation at fairvalue

8. Tangible Fixed assets of Integral Foreign Operation carried atcost are

translatedat
a. Exchange rate at the date of purchase ofasset
b. Closing exchangerate
c. Average exchange rate during theyear
d. Exchange rate on date of valuation at fairvalue

9. Depreciation on fixed asset of Integral Foreign Operation carried at cost are

translatedat
a. exchange rate at the date of purchase ofasset
b. Closing exchange rate
c. average exchange rate during theyear
d. exchange rate on date of valuation at fairvalue

10. Tangible Fixed Assets of Integral Foreign Operation carried atfair

value are translatedat
a. exchange rate at the date of rate ofasset
b. Closing exchange rate
c. average exchange during theyear
d. exchange rate on dateof valuation at fair value

11. Cost of inventories of Integral Foreign Operation is Translatedat

a. Closing exchange rate
b. average exchange rate during theyear
c. exchange rates that existed when the cost of inventory wasincurred
d. opening exchangerate

12. Realizable value of inventories of Integral Foreign Operation is

translatedat
a. Closing exchange rate
 b. average exchange rate during theyear
c. exchange rates that existed when the cost of inventory wasincurred
d. opening exchangerate

13. Exchange difference of Integral Foreign Operationis

a. transferred to suspenseaccount
b. transferred to profit and lossaccount
c. Transferred to foreign currency translationreserve
d. transferred to “Net investment in Integral Foreign operationaccount”

14. Monetary items of Non-Integral Foreign Operation at thebalance

sheet are translatedat
a. exchange rate at the date oftransaction
b. closing exchange rate
c. average exchange rate during theyear
d. exchange rate on date of valuation at fairvalue

15. Non-monetary items of Non-integral Foreign Operation atthe

balance sheet are translatedat
a. exchange rate at the date oftransaction
b. closing exchange rate
c. average exchange rate during theyear
d. exchange rate on date of valuation at fairvalue

16. Exchange difference of Non-Integral Foreign Operationis

a. transferred to suspenseaccount
b. transferred to profit & lossaccount
c. transferred to foreign currency translationreserve
d. transferred to “Net Investment in Integral foreign operationAccount”

17. Any goodwill or capital reserve arising on the acquisition of anon-

integral foreign operation is translatedat
a. exchange rate at the date oftransaction
b. closing exchange rate
c. average exchange rate during theyear
d. exchange rate on date of valuation at fairvalue
18. A contingent liability disclosed in the financial statements of anon-
integral foreign operation is translatedat
a. exchange rate at the date oftransaction
b. closing exchange rate
c. average exchange rate during theyear
d. exchange rate on date of valuation at fairvalue

19. As per the Banking Regulations Act, 1949, a bank can engagein the
following bankingbusiness
a. Borrowing and raising ofmoney
b. Dealing in bills of exchange, hundies, promissory notesetc.
c. Carrying on and transacting evry kind of gurantee andindemnity
business
d. All of theabove

20. Every Banking company in India is required to transferatleast

of its current years profit to the reservefund a.
10%
b. 25%
c. 30%
d. 40%

21. A banking Company cam pay dividend on itsshares

a. After writing off all its capitalized expenses including preliminary
expenses
b. After charging depreciation on itsinvestment
c. After charging bad debts where adequate provisions has beenmade to
the satisfaction of theauditor
d. Before charging depreciation on its investment and writing off allits
capitalizedexpenses

22. Every non-schedule bank has to maintain a cash reserve ofatleast

of its demand and time liabilities inIndia
a. 1%
b. 2%
c. 3%
d. 4%

23. The General Ledger of a bankcontains

a. all personal, Real and nominalaccounts
b. all personalaccount
c. all real and nominalaccounts
d. the control accounts of all personal ,real and nominal account

24. Rebate on bill Discountedis

a. Discount received by bank but notearned
 b. Discount earned by bank bt notreceived
c. Rebate allowed by customer on billsdiscounted
d. Discount charged by bank on billsdiscounted.

25. The first item under ‘Assets’ in the balance sheet of a bankis
a. Cash and balance with Reserve Bank of India
b. Balances with Banks and money at call and shortnotice
c. Investment
d. Advances

26. The item under “Liabilities” in the balance sheet of a bankare

shown in the following order
a. Capital, Reserves & surplus, Borrowings, Deposits
b. Deposits ,capital ,Reserves and surplus, Borrowings
c. Capital, Reserves and surplus, Deposit, Borrowings
d. Borrowings, Deposits, Capital , Reserves andsurplus

27. Bills for collection areshown

a. In the balance sheet of a bank underassets
b. In the balance sheet of a bank underliabilities
c. In the balance sheet of a bank under assets and liabilitiesboth
d. In the notes forming part of balance sheet of a bank
undercontigentliabilities

