Bank Exams Exam  >  Bank Exams Tests  >  Test: Accounting & Financial Management of Banking - 5 - Bank Exams MCQ

Test: Accounting & Financial Management of Banking - 5 - Bank Exams MCQ


Test Description

30 Questions MCQ Test - Test: Accounting & Financial Management of Banking - 5

Test: Accounting & Financial Management of Banking - 5 for Bank Exams 2024 is part of Bank Exams preparation. The Test: Accounting & Financial Management of Banking - 5 questions and answers have been prepared according to the Bank Exams exam syllabus.The Test: Accounting & Financial Management of Banking - 5 MCQs are made for Bank Exams 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Accounting & Financial Management of Banking - 5 below.
Solutions of Test: Accounting & Financial Management of Banking - 5 questions in English are available as part of our course for Bank Exams & Test: Accounting & Financial Management of Banking - 5 solutions in Hindi for Bank Exams course. Download more important topics, notes, lectures and mock test series for Bank Exams Exam by signing up for free. Attempt Test: Accounting & Financial Management of Banking - 5 | 100 questions in 120 minutes | Mock test for Bank Exams preparation | Free important questions MCQ to study for Bank Exams Exam | Download free PDF with solutions
Test: Accounting & Financial Management of Banking - 5 - Question 1

Trial balance of the personal ledgers is prepared in every ______ time interval.

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 1

As per RBI guidelines, In every banking companies, trial balance of the personal ledgers is prepared periodically, usually every 2 weeks and agreed with general ledger control account.

Test: Accounting & Financial Management of Banking - 5 - Question 2

Banks maintain contra accounts with a view to control over transactions which have no direct effect on the bank’s position. For which of the following contra account is used by banks
I. letters of credit opened
II. bills received or sent for collection

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 2

Banks maintain contra accounts with a view to control over transactions which have no direct effect on the bank’s position. e.g., letters of credit opened, bills received or sent for collection, guarantees given, etc. In respect of bills for collection, contra vouchers reflecting both sides of the transaction are prepared at the time of the original entry, and this is reversed on realization.

1 Crore+ students have signed up on EduRev. Have you? Download the App
Test: Accounting & Financial Management of Banking - 5 - Question 3

D limited company sold Rs 2000, 12% perpetual debentures 10 years ago. Interest rates have risen since then so debentures of this company are now selling at a 15 per cent yield basis, determine the expected market price.

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 3

The expected market price of the debentures may be as follows, the annual interest on perpetual debenture is 240 and the yield is 15%.so. the market price may be,
=Annual interest /yield percentage: 2000 ×12%÷0.15= 1600

Test: Accounting & Financial Management of Banking - 5 - Question 4

___ Bonds have variable coupon rates which is reset at preannounced intervals.

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 4

Floating Rate Bonds have variable coupon rates which is reset at preannounced intervals say 6 months or a year. The interest rate is tied to a short-term benchmark rate, such as LIBOR or the Fed funds rate, plus a quoted spread, or rate that holds steady.

Test: Accounting & Financial Management of Banking - 5 - Question 5

Direction: Read the information carefully and answer the questions based on the given informations below:
In the books of Siva, the following transactions related to bills takes place,
(i) Jan 9. Sold goods to Varun for Rs.34000 and draws a bill for 45 days.
(ii) Mar 1. Sold goods to Bhuvanesh and draws a bill at three months for Rs.500000.
But on May 1, he retires his acceptance under rebate of 12% p.a.
(iii) Oct 1, Bill for 3 months was drawn on Sita for the amount of Rs.100000 owed by her. She accepted the bill. On Oct 3, Siva got the bill discounted with the bank for Rs.99000.

Q. The book with assorted transactions of an Account is called ______?

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 5

A ledger is a book that stores bookkeeping entries. The ledger shows the account’s opening balance, all debits and credits to the account for the period, and the ending balance.

Test: Accounting & Financial Management of Banking - 5 - Question 6

Direction: Read the information carefully and answer the questions based on the given informations below:
In the books of Siva, the following transactions related to bills takes place,
(i) Jan 9. Sold goods to Varun for Rs.34000 and draws a bill for 45 days.
(ii) Mar 1. Sold goods to Bhuvanesh and draws a bill at three months for Rs.500000.
But on May 1, he retires his acceptance under rebate of 12% p.a.
(iii) Oct 1, Bill for 3 months was drawn on Sita for the amount of Rs.100000 owed by her. She accepted the bill. On Oct 3, Siva got the bill discounted with the bank for Rs.99000.

