MOST IMPORTANT AND RECOLLECTED 50 QUESTIONS OF JAIIB & CAIIB EXAM PREPARED BY MURUGAN
1. Debt equity ratio is 4:1, Current ratio is 2:1, Total assets 2000000, Owned liabilities 300000. what is the current assets?
a. 8 lakhs
b. 10 lakhs
c. 12 lakhs
d. 15 lakhs
2. Which of the following is revenue expenditure?
a. expenditure for used machinery part for sale
b. purchase of motor car
c. purchase of building
d. cash paid for audit fee
3. Which of the following is classified as one-sided error?
a. Salary paid to Manager is debited to his personal account
b. Sales register is undercast by Rs. 1200
c. Rent paid Rs. 5000 is debited to postage accouont
d. Goods purchased from Mr. X for Rs. 25000/- is wrongly recorded in sales register as Rs. 2500/-
4. On transfer of account from one branch to another branch of same bank what is required?
a. Fresh id proof
b. Address proof
c. Fresh identity and address proof
d. Self declaration
5. An amount of Rs. 6000/- received from a Customer Mr. X, is recorded correctly in the cash book but posted to the debit side of Mr. X’s account in the ledger. This is an example of ……
a. Error of Commission
b. Error of Omission
c. Error of Principle
d. Compensating Error
6. Reverse Mortgage Loan (RML) Scheme,though apparently enables senior’s regular income by pledging home with the lending bank,the product has not met with much success due to obvious reasons such as non-availability of regular income beyond tenure leading to uncertainty as to how manage without payment after the loan term,quantum,etc. To overcome the weakness of the scheme, an improved Reverse Mortgage Loan enabled Annuity Scheme (RMLeA) has envolved as significant improvement over the intial RML product variant.
Answer the following question:
01. RMLeA scheme has been promoted by ……
(i) National Housing Bank
(ii) HDFC Ltd
(iii) Central Bank of India
(iv) Star Union Daichi life insurance Company ltd.
a. (i) and (ii) only
b. (iii) and (iv) only
c. (i),(iii) and (iv) only
d. (i),(ii) and (iii) only
02. Which of the following features are true in respect of RMLeA?
(i) Married couples will be eligible as joint borrower for financial assistance
(ii) Joint borrower will have the option to receive the annuity separately in their respective individual names on proportionate basis that may decide
(iii) The senor Citizen borrower are eligible to receive assured life-time payments even after completion of the fixed term with increased quantum of annuity
(vi) The periodic annuity payments are subject to Income Tax and Taxable in the hand of the annuity recipients.
a. (i),(iii) and (vi)are correct
b. (ii),(iii) and (vi)are correct
c. (iii),(ii) and (i)are correct
d. All (i),(ii),(iii) and (vi)are correct
03. The LTV in respect of Senior Citizen in the age bracet of 70-80 as per the scheme is ……
a.50%
b.75%
c.70%
d.60%
04. Under reverse Mortgage Loan Enabled Annuity(RMLeA), which of the following are considered as the primary annuity sourcing institution?
a. Scheduled Commercial Banks
b. Housing finance Companies
c. Life insurance Corporations
d. All the above
When a bill is endorsed by the drawer in favour of another party, the drawee is required to debit which of the following accounts ……
a. Bills receivable account
b. Bills payable account
c. No entry is needed
d. Endorsee’s account
If a customer has any other existing saving bank account in that bank, he will be required to close it within …… days from date of opening BSBDA account
a. 15
b. 21
c. 30
d. 60
7. After preparation of trial balance it is observed that the goods amounting to Rs.10000 sold to Ashok & Sons were posted as Rs.1000 to their account. The rectification entry will be ……
