JAIIB AFB Sample Questions by Murugan For May 2015

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murugan0501@gmail.com, admin@jaiibcaiibmocktest.com, 09994452442

Accounting & Finance for Bankers
t.c
Simple interest on a sum at 4% p.a. for two years is Rs.800. Find the total amount for the compound
interest on the same principal, rate of interest and for the same period is......
a. Rs. 8160
es
b. Rs. 8610
c. Rs. 10816
d. Rs. 10861
kt
Ans - c
oc
Let me Explain :
Let us first find the principal Amount

m
Simple Interest for 2 years @ 4% = 800
So, for 1 year @ 4% = 800/2 = 400
iib
So, the Principal Amount = 400/4*100 = 10000
Now let us calculate, compound interest on Rs. 10000 at 4% p.a for 2 years
ca
A = P(1+r/100)^n
= 10000 (1+4/100)^2
= 10000 (1.04)^2
= 10000 (1.0816)
iib
= 10816
So, Total Amount on Rs. 10000 at 4% p.a for 2 years is : Rs. 10816
.ja
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A man invested Rs. 1552 in a stock at 97 to obtain an income of Rs. 128. The dividend from the stock is
...... %
w
a. 7.5
w
b. 8
c. 8.5
d. 9.7
w
Ans - b
Explanation:

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By investing Rs. 1552, income = Rs. 128

By investing Rs. 97, income = Rs. 128/1552 x 97 = Rs. 8
t.c
Dividend = 8%
.............................................
es
......is the value of an established business over the above the value represented by its tangible assets.
a. Goodwill
kt
b. Liblities
c. Losses
d. All of the above
oc
Ans - a
.............................................
m
The closing debit balance falls on the
a. Debit Side
iib
b. Credit Side
c. Either Debit or Credit Side
d. None of these
ca
Ans - a
.............................................
iib
When a currency is at discount in future or for a future value date, it is
a. Costlier
b. Cheaper
.ja
c. Equal
d. None of these
w
Ans - b
.............................................
w
What will the ratio of simple interest earned by certain amount at the same rate of interest for 4 years
and that for 10 years.
w
a. 1:2
b. 2:1
c. 2:5
d. 2:3

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Ans - c
t.c
Let me Explain :
Let the principal be P and rate be R
es
then
Ratio = [(PR4/100):(PR10/100)]
kt
= 4PR:10PR
= 4:10
= 2:5
oc
.............................................
...... %
m
a. 8
b. 8.5
iib
c. 9
d. 9.5
ca
Ans - c
Explanation:
iib

Dividend = 9%
.ja
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When overdraft as per cash book and a Cheque of Rs.1000 directly deposited in the bank, but not
w
recorded in cash book ...
a. Add Rs.1000 in CB
w
b. Deduct Rs.1000 in CB
c. Add Rs.2000 in cash book
w
d. Deduct Rs.2000 in CB
Ans - b
.............................................

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Under casting of the credit side of Cash Book has the same effect as over casting of the ...
t.c
a. Debit side of the pass book.
b. Credit side of the pass book.
c. There is no relevance between the two
d. None of the above
es
Ans - b
.............................................
kt
Freight paid on a machine for bringing it to factory is......
oc
a. Capital expenditure
b. Revenue expenditure
c. Deferred revenue expenditure
m
Ans - a
..................................................................
iib
An asset cost Rs. 5,00,000/- has residual value of Rs. 50,000/-, and is expected to last 5 years. Calculate
the total depreciation till 3rd year using Straight-line Method.
ca
a. Rs. 90,000
b. Rs. 1,00,000
c. Rs. 2,70,000
iib
d. Rs. 3,00,000
Ans - c
.ja
Let me Explain :
Expected Life = 5 Years

w
Total Depreciation = Cost of the Asset - Residual Value

So, Value to be taken for Depreciation = 500000 - 50000 = 450000
Depreciation per year = 450000/5 = 90000
w
So, Total Depreciation till 3rd year will be

w
Rs. 90000 * 3 = 2,70,000/-

.............................................

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...... of a partner means that a partner breaks off his relations with all other partners and withdraws
himself from the firm.
t.c
a. Admission
b. Submission
c. Permission
es
d. Retirement
Ans - d
kt
.............................................
...... means accounting performed by a computer.
oc
a. Accounting
b. Computerised accounting
c. Manual accounting
m
Ans - b
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.............................................
...... is the value attached to the super profit earning capacity of business arising from its wide
ca
connections, reputation and long standing in the business.
a. Goodwill
b. Liabilities
iib
c. Losses
d. All of the above
Ans - a
.ja
.............................................
...... of a partner means joining of a new person into an existing partnership as a partner.
w
a. Admission
b. Submission
w
c. Permission
d. Retirement
w
Ans - a
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The set of instructions written by a programmer for a computer is called ......
t.c
a. Programme
b. software programme
c. Computer programmed - software programme
d. Hardware Programme
es
Ans - c
.............................................
kt
Regular ...... of data is required to guard against loss of data.
oc
a. back up
b. Function
c. Up dating
d. Control
m
Ans - a
.............................................
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...... destroys computer data.

ca
a. Software virus
b. Hardware virus
c. Computer virus
iib
Ans - c
.............................................
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The ...... form of Balance Sheet and Profit and Loss account of a banking company is prescribed in Forms
A and B of schedule of the Banking Regulation Act, 1949.
w
a. First
b. Second
c. Third
w
d. Fourth
w
Ans - c
.............................................
In the balance sheet, various items of assets are arranged according to ...... order.
a. Sales

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b. Purchase
c. Stock
t.c
d. Liquidity
Ans - d
.............................................
es
Partnership is a ...... between two or more persons.
kt
a. Friendship
b. Relationship
c. Both a & b
oc
Ans - b
.............................................
m
In the Partnership firms, liability of each partner is ......
iib
a. Limited
b. Unlimited
c. Overhead
ca
d. Maximum
Ans - a
.............................................
iib
A limited company is a/an ...... person.
a. Original
.ja
b. Duplicate
c. Artificial
w
Ans - c
.............................................
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A company has a perpetual ......

w
a. Profits
b. Losses
c. Succession
d. All the above

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Ans - c
.............................................
t.c
A truck cost 8,900 with a residual value of 500. it is estimated the useful life of the truck is 4 years. The
amount of depreciation expense in year 2 by using the declining balance at twice the straight line rate
is...
es
a. 2,225
b. 4,200
kt
c. 4,450
d. 8,400
oc
Ans - c
.............................................
A sum amounts to Rs. 2,916 in 2 years and to Rs. 3,149.28 in 3 years at Compound interest. The sum
m
is......
a. Rs. 1,500
iib
b. Rs. 2,000
c. Rs. 2,500
d. Rs. 3,000
ca
Ans - c
.............................................
iib
The ...... is affixed on all important documents and contracts of a company.
a. Registred seal
b. Common Seal
.ja
c. Govt. seal
d. All the above
w
Ans - b
.............................................
w
Share of a limited company can be classified into ......

w
a. Equity
b. Preference
c. Equity and Preference
Ans c

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...... capital is the amount with which Company is formed.
t.c
a. Authorised
b. Subscribed
c. Both a & b
d. All the above
es
Ans - a
.............................................
kt
Capital subscribed by the public is called ...... capital.
oc
a. Authorised
b. Subscribed
c. Preference
d. Any of the above
m
Ans - b
.............................................
iib
Paid-up Capital means amount of capital actually paid by ......

ca
a. Shareholders
b. Equity Shareholders
c. Preference Shareholders
d. All of the above
iib
Ans - a
.............................................
.ja
Final accounts of a limited company consist of ......
a. Balance Sheet
w
b. Profit and Loss account

c. Trading account
d. Both a and b
w
Ans - c
w
.............................................
...... of the companies Act prescribes the form of balance sheet.
a. Schedule V
b. Schedule VI

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c. Schedule VII
d. Schedule VIII
t.c
Ans - b
.............................................
es
Merchant bank is one that normally doesn't deal in ......
a. International finance
kt
b. Retail Products
c. Long-term loans for companies
d. Underwriting
oc
Ans - b
.............................................
m
Which of the following can't be taken as Proof of Identity?
a. Voter ID
iib
b. Driving License
c. Ration Card
d. Aadhaar Card
ca
Ans - c
.............................................
iib
Composite vouchers normally contain ......
a. Only Debit entries

b. Only Credit entries
.ja
c. Both Debit and Credit entries

d. Any of the above
w
Ans - c
.............................................
w
Accounting for which of the following is normally not carried out at Head Offices?
w
a. Funds Management
b. Investments
c. CASA
d. Bills re-discounting
Ans c

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FIU-Ind comes under the department of ......
t.c
a. Banking, Ministry of Finance
b. Commerce, Ministry of Finance
c. Revenue, Ministry of Finance
d. Intelligence, Ministry of Finance
es
Ans - c
.............................................
kt
What is the market value of a bond that will pay a total of fifty semiannual coupons of Rs. 80 each over
the remainder of its life? Assume the bond has a Rs. 1,000 face value and a 12% yield to maturity.
oc
a. Rs. 734.86
b. Rs. 942.26
c. Rs. 1,135.90
m
d. Rs. 1,315.24
Ans - a
iib
.............................................
What would you pay for a share of ABC Corporation stock today if the next dividend will be Rs. 3 per
ca
share, your required return on equity investments is 15% and the stock is expected to be worth Rs. 90
one year from now?
a. Rs. 60.00
iib
b. Rs. 68.12
c. Rs. 78.26
d. Rs. 80.87
.ja
Ans - c
.............................................
w
Capital = Rs. 65,000, Assets = Rs.80,000, then Liabilities = Rs......
a. Rs. 25,000
w
b. Rs. 35,000
c. Rs. 5,000
w
d. Rs. 15,000
Ans - d
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An asset cost Rs. 16,00,000/- has residual value of Rs. 1,00,000/-, and is expected to last 5 years.
Calculate the depreciation for 4th year using sum of the digits Method.
t.c
a. Rs. 100000
b. Rs. 200000
c. Rs. 300000
es
d. Rs. 400000
Ans - b
kt
Let me explain :
oc
D = (nth/E(sigma)n)(cost-Residual Value)
E(sigma)n = 1+2+3+4+5 = 15
Cost-Residual Value = 1600000 - 100000 = 1500000
m
1st year = 5/15(1500000) = 500000
2nd year = 4/15(1500000) = 400000
3rd year = 3/15(1500000) = 300000
iib
4th year = 2/15(1500000) = 200000

5th year = 1/15(1500000) = 100000
.............................................
ca
A truck cost Rs 1,05,000 with a residual value of Rs. 1,00,000. it has an estimated useful life of 5 years. If
the truck was bought on July 9, what would be the book value at the end of year 1?
iib
a. Rs. 1,00,000
b. Rs. 85,000
c. Rs. 80,000
d. Rs. 25,000
.ja
Ans - a
.............................................
w
A sum of Rs. 25,400 is lent out into two parts, one at 12% p.a. and the other at 12.5% p.a. If the total
annual income from interest is Rs. 3116. the money lent at 12% is......
w
a. Rs. 10,000
w
b. Rs. 11,800
c. Rs. 12,400
d. Rs. 13,400
Ans - b
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ABC Company just issued a bond with a Rs. 1,000 face value and a coupon rate of 8%. If the bond has a
life of 20 years, pays annual coupons, and the yield to maturity is 7.5%, what will the bond sell for?
t.c
a. Rs. 951
b. Rs. 975
c. Rs. 1,020
es
d. Rs. 1,051
Ans - b
kt
.............................................
Which of the following is not an example for debit voucher?
oc
a. Cheques issued by the customers
b. Withdrawal forms
c. Letters of authority signed by the customers, containing standing instructions
m
d. Application for issue of DD, TD, RTGS/NEFT
Ans - d
iib
.............................................
Which activities should not be outsourced?

ca
a. Management of investment portfolio

b. Internal Audit
c. Compliance Functions
iib
d. All the above
Ans - d
.............................................
.ja
Any excess in the Cash Balance must be credited to ...... account on the same day.
w
a. Suspense
b. Sundry Creditor
c. Sundry Debtor
w
d. Head Cashier
w
Ans - b
.............................................

