1000MCQ With Answer On Accounts &#038 Finance For Bankers

1000MCQ with answer on Accounts & Finance for Bankers
MCQ SL No. QUESTION OPTIONS Answer

1 The accepting, for the purpose of lending or investing, of deposits of money from the
public, repayable on demand or otherwise and withdraw able by cheque, draft and order or
otherwise. This definition is given by(a) Companies Act
(b) Negotiable Instrument Act
(c) Banking Regulations Act
(d) Indian Contract Act
(e) None of the above
c
2 Banks may sponsor mutual funds in compliance with the guidelines issued by _____ from
time to time.
(a) SEBI
(b) Company Law Board
(c) ROC
(d) All of the above
a
3 Banks desirous of setting up MMMFs would have to seek necessary clearance from ____.
(a) SEBI
(b) ROC
(c) RBI
(d) Company Law Board
c
4 The head office and regional/zonal offices do not conduct any banking business. They are
generally responsible for administrative and policy decisions which are executed at the
branch level. (a) True
(b) False
(c) Partly true
(d) Partly false
(e) Cant comment
a
5 Banks use of third party to perform activities on a continuing basis that would normally
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be undertaken by the bank itself, now or in the future. This is known as- (a) Auditing
(b) Hedging
(c) Outsourcing
c
6 The banks should outsource core management functions including internal audit,
compliance functions and decision making functions. (a) True
(b) False
(c) Partly true
(d) Partly false
(e) Cant comment b
7 Long Form Audit Report (LFAR) is prepared and submitted by- (a) RBI inspectors
(b) Internal inspectors
(c) Statutory auditors
(d) Concurrent auditors
(e) None of the above c
8 As per FIMMDAs guidelines, the Mid-Office is responsible for- (a) Dealing activities
(b) Risk management
(c) Reconciliation
(d) Conformation of deals
(e) All of the above b
9 FIMMDAs general principles and procedures are applicable to- (a) Fixed Income Market
(b) Money Markets
(c) Derivatives Markets
(e) None of the above d
10 Which of the following forms of business are permissible under Banking Regulation Act?
(a) Borrowing
(b) Issuance of Letters of Credit
(c) Buying and selling of bullion
11 RBIs functions pertaining to banking activities by the banks are classified into- (a)
Supervisory & Regulatory
(b) Promotional & Developmental
(c) Refinance Activities

12 Management of a bank vests with- (a) RBI
(b) Asset Liability Committee (ALCO)
(c) Board of Directors
13 FIMMDAs guidelines does not cover- (a) Call Money
(b) Cross Currency Interest Rate swaps
(c) Commercial Paper
(d) Certificate of Deposit
(e) None of the above b
14 Loan for fish rearing is covered under Priority Sector as ____ advances. (a) Direct
Agriculture
(b) Indirect Agriculture
(c) Self Employment Scheme
(d) Allied to Indirect Agriculture
(e) None of the above a
15 ATM stands for- (a) Automatic Telling Machine
(b) Automated Time Machine
(c) Automated Teller Money
(d) Automated Teller Machine
16 MMMF stands for- (a) Money Market Mutual Funds
(b) Mutual Money Market Funds
(c) Market Money Mutual Funds
(d) Mutual Market Money Funds
a
17 KYC stands for- (a) Know Your Credit
(b) Know Your Cash
(c) Know Your Customer
(d) Know Your Consumer
18 PAN stands for- (a) Permanent Account Number
(b) Profit Account Number
(c) Prominent Account Number
(d) Primary Account Number

19 UIDAI stands for- (a) Unique Identification Authority of India
(b) Unique Identification Account of India
(c) User Identification Account of India
(d) User Identification Authority of India
20 For accounts of individuals, ____ may be used as proof of identity, except- (a) Passport
(b) Driving License
(c) PAN
21 For account of partnership firms, following documents may be used as proof of identity,
except- (a) Registration certificate, if registered
(b) Partnership deed
(c) Birth certificate
(d) Power of attorney
(e) Telephone bill in name of the firm c
22 For account of trusts and foundations, ____ may be used as proof of identity. (a)
Registration certificate, if registered
(b) Partnership deed
(c) Power of attorney
23 For account of proprietorship concerns, ____ may be used as proof of identity. (a)
Registration certificate
(b) Sales & income tax returns
(c) CST/VAT certificate
d
24 Fresh photographs will be required to be obtained from minor customer on becoming
major. (a) True
(b) False
(c) Partly true
(d) Partly false
(e) Cant comment a
25 Full KYC exercise will be required to be done at least every ____ years for high risk
individuals and entities. (a) 2

(b) 4
(c) 8
(d) 10
26 Number of document(s) is/are required for proof of identity and proof of address is- (a)
Single
(b) Double
(c) Triple
(d) Depends upon bank
27 Foreign students have been allowed a time of ____ for furnishing the proof of local
address. (a) One month
(b) Two months
(c) Three months
(d) Four months
28 Small accounts are opened by those- (a) Who have officially valid documents
(b) Who does not have officially valid documents
(c) Who are in need of funds
(d) Whose income are meagre
(e) All of the above b
29 Aggregate withdrawals in small accounts cannot exceed ____ during the month. (a)
10000
(b) 20000
(c) 50000
(d) 100000
30 Small accounts are valid for- (a) 6 months
(b) 12 months
(c) 3 years
(d) 5 years
31 ____ is not an example of non-cash transactions. (a) Issue of passbook
(b) Issue of cheque books
(c) Acceptance of demand draft
(d) Acceptance of share application forms
32 To prevent fraudulent withdrawal at ATMs, RBI has mandated requirement of ____ entry
for each and every transaction. (a) Transaction
(b) Book
(c) PIN
(d) Signature
c
33 A minor cannot have a savings account. (a) True
(b) False
(c) Partly true
(d) Partly false
(e) Cant comment b
34 Minors of age ____ and above can independently operate savings account. (a) 5
(b) 10
(c) 12
(d) 15
35 Third parties called ____ are used to launder the proceeds of fraud schemes by criminals
who gain illegal access to deposit accounts. (a) Money donkeys
(b) Money horses
(c) Money mules
36 FIU-IND stands for- (a) Financial Intelligence Unit-India
(b) Finance Intelligence Unit-India
(c) First Intelligence Unit-India
(d) Forex Intelligence Unit-India
37 The accounting procedure followed by banks are- (a) Journal posting
(b) Voucher posting
(c) Entry posting
38 Non-cash transactions mean- (a) One or both of the accounts concerned are external
accounts of the bank
(b) Both accounts concerned are external to the bank
(c) One or both accounts concerned may be of the customers or the internal accounts of the
bank
39 ____ is not an example of debit vouchers. (a) Cheques issued by the customer
(b) Withdrawal forms received from the saving bank account holders
(c) Applications for issue of term deposits, demand drafts RTGS/NEFT, bankers cheque etc.
(d) Drafts issued by other branches of the bank payable at the branch
(e) All of the above c
40 A trial balance of the personal ledgers is prepared periodically, usually every two weeks
and agreed with general ledger control accounts. This is known as- (a) Balancing of ledgers
(b) Balancing of books
(c) Balancing of cash
(d) Balancing of journal
41 Composite vouchers mainly pertain to- (a) External accounts of the bank
(b) Internal accounts of the bank
(c) Both external & internal accounts of the bank
42 When a cheque is drawn on a bank, the bank is called the- (a) Payee
(b) Drawee
(c) Drawer
(d) Endorsee
43 Bank A allows one of its clients to withdraw against clearing of a cheque. The banker is
called as- (a) Collecting and paying banker
(b) Holder in due course
(c) Holder for value
(d) Reimbursement banker
44 Your banks customer XYZ Ltd, enjoys a Cash Credit limit of 100000, The Cash Credit
account shows a credit balance of 10205. The relationship between your bank and XYZ Ltd
is- (a) Debtor/Creditor
(b) Creditor/Debtor
(c) Bailor/Bailee
(d) Bailee/Bailor
(e) Can not be determined a
45 The system of clearance of cheques facilitating the presentation and payment of cheques
without their physical movement is known as- (a) Cheque Collection Policies
(b) NEFT
(c) CTS
(d) Cheque Transfer Policies
c
46 Under grid basis CTS clearing, all cheques drawn on bank branches falling in the grid
jurisdiction are treated and cleared as local cheques on (a) T basis
(b) T+1 basis
(c) T+2 basis
(d) T+3 basis
47 CTS stands for- (a) Cheque Transfer System
(b) Cash Transfer System
(c) Cash Truncation System
(d) Cheque Truncation System
48 Timeframe for collection of cheques drawn on State Capitals/major cities/other locations
to be- (a) 7/10/14 days respectively
(b) 10/7/14 days respectively
(c) 14/10/7 days respectively
(d) 7/14/10 days respectively
49 RBI prohibits the banks from crediting ____ cheques to the account of any person other
than the payee named therein. (a) Bearer
(b) Account payee
(c) Crossed
(d) Order
50 Cheques presented beyond the period of ____ months, should not be paid by the bank. (a)
6
(b) 4
(c) 1
(d) 3
51 ____ is responsible for any shortage either in hand or Vault balance. (a) Bank manager
(b) Branch manager
(c) Head cashier

52 All cash remittances in transit should be covered under an Insurance Policy obtained by
the bank. This insurance is known as- (a) Cash-in-Transit Insurance Policy
(b) Cash Insurance Policy
(c) Blanket Insurance Policy
53 MICR means- (a) Money Ink Character Recognition
(b) Magnetic Ink Character Recognition
(c) Magnetic Ink Coin Recognition
(d) Money Ink Coin Recognition
b
54 NEFT means- (a) New Electronic Funds Transfer
(b) National Electronic Funds Transaction
(c) New Electronic Funds Transaction
(d) National Electronic Funds Transfer
55 ECS stands for- (a) Electronic Closure System
(b) Easy Clearing System
(c) Electronic Clearing System
(d) End Closure System
c
56 Under ____ system, a few notes in each book of notes are clipped together at the top. (a)
Band
(b) Clip
(c) Strong
(d) Safe
57 Failing to recover cash shortage on the same day, ____ account will be debited. (a)
Shortage
(b) Cashier
(c) Debtor
(d) Suspense

58 ____ functions as a clearing centre for all instruments such as drafts, cheques received
from its customers. (a) Main branch
(b) Local branch
(c) Service branch
(d) Key branch
59 The right of set-off is- (a) Customers Right
(b) Customers Obligation
(c) Bankers Right
(d) Bankers Discretion
60 RTGS stands for- (a) Real Time Settlement System
(b) Real Time Gross Settlement System
(c) Reel Time Gross Settlement System
(d) Real Gross Settlement System
b
61 Current account can be opened by the following except- (a) Sole proprietorship
(b) Minors, operated by natural guardian
(c) Purdanashin women
(d) Clubs
62 Following cannot open a current account except- (a) Purdanashin women
(b) Illiterate persons
(c) Blind persons
(d) Charitable institutions
63 A partner alone can open a current account in the firm name. (a) True
(b) False
(c) Partly true
(d) Partly false
(e) Cant comment
b
64 In case of HUF, both current account opening form and the Joint Hindu Family letter
have to be signed by- (a) Only karta
(b) Only adult male members
(c) Only adult female members

(d) All adult members of the family
65 Where the joint family consists of male minors, the ____ should sign the account opening
form on behalf of the male minors. (a) Mother of the minor child
(b) Father of the minor child
(c) Karta
(d) Minor himself
66 Savings account is made for- (a) Corporates
(b) Partnerships
(c) Clubs
(d) Individuals
67 It is mandatory to open savings account with cheque book facility. (a) True
(b) False
(c) Partly true
(d) Partly false
(e) Cant comment b
68 Savings account can be used for business or trading. (a) True
(b) False
(c) Partly true
(d) Partly false
(e) Cant comment
b
69 Savings account can be transferred from one branch to another branch of the bank. (a)
True. But some charger would be deducted.
(b) True. No charges would be deducted.
(c) False
(d) Partly true, partly false
(e) Cant comment b
70 A savings as well as a current account should be treated as inoperative/dormant if there
is no transaction in the account for over a period of- (a) 1 year
(b) 2 years
(c) 5 years
(d) 10 years
71 Banks should display the list of unclaimed deposits/inoperative accounts which are
inactive for ____ or more on their respective websites. (a) 12 years
(b) 2 years
(c) 5 years
(d) 10 years
72 ____ accounts are the accounts wherein cheques are often drawn for amounts in excess of
balance
available and without any arrangement which results in return of many cheques. (a) Savings
(b) Inoperative
(c) Undisputed
(d) Undesirable
73 Minimum period for fixed deposit is- (a) 7 days
(b) 30 days
(c) 150 days
(d) 365 days
74 Cash certificate and certificate of deposit are other variants of- (a) Savings deposit
(b) Recurring deposit
(c) Current deposit
(d) Fixed deposit
75 Joint or Survivor with Survivorship clause states that- (a) In the event of death of any one
of the holder, the account can continue to operate
(b) In the event of death of any one of the holder, the money in the account will be paid to
the survivors
(c) In the event of death of any one of the holder, the money in the account will be paid to
the survivor& legal heirs of the deceased party
(d) Either (a) or (b)
d
76 Overdraft facility can be given to all except- (a) Companies
(b) Partnerships
(c) Individuals
(d) Minors
77 To an illiterate person, ____ cannot be opened. (a) Fixed deposit account
(b) Recurring deposit account

(c) Savings account
(d) Current account
78 An ____ is a person named in the will and derives title immediately after the death of
Testator for the purpose of administration of the property of the deceased. (a) Heir
(b) Notary
(c) Executor
(d) Administrator
c
79 ____ must obtain from a court of law before acting as an Executor. (a) Will
(b) Deed
(c) Memorandum
(d) Probate
80 Nomination facility is available to- (a) Corporate
(b) Partnership
(c) College
(d) Individual
81 A minor can be a nominee. (a) True. In his own capacity.
(b) True. But represented by his guardian.
(c) False
(d) Partly true, partly false
(e) Cant comment b
82 The role of nominee is to- (a) Operate the account
(b) Take legal action against the account
(c) Obtain loan against the account
(d) Receive proceeds in case of the death of the account holder
83 For all saving account, ____ have to be prepared at the time of opening the account. (a)
Cheque book
(b) Cash book
(c) Bank Reconciliation Statement
(d) Pass book
(e) Ledger book d
84 Garnishee is the- (a) Creditor
(b) Debtor
(c) Court
(d) Bank
85 Section 131 of Negotiable Instrument Act, 1881 extends protection to the ____ banker.
(a) Paying
(b) Collecting
(c) Advising
(d) Issuing
86 ____ instrument is not used at discount. (a) A Certificate of Deposit (CD)
(b) A Treasury Bill (TBill)
(c) A Commercial Paper (CP)
(d) A Fixed Deposit (FD)
d
87 Out of the following which one is not known as Non Fund based facilities? (a) Letters of
Credit
(b) Bank Guarantees
(c) Co-acceptance of Bills
(d) Trust Receipt
88 Retail loans are given to- (a) Wholesalers
(b) Individuals
(c) Both wholesalers and individuals
(d) Firms
89 Commercial loans are given mainly to- (a) Enterprises
(b) Individuals
(c) Students
90 Bills purchased is an example of- (a) Term loan
(b) Demand loan
(c) Home loan
(d) Vehicle loan
91 ____ security is additional security which provides a cushion to the bank in case of need.
(a) Collateral
(b) Primary
(c) Secondary
92 NABARD stands for- (a) National Board for Agriculture & Rural Development
(b) National Bank for Agriculture & Regional Development
(c) National Bank for Agriculture & Rural Development
(d) National Board for Agriculture & Regional Development
93 A floating charge becomes fixed charge when- (a) Money is repaid by the borrower
(b) Money becomes repayable and bank enforces the lien
(c) Discretion of the bank
b
94 The rate of interest should not be above Base rate. (a) True
(b) False
(c) Partly true
(d) Partly false
(e) Cant comment b
95 Actionable claims are accepted as security for- (a) Pledge
(b) Hypothecation
(c) Assignment
(d) Mortgage
(e) All of the above c
96 A ____ lien relates to goods, securities which are not in possession of the bank. (a)
General
(b) Special
(c) Negative
97 CMA refers to- (a) Capital Monitoring Arrangement
(b) Credit Monitoring Arrangement
(c) Credit Money Arrangement
(d) Capital Money Arrangement
98 Form II of CMA relates to- (a) Comparative statement of current assets and current
liabilities
(b) Funds Flow Statement
(c) Operating Statement
(d) Assessment of Maximum Permissible Bank Finance for Working Capital
99 Form VI of CMA relates to- (a) Comparative statement of current assets and current
liabilities
(b) Funds Flow Statement
(c) Operating Statement
(d) Assessment of Maximum Permissible Bank Finance for Working Capital
100 In general, margin on stock of goods may vary from- (a) 40% to 50%
(b) 5% to 10%
(c) 25% to 30%
(d) 80% to 90%
101 For work-in-progress, valuation should be done at- (a) Cost of sales
(b) Cost of manufacture
(c) Gross profit
(d) Net profit
102 Loan sanctioned by bank against pledge of gold ornaments for non-agricultural
purposes should not exceed ____ of the value of gold ornaments. (a) 20%
(b) 50%
(c) 75%
(d) 45%
103 Loan to value in case of housing loan up to 20 lacs is- (a) 90%
(b) 80%
(c) 75%
(d) 60%
104 Maximum loan tenure for vehicle loan ____ months. (a) 60
(b) 72
(c) 84
(d) 96
105 Penal interest will not be charged for loan up to- (a) 10000
(b) 20000
(c) 30000
(d) 50000
106 Hypothecation is applicable in case of- (a) Movable goods
(b) Immovable property
(c) Book debts
(d) Corporate guarantee
107 Charge created on LIC Policy is- (a) Hypothecation
(b) Pledge
(c) Assignment
(d) Mortgage
108 Which one of the following is not barred by law of limitation? (a) Pledge
(b) Hypothecation
(c) Bankers lien
(d) Guarantee
109 Law of limitation is not applicable in respect of- (a) Advance against pledge of shares
(b) Cash Credit granted against hypothecation of inventory
(c) Term loan secured by mortgage of Plant and Machinery
(d) Bank Term Deposit
d
110 The apex institution which handles refinance for agricultural and rural development is
called- (a) RBI
(b) SIDBI
(c) NABARD
(d) SEBI
111 CBS refers to- (a) Core Banking Solutions
(b) Core Banking Services
(c) Corporate Banking Solutions
(d) Corporate Banking Services
112 CBS work on ____ levels of software. (a) 5
(b) 3
(c) 2
(d) 1
113 System audit should be done by- (a) Chartered Accountants
(b) Company Secretaries
(c) Cost Accountants
114 A Co-Operative Bank operating in different States are regulated by- (a) State CoOperative Societies Act
(b) Banking Regulation Act
(c) Multi Unit Co-Operative Societies Act
(d) Banking Laws (applicable to Co-Operative Societies)
115 One of your customers dies without leaving a will and the court appoints a person to
handle the customers property. Such a person is called as- (a) An administrator
(b) An executor
(c) A liquidator
(d) A successor
116 Interest is calculated on actual/365 days basis in respect of the following products,
except one- (a) Call Money
(b) Notice Money
(c) Term Money
(d) GOI dated securities
117 Banks Assets are classified in to standard assets, substandard assets doubtful assets
and loss assets, based on the recommendations of ____ Committee. (a) Rangarajan
(b) Narasimham
(c) Ghosh
(d) Tandon
b
118 A company which pools money from investors and invests in stocks, bonds, shares is
called- (a) A bank
(b) An insurance company
(c) Bancassurance
(d) Mutual fund
119 Tele banking service is based on- (a) Virtual Banking
(b) Online Banking
(c) Voice Processing
(d) Core Banking
120 Cash Reserve Ratio (CRR) is to be maintained on Net Demand and Time Liabilities
(NDTL). SLR is to be maintained on- (a) Total Demand and Time Liabilities
(b) Net Demand and Time Liabilities
(c) Total Demand and Time Assets
(d) Net Demand and Time Assets
121.The financial statements include (i) Profit and Loss Account, (ii) Balance Sheet, (iii)
Funds flow statement (iv) Cash Flow
a. Only (i), (ii) and (iii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii),(iii) & (iv)
Ans d
122.In respect of a firm having fixed cost of Rs. 160000 and variable cost Rs. 20 per unit,
what is the amount of selling price, if break even no. of units is 4,000?
a. Rs. 20
b. Rs. 40
c. Rs. 60
d. Rs. 80
Ans c
123.For assessing financial position of a borrower, the bank should study (i) Only profit
and loss account, (ii) Only Balance Sheet
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans d
124.Funded Debt equity ratio is 2:1 and owned funds Rs. 2 lac. Amount of total assets Rs. 10
lac. What is current ratio if the fixed assets are of Rs. 4 lac?
a. 1:1
b. 1.9:1
c. 1.5:1
d. None of the above
Ans c
125.Term Loans are not paid out of (i) Profits, (ii) Capital, (iii) Working capital limits
a. Only (i) and (ii)
d. (i), (ii) and (iii)
Ans c
126.A fund flow statement is a statement of for a definite period between two definite
dates. (i) source of funds, (ii) use of funds
a. Only (i)
b. Only (ii)
Ans d
127.Current Ratio is not calculated as (i) Current Assets divided by Current Liabilities,
(ii) Fixed Assets divided by Current Assets, (iii) Owned funds divided by Current Liabilities
Ans c
128.Amount of sales is Rs. 100 lac and profit before tax 6% and amount of tax paid Rs. 2 lac.
Rest of the amount is given as dividend on capital of Rs. 10 lac. What is rate of dividend?
a. 10
b. 20
c. 25
d. 40
e. None
Ans d
129.For a dealer in truck vehicles, a truck is (i) A current assets, (ii) A fixed assets (iii)
other non-current Asset
a. Only (i)
b. Only (ii)
c. Either (i) or (iii)
d. Both (i) and (iii)
Ans a
130.Debt equity ratio is (i) Total outside liability/Tangible Net Worth (ii) Long Term
Liabilities/Tangible Net Worth
a. Only (i)
b. Only (ii)
d. Neither (i) nor (ii)
e. None
Ans c
131.Current Ratio is 1.2:1 and amount of current liabilities Rs. 10 lac. Total of Balance
Sheet being Rs. 25 lac, what is amount of fixed assets?
a. Rs. 5 lac
b. Rs. 10 lac
c. Rs. 15 lac
d. Rs. 13 lac
e. None of the above
Ans d
132.Return on Investment is (i) Operating Assets/operating income, (ii) Operating