Q. What will balance to be c/d in the cash account after preparing the ledgers?

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 6

When the cash account was prepared, the debit side will contain Rs.8300
(Opening balance of Rs.8000 and Rahim's account for bad debts Rs.300.) and The credit side will contain Rs.4000.
(Purchase account of Rs.3800 for purchase on Jan1 and Rs.200 for installation charge of machinery on Jan 12.)
Therefore the balance to be carried down in the cash account will be Rs.4300 on credit side.

Test: Accounting & Financial Management of Banking - 5 - Question 7

Direction: Read the information carefully and answer the questions based on the given informations below:
In the books of Siva, the following transactions related to bills takes place,
(i) Jan 9. Sold goods to Varun for Rs.34000 and draws a bill for 45 days.
(ii) Mar 1. Sold goods to Bhuvanesh and draws a bill at three months for Rs.500000.
But on May 1, he retires his acceptance under rebate of 12% p.a.
(iii) Oct 1, Bill for 3 months was drawn on Sita for the amount of Rs.100000 owed by her. She accepted the bill. On Oct 3, Siva got the bill discounted with the bank for Rs.99000.

Q. Pass journal entry for the sale of goods on Jan 12.

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 7

When passing journal entry for credit sales made, the debtor's account should be debited and the sales a/c should be credited with the respective value of the credit sales. The journal entry will be,
Rahim a/c dr.
To Sales a/c

Test: Accounting & Financial Management of Banking - 5 - Question 8

Direction: Read the information carefully and answer the questions based on the given informations below:
In the books of Siva, the following transactions related to bills takes place,
(i) Jan 9. Sold goods to Varun for Rs.34000 and draws a bill for 45 days.
(ii) Mar 1. Sold goods to Bhuvanesh and draws a bill at three months for Rs.500000.
But on May 1, he retires his acceptance under rebate of 12% p.a.
(iii) Oct 1, Bill for 3 months was drawn on Sita for the amount of Rs.100000 owed by her. She accepted the bill. On Oct 3, Siva got the bill discounted with the bank for Rs.99000.

Q. How many days are added as grace days for the bill of exchange after the end of due date?

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 8

Every promissory note or bill of exchange which is not expressed to be payable on demand, at sight or on presentment is at maturity on the third day after the day on which it is expressed to be payable. Those three days are given as the days of grace.

Test: Accounting & Financial Management of Banking - 5 - Question 9

Direction: Read the information carefully and answer the questions based on the given informations below:
In the books of Siva, the following transactions related to bills takes place,
(i) Jan 9. Sold goods to Varun for Rs.34000 and draws a bill for 45 days.
(ii) Mar 1. Sold goods to Bhuvanesh and draws a bill at three months for Rs.500000.
But on May 1, he retires his acceptance under rebate of 12% p.a.
(iii) Oct 1, Bill for 3 months was drawn on Sita for the amount of Rs.100000 owed by her. She accepted the bill. On Oct 3, Siva got the bill discounted with the bank for Rs.99000.

Q. The Bills Receivable Book is a part of _____?

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 9

Bills receivable book is used to record the bills received from debtors. When a bill is received, details of it are recorded in the bills receivable book. First step of accounting is to record transactions and that are recorded in journal so bill receivable book is a part of journal.

Test: Accounting & Financial Management of Banking - 5 - Question 10

Which of the following should be taken into consideration, While calculating NPV cash flow

  1. Taxes
  2. Salvage
  3. Depreciation
  4. Working Capital
Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 10

While calculating NPV, the cash flow should consider taxes and depreciation, salvage value and working capital release at the end.

Test: Accounting & Financial Management of Banking - 5 - Question 11

Under which among the following head is Salary of MP/MLA/MLC is taxable?

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 11

Salary that received to MP/MLA/MLC is taxable under income from Other Sources.
Income that is taxable under head income from other sources is:
- [ ] Amount received as a family pension
- [ ] Agricultural income
- [ ] Director sitting fee
- [ ] Income sub-letting of house property
- [ ] Dividend
- [ ] Winning through lotteries, puzzles, card games
- [ ] Interest that is received through compensation of compulsory acquisition of a capital asset

