JAIIB-ACCOUNTING & FINANCE FOR BANKERS-MOD-C
MODEL QUESTIONS
1) Which
of the following may not be part of the reconciliation process.
a)
Interest on overdraft
b)
Dishonour of cheque
c)
Cash drawn from bank
d)
Cheque deposited but not collected
2) Which
of the following is part of reconciliation.
a) Cash
paid by customer to the trader
b) Cheque
issued, presented, and on the debit side
in the passbook and cashbook.
c) Bank
charges debited.
d) b)
& c)
3) 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.
4) Which
of the following is true
a) Bank Reconciliation Statement(BRC) is an
account.
b) BRC is prepared by the bank.
c) BRC shows causes of disagreement between
cash book & passbook.
d) BRC shows only excess of cash book over
passbook.
5) If
x is a credit balance in cash book carried forward on the debit side, then
reconciliation is
a) Casting
x on the debit side of cash book.
b) Casting
2x on the credit side of cash book.
c) Casting
2x on debit side of cash book.
d) Casting
x on credit side of cash book.
6) If
a trader enjoys an overdraft facility,then
a) His
passbook will show debit balance.
b) His
cash book will show credit balance .
c) Both
a) & b).
d) Neither
a) nor b).
7) Credit
balance in a passbook indicates
a) excess
of deposits over withdrawals.
b) excess
of withdrawals over deposits.
c) debit
balance in cash book.
d) b) & c).
e) a) & c).
8) At
any point in time, cash book & passbook balances will not be same.
a) True.
b) False.
c) Maybe.
9) A
trader has a strict overdraft limit of 10,000/-, overdraft balance of 9,500/-;
issues 2 cheques of 500/- each, which
are presented, then
a) His
cash book will show higher overdraft balance than passbook.
b) His
cash book will show lesser overdraft balance than passbook.
c) His
cash book will show same balance as passbook.
d) Neither
a) nor b) nor c).
10) Direct deposit by a customer in the bank with
no overdraft facility
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.
11) Credit sale of X to Suresh is posted to his
credit , then rectification is
a) Credit
Suresh to the extent of 2X.
b) Credit
Suresh to the extent of X.
c) Debit
Suresh to the extent of 2X.
d) Debit
Suresh to the extent of X.
12) Freight
expenses for carrying Machinery is carried to Travel a/c, then
rectification in trial balance is
a) Debit
machinery a/c and credit travel a/c.
b) Credit
machinery a/c and debit travel a/c
c) Credit
profit and loss account and debit travel a/c.
d) Debit
profit and loss a/c( P&L a/c) and credit travel a/c.
13) Goods worth X sold to Vijay was entered in
purchase account;
The
rectification is
a) Credit
purchases and credit sales to the extent of X each & debit Vijay.
b) Debit
purchases and debit sales to the extent of X each & credit Vijay.
c) Debit
sales to the extent of 2X.
d) Credit
purchases to the extent of 2X.
14) 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/-.
15) Sales
return of amount X from Vijay was wrongly entered in purchase book.
The rectification
is
a) Debit
sales to the extent of 2X.
b) Credit
purchases to the extent of 2X.
c) Credit
Vijay 2X debit sales and purchases to the extent X each.
d) Debit
sales return and credit purchases.
16) 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.
17) 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.
18)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.
19) Statement showing debit and
credit balances of ledger accounts is
a) Gross
trial balance
b) Net
trial balance
c) Trial
balance
d) None
of the above
20) 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.
21) Freight expenses for moving
machinery to factory is
a) Revenue
expenses
b) Deferred
revenue expenditure
c) Capital
expenditure
d) None
of the above
22) 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
23) Which of the following is not
a deferred revenue expenditure
a) Preliminary
expenses for setting up a company.
b) Rights
issue amount.
c) Huge
sales promotion expenditure in launch of new product
d) Cost
of preparing project report
24) Match the columns:
a) Purchase of land for premises 1) Deferred Revenue Expenditure
(c)
b) Purchase of machinery for sale 2) Capital Expenditure (a)
c) Legal expenses for issue of shares
3) Revenue Expenses (b)
d) Excess of sale price of asset over
W D Value 4) Capital Receipt (e)
e) Excess of sale price of asset over
cost price 5) Revenue Receipt (d )
25) 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
26) Inflation of current profits
could be on account of
a) Inflation of closing stock in current year
b) Deflation of closing stock in current year
c) Inflation of closing stock in previous year
d) None of the above
27) 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
28) 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)
29) 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)
30)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
31) In a market of falling prices
which is the best option
a) LIFO
b) FIFO
c) Weighted average cost method (WACM)
d) a) or b)
e) b) or c)
32) In a rising market which is
the best option
a) LIFO
b) FIFO
c) WACM
d) a) or c)
e) b) or c)
33) As per accounting standards
which of the following is not a preferred method
a) LIFO
b) FIFO
c) WACM
d) All of them
34) Consider the following:
01/04 Opening stock of 1000 units
at Rs. 10/- each
10/04 Purchases of 500 units at
Rs. 9/- each
16/04 Purchases of 300 units at
Rs. 11/- each
18/04 Goods of 300 units released
to production
31/04 Books closed
Answer the following: under LIFO under FIFO
under WACM
Goods released to production @ Rs 11/- @ Rs. 10/- @ Rs. 9.89/-
Closing stock @
Rs.10/- @ Rs. 11/-
@ Rs. 9.89/
35)Cost of goods sold reflects the
usual physical flow of goods. This
statement is true of
a) LIFO
B) FIFO
c) WACM
d) Adjusted
selling price method
36) The ending inventory may be
taken at prevailing prices years ago. This
statement is true of
a) LIFO
b) FIFO
b) FIFO
c) WACM
d) Adjusted
selling price method
Read
the following and answer :
Drawer
is ‘A’
Drawee is ‘B’
Endorsee is
‘C’
In
the books of ‘A’
37) Bills
receivable a/c dr.
to
B
a) Bill
accepted by ‘A’
b) Bill
accepted by ‘ B’
c) Bill
retired by ‘B’
d) None of the
above
38) ‘C’ a/c dr.
to Noting
Charges
to
Bills Receivable
a) Bill
dishonoured and received back from ‘C’.
b) Bill
accepted by ‘B’ but dishonoured
c) ‘A’
cancels endorsement
d) None
of the above
.
