SEBI Grade A (General Stream) Mock Test - 7 - Bank Exams MCQ

The correct answer is Romesh Bhattacharji.​In News

• "KASHMIR: Travels in Paradise on Earth"

Key Points

• "KASHMIR: Travels in Paradise on Earth", the book is published by HarperCollins.
• Romesh Bhattacharji authored the book "KASHMIR: Travels in Paradise on Earth"
• HarperCollins is proud to announce the publication of KASHMIR: Travels in Paradise on Earth by Romesh Bhattacharji
• In this book, Romesh Bhattacharji describes, in meticulous detail and with the help of hand-drawn maps, the topography and geography of the region, the charm of Kashmir's nooks and crannies, the splendor of its lakes and meadows, and the beauty of its valleys and peaks.

Additional Information

• Romesh Bhattacharji
  • ​Romesh Bhattacharji retired as the Chief Commissioner of Customs and remains grateful to the organisation for allowing him to serve in the remotest and most magnificent part of India.
  • He has been an avid trekker since his youth, and his fascination for Ladakh has led him to visit the region several times and focus on it in the last decade.
  • He has also authored Lands of Early Dawn, published in 2002.
• HarperCollins
  • ​It is an Anglo-American publishing company that is considered to be one of the "Big Five" English language publishers, along with Penguin Random House, Hachette, Macmillan, and Simon & Schuster.
  • HQ - New York

The correct answer is ​Switzerland.In News

• India ranked 134 out of 193 countries on the global Human Development Index (HDI), according to the United Nations Development Programme’s (UNDP’s) latest report.

Key Points

• The Human Development Index (HDI) is a composite statistic of life expectancy, education, and per capita income indicators, which are used to rank countries into four tiers of human development.
• The HDI is part of the Human Development Report published annually by the United Nations Development Programme (UNDP).
• Generally, countries like Switzerland have historically performed very well on the HDI, often securing top positions.
• The HDI rankings take into account various factors, including life expectancy at birth, expected and mean years of schooling, as well as Gross National Income (GNI) per capita.
• Switzerland has consistently been among the top countries in the HDI rankings due to its high scores across all indicators, including a long life expectancy, a high level of education, and a high GNI per capita, which reflects the well-being and standard of living of its citizens.

Additional Information

The correct answer is the Ministry of Social Justice and Empowerment.

In News

• PM launches Pradhan Mantri Samajik Utthan evam Rozgar Adharit Jankalyan (PM-SURAJ) portal.

Key Points

• The Ministry of Social Justice and Empowerment launched a nationwide initiative aimed at offering credit support to the marginalized segments of society, where Prime Minister Shri Narendra Modi was the Chief Guest of the event.
• During the event, PM unveiled the 'Pradhan Mantri Samajik Utthan and Rozgar Adharit Jankalyan' (PM-SURAJ) national portal online which symbolized the ministry’s dedication to placing the underprivileged at the forefront, towards uplifting the most marginalized sections of society, and supported credit assistance to one lakh entrepreneurs hailing from disadvantaged communities.
• Prime Minister Shri Modi personally interacted with beneficiaries from various states who have benefitted under schemes like NAMASTE, VCF-SC, VCF-BC, and ASIIM from disadvantaged groups, including Scheduled Castes, backward classes, and Safai Mitras.
• Furthermore, Ayushman health cards and personal protective equipment (PPE) kits were distributed by the ministry to sewer and septic tank workers (Safai Mitras) under the National Action for Mechanized Sanitation Ecosystem (NAMASTE).

Additional Information

• Ministry of Social Justice and Empowerment
  • ​It is a Government of India ministry.
  • It is responsible for welfare, social justice, and empowerment of disadvantaged and marginalized sections of society.
  • The current minister is Virendra Kumar.
• PM-SURAJ
  • It signifies the government's commitment to extending credit support and empowering one lakh entrepreneurs from disadvantaged communities.

The correct answer is Rs. 500 crore

In News

• Ministry of Heavy Industries introduces Electric Mobility Promotion Scheme 2024 with a Rs. 500 crore outlay from April 1 to July 31, 2024.

• It aimed at accelerating EV adoption, particularly for electric two-wheelers (e-2W) and three-wheelers (e-3W), to boost green mobility and EV manufacturing ecosystem in India.
• The eligible categories include e-2W and e-3W for commercial purposes, including registered e-rickshaws & e-carts and L5 category e-3W.
• The components include subsidies/demand incentives (INR 493.55 crore) and scheme administration (INR 6.45 crore).
• The targeting supports 3,72,215 EVs, with incentives extended to vehicles fitted with advanced batteries.
• The scheme aligns with Aatma Nirbhar Bharat vision, promoting domestic EV manufacturing and creating employment opportunities.