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Category-wise accounts for various types of transactions put through inter-branch accounts to be
maintained wef ......
t.c
a. 01.01.1998
b. 01.04.1998
c. 01.01.1999
es
d. 01.04.1999
Ans - d
kt
.............................................
Which of the following is not an example for credit voucher?
oc
a. Pay-in-Slips
b. Challans for deposits into Govt Accounts
c. Letters of authority signed by the customers, containing standing instructions
m
d. Application for issue of DD, TD, RTGS/NEFT
Ans - c
iib
.............................................
Who is responsible for any shortage either in hand or Vault Balance?

ca
a. Head Cashier
b. All Cashiers
c. Accountant
iib
d. All of them
Ans - a
.............................................
.ja
Max permissible LTV ratio for Auto Loans upto Rs. 10 Lacs is ...... % of 'on road price' of the car.
w
a. 80
b. 85
c. 90
w
d. 95
w
Ans - b
.............................................
EOD operations at CDC normally starts around ......
a. 8 PM

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b. 9 PM
c. 10 PM
t.c
d. 11 PM
Ans - c
.............................................
es
Max permissible LTV ratio for individual housing Loans upto 20 Lacs is ...... %
kt
a. 80
b. 85
c. 90
oc
d. 95
Ans - c
.............................................
m
Max permissible LTV ratio for Auto Loans above Rs. 10 Lacs is ...... % of 'on road price' of the car.
iib
a. 80
b. 85
c. 90
ca
d. 95
Ans - a
.............................................
iib
Reposting of all the ATM transactions, which happened when the EOD process was running, is taken
care by ......
.ja
a. BOD
b. SOD
c. EOD
w
d. All of the above
Ans - b
w
.............................................
w
Role of the concurrent auditors / Internal auditors with KYC is to ......
a. Review of compliance of KYC guidelines

b. Effectiveness of the implementation of the KYC
c. Verification of newly opened accounts and their transactions
d. All of the above

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Ans - d
.............................................
t.c
One of the sources that is available to identify the correctness of the information given by the New
Customer of the Commercial Bank is ......
es
a. Introduction given by the existing customer of the Bank
b. By studying the account opening form
c. By providing information by the agencies like CRISIL
kt
Ans - c
oc
.............................................
If Rs. 7,500 are borrowed at compound interest at the rate of 4% p.a. then after 2 years the amount to
be paid is ......
m
a. Rs. 8,082
b. Rs. 8,100
iib
c. Rs. 8,112
d. Rs. 8,200
ca
Ans - c
.............................................
If compound interest for 2 Years at the rate of 4% of some money is Rs. 102, find the simple interest at
iib
the same rate for 2 years.
a. Rs. 100
b. Rs. 110
.ja
c. Rs. 120
d. Rs. 130
w
Ans - a
.............................................
w
What is the rate percent per annum if a sum doubles itself in 12 years at Compound rate of interest?
w
a. 5.4%
b. 5.5%
c. 5.8%
d. 5.9%
Ans d

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If a sum of money trebles itself in 2 years at compound interest, then it will be 27 times of itself in ......
t.c
a. 5 years
b. 6 years
c. 12 years
d. 18 years
es
Ans - b
.............................................
kt
The simple interest and compound interest of first year, are
oc
a. equal
b. unequal
c. Can't say
m
Ans - a
.............................................
iib
When compound interest is calculated half yearly, then the period becomes ......
ca
a. half
b. double
c. one fourth
d. one tenth
iib
Ans - b
.............................................
.ja
The present worth of Rs. 7,020 due in two equal half-yearly instalments @ 8%p.a. simple interest is ......
a. Rs. 6,500
w
b. Rs. 6,625
c. Rs. 6,750
d. Rs. 7,000
w
Ans - b
w
.............................................
The simple interest and the true discount on a certain sum for a given time and at a given rate are Rs.
1000 and Rs. 80, respectively. The sum is ......
a. Rs. 400

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b. Rs. 800
c. Rs.1,00
t.c
d. Rs.2,000
Ans - a
.............................................
es
A person buys a watch for Rs. 1,950 in cash and sells it for Rs. 2,200 on credit of 1 year. If the rate of
interest is 10% he ......
kt
a. loses Rs.50
b. Loses Rs.30
oc
c. Gains Rs.30
d. Gains Rs.50
Ans - d
m
.............................................
A has to pay Rs. 22,000 to B after 1 year. B asks A to pay Rs. 11,000 in cash Immediately and defer the
iib
payment of Rs. 11,000 for 2 years. A agrees to it. Counting the rate of interest at 10% p.a. in this new
mode of payment ......
ca
a. A gains Rs. 734

b. A loses Rs. 734
c. A gain Rs. 1,100
iib
d. B gains Rs. 1,100.
Ans - a
.............................................
.ja
Strict adherence to KYC norms is achieved through ......

w
a. Following the statutory authority guidelines

b. Identification of customers with appropriate documents
c. Strict Implementation of the Banks Systems and procedures while opening the accounts
w
d. All of the above

w
Ans - d
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While accounts are transferred from one branch to another, the receiving branch is expected to comply
with KYC Norms. Which one of the following is/are correct in this regard?
t.c
a. Detailed verification of Customer Profile as received from the earlier branch is to be done with
caution and if required fresh details are to be obtained
b. Fresh details are to be obtained and a fresh customer profile is to be prepared
es
c. No transaction is to be permitted for the first six months till the customer is fully know to the bank
d. Detailed verification is not needed but the account is opened immediately and informed to the
customer
kt
Ans - a
.............................................
oc
While opening an account in the name of a company, the following document/s is/are to be obtained -
a. Memorandum and Articles of Association of the Company

m
b. Instructions of the Registrar of the Company
c. Roles and responsibilities of the Company
d. Organisation Chart of the company
iib
Ans - a
.............................................
ca
Max permissible LTV ratio for individual housing Loans Above 20 Lacs & upto 75 Lacs is ...... %
a. 75
iib
b. 80
c. 85
d. 90
.ja
Ans - b
.............................................
w
The branches of commercial banks should report suspicious transactions to ......
a. RBI
w
b. Banks respective authority

c. Ministry of Finance
w
Ans - b
.............................................

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Max permissible LTV ratio for individual housing Loans Above 75 Lacs is ...... %
t.c
a. 75
b. 80
c. 85
d. 90
es
Ans - a
.............................................
kt
What annual rate of simple interest was paid if Rs. 10000 earned Rs. 1100 as interest in 2 Years and 9
months?
oc
a. 2%
b. 3%
c. 4%
m
d. 5%
Ans - c
iib
.............................................
A sum of money at simple interest amounts to Rs. 2,800 in 2 years and to Rs. 3,250 in 5 years. Find the
ca
sum and the rate of interest.
a. Rs. 2,500; 5%
b. Rs. 2,500; 6%
iib
c. Rs. 3,000; 5%
d. Rs. 3,000; 6%
Ans - b
.ja
.............................................
w
the depreciation for 2nd year using sum of the digits Method.
a. Rs. 1,20,000/-
w
b. Rs. 90,000/-
c. Rs. 60,000/-
w
d. Rs. 30,000/-
Ans - b
Let me explain :

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E(sigma)n = 1+2+3+4 = 10
t.c
1st year = 4/10(300000) = 120000
2nd year = 3/10(300000) = 90000
3rd year = 2/10(300000) = 60000
es
4th year = 1/10(300000) = 30000
.............................................
kt
If a sum of money doubles itself in 8 years at simple interest, the rate percent per annum is
A. 12
oc
B. 12.5
C. 13
D. 13.5
m
Ans - B
Explanation:
iib
Let sum = x then Simple Interest = x

ca
Rate = (100 * x) / (x * 8) = 12.5

.............................................
A sum of Rs 12,500 amounts to Rs. 15,500 in the 4 years at the rate of simple interest. Find the rate
iib
percent
A. 6 %
B. 7 %
.ja
C. 8 %
D. 9 %
w
Ans - A
Explanation:
w
S.I.=P*R*T/100
w
=>R=S.I.*100/P/T
So, S.I = 15500 - 12500 = 3000.
=>R = 3000*100/12500/4
= 6%

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What is the present worth of Rs. 132 due in 2 years at 5% simple interest per annum
t.c
A. 110
B. 120
C. 130
D. 140
es
Ans - B
kt
Explanation:
Let the present worth be Rs.x
oc
Then, S.I.= Rs.(132 - x)
= (x*5*2/100) = 132 - x
m
= 10x = 13200 - 100x
iib
= 110x = 13200
x= 120
ca
.............................................
The difference between banker's discount and true discount of a bill which is due after 6 months, is Rs.
75 at the rate of 5% p.a. Find out
iib
a. True discount
b. banker's discount
c. value of the bill.
.ja
a. Rs. 3,075; Rs. 3,000; Rs.1,23,000

b. Rs. 2,075; Rs. 2,000; Rs. 2,13,000
w
c. Rs. 3,000; Rs. 3,075; Rs. 1,23,000

d. Rs. 2,500; Rs. 2,575; Rs. 3,12,000.
w
Ans - c
.............................................
w
A sum of money doubles itself in 16 years at simple interest with yearly rate of...
a. 5.25 %
b. 6.25 %
c. 7.25 %

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d. 8.25 %
t.c
Ans - b
.............................................
Cash discount is
es
a. The allowance to expedite cash receipts and payments within a specified period
b. It is a loss for the firm receiving the payment and again for the firm making the payment
kt
c. Discount allowed is entered on debit side and discount earned on the credit side of cash book.
d. All the above
E. A & B
oc
Ans - d
.............................................
m
For opening accounts in the case of Joint Hindu Undivided Family (JHUF), the following document/s
is/are important -
iib
a. Declaration of all guardians on behalf of minors

b. Declaration of all family members
c. Declaration of the Karta of the family
ca
d. Declaration can be exempted as per Hindu Succession Act
Ans - c
.............................................
iib
A sum of Rs. 26,000 is lent out in two parts in such a way that the interest on one Part @ 10% for 5 years
is equal to the on another part @ 9% for 6 years. The sum lent out at 10% is......
.ja
a. Rs. 10,500
b. Rs. 11,500
c. Rs. 12,500
w
d. Rs. 13,500
Ans - d
w
.............................................
w
The cost of a van is 3,25,000 with a residual value of Rs. 75,000. The van has an estimated useful life of 5
years. The amount of depreciation expense using sum-of-the-year's digit in year 5 is...
a. 16700
b. 33300
c. 50000

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d. 83300
t.c
Ans - a
.............................................
While opening an account in case of partnership firm, one of the vital document to be produced by the
es
firm is ......
a. Partnership Deed
kt
b. Partners MOU
c. Signatures of the partners
d. Registration certificate of Partnership
oc
Ans - a
.............................................
m
...... process is done for all the branches at one consolidated stretch.
a. EOD/BOD
iib
b. EOD/SOD
c. SOD/BOD
d. All the above
ca
Ans - b
.............................................
iib
Submission of details of PAN (Permanent Account Number) is compulsory for Fixed Deposits of ......
a. Rs.20,000/- & above

b. Rs.50,000/- & above
.ja
c. Rs.75,000/- & above

d. Rs.1,00,000/- & above
w
Ans - b
.............................................
w
The present worth of a sum due sometime hence is Rs.5,760 and the banker's gain is Rs. 10. The true
discount is ......
w
a. Rs. 160
b. Rs. 180
c. Rs. 240
d. Rs. 320

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Ans - c
.............................................
t.c
Find the simple interest on Rs 7000 at 50/3 % for 9 months
A. Rs. 1075
es
B. Rs. 975
C. Rs. 875
D. Rs. 775
kt
Ans - C
oc
Explanation:
S.I. = PRT100
m
So, by putting the values in the above formula, we get
S.I. = 700050/3*9/12/100
iib
=875
[Please note that we have divided by 12 as we converted 9 months in a year format]

ca
.............................................
Find the simple interest on the Rs. 2000 at 25/4% per annum for the period from 4th Feb 2013 to 18th
April 2013
iib
A. Rs 25
B. Rs 30
C. Rs 35
.ja
D. Rs 40
Ans - A
w
Explanation:
w
One thing which is tricky in this question is to calculate the number of days.
w
Always remember that the day on which money is deposited is not counted while the day on which
money is withdrawn is counted.
So lets calculate the number of days now,
Time = (24+31+18) days

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= 73/365 years
= 1/5 years
t.c
P = 2000
R = 25/4%
es
S.I. = 2000*25/4/5/100
= 25
.............................................
kt
the depreciation for 3rd year using sum of the digits Method.
oc
a. Rs. 1,20,000/-
b. Rs. 60,000/-
c. Rs. 30,000/-
m
d. Rs. 15,000/-
Ans - b
iib
Let me explain :
ca
E(sigma)n = 1+2+3+4 = 10
1st year = 4/10(300000) = 120000

iib
2nd year = 3/10(300000) = 90000

3rd year = 2/10(300000) = 60000
4th year = 1/10(300000) = 30000
.............................................
.ja
the depreciation for 1st year using sum of the digits Method.
w
a. Rs. 1,20,000/-
b. Rs. 60,000/-
w
c. Rs. 30,000/-
d. Rs. 15,000/-
w
Ans - a
Let me explain :

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E(sigma)n = 1+2+3+4 = 10
t.c
1st year = 4/10(300000) = 120000
2nd year = 3/10(300000) = 90000
3rd year = 2/10(300000) = 60000
es
4th year = 1/10(300000) = 30000
.............................................
kt
Cash book is book of
a. Prime entry
oc
b. Final entry
c. Both of the above
m
Ans - c
.............................................
iib
The true discount on a bill of Rs. 5,400 is Rs. 900. The banker's discount will
a. Rs. 600
ca
b. Rs. 1,110
c. Rs. 1,500
d. Rs. 1,800
iib
Ans - d
.............................................
The sale of business asset on credit is recorded in

