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JAIIB ACCOUNTS 2HRS 120 Questions
1) Which of the following may not be part of the Bank reconciliation process.
a) Interest on overdraft
b) Dishonour of cheque
c) Cash drawn from bank
d) Cheque deposited but not collected
2) 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.
3) 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.
4) 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
d) None of the above
5) 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.
d) None of the above.
6) Goods worth Rs.2000 sold to Vijay was entered in purchase account;
The rectification is
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.
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7) 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/-.
8. 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) 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
9) 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 ½ the amount.
10) 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.
11) Which of the following is true
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.
d) All of the above.
12) 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.
13) Freight expenses for moving new machinery to factory is
a) Revenue expenses
b) Deferred revenue expenditure
c) Capital expenditure
d) None of the above
14) 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
15) Which of the following is not a deferred revenue expenditure
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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
16) If the partnership Deed does not mention any method of maintaining capital
accounts then the fixed capital Account Method has to be followed
True/ False/
17) 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
18) Cost of goods sold is
a) Opening stock + purchases + closing stock
b) Opening stock + purchases – closing stock
c) Opening stock – purchases + closing stock
d) None of above
19) 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)
20) 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)
21)Which of the following is most desirable
a) Pricing issue of goods to match current material costs
b) Overstating profits
c) Understating profits
d) none of the above
22) As per accounting standards which of the following is not a preferred method
a) LIFO
b) FIFO
c) WACM
d) All of them
Read the following and answer :
Drawer is ‘A’
Drawee is ‘B’
Endorsee is ‘C’
23) In the books of ‘A’, Bills receivable a/c is debited and B’s a/c is credited,
then
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a) Bill accepted by ‘A’
b) Bill accepted by ‘ B’
c) Bill retired by ‘B’
d) None of the above
24)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
25) 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
26. Noting charges are
a) Paid to bank for dishonour
b) Paid to drawer for dishonour
c) Paid to notary public for recording dishonour
d) None of the above.
27. Goods lost in transit is
a) Nominal loss
b) Abnormal loss
c) Casual loss
d) Conditional loss
28. Due to heavy flooding a truck carrying consignment goods sinks. This loss is
called
a) contingent loss
b) Nominal loss
c) Abnormal loss
d) Casual loss
29. Which of the following is true for leasing and hire purchase
a) Lessor and vendor can claim depreciation.
b) Lessor and hirer can claim depreciation.
c) Lessee and hirer can claim depreciation.
d) Lessee and vendor can claim depreciation.
30. In sum of digits method for 5 years which of the following is the 1st year’s
allocation ratio.
a) 1/15
b) 2/15
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c) 3/15
d) 5/15
31. 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 – 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
32. 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.
d) All the above
33. 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.
34. 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.
35. Income for the year = I, Outstanding Income for previous year = Id,
Outstanding Income of current year = Idi, then Receipts for the year is
a) I – Idi + Id
b) I + Idi – Id
c) I + Idi + Id
d) None of the above.
36. Opening balance of asset = Oi, Closing balance of asset = Oc, Depn. = D,
Then addition to the asset during the year is
a) Oc – D – Oi
b) Oi + D – Oc
c) Oc + D – Oi
d) Oi – D – Oc
37) Share premium amount can be distributed as dividend amongst the
shareholders
True/ False/
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38) For a Non- Trading Organization, a P & L A/c called an Income &
Expenditure A/c because.
(a) They often make losses.
(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.
39) 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.
40) Under written down value method of Depn., the W D V of the asset is
always
a) equal to zero
b) < zero
c) > zero
d) none of the above
41)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
42)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
.
43)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
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44)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
45)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/d)None of the above
.
46)One of the pairs given below is wrong. Select the wrong pair.