a. Suspense account debit to Ashok & Sons Rs.9000
b. Ashok & sons debit to sales account Rs.9000
c. Sales account debit to suspense account Rs.10000
d. Ashok & sons debit to suspense account Rs.9000
8. Minor above …… years can open and operate SB account independently
a. 10 years
b. 12 years
c. 15 years
d. 18 years
9. The shareholders of a company have a fixed liability to pay, in case of liquidation of the company, It is called ……
a. Company limited by shares
b. Company limited by guarantee
c. Company with limited liability
d. Company with unlimited liability
10. Wages paid for installation of machinery is what kind of expenditure?
a. Capital Expenditure
b. Revenue Expenditure
c. Deferred Revenue Expenditure
d. None of the above
11. Which of the following transactions will result in increase in asset and increase in liability?
a. Payment made to Creditors in cash
b. Goodwill account written off
c. Issue of Bonus shares
d. Machinery purchased on credit
12. In which of the following techniques, depreciation is included as a cost?
a. Accounting Rate of return
b. Internal Rate of return
c. NPV
d. None of the above
13. Which of the following is not true ?
a. Assets that are depreciated are tangible assets.
b. Depreciation is not a part of the operating costs.
c. Depreciation is like an insurance expense.
d. Depreciation is an expense charged to the P & L a/c
14. LTV ratio for home loans above 75 lakh is ……
a. 75 %
b. 80 %
c. 90 %
d. 100 %
15. A person borrowed Rs. 10000 from the bank @ 12% p.a. for 1 year, payable on EMI basis. What is the amount of EMI?
a. 868
b. 888
c. 968
d. 986
16. Given the following information:
Total assets = Rs. 3,00,000
Non-current liabilities = Rs. 80,000
Shareholders’ Funds = Rs. 2,00,000
Non-Current Assets:
Fixed assets = Rs. 1,60,000
Non-current Investments = Rs. 1,00,000
1. Calculate Current Assets
a. Rs. 20,000
b. Rs. 30,000
c. Rs. 40,000
d. Rs. 50,000
2. Calculate Current Liabilities
a. Rs. 20,000
b. Rs. 30,000
c. Rs. 40,000
d. Rs. 50,000
3. Calculate Current Ratio
a. 1 : 1
b. 1 : 2
c. 2 : 1
d. 2 : 1.5
17. Interest rate elasticity of a bond is ……
a. Always a negative number
b. Always a positive number
c. Positive or negative number depending on the market condition
d. Positive or negative number depending on the market value
18. If a company issues bonus shares at 2:1, the debt equity ratio will:
a. Remain unaffected
b. Will go up in the same ratio of issue of bonus to the original holding
c. Will improve in the same ratio of issue of bonus to the original holding
d. Will be lowered
19. A persons owes some amount to the firm, is called …… of the firm
a. Debtor
b. Creditor
c. Customer
d. Lender
20. How much will an ordinary annuity of Rs. 650 per year be worth in eight years at an annual interest rate of 6 percent?
a. Rs. 8,975.38
b. Rs. 6,897.76
c. Rs. 7,021.80
d. Rs. 6,433.38
21. Objects of company are mentioned in ……
a. Memorandum of Association
b. Articles of association
c. Both a and b
d. None of the above
22. The appraisal method for capital expenditure, under which it is examined, how much period the invested funds will come back as cash inflow is called ……
a. Pay-back method
b. Rate of return method
c. Net present value method
d. Internal rate of return
23. LTV ratio for gold loans is ……
a. 75 %
b. 80 %
c. 90 %
d. 100 %
24.Cost of asset = 10,00,000
Estimated residual value = 10% of the cost
Estimated useful life of asset = 4 years
Find the accumulated depreciation for the 2nd year using double declining balance method.
a. 500000
b. 600000
c. 700000
d. 750000
25. X has been investing Rs.5000 every year at year end, at 5% for 5 years. How much he will get at the end of 5 years?
a. 26778.20
b. 27278.90
c. 27628.15
d. 28342.25
26. All saving all well as current accounts should be treated as inoperative/dormant, if there are no transactions in account for period of …… years