.ja
a. Sales journal
b. General journal
w
c. Cash receipt in cash book

d. Nominal accounts
w
Ans - b
.............................................
w
Overdraft as per Cash book means
a. Credit balance in the cash book

b. Credit balance in the bank column of the cash book
c. Neither of the two

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d. Both of the two
t.c
Ans - a
.............................................
If Rs. 50000 is lent at 10% interest, on which one the interest will be highest?
es
a. Yearly compounding
b. Half-Yearly compounding
kt
c. Quarterly compounding
d. Monthly compounding
oc
Ans - d
.............................................
Entries for deposits of cheques into the bank are made by the customer in the debit side of cash book
m
a. Immediately
b. On their clearing
iib
c. At the time of reconciliation

d. After 7 days
ca
Ans - a
.............................................
The present worth of a certain bill due sometime hence is Rs. 1,600 and the true discount is Rs. 27. The
iib
banker's discount will be ......
a. Rs. 68.76
b. Rs. 74
.ja
c. Rs. 75.24
d. Rs. 76
w
Ans - c
.............................................
w
Arun, Kamal and Vinay invested Rs. 8000, Rs. 4000 and Rs. 8000 respectively in a business. Arun left
after six months. If after eight months, there was a gain of Rs. 4005, then what will be the share of
w
Kamal?
A. Rs 870
B. Rs 880
C. Rs 890
D. Rs 900

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Ans - C
t.c
Explanation:
Arun : Kamal : Vinay = (8,000 x 6) : (4,000 x 8) : (8,000 x 8)
es
= 48 : 32 : 64
=3:2:4
kt
Kamal's share
= 4005*2/9
oc
= Rs. 890
.............................................
Cash cannot be accepted for issue of DDs/TTs/Rupee TCs from the customers for Rs. ......
m
a. Rs.20,000/- & above
b. Rs.50,000/- & above
iib
c. Rs.75,000/- & above

d. Rs.1,00,000/- & above
ca
Ans - b
.............................................
The amount beyond which cash transactions (Receipts & Payments) are to be monitored by the
iib
Commercial Banks as stipulated by the RBI in its guidelines is -
a. Rs.5 lacs & above

b. Rs.8 lacs & above
.ja
c. Rs.10 lacs & above

d. No such limit
w
Ans - c
.............................................
w
Which one of the following documents is not generated on EOD?

w
a. Audit Trail
b. Supplementary
c. Balance Sheet
d. Access log
Ans c

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A trader paid Rs. 700 to a lender due after 18 months at the rate of 8% p.a. simple interest. The true
discount is ......
t.c
a. Rs. 60
b. Rs. 65
c. Rs. 70
es
d. Rs. 75
Ans - d
kt
.............................................
A and B entered into a partnership investing Rs. 16000 and Rs. 12000 respectively. After 3 months, A
oc
withdrew Rs. 5000 while B invested Rs. 5000 more. After 3 more months C joins the business with a
capital of Rs. 21000. The share of B exceeds that of C, out of a total profit of Rs. 26400 after one year by
...
m
A. Rs. 3200
B. Rs. 3400
C. Rs. 3600
iib
D. Rs. 3800
Ans - C
ca
Explanation:
A:B: C = 16000*3 + 11000*9:12000*3 + 17000*9:21000*6

iib
= 147:189:126 = 7:9:6
Difference of B and Cs shares =

.ja
Rs. [26400 * (9/22) 26400 * (6/22))
= Rs. 3600
w
.............................................
The banker's gain on a sum due 3 years hence at 5% is Rs. 900. The banker's discount is ......
w
a. Rs. 1,500
w
b. Rs. 6,900
c. Rs. 7,20
d. Rs. 8,100
Ans - b
.............................................

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Wages Paid for the erection of machine debited to wages Ac is
t.c
a. Error of Principle
b. Error of Commission
c. Error of Omission
d. Error of Mathematics
es
Ans - a
.............................................
kt
True discount is equivalent to ......
oc
a. Interest
b. Principal amount
c. Amount
d. All of the above
m
Ans - a
.............................................
iib
Present value is equivalent to ......

ca
a. Interest
b. Principal amount
c. Amount
d. All of the above
iib
Ans - b
.............................................
.ja
Calculate the depreciation for 5th year using sum of the digits Method.
w
a. Rs. 100000
b. Rs. 300000
c. Rs. 500000
w
d. Rs. 700000
w
Ans - a
Let me explain :
E(sigma)n = 1+2+3+4+5 = 15

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t.c
1st year = 5/15(1500000) = 500000
2nd year = 4/15(1500000) = 400000
3rd year = 3/15(1500000) = 300000
4th year = 2/15(1500000) = 200000
es
5th year = 1/15(1500000) = 100000
.............................................
kt
If the true discount on Rs. 14,500 due after 5 years is Rs. 4,500 then the rate of true discount will be ......
a. 5 %
oc
b. 6 %
c. 7 %
d. 9 %
m
Ans - d
.............................................
iib
Instruments payable to order can be transferred or negotiated by
a. Endorsement & delivery

ca
b. Mere delivery
c. Encashment
iib
Ans - a
.............................................
The present worth of a certain sum due sometime hence is Rs. 16,000 and the true discount is 1,600.
.ja
The banker's gain is ......
a. Rs. 100
w
b. Rs. 160
c. Rs. 200
d. Rs. 240
w
Ans - b
w
.............................................
The banker's gain of a certain sum due 2 years hence at 5% p.a. is Rs. 40. The Present worth is ......
a. Rs. 4,000
b. Rs. 4,400

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c. Rs. 6,000
d. Rs. 8,000
t.c
Ans - a
.............................................
es
A bill is discounted @ 5% p.a. If banker's discount be allowed, at what rate per cent must the proceeds
be invested, so that nothing may be lost?
kt
a. 4%
b. 5%
c. 6%
oc
d. 7%
Ans - b
.............................................
m
When the consignee receives the goods from the consigner
iib
a. Goods are debited to goods received on consignment account

b. No entry is to be passed
c. Credit consignor's personal account
ca
Ans - b
.............................................
iib
In retail business, widely followed method of inventory valuation is
a. FIFO
.ja
b. Weighted average
c. Adjusted selling price
d. LIFO
w
Ans - c
.............................................
w
Errors of Commission arise when

w
a. Any transaction is incorrectly recorded either wholly or partially

b. Any transaction is left wholly of partially
c. Any transaction is recorded in a fundamentally incorrect manner
d. All the above

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Ans - c
.............................................
t.c
KYC is ......
a. One-time project
es
b. An ongoing process
c. To be carried out every 2 years
d. To be carried out every 5 years
kt
Ans - b
.............................................
oc
Find the rate at Simple interest, at which a sum becomes four times of itself in 15 years.
A. 10%
m
B. 20%
C. 30%
D. 40%
iib
Ans - B
ca
Explanation:
Let sum be x and rate be r%

iib
then, (x*r*15)/100 = 3x [important to note here is that simple interest will be 3x not 4x, beause 3x+x =
4x]
=> r = 20%
.ja
.............................................
At 5% per annum simple interest, Rahul borrowed Rs. 500. What amount will he pay to clear the debt
w
after 4 years ?
A. 750
w
B. 700
C. 650
w
D. 600
Ans - D
Explanation:

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We need to calculate the total amount to be paid by him after 4 years, So it will be Principal + simple
interest. So,
t.c
=>500+500*5*4/100
=>Rs.600
.............................................
es
Trail balance
kt
a. Is prepared every year
b. Is prepared after preparing the P&L ac
c. Shows the profit earned by a firm during a period
oc
d. Checks the accuracy of posting the ledger accounts
Ans - d
.............................................
m
The test of objectivity and verifiability is satisfied by valuing stock at
iib
a. Historical price
b. Current replacement price
c. Net realizable value
ca
d. Avg market price
Ans - a
.............................................
iib
The banker's discount on a sum of money for 1 year is Rs. 600 and the true discount on the same sum
for 2 years is Rs. 750. The rate per cent is ......
.ja
a. 3 %
b. 1 %
c. 4 %
w
d. 5 %
Ans - b
w
.............................................
w
Calculate the depreciation for 2nd year using sum of the digits Method.
a. Rs. 100000
b. Rs. 200000
c. Rs. 300000

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d. Rs. 400000
t.c
Ans - d
Let me explain :
es
E(sigma)n = 1+2+3+4+5 = 15
kt
1st year = 5/15(1500000) = 500000
2nd year = 4/15(1500000) = 400000
oc
3rd year = 3/15(1500000) = 300000
4th year = 2/15(1500000) = 200000
5th year = 1/15(1500000) = 100000
.............................................
m
Which of following is special journal?
iib
a. Purchase book
b. Creditor a/c
c. Debtor a/c
ca
d. Capital a/c
Ans - a
.............................................
iib
Sales book do not contain:
a. Credit sales
.ja
b. Credit sales of goods

c. Cash sales
d. Trade discount
w
Ans - c
.............................................
w
The true discount on a bill of Rs. 5,400 is Rs. 900. The banker's discount will
w
a. Rs. 600
b. Rs. 1,110
c. Rs. 1,500
d. Rs. 1,800

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Ans - d
.............................................
t.c
The present worth of a certain bill due sometime hence is Rs. 1,600 and the true discount is Rs. 27. The
banker's discount will be ......
es
a. Rs. 68.76
b. Rs. 74
c. Rs. 75.24
kt
d. Rs. 76
Ans - c
oc
.............................................
Subsidiary book contain:

m
a. Interest on capital
b. Credit items
c. Sale of asset
iib
d. Loss of goods
Ans - b
ca
.............................................
The banker's gain of a certain sum of money is Rs. 72 and the true discount on the same sum for the
same time and at the same rate is Rs. 60. The sum is ......
iib
a. Rs. 280
b. Rs. 300
c. Rs. 320
.ja
d. Rs. 360
Ans - d
w
.............................................
Submission of details of PAN (Permanent Account Number) is compulsory for Fixed Deposits,
w
Remittances, such as, DDs / TTs/ Rupee TCs, etc., if the amount exceeds ......
w
a. Rs.10,000/-
b. Rs.25,000/-
c. Rs.50,000/-
d. Rs.1,00,000/-
Ans c

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FCRA means ......
t.c
a. Foreign Contribution Regulation Act
b. Foreign Currency Regulation Act
c. Foreign Cheques/Commodities Regulation Act
es
Ans - a
.............................................
kt
One of the important steps to be taken while opening NRI accounts is ...... by the bank branch
oc
a. Authentication/verification of signature made by the relative of NRI in India
b. Authentication/verification of signature made by friends of the NRI who are staying abroad
c. Authentication/verification of signature by Indian Embassy
d. All of the above
m
Ans - c
.............................................
iib
In case of societies, the important document to be verified is ......

ca
a. Copy of Bye-Laws
b. Certificate given by the Local Authorities
c. Certificate given by the ROC
d. No document is to be verified in case of societies, as it is exempted
iib
Ans - a
.............................................
.ja
Current account can be opened by ......
a. Minors alone
w
b. Illiterate Persons
c. Blind Persons
w
Ans - d
w
.............................................
In case of Government Departments, the important document to be verified is ......
a. Copy of Bye-Laws
b. Copy of Government Orders

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c. Certificate given by the ROC

d. No document is to be verified in case of Govt Departments, as it is exempted
t.c
Ans - b
.............................................
es
The banker's discount on a bill due 1 years 8 months hence is Rs. 100 and the true discount on the same
sum at the same rate per cent is Rs. 90. The rate per cent is ......
kt
a. 5 %
b. 1 %
c. 2 %
oc
d. 6 %
Ans - c
.............................................
m
What is the principal amount which earns Rs. 1320 as compound interest for the second year @ 10%
p.a.?
iib
a. Rs. 10,000
b. Rs. 12,000
ca
c. Rs. 14,000
d. Rs. 16,000
Ans - b
iib
.............................................
Which one is not among the three pillars of BASEL II ?