28. The figures in the final accounts of thebank

a. Are shown to the nearestrupee
b. Are shown in rupee andpaisa
c. Are shown in rupees(Thousands)
d. Are shown in rupees(Hundreds)

29. Capital is classified under authorized, issued, subscribed,called

upetcfor
a. NationalisedBanks
b. ForeignBanks
c. Other than nationalized / foreignbanks
d. Allbanks

30. Amount of deposit kept with the RBI under Section 11(2)of
Banking Regulation Act, 1949 is shown under capitalfor
a. Nationalizedbanks
b. Foreignbanks
c. Other than nationalized / Foreignbanks
d. Allbanks

31. The items under ‘Deposits’ in schedule 3 of the balance sheet ofa
bank are shown in the followingorder
a. Saving deposits ,Demand Deposits, TermDeposits
 b. Demand deposits, Saving bank deposits, TermDeposit
c. Term deposits, Demand Deposit, Saving BankDeposit
d. Demand deposits, Term Deposits, Saving bankDeposits

32. The items under “Reserves and surplus” in schedule 2 ofthe

balance sheet of a Bank are shown in the followingorder
a. Statutory reserves, Capital reserves, sharespremium
b. Capital reserves, statutory reserves, sharespremium
c. Statutory reserves, Shares Premium, Capitalreserves
d. Shares premium, Statutory reserves, Capitalreserves

33. Bills payable are shown in the balance sheet of abank

a. In the notes forming part of balance sheet of a bank undercontingent
liabilities
b. In the schedule of other liabilities andprovisions
c. In the schedule ofdeposits
d. In the schedule ofadvances

34. Balance with RBI are shown in the final account of a bankin
a. Schedule3
b. Schedule4
c. Schedule5
d. Schedule6

35. Interest Accrued is shown in the final accounts of a bankin

a. Schedule3
b. Schedule4
c. Schedule5
d. Schedule6

36. Money at call and short Notice is shown in the final accountsin
a. Schedule7
b. Schedule6
c. Schedule5
d. Schedule4

37. Bills purchased and discounted are shown in the balance sheetof
abank
a. In the notes forming part of Balance sheet of a bank undercontingent
liabilities
b. In the schedule of other liabilities andprovisions
c. In the schedule ofdeposits
d. In the schedule ofadvances
 38. Commission exchange and brokerage is shown by abank
a. On the face of the main profit and lossaccount
b. In schedule of operatingexpenses
c. In schedule of otherincome
d. In schedule of interestearned.

39. AS 11 Defines ‘Foreign Operation’ as an entity whose activities

are based in a foreign countryviz
a. Subsidiary of the reportingenterprise
b. Joint venture of the reportingenterprise
c. Branch of the reportingenterprise
d. All theabove

40. Ifaforeign operationwhichsellsgoodsimportedfromthereporting

enterprise and remits the proceeds to the reporting enterprise, itis
a. An integral ForeignOperation
b. A Non-Integral ForeignOperation
c. Monetary Items
d. Reporting

41. If the change in the exchange rate affects the individual

monetaryitems held by the foreign operation rather than the operating
enterprise, itis
a. An integral ForeignOperation
b. A Non-Integral ForeignOperation
c. Dependent
d. Indepndent

If the change In the exchange rate affects the reporting enterprise’s net
investmentinthatoperationratherthantheindividualmonetaryitemsheld
42. In fire insurancebusiness Percentage of premium income is
carried forward as provision for unexpiredrisk
a. 100 %
b. 50%
c. 25%
d. 10%

43. Insurance business is controlledby

a. InsuranceAct,1938
b. Insurance rules1939
c. IRDA regulations,2002
d. All of theabove

44. In marine insurance business Percentage of premium

income is carried forward as provision for unexpiredrisk
e. 100 %
f. 50%
g. 25%
h. 10%

45. Premium received in advance is disclosed under the headof

a. Provision
b. CurrentLiability
c. Fixedassets
d. Income

46. The schedule which form part of revenue account of anInsurance

company are
a. 2
b. 4
c. 6
d. 10

47. Reinsurance obligations are disclosedunder

a. CurrentLiability
 b. Fixedliability
c. Contingentliability
d. Payable

48. Outstanding premium are shownunder

a. OtherAssets
b. Advances
c. Provisions
d. CurrentLiabilities
49. Commission on reinsurance accepted is addedto
a. Commission
b. Claims
c. Interest
d. None of theothers

50. Claims on reinsurance accepted is addedto

a. ClaimsIncurred
b. Commission Received
c. PremiumEarned
d. None of theabove

51. Premium on ceded is deductedfrom

a. Premium for direct business
b. Interest
c. Commission
d. Discount

52. Share capital is shown in the final accounts of aninsurance

companyunder
a. Schedule3
b. Schedule5
c. Schedule4
d. Schedule6

53. Schedule 1 in case of insurance company finalaccounts

a. Premium earned
b. Investment
 c. Loans
d. Currentassets

54. Current liabilities are shown in the final accounts of aninsurance

Companyunder
a. Schedule10
b. Schedule11
c. Schedule12
d. Schedule13
55. Investment of an insurance company are shownunder
a. Schedule8
b. Schedule9
c. Schedule10
d. Schedule11