Income/operating assets (iii) Net income / Operating Assets
a. Only (i)
b. Only (ii)
c. Only (iii)
d.Either (i) or (ii)
e.None
Ans b
133.For a real property developer, a plot of land is (i) A fixed assets, (ii) A current assets
a. Only (i)
b. Only (ii)
e. None
Ans b
134.The contingent liabilities are (i) Expenses not provided, liability on account of letter of
credit, letter of guarantee, provisions not made etc., (ii) Current liabilities, which are to be
repaid immediately, (iii) Net worth of the party
a. Only (i)
e.None
Ans a
135.Sales Rs. 90000, Gross profit Rs. 30000, Net Profit Rs. 18000. Find selling and
administrative expenses assuming no non-operative income & no other non-operative
expenses
a. 12000
b. 18000
c. 42000
d. 60000
e. 72000
Ans a
136.Long term liabilities of the organisation are: (i) Capital and reserves, (ii) Term Loans
from institutions, (iii) Long term unsecured loans iv) Bills payable
d. (i), (ii) (iii) & (iv)
e. Only (i) , (ii) & (iii)
Ans e
137.Funded Debt equity ratio is 3:1 and the amount of total assets Rs. 20 lac, Current Rtio is
1.5:1 and owned funds Rs. 3 lac. What is amount of current assets?
a. Rs. 5 lac
b. Rs. 3 lac
c. Rs. 12 lac
Ans c
138.Acid test ratio is not computed as (i) Current Assets divided by Current Liabilities,
(ii) Current Assets:Current liabilities, (iii) Current Assets less stocks and then divided by
current liabilities
e.None
Ans a
139.The Current Assets are those assets (i) which can be converted into cash during
accounting period of one year, (ii) which can be sold in the market as current goods, (iii)
which can be kept moving
a. Only (i)
e. None
Ans a
140.Which of the following are not current liabilities for the purpose of current ratio? (i)
Sundry Creditors and expenses payable, (ii) Working Capital raised from the bank and term
loan instalment payable within one year, (iii) Provisions
e. None
Ans e
141.Which of the following statements is true? (i) Balance sheet depicts the financial
position of a particular borrowing unit on a particular date, (ii) It tells about financial
position for the whole year
a. Only (i)
b. Only (ii)
Ans a
142.The fixed assets are those which (i) are used for the business, (ii) are not generally
sold, (iii) cannot be converted into cash easily
e.None
Ans d
143.Long term liabilities should be generally invested in (i) In Current Assets, (ii) In
Fixed Assets, (iii) Partly in Current Assets and fixed assets
e. (ii)
Ans e
144.A Balance sheet shows total liabilities at Rs. 12 lac, current liabilities at Rs. 6 lac and
long term debt Rs. 3 lac and debit balance of profit and Loss account at Rs. 1 lac. The net
worth is
a. Rs. 2 lac
b. Rs. 4 lac
c. Rs. 3 lac
d. 5lac
e. none
Ans a
.
145.Creditors period is worked out on the basis of (i) Cost of production, (ii) Credit
Purchases, (iii) Cost of sales

e.Only (ii)
Ans e
146.Operating Profit Ratio is (i) Operating profit/ Net sales x 100%, (ii) Operating Profit/100
x sales%, (iii) Operating Profit/Income x 100%
a. Only (i)
e.None
Ans a.
147.Total liabilities of a Balance Sheet of a firm are Rs. 80 lac and Current Ratio 1.5:1. If its
fixed assets and assets other than current assets are Rs.50 lacs and debt equity ratio 3:1
what is the amount of long term liabilities?
a. Rs. 20 lac
b. Rs. 45 lac
c. Rs. 15 lac
d. Rs. 10 lac
e.None
Ans b
148.Quick Ratio is (i) Other name of acid test ratio, (ii) Equal to quick assets:quick
liabilities
a. Only (i)
b. Only (ii)
e.None
Ans a
149.Working capital limits are not supposed to be repaid out of (i) Capital, (ii) Sales, (iii)
Current assets

e. None
Ans a
150.A term loan of a firm has been rescheduled by the Bank. As a result of this, which of the
following has been affected?
a. debt-equity ratio
b. current ratio
c. quick ratio
d. debt-service coverage ratio
Ans d
151.Which is not considered as free reserve? (i) Premium received on issue of shares and
debentures, (ii) Debenture redemption reserve, (iii) Reserve for gratuity and pension
Ans c
152.The income break even analysis is good tool to the banker in appraising
a. Working capital proposals
b. Term Loan proposals
c. Underwriting proposal
d. Letter of credit proposal
e.None
Ans b
153.Funds generated in business does not mean (i) Profit and depreciation, (ii) Profit
less depreciation, (iii) Net Profit
Ans c
154.A firm has been producing 4000 units of an item with its break even at 2000 units. Now
it increases the no. of units produced to 5000. What is the change in the break even no. of
units ?
a. 3000
b. 2000
c. 1000
d. Nil
e.None
Ans d
155.A company has issued partly convertible debentures for Rs. 100 lacs of which 40% is
compulsorily convertible to equity. In this case proper classification is
a. Rs 100 lacs as Term Liability
b. Rs 60 lacs equity and Rs 40 lacs Term Liability
c. Classification depends upon the period of payment of debenture
d. Rs 40 lacs net worth and Rs 60 lacs Term Liability
e.None
Ans a
156.
The contingent liabilities are not shown (i) In the balance sheet total, (ii) In the balance
sheet alongwith other liabilities, (iii) As footnotes
Ans a
157.If a company issues bonus shares, the debt equity ratio will (i) Be be affected, (ii)
Remain unaffected
a. Only (i)
b. Only (ii)
Ans b
158.DSCR does not show(i) Excess of current assets over current liabilities, (ii) No. of
times the value of fixed assets covers the amount of loan, (iii) No. of times the companys
earnings cover the payment of interest and repayment of principal of long debt
Ans c
159.Tangible Net worth is calculated as follows

a. Capital plus reserves
b. Capital plus reserves minus intangible assets
c. Capital plus fictitious assets plus reserves minus intangible assets
d. Capital plus reserve minus fictitious assets and intangible assets
e.None
Ans d
160.Return on Investment can be improved by improving (i) Margin, (ii) Turnover

a. Only (i)
b. Only (ii)
Ans d
161.Unsecured loans can generally be taken by the companies to the extent of % of

their net owned funds.
a. 15%
b. 20%
c. 25%
e.None
Ans a
162.Arrears of fixed cumulative dividends and the period for which they are in arrears will
be shown as
a. Provision
b. Reserve
c. Contingent Liability
d. Current Liability
Ans a
163.If a company revalues its assets, its net worth will not (i) improve, (ii) remain same,
(iii) positively affected
Ans b
164.Window dressing of current ratio is not possible by (i) Overvaluing the inventory, (ii)
Depositing cash in hand in bank, (iii) Converting cash into inventory
Ans c
165.For a transport operator, a bus is (i) Current asset, (ii) Fixed asset
a. Only (i)
b. Only (ii)
Ans b
166.If current ratio is above 2:1, it means that the firm (i) Has very high investment in
current assets, (ii) Does not require working capital from the Bank, (iii) Liquidity is very
high
Ans d
167.Working capital gap is not (i) Current Assets less Current Liabilities, (ii) Current
Assets less Current Liabilities other than Bank Borrowings, (iii) 75% of Current Assets

Ans b
168.A company is forced to sell its product at Rs. 90 due to competition, which it had been
selling at Rs.100 earlier. There is no change in the variable cost. Previously the Break even
point units were 2000 and now 2667. What is the variable cost, if fixed cost is Rs. 80000/-?
a. Rs 60
b. Rs 50
c. Rs.40
d. Rs.30
Ans a
169.A company invested Rs. 5 lac from its liquid assets of the business in an associate firm,
due to which its current ratio came down from 2:1 to 1.5:1. What is the amount of current
assets after this investment?
a. Rs. 15 lac
b. Rs. 12 lac
c. Rs. 10 lac
d. Rs. 5 lac
Ans a
170.For a seasonal industry unit like sugar, tea etc. for knowing immediate liquidity
position, bank would need (i) A fund flow statement, (ii) A cash flow statement
a. Only (i)
b. Only (ii)
Ans b
171.If there is a surplus of cash in cash flow statement, it is not a (i) Satisfactory
position, (ii) Strong position, (iii) Weak position
Ans c
172.A firm sells 4000 units and earns profit of Rs. 80000. If fixed cost is Rs. 60000, what is
the break even no. of units?
a. 2000
b. 2500
c. 3000
d. 3500
Ans c
173.Which of the following are not current assets ? (i) Furniture and fixtures, (ii) Plant and
Machineries, (iii) Receivable of 2 years old, slow moving stock
Ans a
174.In a Balance Sheet amount of total assets is Rs. 10 lac, current liabilities Rs. 5 lac and
capital and reserves Rs. 2 lac. What is thefunded debt equity ratio
a. 1:1
b. 1.5:1
c. 2:1
Ans b
175 company had selling price per unit of Rs.100. Its Break even point units are 2000. If
variable cost is Rs.60, what is the fixed cost?
a. Rs. 50000
b. Rs. 60000
c. Rs. 70000
d. Rs. 80000
Ans d
176.Cost of the goods Rs. 99000, Opening Stock Rs. 13500, Purchases Rs. 75000, Sales
Rs. 112500. Find other expenses.
a. 10000
b. 10500
c. 13500
d. 24000
Ans b
177.The debt-equity ratio of a firm has shown increase (increase in long term sources)
alongwith its current ratio. Which of the following is certainly true?
a. Sources of funds have been utilised for purchase of fixed assets
b. Sources of funds have been used for payment of current liabilities
c. Sources of funds have been used for payment of current assets
d. (b) & (c) both
Ans d
178.Contribution is not equal to (i) Variable cost less fixed cost, (ii) Sales less variable
cost, (iii) Sales less fixed cost
Ans b
179.The profit and Loss Account is not an account (i) For one particular date, (ii) For
one particular accounting year, (iii) An account for a particular month
Ans b
180.Rights shares mean the shares which are

a. Issued to directors of the company
b. Issuied for a consideration other than cash
c. Offered to the exiting shareholders
d. Issuied to promoters of the company for thier services
Ans c
Find True / False

181. In banks, relatively lesser emphasis is placed on books of prime entry like journal &
Cash book
Ans: True
182. Banks follow the accounting procedure of voucher posting under which the vouchers
are straightway posted to the individual accounts in subsidiary ledger: True
183. In bank the general ledger trial balance is prepared everyday True
184. In banks there are 2 kinds of vouchers, one which evidences only debit or credit to an
account, and, the other which contains both debit & credit to different accounts: True
185. Voucher which contains both debit & credit to different accounts are called composite
vouchers.True
186. Letter of authority signed by the customer containing standing instruction is a debit
voucher. True
187. Draft issued by other banks on the branch, in terms of arrangement between two banks
is a credit voucher: False
188. Deposit of money with the bank for purchase of non-judicial stamps required for
execution of documents in favour of the bank is credit voucher: True
189. Composite vouchers are also known as Contra Vouchers and by which both debit &
credit takes place through a single voucher to two different accounts: True
190. Outward Bills receivable account is debited to the credit of Outward Bills for Collection
account through Contra Voucher: True
191. A trial balance of the personal ledgers is prepared usually every two weeks and got
tallied with general ledger control accounts, in banking parlance it is known as Balancing
of Books: True
192. The accounting system, as banks use different software, differ among different banks:
True
193. Cheque of Rs. 3000 deposited earlier by Mr. A an account holder is paid through
clearing is credited to As account while a cheque of Rs. 4000 issued to C is received in
clearing is debited to customer account in personal ledger.True
194. Partners have the implied authority to acquire and transfer immovable property on
behalf of the firm: False
195. In the following cases partners have no implied authority, : open bank account on
behalf of firm in his own name , withdraw a legal suit on behalf of the firm, admit any
liability in a suit or proceed against the firm. True
196. Any of the partners has power to countermand the payment of a cheque drawan by
another partner: True
197. In opening a current account in the name of a firm the partnership letter should be
signed by all the partners in individual capacity: True
198. Certificate of Registration is compulsory without which account in the name of a
partnership firm should not be opened. False
199. In case of HUF account both the current account opening form and JHF letter have to
be signed by all the adult members of the family. True

200. In HUF, Karta must sign the account opening form on behalf of the minor as well as
karta True
201. Under Hindu law, a woman can not become a coparcener. True
202. Only the Karta has the eligibility in law to enter into contracts for a HUF. True
203. Certificate of commencement of business need not require for Limited company but a
Must in case of Pvt. Ltd. Company. False
204. Certified copy of board resolution authorizing the opening and operation of the account
of a Joint stock company must be signed by the Managing director of the Company. False
205. Copy of Memorandum is optional but Copy of article of association is a must for
opening account in the name of a Joint stock company. False
206. For opening account in the name of a joint stock company, a mandate giving specific
instructions concerning the way in which operations on the bank account are to be made.
True
206.In case of unregistered bodies like club / association, bank account can be opened
provided a resolution passed in the meeting as their bye-laws regarding opening bank
account is a must and that resolution must contain name and designation who would
operate the bank account. True
207. Bye lawas for opening account in the name of club / societies / association is a must
irrespective of registered or un registered. True
SL. Problem Options Answer Self Assessment
208 Bond is amarket instrument. . Money Market
2. Capital Market
3. Debt Market
4. Stock Market
5. (2+3) 5
209 Current Yield is less when coupon rate is more than Yield . True
2. False 2
210 Rule 72 can be used for getting the time period by which a sum becomes quadruple .
True
5. False 1
211 When rate of interest is 12 % half yearly compounded, what is the effective rate? . 12
2. 12.25
3. 12.36
4. 12.50
. none 3
212. Deep Discount Bond is issued at Discount. . True
2. False 1
213 Par Value Bond means Coupon rate equals to YTM . True
2. False 2
214 If compounding frequency is more than 1 Present Value would be: . More
2. Less
3. Same
4. compounding frequency can never be <1 2
215 FV of a bond is same as Bond Price when YTM=coupon rate . True
2. False 1
216 Duration of a bond can be equal to Term to Maturity but Modified Duration of a Bond is
always < Modified Duration . True
2. False 2
217 Present Value of an Ordinary annuity is less than that of Annuity Due . True
2. False 1
218 The more the Term to Maturity, the more is the Interest rate Risk . True
2. False 1
219 A Sum growing @ a certain simple rate of interest is always less than that of growing at
same rate compounded . True
2. False 1
220 A sum is compounded quarterly @ 9%, what is the effective rate? . 9.20
2.. 9.30
3. 9.36
4. 9.38
. none
2
221. The more the compounding frequency, the less is the Bond Value. . True
2. False 1
222 Interest Rate Elasticity (IE) is always (-)ve. Phenomenon . True
2. False 1
223 Duration is the time period by which Interest Rate Risk gets nil. . True
2. False 1
224 Continuing Compounding can never be determined.
1. True
2. False
2
225. Capital Budgeting Decision is always identical under NPV & IRR method . True
2. False 2
226 Under Payback Method of Capital Budgeting, Inflows should be always uniform. . True
2. False 2
227 To determine the Price of a bond, YTM can never be equal to Coupon Rate . True
2. False 2
228 Bond price would be either at premium or at Discount, it can never be at par . True
2. False 2
229 IRR method is easy to calculate compared to NPV method . True
2. False 2
230 Opportunity Cost is the rate at which inflows are normally discounted under
discounted cash Flow Technique . True
2. False 1
231 Which of the following(s) is / are correct. 1. Higher the pay back period, higher the
acceptability
2. Annuity receipt or payment at the end of the period is Annuity Due
3. Higher is the opportunity cost, higher will be the NPV.
4. Under Double Declining Method of Depreciation, Book Value can be Zero
5. All are Correct
4
232. To calculate Annuity, both PV & FV is needed. . True
2. False 2
`233. Which of the following entry(s) is / are normally first recorded in Cash Book. . Cheque
issued
2. Cheque presented for clearing
3. Cash Withdrwal
4. Cash Deposit
5. All
5
234. Under SYD method of depreciation, the lesser is the rate of depreciation at the initial
period . True
2. False
1
235 Noting Charges of Bill of Exchange dishonored is ultimately to be borne by the Drawee
1.True
2. False 1
236 Present Value under Compounded basis is always less than Future Value. . True
2. False
1
237 Under direct Quotation, Forward Premium has to be added to Spot Rate irrespective of
Buying or selling Transaction to the AD 1.True
2.False 1
238 A. Direct Quotation. B. Forward Rate. C. TOM. D. Bill Buying Rate.E. Forward
Differentials. (Tick the Incorrect) . A: Foreign Currency Variable.
2. B:Rate beyond Spot Rate
3.C: T+1
4. Export / Import
5. Premium / Discount.
1
239 A.1$= INR. 67.65-75 (INDIA)
B. 1DM = $ 0.12-15 (USA)
C. 1GBP = $ 0.75-80 (USA)
D. 1. Yen = AUD 0.55-65 (Australia)
E. 1. $ = CAD 3. 65-75 (Canada)
Tick the incorrect . A: Indirect
2. B: Direct
3. C: Direct
4. D: Direct
5. E: Direct
1
240 Under Forward Rate: (tick the incorrect) 1. Discount is deducted
2. Premium is added
3. Discount: Foreign Currency Cheaper
4. Premium: Home Currency Cheaper
5. None is incorrect.
5
241 A bank is selling long position in USD in Inter-Bank Market. . Buying Transaction
2. Selling Transaction
3. Cover Transaction
4. Arbitrage
5. Swap
3
242 For Buying Transaction the leeser the premium needs to be added to Spot Rate . 1. True
2. False
1
243 A par value bond of Rs. 5000 with term to maturity 3 years , @ 9.5 % interest semiannually ,currently quoted at Rs. Rs.4800. Find the Current Yield.
1. 9.5
2. 9.00
3. 8.90
4. 9.90
5. None 4
244 A certain sum of money @ 6 % @ monthly rest fetches Rs. 6500 by 3 years. Find the
sum. 1. 5432
2. 5855
3. 5900
4. 5525
5. None 1
245 A certain sum is fully repaid @ EMI = Rs. 1600 @6% for 3 years, what would be the
sum needed to repay full & final settlement. 1. 62940
2. 62937
3.62973
4. 62900
5.none 2
246 Economic life:
012345
Outflows:(lac)
1.20 0.35 0.45 0.40 0.20 0.15
Opportunity Cost: 9.5%
Find out:
Present Value & Net Present Value 1. 1.27 lakh & 0.027 lakh
2. 1.23 & 0.03
3. 1.26 & 0.015
4. 1.25 & 0.017
5. None 2
247 Current Yield is 9.4 %, interest on a At Par bond is Rs. 940. Find out current price. 1.
9400
2. 9800
3. 10000
4. 10400
5. None 3
.
248 Which of the following is not source of fund? 1. Outstanding Expenses
2. Advance Payment Received
3. Sundry Creditors
4. C/C availed
5. Fixed Deposit Made 5
249. From pass book it is shown that balance overcast by 1000, what would be the
treatment in BRS.if started from Pass book favourable balance 1. Add Rs. 1000
2. Deduct Rs. 1000
3. Add Rs. 2000
4. Deduct rs. 2000
5. None 2
250 What is the book value of a machine costs Rs. 60000 with scrap value of 10000 and
economic life of 5 years at the end of 4 years under WDV 1. 10000
2. 20480
3. 10480
4. 15480
5. None 2
251. Rs 1800 sale in cheque is wrongly posted in credit side of cash book. Starting from
cash book favourable balance you need to do - in BRS 1.Add 1800
2. Add 3600
3. deduct 1800
4. deduct 3600
5. None 2
252 Assets = ? (Tick the incorrect) 1. Liabilities
2. Capital + Liability
3. Liability + Capital Intangible Assets, if any.
4 Networth + Long term Liability
5.None 2
253 Return outward of Rs. 5000 has been debited to Sales Account. Do the rectification if
needed. 1. Sales Account CR. & Return Outward Account Dr. by 5000.
2. Return Outward Dr. & Purchase Account Cr. by 5000
3. Sundry Creditors Dr. & Sales Account Cr. by 5000
4. Return Outward Dr. & Return Inward Cr. by 5000
5. None
3
254. Which of the following(s) is / are True. 1. The higher is the Pay-back period, the higher
is the acceptability.
2. Price of an asset & Market rate of interest is inversely related.
3. The more the premium in a bond, the more the current yield
4. The lesser is the Compounding frequency, the lesser is the Present Value.
5. None is True 2
255. . The return outward account is a ________ account
a) Real
b) Personal
c) Nominal
d) Fictitious
e) None
Ans: c
256. Strictly speaking the profession of accounting would be denoted by the word:
a) Accounting
b) Chartered accounting
c) Accountancy
d) Cost accountancy
e) None
Ans: c
257. The list given below provide the close relationship between the items of each pair. One
of the pairs has no such close relationship. Identify this pair:
a) Banking Company
b) Form B Profit & Loss account
c) Ledger book Letter of credit register
d) Other liabilities and provisions Schedule 5
e) None
Ans: c
258. Depreciation expense in the declining method is calculated by the depreciation rate :
a) time book value at the beginning of the year
b) plus book value at the end of the year
c) divided by book value at the beginning of the year

d) time accumulated depreciation at year end
e) None
AnsL a
259. Share premium will be received
a) with share application money
b) with the allotment money
c) before the allotment is made
d) after the 1st call is made
e) None
Ans: b
260. Necessary accounting assumptions upon which accounting based may be termed:
a) Ideas
b) Rules
c) Concepts
d) Conventions
e) None
Ans: c
261. Amount given to a non-trading organization as per the will of the deceased persona) Legacy
b) Lease
c) Rebate
d) Discount
e) None
Ans: a
262. If the assets of a firm are Rs. 8,00,00,000.the liabilities are Rs.
3,25,00,000,accumulated profits are Rs. 1,50,00,000,then the capital of the form is _____
a) Rs. 325,00,000
b) Rs. 625,00,000
c) Rs. 975,00.000
d) Rs. 1275.00.000
e) None
Ans: a
263. The left hand side of an account is called ____ side
a) Expenditure
b) Receipt
c) Credit
d) Debit
e) None
Ans: d
264. Salary paid in advance has a ___
a) debit balance
b) credit balance
c) nil balance
d) either credit or debit balance
e. None
Ans: a
265. Abnormal loss is credited toa) Consignment account
b) Sales invoice
c) Consignee account
d) None of these
e) None
Ans: a
266. Statement A : Lease rent paid by lessee is not an expense
Statement B : In an operative lease, period of lease is much less compared to the economic
life of the asset.
a) Statement A is true
b) Statement B is true
c) Both are true
d) Both are false
e. None
Ans: a
267. Which of the following is a operating system?

a) Bad debts
b) Salary of general manager
c) Expired insurance
d) All of the above
e. None
Ans; d
268. A debit may signify
a) Decrease in asset account
b) Increase in asset account
c) Increase in ability account
d) Increase in capital account
e) None
Ans: b
269. Identify the False statement.
a) Preparation of a trial balance helps in locating accounting errors
b) If trial balance does not tally, there is no need to open suspense account
c) Debit balance of ledger account is shown in debt column of the trial balance
d) Balances of ledger accounts are posted to a trial balance
e) None
Answer: b)
270. Where does Net profit appear in the Balance sheet?
a) Liabilities side
b) Asset side
c) Contingent liability
d) Fund flow
e) None
Answer: a)
271. The pass book of an account holder is the copy of ___
a) The bank columns in the cash book of the account holder
b) The relevant account in the books of a bank

c) The cash column in the cash of a customer
d) None of the above
Answer: a)
272. Normally, the items on debit side of cash book are found on _____ side of pass book
a) Credit
b) Debit
c) Post
d) Overdraft
e) None
Answer: a)
273. Which of the following is not the part of floating assets?
a) Debtors
b) Copyrights
c) Land and building
d) Both (b) and (c) above
e) None
Answer: d)
274. What is the market value of a bond that will pay a total of fifty, semi-annual coupons of
Rs. 80 each over the remainder of its life? Assume the bond has a Rs. 1,000 face value and
12% yield to maturity.
a) Rs. 734.86
b) Rs. 942.26
c) Rs. 1,135.90
d) Rs. 1,315.24
Answer: a)
275. If a bond having a face value of Rs, 10,000, has a coupon rate of 11% and is quoted in
the market at Rs. 8,750, the current yield of the bond is
a) 12.75%
b) 11.26%
c) 12.57%
d) 11.62%
e) None
Answer: c)
276. Select the source which is not valid for issue of bonus shares
a) Share premium
b) Revaluation reserve created by revaluation of fixed assets
c) Capital reserve
d) Capital redemption reserve
e) None
Answer: b)
277. The Journal entry on forfeiture of shares is
a) Share capital a/c Dr To calls in arrears a/c To forfeited shares
b) Forfeited shares a/c Dr calls in arrears a/c Dr To share capital a/c
c) Share capital a/c Dr To forfeited shares a/c
d) Forfeited shares a/c Dr To share capital a/c
278. There are ____ parties to promissory note
a) Two
b) Infinite
c) Three
d) Four
e) None
Answer: a)
279. Which of the following is not part of Fixed assets in a company balance sheet?
a) Goodwill
b) Stock in trade
c) Patents, trademarks and designs
d) Plant and machinery
e) None
Answer: b)
280. Double entry system means

a) Amounted is debited twice
b) Transaction is recorded in two accounts, one is debited and other is credited
c) Transactions are recorded only in cash book/bank book
d) Accounting entry is recorded twice to the debit and credit side
Answer: b)
281. One of the statements in respect of Profit & Loss account is incorrect, rest are correct.
Mark the incorrect sentence
a) The account is credited with closing balance of profit and loss account of last year
b) The account is credited with current year
c) The account is debited with provision for taxes
d) The account is debited with provision for dividend
e) None
Answer: c)
282. Mix of debt and equity is known as _______
a) Organizational structure of the firm
b) Financial structure of the firm
c) Capital structure of the firm
d) Bond equity structure of the firm
e) None
Answer: c)
283. Under written down value method of Depn the Wdv of the ____
a) equal to zero
b) less than zero
c) greater than zero
d) less than one
e) None
Answer:c)
284. Which of the following is an operating expense?
a) Bad debts
d) All of the above
e) None
Answer: d)
285. A bill of exchange must be properly
a) Stamped
b) Checked
c) Signed
d) Accepted
e) None
Ans: a
286. The financial statement of bank consists of ______ schedules
a) 18 schedules
b) 16 schedules
c) 17 schedules
d) 9 schedules
e) None
Answer: a)
287. Telephone charges Rs. 500 paid in cash. Identify two accounts in this transaction.
a) Nominal account and cash account
b) Telephone charges and cash
c) Cash and telephone charges
Ans: a
288. Identify the true statement
a) Every transaction is recorded first in the cash book
b) Narration is not necessary
c) Journal is book of original entry
d) Cheques received from the customers are recorded on the credit side of the columner
cash book
Ans: c
289. Which of the following is true?

a) Total lease rent = cost of asset total finance income + residual value
b) Total finance income = total lease rent
c) Total finance income = cost of asset
d) Cost of assert = total lease rent + residual value + total finance income
Answer: b)
290. Choose the incorrect statement in case of dissolution of partnership from the following
statements
a) On the dissolution of the firm, first creditors like wages outstanding etc. will have to be
paid
b) Goodwill will be raised in the books when a firm is dissolved
c) The loan from the spouse of a partner is treated just like a loan from outside parties
d) After the books are closed, no account will show any balance
e) None
Answer:b)
291. Machinery worth (WDV) 1000/- sold for 1200/- is entered in sales register. Rectification
is
a) Credit sales 1200/-, debit machinery 1000/- and debit P & L a/c 200
b) Debit sales 1200/-, credit machinery 1000/- and credit P & L a/c 200
c) Credit machinery 1200/-, debit sales 1000/- and debit P & L a/c 200
d) Debit machinery 1200, credit sales 1000/- and credit P & L a/c 200
Ans: b
292. Where should a withdrawal of cash from business by the proprietor be credited to?
a) Drawings
b) Proprietors a/c
c) Capital a/c
d) Cash a/c
Ans: d
293. Noting charges are
a) Paid to bank for dishonour
b) Paid to drawer to dishonour
c) Paid to notary public for recording dishonour

Ans: c
294. Receipt and Payments statement showsa) Only revenue receipts and payments during a year
b) Only capital receipts and payments during a year
c) Both capital and revenue receipts during a year
d) Only cash transactions
Ans: c
295. Dividend are usually paid on
a) Called up capital
b) Paid up capital
c) Antherised capital
Ans: b
296. Which of the following statements are true?
a) An increase in the owner
b) Increase in one equity with no change in the assets will result in decrease of another item
on the liability side
c) Decrease in one asset with no change in equities will result in increase of another asset
d) All of the above are true
Ans: d
297. Loss of goods due to fire is Rs. 25,000 is classified as Revenue Expenditure as :
a) It is recurring
b) Amount involved is small
c) It is revenue loss arising out of business operation
d) None of these
Ans. c
298. Which of the following statement regarding bond pricing is true?
a) The lower the discount rate, the more valuable the coupon payments are today.
b) Bonds with high coupon payments are generally (all else the same) more sensitive to
changes in interest rates than bonds with lower coupon payments.
c) When market interest rates rise, bond prices will also rise, all else the same.
d) Bonds with short maturities are generally (all else the same) more sensitive to changes in
interest rates than bonds with longer maturities.