.ja
a. Minimum Capital Requirement

b. Supervisory Review Process
c. Risk Based Supervision
w
d. Market Discipline
Ans - c
w
.............................................
w
The banker's gain on a sum due 3 years hence at 5% is Rs. 900. The banker's discount is ......
a. Rs. 1,500
b. Rs. 6,900
c. Rs. 7,20
d. Rs. 8,100

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Ans - b
t.c
.............................................
Rent prepaid account is of the nature of
es
A.Real account
B.Personal account
C.Nominal account
kt
D.Intangible account
Ans - b
oc
.............................................
The banker's discount on Rs. 800 at 6% is the same as the true discount for the same time and at the
same rate. The time is ......
m
a. 2 months
b. 3 months
iib
c. 4 months
d. 5 months
ca
Ans - b
.............................................
The banker's gain on a bill due 1 year hence at 5% is Re. 1 The true discount is ......
iib
a. Rs. 5
b. Rs. 10
c. Rs. 15
.ja
d. Rs. 20
Ans - d
w
.............................................
Effective annual rate of interest corresponding to nominal rate of 6% per annum compounded half
w
yearly will be
w
A. 6.09%
B. 6.10%
C. 6.12%
D. 6.14%
Ans - A

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Explanation:
t.c
Let the amount Rs 100 for 1 year when compounded half yearly, n = 2, Rate = 6/2 = 3%
es
Amount=100(1+3100)2=106.09
Effective rate = (106.09 - 100)% = 6.09%
kt
.............................................
A sum of money invested at compound interest to Rs. 800 in 3 years and to Rs 840 in 4 years. The rate
oc
on interest per annum is.
A. 4%
B. 5%
m
C. 6%
D. 7%
iib
Ans - B
Explanation:
ca
S.I. on Rs 800 for 1 year = 40
Rate = (100*40)/(800*1) = 5%
.............................................
iib
A person deposits Rs. 100 per month in a Recurring Deposit account carrying Simple interest @ 6.5%
Find the amount at the end of one year.
.ja
a. Rs. 1,200.25
b. Rs. 1,278.25
c. Rs. 1,242.25
w
d. Rs. 1,300.25
Ans - c
w
.............................................
w
Following is known as the book of prime entry
A.Journal
B.Cash book
C.Subsidiary book
D.all

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Ans - d
t.c
.............................................
Creditors are included in:
es
a. Fixed liability
b. Current asset
c. Current Viability
kt
d. Loan capital
Ans - c
oc
.............................................
Net profits are considered as:

m
a. Remuneration of enterprise
b. Salary to Manager
c. Remuneration to partner only
iib
d. Gross income
Ans - a
ca
.............................................
Goods given as charity of Rs 500 are:

iib
a. Credited to charity a/c

b. Debited to purchase a/c
c. Debited to charity a/c
d. Credited to purchase a/c
.ja
Ans - c
.............................................
w
Expenses proprietor equity:

w
a. Increase
b. No effect
w
c. Changes
d. Decrease
Ans - d
.............................................

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Decrease in asset is credited but decrease in capital
t.c
a. Credited
b. Debited
c. Either a or b
d. None
es
Ans - b
.............................................
kt
Goods are returned:
oc
a. Due to defect
b. Due to delay in dispatch
c. Due to violation of item
d. Any of these
m
Ans - d
.............................................
iib
Journal proper records:

ca
a. All transaction
b. Credit transactions
c. Transaction not recorded in subsidiary books
d. Cash transactions in any subsidiary book
iib
Ans - c
.............................................
.ja
Sahil took a loan for 6 years at the rate of 5% per annum on Simple Interest, If the total interest paid was
Rs. 1230, the principal was
w
A. 4100
B. 4200
C. 4300
w
D. 4400
w
Ans - A
Explanation:
S.I.=P*R*T/100
=>P=S.I.*100/R/T

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By applying above formula we can easily solve this question, as we are already having the simple
t.c
interest.
P = 1230*100/6/5
= 4100
es
.............................................
There was simple interest of Rs. 4016.25 on a principal amount at the rate of 9%p.a. in 5 years. Find the
kt
principal amount
A. Rs 7925
oc
B. Rs 8925
C. Rs 7926
D. Rs 7925
m
Ans - B
Explanation:
iib
S.I.=P*R*T/100
=>P=S.I.*100/R/T
ca
P = 4016.25*100/9/5
= 8925
.............................................
iib
If furniture is purchased on credit then it be shown in:
a. Debit side of cash book

b. Not shown in cash book
.ja
c. Credit side of cash book

d. Either a or b
w
Ans - b
.............................................
w
Excess of credit side over debit side is called:

w
a. Credit balance
b. Debit balance
c. Over draft only
d. Either b or c
Ans a

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All liabilities has ........ opening balance:
t.c
a. Debit
b. Credit
c. None
d. Only a
es
Ans - b
.............................................
kt
The banker's gain of a certain sum due 2 years hence at 5% p.a. is Rs. 40. The Present worth is ......
oc
a. Rs. 4,000
b. Rs. 4,400
c. Rs. 6,000
d. Rs. 8,000
m
Ans - a
.............................................
iib
A bill is discounted @ 5% p.a. If banker's discount be allowed, at what rate per cent must the proceeds
be invested, so that nothing may be lost?
ca
a. 4%
b. 5%
c. 6%
iib
d. 7%
Ans - b
.............................................
.ja
Withdrawal from bank can be made through:

w
a. Pay-in-slip
b. Deposit slip
c. Cheque
w
d. Cash
w
Ans - c
.............................................
When a cheque is deposited in bank, bank will our a/c:
a. Credit

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b. Debit
c. Add
t.c
d. Subtract
Ans - a
.............................................
es
You want to sell your fridge. There are two offers, one at cash payment of Rs. 16,200 and another at a
credit of Rs. 16,500 to be paid after 6 months. If money being worth 6.25% per annum simple interest,
kt
which offer is better?
a. Both are equally good
oc
b. Rs. 16,200 in cash
c. Rs 16,500 due 6 months hence
m
Ans - b
.............................................
iib
A bill of Rs. 2,000 is due 10 years hence at simple interest rate 5% p.a. Find Banker's discount.
a. Rs. 200
ca
b. Rs. 225
c. Rs. 300
d. Rs. 1,000
iib
Ans - d
.............................................
A person purchased a watch for Rs. 3,000 and sold it the same day for Rs,3,600 allowing the buyer a
.ja
credit of 9 years. If the rate of interest be 7.5% p.a. he has a gain of ......
a. 4.5%
w
b. 5%
c. 5.5%
d. 6%
w
Ans - b
w
.............................................
The true discount on Rs. 9,300 due after a certain period at 5% p.a. is Rs. 300. The time after which it is
due, is ......
a. 4 months

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b. 6 months
c. 8 months
t.c
d. 9 months
Ans - c
.............................................
es
At 5% per annum simple interest, Rahul borrowed Rs. 500. What amount will he pay to clear the debt
after 4 years
kt
A. 750
B. 700
oc
C. 650
D. 600
Ans - D
m
Explanation:
iib
We need to calculate the total amount to be paid by him after 4 years, So it will be Principal + simple
interest.
ca
So,
=>500+500*5*4/100
=>Rs.600
iib
.............................................
If a sum of money doubles itself in 8 years at simple interest, the rate percent per annum is
.ja
A. 12
B. 12.5
C. 13
w
D. 13.5
Ans - B
w
Explanation:
w
Let sum = x then Simple Interest = x
Rate = (100 * x) / (x * 8) = 12.5

.............................................

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A sum of Rs 12,500 amounts to Rs. 15,500 in the 4 years at the rate of simple interest. Find the rate
percent?
t.c
A. 6 %
B. 7 %
C. 8 %
es
D. 9 %
Ans - A
kt
Explanation:
oc
S.I.=P*R*T/100
=>R=S.I.*100/P/T
So, S.I = 15500 - 12500 = 3000.

m
=>R = 3000*100/12500/4
= 6%
iib
.............................................
What is the present worth of Rs. 132 due in 2 years at 5% simple interest per annum ?
ca
A. 110
B. 120
C. 130
iib
D. 140
Ans - B
.ja
Explanation:
Let the present worth be Rs.x

w
Then,S.I.= Rs.(132 - x)
w
= (x*5*2/100) = 132 - x
w
= 10x = 13200 - 100x
= 110x = 13200
x= 120
.............................................

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Rebate on bills discounted account is of the nature of
t.c
A. Real account
B. Personal account
C. Nominal account
D. Intangible account
es
Ans - c
.............................................
kt
Patents right account is of the nature of
oc
A. Real account
B. Personal account
C. Nominal account
m
Ans - a
.............................................
iib
Accounts generally prepared for ....... months

ca
a. 6
b. 9
c. 12
d. 18
iib
Ans - c
.............................................
.ja
There was simple interest of Rs. 4016.25 on a principal amount at the rate of 9%p.a. in 5 years. Find the
principal amount
w
A. Rs 7925
B. Rs 8925
C. Rs 7926
w
D. Rs 7925
w
Ans - B
Explanation:
S.I.=P*R*T/100
=>P=S.I.*100/R/T

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P = 4016.25*100/9/5
t.c
= 8925
.............................................
Find the rate at Simple interest, at which a sum becomes four times of itself in 15 years.
es
A. 10%
B. 20%
kt
C. 30%
D. 40%
oc
Ans - B
Explanation:
m
Let sum be x and rate be r%
then, (x*r*15)/100 = 3x [important to note here is that simple interest will be 3x not 4x, beause 3x+x =
iib
4x]
=> r = 20%
ca
.............................................
Entries for deposits of cheques into the bank are made by the bank on the credit of customer account
iib
a. Immediately
b. On their clearing/collection
c. After 7 days
d. After reconciliation.
.ja
Ans - b
.............................................
w
In the FIFO method supplies are made from the godown for the production at the price of the earliest
stock on hand. The closing stock is valued at the
w
a. Price paid for the latest lot

w
b. Price paid for the earliest lot

c. Current market value
d. Avg purchase price
Ans - a
.............................................

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The banker's discount on a bill due 6 months hence at 6% p.a. is Rs. 370.80. The true discount is ......
t.c
a. Rs. 61.80
b. Rs. 123.60
c. Rs. 220.00
es
d. Rs. 360.00
Ans - d
kt
.............................................
Bills receivable endorsed are debited to:
oc
a. B/R a/c
b. Debtors a/c
c. Creditors a/c
m
d. Drawer a/c
Ans - c
iib
.............................................
Sacrificing ratio is calculated at the time of:

ca
a. Admission
b. Retirement
c. Death
iib
d. None
Ans - a
.............................................
.ja
On the admission of a partner, decrease in the value of machinery is debited to:

w
a. Revaluation a/c
b. Machinery a/c
c. Old partner's capital a/c
w
d. Depreciation a/c
w
Ans - a
.............................................
A firm earning losses and is in dissolution process, have:
a. Nominal goodwill

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b. Full value of goodwill

c. Goodwill equal to share of partners
t.c
d. No goodwill
Ans - d
.............................................
es
When all partner's are insolvent, the loss is then borne by:
kt
a. Government
b. Creditors
c. Partners
oc
d. Firm collectively
Ans - b
.............................................
m
Short term loans are due for payment within:
iib
a. 6 month
b. 1 year
c. 2 year
ca
d. 30 days
Ans - b
.............................................
iib
The banker's discount on a sum of money for 1 year is Rs. 600 and the true discount on the same sum
for 2 years is Rs. 750. The rate per cent is ......
.ja
a. 3 %
b. 1 %
c. 4 %
w
d. 5 %
Ans - b
w
.............................................
w
Dividends are usually paid on:
a. Called-up-capital
b. Subscribed-capital
c. Paid-up-capital.
d. Issued capital

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Ans - c
t.c
.............................................
Profit on re-issue of forfeited shares is transferred to:
es
a. Profit and loss a/c
b. Capital Reserve a/c
c. Share capital a/c
kt
d. General reserve a/c
Ans - b
oc
.............................................
Book of accounts of a bank includes:

m
a. Current a/c ledger
b. Investment ledger
c. Bill discounted ledger
iib
d. All of above
Ans - d
ca
.............................................
Ram borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends money to Rahul at
25/4% p.a. for 2 years. Find the gain of one year by Ram.
iib
A. 110.50
B. 111.50
C. 112.50
.ja
D. 113.50
Ans - C
w
Explanation:
w
Two things need to give attention in this question, First we need to calculate gain for 1 year only.
Second, where we take money at some interest and lends at other, then we use to subtract each other
w
to get result in this type of question.
Lets solve this Simple Interest question now.
Gain in 2 year = [(50002542100)(500042100)+

= (625400)

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= 225
t.c
So gain for 1 year = 225/2 = 112.50
.............................................
If A lends Rs. 3500 to B at 10% p.a. and B lends the same sum to C at 11.5% p.a., then the gain of B (in
es
Rs.) in a period of 3 years is
A. Rs. 154.50
kt
B. Rs. 155.50
C. Rs. 156.50
D. Rs. 157.50
oc
Ans - D
Explanation:
m
We need to calculate the profit of B.
iib
It will be,
SI on the rate B lends - SI on the rate B gets

ca
Gain of B = 3500*11.5/100*33500*10/100*3
= 1207.50 - 1050
= 157.50
iib
.............................................
The purpose of depreciation is to:

.ja
a. Reduce fixed assets

b. Save income tax
c. Reduce fixed assets to nil
w
d. Allocate the cost
Ans - d
w
.............................................
w
Accounts in banks are closed on ......... every year.
a. 31 Dec
b. 31 Mar
c. 30 June
d. 31 July

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Ans - a
t.c
.............................................
Ram borrows Rs. 5000 for 2 years at 4% p.a. simple interest. He immediately lends money to Rahul at
25/4% p.a. for 2 years. Find the gain of one year by Ram.
es
A. 110.50
B. 111.50
kt
C. 112.50
D. 113.50
oc
Ans - C
Explanation:
m
Two things need to give attention in this question, First we need to calculate gain for 1 year only.
Second, where we take money at some interest and lends at other, then we use to subtract each other
to get result in this type of question.
iib
Lets solve this Simple Interest question now.

ca
Gain in 2 year = [(50002542100)-(500042100)]

= (625-400)
= 225
iib
So gain for 1 year = 225/2 = 112.50

.............................................
If A lends Rs. 3500 to B at 10% p.a. and B lends the same sum to C at 11.5% p.a., then the gain of B (in
.ja
Rs.) in a period of 3 years is
A. Rs. 154.50
w
B. Rs. 155.50
C. Rs. 156.50
D. Rs. 157.50
w
Ans - D
w
Explanation:
We need to calculate the profit of B.
It will be,