39)
Bill sent for collection
a/c dr.
To Bank
a) Bill
is paid by ‘B’
b) Bill
is dishonoured by ‘B’
c) Amount
paid to bank by ‘A’ after dishonour
d) None
of the above
In the books of ‘B’
40) Bills payable a/c dr.
to bank
a) Bill
accepted by ‘B’
b) Bill
retired by ‘B’
c) Bill
dishonoured by ‘B’
d) Bill
sent by ‘A’ for payment
41) Bank a/c dr.
To
bills payable
a) Bill
accepted by ‘B’
b) Bill
dishonoured by ‘B’
c) Bill
paid by ‘B’
d) None
of the above
42)
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
43)
Which of the following is true
a) An
insolvent is a person from whom some portion of the debt is recoverable
b) Drawer
drags the drawee to court in case of dishonour of accommodation
Bill.
c) A
bill drawn for mutual help is an accommodation bill
d) Drawee
is a person to whom bill is endorsed
44)
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.
45)
Which of the is true
a) Del
Credere commission is calculated on credit sales
b) Value
of goods sent on consignment is debited to consignee a/c.
c) The
relationship between consignor and consignee is that of principal and agent.
d) The
statement of sales sent by consignee is called account sale.
46)
Goods lost in transit is
a) Nominal
loss
b) Abnormal
loss
c) Casual
loss
d) Conditional
loss
47)
Due to tsunami a ship of consignment goods sinks. This
loss is called
a) contingent
loss
b) Nominal
loss
c) Abnormal
loss
d) Casual
loss
48)
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.
49)
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
c) 3/15
d) 4/15
e) 5/15
50)
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
51)
The break up of lease rentals into total finance income
,lease equalization and depreciation represents the principle of
a) Equity
b) Consistency
c) Conservatism
d) Materialism
52)
Which of the following is not true for a lessee in a
lease transaction?
a) reduction
in capital investment
b) reduction
in tax liability
c) risk
of obsolescence
d) rentals
can be expensive
53)
Lease terminal adjustment account is a balance sheet
account
Its treatment is in the
following. Identify the correct one.
a)
if it is debit balance it is deducted from the W D V of
the asset.
b)
If it is credit balance it is added to the W D V of the
asset.
c)
If it is credit balance it is deducted from the W D
V of the asset.
d)
None of the above.
54)
If statutory depreciation > annual lease charge then
a) The
difference is added to the P & L a/c.
b) The
difference is subtracted from the P & L a/c.
c) The
difference is taken to the bank account
d) None
of the above.
55)
Residual value
is
a) Possible
resale value after the asset is written off in the books.
b) Real
value arrived at after calculation.
c) Negligible
balance after the asset is written off over the useful life of the asset.
d) a)
or c)
56)
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.
57)
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.
58)
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.
59)
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.
60)
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
61) Tick in the appropriate column for a
Non-Trading Organization
Item
Revenue Receipt Capital
Receipt
a)
Donations for sports meet
√
b) Donations
by Legacy/Will √
c) Grant for playground
√
d) Life membership fees √
e) Profit on sale of fixed assets √
62) For a Non- Trading Organization, a P & L
statement is
called an Income & Expenditure
statement because.
They often make losses.
They are forbidden by statute to make profits
By object of their association they are non profit making
bodies.
Their income & expenditure statement are a combination of
capital & revenue
receipts.
63) The useful or service life of a tangible asset is limited by physical process of wearing
out. This is called.
obsolescence
deterioration
depreciation
depletion
64) All costs be they revenue or capital will have matching
revenues
over a period of time. This accounting process
is called
amortization
depreciation
depletion
all of these
65) Which of the following is not true
Depreciation is an expense charged to the P & L a/c.
Depreciation is not a part of the operating costs.
Assets that are depreciated are tangible assets.
Depreciation is like an insurance expense.
66) Under written down value method of Depn., the W D V of the
asset is always
a) equal
to zero
b) <
zero
c) >
zero
67)Depreciation shrinks the
scrap value of the asset
market value of the asset
residual value of the asset
book value of the asset
68) Depreciation is an estimate because
a) rates
of depreciation are not fixed
b) residual
value of the asset is not known
c) useful
life of the asset is difficult to ascertain
d) a)
& b)
e) b)
& c)
69) In sinking fund method of depreciation accounting
a) A
fund is created at the beginning to which
depreciation is charged annually.
b) Since
acquiring an asset results in sunk costs
depreciation of the asset is
called so.
c) Depreciation
charged annually is transferred to a fund
which is invested in growth
and income generating
securities to take care of the
replacement of the asset.
d) None
of the above.
70) What is G A A P
a) General
American Accounting Practices.
b) Greatly
Accepted Accounting Practices.
c) Generally
Accepted Accounting Principles.
d) Good
American Accounting Practices.
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