Ans. a
a) The additional share in the profits by the continuing partners is called Gain Ratio
b) The balance sheet represents and expansion of the equations as Assets = Liabilities +
Capital
c) Assets will be equal to capital if there are no liabilities of the business.
d) All the statements are true.
Ans. d
300. The balance is useful for locating
a) Errors
b) Cash errors
c) Errors in cash
d) Payment errors
Ans. a
301. Which of the following statements of lease contract is false?
a) The owner of the asset is known as lesser
b) The user of the asset is known as lessee
c) In a lease agreement there are three parties
d) The ownership of the asset remains with the lesser
Ans. c
302. Direct Expenses appears on ______ side of ________ account
a) Debit, Trading
b) Credit, Trading
c) Debit, Profit & Loss
d) Credit, Profit & Loss
Ans. a
303. Suspense a/c is not used in which of the following cases
a) Before trial balance
b) After trial balance
c) Before final accounts
Ans. a
304. A credit may denote
a) Decrease in assets
b) Increase in liabilities
c) Increase in capital account
d) All of the above
Ans. d
305. Identify the false statement :
a) The relationship between Consigner and Consignee is that of seller and buyer.
b) When goods are sent on consignment, the consignee account is debited.
c) Account sale is the sales account of the books of the consigner.
d) All the statements are false.
Ans. d
306. Revaluation account is to be debited on ________
a) Increase in the value of land and building.
b) Decrease in the amount of creditors.
c) Decrease in Provision for Bad & Doubtful debts.
d) Increase in the amount of creditors.
Ans. d
307. If a trader enjoys a overdraft facility, then
a) His passbook will show debit balance.
b) His cashbook will show debit balance.
c) Excess of deposits over withdraws.
Ans. a
308. For sales return at branch, in case of dependent branches, entry to be passed in H O
books
a) Debit Branch Debtors A/C , Credit Branch Stock A/C
b) Debit Sales A/C , Credit Branch Debtors A/C
c) Debit Sales A/C , Credit Branch Stock A/C
d) Debit Branch Stock A/C , Credit Branch Debtors A/C
Ans. d
309. Discount which is recorded in the books of account :
a) Trade discount
b) Rebate
c) Bill Discount
d) None of these
Ans. d
310. Statement A : Wages and salaries appear on profit & loss account
Statement B : Salaries and wages appear on trading account
c) Both statements are false
d) Both statements are true
Ans. c
311. Qualitative transactions are not recorded in the accounts due to
a) Dual concept
b) Accrual concept
c) Money measurement concept
d) Convention of materiality
Ans. c
312. The ascertainment of value of stock from accounting record is known as _
a) Periodic inventory
b) Perpetual inventory
c) Preliminary inventory
d) Preliminary Expenses
Ans. b
313. Statement A : Rehman has assets of Rs. 10,000 and liabilities of Rs. 5,000. His capital
therefore would be Rs. 15,000. Statement B : If a firm borrows a sum of money, its capital
would be reduced
c) Both statements are true
d) Both statements are false
Ans. d
314. Identify the pair which is mismatch from the following pairs in respect of company
accounts
a) Miscellaneous expenditure
b) Contingent liabilities
c) Debentures
d) Outstanding Expenses
Ans. c
315. The difference in the bank reconciliation statement may be due to which of the
following reasons?
a) Cheque deposited and cleared by the bank is recorded on the debit side in the cash book.
b) Bank charges debited is recorded on the credit side in the cash book.
c) Amount paid by bank for insurance premium is recorded on the credit side in the cash
book.
d) Cheque dishonoured by the bank is recorded on the debit side of the cash book .
Ans. d
316. A fixed percentage of depreciation is charged every year under
a) Straight line method
b) Written down value
c) Revaluation method
d) Sum of digit method
Ans. a
317. Zero coupon bonds are bonds which _____
a) Are issued at a lower price than the redemption value.
b) Carry a fixed rate of interest payable at the time of redemption of the bond.
c) Bear zero risk.
d) All of the above.
Ans. a
318. If a company alternately uses the LIFO and FIFO inventory methods, which accounting
principle does it violate?
a) Materiality
b) Cost principle
c) Consistency
d) No principle of accounting
Ans. c
319. Cost of the replacement of defective parts of the machinery is ____
a) Capital expenditure
b) Revenue expenditure
c) Deferred revenue expenditure
Ans. b
320. The passbook of an account holder is the copy of _____
a) The bank columns in the cash book of the account holder.
b) The relevant account in the books of a bank.
c) The cash column in the cash book of a customer.
d) None of the above.
Ans. a
321. Bond A is selling at a market price of 90 and offers Rs. 6 as annual interest and bond B
is selling at a market price of 120 and offers an annual interest of Rs. 8. Which is a better
investment?
a) Stock A
b) Stock B
c) Stock A and Stock B fetch identical returns
d) Insufficient data
Ans. c
322. If the cost of four small files, of Rs. 5 each, is charged to expenses, though they had a
useful life of several years, this follows the ____ principle
a) Cost
b) Conservatism
c) Full disclosure
d) Materiality
Ans. d
323. Trial Balance in which the debit and credit total of each ledger account are shown in
the two amount columns against the name of the account.
a) Gross Trial Balance
b) Net Trial Balance
c) Trial Balance
d) All of the above
Ans. a
324. Accounts book where transactions are first recorded ___
a) Journal
b) Ledger
c) Petty cash book
d) Sales book
Ans. a
325. Identify the false statement:
a) The relation between the co- venturers is that of Principle and an Agent.
b) Liability of the co-venturers is unlimited
c) Joint venture is a non trading concern
d) All the statements are false
Ans. d
326. ________ is the value attached to the super profit earning capacity of business arising
from its wide connections, reputation and long standing in the business.
a) Goodwill
b) Premium reserves
c) Reserves
d) Capital Assets
Ans. a
327. Identify which is a non-operating income among the following :
a) Revenue from sales in a trading concern.
b) Dividends received by an investment company.
c) Profit on sale of used plant in a manufacturing concern.
d) Premium received by an insurance company.
Ans. c
Ans. b
328. Which of the following is not part of the floating assets?
a) Debtors
b) Copyrights
c) Land and building
d) Both (b) and (c) above
Ans. d
329. Anticipate for no profit and provide for all possible losses would indicate the
accounting convention of :
a) Consistency
b) Conservatism
c) Materiality
d) Uniformity
Ans. b
330. Statement A : Shares are not freely transferable in private limited company. Statement
B : Shareholders liability is limited in a public company.
c) Both statements are true
d) Both statements are false
Ans. c
331. Which of the following is an incorrect statement?
a) Net profit is not deducted from capital.
b) Net worth and own funds mean the same.
c) Stock in hand is a real account.
d) Purchase of machinery is shown in trading account on debit side.
Ans. b
332. According to the money measure concept, which of the following will be recorded in
the books of accounts?
a) Extra profits made owing to a new system.
b) Quality control in business.
c) Commission payable to a salesman
d) All the above
Ans. c
333. Profit or loss on a venture is shared by a co-venturers _____
a) equally
b) in the capital ratio
c) as per the agreement
d) none of the above
Ans. c
334. A bill of exchange contains an ________ order.
a) Unconditional
b) Conditional
c) Confidential
d) Acceptable
Ans. a
a) Balance sheet is a ledger A/C
b) Land is an intangible asset
c) Bills payable is a long term liabilities
d) All are false
Ans. d
336. Which concept mandates that in determining the net income from business, all costs
that are applicable to the revenue of the period should be charged against that revenue?
a) The cost concept
b) The matching concept

c) The dual aspect concept
d) The money measurement concept
Ans. b
337. Carriage is a _____
a) Real account
b) Nominal account
c) Representative personal account
d) Personal account
Ans. b
338. Debit all expenses and losses, Credit all incomes and gains will represent _
a) Nominal accounts
b) Real accounts
c) Personal accounts
d) Artificial accounts
Ans. a
339. Legacy is a donation by the donor. It is a ____
a) Capital receipt
b) Revenue receipt
c) Either (a) or (b)
Ans. a
340. Normally, the items on debit side of cash book are found on _____ side of pass book.
a) Credit
b) Debit
c) Post
d) Overdraft
Ans. a
341. Identify the true statement :
a) Decrease in one asset with no change in equities will result in increase of another asset.
b) The principle of accountancy which recognizes the double aspect of a business
transaction is known as dual aspect concept.
c) Under the consistency concept, events of the same character must be treated by the same
accounting method, unless there are compelling reasons to change the method.
d) All of the above are true.
Ans. d
342. Preliminary expenses, discount allowed on issue of shares are the example of :
b) Deferred revenue expenditure
c) Revenue expenditure
d) Deferred capital expenditure
Ans. b
343. Interest on overdraft will appear _____
a) In cash book
b) In pass book
c) In ledger
Ans. a
a) There are three parties to a Bill of Exchange.
b) There are two parties to a Promissory Note.
c) Drawee is the maker of a Bill of Exchange.
d) Debtor is the maker of Promissory Note.
Ans. c
345. Mandatory accounting standard if not followed requires auditors who are members of
ICAI to :
a) Qualify their audit reports
b) Inform to management of company
c) Inform to ICAI
d) Need to report anything
Ans. a
346. Contingent liability is shown owing to the :
a) Convention of conservatism.
b) Convention of materiality.
c) Convention of full disclosure
d) Dual aspect concept
Ans. c
347. Under Basel II, the capital as a percentage of RWAs to be maintained by banks in India
a) 8 percent
b) 4.5percent
c) 9 percent
d) 12 percent
Ans. c
348. Balance of liabilities is recorded on ____ side of the trial balance.

a) Credit
b) Debit
c) Payment
d) Receipt
Ans. a
349. The transactions in the bank column on credit side of the three columnar cash book
indicates
a) Amount withdrawn from the bank
b) Amount deposited in the bank
c) Both (a) and (b) given
Ans. a
350. The due date for a bill of exchange falls on a public holiday. It therefore becomes due
on the _______
a) Next working day
b) Previous day
c) Previous working day
d) Next day
Ans. c
351. When goods are sold on credit, seller becomes a ______ and buyer becomes a ______
a) Creditor, Debtor
b) Debtor, Creditor
c) Lesser, Lessee
d) Bailer, Baillie
Ans. a
352. What type of account is a trading account?
a) Real
b) Personal
c) Nominal
d) Fictitious
Ans. c
353. A situation in which taking one investment prevents the taking of another is called __
a) Net present value profiling
b) Operational ambiguity
c) Mutually exclusive investment decisions
d) Issue of scale
Ans. a
354. The difference between two sides of account is called _____
a) Cash balance
b) Bank balance
c) Balance
d) Profit
Ans. c
355. Advances given to a staff by a bank as an employer should be included in ___
a) Other assets
b) Advances
c) Investments
Ans. a
356. Total of debit side is greater than credit side of an account implies :
a) Credit balance
b) Profit
c) Loss
d) Debit balance
Ans. d
357. Preliminary expenses is ____
a) Fictitious Asset
b) Current Liability
c) Current Asset
Ans. a
358. Discount allowed by the creditor is recorded on the _____ side of cash book
a) Payment
b) Receipt
c) Debit
d) Credit
Ans. a
359. Discount received in Advance Account is a ______ account
a) Real
b) Personal
c) Nominal
d) Fictitious
Ans. b
360. Amount paid in petty cashier is called _______
a) Advance amount
b) Loan amount
c) Imprest amount
d) Petty cash amount
Ans. c
361. A chartered account ant rendering accounting services on a fee basis is
a/an ______ accountant
a) Private
b) Internal
c) Government
d) Public
Ans. d
362. The rules for debit and credit in respect of a nominal a/c is _____
a) Debit what goes and credit what comes in
b) Debit what comes in and credit what goes out
c) Debit expenses or losses, credit incomes or gains
Ans. c
363. The following financial statement is not prepared by a non-trading concern
a) Receipt and payment account
b) Income and expenditure account
c) Profit and loss account
d) Balance sheet
Ans. c
364. Interest on capital allowed to partners should be treated as :
a) A charge against profit
b) An appropriation of profit
c) A charge when profits are not available
d) None of these
Ans. b
365. Shares issued by a company to employees or directors at a discount or for
consideration other than cash for providing knowhow or making available in the nature of
IPR or value addition are known as :
a) Equity shares without voting rights
b) Sweat equity shares
c) Employees stock options
d) Convertible preference shares
Ans. b
366. Which of the following may not be part of the bank reconciliation process?
a) Interest on overdraft
b) Dishonor of cheque
c) Cash drawn from bank
d) Cheque deposited but not collected
Ans. c
367. Salary paid in advance has a _____
a) Debit balance
b) Credit balance
c) Nil balance
d) Either credit or debit balance
Ans. a
368. During a period of rising prices higher profits can be shown by valuing stock at :
a) LIFO basis
b) FIFO basis
c) Weighted Average Price
d) Sum of Digits Method
Ans. b
369. Cost of registration and documentation of a new formed company is Rs. 10,000 is a
Deferred Revenue Expenses as :
a) It is non0recurring
b) Benefit is not exhausted in new year
c) Increases earning capacity of the business
d) It is recurring
Ans. b
370. A bill of exchange is not to be dated
a) True
b) False
c) Varies from case to case
Ans. b
371. A debit balance in joint venture account indicates
a) Loss
b) Profit
c) Profit or loss
d) All of the above
Ans. a
372. Who draws a bill on whom?

a) Creditor, Debtor
b) Debtor, Creditor
c) Lesser, lessee
d) Beller, Bellee
Ans. a
373. Debit the receiver, credit the giver will represent :
a) Nominal accounts
b) Real accounts
c) Personal accounts
d) Artificial accounts
Ans.
a) Trial balance ensures arithmetical accuracy
b) If trial balance errors are not located then the difference is sent to suspense a/c
c) Trial balance is base for final accounts
d) All of the above
Ans.d
375. Compliance with Accounting Standard is the duty of the _______
a) Auditor
b) Lessee
c) Lessor
d) Debtor
Ans: a
376. Sudhir sells goods to Ram Rs. 10,000 credit. Identity two accounts in this transaction
a) Sudhir & Purchaser
b) Sales & Sudhir
c) Goods & Ram
d) Ram & Goods
Ans: d
377. Choose the sentence which is not relating to fixed asset of a banking company _________
a) Premises wholly owned by the banking company for the purpose of banking business
b) Other fixed assets ( including furniture and fixtures), Motor vehicles
c) As regards fixed assets, where sums have been written off on revaluation of assets, every
balance sheet after the first balance sheet subsequent to the revaluation should show the
revised figures for a period of five years with the date and amount 0
d) Non-banking assets acquired in satisfaction of claims would include immovable
properties/tangible assets acquired in satisfaction of claims.
Ans: d
378. Amount brought in by proprietor in business should be created to:
a) Drawees account
b) Capital account of proprietor
c) Asset account
d) None of these
Ans: b
379. Which of the following is not subsidiary book?
a) Ledger
b) Cash book
c) Purchase book
d) Sales book
Ans: a
380. The Machinery is recorded in the books of a firm at the price paid to the supplier plus
the expenses of bringing and installing the machinery. This is due to the application of
a) Money measurement concept
b) Cost concept
c) Business entity concept
d) Realization concept
Ans: b
381. The rate of return required by investors in the market for owing a bond is called the :
a) Coupon
b) Face value
c) Maturity
d) Yield to maturity
Ans: a
382. The intrinsic value of a bond is ______

a) Face value
b) Present value of cash flows in future
c) Market price
d) Issue price
Ans: b
383. Identify the False statement:
a) A bill of exchange is a conditional order
b) A bill of exchange must be properly stamped
c) The maker of a Promissory note must sign it
d) Mere acknowledgement of debts is not a promise
Ans: a
384. If the tribal balance does not tally, difference of tribal balanceis transferred to:
a) Suspense a/c
b) Nominal a/c
c) Personal a/c
d) Real a/c
Ans: a
385. What annual rate of simple interest is paid if Rs. 500 earned Rs. 55 as interest in
2years and 9 months
a) 3%
b) 2%
c) 3.5%
d) 4%
Ans: d
386. Journal is a book of _____
a) Double entry
b) Single entry
c) Contra entry
d) Original entry
Ans: d
387. Stocks-in-trade is valued at

a) Cost price
b) Market price
c) Costs or market price whichever is less
d) Costs or market price whichever is higher
Ans: c
388. The accounting convention which states that when in doubt, choose the solution least
likely to overstate assets and income is
a) Materiality
b) Consistency
c) Continuity
d) Conservatism
Ans: d
a) Accounting standard 2 is mandatory
b) The institute of Chartered Accountants of India is a member of the international
Accounting Standard Committee
c) Financial statements are prepared using accounting standards
d) Accounting standards issued are reviewed regularly and are subject to revisions
Ans: a
390. A loss which is natural and unavoidable is
a) Abnormal
b) Normal
c) Contingent
d) All of the above
Ans. b
391. Arrears of wages Rs 22750 for the last month paid on account of DA revision is
c) Deferred revenue expenditure
d) Discharge of liability
Ans: c
392. The ascertainment of value of stock from accounting record is known as ________
a) Periodic inventory
b) Perpetual inventory
c) Preliminary inventory
d) Preliminary expenses
Ans: b
393. . Debit balance as per pass book means
a) Overdraft
b) Debit balance
c) Credit balance
d) Bank loan
Ans: a
394. Rent received by a trading company should be treated as
a) Operating income
b) Non-operating income
c) Operating expense
d) Non-operating expense
Ans: b
395. The actual normal profit of a firm are Rs 25000 with a capital of Rs 1lakh. Normal
return in the business is 10%, what is the amount of goodwill as per the civilization of profit
method?
a) 10,000
b) 15,000
c) 25,000
d) 30,000
Ans. b
396. The system of recording transactions based on dual aspect concept is called _______
a) Double entry
b) Reverse entry
c) Single entry
Ans: a
397. The drawer of a bill of exchange cannot take legal action in case of
a) Demand bill
b) Usance bill
c) Foreign bill
d) Accommodation bill
Ans: d
398. Identify the false statement
a) Depreciation is a part of the operating cost
b) Depreciation is to know the correct profit
c) Depreciation is provided to arrive at the profit earned by the business
d) Fall in market price is the main cause of depreciation
Ans: d
399. If the net worth of the business is Rs 500, fixed amts are Rs 500, current assets Rs 300,
investments Rs 300, current liabilities Rs Nil, what is the amount of claim to outsiders?
a) Nil
b) Rs 1100
c) Rs 500
d) Rs 600
Ans: d
400. . Which of the following entry will be recorded when the Bad Debts are recovered?
a) Cash (Dr) and Bad Debts recovered (Cr)
b) A/c Receivable (Dr) and Bad Debts recovered (Cr)
c) Bad debts recovered (Dr) and profit and loss (Cr)
d) Both A and C are correct
Ans: d
401. . Select the incorrect sentence
a) Whenever there is no profit or inadequate profit, dividend cannot be declared
b) The right to claim dividend lapses when there is no profit in case of cumulative
preference shares
c) When the company makes profit, arrears of preference dividend are cleared first
d) The Act prohibits the issue of any preference shares which are irredeemable
Ans: b
402. . In sum of digits method for 5years which of the following is the 1yearss allocation
ratio
a) 1/15
b) 2/15
c) 3/15
d) 5/15
Ans: d
403. . Sales return of amount Rs 1000 from Vijay was wrongly entered in purchase book.
The rectification is
a) Debit sales to the extent of Rs 2000
b) Credit purchases to the extent of Rs 2000
c) Vijay credited Rs 2000 debit sales and purchases to the extent of Rs 1000 each
d) Debit sales return by Rs 1000 and credit purchases by Rs 1000
Ans: d
404. A bill of exchange contains as _______ order
a) Unconditional
b) Conditional
c) Confidential
d) Acceptable
Ans: a
405. . Ranjana purchased goods worth Rs 5000 from Mayur, identify two
accounts in this transaction:
a) Ranjana and Mayur
b) Goods and Mayur
c) Ranjana and sales
d) Purchase and Mayur
e) Either (b) or (d)
Ans: e
406. Which of the following is NOT a function of bank reconciliation statement
a) To check for errors in balance sheet

b) To update omitted entries into the cash book
c) To update omitted entries into the bank statement
d) To reconcile the difference in bank statement and cash book
Ans: a
407. .Provision for discount on debtors account has a _______
a) Debt balance
b) Credit balance
c) Either credit or debit balance
d) No balance
Ans: b
408. Which one is false:
a) A bill of exchange may be drawn for payment in kind
b) Drawee has the right to discount the bill
c) A bill of exchange need not be dated
d) All the statements are false
Ans: d
409. Mark out the non-operating expense among the following:
a) Miscellaneous office expenses
b) Depreciation of plant and machine
c) Interest on debenture
d) All of the above
Ans: c
410. .Where should a withdrawal of cash from business by the proprietor for personal use
be debited to
a) Suspense a/c
b) Proprietors a/c
c) Capital a/c
d) Cash a/c
e) Drawings Account
Ans: e
411. Trial balance prepared at the end of ________ year

a) accounting
b) posting
c) booking
d) all of the above
Ans: a
412. Undercasting of the credit side of cash book has the same effect as overcastting of the :
a) Debit side of the pass book
b) Credit side of the pass book
c) There is no relevance between the two
d) Either debit side or credit side
Ans: a
413. . Under Basel II, the capital as a percentage of RWAs to be maintained banks in
India?
a) 8%
b) 4.5%
c) 9%
d) 12%
Ans: c
a) There are three parties to a Bill of Exchange
b) There are two parties to a Promissory Note
c) Drawee is the maker of a Bill of Exchange
d) Debtor is the maker of a Promissory Note
Ans: c
415. Accounting concepts are :
a) Broad assumptions
b) Method of presenting financial accounts
c) Bases selected to prepare a specific set of accounts
Ans: a
416. The scheduled banks are required by RBI to transfer at least ______ of their disclosed
profit
a) 25%
b) 20%
c) 10%
Ans: a
417. The financial statement of bank consists of _________ schedules
a) 18 schedules
b) 16 schedules
c) 17 schedules
d) 5 schedules
Ans: a
418. For an expense to be classified as revenue or capital depends on :
a) Kinds of expense
b) Duration of the benefit of the expenditure
c) Effect of revenue earning capacity
d) All of the above
Ans: d
419. Current yields on a bond is obtained by dividing the coupon interest by
a) YTM
b) Duration pric
c) Current Price
d) Macualays duration
Ans: c
420. Mclvers meals, Inc. currently pays Rs. 2 annual dividend. Investors believe that
dividends will grow at 20% next year, 12% annually for the two years after that, and 6%
annually thereafter. Assume the required return is10%. What is the current market price of
the stock?
a) Rs. 54.90
b) Rs. 60.80
c) Rs. 66.60
d) Rs. 69.30
Ans: a
421. Acceptances, endorsements and guarantees are shown as ________
a) Other assets
b) Contingent abilities
c) Advances
d) Other liabilities and provisions
Ans: b
d) Cost of asset = total lease rent + residual value + total finance income
Ans: b
423. In a balance sheet, how will Goodwill be classified?
a) Fixed assets
b) Current assets
c) Other non- current assets
Ans: a
424. A document inviting deposits from the public to subscribe for all the shares of a
company is termed as :
a) Memorandum of association
b) Article of association
c) Prospectus
d) Minutes book
Ans. c
425. Dual aspect concept means recording of ______ effects of a transaction
a) Double
b) Single
c) Multiple