a. 1
b. 2
c. 3
d. 5
27. What would be the impact on the Trial Balance of each of the following errors?
1. A copy of a sales invoice for Rs. 4,000 is not recorded in the Sales Day Book
a. Excess credit Rs. 4,000
b. Excess credit Rs. 8,000
c. Excess debit Rs. 4,000
d. No impact
2. A supplier’s invoice for Rs. 2,500 is posted to the debit of the Trade Payable’s account
a. Excess credit Rs. 2,500
b. Excess credit Rs. 5,000
c. Excess debit Rs. 2,500
d. Excess debit Rs. 5,000
3. The daily total of the Sales Day Book is stated as Rs. 345,000 instead of Rs. 315,000 (i.e. overcast by Rs. 30,000).
a. Excess debit Rs. 30,000
b. Excess debit Rs. 60,000
c. Excess credit Rs. 30,000
d. No impact
4. A purchase invoice is recorded in the Purchases Day Book as Rs. 18,500, without taking account of 10% of that amount offered as trade discount.
a. Excess credit Rs. 1,850
b. Excess debit Rs. 1,850
c. Excess debit Rs. 3,700
d. No impact
5. A sales invoice for Rs. 21,000 has been posted to the Customer’s account as Rs. 12,000.
a. Excess credit Rs. 12,000
b. Excess debit Rs. 12,000
c. Excess credit Rs. 9,000
d. Excess debit Rs. 9,000
6. A Credit Note for Rs. 2,400 received from a supplier has been posted to the credit of the supplier’s account.
a. Excess credit Rs. 2,400
b. Excess credit Rs. 4,800
c. Excess debit Rs. 2,400
d. Excess debit Rs. 4,800
7. The year-end balance in a Trade Receivable’s account has been carried down as Rs. 14,800, instead of Rs. 18,400.
a. Excess debit Rs. 3,600
b. Excess credit Rs. 3,600
c. Excess credit Rs. 7,200
d. No impact
8. The total of the Returns Outwards Day Book, amounting to Rs. 9,800, has been posted to the debit of the Purchases Returns account.
a. Excess debit Rs. 9,800
b. Excess debit Rs. 19,600
c. Excess credit Rs. 19,600
d. No impact
Bank reconciliation is done by ……
a. Customer
b. Bank
c. Auditor
d. Any of the above
28. Maximum number of members in private companies as per Companies Act, 2013 is ……
a. 50
b. 100
c. 200
d. 500
29. Which of the following statement is true?
a. Before opening account, trust deed must be obtained from trustee
b. Partnership a/c must be open in name of firm and not in name of partner
c. While operating partnership account, partner should sign for & on behalf of firm & not as individual
d. All of the statements are correct
30. Limited company uses ……
a. double entry system
b. single entry system
c. hybrid
d. any
31. Expense necessary to produce goods or service in a business organization can be classified as ……
a. Outflow of assets
b. Decrease in assets
c. Increase in liabilities
d. All the above
32. ABC Limited Profit and Loss Account for the year ended 31.03.2022 is given below,
Turnover – 8030
Cost of sales – 4818
Distribution costs – 1606
Admin expenses – 600
Interest – 200
Tax – 286
Dividend – 320
Balance sheet as on 31.03.2016
Fixed assets
Plant and machinery – 4000
Current assets = 2800
Stocks – 1800
Debtors – 960
Bank – 40
Current liabilities = 1100
Trade creditors – 520
Proposed dividend – 320
Taxation – 160
Accruals – 100
Net current assets – 1700
10% debenture – 2000
Financed by – 3700
Ordinary shares – 900
Retained profit – 2800
Calculate the following based on the above details.