56. Fixed assets are shown in the final accounts of aninsurance

companyunder
a. Schedule8
b. Schedule9
c. Schedule10
d. Schedule11

57. Borrowing are shown in the final accounts of insurancecompany

under
a. Schedule5
b. Schedule6
c. Schedule7
d. Schedule8

58. Cash and Bank balance is shown in the final accounts of an

insurance companyunder
a. Schdeule10
b. Schedule11
c. Schedule12
d. Schedule13
59. Management expenses are shown in Final accounts of an
insurance Companyunder
a. Schedule1
b. Schedule2
c. Schedule3
d. Schedule4

60. Claims incurred are shown in the final accounts of aninsurance

companyunder
a. Schedule1
b. Schedule2
c. Schedule3
d. Schedule4

61. Liabilities under the existing policies are determined by _______ valuation in
case of life insurance.
a. Actuarial
b. Fair
c. Average
d. Surrender
62. Revenue Account of a Life Insurance Business is also known as
a. Policyholders account
b. Profit and Loss Account
c. Shareholders Account
d. Non-Technical Account
63. Policy liabilities are shown in the balance sheet under
a. Policyholders Fund
b. Profit & Loss Account
c. Shareholders Fund
d. Non- Technical account
64. Under this plan the sum assured is payable even if the insured survives the
policy term
a. Term Life Policy
b. Whole Life Policy
c. Endowment Policy
d. Money Back Policy
65. Under this plan, a portion of the sum assured is payable at regular
interval.
a. Term Life Policy
b. Whole Life Policy
c. Endowment Policy
d. Money Back Policy

66. Bonus is Declared

a. Only on general insurance
b. On life as well as general insurance
c. Only on life insurance polices
d. On Fire Policies
67. A Co-Operative form of organization is based on the principleof
a. Democracy
b. Autocracy
c. Unity
d. TeamSpirit

68. Co-operative societies are formedby

a. Richpeople
b. Farmers
c. Governmentservants
d. Weaker sections ofsociety

69. The aim of co-operative societiesis

a. Service
b. Profit
c. SocialWelfare
d. Charity
70. The Maharashtra Co-operative Societies Act was passedin
a.1912
b.1960
c.1980
d.1961

71. The society doing business of bank is calledas

a. CentralBank
b. Co-operativeBank
c. MahaBank
d. ApexBank

72. Register of members should be maintained inForm

a. FormA
b. FormI
c. FormD
d. FormC

73. Balance Sheet and P & L A/c of a co-operative society should beprepared in
a. FormA
b. FormN
c. FormD
d. FormB

74. The amount of profit to be transferred to Reserve Fundis

a.10%
b.20%
c.25%
d.35%

75. Payment of Dividend by the society should notexceed

a.10%
b.20%
c.12%
d.15%
 76. In case of co-operative society, Debentures will be shownunder
a. SecuredLoans
b. UnsecuredLoans
c. ReserveFund
d. None of theabove

77. In case of co-operative society, Fixed Deposits should be shown under

a. Loans
b. Deposits
c. UnsecuredLoans
d. CurrentLiabilities

78. While preparing final accounts of co-operative society Prepaid Expenses

should be disclosedunder
a. Other items
b. Advances
c. CurrentAssets
d. None of theabove

79. While preparing final accounts of co-operative society Loose Tools should be
disclosedunder
a. Fixed Assets
b. CurrentAssets
c. Otheritems
d. Miscellaneous Expenditure
80. Government securities purchased should be disclosed under

a. Investments
b. CurrentAssets
c. Otheritems
d. MiscellaneousExpenditure

76. In case of co-operative societies Interest received on loans shouldbe

a. Credited to Income & ExpenditureA/c
b. Debited to Profit and LossA/c
c. Disclosed asliability
d. Both (a) &(b)
77. Staff Provident Fund should be disclosed in the Balance Sheet of Co-
operative Society
a. Separately on Liability side
b. Under Reserve Fund
c. CurrentLiabilities
d. Under heading Staff provident Fund

78. Share Transfer fees shouldbe

a. Credited to ReserveFund
b. Debited P & LA/c
c. Shown under intangibleassets
d. Credited as Miscellaneous income