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SI on the rate B lends - SI on the rate B gets
t.c
Gain of B = 3500*11.5/100*3-3500*10/100*3
= 1207.50 - 1050
= 157.50
es
.............................................
Sahil took a loan for 6 years at the rate of 5% per annum on Simple Interest, If the total interest paid was
kt
Rs. 1230, the principal was
A. 4100
oc
B. 4200
C. 4300
D. 4400
m
Ans - A
Explanation:
iib
S.I.=P*R*T/100
=>P=S.I.*100/R/T
ca
By applying above formula we can easily solve this question, as we are already having the simple
interest.
iib
P = 1230*100/6/5
= 4100
.............................................
.ja
In perpetual bonds
a. Interest is paid even beyond maturity period

w
b. Only interest is paid and has no maturity value

c. Interest and maturity value is paid in advance
d. All the above
w
Ans - b
w
.............................................
Value of the asset is increased or the business has acquired more of that asset, then there is a ........
a. Credit in Real Account

b. Debit in Real Account

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c. Credit in Nominal Account

d. Debit in Nominal Account
t.c
Ans - b
.............................................
es
Commission received in advance is of the nature of
A.Real account
kt
B.Personal account
C.Nominal account
D.Intangible account
oc
Ans - b
.............................................
m
The true discount on Rs. 5,150 due 4 months hence is Rs. 150. The rate per cent is ......
a. 5 %
iib
b. 6 %
c. 7 %
d. 9 %
ca
Ans - d
.............................................
iib
Liabilities in a company are of Rs. 80,000 and owner's equity is Rs. 70,000. What is the amount of total
equity?
a. Rs. 80,000
.ja
c. Rs. 10,000
b. Rs. 70,000
d. Rs. 1,50,000
w
Ans - d
.............................................
w
Goodwill on two years purchase of the average profit of last three years profits of 20,000,10,000,15,000
w
is:
a. Rs 50,000
b. Rs. 30,000
c. Rs. 45,000
d. Rs. 40,000

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Ans - b
t.c
.............................................
The minimum subscription is to be received in:
es
a. 45 days
b. 120 days
c. 130 days
kt
d. 50 days
Ans - b
oc
.............................................
R, N, S share profits in 5:3:2. If N retire then new ratio of R and S is 2:3. Gaining ratio is ......... :
m
a. 1:1
b. 1:4
c. 0:4
iib
d. 4:0
Ans - c
ca
.............................................
Partnership is a form of business organisation in which business debts can be recovered from:
iib
a. The partners
b. All the managers
c. The firm
d. The firm and all the partners
.ja
Ans - d
.............................................
w
A sum of money at simple interest amounts to Rs. 815 in 3 years and to Rs. 854 in 4 years. The sum is:
w
A. Rs. 650
B. Rs. 690
w
C. Rs. 698
D. Rs. 700
Ans - C
Explanation:

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S.I. for 1 year = Rs. (854 - 815) = Rs. 39.
t.c
S.I. for 3 years = Rs.(39 x 3) = Rs. 117.
Principal = Rs. (815 - 117) = Rs. 698.

.............................................
es
A certain amount earns simple interest of Rs. 1750 after 7 years. Had the interest been 2% more, how
much more interest would it have earned?
kt
A. Rs. 35
B. Rs. 245
oc
C. Rs. 350
D. Cannot be determined
Ans - D
m
Explanation:
iib
We need to know the S.I., principal and time to find the rate.
Since the principal is not given, so data is inadequate.

ca
.............................................
Which of following is contingent liability?

iib
a. Claim against company not acknowledged as debt

b. Unpaid liability of shares
c. Arrear of fixed cumulative dividend
d. All above
.ja
Ans - d
.............................................
w
Purchase a/c always have a:

w
a. Debit balance
b. Credit balance
w
c. Either debit or credit balance

d. None
Ans - a
.............................................

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Error of principle are committed due to:
t.c
a. Incomplete knowledge of capital & revenue expenditure
b. Incomplete recording of amount
c. Incorrect balancing of ledger a/c's
d. Wrong posting in ledger
es
Ans - a
.............................................
kt
The banker's discount on Rs. 800 at 6% is the same as the true discount for the same time and at the
same rate. The time is ......
oc
a. 2 months
b. 3 months
c. 4 months
m
d. 5 months
Ans - b
iib
.............................................
The banker's gain on a bill due 1 year hence at 5% is Re. 1 The true discount is ......
ca
a. Rs. 5
b. Rs. 10
c. Rs. 15
iib
d. Rs. 20
Ans - d
.............................................
.ja
A person deposits Rs. 100 per month in a Recurring Deposit account carrying Simple interest @ 6.5%
Find the amount at the end of one year.
w
a. Rs. 1,200
b. Rs. 1,278
w
c. Rs. 1,242.25
d. Rs. 1,300
w
Ans - c
.............................................

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Insurance unexpired is a:
t.c
a. Personal a/c
b. Real a/c
c. Nominal a/c
d. Both a & b
es
Ans - a
.............................................
kt
Depletion is used in relation to:
oc
a. Plant and Machinery
b. Good-will
c. Stock in trade
d. Mines
m
Ans - d
.............................................
iib
A certain amount earns simple interest of Rs. 1750 after 7 years. Had the interest been 2% more, how
much more interest would it have earned?
ca
A. Rs. 35
B. Rs. 245
C. Rs. 350
iib
D. Cannot be determined
Ans - d
.ja
Explanation:
We need to know the S.I., principal and time to find the rate.
w
Since the principal is not given, so data is inadequate.

.............................................
w
Find the simple interest on Rs 7000 at 50/3 % for 9 months

w
a. Rs. 1075
b. Rs. 975
c. Rs. 875
d. Rs. 775

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Ans - c
t.c
Explanation:
S.I. = PRT100
es
So, by putting the values in the above formula, we get
S.I. = 700050/3*9/12/100
kt
=875
[Please note that we have divided by 12 as we converted 9 months in a year format]
oc
.............................................
Find the simple interest on the Rs. 2000 at 25/4% per annum for the period from 4th Feb 2013 to 18th
April 2013
m
a. Rs 25
b. Rs 30
iib
c. Rs 35
d. Rs 40
ca
Ans - a
Explanation:
iib
One thing which is tricky in this question is to calculate the number of days.
Always remember that the day on which money is deposited is not counted while the day on which
money is withdrawn is counted.
.ja
So lets calculate the number of days now,

w
Time = (24+31+18) days

= 73/365 years
= 1/5 years
w
P = 2000
w
R = 25/4%
S.I. = 2000*25/4/5/100
= 25
.............................................

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The true discount on a bill due 10 months hence @ 6% p.a is Rs. 2,625. The Amount of the bill is ......
t.c
a. Rs. 50,000
b. Rs. 55,125
c. Rs. 65,000
d. Rs, 65,125
es
Ans - b
.............................................
kt
Accounting standard AS 13 deals with
oc
a. Cash Flow statements
b. Valuation of Inventories
c. Depreciation Accounting
d. Accounting for investments
m
Ans - d
.............................................
iib
Effective annual rate of interest corresponding to nominal rate of 6% per annum compounded half
yearly will be
ca
A. 6.09%
B. 6.10%
C. 6.12%
iib
D. 6.14%
Ans - A
.ja
Explanation:
Let the amount Rs 100 for 1 year when compounded half yearly, n = 2, Rate = 6/2 = 3%
w
Amount=100(1+3100)2=106.09
w
Effective rate = (106.09 - 100)% = 6.09%

w
.............................................
A sum of money invested at compound interest to Rs. 800 in 3 years and to Rs 840 in 4 years. The rate
on interest per annum is.
A. 4%

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B. 5%
C. 6%
t.c
D. 7%
Ans - B
es
Explanation:
S.I. on Rs 800 for 1 year = 40
kt
Rate = (100*40)/(800*1) = 5%
.............................................
oc
The marine insurance policy should be expressed in
a. Rupees.
m
b. Us Dollars.
c. Same currency which the LC is drawn.
d. Any foreign currency.
iib
Ans - c
.............................................
ca
If goodwill is raised at full value in the books of the firm on retirement of a partner, and is to be written
off completely, then the capital accounts of the remaining partners will be debited in-
iib
a. old Profit sharing ratio

b. new profit sharing ratio
c. sacrificing ratio
d. gaining ratio
.ja
Ans - b
.............................................
w
A partner's capital balance at the end of the year is Rs. 1,00,000 after adjusting for drawings Rs. 20,000
and his share in the profits Rs. 10.000. Interest payable to him at 5% p.a. on the opening capital balance,
w
would be
w
a. Rs. 3,500
b. RS. 4,500
c. RS. 5,000
d. Rs. 5,500
Ans d

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Bank Reconciliation Statement is prepared with the help of ......
t.c
a. Bank Passbook
b. Cash column of cash book
c. Bank Passbook and bank column of cash book
d. Bank Passbook and cash column of cash book
es
Ans - c
.............................................
kt
A firm purchased a machinery worth Rs. 2,05,000 and spent Rs. 20,000 on its installation. Its effective
useful life is estimated at 10 years and scrap value Rs. 25,000. What will be the depreciated value at the
oc
end of 3rd year under straight line method?
a. Rs. 2,25,000
b. Rs. 60,000
m
c. Rs. 1,65,000
d. Rs. 45,000
iib
Ans - c
.............................................
ca
Calculate gross income from the following information:
sales Rs 2,00,000
opening stock Rs 20,000
iib
purchases 1,20,000
purchase returns 2,000
wages 14,000
frieght 6,000
.ja
salaries 40,000
closing stock 24,000
w
a. Rs 60,000
b. Rs 78,000
c. Rs 1,34,000
w
d. Rs 62,000
w
Ans - d
.............................................
Solvency means:
a. Financial soundness of business

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b. Financial unsoundness of business

c. Capital position of business
t.c
d. None of these
Ans - a
.............................................
es
Rs. 2,000 is the true discount on Rs. 26,000 due after a certain time. What will be the true discount on
the same sum due after half of the former time, the rate of interest being the same?
kt
a. Rs. 1,000
b. Rs. 1,040
oc
c. Rs. 1,300
d. Rs. 1,400
Ans - b
m
.............................................
Find the compound interest on Rs. 7500 at 4% per annum for 2 years, compounded annually.
iib
A. Rs. 610
B. Rs. 612
ca
C. Rs. 614
D. Rs. 616
Ans - B
iib
Explanation:
Amount=[7500(1+4100)2]=(750026252625)=8112
.ja
So compound interest = (8112 - 7500) = 612

.............................................
w
Find compound interest on Rs. 7500 at 4% per annum for 2 years, compounded annually
A. Rs 312
w
B. Rs 412
C. Rs 512
w
D. Rs 612
Ans - D
.............................................

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Find the compound interest on Rs.16,000 at 20% per annum for 9 months, compounded quarterly
t.c
A. Rs 2520
B. Rs 2521
C. Rs 2522
D. Rs 2523
es
Ans - C
kt
Explanation:
Please remember, when we have to calculate C.I. quarterly then we apply following formula if n is the
oc
number of years
Amount=P(1+R4100)4n
m
Principal = Rs.16,000;
Time=9 months = 3 quarters;
Rate = 20%, it will be 20/4 = 5%
iib
So lets solve this question now,

ca
Amount=16000(1+5100)3=18522C.I=1852216000=2522
.............................................
What will be the difference between simple and compound interest @ 10% per annum on the sum of Rs
iib
1000 after 4 years ?
A. Rs 62.10
B. Rs 63.10
.ja
C. Rs 64.10
D. Rs 65.10
w
Ans - C
Explanation:
w
S.I.= 1000*10/100*4 = 400

w
C.I.=*1000(1+10/100)41000+ = 464.10
So difference between simple interest and compound interest will be
464.10 - 400 = 64.10

.............................................

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Underwriting commission on share issued by banking company can't exceed:
t.c
a. 2 1/2% of paid up capital
b. 2% of paid up capital
c. 3% of paid up capital
d. 2 1/2 of called up capital
es
Ans - a
.............................................
kt
........ is the whole time servant of bank.
oc
a. Director
b. Chairman
c. Manager
d. Member
m
Ans - b
.............................................
iib
Debit the debtor and credit the creditor's rule apply to:
ca
a. Real A/c
b. Personal a/c
c. Nominal a/c
d. None
iib
Ans - b
.............................................
.ja
Mr. A borrowed Rs. 10,400. He wants to pay this in two annual equal installments. The rate of
compound interest is 8% per annum. Find the amount of each installment.
w
a. Rs. 2,916
b. Rs. 5,832
c. Rs. 5,200
w
d. Rs. 5,000
w
Ans - b
.............................................