Test: Accounting & Financial Management of Banking - 5 - Question 12

Direction: Using the following case study , choose the appropriate answers for the questions carefully.
M/s. No Ltd Bank is a commercial bank. The No Ltd bank has classified their advances into Performing assets and Non-Performing Assets. Non - Performing assets are further classified into Sub-Standard assets, Doubtful assets & Loss Assets. All the assets of M/s. XYZ ltd are secured assets.
As per RBI guidelines, loan upon becoming an NPA would first be classified as sub-standard for a period not exceeding 12 months and beyond that, it would have to be classified as DOUBTFUL. The doubtful assets are further categorised into Doubtful-1, Doubtful-2 and Doubtful-3 on the basis of their ageing from the date of classification of NPA. After if it become due it is classified as Loss Assets.
Taking into account the time lag between an asset becoming substandard/doubtful turning into loss asset, RBI has directed that bank should make provision against all assets (i.e) Loans & advances. The Management of XYZ Ltd want your help in creation Provision for Assets for the year ended 31-Mar-2022 as per the RBI Guidelines. The Following are details of XYZ Ltd for the year ending 31-Mar-2022.
Asset which do not carry Normal risk - Rs. 2500
Asset which carries risk less than 12 Months (NPA) - Rs. 2000

  • Doubtful Assets
  • from 01-04-2021 - 400
  • from 01-04-2019 - 300
  • from 01-04-2015 - 100
  • Loss Assets - 500

Q. What is the Rate of Provision for Substandard assets?

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 12

As per the Guidelines, the Provision has to be created for different category of advances out of which advances to Sub standard assets is 15%.

Test: Accounting & Financial Management of Banking - 5 - Question 13

Direction: Using the following case study , choose the appropriate answers for the questions carefully.
M/s. No Ltd Bank is a commercial bank. The No Ltd bank has classified their advances into Performing assets and Non-Performing Assets. Non - Performing assets are further classified into Sub-Standard assets, Doubtful assets & Loss Assets. All the assets of M/s. XYZ ltd are secured assets.
As per RBI guidelines, loan upon becoming an NPA would first be classified as sub-standard for a period not exceeding 12 months and beyond that, it would have to be classified as DOUBTFUL. The doubtful assets are further categorised into Doubtful-1, Doubtful-2 and Doubtful-3 on the basis of their ageing from the date of classification of NPA. After if it become due it is classified as Loss Assets.
Taking into account the time lag between an asset becoming substandard/doubtful turning into loss asset, RBI has directed that bank should make provision against all assets (i.e) Loans & advances. The Management of XYZ Ltd want your help in creation Provision for Assets for the year ended 31-Mar-2022 as per the RBI Guidelines. The Following are details of XYZ Ltd for the year ending 31-Mar-2022.
Asset which do not carry Normal risk - Rs. 2500
Asset which carries risk less than 12 Months (NPA) - Rs. 2000

  • Doubtful Assets
  • from 01-04-2021 - 400
  • from 01-04-2019 - 300
  • from 01-04-2015 - 100
  • Loss Assets - 500

Q. What is the Rate of Provision for Doubtful assets from 1 year to 3 years?

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 13

As per the Guidelines, the Provision has to be created for different category of advances out of which advances to lDoubtful assets for more than 1 year is 40%.

Test: Accounting & Financial Management of Banking - 5 - Question 14

Direction: Using the following case study , choose the appropriate answers for the questions carefully.
M/s. No Ltd Bank is a commercial bank. The No Ltd bank has classified their advances into Performing assets and Non-Performing Assets. Non - Performing assets are further classified into Sub-Standard assets, Doubtful assets & Loss Assets. All the assets of M/s. XYZ ltd are secured assets.
As per RBI guidelines, loan upon becoming an NPA would first be classified as sub-standard for a period not exceeding 12 months and beyond that, it would have to be classified as DOUBTFUL. The doubtful assets are further categorised into Doubtful-1, Doubtful-2 and Doubtful-3 on the basis of their ageing from the date of classification of NPA. After if it become due it is classified as Loss Assets.
Taking into account the time lag between an asset becoming substandard/doubtful turning into loss asset, RBI has directed that bank should make provision against all assets (i.e) Loans & advances. The Management of XYZ Ltd want your help in creation Provision for Assets for the year ended 31-Mar-2022 as per the RBI Guidelines. The Following are details of XYZ Ltd for the year ending 31-Mar-2022.
Asset which do not carry Normal risk - Rs. 2500
Asset which carries risk less than 12 Months (NPA) - Rs. 2000

  • Doubtful Assets
  • from 01-04-2021 - 400
  • from 01-04-2019 - 300
  • from 01-04-2015 - 100
  • Loss Assets - 500

Q. Out of the above information, what is the value of Standard assets?

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 14

A standard assets are those which do not disclose any problems and which does not carry more than normal risk attached to the Business. Here Asset which do not carry risk is Rs. 2500.