The correct answer is knack.

Key Points

• knack - an acquired or natural skill at doing something.

The sentence should be read as :​ Eye makeup application is an art form, as anyone with a knack for creating a glamorous look can attest to.

Additional Information

Let us look at the meaning of the other words:

• cool - of or at a fairly low temperature.
• tense - unable to relax because of nervousness, anxiety, or stimulation.
• jumpy - (of a person) anxious and uneasy.
• eager - strongly wanting to do or have something.

Important Points

• The sentence talks about how a certain makeup application is an art form and how this fact is known by people who like to create a glamorous look.
• This makes knack the correct word for the given blank.

The correct answer is Bashful.

Key Points

• Bashful: socially shy or timid.
  • ​​The context talks about Sheldon, who couldn't speak in front of a large audience because of his shy nature.
• ​Therefore, the correct answer is: Because of his bashful nature, Sheldon couldn't speak in front of a large audience.

Additional Information​

The correct answer is Regime.

Key Points

• Regime: reign or authority
  • The context says that the golden period of India began under the authority of the Guptas.
• Therefore, the correct answer is: The golden period of India began under the regime of the Guptas.

Additional Information​

The correct answer is option 2.

The correct order of the sentences should be FECDAB

The introductory sentence should introduce the basic premise of the passage. The only sentence that highlights the premise i.e. financial frauds should come first. Thus, F should be the first sentence.

Further, examination of records has to be done by someone. E, uses the connector, therefore, and introduces ‘external auditor’ as the ‘someone’.

Further, the passage should highlight the work/task undertaken by the external auditor. This gives us 2 possibilities, sentence A and C. But the use of the word ‘initial’ before assessment narrows down the option to C.

Then, D has already been marked as the next correct sentence.

Further, we are left with A and B. Clearly B highlights the conclusion i.e. disclosure of the fraud. Thus B has to be the concluding sentence and A will be the penultimate sentence.

Therefore, the last sentence should be B.

The correct answer is 'A-R.'

Key Points

• From the given options, only the combination of phrases 'A-R' creates the correct sentence.
• Let's look at the sentences:
  • 'A-R' talks about someone who do not like the other person because she is too tall and also she smokes too much.
    • 'Furthermore' means ''in addition; besides'' used to introduce a fresh consideration in an argument. (भी; के अतिरिक्त)
      

Hence, the correct answer is option 2.

The correct option is 1 i.e. A-B

Key Points

We can look at the given sentence in the following way:

A fox one day _________ (A) a Cock who was _________ (B) for his_________ (C), and the two _________ (D) fellows began to talk.

• famous: an adjective which means
  known about by many people
• met: a verb which means two or more people or things have come together or connected.
• A Fox one day met a Cock is grammatically and contextually correct.
• Therefore, A and B should be interchanged
• wisdom:
  the quality of having experience, knowledge, and good judgment; the quality of being wise.
• cunning: an adjective which means getting what is wanted in a clever and often deceptive way

​Therefore, the correct sentence is,

A fox one day met a Cock who was famous for his wisdom, and the two cunning fellows began to talk.

The correct answer is BADCE.

Key Points

Let's consider A, B, C, D and, E to be five blanks, with A being the first, B the second, and so on.

• The first blank is preceded by a number, and hence noun used after it should be plural; that is why plant is wrong here, and the use of preposition of is used here to make a choice among something, and hence, stranded fits the blank as of the sixteen stranded.
• The second blank should be filled with the word plant because NTPC is the name of a national power plant.
• The third blank is preceded by a helping verb were, and it is a passive construction and hence should follow past participle form of the verb which is here rescued only.
• The fourth blank can only be filled with trench as it can be dug.
• The fifth blank is left with option evening, which is correctly placed already as on Sunday evening.

Hence, the correct sentence is: Of the sixteen stranded in a tunnel in the NTPC plant, two were rescued through a specially dug trench on Sunday evening.

Additional Information

Let's look at the meanings of the words:

• Stranded: Leave without the means to move from a place.
• Plant: a factory in which a particular product is made or power is produced
• Rescued: a past form of rescue which means to help someone or something out of a dangerous, harmful, or unpleasant situation.
• Trench: a narrow hole that is dug into the ground.
• Evening: the part of the day between the end of the afternoon and night.