1. Gross profit
a. 1006
b. 2206
c. 3122
d. 3212
2. Operating profit
a. 200
b. 520
c. 806
d. 1006
3. Profit before tax
a. 200
b. 520
c. 806
d. 1006
4. Profit attributable to shareholders
a. 200
b. 520
c. 806
d. 1006
5. Retained profit
a. 200
b. 520
c. 806
d. 1006
6. Gross profit margin
a. 12.53 %
b. 17.65 %
c. 33.33 %
d. 40 %
7. Operating margin
a. 12.53 %
b. 17.65 %
c. 33.33 %
d. 40 %
8. Return on capital employed (ROCE) ratio
a. 12.53 %
b. 17.65 %
c. 33.33 %
d. 40 %
9. Current Ratio
a. 1:0.91
b. 1:2.55
c. 0.91:1
d. 2.55:1
10. Acid test/Quick ratio
a. 1:0.91
b. 1:2.55
c. 0.91:1
d. 2.55:1
33. An amount of Rs. 6000/- received from a Customer Mr. X, is recorded correctly in the cash book but posted to the debit side of Mr. X’s account in the ledger. This is an example of ……
a. Error of Commission
b. Error of Omission
c. Error of Principle
d. Compensating Error
Ans – a
34. On transfer of account from one branch to another branch of same bank what is required?
a. Fresh id proof
b. Address proof
c. Fresh identity and address proof
d. Self declaration
Ans – d
35. Which of the following is classified as one-sided error?
a. Salary paid to Manager is debited to his personal account
b. Sales register is undercast by Rs. 1200
c. Rent paid Rs. 5000 is debited to postage accouont
d. Goods purchased from Mr. X for Rs. 25000/- is wrongly recorded in sales register as Rs. 2500/-
Ans – b
36. Which of the following is revenue expenditure?
a. expenditure for used machinery part for sale
b. purchase of motor car
c. purchase of building
d. cash paid for audit fee
Ans – d
37. Debt equity ratio is 4:1, Current ratio is 2:1, Total assets 2000000, Owned liabilities 300000. what is the current assets?
a. 8 lakhs
b. 10 lakhs
c. 12 lakhs
d. 15 lakhs
Ans – b
Solution :
Debt equity ratios is 4:1 means 12 lac : 3 lac
Asset = Current Liabilities + Debt + Equity i.e
20 Lac = Current Liabilities + 12 Lac + 3 Lac
Current Liabilities = 20 Lac – 15 Lac = 5 Lac
Current Ratio is 2 : 1
Current Asset = 2 x 5 = 10 Lac
38. Reverse Mortgage Loan (RML) Scheme,though apparently enables senior’s regular income by pledging home with the lending bank,the product has not met with much success due to obvious reasons such as non-availability of regular income beyond tenure leading to uncertainty as to how manage without payment after the loan term,quantum,etc. To overcome the weakness of the scheme, an improved Reverse Mortgage Loan enabled Annuity Scheme (RMLeA) has envolved as significant improvement over the intial RML product variant.
Answer the following question:
01. RMLeA scheme has been promoted by ……
(i) National Housing Bank
(ii) HDFC Ltd
(iii) Central Bank of India
(iv) Star Union Daichi life insurance Company ltd.
a. (i) and (ii) only
b. (iii) and (iv) only
c. (i),(iii) and (iv) only
d. (i),(ii) and (iii) only
02. Which of the following features are true in respect of RMLeA?
(i) Married couples will be eligible as joint borrower for financial assistance
(ii) Joint borrower will have the option to receive the annuity separately in their respective individual names on proportionate basis that may decide
(iii) The senor Citizen borrower are eligible to receive assured life-time payments even after completion of the fixed term with increased quantum of annuity
(vi) The periodic annuity payments are subject to Income Tax and Taxable in the hand of the annuity recipients.
a. (i),(iii) and (vi)are correct
b. (ii),(iii) and (vi)are correct
c. (iii),(ii) and (i)are correct
d. All (i),(ii),(iii) and (vi)are correct
03. The LTV in respect of Senior Citizen in the age bracet of 70-80 as per the scheme is ……
a.50%
b.75%
c.70%
d.60%
04. Under reverse Mortgage Loan Enabled Annuity(RMLeA), which of the following are considered as the primary annuity sourcing institution?