(e) Outstanding expenses - Nominal account
(f) Profit and Loss Account (Dr. balance) – Application of funds
(g) Net worth less reserves & surplus - Capital
(h) Balance sheet - Financial position
47)Choose the sentence which speak about illegal association
(i) The unregistered association of 10 persons to do banking business
(j) The unregistered association of 50 persons to do non banking business
(k) The unregistered association of 20 persons to do business other than
banking
(l) The unregistered association of 10 persons to do business other than
banking
48)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 partner’s 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
49)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
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50)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/d)None of the above
51)A and B are two partners in a firm sharing profits and losses as 2:1. they admitted
C as a partner with 25% share in the profits of the firm. Hence , the new profit sharing
ratio , after admission of C would be -----
(e) 15:15:10
(f) 20:10:10
(g) 3:1:1
(h) None of the above
52)Mr. Q and Mr. R were partners of a firm sharing profit and losses in the ratio of
3:2. They take S into partnership. It was agreed that S will pay Rs.1,00,000 as his
share of goodwill which will be retained in business and also bring Rs.3,00,000 as
capital for one fourth share in the future profits. The book value of the stock was
41,000 but was to be revalued at Rs.50,000, Accountant has passed following entries,
but Mr. Q feels that one of the entry is wrong. Select the wrong entry from the
following.
(i) Debit cash and credit Goodwill for Rs.1,00,000
(j) Debit cash and credit S’s Capital for Rs.3,00,000
(k) Debit Goodwill for Rs.1,00,000 and credit Q’s Capital by Rs. 60000 &
R’s Capital by Rs. 40,000
(l) Debit Stock and credit Profit & Loss Adjustment A/c by Rs.9,000
53)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.
(m) For increase in the value of assets-Debit Asset Account and Credit
Revaluation Account.
(n) For decrease in the value of liabilities- Debit Liabilities Account and
Credit Revaluation Account.
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(o) For Profit on revaluation of assets and liabilities – Debit Old Partners
Capital Account in old profit sharing ratio and Credit Revaluation
Account
(p) For decrease in the value of assets -Debit Revaluation Account and
Credit Asset Account
54) Any facts, observations, occurrences are called -----
(a) data
(b) record
(c) file
(d) system
55)In the books of ABC Enterprises, a partnership firm, when Mr. C, a partner
decided to resign from the firm, a revaluation of assets and liabilities was done and
Revaluation account was prepared which showed the following position: At the credit
side of Revaluation Account, Stock A/c Rs.25000, Premises A/c Rs.52000 and
Creditors A/c Rs. 8000 were shown while at debit side of Revaluation Account
Reserve for Doubtful Debts A/c. Rs.15000, A’s Capital A/c.Rs.20000, B’s Capital
A/c. Rs.20,000 and C’s Capital A/c. Rs.20000 were shown. Accountant has
interpreted the Revaluation Account as follows. One of the interpretations by him is
incorrect. Select the incorrect sentence.
(a) Stock is revalued upwardly by Rs. 25000
(b) Creditors are revised upwardly by Rs.8000
(c) Premises are revised upwardly by Rs.52000
(d) A provision on debtors of Rs. 15,000 is made for doubtful
debts
56)Select the True statement from the following
(e) Interest on drawing is an income to the partnership firm
(f) Joint Venture is a permanent partnership firm
(g) Goodwill is a tangible asset of the firm
(h) In the absence of partnership agreement , partners share
profit and loss in proportion to the capital contributed by
the partners.
57)Select the incorrect statement in respect of companies.
(i) A member of a company can enter into contract with a
company
(j) It is compulsory to register a joint stock company
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(k) If all but one member of a private company becomes
insolvent ,it affects the existence of the organisation
(l) Shareholders are not liable for the acts of the company
58)Select the incorrect sentence
(m) Whenever, there is no profit or inadequate profit, dividend
cannot be declared
(n) The right to claim dividend lapses when there is no profit in
case of cumulative preference shares
(o) When the company makes profit , arrears of preference
dividend are cleared first
(p) The Act prohibits the issue of any preference shares which
are irredeemable
59)Select the incorrect statement
(q) Authorized capital is the capital with which the company is
registered
(r) Issued capital is equal to its authorized capital
(s) Authorized capital, issued capital, subscribed capital, called
up capital and paid up capital cannot be same
(t) The amount which the company has asked its shareholders
to pay is called up capital of the company.
60)Following are the journal during the process of application to allotment stage .
One of the entries is wrong. Select the wrong entry.
(u) Debit bank account and credit share application account (
when application money is received)
(v) Debit share application account and credit share capital
account (application transferred to share capital account)
(w) Debit share capital and credit share allotment account ( for
recording allotment money being fallen due )
(x) Debit bank account and credit share allotment account ( for
receipt of allotment money)
61)Select the incorrect statement in respect of calls in advance
(y) The company may accept from shareholders , the uncalled
amount on shares even before it is fallen due
(z) The article of association must permit such acceptance of
advance call money
(aa) Interest on calls in advance can be paid but the
maximum is upto 6%
(bb) The amount of calls in advance is part of the paid up
share capital
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62)Select the incorrect statement in respect of utilization of share premium
(cc) it is used for the purpose of buy back of shares
(dd) it used for payment of dividend in case of inadequacy of
profits
(ee) it is used for writing off preliminary expenses
(ff) it is used for issue of fully paid bonus shares
63)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.