Given:

16, 8, 12, 30, 104, 472.5

Calculation:

The logic follows here is:

16 × 0.5 = 8

8 × 1.5 = 12

12 × 2.5 = 30

30 × 3.5 = 105 ≠ 104

105 × 4.5 = 472.5

There should be 105 instead of 104.

∴ 104 is the wrong term.

Given

Speed of swimmer in still water = 15 km/hour

Speed in upstream river = 3 × Speed in downstream river

Formula used

Speed = Distance/Time

Calculation

Let the speed of the river = x km/hour

So, speed of the swimmer with the flow (downward speed) = 15 + x

Similarly speed of swimmer against the flow (upward speed) = 15 - x

Let the swimmer covers distance = y km

So time taken to cover the distance y when he swims up the river

⇒ 3 × time taken to cover the distance y when he swims down the river.

⇒ y/ (15 – x) = 3 × y /(15 + x)

⇒ 15y + xy = 45y – 3xy

⇒ x = 15/2 = 7.5 km/hour

∴ the speed of the river is 7.5 km/hour.

Alternate Method:

If the speed of swimmer = a And

speed of stream = b

Downstream speed = (a + b)

Upstream speed = (a - b)

Ratio of time 1 : 3

Ratio of speed 3 : 1

Let Downstream speed = 3 units

Upstream speed = 1 units

So, Speed of swimmer = 2 units and

Speed of stream = 1 unit,

As we know that,

⇒ 2 unit = 15 km/hr

⇒ 1 unit = 7.5 km/hr

Hence, the speed of stream will be 7.5 km/hr

The least possible Venn diagram for the given statement is as follows:

Conclusion:
I. Some Lemons are Apples. → False (No direct relation between Lemon and Apple is given. So, it is possible but not definite. So, Lemons are Apples does not follow.)

II. All Pineapple being oranges is a possibility → True(Some Pineapples are Oranges is given. No information is given about some Pineapple not being oranges. All Pineapple being oranges is a possibility.)

Hence, Only conclusion II follows.

Seven persons Kriti, Lavanya, Mahesh, Narender, Pooja, Rajat, and Suman are sitting around a circular table.

Some of them are facing outside and some of them are facing inside the centre.

1) Rajat is sitting second to the left of Layanya. One person is sitting between Pooja and Rajat.

2) Three persons are sitting between Pooja and Kriti. Mahesh and Suman are immediately left of each other. Suman is not the immediate neighbor of Pooja.

3) Narender sits second to the right of Kriti. Rajat and Kriti face opposite directions. The immediate neighbor of Narender faces the same direction. Narender faces inside

​

4) No three persons facing the same direction sit together.

In Case 1, Narender, Rajat, Pooja, and Mahesh are facing the same direction. This contradicts the given condition. So, case 1 is eliminated.

The final arrangement is:

Mahesh and Lavanya are the immediate neighbours of Suman.

Seven persons Kriti, Lavanya, Mahesh, Narender, Pooja, Rajat, and Suman are sitting around a circular table.

Some of them are facing outside and some of them are facing inside the centre.

1) Rajat is sitting second to the left of Layanya. One person is sitting between Pooja and Rajat.

2) Three persons are sitting between Pooja and Kriti. Mahesh and Suman are immediately left of each other. Suman is not the immediate neighbor of Pooja.

3) Narender sits second to the right of Kriti. Rajat and Kriti face opposite directions. The immediate neighbor of Narender faces the same direction. Narender faces inside

​

4) No three persons facing the same direction sit together.

In Case 1, Narender, Rajat, Pooja, and Mahesh are facing the same direction. This contradicts the given condition. So, case 1 is eliminated.

The final arrangement is:

Three persons are sitting between Pooja and Lavanya when counted to the right of Pooja

The correct answer is All of these.

• Equity funds are the type of mutual funds that invest investors money in the stock market.
• Large-cap mutual funds - In large-cap funds, a large portion of the investment is done in companies with large market capitalization. Large-cap are big, well-established companies in the equity market. These companies are strong, reputable, and trustworthy. Large-cap companies generally are the top 100 companies in a market.
  • ​Large-cap funds have lower growth potential and give investors lower returns on investment as compared to mid and small-cap funds.
  • Such companies have capital worth 20,000 crores or more.
• Mid-cap mutual funds - In mid-cap funds, a large portion of the investment is done in companies with medium market capitalization.
  • It has better growth potential and gives investors higher returns on investment as compared to large-cap funds.
• Small-cap mutual funds - In small-cap funds, a large portion of the investment is done in companies with small market capitalization i.e. having a market cap of less than INR 500 crore.
  • It has exponential growth potential and gives investors high returns on investment.
• Equity-linked saving scheme(ELSS) - These funds provide tax savings to the investors and hence most popular among them. But these funds have a lock-in period of 3 years.
  • Investors cannot redeem their money before the maturity date.
  • It also provides an opportunity for long term capital appreciation.