a. Scheduled Commercial Banks
b. Housing finance Companies
c. Life insurance Corporations
d. All the above
Answers
1-b, 2-a, 3-c, 4-c
39. The shareholders of a company have a fixed liability to pay, in case of liquidation of the company, It is called ……
a. Company limited by shares
b. Company limited by guarantee
c. Company with limited liability
d. Company with unlimited liability
Ans – b
40. Minor above …… years can open and operate SB account independently
a. 10 years
b. 12 years
c. 15 years
d. 18 years
Ans – a
41. After preparation of trial balance it is observed that the goods amounting to Rs.10000 sold to Ashok & Sons were posted as Rs.1000 to their account. The rectification entry will be ……
a. Suspense account debit to Ashok & Sons Rs.9000
b. Ashok & sons debit to sales account Rs.9000
c. Sales account debit to suspense account Rs.10000
d. Ashok & sons debit to suspense account Rs.9000
Ans – d
42. If a customer has any other existing saving bank account in that bank, he will be required to close it within …… days from date of opening BSBDA account
a. 15
b. 21
c. 30
d. 60
Ans – c
43. When a bill is endorsed by the drawer in favour of another party, the drawee is required to debit which of the following accounts ……
a. Bills receivable account
b. Bills payable account
c. No entry is needed
d. Endorsee’s account
Ans – c
44. Which of the following is not true ?
a. Assets that are depreciated are tangible assets.
b. Depreciation is not a part of the operating costs.
c. Depreciation is like an insurance expense.
d. Depreciation is an expense charged to the P & L a/c
Ans – b
45. In which of the following techniques, depreciation is included as a cost?
a. Accounting Rate of return
b. Internal Rate of return
c. NPV
d. None of the above
Ans – a
The depreciation has been charged and it has been debited to fixed asset account. It is an ……
a. Error of omission
b. Error of Commission
c. Error of principle
d. Compensating error
Ans – c
46. Which of the following transactions will result in increase in asset and increase in liability?
a. Payment made to Creditors in cash
b. Goodwill account written off
c. Issue of Bonus shares
d. Machinery purchased on credit
Ans – d
47. Wages paid for installation of machinery is what kind of expenditure?
a. Capital Expenditure
b. Revenue Expenditure
c. Deferred Revenue Expenditure
d. None of the above
Ans – a
48. Given the following information:
Total assets = Rs. 3,00,000
Non-current liabilities = Rs. 80,000
Shareholders’ Funds = Rs. 2,00,000
Non-Current Assets:
Fixed assets = Rs. 1,60,000
Non-current Investments = Rs. 1,00,000
1. Calculate Current Assets
a. Rs. 20,000
b. Rs. 30,000
c. Rs. 40,000
d. Rs. 50,000
Ans – c
2. Calculate Current Liabilities
a. Rs. 20,000
b. Rs. 30,000
c. Rs. 40,000
d. Rs. 50,000
Ans – a
3. Calculate Current Ratio
a. 1 : 1
b. 1 : 2
c. 2 : 1
d. 2 : 1.5
Ans – c
Solution:
1. c
Total assets = Non-current assets + Current assets
Rs. 3,00,000 = Rs. 2,60,000 + Current assets
Current assets = Rs. 3,00,000 – Rs. 2,60,000
= Rs. 40,000
2. a
Total assets = Equity and Liabilities
= Shareholders’ Funds + Non-current liabilities + Current liabilities
Rs. 3,00,000 = Rs. 2,00,000 + Rs. 80,000 + Current Liabilities
Current liabilities = Rs. 3,00,000 – Rs. 2,80,000
= Rs. 20,000
3. c
Current Ratio = Current Assets / Current Liabilities
= Rs. 40,000 / Rs. 20,000
= 2 : 1
49. A person borrowed Rs. 10000 from the bank @ 12% p.a. for 1 year, payable on EMI basis. What is the amount of EMI?
a. 868
b. 888
c. 968
d. 986
Ans – b
Solution:
P = 10000
R = 12% / 12 = 0.01% (In EMI or Equated Monthly Instalment), we need to find monthly rate, so we divide rate by 12)
T = 1 *12 = 12 (In EMI or Equated Monthly Instalment, we multiply time with 12)
The formula of EMI =
P * R * (1 + R)^T ÷ { (1 + R)^T – 1 }
So,
EMI = 10000*0.01*(1+0.01)^12 ÷ {(1+0.01)^12 – 1}
= 888 Ans
………………………………………
LTV ratio for home loans above 75 lakh is ……
a. 75 %
b. 80 %
c. 90 %
d. 100 %
Ans – a
All saving all well as current accounts should be treated as inoperative/dormant, if there are no transactions in account for period of …… years
a. 1
b. 2
c. 3
d. 5
Ans – b
X has been investing Rs.5000 every year at year end, at 5% for 5 years. How much he will get at the end of 5 years?