Ans. a
a) Total lease rent = cost of asset total finance income + residual value.
d) Cost of asset = total lease rent + residual value + total finance income
Ans. b
427. Which of the following investment rules does not use the time value of the money
concept?
a) The payback period
b) Internal rate of return
c) Net present value
d) All of the above use the time value concept
Ans. a
428. A banker can use credit balance in one account to settle debit balance in another
account of the same customer only if
a) Both the accounts are in the same branch of the bank.
b) Both the accounts are with the same bank though they may be with different branches.
c) Each of the account is from a member of the same family.
d) The accounts are with different banks.
Ans. b
429. Which of the following is not an unsecured loan in Balance sheet of a company?
a) Acceptance of Fixed Deposits.
b) Creation of Sinking Funds.
c) Loans and Advances from others.
d) Short term loans from banks.
Ans. b
430. Straight line depreciation does not :
a) Use residual value to calculate yearly depreciation.
b) Have a book value.
c) Accelerate depreciation.
d) Let the cost remain the same.
Ans. a
a) If the Partnership Deed does not mention any method of maintaining Capital Accounts
then the Fixed Capital Account method has to be followed.
b) If the partnership firm follows the Fixed Capital Account Method then the salary payable
to a partner is credited the partners current account.
c) Drawings made by partners are never entered in the Profit & Loss Appreciation Account.
d) Computerized accounting is a high speed, accurate and error free accounting.
Ans. a
432. The two portion of each pair relating to partnership accounts has got some
relationship. However one of the pairs is a mismatch and has no relationship. Select this
pair from the following :
a) Management of business business may be run by one or some or all partners.
b) Treat of losses insolvency of a partner.
c) Loan from partners No interest as partners are owners.
d) Goodwill super profit method.
Ans. c
433. The journal entry on forfeiture of shares is ____
a) Share capital a/c Dr to calls in arrears a/c to forfeited shares.
b) Forfeited shares a/c Dr to calls in arrears a/c Dr to share capital a/c.
c) Share capital a/c Dr to forfeited shares a/c.
d) Forfeited share a/c Dr to share capital a/c.
Ans. a
434. In double entry book-keeping, entry is balanced with a corresponding Contra entry :
a) Reverse entry
b) Adjusting entry
c) Contra entry
d) Double entry
Ans. c
435. The following data are given : (Rs. 000) Fixed assets 5000, other non-current assets
3000, Current assets 4000, Net worth 6000, Current ratio
2:1. The Term liabilities will be _______
a) Rs. 4000.
b) Rs. 2000.
c) Rs. 1500.
d) Rs. 3000.
Ans. a
436. Provision for bad debts is made under the principle of :
a) Consistency
b) Full disclosure
c) Industry practice
d) Conservatism
Ans. d
437. Debit the receiver and credit the giver is applicable to :
a) Real accounts
b) Personal accounts
c) Nominal accounts
d) All of these
Ans. b
438. Revaluation account is to be credited on ______
a) Increase in the amount of creditors.
b) Decrease in the value of Plant and Machinery.
c) Increase in provision for Bad and Doubtful debts.
d) Decrease in the amount of creditors
Ans. d
439. Profit or loss on a joint venture is shared by the co- ventures :
a) Equally
b) In the capital ratio
c) As per the agreement
Ans. c
440. Select the incorrect statement in respect of calls in advance.
a) The company may accept the shareholders, the uncalled amount on shares even before it
is fallen due.
b) The article of association must permit such acceptance of advance call money.
c) Interest on calls in advance can be paid but the maximum is up to 6%.
d) The amount of calls in advance is part of the paid up share capital.
Ans. d
441. Anticipate no profits and provide for all possible losses would indicate the accounting
convention of :a) Consistency.
b) Conservatism.
c) Materiality.
d) Uniformity.
Ans. b
442. A joint venture is a :
a) General partnership.
b) A particular partnership
c) Not limited a particular venture.

Ans. b
443. A book-keeping capital account is a
a) Real account
b) Nominal account
c) Personal account
d) Either real or personal account
Ans. a
444. Provision for doubtful debts account is a ____ account
a) Real
b) Personal
c) Nominal
d) None of these
Ans. c
445. The user of the asset is known as :a) Lessee
b) Lesser
c) Bailer
d) Baillie
Ans. a
446. Which of the following are examples of capital expenditure?
A: cost incurred in testing whether a newly installed asset is functioning properly. B: cost
incurred in relocating a machine to a new factory. C: cost incurred in replacing an old
engine of the aircraft with a new one.
a) A and B
b) B and C
c) A and C
Ans. c
447. If the liabilities of a business are Rs. 12,000 and the owner equity is Rs. 15,000, the
business assets will be :a) Rs. 3,000
b) Rs. 27,000
c) Rs. 12,000
d) Rs. 15,000
Ans. b
448. Depreciation is calculated on the diminishing value of the asset in
a) Written down value

b) Sum of digit method
c) Revaluation method
d) Straight line method
Ans. a
449. Which of the following statements of lease contract is true?
a) The owner of the asset is known as lesser.
b) The user of the asset is known as lessee.
c) The ownership of the asset remains with the lesser.
Ans. d
450. Opening balance of asset = Oi, closing balance of asset =Oc, Depn.= D. Then addition
to the asset during the year is
a) Oc
b) Oi+D
c) Oc+D
d) Oi
Ans. c
451. Suspense account is not used in which of the following cases?
a) Before trial balance
b) After trial balance
c) Before final accounts
Ans. a
452. Stocks in trade is valued at :a) Cost price
b) Market price
c) Costs or market price whichever is less
d) Costs or market price whichever is higher
Ans. c
453. 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 ______
a) 1 year thereafter
b) 2 years thereafter
c) 3 years thereafter
d) 5 years thereafter
Ans. d
454. A machinery is purchased on June 12, 2006 for Rs. 60,000. Another machinery is
purchased on Jan. 22, 2007 for Rs. 40,000. The depreciation rate is 10% SLM. What is the
book value as at March 31, 2009 (It is annual closing period)?
a) 79,000
b) 76,000
c) 73,000
d) 69,000
Ans. c
455. Which of the following is the accounting equation?
a) Assets = Capital
b) Assets = Capital Liabilities
c) Assets = Capital + Liabilities
d) None of these
Ans. c
456. Freight and dock dues paid while acquiring a new machine will be debited to :a) Profit & Loss A/C
b) Freight A/C
c) Transportation A/C
d) Machinery A/C
Ans. d
457. Capital is shown on the liability side because of
a) Business entity concept
b) Conservatism concept
c) Accrual concept
d) Duality concept
Ans. a
458. Cheque deposited but not cleared is ____ in bank reconciliation statement, when
started with overdraft balance in pass book.
a) Subtracted
b) Added
c) Increase
d) Decrease
Ans. a
459. If Lease Charges of the year exceed the depreciation charge of the year then ______
a) Lease Equalization account is debited (with the difference)
b) Lease Equalization account is credited (with the difference)
c) Lease Terminal Adjustment account is debited (with the difference)

Ans. a
460. 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-payment of Rs. 4, the Share Capital Account will be
debited by
a) Rs. 15
b) Rs. 10
c) Rs. 4
d) Rs. 6
Ans. b
461. An account has a debit balance in the cash book and credit balance in the bank
statement. This implies that there is _____
a) An overdrawn balance
b) A recording error
c) A positive balance
d) Wrong carry forward of balance
Ans. c
a) The lower the discount rate, the more valuable the coupon payments are today.
b) Bonds with high coupon payments are generally (all else the same) more sensitive to
c) When market interest rates rise, bond prices will also rise, all else the same.
d) Bonds with short maturities are generally (all else the same) more sensitive to changes in
Ans. a
463. Select the incorrect statement in case of Share Capital and Reserves and Surplus as
shown in the balance sheet.
a) Under share capital, the following order is maintained. Authorized capital, issued capital,
subscribed capital.
b) 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.
c) The amount of unpaid calls is deducted from (b) above.
d) The amount of forfeited shares account is shown under Reserves & Surplus.
Ans. d
likely to overstate assets and income is :a) Materiality
b) Consistency
c) Continuity
d) Conservatism
Ans. d
465. Which of the following items should not be entered in the receipts _ payments ?
a) Subscription received
b) Sale of machinery
c) Loss on sale of old furniture
d) None
Ans. c
466. ________schedule of the Companies Act prescribes the form of balance sheet.
a) Schedule VI
b) Schedule VIII
c) Schedule VII
d) Schedule V
Ans. a
467. Discount on Bill discounted is an _____ to bank and an ____to the drawer.
a) Income, Expenses
b) Expenses, Income
c) Profit, Loss
d) Loss, profit
Ans. a
468. A bill of exchange must be properly ___
a) Stamped
b) Checked
c) Signed
d) Accepted
Ans. a
469. Direct expenses appear on ______ side of ____ account.
a) Debit, Trading.
b) Credit, Trading.
c) Debit, profit & Loss
d) Credit, Profit & Loss
Ans. a
470. A company wishes to pay dividend on shares. State which of the following may be used
for the purpose.
a) Premium of shares
b) Profit on re-issue of forfeited shares
c) General reserve
d) None of these
Ans. c
a) Leasing agreement is usually for a specific period.
b) Leasing is a tool of tax planning.
c) Under leasing arrangement, risk of obsolescence is to be borne by the lessee.
d) Lesser can claim deprecation on leased assets.
Ans. c
472. Wages paid for installation of machinery affecta) Only machinery A/C
b) Only wages A/C
c) Profit & Loss A/C
d) Both machinery A/C and wages A/C
Ans. a
473. Name the account which is opened in the trial balance to tally ita) Suspense account
b) Nominal account
c) Personal account
d) Cash account
Ans. a
474. The amount brought in by the proprietor in the business should be credited to
a) Proprietors account
b) Drawing account
c) Capital account
d) Cash account
Ans. c
475. The purpose of accommodation bill is to satisfy _____ need of funds.
a) Mutual
b) Personal
c) Urgent
d) General
Ans. a
476. In retail business, widely followed method of inventory valuation is :a) FIFO
b) Weighted average
c) Adjusted selling price
d) All of the above
Ans. c
477. Direct deposit by a customer in the bank
a) Shows a higher passbook balance than cash book.
b) Shows a lesser passbook balance than cash book.
c) Shows no difference.
Ans. a
478. Where does net profit appear in the balance sheet?
a) Liabilities side
b) Asset side
c) Contingent liability
d) Fund flow
Ans. a
479. P & L A/C of a non-trading organization is called as Income & Expenditure A/C why?
a) They often make looses.
b) They are forbidden by statute to make profits.
c) By object of their association they are non-profit making bodies.
d) Their income & expenditure statement are a combination of capital & revenue receipts.
Ans. c
480. Where should a withdrawal of cash from business by the proprietor be credited to :a) Drawings
b) Proprietors A/C
c) Capital A/C
d) Cash A/C
Ans. d
481. Consignee becomes a debtor of the consignor when
a) The goods are dispatched
b) The goods are received
c) The goods are sold
Ans. c
482. J & J manufacturing just issued a bond with Rs. 1000 face value and coupon rate of 8%.
If the bond has a life of 20 years, pays annual coupons, and the yield to maturity is 7.5%,
what will the bond sell for?
a) Rs. 975
b) Rs. 1020
c) Rs. 1051
d) Rs. 1087
Ans. a
483. Petty cash book is generally maintained on ____ system
a) Bank
b) Cash
c) Heavy expenses
d) Imprest
Ans. d
484. Accounts book where individual records of persons, properties, expenses, etc. are
maintaineda) Journal
b) Personal
c) Purchase
d) Ledger
Ans. d
485. If depreciation is not recorded to avoid reporting a net loss, name the accounting
principle that is violated
a) Consistency
b) Cost principle
c) Full disclosure
d) Conservatism
Ans. c
486. A truck cost Rs.6,000 with a residual value of Rs. 2,000. The truck is expected to have a
useful life of 50,000 miles. By assuming the truck is driven 20,000 miles the first year, the
depreciation expenses would be :a) 2,400
b) 240
c) 16,000
d) 1,600
Ans. a
487. On the retirement of the partner, the profits on revaluation of assets should be credited
to the accounts of
a) All the partners in their profit sharing ratio.
b) The remaining partners in their new profit sharing ratio.
c) The remaining partners in their old profit sharing ratio.
Ans. a
488. Amount invested in business by its owner is known as _____ account.
a) Expenses
b) Capital
c) Loan
d) Investment
Ans. b
489. Which of the following terms is related to accounts of Electricity Companies?
a) Clear profit
b) Work uncertified
c) NPA
d) Claims outstanding
Ans. a
490. How the closing stock is shown in final accounts?
a) Debit side of trading account and asset side of balance sheet.
b) Credit side of trading account and liabilities side of balance sheet.
c) Credit side of trading account and asset side of balance sheet.
d) Credit side of trading account.
Ans. c
491. Bill for collection appears in the balance sheet as :a) Contra entry
b) Single entry
c) Liabilities & Provisions
Ans. a
492. Share premium will be received :
a) With share application money
b) With the allotment money
c) Before the allotment is made
d) After the 1st call is made
Ans. b
493. A new company cannot issue shares _____
a) At par
b) At discount
c) At premium
Ans. b
494. During inflation, issue of material from the stores is charged to the products at the
highest price under
a) LIFO method
b) FIFO method
c) Average cost method
Ans. b
495. In case of bad debt, the amount should be debited to:
a) Bad debts account
b) Customer account
c) Discount account
d) None of these
Ans. a
496. A clubs would be a ________ account
a) Real
b) Personal
c) Nominal
Ans: b
497. Which of the following terms is related to Accounts of Electricity Company?
a) Clear profit
b) NPA
c) Work uncertified
d) Claims outstanding
Ans: a
498. Cost recovery using MACRS is calculated by
a) Rate divided by cost
b) Rate multiplied by cost
c) Rate plus cost
Ans: a
499. Trial balance in which the debit and credit total of each ledger account are shown in
the two amount columns against the name of the account
a) Gross Trial Balance

b) Net Trial Balance
c) Trial balance
d) All of the above
Ans: a
500. Which of the following is an operating expense?
a) Bad debts
d) All of the above
Ans: d
501. If lease charges of the year exceed the depreciation charge of the year then ________
a) Lease equalization account is debited (with the difference)
b) Lease equalization account is credited (with the difference)
c) Lease terminal adjustment account is debited (with the difference)
Ans: a
502. When the exchange of currencies takes place on the second working day after the deal,
it is known as _____
a) SPOT
b) TOM
c) CASH
d) READY
Ans: a
503. The technique(s) that can be suggested to the decision maker, who is faced with the
problem of appraising investments where the future cash flows are not certain is ___
a) Expected NPV rule
b) Risk adjusted discount rate approach
c) Sensitivity analysis
d) All of the above
Ans: d
504. Abstract or list showing the debit or credit balance of various accounts is called
a) Trial balance
b) Gross trial balance
c) Net trial balance
d) All of the above
Ans: d
505. Dual concepts results in accounting equation :a) Capital + Liabilities = Assets
b) Capital = Assets
c) Revenue = Expenditure
d) Capital + Profit = Assets + Expenditure
Ans: a
506. Amount paid to the petty cashier is called ___
a) Advance amount
b) Loan amount
c) Imprest amount
d) Petty cash amount
Ans: c
507. Which of the following statements is False?
a) If assets increase and liabilities do not, the capital will increase
b) If assets increase and liabilities also increase by same sum, the capital will remain same
c) A reduction in the amount of assets will amount to equivalent reduction in the net worth
d) An increase in the amount of liabilities with no corresponding increase in assets will
increase the amount of capital
Ans: d
508. In Lease the ownership of the asset remains with the
a) Lesser
b) Lessee
c) Bailor
d) Bailee
Ans: a
509. Heavy initial expenditure on advertising the launch of a new product should be
classified as
c) Loss expenditure
d) Deferred revenue expenditure
Ans: d
510. Choose the sentence which speak about illegal association
a) The unregistered association of 10 persons to do banking business
b) The unregistered association of 50 persons to do non-banking business
c) The unregistered association of 20 persons to do business other than banking
d) The unregistered association of 10 persons to do business other than banking
Ans: b
511. Statement A: In accordance with the going concern concept in accounting, a business
is considered as having an indefinite life. Statement B: Withdrawal of cash from business by
the proprietor will be credited to cash account.
c) Both statements are false
d) Both statements are true
Ans: d
512. Three columnar cash book records :a) Cash transactions only
b) Both cash and bank transactions including discounts
c) Both cash and bank transactions excluding discounts
Ans: b
513. Indirect expenses appears on ___ side of ___ account
a) Debit, Trading
b) Credit, Trading
c) Debit, Profit and Loss
d) Credit, Profit and Loss
Ans: c
514. Identify the wrong pair :a) Outstanding expenses Nominal account
b) Net worth less reserves and surplus Balance in P&L account
c) Balance sheet Financial position
d) Profit & Loss account (Dr Balance)
Ans: b
515. 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-payment of Rs. 4, the share capital account will be
debited by
a) Rs. 15
b) Rs. 10
c) Rs. 4
d) Rs. 6
a) A Bill of exchange which arises out of trading relationship of two persons is called as a
Trade Bill
b) Acceptance is voluntary for a Bill of exchange
c) In general acceptance, the drawee agrees with some of the conditions of the bill
d) Drawee is a person to whom the bill is endorsed
Ans: a
a) The owner of the asset is known as lessor
b) The user of the asset is known as lessee
c) The ownership of the asset remains with the lessor
d) All of the above
Ans: d
518. The debit side of cash book is called_____ and credit side is called ____
a) Payment, Receipt
b) Debit
c) Receipt, Payment
d) Payment
Ans: c
519. The cost formulae recommended by Accounting Standard 2 for valuation of inventories
are
a) FIFO or Weighted Average
b) Standard cost
c) LIFO or latest purchase price
d) All of the above
Ans: a
520. The investment under held to maturity should not exceed ____ of banks total investment
a) 25%
b) 75%
c) 5%
Ans: a
521. Shares issued by a company to employees or directors at a discount for consideration
other than cash for providing know how or making available in the nature of IPR or value
addition re known as
a) Equity shares without voting right
b) Sweat equity shares
c) Employees stock options
d) Convertible preference shares
Ans: b
522. Income and Expenditure Account is
a) Personal account
b) Real account
c) Nominal account
d) Either Real or Personal account
Ans: c
523. A chartered accountant rendering accounting services on a fee basis is a /an _____
accountant
a) Private
b) Internal
c) Government
d) Public
Ans: d
526. The expenses which help to generate income over a period of years are called
a) Revenue
c) Deferred capital expenditure
d) Capital expenditure
Ans: d
527. In management accounting capital employed is
a) Some total of all assets
b) Some total of fixed assets
c) Share capital + reserves + long term loans
Ans: c
528. Which of the following statements is true?
a) Assets are to be shown in the balance sheet at the values realizable on liquidation
b) Money measurement concept
c) Contingent liability is shown in the balance sheet due to convention of disclosure
d) All are true
Ans: c
529. Select the incorrect statement in respect of utilization of share premium
a) It is used for the purpose of buy back of shares
b) It is used for payment of dividend in case of inadequacy of profits
c) It is used for writing off preliminary expenses
d) It is used for issue of fully paid bonus shares
Ans: b
530. Mark out the non operating expenses among the following
a) Miscellaneous office expenses
b) Depreciation of plant and machine
c) Interest on debenture

Ans: c
531. Which of the following is not one of the approaches for measuring operational risk?
a) Basic Indicator Approach
b) Standardized Approach
c) Advanced Measurement Approach
d) Basic Measurement Approach
Ans: d
532. Amount received towards Endowment Fund is
a) Revenue receipt
b) Capital receipt
c) Deferred revenue receipt
d) Sales receipt
Ans: b
533. Money receipt in advance from share holder before it is actually called up by the
company is
a) Debited to calls in Arrears Account
b) Debited to calls in Advance Account
c) Credited to calls in Advance Account
d) Credited to Share Capital Account
Ans: c
534. Which of the following is a real account?
a) Salaries
b) Shares and debenture or companies
c) Debtors account
d) Bank account
Ans: b
535. Freight expenses for moving new machinery to factory is
a) Revenue expenses
c) Capital expenditure
Ans: c
536. Mr. A, a customer directly deposited to Rs 1500 into firms bank account. The same is
a) Recorded in bank column on the debit side of cash book
b) Recorded in cash column on the credit side of cash book
c) Recorded as contra entry
d) Both A and B are correct
Ans: d
537. What does debiting the profit and loss account create?
a) Dividend equalization fund
b) Sinking fund for redemption of debentures
c) Provision
d) All of the above
Ans: c
538. The system of recording transactions based on dual concept is called
a) Double account bookkeeping
b) Single entry system
c) Double entry system
Ans: c
a) Proprietors account
b) Drawing account
c) Capital account
d) Cash account
Ans: c
540. . Statement A: Wages and salaries appear on profit and loss account
Statement B: Salaries and wages appear on trading account
c) Both the statements A and B are false
d) Both the statements A and B are true

Ans: c
541. Total of debit side is greater than credit side of an account implies
a) Credit balance
b) Profit
c) Loss
d) Debit balance
Ans: d
542. The concept of realization would imply
a) When cash is received from debtors
b) When order is received
c) When goods are delivered to customer
d) Meeting the plan targets
Ans: c
543. In ________ acceptance the drawee puts his signature across the face of the bill with or
without the work accepted
a) General
b) Specially
c) Ordinary
Ans: a
544. Which of the following is NOT a function of bank reconciliation statement?
a) To check for errors in balance sheet
b) To update omitted entries into the cash book
c) To update omitted entries into the bank statement
d) To reconcile the difference in bank statement and cash book
Ans: a
545. Indian Oil Company Ltd. is ________ account
a) Real
b) Personal
c) Nominal
d) Artificial Real
Ans: b
546. . Statement A: Shares are not freely transferable in private limited company.
Statement B: Shareholders liability is limited in a public company.
c) Both the statements are true
d) Both the statements are false
Ans: c
547. Select the wrong pair among the following
a) Outstanding expenses Nominal account
b) Profit and loss account (Dr Balance)
c) Net worth less reserves and surplus Capital
d) Balance sheet Financial position
Ans: a
548. Choose the item which will appear last in respect of vshare capital in company balance
sheet
a) Paid up capital
b) Subscribed capital
c) Calls in advance
d) Issued capital
Ans: c
549. If the assets of a business are Rs 80,000 and liabilities Rs 60,000, what is the amount of
owners equity?
a) Rs 20,000
b) Rs 1,40,000
c) Rs 60,000
d) Rs 80,000
Ans: a
550. The cost of a van is 3,250 with a residual value of Rs 750. The van has an estimated
useful life of 5years. The amount of depreciation expense using sum of the years digit to
nearest dollar in year 5 is
a) 167
b) 500
c) 833
d) 333
Ans: a
551. Which of the following is not true?
a) There is no difference in appearance between trade and accommodation bill
b) A bill of exchange must be accepted
c) Drawee is maker of a bill
d) Accommodation bill is for an imaginary transaction.
Ans: c
552. Which one is not based on passage of time?
a) Straight line
b) Sum of the years
c) Declining balance
d) Units of products
Ans: a
553. Legacy is a donation through will by the donor. It is a
a) Capital receipt
b) Revenue receipt
c) Either (a) or (b)
Ans: a
554. The accounting equation is in accord with the fundamental ____ concept of accounting.
a) Money measurement
b) Going concern
c) Realization
d) Dual aspect
Ans: d
555. Raw Material Consumed equals to
a) Opening stock + Purchases + closing stock
b) Opening stock + Purchases minus closing stock
c) Opening stock
Ans: b
556. Select the incorrect sentence
a) Whenever there is no profit or inadequate profit, dividend cannot be declared
b) The right to claim dividend lapses when there is no profit in case of cumulative
preference shares
c) When the company makes profit, arrears of preference dividend are cleared first
d) The act prohibits the issue of any preference shares which are irredeemable
Ans: b
557. Unfavourable bank balance means :
a) Credit balance in pass book
b) Debit balance in pass book
c) Credit balance in cash book
d) Both (b) and (c)
Ans: a
558. Accounting standards are statements prescribed by :
a) Law
b) Government regulatory bodies
c) Bodies of share holders
d) Professional accounting bodies
Ans: d
559. Select the incorrect statement in respect of form of balance sheet of companies
(Liabilities side)
a) Sinking fund is shown under Unsecured Loans
b) Loans and Advances from banks are grouped under the head Secured Loans
c) Unclaimed dividend is grouped under the head Current Liabilities
d) Proposed dividend is grouped under Provisions
Ans: a
560. Select from the following , a statement which speaks about liabilities of an entity.
(a) The liabilities consist of claims of the owners
(b) The liabilities consist of claims of the owners and outsiders
(c) The liabilities consist of claims of the outsiders
(d) None of the above