Key Points

Cost accounting - Cost Accounting may be defined as “Accounting for costs classification and analysis of expenditure as will enable the total cost of any particular unit of production to be ascertained with reasonable degree of accuracy and at the same time to disclose exactly how such total cost is constituted”.

There are various types of cost accounting, such as:

• Standard costing
• Activity based costing
• Marginal costing
• Service costing
• Job costing
• Process costing
• Contract costing

Service costing - Service costing, also known as operating costing, is a cost estimation tool used by businesses that offer services. For example, service costing is used by transportation firms, electrical providers, hospitals, movie theatres, hotels, schools, and universities to determine cost per unit.

Process costing - Process costing is a costing approach used mostly in manufacturing, where units are mass-produced in a continuous manner using one or more processes. Manufacturing erasers, chemicals, paper industry, and processed foods are all examples of this.

Contract costing - Contract costing is a type of particular order costing in which work is performed according to the customer's specified requirements and each order is of a long duration. Contractors who perform construction and engineering work such as roads, dams, buildings, canals, railway lines, bridges, a city or town's drainage system, hospital, schools, or colleges buildings or private structures, shipbuilding, and so on use contract costing.

Batch costing - Batch costing is a type of special order costing in which each batch is handled as an independent cost unit, with expenses accrued and calculated individually for each batch. Each batch is made up of a number of similar units. Batch costing is a costing approach used by businesses that produce a similar product or component in large quantities.

Additional Information

Standard costing - The method of calculating the cost of a manufacturing process is known as standard costing. It's a type of cost accounting that allows a company, for example, to budget for miscellaneous expenses such as direct material, direct labour, and overhead for the following year. These companies will also be able to correlate the standard price to the real price.

Activity based costing - A costing approach known as activity-based costing (ABC) assigns overhead and indirect expenses to associated products and services. Unlike traditional costing techniques, this accounting costing method acknowledges the link between expenses, overhead activities, and produced items, attributing indirect costs to products with less arbitrariness.

Marginal costing - The cost of one more unit of output is known as marginal cost. The notion is used to determine the optimum production quantity for a corporation, where producing further units costs the least amount of money. It's computed by multiplying the change in manufacturing expenses by the change in production quantity.

Job costing - Job costing is a way of accounting used to keep track of the costs of different projects and activities. It entails examining direct and indirect expenses, which are often divided into three categories: labour, materials, and overhead.

The correct answer is option (5) i.e. No insurance is provided to NBFC.

• DICGC stands for Deposit Insurance and Credit Guarantee Corporation and NBFC stands for Non-Banking Financial Company.
• NBFC provides loan and advances facilities.
• DICGC is a wholly subsidiary of the RBI it was established in 1978.
• It was established under the Deposit Insurance and Credit Guarantee Corporation Act, 1961.
• DICGC earlier provided insurance to all the depositors of insured bank up to 1 lakh rupees but from February 2020 the amount has been increased from 1 lakh to 5 lakhs.
• DICGC does not provide insurance to NBFC.

The correct answer is Intangible asset; contingent liability.

Key Points

• An intangible asset called goodwill is created whenever a buyer purchases an existing business organisation for more money than its actual value.
• A contingent liability is a prospective debt that might materialise based on how a future event plays out.

Important Points1. Goodwill:

• An intangible asset connected to the acquisition of a company by another is goodwill.
• In particular, goodwill is documented when the purchase price exceeds the total of the fair values of all tangible and intangible assets acquired in the acquisition as well as the liabilities taken on throughout the process.
• Examples of goodwill include the value of a company's brand name, strong customer base, positive customer and employee interactions, and any patents or proprietary technology.

2. Contingent Liabilities:

• Liabilities classified as contingent may or may not require payment in the future. It is the responsibility of the auditor to ensure that all liabilities, known and unknown, have been entered into the books as of the balance sheet date and are properly displayed as such.
• As of today, a "bill discounted but not matured" is not a liability. However, if the bill has been paid late, it can become your responsibility. If a discounted bill is not honoured, we are responsible for paying the full amount to the bank where the bill was discounted. As a result, it is a contingent liability.