a. 26778.20
b. 27278.90
c. 27628.15
d. 28342.25
Ans – c
50. Cost of asset = 10,00,000
Estimated residual value = 10% of the cost
Estimated useful life of asset = 4 years
Find the accumulated depreciation for the 2nd year using double declining balance method.
a. 500000
b. 600000
c. 700000
d. 750000
Ans – d
Explanation
Depreciation rate = (1/useful life) x 200%
= 1/4 x 200% = 20% x 2 = 50%
[Year 1]
Depreciation amount for year 1
= beginning book value x depreciation rate
= 10,00,000 x 50%
= 5,00,000
Accumulated depreciation at the end of year 1 = 5,00,000
Book value at the end of year 1
= 10,00,000 – 5,00,000
= 5,00,000
[Year 2]
Depreciation amount for year 2
= beginning book value x depreciation rate
= 5,00,000 x 50% = 2,50,000
Accumulated depreciation at the end of year 2
5,00,000 + 2,50,000 = 7,50,000
LTV ratio for gold loans is ……
a. 75 %
b. 80 %
c. 90 %
d. 100 %
Ans – c
The appraisal method for capital expenditure, under which it is examined, how much period the invested funds will come back as cash inflow is called ……
a. Pay-back method
b. Rate of return method
c. Net present value method
d. Internal rate of return
Ans – a
What would be the impact on the Trial Balance of each of the following errors?
1. A copy of a sales invoice for Rs. 4,000 is not recorded in the Sales Day Book
a. Excess credit Rs. 4,000
b. Excess credit Rs. 8,000
c. Excess debit Rs. 4,000
d. No impact
Ans – d
If there is no record of a copy invoice in the Sales Day Book then there has been no prime entry. This means that there will be no credit in the Sales account and no debit in a customer’s account. As an Error of Omission there is no impact on the Trial Balance.
2. A supplier’s invoice for Rs. 2,500 is posted to the debit of the Trade Payable’s account
a. Excess credit Rs. 2,500
b. Excess credit Rs. 5,000
c. Excess debit Rs. 2,500
d. Excess debit Rs. 5,000
Ans – d
If the supplier’s invoice had not been posted, the debits would have exceeded the credits in the Trial Balance by Rs. 2,500. As the invoice was actually posted to the debit in the supplier’s account the effect is doubled so that the total of the debits will exceed the total of the credits by Rs. 5,000
3. The daily total of the Sales Day Book is stated as Rs. 345,000 instead of Rs. 315,000 (i.e. overcast by Rs. 30,000).
a. Excess debit Rs. 30,000
b. Excess debit Rs. 60,000
c. Excess credit Rs. 30,000
d. No impact
Ans – c
The total from the Sales Day Book is posted to the credit of the Sales account. The Sales account will be listed in the Trial Balance. If the total transferred from the Sales Day Book is higher than it should be the Trial Balance will show an excess of credits. In this case the excess is Rs. 30,000
4. A purchase invoice is recorded in the Purchases Day Book as Rs. 18,500, without taking account of 10% of that amount offered as trade discount.
a. Excess credit Rs. 1,850
b. Excess debit Rs. 1,850
c. Excess debit Rs. 3,700
d. No impact
Ans – d
The amount entered in the Purchases Day Book is incorrect as trade discount is never entered in the books. However, it is the incorrect amount that will appear in both the debits in the Purchases account and the credit in the supplier’s account. Although the amount is incorrect because the same amount has been entered as both a debit and a credit there will be no impact on the Trial Balance, i.e. it will continue to be in balance.