Ans: b
561. 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?
a. Rs. Nil
b. Rs. 1100
c. Rs.500
d. Rs.600
Ans: d
.
562. Select from the following a sentence which is wrong
a. If assets increase and liabilities do not , the capital will increase
b. If assets increase and liabilities also increase by same sum , the capital will remain same
c. A reduction in the amount of assets will amount to equivalent reduction in the net worth
d. An increase in the amount of liabilities with no corresponding increase in liabilities will
increase the amount of capital
Ans: d
563. 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
a. increases by Rs.50000
b. reduces by Rs.40000
c. increases by Rs. 20000
d. reduces by Rs. 20000
Ans: c
.
564. Mr.Ghatge commenced his business on 1st April, 2006 with Capital of Rs.1,00,000. He
did good business during the year and earned handsome profit. At the end of 31st March,
2007, his financial position was: Fixed Assets Rs.1, 20,000 and bank balance of Rs.33000
and Creditors Rs. 17000. What was his net profit for the year 05-06?
a. Rs. 36000
b. Rs.70000
c. Rs.53000
Ans: a
.
565. One of the pairs given below is wrong. Select the wrong pair.
a. Outstanding expenses Nominal account
b. Profit and Loss Account (Dr. balance) Application of funds
c. Net worth less reserves & surplus Capital
d. Balance sheet Financial position
Ans: a
566. Choose the sentence which speak about illegal association
a. The unregistered association of 10 persons to do banking business
b. The unregistered association of 50 persons to do non banking business
c. The unregistered association of 20 persons to do business other than banking
d. The unregistered association of 10 persons to do business other than banking
Ans: b
567. From the following ,find a sentence which is false in respect of partnership
(a) If the partnership is following the Fixed Capital Account Method salary payable to a
partner is credited to the partners current account
(b) Drawings made by partners are never entered in the Profit and Loss Appropriation
Account.
(c) In the Fluctuating Capital Account Method the balance in the capital account always
remains the same
(d) The capital account of a partner is required to be opened in both the Fixed Capital
Account Method and Fluctuating Capital Account Method
Ans: c
568. From the account given below, select the account which is wrongly included in Profit &
Loss Appropriation Account at the debit side
a. Drawings Account
b. Partners Salary Account
c. Interest on Loan Account
d. Commission to Partners Account
Ans: a
569. The average net profits expected are Rs.108000 per annum before charging
remuneration of Rs. 18000 to partner . The capital employed in the business is Rs.6,00,000.
The rate of return expected on capital employed of a firm is 10%. What is the value of
goodwill on the basis of two years purchase of super profits.
a. Rs.108,000
b. Rs.60,000
c. Rs.78,000

Ans: b
570. 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.
a.For increase in the value of assets-Debit Asset Account and Credit Revaluation Account.
b.For decrease in the value of liabilities- Debit Liabilities Account and Credit Revaluation
Account.
c.For Profit on revaluation of assets and liabilities Debit Old Partners Capital Account in
old profit sharing ratio and Credit Revaluation Account
d.For decrease in the value of assets -Debit Revaluation Account and Credit Asset Account
Ans: c
.
571.Select the True statement from the following
a.Interest on drawing is an income to the partnership firm
b.Joint Venture is a permanent partnership firm
c.Goodwill is a tangible asset of the firm
d.In the absence of partnership agreement , partners share profit and loss in proportion to
the capital contributed by the partners.
Ans: a
572. .Select the incorrect statement in respect of companies.
a. member of a company can enter into contract with a company
b.It is compulsory to register a joint stock company
c.If all but one member of a private company becomes insolvent ,it affects the existence of
the organisation
d.Shareholders are not liable for the acts of the company
Ans: c
573. .Select the incorrect sentence
a.Whenever, there is no profit or inadequate profit, dividend cannot be declared
b.The right to claim dividend lapses when there is no profit in case of cumulative preference
shares
c.When the company makes profit , arrears of preference dividend are cleared first
d. The Act prohibits the issue of any preference shares which are irredeemable
Ans: b
574.Select the incorrect statement
a.Authorized capital is the capital with which the company is registered
b.Issued capital is equal to its authorized capital
c.Authorized capital, issued capital, subscribed capital, called up capital and paid up capital
cannot be same
d.The amount which the company has asked its shareholders to pay is called up capital of
the company.
Ans: c
575. .Following are the journal during the process of application to allotment stage . One of
the entries is wrong. Select the wrong entry.
a.Debit bank account and credit share application account ( when application money is
received)
b.Debit share application account and credit share capital account (application transferred
to share capital account)
c.Debit share capital and credit share allotment account ( for recording allotment money
being fallen due )
d.Debit bank account and credit share allotment account ( for receipt of allotment money)
Ans: c
576.Select the incorrect statement in respect of calls in advance
a.The company may accept from shareholders , the uncalled amount on shares even before
it is fallen due
b.The article of association must permit such acceptance of advance call money
c.Interest on calls in advance can be paid but the maximum is upto 6%
d.The amount of calls in advance is part of the paid up share capital
Ans: d
577. .Select the incorrect statement in respect of utilization of share premium
a. it is used for the purpose of buy back of shares
b. it used for payment of dividend in case of inadequacy of profits
c. it is used for writing off preliminary expenses
d. it is used for issue of fully paid bonus shares
e. Ans: b
578.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.
a.Debit bank account by Rs.900
b.Debit forfeited shares by Rs.500

c.Credit share capital by Rs.1000
d.Credit forfeited shares by Rs.400
Ans: d
579.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.
a.Credit Forfeited shares Account by Rs.200
b.Credit Share allotment Account by Rs.200
c.Credit share premium Account by Rs.100
d.Credit Share first call Account by Rs.200
Ans: c
580.Select the source which is not valid for issue of bonus shares
a.Share premium
b. Revaluation reserve created by revaluation of fixed assets
c. Capital reserve
d. Capital redemption reserve
Ans: b
581.Select the incorrect statement in respect of form of balance sheet of companies ( Asset
side).
a.Live Stock is grouped under the head current Asset
b.Balance of unutilized monies raised by issue is grouped under the head Investments
c.Interest paid out of capital during construction is grouped under the head Miscellaneous
Expenditure
d.Vehicles are grouped under the head Fixed Asset
Ans: a
582.In case any sum has been written off on a reduction of capital or revaluation of assets,
figures and date of reduction for a period of
a.1 year thereafter
b.2 years thereafter
c.3 years thereafter
d.5 year thereafter
Ans: d
583.One of the accounts is wrongly debited to Profit and Loss Appropriation A/c of a
company. Name the wrong account debited
a. Interim dividend
b. Proposed dividend
c. Provision for tax
d. Capital redemption reserve
Ans: c
584.Investments, Advances, Fixed Assets and other Assets are part of Schedule
Nos.respectively
a. 6,7,8,9
b. 7,8,9,10
c. 8,9,10,11
d. 9,10,11,12
e. Ans; c
.
585..Liability for partially paid investments in respect of banking companies is grouped
under the head
(a) Investments
(b) Other assets
(c) Other liabilities and provisions
(d) Contingent liabilities
(e) Ans: d
586.One of the items is a misfit in a group namely other income of a banking company.
Select this item from the following
(a) Income on Investments
(b) Profit on sale of investments
(c) Profit on revaluation of investments
(d) Profit on exchange transactions
Ans: a
586.In banking company, matured term deposit to be shown under
(a) demand deposits
(b) saving bank deposits
(c) term deposits
(d) other liabilities and provisions
Ans. a
587..Advances given to a staff by a bank as a employer should be included in
(a) other assets

(b) advances
(c) investments
(d) none of the above
Ans: a
588..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.
(a) depreciation on motor cars
(b) depreciation on stationary and stamps
(c) depreciation on furniture
(d) depreciation on non-banking assets
Ans: b
589.The list given below consists of various securities. Identify the security which is SLR
security
(a) Securities issued by local authorities
(b) Shares
(c) Bonds
(d) Subsidiaries
Ans: a
590. Acceptances, endorsements and guarantees are shown as
(a) other assets
(b) contingent liabilities
(c) advances
(d) other liabilities and provisions
Ans: b
591. Select the false statement in respect of banking
(a) A company accepting deposits for the purpose of lending or investment is a banking
company
(b) 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
(c) A company besides accepting deposits and lending is dealing in goods in connection with
the realisation of a security is a banking company
(d) A company besides accepting deposits and lending is in the business of collections or
negotiating bills of exchange is a banking company.
Ans: b
592.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.
(a) Banking company trustees and executors
(b) Form B Profit and Loss Account
(c) Ledger book Letter of credit register
(d) Other liabilities and provisions Schedule 5
Ans: c
593Choose the wrong pair from the following. The information given in the pair is
pertaining to banking companies
(a) Demand Deposits Compulsory deposits under excise rules
(b) rebate on bills discounted unexpired discount
(c) Operating Expenses Schedule 14
(d) Other Income Profit on sale of investments less loss on sale of investments
Ans: c
596..Identify a pair which is mismatch from the following pairs in respect of Company
Accounts
(a) Miscellaneous Expenditure Preliminary Expenses
(b) Contingent Liabilities footnote to balance sheet
(c) Debentures Unsecured Loans
(d) Outstanding Expenses Current Liabilities
Ans: c
597.Identify a pair which is mismatch from the following pairs in respect of Company
Accounts
(a) Discount on issue of shares Profit and Loss Account
(b) Bill discounted contingent liabilities
(c) Interest accrued and due on debentures Secured Loans
(d) Mortgage Loan Secured Loans
(e) Ans: a
598.One of the statements in respect of Profit & Loss Adjustment account is incorrect, rest
are correct. Mark the incorrect sentence.
(a) The account is credited with closing balance of profit and loss account of last year
(b) The account is credited with current years net profit
(c) The account is debited with provision for taxes
(d) The account is debited with provision for dividend
Ans: c
599..The two portion of each pair relating to partnership accounts has got some
pair from the following
(a) Management of business business may be run by one or some or all partner
(b) Treatment of losses insolvency of a partner
(c) Loan from partners No interest as partners are owners
(d) Goodwill super profit method
Ans: c.
.
.
.
600.Choose the incorrect statement from the following statement which are pertaining to
company accounts
(a) The company is an artificial person
(b) A member of a company may bind the company by its actions.
(c) The shareholders are not liable for the acts of the company
(d) The premium received on shares may be distributed among shareholders.
Ans: b
601.A new company cannot issue shares
(a) at par
(b) at discount
(c) at premium
(d) none of the above
Ans: b
602.A company wishes to pay dividend on shares. State which of the following may be used
for the purpose.
a.Premium of shares
b.Profit on re-issue of forfeited shares
c.General Reserve
d.None of the above
Ans: c
603.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 payment of Rs. 4, the Share Capital Account will be
debited by
a.Rs.15
b.Rs.10
c.Rs.4
d.Rs.6
Ans: b
.
604.Money received in advance from shareholder before it is actually called up by the
company is
a.Debited to Calls in arrears Account
b.Debited to Calls in Advance Account
c.Credited to Calls in Advance Account
d.Credited to Share Capital Account
Ans: c
605.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
a.Rs.8
b.Rs.10
c.Rs.9
d.Rs.7
Ans: a
606.Dividend are usually paid on
a.Called up capital
b.Paid up capital
c.Authorised capital
d.None of the above
Ans: b
607.Preliminary Expenses is
a.Fictitious Asset
b.Current liability
c.Current asset
d.None of the above
Ans: a
608..Choose the correct treatment for premium paid on Joint Life Policy when premium
paid is treated as an expense.
a.Premium amount is debited to P & L account every year and when claim becomes due
then to be shared by all partners
b.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

c.Joint Life Policy and Joint Life reserve Account are adjusted to bring them down to
surrender value of policy.
d.None of the above.
Ans: a
.
609. What is the Rate of Interest if Rs.2000/- when invested on Simple Interest becomes
Rs.4000/- in 8 years
a. 13.25 % b. 13.50 %
c. 12.5 % d. 12.75 %
Ans: c
610. Rs.2000/- when invested on Simple Interest becomes Rs.4000/- in 8 years, in how many
years it will become Rs.8000/-
a. 12 b. 16
c. 20 d. 24
Ans: d
610.What is the Present Value of Rs.7500/- to be received after 4 years, if the current
investment rate is 7.5% pa
a. 5616 b. 5576
c. 5689 d. 5715
Ans: a
611. I need Rs.40000/- to enable me to purchase a Bike after 2 years. How much amount I
should invest if the rate of interest is 8% pa. Compounded quarterly.
a. 34140 b. 35570
c. 32480 d. 33845
Ans: a
612.Diminishing balance method of depreciation is one, according to which
a. The amount on which depreciation is charged declines from year to year
b. The rate at which depreciation is charged declines from year to year
c. The rate as well as the amount declines from year to year
d. The rate & the amount remains the same but the depreciation amount declines from year
to year as per government guidelines
Ans: a
613.Expenditure incurred on Research & Development is an example of

a. Capital expenditure
b. Revenue expenditure
c. Deferred revenue expenditure
d. It indicates cash withdrawal
Ans: c
614. There is overdraft of Rs.17000/- as per cash book of the trader, he deposited a cheque
of Rs.7000/- in the bank which is not yet credited to the traders account. What is the
balance as per bank pass book
a. Rs.10000/- b. Rs.17000/c. Rs.24000/- d. None of these
Ans: b
615.RBI has put minimum Capital to Risk-Weighted Assets Ratio (CRAR) for New Private
Sector Banks at
a. 8% b. 9%
c. 15% d. Not Applicable to Pvt. Sector Banks
Ans: b
616
.Which of the following maxim is applied in the case of Indirect Quotation.
a. Buy Low Sell High b. Buy High Sell Low
c. Buy Low Sell Low d. Buy High Sell High
Ans: b
617. Reconciliation of overcasting on receipts side of cash book
a) Increases the balance in the cash book.
b) Increases the balance in the passbook.
c) Decreases the balance in the cash book.
d) Decreases the balance in the passbook.
Ans: a
618.Which of the following is true
a) Bank Reconciliation Statement(BRS) is an account.
b) BRS is prepared by the bank.
c) BRS shows causes of disagreement between cash book & passbook.
d) BRS shows only excess of cash book over passbook.
Ans: c
619. If a trader enjoys an overdraft facility, then

a) His passbook will show debit balance.
b) His cash book will show debit balance .
c) excess of deposits over withdrawals
Ans: a
a) Shows a higher passbook balance than cash book.
b) Shows a lesser passbook balance than cash book.
c) Shows no difference.
Ans: a
621. Goods worth Rs.2000 sold to Vijay was entered in purchase account;
a) Credit purchases and credit sales to the extent of Rs.2000 each & debit Vijay by Rs.2000
b) Debit purchases and debit sales to the extent of Rs.2000 each & credit Vijay.
c) Debit sales to the extent of Rs.4000.
d) Credit purchases to the extent of Rs.4000.
Ans: a
622. Machinery worth (WDV) 1000/- sold for 1200/- is entered in sales register. The
rectification is
a) Credit sales 1200/-, debit machinery 1000/- and debit P&L a/c 200/-.
b) Debit sales 1200/- , credit machinery 1000/- and credit P&L a/c 200/-.
c) Credit machinery 1200/-, debit sales 1000/- and debit P&L a/c 200/-.
d) Debit machinery 1200/-, credit sales 1000/- and credit P&L a/c 200/-.
Ans: b
623. Sales return of amount Rs.1000 from Vijay was wrongly entered in purchase book.
a) Debit sales to the extent of Rs.2000.
b) Credit purchases to the extent of Rs.2000
c) Credit Vijay Rs.2000, debit sales and purchases to the extent Rs.1000, each.
d) Debit sales return by Rs.1000 and credit purchases by Rs.1000
Ans: d
624. Which of the following will not affect Trial Balance
a) Goods sold on credit not recorded in books.
b) Overstating of sales register.

c) Rent account credited instead of debit.
d) Salary debited to the extent the amount.
Ans: a
625. Suspense a/c is not used in which of the following cases.
a) before trial balance.
b) after trial balance.
c) before final accounts.
d) none of the above.
Ans: a
a) Trial balance ensures arithmetical accuracy.
b) Trial balance errors are not located then the difference is sent to suspense a/c.
c) Trial balance is base for final accounts.
Ans: d
627. Which of the following are true
a) Nominal accounts always have credit balances.
b) Real accounts always have debit balances.
c) Debit balance in ledger account is credit balance in trial balance.
d) P&L a/c appears in trial balance.
Ans: b
628.Freight expenses for moving new machinery to factory is
a) Revenue expenses
c) Capital expenditure
Ans: c
629.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
Ans: c
630. Which of the following is not a deferred revenue expenditure

a) Preliminary expenses for setting up a company.
b) Amount raised through Rights issue.
c) Huge sales promotion expenditure in launch of new product
d) Cost of preparing project report
Ans: b
631 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
Ans: d
632. 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)
Ans: a
633. 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)
Ans: c
634.Which of the following is most desirable
a) Pricing issue of goods to match current material costs
b) Overstating profits
c) Understating profits
Ans: a
635.As per accounting standards which of the following is not a preferred method
a) LIFO
b) FIFO
c) WACM
d) All of them
Ans: a
632.Read the following and answer :

Drawer is A
Drawee is B
Endorsee is C
In the books of A, Bills receivable a/c is debited and Bs a/c is credited, then
a) Bill accepted by A
b) Bill accepted by B
c) Bill retired by B
Ans: b
633.In the books of B , 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
e) Ans: b
634. Which of the following is not true
a) there is no difference in appearance between trade
and accommodation bill.
b) An Usance bill of exchange must be accepted
c) Drawee is maker of a bill
d) Accommodation bill is for an imaginary transaction
Ans: c
635.Noting charges are
a) Paid to bank for dishonour
b) Paid to drawer for dishonour
c) Paid to notary public for recording dishonour
Ans: c
636.In sum of digits method for 5 years which of the following is the 1st years allocation
ratio.
a) 1/15
b) 2/15
c) 3/15
d) 4/15
e) 5/15
Ans: e
b) Total finance income = total lease rent cost of asset + residual value
c) Total finance income = cost of asset total lease rent + residual value
d) Cost of the asset = total lease rent + residual value + total finance income
e) Ans: b
638.In operating lease the period is
a) Less than the useful life of the asset.
b) Greater than the useful life of the asset.
c) Equal to the useful life of the asset.
Ans: a
639.In comparing lease & hire purchase (H P) there are differences & similarities.
Of the following which one is not true?
a) In lease the user of the asset does not retain it, while in H P he does.
b) In lease the user does not claim depreciation while he does in H P.
c) Payment of rentals is on instalment basis in both.
d) The users of assets in both lease & H P run the risk of obsolescence.
Ans: d
640. Receipts and payments statement shows
a) Only revenue receipts and payments during a year.
b) Only capital receipts & payments during a year.
c) Both capital and revenue receipts during a year.
d) Cash Only transactions.
Ans: d
641.Which of the following is not true
(a) Depreciation is an expense charged to the P & L a/c.
(b) Depreciation is not a part of the operating costs.
(c) Assets that are depreciated are tangible assets.
(d) Depreciation is like an insurance expense.
Ans: b
642. Under written down value method of Depreciation the W D V of the asset is always
a) equal to zero
b) < zero
c) > zero
d) No Such Method
Ans: c
SL No MCQ Options Answer
643 The main inter-related functions of commercial banks are: Tick the incorrect one. 1.
Holding of Deposits
2. Creating credit through trending & investments.
3. Provides a mechanism for payments and transfer of funds for various productive activities
4. Holding cash on behalf of RBI
5. None is incorrect
4
644 The core activity of a bank is: 1. acceptance of deposits
2.maintenance of deposit account
3. creating credit
4. (1+2)
5. (1+3)
4
645 Types of Deposit Accounts: Find the odd man 1.Demand Deposit
2. Term Deposit
3. Savings Deposit
4. Fixed Deposit
5.(3+4)
5
646 Product of a bank not falling under Loans & Advances. 1.Overdraft
2.Cash Credit
3.Bill Discounting
4.Securitization of Loan
5. None
4
647 Accepting deposit by a corporate isactivity 1.Banking Equivalent
2.Para Banking
3. Quasi Banking
4. Semi Banking
5. None
5
648 Tick the irrelevant in respect of Banking in India as per B.R.Act 1949 1Prohibited
Activities: Sec 8
2.Definition of Banking: Sec 5
3.Name of a Bank: Sec 7
4.Permitted Activities: sec 6
5. None is irrelevant
5
649 Not considered loan with collateral security 1Mortgage of landed property in Cash
Credit for Working Capital Finance
2.Mortgage of Building against Housing loan to individual
3.Term loan for purchasing Machine where Third Party Guarantee Taken
4. Demand Loan against growing crop with mortgage of land
5. All are collateral security
3
650 Third party guarantee to secure a loan or advance 1. Secured
2. Unsecured
3.Quasi Secured
4.Partly Secured
5. (3+4)
1
651 Give an example where Mortgage of House Property is Primary security but TPG. Is
collateral one 1. CC for WCF secured by Mortgage & TPG
2.Mortgage of Land for construction of house on a plot of land where TPG is taken
3.Loan against agricultural produce already harvested where mortgage & TPG have been
taken
4. Loan for establishment of Retail shop of Medicine where mortgage of Building & TPG
have been offered
5. In no case
2
652 In which of the following case primary security is created out of banks fund under loan
1.Housing loan to individual
2.Consumption loan
3.Gold loan
4.Demand loan against Fixed Deposit
5. Overdraft against works order