Hence, it can be concluded that the current classification for ‘goodwill’ and ‘bill discounted but not matured’, is Intangible asset, contingent liability respectively.

The correct answer is It is recurring in nature

• An expenditure that results in the formation of assets or reduction of liabilities is called Capital Expenditure.
• It contains expenditure incurred on acquiring capital including land, buildings, and machinery.
• It includes loans by the Central government to PSU, State, and UTs.
• Such expenditures are incurred on long period development programs, real capital assets, and financial assets.
• It is non-recurring in nature.

Sunk cost is a cost that has already been incurred and that cannot be changed in any decision made now or in the future.

Key Points

• Cash which has already been expended and cannot be reclaimed is referred to as a sunk cost. For example, a manufacturing company may have a lot of sunk expenses, such as the cost of machinery and equipment, as well as the cost of the factory's lease.
• The concept that "you have to spend money to make money" is represented in the phenomena of sunk cost in business.
• A sunk cost is distinct from potential costs that a company may incur, such as inventory acquisition costs or product price decisions.
• Sunk costs are not included in future business choices, since the cost will stay constant regardless of the decision's outcome.

Additional Information

• Imputed Cost - Imputed costs are the expenses of committing resources to a certain plan of action while renouncing any potential advantages from using those same resources in another way. For example, if a person chose to attend a master's program instead of working, the imputed cost will be the income they would have earned while in school.
• Historical Cost - The original cost of an asset, as documented in an entity's books of accounts, is known as historical cost. Many transactions are listed at their historical cost in an organization's accounting records. A corporation's worth can only be calculated using the historical cost of its assets, rather than the current market price or sales value. The records preserved on the basis of historical cost are deemed consistent, comparable, verifiable, and dependable, which is a significant benefit.
• Marginal Cost - The cost of manufacturing one extra unit of an item is known as the marginal cost. All costs that fluctuate with the degree of output are included in the marginal cost. For instance, if a corporation wants to construct a new plant in order to manufacture more items, the cost of doing so is a marginal cost.

Key Points

• Auditors are qualified professionals who examine companies' financial records to find any errors or discrepancies.
• They make sure that businesses abide by numerous tax laws and rules.
• A statutory audit is one that is required by a law or statute.
• The main goal of a statutory audit is to give the public and regulators a true and fair representation of a business's book of accounts. Company audits and tax audits are the two types of statutory audits.

Important PointsThe following are the principal statutory obligations of an auditor, as stated in section 143 of the Indian Company Act of 2013.

• The auditor has to inquire whether loans and advances made by the company on the basis of security have been properly secured and whether the terms on which they have been made are not prejudicial to the interests of the company or its members.
• The auditor shall enquire the entries made in books are not prejudicial.
• He shall inquire about the company, whether it is an investment company, and if not, whether the assets of the company, consist of shares and debentures.
• He should also check whether loans and advances made by the company have been shown as deposits.
• He should verify whether the personal expenses have been charged to the revenue account.
• In case, in the books of accounts, it has been stated that if any shares have been allotted for cash, he has to verify whether the cash has actually been received in respect of such allotment.

Hence, a duty of an auditor to verify whether loans and advances have been properly secured or not is referred to as statutory duty.

The correct answer is N. K. Singh Committee.

Key Points

• N. K. Singh Committee
  • In the Union Budget 2016-17 it was proposed to constitute a Committee to review the implementation of the FRBM Act and give its recommendations on the way forward.
  • The government constituted the Committee in May 2016 under the Chairmanship of Shri N.K. Singh, former Revenue and Expenditure Secretary and former Member of Parliament. Hence, Option 2 is correct.
  • The Committee had wide-ranging Terms of Reference (ToR) to comprehensively review the existing FRBM Act in the light of contemporary changes, past outcomes, global economic developments, best international practices and to recommend the future fiscal framework and roadmap for the country.
  • Subsequently, the Terms of Reference were enlarged to seek the Committee’s views on certain recommendations of the Fourteenth Finance Commission and the Expenditure Management Commission.
  • These are primarily related to strengthening the institutional framework on fiscal matters as well as certain issues connected with new capital expenditures in the budget.
  • Committee submitted its report in January 2017.