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A person wants to pay his loan of Rs. 2,522 payable in three equal annual Installments. If the rate of
compound interest is 5% p.a.; find out the amount of each installment.
t.c
a. Rs. 600
b. Rs. 650
c. Rs. 700
es
d. Rs. 800
Ans - d
kt
.............................................
A lease of Rs.80,000 was taken on 1st January 2005 for 2 years. Calculate the Annuity (Annual
oc
Depreciation) if rate of increase is 10% p.a.
a. Rs. 40,095
b. Rs. 44,045
m
c. Rs. 46,795
d. Rs. 46,095
iib
Ans - d
.............................................
ca
In double entry system, credit means:
a. Decrease in loss
b. Increase in asset
iib
c. Decrease in capital
d. Increase in expenses
Ans - a
.ja
.............................................
Narration starts with word:

w
a. To
b. By
w
c. Being
d. With
w
Ans - c
.............................................

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Cash discount is allowed at time of:
t.c
a. Payment
b. Purchase
c. Sale
d. None
es
Ans - a
.............................................
kt
Which of following is contra entry?
oc
a. Cash withdrawn from office
b. Cash deposited in bank
c. Cheque withdrawn for domestic use
d. Goods withdrawn
m
Ans - b
.............................................
iib
The columns available in a three columnar cash book are...

ca
a. Cash, Discount, Bank

b. Cash, Bank, Discount Paid
c. Cash, Discount Received, Bank
d. None of these
iib
Ans - a
.............................................
.ja
Intangible Assets are dealt in Accounting Standard
a. AS 9
w
b. AS 19
c. AS 26
d. AS 28
w
Ans - c
w
.............................................
Which is not one of the approaches proposed for measurement of operational risks ?
a. Basic Indicator Approach

b. Standardised Approach

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c. Advanced Measurement
d. Internal Rating Based Approach
t.c
Ans - d
.............................................
es
According to NPV, undertake those investments for which the NPV is
a. Positive
kt
b. Negative
c. Either positive or Negative
d. None of these
oc
Ans - a
.............................................
m
The banker's gain of a certain sum of money is Rs. 72 and the true discount on the same sum for the
same time and at the same rate is Rs. 60. The sum is ......
iib
a. Rs. 280
b. Rs. 300
c. Rs. 320
ca
d. Rs. 360
Ans - d
.............................................
iib
sales during the year is Rs 1,00,000 gross profits is 25% on cost find out the amount of gross profit
a. Rs 20,000
.ja
b. Rs 25,000
c. Rs 30,000
d. Rs 33,000
w
Ans - a
.............................................
w
Calculate sales if cost of sales is Rs 1,60,000 and the gross loss is Rs 68,00
w
a. Rs. 2,28,000
b. Rs. 92,000
c. Rs. 2,52,00
d. RS. 1,42,000

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Ans - c
.............................................
t.c
Find out net profit from the following figures
cash sale = Rs 70,000
credit sales =RS 80,000
es
cost of goods =Rs 1,04,000
selling expenses =Rs 13,400
kt
a. (-) Rs. 34,000
b. (-) Rs. 24,000
c. Rs. 32,600
oc
d. RS. 46,000
Ans - c
.............................................
m
M and N are partners in the ratio of 3:2. Q is admitted and the new ratio is 4:3:2. What is the sacrificing
ratio?
iib
a. 3:2
b. 4:3
ca
c. 7:3
d. 4:5
Ans - c
iib
.............................................
Gross profit is calculated as:

.ja
a. Net sales - Loss

b. Sale x Rate of G.P/100
c. Net Profit - Expenses
w
d. Both a & b
Ans - d
w
.............................................
w
P and Q started a business investing Rs 85000 and Rs 15000 resp. In what ratio the profit earned after 2
years be divided between P and Q respectively.
A. 17:5
B. 17:3
C. 17:6

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D. 17:7
t.c
Ans - B
Explanation:
es
In this type of question as time frame for both investors is equal then just get the ratio of their
investments.
kt
P:Q = 85000:15000
= 85:15
= 17:3
oc
.............................................
A, B and C enter into a partnership investing Rs 35000, Rs 45000 and Rs 55000 resp. The respective
share of A,B and C in an annual profit of Rs 40500 are.
m
A. Rs. 11500, Rs. 13500, Rs. 16500
B. Rs. 10500, Rs. 12500, Rs. 16500
iib
C. Rs. 10500, Rs. 13500, Rs. 15500

D. Rs. 10500, Rs. 13500, Rs. 16500
ca
Ans - D
Explanation:
iib
A:B:C = 35000:45000:55000
= 7:9:11
Now we are having the ratio. To get the share, first make total of above ratio. Then get each share.
.ja
A's Share=Rs. 40500*7/27

B's Share=Rs. 40500*9/27
w
C's Share=Rs. 40500*11/27
=Rs. 10500, 13500, 16500

w
.............................................
w
Kamal started a business investing Rs 9000. After five months, Sameer joined with a capital of Rs 8000. If
at the end of the year, they earn a profit of Rs. 6970, then what will be the share of Sameer in the
profit?
A. Rs 2380
B. Rs 2300

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C. Rs 2280
D. Rs 2260
t.c
Ans - A
Explanation:
es
Now as per question, Kamal invested for 12 months and Sameer invested for 7 months.
kt
So,
Kamal:Sameer = (9000*12):(8000*7)
= 108:56
oc
= 27:14
Sameer Ratio in profit will be

m
=(6970*1441)=Rs. 2380
.............................................
iib
Purchase of machinery for cash, results in:
a. Decrease in total assets

ca
b. Increase in total assets

c. No change in total assets
d. Increase in liability
iib
Ans - c
.............................................
Rate of depreciation in reducing balance method is:

.ja
a. High
b. Moderate
w
c. Low
d. 5%
w
Ans - a
.............................................
w
If an asset is sold on 30 June while the accounts are closed on 31 Dec., then depreciation is calculated
for:
a. 1 year
b. 6 month

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c. 1 month
d. 5 month
t.c
Ans - b
.............................................
es
Shradha borrowed some money from a money-lender. She returns this in two Annual equal instalments
of Rs. 5,832 each. Find the sum, if the rate of compound interest is 8% p.a.
kt
a. Rs. 5,832
b. Rs. 5,200
c. Rs. 11,664
oc
d. Rs. 10,400
Ans - d
.............................................
m
A sum of money was borrowed the paid back in 2 annual instalments of Rs. 1,864 and Rs1,740,
respectively. If the rate of compound interest was 16% p.a. find out the sum borrowed.
iib
a. Rs. 3,604
b. Rs. 3,202
ca
c. Rs. 2,900
d. Rs. 2,700
Ans - c
iib
.............................................
Bank column of cash book has ......... balance:

.ja
a. Debit
b. Credit
c. Either a or b
w
d. None
Ans - c
w
.............................................
w
Trade discount is shown in:
a. Cash book
b. Subsidiary books
c. Journal
d. Ledger

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Ans - b
t.c
.............................................
If a partner draw amount of Rs 1,000 p.m in beginning of every month, what will be the interest on
drawing @ 15%:
es
a. Rs 800
b. Rs 900
kt
c. Rs 975
d. Rs 825
oc
Ans - b
.............................................
On 1st January 2002, Mr. X purchased a plant costing Rs. 82,000 and spent Rs. 8,000 in its erection. The
m
estimated effective life of the plant is 10 years, its scrap value being Rs. 10,000. What will be the
depreciation value at the end of the 3rd year, under straight line method?
Accounts are closed on 31st December each year.
iib
a. Rs. 61,000
b. Rs. 58,000
ca
c. Rs. 56,000
d. Rs. 54,000
Ans - c
iib
.............................................
A firm purchased a machine for Rs. 5,00,000 on 1st April 2004, Its estimated effective life is 5 years at
the end of which it will have a scrap value of Rs. 1,40,000. What will be the amount of depreciation each
.ja
year if charged under straight line method.
a. Rs. 60000
w
b. Rs. 72,000
c. Rs. 80,000
d. Rs. 1,00,000
w
Ans - b
w
.............................................

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On 1st January 2002, a firm purchased machinery worth Rs., 1 lakh, and on 1st July 2004, it buys
additional machinery worth Rs. 20,000 and spends Rs. 2,000 and spends Rs. 2,000 on its erection.
t.c
Annual depreciation is 10% on straight line method. What will be written down value at the end of 5th
year?
a. Rs. 66,000
es
b. Rs. 66,500
c. Rs. 65,600
d. Rs. 56,500
kt
Ans - b
.............................................
oc
Find compound interest on Rs. 7500 at 4% per annum for 2 years, compounded annually
A. Rs 312
m
B. Rs 412
C. Rs 512
D. Rs 612
iib
Ans - D
.............................................
ca
Find the compound interest on Rs.16,000 at 20% per annum for 9 months, compounded quarterly
A. Rs 2520
iib
B. Rs 2521
C. Rs 2522
D. Rs 2523
.ja
Ans - C
Explanation:
w
Please remember, when we have to calculate C.I. quarterly then we apply following formula if n is the
number of years
w
Amount=P(1+R4100)4n
w
Principal = Rs.16,000;
Time=9 months = 3 quarters;
Rate = 20%, it will be 20/4 = 5%
So lets solve this question now,

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Amount=16000(1+5100)3 =18522
t.c
C.I=18522-16000 =2522
.............................................
What will be the difference between simple and compound interest @ 10% per annum on the sum of Rs
es
1000 after 4 years ?
A. Rs 62.10
kt
B. Rs 63.10
C. Rs 64.10
D. Rs 65.10
oc
Ans - C
Explanation:
m
S.I.= 1000*10/100*4 = 400
C.I.=[1000(1+10/100)4-1000] = 464.10
iib
So difference between simple interest and compound interest will be

ca
464.10 - 400 = 64.10

.............................................
Private Sector Companies can issue .......... bonds.

iib
a. Secured
b. Unsecured
c. Any one of the above
.ja
d. None of these
Ans - c
w
.............................................
Functions of a trial balance

w
a. To act as a device to check the arithmetical accuracy of the accounting process

w
b. To provide summary position of each account and accounts in general

c. To act as a starting point for preparation of final accounts
d. All the above
Ans - d
.............................................

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The securities acquired and the old assets are sold at the time of replacement a new asset is purchased
under.
t.c
a. Straight Line Method
b. Diminishing balance Method
c. Sinking fund method.
es
d. Neither a nor b.
Ans - c
kt
.............................................
When compound interest is calculated half yearly, then the period becomes ......
oc
a. half
b. double
c. one fourth
m
d. one tenth
Ans - b
iib
.............................................
If the true discount on a sum due 2 years hence @ 5% per annum be Rs. 300, then the sum due is ......
ca
a. Rs. 3,000
b. Rs. 3,200
c. Rs. 3,300
iib
d. Rs. 3,500
Ans - c
.............................................
.ja
Shradha sends 100 watches to Shubhra at an invoice price of Rs. 1,200 which is cost + 20%. 10 watches
are lost in transit and an amount of Rs. 8,000 is received from the insurance company in full settlement.
w
The amount to be credited to Consignment a/c being abnormal loss, is ...
a. Rs. 2,000
w
b. Rs. 8,000
c. Rs. 10,000
w
d. Rs. 12,000
Ans - c
.............................................

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The Income & Expenditure a/c of a club shows subscriptions of Rs. 50,000. Subscriptions Accrued at the
beginning of the year are Rs. 5,000 and subscriptions accrued at the end of the year are Rs. 7,500. The
t.c
amount that figures in Receipts & Payment a/c under the head 'Subscriptions' will be ...
Rs. 42,500
Rs. 47,500.
es
Rs. 50,000.
Rs. 55,000.
kt
Ans - b
.............................................
oc
In a club, amount received from special fund is Rs. 17,000 and expenditure incurred from the fund is Rs.
9,000. The amount to be credited to Income & Expenditure a/c would be
a. Nil
m
b. Rs. 8,000
c. Rs. 9,000
d. Rs. 17,000
iib
Ans - a
.............................................
ca
The present worth of Rs. 7,020 due in two equal half-yearly installments @ 8%p.a. simple interest is ......
Rs. 6,500
iib
Rs. 6,625
Rs. 6,750
Rs. 7,000
.ja
Ans - b
.............................................
w
The banker's discount on a bill due 1 years 8 months hence is Rs. 100 and the true discount on the same
sum at the same rate per cent is Rs. 90. The rate per cent is ......
w
a. 5 %
b. 1 %
w
c. 2 %
d. 6 %
Ans - c
.............................................