Test: Accounting & Financial Management of Banking - 5 - Question 15

Direction: Following are the sales figures for different months.

  • Jan - 15000
  • Feb - 20000
  • Mar - 30000
  • Apr - 20000
  • May - 25000

Of the above 20% are cash sales.
50% of the customers pay in the next month and balance in the following month

Q. Find the amount of debtors realized for the month of April

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 15

In the April month, the sales of Feb and March shall be considered for the calculation of debtors realization.
(Credit sales × realisation %)
Feb - (20000×80%×50%) = 8000
Mar - (30000×80%×50%) = 12000
Total = 20000 rupees

Test: Accounting & Financial Management of Banking - 5 - Question 16

For services rendered in hospitals, they use which type of cost?

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 16

Operating costing helps businesses account for the total cost of each operation, which allows accounting professionals to better understand and control costs. Operating costing is used by Companies rendering services such as power supply, transport, water works, hospitals etc.

Test: Accounting & Financial Management of Banking - 5 - Question 17

In the accounting system of banks, at the end, all the vouchers related to the transactions in all the savings banks account at the branch will be entered in the _____ book.

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 17

In the accounting system of banks, at the end, all the vouchers related to the transactions in all the savings banks account at the branch will be entered in the SB day book.

Test: Accounting & Financial Management of Banking - 5 - Question 18

In a manufacturing unit, The difference between sales revenue and total variable costs is known as _________.

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 18

In a manufacturing and non-manufacturing unit, The difference between sales revenue and total variable costs is known as a contribution or contribution margin.

Test: Accounting & Financial Management of Banking - 5 - Question 19

Seperate blocked account should be shown in balance sheet under _____.

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 19

Schedule 7 of the balance sheet is used to show the investments made by a company. A separate blocked account is a type of investment account that holds funds that are restricted for a specific purpose, such as security deposits, dividend payments, or legal claims. These funds cannot be used for general business operations or other purposes. Therefore, a separate blocked account should be shown in the balance sheet under Schedule 7 - Investments, along with other investment accounts.

Test: Accounting & Financial Management of Banking - 5 - Question 20

Calculate the minimum inventory holding cost from the following information
Monthly demand for a product of 100 units
Setting-up cost per batch is Rs 30
Cost of manufacturing per unit Rs 10
Rate of interest 10% p.a
Carrying cost per unit per month Rs 1

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 20

Minimum Inventory Cost = Average Inventory × Inventory Carrying Cost per unit per annum
Average Inventory: Optimum inventory is calculated from Economic batch quantity

Where, D = Annual demand for the product
S = Setting up the cost per batch
C = Carrying cost per unit of production

= 268.33 units
Average inventory = 268.33 units ÷ 2 = 134.16 units
Carrying Cost per unit per annum= 1 × 12 months = Rs 12
Minimum Inventory Holding Costs = 134.16 units × 12 = Rs 1610

Test: Accounting & Financial Management of Banking - 5 - Question 21

Which of the following items temporally recorded in suspense account?

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 21

Suspense account is often used to temporary record certain items like losses caused due to frauds and awaiting adjustment, Debit balance arising from the payment is made by various branches in this account, etc.

Test: Accounting & Financial Management of Banking - 5 - Question 22

At the end, all the entries related to income and expenditure should be transferred to _________.

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 22

At the end of each accounting period, all the income and expenses account should be closed by transferring the balances to the Profit and loss account.

Test: Accounting & Financial Management of Banking - 5 - Question 23

Direction: Read the below case study carefully and answer the given questions:
ABC limited company was registered with the authorised capital of Rs 55 lakhs in the memorandum of association. The company issued 40000 equity shares of Rs.100 each payable at Rs.30 on application, Rs.30 on allotment, Rs.20 on first call, Rs.20 on final call and 36000 shares have been subscribed by the public. All the money was duly received except one member holding 100 shares who was not paid first call money. Final call was not made.

Q. If the public subscribed 42000 equity shares instead of 36000 equity shares, this indicates ____________.

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 23

Over subscription of shares refers to an issue of shares in which the demand of shares exceeds the issued shares. Here in the case, 42000 subscribed shares exceeds 40000 issued shares, hence it indicates over subscription.