1
653 Mortgage of Immovable Property is always considered as Collateral Security. 1. True
2. False 2
654 Third Party Guarantee is neither Primary Security nor Collateral Security. 1. True
2. False 2
655 Not considered as unsecured loan: 1.Personal loan
2.Loan to pensioner against pension drawn from the same bank
3. OD against Receivables
4. OD against Demat Share
5. All
4
656 Not a para-banking activity as per RBI 1.Investment in venture capital fund
2.MMMFS
3.Merchant Banking
4.Leasing & Hire purchase
5.Dealing in securities on behalf of customer
5
657 Para banking activity: 1. Factoring
2.Receipt of foreign currencies on behalf of registered organizations
3. DEMAT services
4. CMS
5. None 1
658 Not falling under Demand Deposit: 1. Call Deposit Receipt
2.Credit balance held in Suspense A/C Sundry Creditor
3.Credit balance of Dormant / Inoperative Savings Account
4.Overdue Time Deposit
5. All are Demand Deposit
659 Tick the incorrect one 1. The general power vested with banks to operate Portfolio
Management Services (PMs)since withdrawn
2.Bank sponsored NBFCs are allowed to offer PMs to their clients
3.Those banks who can provide PMs on their own are allowed
4. Banks who are allowed to do PMs can do so even free of cost
4
660 RBI guidelines with regard to PMs, tick the incorrect one 1.PMs should be in the nature
of Investment Consultancy / Management
2.Entirely at customers risk without guaranteeing pre determined return
3.Funds accepted for PMs from the clients may be entrusted to another bank for
management
4. (2+3))
5. None is incorrect 5
661 Banks can act as PDs 1. True
2. False 1
662 Insurance Business by bank. Tick the incorrect one 1. Can act as Corporate Agent
2. Can act as Insurance Broker
3.can set up joint venture with equity contribution on risk participation basis
4.can invest in insurance companies for infrastructure & service support
5.None is incorrect
5
663 Tick the incorrect one in respect of Banks Pension Fund Management Service 1.May
establish subsidiaries for Pension fund management service
2. (1) subject to prior approval of RBI
3.Eligibility Criteria has been prescribed by RBI
4. Pension Fund Management service is not allowed to provide department
664 SCBs are not allowed to act as Sponsor to Infrastructure Development Fund 1. True
2. False 2
665 Which of the following Underwriting Service bank can not provide? 1.Underwriting of
Corporate share & debenture though the corporate are banks client
2. Underwriting of corporate share & debentures where the corporate are not banks clients
3.Unsderwriting of PSU Bonds
4. Subscribe out rightly to corporate share / debentures initially but later to sell to the
public
666 Banks are not permitted to undertake the business of Retaining of Govt. Securities. 1.
True
2. False
667 Back office of a bank must be located in the same premise where front office activity is
conducted 1. True
2. False
668 Front Office is banks department that come in contact with the client. Tick the
irrelevant on this score. 1.Marketing
2.Sales
3.Customer Relation
4. MIS
5. None
4
669 Extensive use of outsourcing is to 1. Reducing costs
2. Retrenchment of staff
3.Use of expertise
4.(a+c)
e. All 4
670 Banks should not outsource. (tick the incorrect one) 1.Internal Audit function
2.Compliance Function
3.Secision making function
4.(2+3)
671 Risks associated with outsourcing of banking activities. (tick the incorrect one)
1.Intraday Payment Risk
2.Loss of cash
3.both
4. Loss of Financial Instruments
5
672 The off-balance sheet items may not involve accounting entries 1. True
2. False
673 The job manual is not only guide to operational activities but also provides full ledged
legal framework of banking operation 1. True
2. False 1
674 Banks can set up Mutual Funds after getting necessary permission from: 1. SEBI
2. ROC
3. RBI
4. GOI
5.AMFI
3
675 As per FIMMDA the Mid-office is responsible for? 1. Dealing Activities
2. Risk Management
3. Reconciliation
4. (1+)
5.(2+3) 5
676 RBI function are classified into mainly: Tick the incorrect: 1. Supervisory
2. Regulatory
3. Promotional & Developmental
4. Refinance
5. None is Incorrect 5
677 Tick the unmatched one: 1. Financial Services: Money Market
2. Financial Intermediaries: Residual NBFC
3. Immovable Property: Mortgage
4. Paper Security: Pledge
5. Book debt: Lien 5
678 FIMMDAs guideline does not cover: 1. Call Money
2. Cross Country Interest Rate Swap
3. CDs
4. CPs
5. None 2
679 Match the unmatched one with regard to KYC 1. CIP: Identity document and address
proof
2.CAP:Acceptance of identity and address proof to the satisfaction of bank
3. Monitoring: Updation of KYC data
4. Risk Management: Providing threshold need to customer
5. None 5
680 Copy of certificate for commencement of business may be taken as identity document
for corporate account. 1. True
2. False 2
681 Which may not be taken as identity proof for traditional partnership account? 1.
Partnership Deed
2. Registration Certificate
3. Power of Attorney
4. Partnership Declaration
5. Telephone Bill in the name of the firm 4
682 Which document may not be taken as identity proof for account of proprietary concern?
1. Sale Tax/IT Return
2. CST/VAT Certificate
3. Trade License
4. Certificate Issued by
5. ICAI, ICWAI
6. ICSI etc.
7. None 7
683 Tick the unmatched about time interval for KYC updation for the customers. 1. High
Risk:3 years
2. Medium Risk: 8 years
3. Low risk: 10 years
4. All
5. None 1
684 Fresh photograph may not been insisted upon for minor customer attaining majority. 1.
True
2. False 2.
685 Which of the following is not falling under RBIs guidelines for recent simplification of
KYC norms? 1. Separate proof of address where identity document is having the address
2. Persons who do not have any of the officially valid document as listed in KYC guidelines
communication of RBI may open small value deposit account under relaxed KYC norms
3. Single document covering identity and proof of address are acceptable
4. No separate document for local address proof for the migrated people who provide that of
for permanent addresses
5. None 5
686 Which is incorrect in respect of Small Value Deposit Account under the cover of BSBD
account? 1. Aggregate credit maximum 1 lakh in arrear
2. Maximum withdrawal of Rs.10000 in a month
3. Balance outstanding cannot exceed Rs.50,000 at any point of time
4. Maximum number of withdrawal is 4 times in a month including that of through ATM
687 No separate KYC verification is needed at the time of creating linkage to SHG for all the
members in the group 1. True
2. False 1
688 KYC verifications of only the office bearers of SHG will serve the purpose, verification
for all members is not needed. 1. True
2. False 1
689 For account in the name of foreign student . Time period for
submission of proof of local address is allowed. 1. 6 months
2. 3 months
3. 1 year
4. 1 month
5. No such provision 4
690 For low risk customers . Time period may be allowed to submit KYC
documents after opening account. 1. 3 months
2. 6 months
3. 12 months
4. 1 month
691 The letter issued by UIDAI may be taken as officially valid documents for KYC
compliance provided it bears- Tick the incorrect one: 1. Name
2. Address
3. Number
4. Date of Birth
692 If address in Aadhar Card vis same as provided by the customer in the application form
for opening account, Aadhar can be accepted as officially valid document for both the
purpose of identity and address verification. 1. True
2. False 1
693 P-Adhar downloaded from UIIDAI website may be accepted for KYC compliance. 1. True
2. False
694 E-KYC as a valid process for verification of customers identity is provided in 1. BR. Act
1949
2. RBI Act1934
3. PMLA Act2002
4. FIU-IND Communication
695 Besides RBI guidelines for customers service, banks need to follow-Codes 1.
FIU-IND
2.Customers Grievance Cell
3. Ombudsman
4. BCSBI
5. None
4
696 Cashiers hand balance containing receptacle must be under the double log of the
cashier and the supervising officer along with all other receptacles in the strongroom which
are used for storing cash and small coin balances. 1. True
. False
697 The manager will also sign the cash balance group after agreeing the combined total of
the joint custody balance & the headcashiers/cashiers hand balances of the closing
balances of its cash scroll 1. True
. False 1
698 At the close of the working day the supervisory officer would verify that the
balance corresponds exactly with the entries in the cash balance group.
1. Cashiers hand balance
. Closing cash call balance
3. Final cash balance
4. Joint custody balance
5. None 4
699 Any shortage in the cash balance should be recovered on the same day from the
- who will in turn recover it from the cash department
employ. 1. Supervising official
. Branch Manager
3. Head Cashier/Cashier/Cash Officer
4. Option 3 along with from employee of the cash department on 50% sharing
5. To be meet up from the parties 3
700 Any excess cash received must be: 1. credited to sundry creditors account on the same
day
. Credited to sundry creditors account on the next working day
3. Credited to sundry creditors account after successive 3 working days if it could not be
detected/returned to the client from whom excess have been received.
4. At any cost it has to be detected for refund to the client who has tendered excess on the
same day
5. Neither be returned nor be credited but can be utilized for fulfilling any short found in
future. 1
701 Physical cash remittences to branches outside the town , tick the incorrect: 1. Should
be undertaken only if fund transfer could not be effected through the account with SBI or
any nationalized bank or other bank usually maintained
2. Cash should not be allowed to be carried without an armguard irrespective of local and
outside branches.
3. Cash remmittence should be accompanied by any employee, reliable subordinate staff
and armguard irrespective of local and outside branches.
4. The cash remittance box should be carried in the van provided by the bank irrespective of
local and outward branches.
5. Cash remittance register should be maintain with all records separating that of from local
branches as well as separate sections for inward and outward remittences irreapective of
local and outside branches. 3
702 Mr.A.K.Chatterjee is maintaining a Savings account with Burdwan branch of Modern

bank. Mr.Chatterjee conducted the following transactions from the account during the
month of August 2015. Cash deposit of 15000. Payment of cheques issued to the extent of
25000. Bank recovered cheque leave charges of Rs.250. Deposited three cheques for
collection of Rs.2500, 5250 & 10,000 out of which the first two cheques have been cleared
during the month. Received cheque in clearing by in numbers amounting 35000 out if
which a cheque amounting 25000 has been returned. Withdrawn cash by self and bearer
cheques for Rs. 15000. Determine the initial amount of cleared balance in the account
before conducting these operations if the present gross balance is Rs. 18,000. 1. Minimum
27,500
. Minimum 22,750
3. Minimum 45,500
4. Cannot be determined
5. None of the above 1
Question No. Question Options Answers
703 As banks are linked to national and international settlement systems, they could pose
torisk. 1. settlement risk
. Unsystematic risk
3. systematic risk
4. sovereign risk
5. none 3
704 STR needs to be submitted to1. RBI
.GOI
3.H.O.
4.FI-IND
5. No such return
4
705 STR stands for: 1.Special Transaction Return
. Suspicious Transaction Return
3. Special Transaction Report
4.Suspecious Transaction Report
5.None
4
706 CCR stands for: 1. Cash Credit Report
. Counterfeit Cash Report
3. Counterfeit Currency Report
4. Credit Conversion Report

5. None
3
707 CTR stands for: 1. Credit Transaction Report
. Cash Transaction Report
3. Critical Transaction Report
4. Counter Transaction Report
5. None
708 CTR is applicable for: 1. Single Transaction in cash for 10 lac or above /equivalent
foreign currency transaction
. Aggregate of cash transaction in a month Rs, 10 lacs and above where per transaction
volume is below 10 lacs / Equivalent Foreign currency transaction
3 (1+) subject to individual transaction under () is Rs. 50000 or more (equivalent foreign
currency transaction
4. 3 but Rs. 50000 criterion is not there
5. (1++3) but Foreign currency transaction is not included
3
709 CTR & CCR are reported to 1. RBI
. MOF,GOI
3. H.O.
4. FIU-IND
5. local PS officer in charge
710 BCSBI was constituted in terms of-Committee Recommendations: 1.
C.Rangarajan
.S.S.Tarapore
3. Aditya Puri
4. Nachiket Moor
5. Aswini Kr. Lahiri
711 BCSBI is an independent and autonomous body that was established in 2003 to ensure
Customers of Banking industries to protect their rights in terms of commitments of the
banks during the course of availing different financial services where membership is
voluntary and initially made open to SCBs. Now -is / are included 1. RRBs
.All Cooperative banks
3. Select Urban Co-operative banks
(1+)
4. (1+3)
5.Only PSBs
4
712 BCSBI in collaboration withevolved two codes, one is Banks Commitment
to Customers and other is 1. IBA / Bank Commitment to Industries
. IBA / Banks Commitment to Micro & Small Enterprises
3. IBA / Banks Commitments to Micro / Small / Medium Enterprises
4.CIBIL / Banks Commitment to Micro & Small Enterprises
5. CIBIL / Banks Commitment to Micro, Small & Medium Industries
713 BCSBI Codes, Tick the irrelevant one: 1. Commitment of banks to their customers
.Charter of Rights to the Common people
3.Codes are Maximum Stipulation of standard of services
4. To bring confidence of the people in banking system
5. none is irrelevant
3
714 Member banks of BCSBI need to submit an an-Statement of Compliance
1. Monthly
. Quarterly
3. yearly
4. Fortnightly
5. Bi-monthly
3
715 BCSBI organizes conference with the codes compliance officers of the member banks
at-rests. 1. Montly
. Bi-monthly
3. Semi-Annual
4. Annual
5.Biennial
4
716 Which of the following(s) is / are never associated with customer service committee in
banking services 1. Talwar Committee
. Goipooria Committee
3. S.S.Tarapore
4. Rashid Jilani
5.(3+4)
4
717 At present, framing compensation policy i.e. penalties etc. for delayed or noncompliance of customer services related issues implemented by RBI in terms of the
recommendations of different committees on customer services, is the pergative
of 1. RBI
. Banking Ombudsman
3.BCSBI
4. Banks Board
5.No such uniform policy in banks, it depends bank to bank and on adhoc basis
3
718 Which of the following activities are not performed by BCSBI 1. Faculty support to
training establishment of banks
2. Participate in on-location workshops conducted by the bank
3. Associate with customer Associates program conducted by banking Ombudsman
4. Undertake campaign program for awareness of codes amongst customers and banks
5. (1+2)
6, None 6
719 BCSBI provides - services in Mumbai. 1. Deposit Counselling
. Customers counseling
3. IT based banking services counseling
4. Credit counseling
5. Risk management counseling 4
720 The newsletter Customer Matters published by BCSBI is a issue 1.
Monthly
. Bi-monthly
3. Quarterly
4. Semi-anually
5. Anually 3
721 BCSBI does not at all deal with customer complaint. 1. True
. False
722 BCSBI is associated with any systemic issues that may exist in any complain of the
customer and take up the matter with respective bank for suitable corrections of systems
and procedures to avoid recurrence of such type of customer grievance. 1. True
. False 1
723 Which of the following is not falling under recent changes in the area of customer
service as per RBI directives? 1. Any deposit account can be opened by minor irrerespective
of age operated by natural or legal guardian
2. Minors attaining the age of 10 years and above may be allowed to open savings bank
account independently under self-operation
3. The erstwhile maintaining accounts, on attaining majority needs to confirm the balance in
his self-operated account.
4. The option no.3 above is also applicable for accounts operated by guardian, and, fresh
operating instruction with specimen signature from the minor now major ne4eds to be
obtained
5. None 5
724 As per RBI banks have been allowed discretion to offer additional facilities to the
minors maintaining accounts like facilities pertaining to IT based banking /cheque
facility/Debit Card etc keeping adequate safeguards. 1. True
2. False 1
725 In deserving cases minors account may be allowed to be overdrawn 1. True
2. False
726 With regard to SMS alerts to customers banks cannot recover charge from customers
by default without obtaining customers consent for providing such service and such
charges should be a meager amount with uniformity in the industry on actual usage basis. 1.
True
2. False 1
727 Which of the following is the recent directives of RBI relating to ATM services of banks.
1. Non-availability of cash should be properly displayed either on the ATM screen or
otherwise in the ATM room
2. To display ATM ID conspicuously in the ATM premises
3. Availability of complaint form pertaining to ATM facility and name with telephone number
of the complaint dealing officers, within the ATM premises
4. All of these
5. None of these 4
728 Which of the following are the RBI mandate relating to ATM facility 1. Requirement of
pin entry in every transaction including balance entry
. Per transaction time limit vis a vis enabling time out session
3. Availing sufficient toll free numbers by the banks to facilitate lodging complaint
4. Increasing local helpline numbers and their display in the ATM premises
5. All 5
729 Banks are under obligation mandatorily to intimate maturity date of fixed deposit of
customers well in advance. 1. True
. False 1
730 Under fare practice code which of the following are not covered? 1. Display of
information comprehensive notice board for customer service
information/service charges/grievance redressals/others

. Information related to interest rate
3. Services rendered free of charge
4. Charges for fee-based services
5. None 5
731 Where banks are providing cheque drop facility for collection of cheques, bank may
refuse accept and acknowledge cheques tender by customers at their countor for collection.
1. True
2. False
732 Deaf is a scheme of RBI for customers education where unclaimed deposit for 10
years or above lying with the bank would be utilized. Deaf stands for: 1. Depositors
Awareness Fund
. Depositors Awareness Facility
Depositors Awareness Forum
3. Depositors Educaton and Awareness Fund
4. Depositors Education and Awareness Forum
5. None
733 Tick the incorrect in respect of ECS debit and ECS credit respectively. 1. ECS
Debit:Single Account Debited Against Multiple Account Credired
. ECS Credit: Single Receiver of Fund From Multiple Customers
3. Your mandate to debit account for payment of telephone bill given to BSNL is ECS credit
to BSNL
4. Example given in option 3 is ECS debit to BSNL
734 At present the CTS is operated on grid basis which implies that all cheques drawn on
bank branches falling in the grid jurisdiction are cleared as local cheques on: 1. T+0 basis
. T+1 basis
3.T+ basis
4. T+3 basis
5. No such provision
735 Which one is correct in respect of clearing of non-CTS 2010 instrument parallel with
CTS instrument with effect from November 2014 onwards. 1. Separate clearing session for
the same
. Clearing session weekly once
3. Only on Monday
4. If the clearing session falls on holiday under NI Act, presentation session will be
conducted on the previous working day.
5. For such holiday under NI ACT presentation session will be conducted on the succeeding
working day
5
736 If any non-CTS cheque received in the CTS session such needs to be returned with the
reason 1. Reason Code 37 present properly
2. Reason Code 37 please present on non-CTS session
3. Reason code 37 present in proper zone
4. reason code 37 present in special session
5. Reason varies bank to bank 3
737 Which of the following facility in relation to collection of instruments RBI has left to the
individual bank to decide and formulate policies? 1. Immediate credit of local/outstationed
cheques
. Time lag for collection of local/outstationed cheques
3. Payment of penal interest for delayed collection
4. 1+
5. All of these 5
738 In cheque collection policy for delay in realization of local cheques if it is silent about
compensation bank should at least compensate by paying rate for
the corresponding period of delay 1. Flat Rs.100+Service Tax/Day
. 0.5% of the amount of cheque for any period of delay beyond the stipulated time lag
3. Time deposit rate for the delayed period
4. Savings bank rate for the delayed period
5. Base rate for the delayed period 4
739 Compensation for delayed collection of cheque should be made by the banks only on
claim received from the customers for such payment 1. True
.False .
740 In terms of Case No. 82 of 2006 before National Consumer dispute Redressal
Commission on the issues of delay in cheque clearing time frame for collection of outstation
cheques, tick the incorrect one: 1. 7 days on cheques drawn on cheque capital
. 10 days on cheques drawn on major cities
3. 14 days on cheques drawn on other locations
4. Penal interest at the rate of fixed deposit table rate of the concerned bank for the
corresponding period of delay
741 Which of the following is irrelevant in respect of credit of account payee cheque to third
party account? 1. Banks should not collect account payee cheque for any person other than
the payee constituent
2. The instruction under option number 1 is not applicable to the cheque drawn by a bank
payable to another bank.

3. Account payee cheque deposted with the sub-member banks for credit to their customers
account can be collected by the sponsored member banks of the clearing house subject to
clear undertaking to the effect that the proceeds of the cheque will be credited to the
payees account ony after realization
4. For cheques in the name of constituent of the property credit society account payee
cheque may be collected to the account of co-operative credit socities maintained by the
collecting bank under clear understanding that the proceeds of the cheque upon realization
credit would be given to the account of the named payee member of the society further
subject to the compliance of the provisuion of Secton 131 of NI Act 1881
5. None is irrelevant 5
742 Which of the following is relevant for the occasion of cheques/instrument presented for
collection lost in transit/clearing process/at paying banks branch? 1. Banks should give
notice of such loss to the account holder so tha the latter can stop the payment
. The onus of such loss lies with the collecting banker and not the account holder.
3. Banks should reimburse the account holder/payee duplicate instruments if any and should
pay interest for such delay to obtain the same
4. If the cheque is lost at the paying banks branch collecting banker enjoys the right to
recover the amount already reimbursed to the customer, from the paying banker
5. All are relevant 5
743.A document inviting deposits from the public to subscribe for all the shares of a
company is termed as :
a.Memorandum of association
b.Article of association
c.Prospectus
d.Minutes book
Ans. C
744.Dual aspect concept means recording of ______ effects of a transaction
a.Double
b.Single
c.Multiple
d.None of the above
Ans. a
745.Which of the following is true?
a.Total lease rent = cost of asset total finance income + residual value.
b.Total finance income = total lease rent
c.Total finance income = cost of asset
d.Cost of asset = total lease rent + residual value + total finance income
Ans. b
746. Which of the following investment rules does not use the time value of the money
concept?
a.The payback period
b.Internal rate of return
c.Net present value
d.All of the above use the time value concept
Ans. a
747. A banker can use credit balance in one account to settle debit balance in another
account of the same customer only if
a.Both the accounts are in the same branch of the bank.
b.Both the accounts are with the same bank though they may be with different branches.
c.Each of the account is from a member of the same family.
d.The accounts are with different banks.
Ans. b
748.Which of the following is not an unsecured loan in Balance sheet of a company?
a.Acceptance of Fixed Deposits.
b.Creation of Sinking Funds.
c.Loans and Advances from others.
d.Short term loans from banks.
Ans. b
749. Straight line depreciation does not :
a. Use residual value to calculate yearly depreciation.
b. Have a book value.
c.Accelerate depreciation.
d.Let the cost remain the same.
Ans. a
a.If the Partnership Deed does not mention any method of maintaining Capital Accounts
then the Fixed Capital Account method has to be followed.
b.If the partnership firm follows the Fixed Capital Account Method then the salary payable
to a partner is credited the partners current account.
c.Drawings made by partners are never entered in the Profit & Loss Appreciation Account.
d.Computerized accounting is a high speed, accurate and error free accounting.
Ans. a
751. The two portion of each pair relating to partnership accounts has got some
pair from the following :

a.Management of business business may be run by one or some or all partners.
b.Treat of losses insolvency of a partner.
c.Loan from partners No interest as partners are owners.
d.Goodwill super profit method.
Ans. c
752.The journal entry on forfeiture of shares is ____
a.Share capital a/c Dr to calls in arrears a/c to forfeited shares.
b.Forfeited shares a/c Dr to calls in arrears a/c Dr to share capital a/c.
c.Share capital a/c Dr to forfeited shares a/c.
d.Forfeited share a/c Dr to share capital a/c.
Ans. a
753. In double entry book-keeping, entry is balanced with a corresponding Contra entry :
a.Reverse entry
b.Adjusting entry
c.Contra entry
d.Double entry
Ans. c
754.The following data are given : (Rs. 000) Fixed assets 5000, other non-current assets
3000, Current assets 4000, Net worth 6000, Current ratio
2:1. The Term liabilities will be _______
a.Rs. 4000.
b.Rs. 2000.
c.Rs. 1500.
d.Rs. 3000.
Ans. a
755. Provision for bad debts is made under the principle of :
a.Consistency
b.Full disclosure
c.Industry practice
d.Conservatism
Ans. d
756. Debit the receiver and credit the giver is applicable to :
a.Real accounts
b.Personal accounts
c.Nominal accounts
d.All of these
Ans. b
758. Revaluation account is to be credited on ______
a. Increase in the amount of creditors.
b.Decrease in the value of Plant and Machinery.
c. Increase in provision for Bad and Doubtful debts.
d.Decrease in the amount of creditors
Ans. d
759. Profit or loss on a joint venture is shared by the co- ventures :
a.Equally
b.In the capital ratio
c.As per the agreement
d.None of the above
Ans. c
760.Select the incorrect statement in respect of calls in advance.
a.The company may accept the shareholders, the uncalled amount on shares even before it
is fallen due.
b.The article of association must permit such acceptance of advance call money.
c.Interest on calls in advance can be paid but the maximum is up to 6%.
d.The amount of calls in advance is part of the paid up share capital.
Ans. d
761. Anticipate no profits and provide for all possible losses would indicate the accounting
convention of :a.Consistency.
b.Conservatism.
c.Materiality.
d.Uniformity.
Ans. b
762. A joint venture is a :
a.General partnership.
b.A particular partnership
c.Not limited a particular venture.
d.None of the above.
Ans. b
763. A book-keeping capital account is a
a. Real account
b. Nominal account
c.Personal account
d.Either real or personal account
Ans. a
764. Provision for doubtful debts account is a ____ account
a.Real
b.Personal
c.Nominal
d.None of these
Ans. c
765. The user of the asset is known as :a.Lessee
b.Lesser
c.Bailer
d.Baillie
Ans. a
766. Which of the following are examples of capital expenditure?
A: cost incurred in testing whether a newly installed asset is functioning properly. B: cost
incurred in relocating a machine to a new factory. C: cost incurred in replacing an old
engine of the aircraft with a new one.
a.A and B
b.B and C
c.A and C
d.None of the above
Ans. c
767. If the liabilities of a business are Rs. 12,000 and the owner equity is Rs. 15,000, the
business assets will be :a.Rs. 3,000
b.Rs. 27,000
c.Rs. 12,000
d.Rs. 15,000
Ans. b
768. Depreciation is calculated on the diminishing value of the asset in
a.Written down value
b.Sum of digit method
c.Revaluation method
d.Straight line method
Ans. a
a.The owner of the asset is known as lesser.