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A and B entered into a partnership investing Rs. 16000 and Rs. 12000 respectively. After 3 months, A
withdrew Rs. 5000 while B invested Rs. 5000 more. After 3 more months C joins the business with a
t.c
capital of Rs. 21000. The share of B exceeds that of C, out of a total profit of Rs. 26400 after one year by
A. Rs. 3200
B. Rs. 3400
es
C. Rs. 3600
D. Rs. 3800
kt
Ans - C
Explanation:
oc
A:B: C = 16000*3 + 11000*9:12000*3 + 17000*9:21000*6
= 147:189:126 = 7:9:6
m
Difference of B and Cs shares =
Rs. [26400 * (9/22) 26400 * (6/22))

iib
= Rs. 3600
.............................................
ca
Find the compound interest on Rs. 7500 at 4% per annum for 2 years, compounded annually.
A. Rs. 610
iib
B. Rs. 612
C. Rs. 614
D. Rs. 616
.ja
Ans - B
Explanation:
w
Amount=[7500(1+4100)2]=(750026252625)=8112
w
So compound interest = (8112 - 7500) = 612

.............................................
w
Albert invested amount of 8000 in a fixed deposit for 2 years at compound interest rate of 5 % per
annum. How much Albert will get on the maturity of the fixed deposit.
A. Rs. 8510
B. Rs. 8620

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C. Rs. 8730
D. Rs. 8820
t.c
Ans - D
Explanation:
es
=>(8000(1+5100)2)
=>800021202120
kt
=>8820
.............................................
oc
What will be the compound interest on Rs. 25000 after 3 years at the rate of 12 % per annum
A. Rs 10123.20
B. Rs 10123.30
m
C. Rs 10123.40
D. Rs 10123.50
iib
Ans - A
Explanation:
ca
(25000(1+12100)3)=>25000282528252825=>35123.20
So Compound interest will be 35123.20 - 25000

iib
= Rs 10123.20
.............................................
.ja
The simple interest and the true discount on a certain sum for a given time and at a given rate are Rs.
1000 and Rs. 80, respectively. The sum is ......
w
Rs. 400
Rs. 800
Rs. 1,00
w
Rs. 2,000
w
Ans - a
.............................................

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A machine was purchased for Rs 1,16,000 payments made Rs 10,000 by cheque and remaining by issue
of shares of Rs 10 each @ 10.50 each. Number of share allotted will be:
t.c
a. 11000
b. 9000
c. 10000
es
d. 8000
Ans - c
kt
.............................................
Debentures can be redeemed by:
oc
a. Purchase in open market
b. Drawing a lot
c. Redemption in lumpsum
m
d. All above
Ans - b
iib
.............................................
7000 shares of Rs 100 were issued at discount of 10% and redeemed at premium of 5%. Loss at time of
ca
issue is equal to:
a. 1,05,000
b. 70,000
iib
c. 45,000
d. 7,00,000
Ans - b
.ja
.............................................
Calculate the amount of an annuity of Rs. 12,000 for 15 years. Rate of interest is 14 p.a.
w
a. Rs. 2,49,912
b. Rs. 1,24,956
w
c. Rs. 1,00,000
d. Rs. 1,12,000
w
Ans - a
.............................................

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Calculate the present value of an annuity of Rs. 12,000 for 15 years. The rate 1of compound interest is 4
p.a.
t.c
a. Rs. 1,00,000
b. Rs. 1,20,000
c. Rs. 1,28,880
es
d. Rs. 2,57,760
Ans - c
kt
.............................................
A woman retire at the age of 60 years and her employer gives her a pension of Rs. 12,000 a year paid on
oc
half-yearly installments for the rest of her life. Supposing her expectation of life to be 13 years more and
that interest is @ 4% p.a. payable half-yearly, what single sum is equivalent to this pension?
a. Rs. 3,00,000
m
b. Rs. 2,50,000
c. Rs. 2,41,500
d. Rs. 1,20,750
iib
Ans - d
.............................................
ca
Goodwill is raised at the time of:
a. Dissolution
iib
b. Admission
c. Death
d. Both b & c
.ja
Ans - d
.............................................
w
Claim 'of a retiring partner can be paid:
a. In full
w
b. In installment
c. Half yearly
w
d. Both a & b
Ans - d
.............................................

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Yogesh started a business investing Rs. 45000. After 3 months, Pranab joined him with a capital of Rs.
60000. After another 6 months, Atul joined them with a capital of Rs. 90000. At the end of the year, they
t.c
made a profit of Rs. 20000. What would be Atuls share in it?
A. Rs 7000
B. Rs 6000
es
C. Rs 5000
D. Rs 4000
kt
Ans - d
Explanation:
oc
Just take care of the months of investment, rest all will be simple.
Yogesh:Pranab:Atul = 45000*12:60000*9:90000*3
m
= 2:2:1
Atul's share = Rs. 20000 * (1/5) = Rs. 4000

iib
.............................................
In business, A and C invested amounts in the ratio 2:1, whereas the ratio between amounts invested by
ca
A and B was 3:2, If Rs 157300 was their profit, how much amount did B receive.
A. Rs 48000
B. Rs 47000
iib
C. Rs 47400
D. Rs 48400
Ans - d
.ja
Explanation:
w
A:B = 3:2 = 6:4

A:C = 2:1 = 6:3
w
A:B:C = 6:4:3
w
B share = (4/13)*157300
= 48400
.............................................

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Purchase A/c shows only:
t.c
a. All purchases of goods & Assets
b. Only cash of goods & Assets
c. All cash and credit purchase of trading goods
d. Only credit of goods
es
Ans - c
.............................................
kt
Posting is made at ...... side of any a/c appearing at debit side of cash book:
oc
a. Debit
b. Credit
c. Either a or b
d. none
m
Ans - b
.............................................
iib
A money-lender finds that due to a fail in the rate of interest from 13% to 12.5%, His yearly income from
interest falls by Rs. 208. His principal amount is......
ca
a. Rs. 42,800
b. Rs. 41,600
c. Rs. 44,600
iib
d. Rs. 48,000
Ans - c
.............................................
.ja
A, B and C enter into a partnership in the ratio 7/2 : 4/3 : 6/5. After 4 months, A increases his share 50%.
If the total profit at the end of one year be Rs. 21,600, then B's share in the profit is:
w
a. Rs. 2100
b. Rs. 2400
w
c. Rs. 3600
d. Rs. 4000
w
Ans - d
Explanation:
Ratio of initial investments = 7/2 : 4/3 : 6/5 = 105 : 40 : 36.

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Let the initial investments be 105x, 40x and 36x.
t.c
A:B:C= (105x x 4 + 150/100 x 105x x 8) : (40x x 12) : (36x x 12)
= 1680x : 480x : 432x = 35 : 10 : 9.
Hence, B's share = Rs. 21600 x 10/54 = Rs. 4000.
es
.............................................
Personal a/c may have ....... balance:
kt
a. Debit
b. Credit
oc
c. Either a or b
d. None
Ans - c
m
.............................................
Interest collected by bank is in our passbook:

iib
a. Credited
b. Debited
ca
c. Subtracted
d. Not shown
Ans - a
iib
.............................................
Bank reconciliation statement is prepared by:

.ja
a. Bank
b. Customer
c. Creditor
w
d. Firm
Ans - b
w
.............................................
w
The debit balance of passbook is:
a. Plus balance
b. Minus balance
c. Either a or b
d. none

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Ans - b
t.c
.............................................
Trial balance shows:
es
a. Arithmetic accuracy of books
b. Only ledger balances
c. Necessary adjustments
kt
d. Only cash transactions
Ans - a
oc
.............................................
According to Accounting Standard 2 inventory means tangible property held

m
a. For sale in the ordinary course of business (finished goods)
b. In the process of production for such sale(work-in-process)
c. For production in the production of goods or services for sale(raw materials)
iib
d. All the above
Ans - d
ca
.............................................
A person desires to create a endowment fund to provide for a prize of Rs.3,000 every pear. If the fund
can be invested at 10% per annum compound interest, find the amount of the endowment.
iib
a. Rs. 3,000
b. Rs. 6,000
c. Rs. 15,000
.ja
d. Rs. 30,000
Ans - d
w
.............................................
My daughter is 5 years old. In order to provide a sum Rs. 1,00,000 when she Completes 21 years, I have
w
decided to invest a fixed sum of money every year beginning immediately and the last payment will be
when she completes 21 years. Find the fixed sum of money assuming the money earns compound
w
interest at the rate of 8%p.a.
a. Rs 1,483 approx.
b. Rs. 1,400 approx.
c. Rs. 1,500 approx.
d. Rs. 2,966 approx.

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Ans - d
t.c
.............................................
The rate of interest in a bank is 5% compounded annually. What should I invest per year to get Rs.
6,00,00 at the end of 20 years?
es
a. Rs. 8,000 approx.
kt
c. Rs. 18,146 approx
d. Rs. 36,292 approx
oc
Ans - c
.............................................
A firm has leased a leasehold property for 3 years on 1st January, 2005 for Rs.1,00,000 and his decided
m
to replace it by creating a depreciation fund. The rate of compound interest on investments is 55 p.a.
Calculate the annual depreciation (i.e. the amount to be invested).
iib
a. Between Rs. 30,000 and Rs. 31,000

b. Between Rs. 31,000 and Rs. 32,000
c. Between Rs. 32,000 and Rs. 33,000
ca
d. Between Rs. 33,000 and Rs. 34,000
Ans - b
.............................................
iib
Nirmal and Kapil started a business investing Rs. 9000 and Rs. 12000 respectively. After 6 months, Kapil
withdrew half of his investment. If after a year, the total profit was Rs. 4600, what was Kapils share
initially ?
.ja
A. Rs 2300
B. Rs 2400
C. Rs 2500
w
D. Rs 2600
Ans - a
w
Explanation:
w
Nirmal:Kapil = 9000*12:(12000*6+6000*6) = 1:1
Kapils share = Rs. [4600 *(1/2)) = Rs. 2300

.............................................

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Manoj received Rs. 6000 as his share out of the total profit of Rs. 9000 which he and Ramesh earned at
the end of one year. If Manoj invested Rs.120000 for 6 months, whereas Ramesh invested his amount
t.c
for the whole year, what was the amount invested by Ramesh ?
A. Rs. 2000
B. Rs. 3000
es
C. Rs. 4000
D. Rs. 5000
kt
Ans - d
Explanation:
oc
Suppose Ramesh invested Rs. x. Then,
Manoj : Ramesh = 20000 * 6 : x * 12.

m
120000/12x : 6000/3000
=> x = 120000/24
= 5000
iib
.............................................
A machine costs Rs. 5,00,000 and its effective life estimated to be 10 years Its scrap value is Rs. 50,000.
ca
What amount should be retained out of profits at the end of each year to accumulate at 5% p.a. with
compound interest for 10 years to replace the machine by another one costing Rs. 5,00,000?
a. Rs. 33,771
iib
b. Rs. 34,771
c. Rs. 35,771
d. Rs. 36,771
.ja
Ans - c
.............................................
w
What annual installment will discharge a debt of Rs. 92,400 due in years at 5% simple interest?
a. Rs. 20,000
w
b. Rs. 21,000
c. Rs. 22,000
w
d. Rs. 23,000
Ans - b
.............................................

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A 12% stock yielding 10% is quoted at:
t.c
a. Rs. 83.33
b. Rs. 110
c. Rs. 112
d. Rs. 120
es
Ans - d
kt
Explanation:
To earn Rs. 10, money invested = Rs. 100.
oc
To earn Rs. 12, money invested = Rs. 100/10x12 = Rs. 120.
Market value of Rs. 100 stock = Rs. 120.

.............................................
m
A money lender lent some amount to a trader @ 8% p.a. After 18 months, the trader paid him Rs. 700 in
full payment of interest and principal amount. Find out the sum lent by the money-lender.
iib
a. Rs. 600
b. Rs. 610
ca
c. Rs. 625
d. Rs. 650
Ans - c
iib
.............................................
A certain sum @4% simple interest per annum becomes Rs.31,360 in 3 years. What will be the amount
of installment per year to repay the loan in 3 years?
.ja
a. Rs.10,051 approx.
b. Rs.11,000 approx.
w
c. Rs.11,120 approx.
d. Rs.11,215 approx.
w
Ans - a
.............................................
w
A person borrowed Rs. 6,560 at 5% compound interest to repay in two equal Annual installments. Find
the amount of each installment.
a. Rs. 2,835
b. Rs. 3,285

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c. Rs, 3,320
d. Rs. 3,528
t.c
Ans - d
.............................................
es
A company issues 3,00,000 share of Rs. 10 each at a premium of Rs. 2 per share. What will be the
amount of paid up capital?
kt
a. Rs. 30,00,000
b. Rs. 6,00,000
c. Rs. 36,00,000
oc
d. Rs. 24,00,000
Ans - a
.............................................
m
If a share of Rs 100, on which Rs. 60 have been paid, is forfeited, it can be re-issued at the minimum
price of ...
iib
a. Rs. 40
b. Rs. 60
ca
c. Rs. 100
d. Rs. 140
Ans - a
iib
.............................................
If the preference share capital of Rs1,00,000 is to be redeemed, and for this 5.000 equity share of Rs . 10
each have been issued at discount of 10%, the amount to be transferred to capital redemption /Reserve
.ja
will be If the preference share capital of Rs1,00,000 is to be redeemed, and for this 5,000 equity shares
of rs. 10 each have been issued at a discount of 10% , the amount to be transferred to Capital
Redemption Reserve will be ...
w
a. Rs. 45,000
b. Rs. 50,000
w
c. Rs. 55,000
d. Rs. 60,000
w
Ans - c
.............................................