Test: Accounting & Financial Management of Banking - 5 - Question 24

Direction: Read the below case study carefully and answer the given questions:
ABC limited company was registered with the authorised capital of Rs 55 lakhs in the memorandum of association. The company issued 40000 equity shares of Rs.100 each payable at Rs.30 on application, Rs.30 on allotment, Rs.20 on first call, Rs.20 on final call and 36000 shares have been subscribed by the public. All the money was duly received except one member holding 100 shares who was not paid first call money. Final call was not made.

Q. ABC Ltd. company is one of the type of companies based on _____.

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 24

There are different types of companies they may be classified on the basis of their incorporation ownership and liability of members.
On the basis of ownership, it may be divided into private company, public company, government company, holding company, associate company, one person company, subsidiary company.
Hence, ABC Ltd. company is one of the type of companies based on ownership.

Test: Accounting & Financial Management of Banking - 5 - Question 25

A bond, with a par value of Rs. 2,000, bears a coupon rate of 12 per cent and has a maturity period of 4 years. The required rate of return on the bond is 11 per cent. What is the value of this bond?

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 25

Annual interest payable = 1,000 x 12% =120
Principal repayment at the end of 3 years = Rs. 2,000
The value of the bond
= 120 (PVIFA 11%, 4 yrs) + Rs. 2,000 (PVIF 11%, 4 yrs)
= 120 (3.170) + 2,000 (0.659)
= 380.4 + 1318
= Rs. 1698.4

Test: Accounting & Financial Management of Banking - 5 - Question 26

__ is a Progressive Tax?

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 26

Progressive tax is referred to the tax that is directly related to the taxpayer's ability to pay.
Every year, a fixed portion of our income is to be payed to the central government in the form of income tax.
As per the central government rules for Income tax, The income tax of all people is based on per slab.
Total funds that is collected through income tax is used by the government for services to fulfill the requirements for the country's development.

Test: Accounting & Financial Management of Banking - 5 - Question 27

Costs which do not involve immediate cash payment and are not recorded in books of accounts are known as __________

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 27

Implicit costs also known as Economic costs do not involve any immediate cash payment and they are not recorded in books of accounts. Example opportunity cost.

Test: Accounting & Financial Management of Banking - 5 - Question 28

The income or gain expected from the second-best use of resources lost due to the best use of the scarce resources is known as:

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 28

Opportunity costs are the possible advantages that a person or company forgo while choosing one alternative over another.
It is necessary to weigh the pros and cons of each choice offered to correctly assess opportunity costs.
For example, an owner can invest surplus capital in stocks or can buy an asset for the business. He will give up the benefit of one option by choosing an alternative one.
Hence, the income or gain expected from the second-best use of resources lost due to the best use of the scarce resources is known as Opportunity cost.

Test: Accounting & Financial Management of Banking - 5 - Question 29

Direction: Read the information carefully and answer the questions based on the given informations below:
A machinery was purchased on 1-1-2013 for Rs.180000. Installation was done on 1-3-2013 and costs Rs.20000. It was put to use from 1-4-2013. The depreciation to be provided for the machinery is decided at 10% p.a in diminishing balance method.
On 31-12-2014 the machinery was sold for Rs.160000. The books were closed on 31st December every year.

Q. Under the diminishing balance method, the depreciation amount will be ______?

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 29

Under diminishing balance method, depreciation decreases every year. Since the book value reduces every year, hence the amount of depreciation also reduces every year. Under this method, the value of the asset never reduces to zero.

Test: Accounting & Financial Management of Banking - 5 - Question 30

Direction: Read the information carefully and answer the questions based on the given informations below:
A machinery was purchased on 1-1-2013 for Rs.180000. Installation was done on 1-3-2013 and costs Rs.20000. It was put to use from 1-4-2013. The depreciation to be provided for the machinery is decided at 10% p.a in diminishing balance method.
On 31-12-2014 the machinery was sold for Rs.160000. The books were closed on 31st December every year.

Q. What will be the profit/loss will arise from selling the machinery?

Detailed Solution for Test: Accounting & Financial Management of Banking - 5 - Question 30
  • The book value of the machinery after providing the depreciation will be Rs.166500.
  • But the machinery was sold for Rs.160000.
  • Therefore while selling the machinery, a loss of Rs.6500 was suffered.
View more questions
Information about Test: Accounting & Financial Management of Banking - 5 Page
In this test you can find the Exam questions for Test: Accounting & Financial Management of Banking - 5 solved & explained in the simplest way possible. Besides giving Questions and answers for Test: Accounting & Financial Management of Banking - 5, EduRev gives you an ample number of Online tests for practice

Top Courses for Bank Exams

Download as PDF

Top Courses for Bank Exams