(gg) Debit bank account by Rs.900
(hh) Debit forfeited shares by Rs.500
(ii) Credit share capital by Rs.1000
(jj) Credit forfeited shares by Rs.400
64)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.
(kk) Credit Forfeited shares Account by Rs.200
(ll) Credit Share allotment Account by Rs.200
(mm) Credit share premium Account by Rs.100
(nn) Credit Share first call Account by Rs.200
65)Select the source which is not valid for issue of bonus shares
(oo) Share premium
(pp) Revaluation reserve created by revaluation of fixed
assets
(qq) Capital reserve
(rr) Capital redemption reserve
66)The liability side of the balance sheet of ABC International Ltd. is showing
following position: Paid up share capital Rs.25 Lakh ( 25,000 shares of Rs.100
each fully paid up)Share premium Rs.5 Lakh, Capital Reserve Rs. 3 Lakh, General
Reserve Rs. 15 Lakh and Profit & Loss account Rs. 15 Lakh .It was decided to use
minimum free reserve for issue of 1:1 bonus shares.. The accounts and the amount
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with which the account is debited are given below in sets. One of the set is correct.
Select the same.
(ss) Share Premium Account (Rs.5 Lakh), Capital Reserve
Account ( Rs. 1 Lakh), General Reserve Account (15
Lakh) & Profit & Loss Account by Rs. 4 Lakh
(tt) Share Premium Account (Rs. Nil Lakh), Capital Reserve
Account ( Rs. Nil Lakh), General Reserve Account (10
Lakh) & Profit & Loss Account by Rs. 15 Lakh
(uu) Share Premium Account (Rs.5 Lakh), Capital Reserve
Account ( Rs. 3 Lakh), General Reserve Account (15
Lakh) & Profit & Loss Account by Rs. 2 Lakh
(vv) Share Premium Account (Rs.5 Lakh), Capital Reserve
Account ( Rs. 1 Lakh), General Reserve Account (4 Lakh)
& Profit & Loss Account by Rs. 15 Lakh
67)Select the incorrect statement in case of Share Capital and Reserves and Surplus
as shown in the balance sheet.
(ww) Under share capital, the following order is maintained:
Authorised capital, issued capital, subscribed capital
(xx) 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
(yy) The amount of unpaid calls is deducted from (b) above
(zz) The amount of forfeited shares account is shown under
Reserves & surplus
68)Select the incorrect statement in respect of form of balance sheet of
companies(Liabilities side).
(aaa) sinking fund is shown under unsecured loans
(bbb) Loans and Advances from banks are grouped under the
head Secured Loans
(ccc) Unclaimed Dividend is grouped under the head current
liabilities
(ddd) Proposed dividend is grouped under provisions.
69)Select the incorrect statement in respect of form of balance sheet of companies (
Asset side).
(eee) Live Stock is grouped under the head ‘current Asset’
(fff) Balance of unutilized monies raised by issue is grouped
under the head ‘Investments’
(ggg) Interest paid out of capital during construction is
grouped under the head ‘Miscellaneous Expenditure’
(hhh) Vehicles are grouped under the head ‘Fixed Asset’
70)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 -----
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(iii)1 year thereafter
(jjj)2 years thereafter
(kkk) 3 years thereafter
(lll)5 year thereafter
71)One of the accounts is wrongly grouped under the head “Investments” while
preparing the balance sheet of the company. Single out the wrong account.