b.The user of the asset is known as lessee.
c.The ownership of the asset remains with the lesser.
d.All of the above.
Ans. d
770. Opening balance of asset = Oi, closing balance of asset =Oc, Depn.= D. Then addition
to the asset during the year is
a.Oc
b.Oi+D
c.Oc+D
d.Oi
Ans. c
771.Suspense account is not used in which of the following cases?
a.Before trial balance
b.After trial balance
c.Before final accounts
d.None of the above
Ans. a
772. Stocks in trade is valued at :a.Cost price
b.Market price
c.Costs or market price whichever is less
d.Costs or market price whichever is higher
Ans. c
773. In case any sum has been written off on a reduction of capital or revaluation of assets,
figures and date of reduction for a period of ______
a.1 year thereafter
b.2 years thereafter
c.3 years thereafter
d.5 years thereafter
Ans. d
774. A machinery is purchased on June 12, 2006 for Rs. 60,000. Another machinery is
purchased on Jan. 22, 2007 for Rs. 40,000. The depreciation rate is 10% SLM. What is the
book value as at March 31, 2009 (It is annual closing period)?
a.79,000
b.76,000
c.73,000
d.69,000
Ans. c
c
775.Freight and dock dues paid while acquiring a new machine will be debited to :a. Profit & Loss A/C
b.Freight A/C
c.Transportation A/C
d.Machinery A/C
Ans. d
776. Capital is shown on the liability side because of
a.Business entity concept
b.Conservatism concept
c.Accrual concept
d.Duality concept
Ans. a
777. Cheque deposited but not cleared is ____ in bank reconciliation statement, when
started with overdraft balance in pass book.
a. Subtracted
b.Added
c.Double subtracted
d. double added
Ans. a
778. If Lease Charges of the year exceed the depreciation charge of the year then ______
a.Lease Equalization account is debited (with the difference)
b.Lease Equalization account is credited (with the difference)
c.Lease Terminal Adjustment account is debited (with the difference)
d.None of the above
Ans. a
779. 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-payment of Rs. 4, the Share Capital Account will be
debited by
a.Rs. 15
b.Rs. 10
c.Rs. 4
d.Rs. 6
Ans. b
780. An account has a debit balance in the cash book and credit balance in the bank
statement. This implies that there is _____
a.An overdrawn balance

b.A recording error
c.A positive balance
d.Wrong carry forward of balance
Ans. c
a.The lower the discount rate, the more valuable the coupon payments are today.
b.Bonds with high coupon payments are generally (all else the same) more sensitive to
c.When market interest rates rise, bond prices will also rise, all else the same.
d.Bonds with short maturities are generally (all else the same) more sensitive to changes in
Ans. a
782. Select the incorrect statement in case of Share Capital and Reserves and Surplus as
shown in the balance sheet.
a.Under share capital, the following order is maintained. Authorized capital, issued capital,
subscribed capital.
b.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.
c.The amount of unpaid calls is deducted from (b) above.
d.The amount of forfeited shares account is shown under Reserves & Surplus.
Ans. d
likely to overstate assets and income is :a.Materiality
b.Consistency
c.Continuity
d.Conservatism
Ans. d
784. Which of the following items should not be entered in the receipts _ payments ?
a.Subscription received
b.Sale of machinery
c.Loss on sale of old furniture
d.None
Ans. c
785. ________schedule of the Companies Act prescribes the form of balance sheet.
a.Schedule VI
b.Schedule VIII
c.Schedule VII
d.Schedule V
Ans. a
786. Discount on Bill discounted is an _____ to bank and an ____to the drawer.
a.Income, Expenses
b.Expenses, Income
c.Profit, Loss
d.Loss, profit
Ans. a
787. A bill of exchange must be properly ___
a.Stamped
b.Checked
c.Signed
d.Accepted
Ans. a
788. Direct expenses appear on ______ side of ____ account.
a.Debit, Trading.
b.Credit, Trading.
c.Debit, profit & Loss
d.Credit, Profit & Loss
Ans. A
789. A company wishes to pay dividend on shares. State which of the following may be used
for the purpose.
a.Premium of shares
b.Profit on re-issue of forfeited shares
c.General reserve
d.None of these
Ans. c
a.Leasing agreement is usually for a specific period.
b.Leasing is a tool of tax planning.
c.Under leasing arrangement, risk of obsolescence is to be borne by the lessee.
d.Lesser can claim deprecation on leased assets.
Ans. c
791. Wages paid for installation of machinery affecta.Only machinery A/C
b.Only wages A/C
c.Profit & Loss A/C

d.Both machinery A/C and wages A/C
Ans. a
792. Name the account which is opened in the trial balance to tally ita.Suspense account
b.Nominal account
c.Personal account
d.
Cash account
Ans. a
e) Proprietors account
f) Drawing account
g) Capital account
h) Cash account
Ans. c
794. The purpose of accommodation bill is to satisfy _____ need of funds.
e) Mutual
f) Personal
g) Urgent
h) General
Ans. a
795. In retail business, widely followed method of inventory valuation is :e) FIFO
f) Weighted average
g) Adjusted selling price
h) All of the above
Ans. c
e) Shows a higher passbook balance than cash book.
f) Shows a lesser passbook balance than cash book.
g) Shows no difference.
h) None of the above.
Ans. a
797. Where does net profit appear in the balance sheet?
e) Liabilities side
f) Asset side
g) Contingent liability
h) Fund flow
Ans. a
798. P & L A/C of a non-trading organization is called as Income & Expenditure A/C why?
e) They often make looses.
f) They are forbidden by statute to make profits.
g) By object of their association they are non-profit making bodies.
h) Their income & expenditure statement are a combination of capital & revenue receipts.
Ans. c
799. Where should a withdrawal of cash from business by the proprietor be credited to :e) Drawings
f) Proprietors A/C
g) Capital A/C
h) Cash A/C
Ans. d
800. Consignee becomes a debtor of the consignor when
e) The goods are dispatched
f) The goods are received
g) The goods are sold
h) None of the above
Ans. c
801. J & J manufacturing just issued a bond with Rs. 1000 face value and coupon rate of 8%.
If the bond has a life of 20 years, pays annual coupons, and the yield to maturity is 7.5%,
what will the bond sell for?
e) Rs. 975
f) Rs. 1020
g) Rs. 1051
h) Rs. 1087
Ans. a
802. Petty cash book is generally maintained on ____ system
e) Bank
f) Cash
g) Heavy expenses
h) Imprest
Ans. d
803. Accounts book where individual records of persons, properties, expenses, etc. are
maintained-
e) Journal
f) Personal
g) Purchase
h) Ledger
Ans. d
804. If depreciation is not recorded to avoid reporting a net loss, name the accounting
principle that is violated
e) Consistency
f) Cost principle
g) Full disclosure
h) Conservatism
Ans. c
805. A truck cost Rs.6,000 with a residual value of Rs. 2,000. The truck is expected to have a
useful life of 50,000 miles. By assuming the truck is driven 20,000 miles the first year, the
depreciation expenses would be :e) 2,400
f) 240
g) 16,000
h) 1,600
Ans. a
806. On the retirement of the partner, the profits on revaluation of assets should be credited
to the accounts of
e) All the partners in their profit sharing ratio.
f) The remaining partners in their new profit sharing ratio.
g) The remaining partners in their old profit sharing ratio.
h) None of the above.
Ans. a
807. Amount invested in business by its owner is known as _____ account.
e) Expenses
f) Capital
g) Loan
h) Investment
Ans. b
808. Which of the following terms is related to accounts of Electricity Companies?
e) Clear profit
f) Work uncertified
g) NPA
h) Claims outstanding
Ans. a
809. How the closing stock is shown in final accounts?
e) Debit side of trading account and asset side of balance sheet.
f) Credit side of trading account and liabilities side of balance sheet.
g) Credit side of trading account and asset side of balance sheet.
h) Credit side of trading account.
Ans. c
810. Bill for collection appears in the balance sheet as :e) Contra entry
f) Single entry
g) Liabilities & Provisions
h) None of the above
Ans. a
811. Share premium will be received :
e) With share application money
f) With the allotment money
g) Before the allotment is made
h) After the 1st call is made
Ans. b
812. A new company cannot issue shares _____
a. At par
b.At discount
c.At premium
d.None of the above
Ans. b
813. During inflation, issue of material from the stores is charged to the products at the
highest price under
a.LIFO method
b.FIFO method
c.Average cost method
d.None of the above
Ans. B
814. In case of bad debt, the amount should be debited to:
a.Bad debts account
b.Customer account
c.Discount account
d.None of these
Ans. a
815. The Companies Bill 2013 has received assent from the President on after
receiving Parliamentary Approval earlier, It would replace the Act.
1. October 29, 2013 / The Company Bill 1956
2. September 29, 2013 / The Company Bill 1956
3. August 28, 2013 / The Company Bill 1956
4. August 29, 2013 / The Companies Act 1956
5. August 29, 2013 / The Companies Act 1913
Ans: 4
816. The Companies Act 2013 has been divided inchapters and comprises
altogether no. of clauses.
1. 29 / 658
2. 28 / 470
3. 29 / 470
4. 28 / 658
5. None / None
Ans: 3
817. The Companies Act 2013 prescribesno. of new definitions.
1. 30
2. 31
3. 32
4. 33
5. 34
Ans: 4
818. In terms of The Companies Act 2013, Profit-making companies are required to
spend-% of their average net profit of three years for activities related to
corporate social responsibility.
1. 1
2. 1.5
3. 2
4. 2.5
5. 3
Ans: 3
819. Government has diluted the mandatory provision of Corporate Social Responsibility
after objections from India Inc. Those failing to meet the obligation will have to explain the
reasons for the shortfall. However, the norm is valid only for companies with net worth of
Rs. crore or more, or turnover of Rs.-crore or more, or a net profit of
Rs.- crore or more, during the past three financial year.
1. 500 / 1000 / 5
2. 500 / 1000 / 10
3. 500 / 1500 / 5
4. 1000 / 5000 / 5
5. 500 / 500 / 5
Ans: 1
820. As per Companies Act 2013, maximum no. of companies an auditor can serve.
It has also brought in more clarity on auditors criminal liability. It also includes annual
ratification of appointment of auditors for years and introduction of a new clause
related to offence of falsely inducing banks for obtaining credit.
1. 10 / 5
2. 20 / 10
3. 10 / 10
4. 20 / 5
5. 20 / 15
Ans: 4
821. In terms of Companies Act 2013, Companies have to disclose each directors ratio of
remuneration in terms of the average of , on the board
1. All directors remuneration
2. Employees salary
3. Net Profit for 3 years
4. expenditures for 3 years
5. None
Ans: 2
822. Which of the following statement(s) is / are incorrect in respect of The Companies Act
2013.
1. The Employees Stock Option (ESOP) could not be given to independent directors
2. No. of independent directors at the board should be minimum 1/3rd.
3. Even 1 person can form a company as against earlier provision of at least two people
4. Minimum 2 years salary to employees of that company under wind up operation
Ans: 5
823. Which of the following investigation authority has been vested with statutory power in
companies Act 2013, to tackle corporate frauds?
1. Central Bureau of Investigation (CBI)
2. Intelligence Bureau (IB)
3. Criminal Investigation Division (CID)
4. Serious Fraud Investigation Office (SFIO)
5. GOI, Ministry of Home, Crime Detection Department.
Ans: 4
824. Which of the following Chapter(s) is / are not the new inclusion to The Companies Act
2013?
1. Registered Valuers
2. Government Companies
3. Nidhis
4. National Company Law tribunal & Appellate Tribunal and Special Courts
5. All are the new inclusions.
Ans: 5
825. Tick the incorrect in respect of new definitions introduced in the new Company Bill :
1. Accounting Standards & Auditing Standards
2. Associate Company / One Person Company / Small Company
3. Employees Stock Options / Global Depository receipts / Indian Depository Receipts
4. CEO / CFO / Independent Director / Interested Director / Key Managerial Personnel /
Promoter
5. None is Incorrect
Ans: 5
826. In terms of The Companies Act 2013, Private Placement refers to:
1. Any offer of securities or invitation to subscribe securities to a select group of persons by
a company
2. (1)+ other than by way of Public Offer
3 (2) + through issue of a private placement offer letter as per the conditions laid down in
the relevant section.

4. Only (1) is relevant
5. None is relevant
Ans: 3
827. Company issues a duplicate certificate of shares with intent to defraud the investor(s)
is punishable with the fine of not less thantimes of the face value of the shares
involved in the issue of duplicate certificate and the fine may extend to -times the
face value of such shares or Rs.-Crore, whichever is higher.
1. 10 / 15 / 5
2. 5 / 10 / 5
3. 10 / 20 / 10
4. 5 / 10 / 10
5. 5 / none / 10
Ans: 4
828. Tick the incorrect option in respect of minimum no. of directors for the followings.
1. Public Limited Company: 3
2. Private Limited Company: 2
3. One Person Company: 1
4. (1+2) are incorrect
5. None of (1+2+3) is incorrect
Ans: 5
829. Maximum limit for no. of directors has been increased form to for
Private Limited Company .However more directors can be added after passing a special
resolution and for this no approval from GOI is needed.
1. 12 / 15
2. 12 / 20
3. 10 / 15
4. 10 / 20
5. 12 / no increase
Ans: 1
830. For the first time The Companies Act 2013 defines Financial Statement which
includes: tick the incorrect:
1. Balance Sheet & Profit & Loss Account (Non-profit earning company: Income &
expenditure account)
2. Cash Flow Statement (not needed for Dormant Company)
3. Statement of changes in equity (for equity based company)
4. Fund Flow Statement
5, Explanatory Note
Ans: 4
831. The Central Govt. may, by notification, constitute a for matters related to
Accounts & Auditing Standards.
1. National Financial Regulatory Authority.
2. National Financial Restructuring Authority
3. National financial Reporting Authority
4. National Financial Responsibility Authority
5. National Financial Reviewing Authority
Ans: 3
832. The Companies Act 2013 first time defined Fraud. Which of the following(s) is / are
not true in this respect:
1. A person found guilty of Fraud is punishable with imprisonment for a term of not less
than 6 months and this may extend to 10 years
2. Shall also be liable to fine not less than the amount involved in the Fraud which may
extend to 3 times of such amount involved
3. If the Fraud involves public interest, imprisonment not less than 3 years
4. Maximum imprisonment in any case shall not exceed 5 years & max. fine shall not exceed
5 times of the amount involved in the Fraud
5. All are true
Ans: 4
833. The Central Govt., by notification shall issue a Tribunal called &
an- called National Company Law Appellate Tribunal for settling legal matters in
respect of Companies affairs, as provided in The Companies Bill 2013:
1. National Company Law Board / Appellate Tribunal
2. National Company Law Tribunal / Appellate Tribunal
3. National Company Law Tribunal / Appeal Board
4. National Company Law Cell / Appellate Cell
5. National Company Legal Cell / Appellate Cell
Ans: 2
834.The Company Bill 2013 has provided cross boarder merger of any Indian Company with
any foreign Company.
1. True
2. False
Ans: True
835. The Maximum No. of Members of a Private Limited Company has been changed from
50 to-.
1. 75
2. 100
3. 125
4. 150
5. 200
Ans: 5.
836. An Associate Company means a company whose control is significantly influenced by a
Parent Company, or is a Joint Venture Company. Here significance influence denotes:
1. control of at least 50 % of total share capital
2. Control of at least 20 % of business decision under an agreement
3. Control of at least 20 % of total share capital
4. Control of at least 50 % of total business decision under an agreement
5. Either (2) or (3) or both
Ans: 5
837. Which of the following(s) is / are not True in respect of a Subsidiary Company in
terms of Company Bill 2013?
1. A company where a Holding Company controls the Board of Directors
2. A company where the Holding Company controls or exercises more than 50 % of total
share capital either at its own or together with one or more of its Subsidiary Companies.
3. An Associate Company as defined in The Company Bill 2013
4. A Company where the Holding company controls or exercises more than 50 % Equity
Share Capital Only either at its own or together with one or more of its Subsidiary
Companies.
5. (3+4) are not true
Ans: 5
838. A Foreign Company means any Company or Body Corporate incorporated outside India
which:
1. has a place of business in India by itself or through an agent, physically or through
electronic mode
2. conduct any business activity in India in any other manner
3. A Company or Body Corporate incorporated in India but the business activity are
conducted outside India in any mode, physically or electronically or in any other manner
4. (1+2) are relevant
5. None is relevant
Ans: 4
839. In terms of The Companies Act 2013, which Company can obtain the status of a
Dormant Company (Tick the irrelevant one)
1. A Company is formed and registered under Companies Act 1956
2. So registered for a future project
3. To hold any future assets or intellectual property
4. has no significant transaction
5. A Company is formed and registered under The Companies Act 2013
Ans: 1.
840. The no. of persons in any association or partnership, other than the Company within
the meaning of The Companies Act, shall not exceed such no. of persons as may be
prescribed subject to maximum-.
1. 50
2. 100
3. 150
4. 200
5. 250
Ans: 2
841. The ceiling in no. of persons in any association or partnership, as prescribed by The
Companies Act 2013, as mentioned in MCQ. No. (26) hereinabove will not apply to an
association or partnership constituted by:
1. Professionals governed by special Act.
2. SHGs
3. JLGs
4. Both (2) & (3)
5. All (1+2+3)
Ans: 1
842. The Term Promoter has been defined in The Companies Bill 2013 is a person (Tick the
incorrect(s))
1. named as Promoter in a prospectus
2. is identified as such by the company in the annual return
3. who has controlled over the affairs of the company, directly or indirectly whether as a
shareholder, director or otherwise
4. under whose direction and / or instruction the Board of Directors is accustomed to work
Ans: 5
843. Concept of One Person Company has been provided in The Companies Act 2013 where
no. of Director(s) is / are:
1. No director
2. only one director
3. one member but no director
4. (2+3)
5. No such provision in The Companies Act 2013
Ans: 2
844. The One Person Company (OPC) will have one member & that member is the Director:
1. True
2. False
Ans: 1
845. An OPC can be either Private Limited co or Public Limited Company
1. True
2. False
Ans: 2
846. The liability under OPC is not unlimited liability of the member / shareholder but
limited to the Company.
1. True
2. False
Ans: 1
847. The New Bill allows merger of a listed Company with an unlisted one.
1. True
2. False
Ans: 1
848. The Companies Act 2013 provides appointment of one women director.
1. True
2. False
Ans: 1
849. The New Bill provides that a listed company or other specified company is required to
change individual auditor at years alternate and for audit firm atyears
interval.
1. 5 / 5
2. 5 /10
3. 10 / 5
4. 10 / 5
5. No such provision
Ans: 2
850. In an OPC one person is to be appointed as Nominee who. In case of death of the
existing shareholder, would be the share holder of the OPC
1. True
2. False
Ans: 1
851. The Person who will be appointed as Nominee in an OPC, the written consent of the
person so nominated as Nominee need not be taken:
1. True
2. False
Ans: 2
852. Once a person is appointed as Nominee in an OPC, no subsequent change of
nomination is possible
1. True
2. False
Ans: 2
853. The Companies Act 2013, has made mandatory for an OPC to convene Annual General
Meeting / Extraordinary General Meeting or other board meeting.
1. True
2. False
Ans: 2
854. The Provision of Accounts, audits would also not apply to an OPC
1. True
2. False
Ans: 2
MCQ No. MCQs Options Answer
855 Which of the following is not associated with Letter of Credit (LC) 1. It is a credit
arrangement
2. An undertaking given by the buyers bank on behalf of the buyer to the seller
3. Issuing bank undertakes to pay the amount of bill drawn by the supplier under LC
4.Payment is subject to presentment of documents within a stipulated date
5. All are associated with
5.
856 Which of the following issues LC 1. Sellers bank
2. Buyers bank
3. Negotiating bank
4. Advising bank
5. Confirming bank 2.
857 LC opening bank adds its credit standing to that of the seller 1. True
2. False 2.
858 The supplier or the shipper is the beneficiary under LC 1. True
2. False 1.
859 Negotiating bank of an LC is always the confirming bank 1.True
2. False 2.
860 The supplier gets the bill under LC discounted at the bank known as 1. Confirming bank
2. Advising bank
3. Reimbursing bank
4. Negotiating back
5. None of these 4.
861 Advising bank if undertakes to negotiate the bills under LC can be considered as 1.
Confirming bank
2. Negotiating bank
3. Reimbursing bank
4. Either 1 or 2
5. None of these 4.
862 The bank advises the credit under LC & any amendment without any undertaking is
known as 1. Advising bank
2. Negotiating bank
3. Confirming bank
4. Reimbursing bank
5. None 1.
863 Advising bank advises the credit under LC at the request of 1. Beneficiary
2. Buyer
3. Negotiating bank
4. Opening or issuing bank
5. None 4.
864 The present ICC brochure enforce is known as 1. UCPDC 500
2. UCPDC 600
3. UCP500
4. UCP600
5.2 & 4 are relevant 5.
865 UCPDC is prepared by 1. World Chamber of Commerce (WCC)
2. Global Chamber of Commerce (GCC)
3. Universal Chamber of Commerce (UCC)
4. International Chamber of Commerce (ICC)
5. American Chamber of Commerce (ACC) 4.
866 The number of articles & e-Articles under UCPDC 600 are respectively 1. 49 , 12
2.39 , 12
3.59 , 12
4.69 , 12
5. None 2.
867 An amendment in LC can be made with the consent of 1. Issuing bank only
2. Beneficiary only
3. Confirming bank only
4. Bias only
5. (1+2+3) 5.
868 Irrevocable LC is also known as without recourse 1.True
2. False 1.
869 An irrevocable LC without the consent of beneficiary/seller (Tick the incorrect) 1.
Cannot be cancelled by the buyer
2. Cannot be revoked by the issuing bank
3. Once the beneficiary is advised he should get the drafts drawn under LC paid by the
issuing bank if documents are in conformity with LC
4. Once bills are paid there can have no recourse against the beneficiary
5. None is incorrect 5.
870 Revocable LC can be modified or cancelled without the consent of the beneficiary 1.
True
2.False 1.
871 If the bill under LC accepted or negotiated prior to the notice of cancellation received
the issuing back cannot however dishonor to payback the amount under LC to the
negotiating bank 1. True
2. False 1.
872 Revocable LC or with recourse LC is at present not allowed to be opened 1. True
2. False 1.
873 Revolving LC provides that the amount of drawing stipulated will be available to the
beneficiary only once within the stipulated period 1. True
2. False 2.
874 Though a revolving LC may revolved again & again within a stipulated period as agreed
between buyers & suppliers, the provision of controlling of frequency of the drawing can be
made within the due date 1. True
2. False 1.
875 Bank can insist that a protective clause or re-instatement clause is incorporated in
revolving LC 1.True
2.False 1.True
876. As per section 31 and 32 of the Banking Regulation Act, 1949, three copies of balance
sheet and profit and loss account prepared u/s 29 and auditors report u/s 30 must be
submitted to RBI within
a) One month from the end of the period to which they refer
b) Six months from the end of the period to which they refer
c) Three months from the end of the period to which they refer
d) Nine months from the end of the period to which they refer
Ans: c
877. Accounting principles are generally based on
a) Practicability
b) Acceptability to management
c) Subjectivity
d) Convenience
Ans: c
879. Annuity is defined as :
a) Equal cash flows at equal intervals forever
b) Equal cash flows at equal intervals for a specified period
c) Unequal cash flows at equal intervals for a specified period
d) Unequal cash flows at equal intervals forever
Ans: b
880. The rule debit what comes in and credit what goes out is applicable to
a) Real accounts
c) Nominal accounts
d) Fictitious accounts
Ans: a
881. Wages paid for installation of Machinery Rs. 500 is a capital expenditure as :
a) It is non recurring
b) It is necessary to put the asset in working condition
c) It is incidental of acquiring new asset
d) It is a deferred revenue expenditure
Ans: b
882. Unexpired cost carried forward will be more under the following method of
depreciation
a) Straight line method
b) Diminishing balance method
c) Sum of digits method
d) FIFO method
Ans: a
883. Any profit prior to incorporation may be :
a) Credited to Capital Revenue A/C
b) Debited to Goodwill A/C
c) Debited to Suspense A/C
Ans: a
884. Entrance fees received by a Non trading organization is :
a) Revenue receipt
b) Capital receipt
c) Operating profit
d) Deferred income
Ans: b
885. Cheque issued but not presented is _____ in bank reconciliation statement, when
started with overdraft as per cash book
a) Subtracted
b) half substracted
c) Added
d) half added
Ans: a
886. Machinery costing Rs, 15,000, whose current book value is Rs. 12000 is sold for Rs.
17,000 . What is the amount of capital and revenue receipt?
a) Capital receipt of Rs. 7000 & Revenue receipt of Rs.10,000
b) Capital receipt of Rs. 12000 & Revenue receipt of Rs. 5000.
c) Capital receipt of Rs. 17000 & Revenue receipt of Rs. Nil
Ans: b
887. Paid rent to landlord Rs 1500. Identify two accounts involved in this
a) Landlord and cash
b) Rent and landlord
c) Rent and cash
d) Cash and Rent
Ans: d
888. ________ transactions are not recorded in accounts owing to the money measurement
concept
a) Quantitative
b) Fictitious
c) Illegal
d) Qualitative
Ans: d
889. Bill for collection appears in the balance sheet as
a) Central entry
b) Single entry
c) Liabilities and provisions
Ans: a
890. The rule debit the receiver, credit the giver
a) Real accounts
c) Nominal accounts
d) Fictitious accounts
Ans: b
891. The firm was able to recover amount from a debtor which was written off. The amount
is credited to the personal account of the debtor? How the error shall be removed?
a) By crediting the amount to the Sundry Debtor Account
b) By crediting the amount to the Cash Account
c) By debiting the debtor account and crediting the Profit and Loss account
d) By debiting the debtor account and crediting the Provisions account
Ans: c
892. Purchases Account is a ________ account
a) Real
b) Nominal
c) Personal
d) Fictituous
Ans: b
893. For nominal accounts, the fundamental rule of debit and credit is, debit expenses and
losses and credit ________
a) The giver
b) What goes out
c) Income and gains
Ans: c
894. Revaluation account is to be debited on __________
a) Increase in the value of land and building
b) Decrease in the amount of creditors