79. Contingent Liabilities should be shownunder

a. CurrentLiabilities
b. SecuredLoans
c. A foot note to BalanceSheet
d. Ignored totally
80. Dead stocks is shown in the balance sheet of a co-operative society
a. Under Fixed Assets
b. Under Current Assets
c. Separately
d. Miscellaneous Expenditure
81. Annual contribution towards Education Fund by a Primary Consumers Society
a. 2 Paise per Rs.100 of working Capital
b. 10% of working Capital
c. Rs.1 per member having a tenement
d. 1/10% of working capital
82. Books , records & Register
a. Bye Law no.142
b. Bye Law no.145
c. Bye Law no. 146
d. Bye Law no. 147
83. Maximum Cash Balance
a. Bye Law no.142
b. Bye Law no.145
c. Bye Law no. 146
 d. Bye Law no. 147
84. Cheque Payments
a. Bye Law no.142
b. Bye Law no.145
c. Bye Law no. 146
d. Bye Law no. 147
85. Final Accounts
a. Bye Law no.142
b. Bye Law no.145
c. Bye Law no. 146
d. Bye Law no. 147
86. A co-operative housing society has 15 members. All payments in excess of the
following limits shall be made by means of crossed a/c payee Cheque.
a. Rs.1,500
b. Rs. 3,000
c. Rs.4,500
d. Rs.5,000
87. A member who holds jointly a share of society with others, but whose name
doesn’t stand first in share certificate.
a. Nominal member
b. Sympathiser Members
c. Associate Members
d. Co-members
88. Expulsion of member can be done
a. By managing Committee
b. By the general body by simple majority
c. By the general body by ¾ majority
d. By the chairman
89. Amendment of bye-laws of society can be done
a. By the general body by 2/3rd majority
b. By General Body by 2/3rd majority subject to Approval from Registrar
c. By the General Body by Simple majority
d. By the General Body by 3/4th majority
90. Proper Custody and maintenance of property belonging to society is the function
of
a. The chairman
b. The managing committee
 c. The secretary
d. The treasure
91. Proper maintenance of accounts relating to financial transactions of the society
a. The chairman
b. The managing committee
c. The secretary
d. The treasure

92. To summon all the meetings including Annual General Meeting and record the
proceedings in respective books.
a. The chairman
b. The managing committee
c. The secretary
d. The treasure
93. To Keep all the necessary registers and records required by the Act and Rules
and bye laws
a. The chairman
b. The managing committee
c. The secretary
d. The treasure
94. Register of Audit objections is required to be maintained by a

a. Bank
b. Life Insurance Company
c. General Insurance Company
d. Co-operative Society
95. Interest on default charges
a. Bye Law no. 70
b. Bye Law no. 71
c. Bye law no. 72
d. Bye law no. 142
Sr.
No Question Option A Option B Option C Option D

Rebate on bills discounted is shown under other liabilities current contingent Borrowed
1 ______ & provisions liabilities liabilities Fund

Non Net
Non privilege performing performing None of the
2 NPA stands for _______ asset asset assets above

Cash Cash Cash

Cash Reserve Retained Reserve revenue
3 CRR stands for_________ Ratio Ratio Refunded reserve

4 Interest on deposits is an _____ income expense loss gain

Commission, exchange and brokerage is other Misc. none of the

5 shown under interest income income above

The % of provision on doubtful assets upto

6 1 year is _______. 25% 30% 5% 40%

Acceptances & endorsements are shown Current Contingent Current none of the
7 under _______ liabilities liabilities assets above

Share premium is disclosed under Reserves Current

8 _________ Fixed assets Share capital &surplus liabilities

Interest on loans & advances is an none of the

9 _______ income expense loss above

Savings Bank deposits are disclosed under Current None of the

10 ______ Deposits Fixed assets liabilities above

________________ regulates Insurance sector

11 in India IRDA RBI SEBI ICICI

Reserve for unexpired risk for Marine Business

12 in _______ 100% 50% 40% 45%

Calculate Net Commission: Commission Paid =

Rs.1,00,000; Commission on reinsurance
accepted =Rs.50,000 and Commission on
13 reinsurance ceded = Rs.20,000 1,50,000 1,30,000 1,20,000 75,000
 Calculate Premium: Premium on Direct
Business = Rs.2,00,000; Premium at the end of
the year = Rs.10,000 and Premium at the
14 beginning of the year = Rs.5,000 2,00,000 2,50,000 2,05,000 2,15,000

Expenses in connection with claim is record

under _______ of revenue account of insurance Operating
15 business. Claim expenses premiuim Commission

Claim on Re insurance ceded is deducted from

16 ______ Commission Claim Interest premium

When more than one policy is taken to cover Double General Direct
17 the same risk it is called ______. Re- insurance Insurance Insurance Insurance

Current
18 Outstanding premiums are shown under Other assets Advances Provisions Liabilities

19 Revenue A/c is prepared in the form RA B-RA C-RA D-RA

Insurance
Regulartory India
Insurance and Regulator
Regulator Divided Developing Divided
20 IRDA stands for ____________ Authority Authority Authority