(mmm) Investments in government or trust securities
(nnn) Investments in shares ,debentures or bonds
(ooo) Immovable properties
(ppp) Interest accrued on investments
72)One of the accounts is wrongly debited to “Profit and Loss Appropriation A/c”
of a company. Name the wrong account debited
(qqq) Interim dividend
(rrr) Proposed dividend
(sss) Provision for tax
(ttt)Capital redemption reserve
73)Select the false statement in respect of assets
(a) a banking company is allowed to acquire assets for its own use
(b) a banking company is allowed to grant loans against the security of
assets belonging to its customers
(c) a banking company is allowed to take possession of such assets in case
of default committed by the borrower
(d) a banking company is not allowed to sale the assets against the security
of which it has granted loans
74)The scheduled banks are required by RBI to transfer at least ------ of their
disclosed profit after adjustment/provision towards bonus to staff
a. 20%
b. 15%
c. 10%
d. None of the above
75)Select the incorrect statement in respect of “ financial Statements of
Banks”
(a) a banking company is not required to prepare
financial statements in accordance with Schedule VI
of the Companies Act , 1956.
(b) The Act prescribes special forms of balance sheet
and profit and loss account for the preparation of its
final accounts
(c) These are set out in form A and form B of the first
schedule to the Banking regulation Act, 1949
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(d) Form A gives format of a balance sheet and form “B”
gives the format of a profit and loss account
76)The financial statement of bank consists of ------- schedules
(a) 18 Schedules
(b) 16 Schedules
(c) 17 Schedules
(d) Schedules
77)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
.
78)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
79)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
80)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
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81)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
82).Depreciation on bank’s 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
83)Select the correct statement in respect of doubtful debts
(a) Which has remained NPA for a period not exceeding 18
months?
(b) Which has remained NPA for a period exceeding 18 months
(c) Which is considered uncollectible by bank/ internal auditor
or RBI Inspection
(d) None of the above
84)The provisional requirement for standard asset is-----
(a) 1%(revised) of total outstanding
(b) 10%(revised) of total outstanding
(c) 40%(revised) of total outstanding
(d) 100%(revised) of total outstanding
85)The investment under “held to maturity” should not exceed -----of
bank’s total investment.
(a) 25%/b)75%c)5%d)None of the above
86)The list given below consists of various securities. Identify the security
which is SLR security
(a) Securities issued by local authorities
(b) Shares/c)Bondsd)subsidiaries
87)Acceptances, endorsements and guarantees are shown as-----
(a) other assets
(b) contingent liabilities
(c) advances
(d) other liabilities and provisions
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88)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.
89)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
90)Choose the wrong pair from the following. The information given in
the pair is pertaining to banking companies
(a) Reserves & surplus - Share premium
(b) Time deposits - Matured time deposits
(c) Borrowings in India - Refinance from NABARD
(d) Other Liabilities & Provisions - Inter office/branch
adjustments(net
91)Choose 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
92)The name of the accounts with the coverage of various items in
building that account is given below. One of the items covered in on of the
accounts is wrong. Select this account
(a) Closing balance of provisions held towards NPA - Opening
Balance plus provisions made during the year less write off
of bad debts/write back of excess provisions
(b) Interest Earned - interest on advances plus income on
investments plus interest on deposit with RBI plus income
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earned by way of dividends from subsidiaries plus discount
on bills less unexpired discount
(c) Reserves & surplus - Opening balance plus additions during
the year less deductions during the year
(d) Term deposits - from banks and from Others
93)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
94)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
95)Companies are required to transfer certain percentage of their profit
after tax to reserves, to declare dividend. The various rates of transfer
based on the rates of dividend are given below in pair. Select the wrong
pair.
(a) Rate of dividend exceeds 10% but not 12.50- Transfer to
reserve @ Nil%
(b) Rate of dividend exceeds 12.50% but not 15%- Transfer to
reserve @ 5%
(c) Rate of dividend exceeds 15% but not 20%- Transfer to
reserve @ 7.50%
(d) Rate of dividend exceeds 20% - Transfer to reserve @ 10%
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96)While preparing the final accounts of the company, the adjustments [(i)
to (iv)] are to be made by passing necessary entries. One of the entries
passed is wrong entry. Select the wrong entry.(i) Depreciate plant ,WDV
of which is Rs.3,30,000 at 15% (ii) Write off Rs.5,000 from Preliminary
Expenses (iii) Half years debenture interest due (12% debentures of Rs.
3,00,000) (iv) a claim of Rs. 25,000 for workmen’s compensation is
disputed by the company.