Additional Information

• Vijay Kelkar Committee
  • On Revisiting and Revitalizing the. PPP model of Infrastructure Development.
• Rangachary committee
  • ​Examined the taxation policies for the IT Sector.
• The P J Nayak Committee or officially the Committee to Review Governance of Boards of Banks in India was set up by the Reserve Bank of India (RBI) to review the governance of the board of banks in India. The Committee was set up in January 2014.

The correct answer is Receipts of Exports and Imports are equal.

Key Points

• GNP = GDP + NET FACTOR INCOME FROM ABROAD (Export-Import)
  • Net factor income from abroad includes exports and imports.

Additional Information

• GDP: Gross Domestic Product is the sum of the money of all the final goods and services produced solely within the boundaries of a country, at a specific time.
  • GDP includes the income of foreigners staying in the country.
  • It excludes the income of nationals of the country staying abroad and also excludes the remittances sent from abroad.
• GNP: Gross National Product is the sum of the money of all the final goods and services produced both within and outside of a country by nationals during a specific period of time.
  • GNP includes remittances.
  • It excludes income generated locally by non-nationals.

The correct answer is a debt-equity ratio.

Key Points

• The following are the objectives of buyback of shares:
  • To return surplus cash to investors. Companies want to have back their shares since it facilitates them to manage their surplus cash. If it is paid as dividend companies will have to pay dividend tax on the distribution on the other hand; if cash is distributed through buyback, the tax burden shifts to shareholders who have to pay capital gains tax.
  • To increase underlying share value. Buyback reduces equity and enables the company to increase earnings per share, which would result in enhancing the share value. A share buyback may also be announced when share prices are depressed in the market.
  • To prevent hostile takeover bids. By eliminating surplus cash through buyback such a bid can be avoided.
  • Buy–back also facilitate a company to maintain a target capital structure. Buyback aids a company to achieve an optimal debt-equity ratio.

The correct answer is Discounting.

Key Points Discounting:

• The process of converting cash flow into present equitable is called Discounted Cash Flow (DCF) analysis.
• The goal of DCF analysis is to estimate the value of an investment, business, or asset based on its expected future cash flows, discounted to its present value using a discount rate that reflects the risk associated with the investment.
• In other words, DCF analysis involves estimating the future cash flows that an investment is expected to generate, determining the appropriate discount rate to reflect the risk of those cash flows, and then calculating the present value of those cash flows by discounting them back to their present value.
• The resulting present value is then used to determine whether the investment is worth undertaking or not, based on the investor's required rate of return.

Additional Information

Compounding: Compounding is the process of earning interest on an investment's principal amount and the accumulated interest earned over time. In other words, compounding refers to the exponential growth of an investment, as the interest earned on the principal amount is reinvested and generates more interest. The compounding effect can be significant over a long period, as the interest earned on the interest earned can become a substantial part of the total return.

Budgeting: Budgeting is the process of allocating financial resources, such as income and expenses, over a specified period. The purpose of budgeting is to help individuals and organizations to plan and control their finances, by setting priorities, identifying areas of potential savings, and ensuring that expenses do not exceed income. A budget typically involves estimating future income and expenses, setting spending limits for each category, and monitoring actual spending against the budget to identify variances.

Rationing: Rationing refers to the process of allocating scarce resources among competing uses, based on predetermined criteria. Rationing is often used in situations where there is not enough of a resource to meet the demand, and some form of prioritization is required. In a financial context, rationing may involve allocating funds among different projects or departments, based on their strategic importance or financial performance. Rationing decisions may be made by senior management, a budget committee, or other decision-making bodies within an organization.

Hence, the correct answer is Discounting.

The correct answer is Partner’s Capital A/c

Key Points Realization Account:

• The nature of the Realization account is a Nominal Account. The purpose of preparing a Realization account is to close the dissolved firm's books of accounts and determine profit or loss on the Realization of assets and payment of liabilities. It is put together by:
  • Transferring all assets, except cash and bank accounts, to the account's debit side.
  • Transferring all liabilities to the credit side of the account except the Partner's Loan Account and the Partners' Capital Accounts.
  • Crediting the asset sale receipt to the account.
  • Debiting the account for the payment of liabilities.
  • Deducting the firm's dissolution expenses.
  • The account balance can be either profit or loss. This balance is transferred to the Partners' Capital Accounts in their profit-sharing ratio.
  • In Certain scenarios Partner voluntarily gives his personal asset to the firm's creditor as payment, the account credited to Partner’s Capital A/c.