c) Decrease in the provision for bed and doubtful debts
d) Increase in the amount of creditors
Ans: d
895. In a balance sheet, how will goodwill be classified?
a) Fixed assets
b) Current assets
c) Other non-current assets
Ans: c
896. The liability of partners of a firm is:
a) Unlimited
b) Limited
c) To the defined extent
Ans: a
897. Identify the nominal account among the following
a) Bills payable
b) Bills receivable
c) Stationary
d) Debtors
Ans: c
898. __________ trial balance is not commonly used
a) Gross
b) Net
c) Full and final
d) Balance
Ans: a
899. When overdraft as per cash book and a cheque of Rs. 1000 directly deposited in the
bank, but not recorded in cash book ________
a) Add Rs. 1000 in cashbook
b) Deduct Rs. 1000 in cashbook
c) Add Rs. 2000 in cash book
d) Deduct Rs. 2000 in cash book
Ans: b
900. Carriage is a _________ account
a) Real account
b) Nominal account
c) Representative personal account
d) Personal account
Ans: b
901. The convention of conservation would require the stock in trade to be valued at
a) Cost price
b) Market price
c) The higher of the cost price or market price
d) The lower of the cost price or market price
Ans: d
902. What is the present value of Rs. 115000 to be required after 1year at 10%
a) 121000
b) 110000
c) 100500
d) 104545
Ans: d
903. Balance sheet is prepared to show _________
a) Financial position of the business concern at the point of time
b) Results a business of over a period of time
c) A statement showing assets a liabilities
d) Both (a) and (c) above
Ans: d
a) Balance sheet is a ledge account
b) Lend is an intangible asset
c) Patent is a tangible asset
d) Stock is a floating asset
Ans: d
905. % change in price of a bond equals to:
a) Duration * change in YTM
b) Duration / Change in YTM
c) Modified Duration * Change in YTM

d) Modified Duration / Change in YTM
e) None
Ans: c
906. Duration of a Bond is 2.76 years. YTM is 8%. Find the Modified Duration:
a. 2.98 years
b. 2.55 years
c. 2.76 years
d. 3 years
e. none
Ans: b
907. Ledger is principal book in which
a) Real accounts are maintained
b) Personal accounts are maintained
c) Nominal accounts are maintained
d) All of the above
e). None
Ans: d
908. The following data are given: (Rs.000) Fixed assets 5000, other non current assets
3000, current assets 4000, net worth 6000, current ratio 2:1, the term liabilities will be
________ (Rs 000)
a) Rs. 4000
b) Rs. 2000
c) Rs. 1500
d) Rs. 3000
e) none
Ans: a
909. Interest Rate Elasticity of a bond equals to:
a. % change in price for t period * % change in YTM
b. % change in price for t period / % change in YTM
c. Duration / 1+ base YTM
d. Duration * change in YTM
e. None
Ans: b
910. If cost of a machine is Rs. 5 lac, Economic life is 7 years and Scrap Value is Rs. 20000.
Find the amount of depreciation in 3rd. Year under declining balance method.
a. Rs. 8394
b. Rs. 11424
c. Rs. 14285
d. Rs. 9793
e. None
Ans: a
911. Accommodation Bill is drawn without any
a) Consideration
b) Accommodation
c) Acceptance
Ans: a
912. One of the accounts is wrongly debited to profit and loss appropriation account of a
company. Name the wrong account debited
a) Interim dividend
b) Provision for tax
c) Proposed dividend
d) Capital redemption reverse
Ans: b
913. Opportunity Cost is:
a. alternative income
b. super profit
c. foregone income
d. alternative cost
e. None
Ans: c
914. Fixed Asset is 10 lac. Current Ratio is: 3:2. Total Liabilities is 20 lac.Long Term
Liability is 10 lac. Find the Networh.
a. Rs. 8 lac
b. Rs. 6 lac
c. Rs. 4 lac
d. Rs. 8lac
e. None
Ans: b
915. Gross Sales: 18 lac. Current assets 8 lac and Current Liability Rs. 4 lac. Find the
working capital limit under Turnover Method of Lending.
a. Rs. 0.50 lac
b. 3.60 lac
c. 4.50 lac
d. None
e. data insufficient
Ans: a
916. A bond has a par value of Rs. 10,000, has an annual coupon rate of 12% and has a
maturity period of 3 years. The required rate on the bond is 10 percentage. The price of this
bond is _____
a) 10494
b) 10944
c) 8627
d) 10002
e) None
Ans: a
917. Provision for discount on debtors account has a _____
a) Debit balance
b) Credit balance
c) Either credit or debit balance
d) No balance
Ans: b
918. The technique(s) that can be suggested to the decision maker, who is faced with the
problem of appraising investments where the future cash flows are not certain is ________
a) Expected NPV rule
b) Risk adjusted discount rate approach
c) Sensitivity analysis
d) All of the above
e) None
Ans: d
919. The following financial statement is not prepared by a non- trading concerns
a) Receipt and payment account
b) Income and expenditure account
c) Profit and loss account
d) Balance sheet
Ans: c
920. Opening Inventory is 12 lac; closing inventory is 16 lac; cost of gods sold is 40 lac; find
the Inventory holding period.

a. 3 months
b. 3.2 manths
c. 4.8 months
d. 4.2 months
e. none
Ans: d
921. The intrinsic value of a bond is:
a) Face value
b) Present value of cash flows in future
c) Market price
d) Issue price
e) None
Ans: b
922. Secret reserves may result by :
a) Overvaluation of stocks
b) Undervaluation of liabilities
c) Creating general reserve
d) Providing excessive depreciation
Ans: d
923. Noting charges account is debited by :
a) The payee
b) The drawer
c) The bank
d) The acceptor
Ans: a
924. Minimum Current Ratio under Second Method of Lending of Tandon Committee is:
a. 1.17:1
b. 1.25:1
c. 1.33:1
d. 1.79:1
e. None
Ans: c
925. Entries for deposits of cheques into the bank are made by the customer in the debit
side of the cash book ____
a) Before depositing to the bank
b) On their clearing
c) At the time of reconciliation
d) After 7 days
Ans: a
926. What type of account is a trading account ?
a) Real
b) Personal
c) Nominal
d) Fictitious
Ans: c
927: Find the odd man:
a.Goodwill
b.Preliminary expenses
c.Prepaid exp.
d.Accumulated Loss
Ans: c
928. Identify the true statement:
a) Interest allowed by the bank will be entered in the debit side of the cash book in the cash
column.
b) A bearer cheque received from a customer or paid to a supplier will always be entered in
the cash column of the cash book.
c) Credit sales are recorded on the credit side of the cash book.
d) Bank account is a personal account
Ans: d
929.
If the amount of investment in a machine is Rs. 1.50 lac, Economic life is 5 years and annual
return is is 33.%. find the payback period.
a.3.03 years
b. 3 years
c. 4 years
d. 5 years
e. can not be determined
Ans: a
930.
Investment Rs. 1.50 lac. Return 1st year 0.40lac, 2nd year 0.50 lac, 3rd year 0.60 lac; 4th
year. O.25 lac and 5th year 0.15 lac. If opportunity cost is 12%. Find the NPV.
a.Rs.7430
b.(-) 7430
c. 8430
d.(-) 8430
e. Can Not br determined
Ans: b
931. Which of the following is not falling under discounted cash flow techniques of Capital
Budgeting?
a. Pay Back Period
b. discounted PayBack Period
c.Average Rate of Return
d. Internal rate of return
e. (a+c)
Ans: e
932. Investment Rs. 550000. Profit After Tax is Rs. 45000; Scrap Value is Rs. 25000; Tax is
Rs. 20000; Depreciation is Rs. 30000. Find the Accounting Rate of Return.
a. 30.08%
b. 26.08%
c. 36.20%
d. 30.20%
c. None
Ans: a
933. Overdraft as per cash book means balance ____
a) Credit
b) Debit
c) Multiple
Ans: a
934. Dual aspect concept means recording of _________ effects of a transaction
a) Double
b) Single
c) Multiple
Ans: a
935. When Coupon Interest of a Bond and Market rate of Interest is the same; the bond
isa. at premium
b. at discount
c. at par
d. No relation with bond price

e. Par Value
Ans: c
936. Furniture purchased by issuing cheque, what entries to be passed :
a) Debit furniture and credit bank account
b) Debit bank account and credit furniture
c) Debit furniture and credit cash
d) Debit bank and credit furniture shop account
e) None
Ans: a
937. In which of the following cases a partner can not enjoy implied authority.
a. To Open Bank account in the name of firm
b. to sell or mortgage immovable property of the firm
c. To admit liability in a suit
d. (b+c)
e. None
Ans: e
938. A Minor can not:
a. draw a cheque
b. endorse a cheque
c. act as agent
d. appoint an agent
e. None
Ans: d
939. ______ inability to pay the bills on due date
a) Insolvency
b) Bad debts
c) Creditor
d) Debtor
940. Which one is the highest value?
a. Paid up capital
b. Issued capital
c. subscribed Capital
d. Authorized capital
e. None
ans: d
941. Goods worth Rs. 1,00,000 were sold to Mr. X against a cheque issued by him. The
journal entry for this will be_____
a) Debit bank account , credit Mr. Xs account
b) Debit Mr. Xs account , credit sales account
c) Debit bank account, credit sales account
d) Debit cheque received account, credit sales account
e) None
Ans: b
942. Amount invested in business by its owner is known as _______ account.
a) Expenses
b) Capital
c) Loan
d) Investment
e) None
Ans: b
943. What sort of reserve is a provision?
a) General reserve
b) Specific reserve
c) Capital reserve
d) None
Ans: b
944. X&Co pays to Y Rs. 500 in full & final settlement of trade dues of Rs. 600. Which of the
following is true?
a. Debit Y Rs. 600 and Credit Cash account Rs. 600
b. Debit y Rs. 500 Debit discount Rs. 100 to the credit of Rs. 600
c. Debit Y Rs. 600 to the credit of Cash Rs. 500 and discount Rs. 100
d. Debit Y Rs. 500 to the credit of Rs. 500
e. None
Ans: c
945. SEBI and companys Act require auditors to qualify audit reports that
a) Do not confirm to mandatory accounting standards
b) Conform to mandatory accounting standards
c) Do not confirm to accounting standards
d) No responsibility on auditors
e) None
Ans: a
946. Which of the following is a Revenue Expenditure?
a) Construction of Factory shed

b) Sales tax paid in connection with purchase of office equipment
c) Legal expenses in connection with defending a title to firms property
d) Installation of new machinery
e) None
Ans: c
947.
Cheque of Rs. 5000 issued to the partner but not presented for payment. What is the
treatment in BRS starting with Passbook Overdraft?
a. Add Rs. 5000
b. Add Rs. 2500
c. Deduct Rs. 5000
d. Deduct Rs. 2500
e. No Treatment is needed
Ans: a
948. Balance under casted by Rs. 1000 in Passbook. What will be the treatment in BRS
starting from Cash Book Unfavourable balance.
a. Add Rs. 1000
b.Deduct Rs. 1000
c. add Rs. 500
d. deduct Rs. 500
e. No effect
Ans: b
949. Total credit side is greater than debit side of an account implies : -Tick the incorrect
a) Closing Balance: To Balance cd
b) Closing Balance: By balance cd
c) Opening balance: by balance bd
d) Opening balance: to balance bd
e) (b+d)
Ans: e
950. How the closing stock is shown in final accounts ?
a) Debit side of trading account and asset side of balance sheet
b) Credit side of the trading account and liabilities side of balance sheet
c) Credit side of trading account and asset side of balance sheet
d) Credit side of trading account
e) None
Ans: d
951. Loss of Goods due to fire is Rs. 25,000 is classified as Revenue Expenditure as :
a) it is recurring
b) amount involved is small
c) it is revenue loss arising out of business operation
Ans: c
952. The yield to maturity is a rate of return which ____
a) gives the current yield
b) is the discount rate at which the present value, of the coupon and the final payment at
face value, equals the current price
c) gives the return at maturity on the bond for the original holder
d) (b) or (c)
e) None
Ans: d
953. During preparation of final accounts it is observed that wages paid less by Rs. 5000.
Which of the following adjustment entry needs to be passed?
a. Wages account is to be debited to the credit of Cash account
b. Wages account is to be debited to the credit of Outstanding Expenses Account
c. Profit & Loss account is to be debited to the credit of Cash account
d. None
e. no entry needs to be passed
Ans: b
954. In banking company, matured term deposits to be shown under ______
a) demand deposits
b) saving bank deposits
c) term deposits
d) other liabilities and provisions
e) None
Ans: a
955. Qualitative transactions are not recorded in the accounts due to ___
a) Dual concept
b) Accrual concept
c) Money measurement concept
d) Convention of materiality
e) None
Ans; c
X Y & Associates, a partnership concern having the following figures as of 31-03-2014.
Capital Rs; 6 lac
Term Loan Rs. 8 lac

Sundry Creditors : Rs. 3 lac
Advance payment Received Rs; 1 lac
Fixed assets: Rs. 8 Lac
Intangible assets: Rs. 1 lac
Inventory: Rs. Rs; 7 lac
Cash & Bank Rs: 0.25 lac
Pre paid expenses Rs. 0.25 lac
Sundry Debtors: Rs: 1.50 lac
956.Find the Current ratio:
a. 2.25 : 1
b. 2.18: 1
c. 2.33: 1
d. 1.33:1
e. None
957.From the above facts and figure find out the Acid Test Ratio:
a. 2:1
b. 0.5:1
c. 2.4:1
d. None
Ans: c
958.
From the above facts and figure, find out the Net Working Capital (NWC)
1. 5 lac
2. 4 lac
3. 3.50 lac
4. 4.50 lac
5. Can not be determined
Ans: 1
959.
From the above facts and figures find out the amount of tangible networth
a. 5 lac
b. 6 lac
c. 4lac
d. None
e. Can not be determined
Ans: a
960.
From the above facts and figure calculate Total Outside Liability Ratio:
a. 0.42: 1
b. 0.5:1
c. 1:1
d. 1.25:1
e. Can not be determined
Ans: a
961. From the above facts & figure calculate Debt-equity ratio?
a. 1.33:1
b. 1.6:1
c. 1.5:1
d. None
Ans: b
962. Gross Sales Rs. 25 lac. Opening Stock of Rawmaterial rs. 3 lac. Closing stock of raw
Material Rs. 4 lac; Purchases Rs. 6 lac. Calculate Raw Material consumed:
a. 4 lac
b. 9 lac
c. 5 lac
d. None
e. Data Insufficient.
Ans: c
Material Rs. 4 lac; Purchases Rs. 6 lac. Depreciation: Rs. 1 lac; Mfg. Expenses Rs. 3 lac;
opening stock of WIP Rs. 1 lac; closing stock of WIP Rs. 3 lac. Calculate Cost of Production
a. 7 lac
b. 6 lac
c. 5 lac
d. 8 lac
e. None
Ans: a
964.
Gross Sales Rs. 25 lac. Opening Stock of Rawmaterial rs. 3 lac. Closing stock of raw
opening stock of WIP Rs. 1 lac; closing stock of WIP Rs. 3 lac. Opening stock of finished
goods 5 lac; closing stock of finished goods 4 lac.Calculate Cost of goods Sold
a. 7 lac
b. 8 lac
c. 6 lac
d. 5 lac
e. None
Ans: b
goods 5 lac; closing stock of finished goods 4 lac. Calculate Cost of Gross Profit.
a. 15 lac
b. 16 lac
c. 17 lac
d. 18 lac
Ans: c
goods 5 lac; closing stock of finished goods 4 lac. Selling & Admin. Exp. Rs.4 lac. Other Nonoperative income rs. 1 lac; other non-operative exp. 2 lac. Calculate operating Profit
a. 12 lac
b. 13 lac
c. 14 lac
d. 15 lac
Ans: a
goods 5 lac; closing stock of finished goods 4 lac. Selling & Admin. Exp. Rs.4 lac. Other Nonoperative income rs. 1 lac; other non-operative exp. 2 lac. Interest on long term loan Rs. 5
lac. Calculate PBT [Profit before tax]
a. 8 lac
b. 7 lac
c. 6 lac
d. 5 lac
e None
Ans: b
lac. Calculate cash profit.
a. 5 lac
b. 7 lac
c. 6 lac
d. 4 lac
e. none
Ans: c
lac. Calculate Net Profit ratio.
a. 25 %
b. 24%
c. 23%
d. 22%
Ans: b
970. Debt collection period in terms of months equals to:
a. Average Debtors / Total sales * 12
b. Average debtors / Credit sales * 12
c. average Debtors / cost of goods sold *12
d. Closing debtors / Cost of Goods Sold * 12
e. None
ans: b
971. To calculate holding period of Work-in process the denominator will be:
a. Cost of Goods sold
b. total sales
c. cost of Production
d. raw material consumed
e. None
Ans: c
972.Debtors Velocity is:
a. Credit sales / Average debtors
b. Total sales / Average debtors
c. Cost of Goods sold / average debtors
d.Cost of Production / average debtors
e. None
ans: a
973. You have taken a loan of a certain amount which will be repaid in full and final
settlement if you pay Rs. 10000 per quarter for 4 years. What was the loan amount when
rate of interest is 9%?
a. Rs. 311 318
b. Rs. 324 318
c. Rs. 301318
d. Rs. 300000
Ans: a
974. Under annualized compounding if a certain sum of money becomes trible in 12 years
find the rate of interest.
a. 10 %
b. 9%
c. 9.5 %
d. 10.5%
e. Data insufficient
Ans: c
975. A Par Value bond of 1000 with coupon of 8%; Term to Maturity is 5 years and YTM is
9%. Calculate bond price
a. 960
b. 1060
c. 980
d. 990
e none
Ans: a
976. . A Par Value bond of 1000 with coupon of 8%; Term to Maturity is 5 years and YTM is
9%. Calculate Duration.

a. 5.30 years
b. 4.30 years
c. 4.15 years
d. 4.05 years
e. None
Ans: b
9%. Calculate Modified Duration.
a. 3.94 years
b. 4.15 years
c. 4 years
d.4.05 years
e. none
Ans: a
9%. If the bond is quoted in the market at present at Rs. 900; find the current yield.
a. 9.22 %
b. 9%
c. 8.88%
d. 8.28%
e. None
Ans. c
9%. If the YTM increases by 1%; Find the price of the bond.
a. 1017
b. 1024
c. 924
d. 1124
e. None
Ans. c
980. A school is planning to purchase a bus worth Rs. 5,00,000 after 4 years. They have
planned to make savings right from this year. Calculate the yearly savings, they are
required to make the purchase the bus, if the return on investment is 12%.
a. 1,03,210
b. 1,04620
c. 1,20,000
d. 1,21,630
e. None
Ans: b
981. What is the effective rate of interest corresponding to the rate of 10% per annum; if
interested is compounded half yearly.
a. 10.25%
b. 10.50%
c. 10.00%
d. 10.15%
e. None
Ans: a
982. A person deposited Rs.4, 000 in a bank at 6% compounded continuously. After 3 years,
the rate of interest was increased to 7% and after 5 more years, the rate was further
increased to 8%. The money was withdrawn at the end of 10 year. Find the amount.
a. 7,947.58
b. 7,794.58
c. 7,974.58
d. 7,900.85
e. None
Ans: b
983. A person desires to create an endowment fund to provide for a prize of Rs.300 every
year. If the fund can be invested at 10% p.a. compound interest, find the amount of the
endowment.
a. Rs. 6,000
b. Rs. 3,000
c. Rs. 2,500
d. Rs. 3,547.67
Ans: b
984. Rs. 5000 par value bond.Current Market Price is Rs. 4000.Coupon Rate is 10 %. It has
maturity of 6 years.What would be the YTM if the bond is held till maturity?
a. 12%
b. 14.3%
c. 15.35%
d.11.45%
e. None
Ans: b
985. The Concept of Duration of a Bond is also known as:

a. McGragors Duration
b. Molar duration
c. Morgans duration
d. McCaulays duration
e. None
Ans: d
986. Which of the following(s) is / are incorrect statement?
a. the higher the Payback Period, the higher is the acceptability
b. Pay back period does not take into account the present value of money
c. NPV calculation is done with a pre-determined discount rate
d. IRR calculation attempts to find out the opportunity Cost (Discount Rate) at which
present value of inflows equals to the amount of Outflow
e. none is incorrect
ans; a
987. Rule 72 helps us to determine the time period by which a certain sum at a certain rate
percent would be double under:
a. Simple rate of interest
b. Annualized compounding
c. quarterly compounding
d. Half yearly compounding
e. Monthly compounding
ans: b
988. Original Cost of a Machine is Rs. 78000. The salvage value is Rs.. 18000. If the book
value at the beginning of second year is 48000, find the rate of depretiation.
a. 15 %
b. 20%
c. 25%
d. 12%
e. None
Ans: b
989. According to AS-6; which of the following is / are true in respect of Depreciation:
a. Assets held by the business entity for use in the production process
b. Expected to be used for more than one accounting year
c. have a limited productive life
d. All are correct
e. none is correct
Ans: d
990. The depreciation charged on an asset till 31st March 2014 was Rs. 38000. Original
Cost of the asset is Rs. 200000. Rate of depreciation is 10% what will be the depreciation for
2013-14. Rate of Depreciation is 10 %. Find the depreciation for 2014-15.
a. Rs. 20000
b. Rs. 16200
c. Rs. 15000
d.Rs. 23800
e. None
Ans: b
991. The balance of machine as on 31-03-2013 is Rs. 72900. The Machine was purchased on
1st April 2009.Depreciation charged @ 10 %(WDV).The cost price of the machine:
a. 100000
b. 90000
c. 81000
d. 72900
e. None
Ans: a
992. Preference share can be:
a. Cumulative
b.Redeemable
c. Participating
d. All
e. None
Ans: d
993. XyZ & Co Ltd offers to its shareholders the right to buy one share of Rs. 100 at a price
of Rs. 150 for every three share held. The market value of the share is Rs. 200.Find the
value of Right
a. Rs. 187.50
b. Rs. 12.50
c. Rs. 200
d. Rs. 1125.00
e. None
Ans: b
994. A Company offers comes with IPO of 10000 shares. Application received for 14000
shares. If the shares are allotted on pro-rata basis, then applicants for 14000 shares are to
be allotted:
a. 4 shares of every 5 shares applied
b. 2 shares for every 3 shares applied

c. 5 shares for every 7 shares applied
d. 3 shares for every 4 shares applied
e. None
995. When no applicant for shares is refused but none is allotted in full; it is
called- allotment.
a. ad-hoc allotment
b. allotment on over subscription
c. allotment on under subscription
d. Pro-rata allotment
e. None
Ans: d
996. 500 shares of Rs. 20 each issued at 5% discount are forfeited for non-payment of
allotment and final call money @ Rs. 9 and Rs. 5 respectively. Amount to be credited to
Share forfeiture account:
a. Rs. 2000
b. Rs. 2500
c. Rs. 3000
d. Rs. 7000
e. None
Ans: b
997. Under CBS environment, if the savings account of A is to be debited with Rs. 1000 to
the credit of Bs Savings Account, the transactions take place in the system: Tick the
incorrect option.
a. GLSB Account A is directly Debited to the Direct credit of GLSB account B
b. Balancing account is credited for debit to A and Balancing account is debited for credit
to B
c. Balancing account is debited to the credit of GL SB account B
d. Balancing account is Credited to the debit of GL SB Account A
e. None is incorrect
Ans: a
998. In batch transaction, say CD account of GURUDAS College has to be debited for Rs.
1000000 for credit of 20 lecturers savings account assuming that each lecturer would get
credit of Rs. 50000. Tick the irrelevant option in this regard.
a. Debit CD A/C Gurudas College by Rs. 1000000
b. Credit Balancing account by Rs. 1000000
c. Debit balancing Account 20times by Rs. 50000 each
d. Credit Individual Lecturers account by 50000 each
e. None is incorrect
Ans: e
999. EOD operation at CDC will start around-PM
a. 8.30
b. 9.30
c. 10.00
d. 10.30
e.None
Ans: c
1000. SOD process takes care all the reposting of ATM transaction took place during EOD
process. SOD stands for:
a. Statement of the Day
b. Start of the Day
c. Stay of the Day
d. Source of the Day
e. None
Ans: b

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132.Return on Investment is (i) Operating Assets/operating income, (ii) Operating

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a. Only (i) and (ii)

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1000MCQ with answer on Accounts & Finance for Bankers

b. Only (i) and (iii)

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