(a) Debit Depreciation on plant by Rs.49,500 credit plant by
49,500 AND Debit Profit & Loss Account by 49,500 and
Credit Depreciation on plant by 49,500
(b) Debit Profit and Loss Account by Rs.5,000 and Credit
Preliminary Expenses
(c) Debit Debenture Interest by Rs.18,000 & Outstanding
Liability for Deb. Interest by 18,000 AND Debit Profit
and Loss Account by Rs.18,000 and Credit Debenture
Interest by Rs.18000
(d) Debit Wages by Rs.25,000 & Credit Outstanding Liability
for Workers compensation AND Debit Profit and Loss
Account by Rs.25,000 and Credit Wages by Rs.25,000
.
97)While preparing the final accounts of the company, the adjustments [(i)
to (iv)] are to be made by passing necessary entries. One of the entries
passed is wrong entry. Select the wrong entry.(i) Provide dividend 5% of
paid up share capital (Share capital of Rs. 5,00,000 consisting of shares of
Rs. 10 each fully paid) (ii) Insurance for unexpired period is Rs.2000 (iii)
A provision of Rs. 25,000 is to be made for income tax (iv) a provision of
Rs. 5000 is to be made for doubtful debts
(a) Debit Dividend by Rs.25000 & Credit Bank by Rs.25000
(b) Prepaid Insurance by Rs.2000 & Insurance by Rs.2000
(c) Debit Profit & Loss Account by Rs.25,000 & Credit
Provision for Tax by Rs.25,000
(d) Debit Profit & Loss by Rs.5,000 & Credit Provision for
doubtful debts by Rs.5,000.
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98)In respect of asset side of the balance sheet one of the items is
presented in a proper order, rests are disorderly. Select the orderly
presented item from the following.
(a) Investments, Fixed Assets, Current Assets & Loan
Advances, Profit & Loss Account(Dr. balance),
Miscellaneous Expenditure
(b) Fixed Assets, Investments, Current Assets & Loan
Advances, Profit & Loss Account(Dr. balance) ,
Miscellaneous Expenditure
(c) Fixed Assets, Investments, Current Assets & Loan
Advances, Miscellaneous Expenditure, Profit & Loss
Account(Dr. balance)
(d) Fixed Assets, Current Assets & Loan Advances, Profit &
Loss Account(Dr. balance), Miscellaneous Expenditure
99)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 year’s net profit
(c) The account is debited with provision for taxes
(d) The account is debited with provision for dividend
100)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 partner
(b) Treatment of losses - insolvency of a partner
(c) Loan from partners - No interest as partners are owners
(d) Goodwill - super profit method
101)The two portion of each pair relating to admission of a partner has got
some relationship. However one of the pairs is mismatch and has no
relationship. Select this pair from the following
(a) Admission of a partner - gain ratio
(b) Reserves & surplus - Old partners
(c) Goodwill - new partner
(d) Revaluation of assets & liabilities - Profit & Loss
adjustment account
102)The two portion of each pair relating to retirement of a partner has
got some relationship. However one of the pair is mismatch and has no
relationship. Select this pair from the following
(a) Retirement - voluntary action
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(b) Gain - retiring partner
(c) Share of goodwill - borne by continuing partners
(d) Reserve & surplus - belong to all partners
103)If the partners capital accounts are fixed, where will you record
(either debit side or credit side of which account ) the following
transactions (i) Salary payable to partner (ii) Fresh capital introduced by
a partner (iii) Drawing made by a partner (iv) Share of profit earned by a
partner. The effect to one of the journal entries is wrongly given. Identify
that account from the following.
(a) Debit side of partner’s current account
(b) Credit side of partner’s capital account
(c) Debit side of partner’s current account
(d) Credit side of partner’s current account
104)L,K and P are partners. The following differences as listed at (i) to
(iv) have arisen due to misunderstanding. The answer to each point is
given at (a) to (d). One of the solutions is incorrect. Identify the wrong
solution. (i) L used Rs.25,000 belonging to the firm and made a profit of
Rs.4,000. K wants the amount to be given to the firm (ii) P used
Rs.10,000 belonging to the firm and suffered a loss of Rs. 3000. He wants
the firm to bear the loss (iii) L & K wishes to appoint S as new partner. P
does not agree (iv) L has given loan of Rs. 50,000 to the firm, he wants
interest at 6% ( there is no partnership deed)
(a) K is right .L must pay Rs.29,000 to the firm
(b) P is right . Firm should bear profit as well as losses.
(c) P is right. No new partner can be admitted without the
consent of all.
(d) L is right. He is entitled for interest at 6% in the absence
of partnership agreement.