5. A sales invoice for Rs. 21,000 has been posted to the Customer’s account as Rs. 12,000.
a. Excess credit Rs. 12,000
b. Excess debit Rs. 12,000
c. Excess credit Rs. 9,000
d. Excess debit Rs. 9,000
Ans – c
The sales invoice will have been posted to the debit of the customer’s account. As the amount is Rs. 9,000 less than the amount that will appear in the Sales account credit balance, it follows that the Trial Balance will show an excess credit of Rs. 9,000 ……………………………………………
6. A Credit Note for Rs. 2,400 received from a supplier has been posted to the credit of the supplier’s account.
a. Excess credit Rs. 2,400
b. Excess credit Rs. 4,800
c. Excess debit Rs. 2,400
d. Excess debit Rs. 4,800
Ans – b
Credit purchases will have been credited to the supplier’s account. If the supplier sends a Credit Note indicating an amount that does not have to be paid, then there should be a debit to the supplier’s account. If the debit of Rs. 1,200 had not been made then there would be an excess of credits of Rs. 1,200. Because the Rs. 1,200 was actually posted to the wrong side there is a double effect and the credits will exceed the debits by Rs. 2,400
7. The year-end balance in a Trade Receivable’s account has been carried down as Rs. 14,800, instead of Rs. 18,400.
a. Excess debit Rs. 3,600
b. Excess credit Rs. 3,600
c. Excess credit Rs. 7,200
d. No impact
Ans – b
Trade Receivable balances are listed as debits in the Trial Balance. If figures are transposed so that Rs. 18,400 is listed as Rs. 14,800 then the debits are too low and there will be excess credits of Rs. 3,600.
……………………………………………
8. The total of the Returns Outwards Day Book, amounting to Rs. 9,800, has been posted to the debit of the Purchases Returns account.
a. Excess debit Rs. 9,800
b. Excess debit Rs. 19,600
c. Excess credit Rs. 19,600
d. No impact
Ans – b
The total of Returns Outwards should be a credit with the individual debits made in the supplier’s account. In this case the Rs. 9,800 returned has been entered on the wrong side, so doubling the effect of the error. This means that there will be an excess of credits of Rs. 19,600
Machinery value – 12,00,000, Salvage Value – 1,00,000, Useful Life in Years – 10 Years
Use sum of the years’ digits method of depreciation to find the Book value after 3 years
a. 540000
b. 660000
c. 820000
d. 1000000
Ans – b
Solution :
Sum of the Years’ Digits = 1 + 2 + 3 + 4 + … + 10 = 10(10 + 1) ÷ 2 = 55
Depreciable Base = 12,00,000 − 1,00,000 = 11,00,000
1st year = 10/55*1100000 = 200000
2nd year = 9/55*1100000 = 180000
3rd year = 8/55*1100000 = 160000
Book Value at the end of 3rd year = 1200000 – (200000 + 180000 + 160000)
= 1200000 – 540000 = 660000
When the exchange of currencies take place on 2nd working day after the deal, it is said to have taken place at ……
a. Forward Rate
b. Case/Ready Rate
c. TOM Rate
d. None of the above
Ans – d
Which of the following statements is/are true regarding Bill of Exchange?
(i) It is an instrument in writing, signed by the maker
(ii) It contains a conditional order
(iii) It contains an unconditional order to the drawee to pay a certain sum of money to a person or his order
(iv) It is payable on a certain date or after a certain period or on demand
a. (i) and (ii) only
b. (ii) and (iv) only
c. (i), (iii) and (iv) only
d. (i), (ii), (iii) and (iv)
Ans – c
Which of following is true?
a. All payments to third parties must be made by the account holder only through cash
b. Bank cannot effect payment to debit of account if account holder has given written instruction
c. All withdrawal by current holder, including NEFT/RTGS should be fine through cheques only
d. Interest is payable on current account balances
Ans – c
In case of minor married girl, …… is guardian
a. Father
b. Husband
c. Father in law
d. Mother
Ans – b