105)Below are some statements about partnership. One of them is correct,
identify that statement.
(a) Partnership arises from reputation
(b) A partnership is formed only for a legal business
(c) The liability of partners is limited
(d) The business of the firm is conducted by two partners
Page 21
106)O and P are two partners sharing profits in the ratio of 7:3. They
admit Q into partnership as a partner from 1st
April 2006 on 3/7th
share in
the profit. What is the new profit sharing ratio
(a) 14: 6 : 15
(b) 7: 3: 3
(c) 2: 2: 3
(d) None of the above
.
107)A firm earns Rs.10,000 as its normal profits. The rate of normal
return being 10%. The assets of the firm amount to Rs.72,000 and
liabilities to Rs.24,000. Find out the value of goodwill.
(a) Rs.52,000
(b) Rs.1,00,000
(c) Rs.28,000
(d) Nil
(e)
.
108)When a new partner gives cash for goodwill, the amount is credited
to-----
(a) Goodwill account
(b) Capital account of new partner
(c) Cash account
(d) None of the above
109)A and B sharing profits and losses in the ratio of 2:1. C is admitted as
partner giving him ¼ share. The new profit sharing ratio will be-----
(a) 2:1:1
(b) 4: 4:3
(c) 3: 3: 2
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(d) None of the above
110) The rate of interest in a bank is 5% compounded annually. What should I
invest per year to get Rs. 6,00,000 at the end of 20 years?
a) Rs. 8,000 approx./ b) Rs. 9,073 approx./ c) Rs. 18,146 approx/ d) Rs. 36,292 approx.
111) A person borrowed Rs. 6,560 at 5% compound interest to repay in
two equal Annual Installments. Find the amount of each Installment.
a) Rs. 2,835/ b)Rs., c)3,285/ d) Rs. 3,528/
112. What is the market value of a bond that will pay a total of fifty semiannual
coupons of Rs. 80 each over the remainder of its life? Assume the bond has a Rs.
1,000 face value and a 12% yield to maturity.
a) Rs. 734.86, b) Rs. 942.26, c) Rs. 1,135.90 , d) Rs. 1,315.24,
113)M/s Jayesh manufacturing just issued a bond with a Rs. 1,000 face value and a
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. 1,020 , c)Rs. 1,051 , d)Rs. 1,087 ,
114)You have a choice between 2 mutually exclusive investments. If you require a
15% return, which investment should you choose?A B Year Cash Flow Cash Flow 0 -
Rs 1,00,000 -Rs. 125,000 1 20,000 75,000 2 40,000 45,000 3 80,000 40,000
a)Project A, because it has a smaller intial investment.
b)Project B, because it has a higher NPV.
c)Project A, because it has the higher internal rate of return.
d)Project B, because it pays back faster.
115)At a certain rate of simple interest, a sum doubles itself in 10 years. It will treble
Itself in-
a)12 Years/ b) 15 Years/ c) 18 Years/ d) 20 years/
116)A sum of money at simple interest amounts to Rs. 2,800 in 2 years and to Rs.
3,250 in 5 years. Find the sum and the rate of interest.
a)Rs. 2,500 ; 4%/ b) Rs. 2,500; 5%/ c) Rs. 3,000 ; 4%/ d) Rs. 2,500 ; 6%
117)A sum of money amount to Rs.2,240 @ 4% simple interest in 3 years. Find the
interest on the same sum for 6 months @ 3.5% p.a. a)Rs. 35/ b) Rs. 40/ c) Rs.
45/ d) Rs.50/
Page 23
118). What is the rate percent per annum if a sum doubles itself in 12 years at
Compound rate of interest?
a)5.2%/ b)5.4%/ c) 5.8%/ d) 5.9%
119)Sharda borrowed some money from a money-lender. She returns this in two
Annual equal Installments of Rs. 5,832 each. Find the sum, if the rate of compound
interest is 8% p.a.
a) Rs. 5,832/ b) Rs. 5,200/ c) Rs. 11,664/ d) Rs. 10,400/
120)A sum of money was borrowed the paid back in 2 annual Installments of
Rs. 1,864 and Rs1,740, respectively. If the rate of compound interest was 16%
p.a. find out the sum borrowed.
a) Rs.3,604/ b) Rs.3,202/c) Rs. 2,900/d)Rs.2,700/