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Neeta, Anita and Sunita are equal partners in a firm. They have agreed that in case of death of anyone of
them, an annuity in 10 annual equal instalments will be paid to he husband carrying compound interest
t.c
@ 10% p.a. Calculate the annuity to be paid to Sunitas husband after her death if her capital is Rs.
6,00,000.
a. Rs. 79,406 approx
es
b. Rs. 97,640 approx
c. Rs. 64,697 approx
d. Rs. 97,460 approx
kt
Ans - d
.............................................
oc
Mr. A purchased a machinery from Mr. B on hire-purchase system, the cash price of which is Rs.
1,00,000. Payment is to be made in 3 equal annual installments including interest on the unpaid balance
@10% per annum. Each installment is to be paid at the end of each year. Calculate the amount of annual
m
installment.
a. Rs. 33,333.33
iib
b. Rs. 45,000
c. Rs. 66,666.67
d. Rs. 40,211.50
ca
Ans - d
.............................................
iib
A started a business with Rs.21,000 and is joined afterwards by B with Rs.36,000. After how many
months did B join if the profits at the end of the year are divided equally?
A. 4
.ja
B. 5
C. 6
D. 7
w
Ans - b
w
Explanation:
w
Suppose B joined after x months. Then,
21000*12=36000*(12-x)
=> 36x = 180
=> x = 5
.............................................

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A, B and C invested Rs. 8000, Rs. 4000 and Rs. 8000 respectively in a business. A left after six months. If
after eight months, there was a gain of Rs. 4005, then what will be the share of B?
t.c
A. Rs 690
B. Rs 790
C. Rs 890
es
D. Rs 990
Ans - c
kt
Explanation:
oc
A:B:C = (8000*6):(4000*8):(8000*8)
= 48:32:64
= 3:2:4
So B share
m
= (2/9)*4005
= Rs 890
iib
.............................................
A Washing machine worth Rs. 10,000 is purchased on installment payment system under which 10 equal
ca
annual installments including interest at 10% p.a. are payable. Find the amount of annual installment.
a. Rs. 1,627.00
b. Rs. 1,000.00
iib
c. Rs. 1,333.00
d. Rs. 1,225.00
Ans - a
.ja
.............................................
A shopkeeper advertises the case price of a colour. T.V. as Rs. 8,500. The same T.V. can also be
w
purchased by paying Rs. 1,600 immediately and the balance in equal 8 installments monthly of Rs. 900
each. Find the rate of interest.
w
a. 6% p.a.
b. 8% p.a.
w
c. 10% p.a.
d. 12% p.a.
Ans - d
.............................................

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Sales - Rs. 85000, Operating expenses - Rs. 20000, Net Profit - Rs. 15000. Find gross profit.
t.c
a. 5000
b. 20000
c. 35000
d. 50000
es
Ans - c
.............................................
kt
Expenditure on advertisement for a product is a ......
oc
a. Capital Expenditure
b. Revenue Expenditure
c. Deferred Revenue Expenditure
m
Ans - c
.............................................
iib
Cash in hand in Trial balance indicates a ......

ca
a. Debit Balance
b. Credit Balance
c. Either Debit or Credit Balance
d. Neither Debit nor Credit Balance
iib
Ans - a
.............................................
.ja
Merchandise costs - Rs. 250000, Gross Profit - Rs. 23000, Net Profit - Rs. 15000. Find the amount of
sales.
w
a. 227000
b. 235000
c. 265000
w
d. 273000
w
Ans - d
.............................................
Which one does not appear in 'Other Assets'?
a. Gold

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b. Silver
c. Interest accrued
t.c
d. Stationery and Stamps
Ans - a
.............................................
es
Under Fluctuating Capital Method, for each partner, the following account/s is/are maintained.
kt
a. Partner's Capital A/c
b. Partner's Current A/c
c. Both a & b
oc
d. Any one of the two
Ans - a
.............................................
m
A person buys a watch for Rs. 1,950 in cash and sells it for Rs. 2,200 on credit of 1 year. If the rate of
interest Is 10% he ......
iib
a. Loses Rs.50
b. Loses Rs.30
ca
c. Gains Rs.30
d. Gains Rs.50
Ans - d
iib
.............................................
If Rs. 100 be allowed as true discount on a bill of Rs. 1,100 due at the end of a Certain period, then the
discount allowed on the same sum due at the end of double the time is ......
.ja
a. Rs. 183.30
b. Rs. 200.00
w
c. Rs. 218.10
d. Rs. 222.00
w
Ans - a
.............................................
w
A bill of Rs. 2,000 is due 10 years hence at simple interest rate 5% p.a. Find Banker's discount.
a. Rs. 200
b. Rs. 225
c. Rs. 300

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d. Rs. 1,000
t.c
Ans - d
.............................................
A, B and C enter into a partnership investing Rs 35000, Rs 45000 and Rs 55000 resp. The respective
es
share of A,B and C in an annual profit of Rs 40500 are.
A. Rs. 11500, Rs. 13500, Rs. 16500
kt
B. Rs. 10500, Rs. 12500, Rs. 16500
C. Rs. 10500, Rs. 13500, Rs. 15500
D. Rs. 10500, Rs. 13500, Rs. 16500
oc
Ans - D
Explanation:
m
A:B:C = 35000:45000:55000
= 7:9:11
iib
Now we are having the ratio. To get the share, first make total of above ratio. Then get each share.
ca
A's Share=Rs. 40500*7/27

B's Share=Rs. 40500*9/27
C's Share=Rs. 40500*11/27
iib
=Rs. 10500, 13500, 16500

.............................................
Kamal started a business investing Rs 9000. After five months, Sameer joined with a capital of Rs 8000. If
.ja
at the end of the year, they earn a profit of Rs. 6970, then what will be the share of Sameer in the
profit?
w
A. Rs 2380
B. Rs 2300
C. Rs 2280
w
D. Rs 2260
w
Ans - A
Explanation:
Now as per question, Kamal invested for 12 months and Sameer invested for 7 months.

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So,
Kamal:Sameer = (9000*12):(8000*7)
t.c
= 108:56
= 27:14
Sameer Ratio in profit will be
es
=(6970*1441)=Rs. 2380
.............................................
kt
Arun, Kamal and Vinay invested Rs. 8000, Rs. 4000 and Rs. 8000 respectively in a business. Arun left
after six months. If after eight months, there was a gain of Rs. 4005, then what will be the share of
oc
Kamal?
A. Rs 870
B. Rs 880
m
C. Rs 890
D. Rs 900
iib
Ans - C
Explanation:
ca
Arun : Kamal : Vinay = (8,000 x 6) : (4,000 x 8) : (8,000 x 8)

= 48 : 32 : 64
=3:2:4
iib
Kamal's share
= 4005*2/9
.ja
= Rs. 890
.............................................
w
A has to pay Rs. 22,000 to B after 1 year. B asks A to pay Rs. 11,000 in cash Immediately and defer the
payment of Rs. 11,000 for 2 years. A agrees to it. Counting the rate of interest at 10% p.a. in this new
mode of payment ......
w
a. A gains Rs. 734

w
b. A loses Rs. 734

c. A gains Rs. 1,100
d. B gains Rs. 1,100
Ans - a
.............................................

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A owes B Rs. 1,802 due 1 year hence. However, a wants to settle the account after 3 months. How much
cash should he pay, if rate is 8% p.a.?
t.c
a. Rs. 1,700
b. Rs. 1,740
c. Rs. 1,750
es
d. Rs. 1,760
Ans - a
kt
.............................................
Gold appears under
oc
a. Other assets
b. Investments
c. Fixed assets
m
d. None of these
Ans - b
iib
.............................................
The banker's discount on a bill due 6 months hence at 6% p.a. is Rs. 370.80. The true discount is ......
ca
a. Rs. 61.80
b. Rs. 123.60
c. Rs. 220.00
iib
d. Rs. 360.00
Ans - d
.............................................
.ja
Yogesh started a business investing Rs. 45000. After 3 months, Pranab joined him with a capital of Rs.
60000. After another 6 months, Atul joined them with a capital of Rs. 90000. At the end of the year, they
w
made a profit of Rs. 20000. What would be Atuls share in it?
A. Rs 7000
w
B. Rs 6000
C. Rs 5000
w
D. Rs 4000
Ans - d
Explanation:

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Just take care of the months of investment, rest all will be simple.
t.c
Yogesh:Pranab:Atul = 45000*12:60000*9:90000*3
= 2:2:1
Atul's share = Rs. 20000 * (1/5) = Rs. 4000
es
.............................................
In business, A and C invested amounts in the ratio 2:1, whereas the ratio between amounts invested by
kt
A and B was 3:2, If Rs 157300 was their profit, how much amount did B receive.
A. Rs 48000
oc
B. Rs 47000
C. Rs 47400
D. Rs 48400
m
Ans - d
Explanation:
iib
A:B = 3:2 = 6:4

A:C = 2:1 = 6:3
ca
A:B:C = 6:4:3
B share = (4/13)*157300
iib
= 48400
.............................................
.ja
P and Q started a business investing Rs 85000 and Rs 15000 resp. In what ratio the profit earned after 2
years be divided between P and Q respectively.
w
A. 17:5
B. 17:3
C. 17:6
w
D. 17:7
w
Ans - B
Explanation:
In this type of question as time frame for both investors is equal then just get the ratio of their
investments.

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P:Q = 85000:15000
t.c
= 85:15
= 17:3
.............................................
es
Active Partners are also called as
a. Nominal Partners
kt
b. Quasi Partners
c. Sleeping Partners
d. Working Partners
oc
Ans - d
.............................................
m
The central processing unit in a computer comprises the following ...
a. Control unit and logical unit

iib
b. Control unit, logical unit and output unit

c. Control unit, Input unit and output unit
d. Control unit, logical unit and storage unit
ca
Ans - a
.............................................
iib
In the event of death of a partner, the accumulated profits and losses are shared by the partner in ...
a. new ratio
b. old ratio
.ja
c. sacrifice ratio
d. gaining ratio
w
Ans - b
.............................................
w
A credit entry of Rs. 5200 to Mr. Anand's account was credited as Rs. 2500. It is an ......
w
a. Errors of commission
b. Errors of omission
c. Errors of principle
Ans a

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Acquisition of Fixed assets is a ......
t.c
es
Ans - a
.............................................
kt
Sales - Rs. 90000, Gross profit - Rs. 30000, Net Profit - Rs. 18000. Find Operating expenses.
oc
a. 12000
b. 18000
c. 42000
d. 60000
m
Ans - a
.............................................
iib
If compound interest for 2 Years at the rate of 4% of some money is Rs. 102, find the simple interest at
the same rate for 2 years.
ca
a. Rs. 108.16
b. Rs. 100
c. Rs. 110
iib
d. Rs. 120
Ans - b
.............................................
.ja
What is the rate percent per annum if a sum doubles itself in 12 years at Compound rate of interest?
w
a. 5.2%
b. 5.4%
c. 5.5%
w
d. 5.9%
w
Ans - d
.............................................
If a sum of money trebles itself in 2 years at compound interest, then it will be 27 times of itself in ......
a. 5 years

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b. 6 years
c. 12 years
t.c
d. 15 years
Ans - b
.............................................
es
Wages outstanding in Trial balance will show a ......
kt
a. Debit Balance
b. Credit Balance
c. Either Debit or Credit Balance
oc
d. Neither Debit nor Credit Balance
Ans - b
.............................................
m
Personal expenses of Rs. 4200 by the proprietor debited to Office Expenses account. It is an ......
iib
ca
Ans - c
.............................................
iib
A, B and C invested Rs. 8000, Rs. 4000 and Rs. 8000 respectively in a business. A left after six months. If
after eight months, there was a gain of Rs. 4005, then what will be the share of B?
.ja
A. Rs 690
B. Rs 790
C. Rs 890
w
D. Rs 990
Ans - c
w
Explanation:
w
A:B:C = (8000*6):(4000*8):(8000*8)
= 48:32:64
= 3:2:4
So B share

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= (2/9)*4005
t.c
= Rs 890
.............................................
Nirmal and Kapil started a business investing Rs. 9000 and Rs. 12000 respectively. After 6 months, Kapil
es
withdrew half of his investment. If after a year, the total profit was Rs. 4600, what was Kapils share
initially ?
kt
A. Rs 2300
B. Rs 2400
C. Rs 2500
oc
D. Rs 2600
Ans - a
m
Explanation:
Nirmal:Kapil = 9000*12:(12000*6+6000*6) = 1:1

iib
Kapils share = Rs. [4600 *(1/2)) = Rs. 2300

.............................................
ca
Manoj received Rs. 6000 as his share out of the total profit of Rs. 9000 which he and Ramesh earned at
the end of one year. If Manoj invested Rs.120000 for 6 months, whereas Ramesh invested his amount
for the whole year, what was the amount invested by Ramesh ?
iib
A. Rs. 2000
B. Rs. 3000
C. Rs. 4000
.ja
D. Rs. 5000
Ans - d
w
Explanation:
w
Suppose Ramesh invested Rs. x. Then,

w
Manoj : Ramesh = 20000 * 6 : x * 12.

120000/12x : 6000/3000
=> x = 120000/24
= 5000
.............................................

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Sales - Rs. 110000, Gross profit - Rs. 35000, Net loss - Rs. 7500. Find Operating expenses.
t.c
a. 27500
b. 42500
c. 68500
d. 75000
es
Ans - b
.............................................
kt
An entry of Rs. 4000 wrongly posted to inventory account instead of building account is an ......
oc
m
Ans - c
.............................................
iib
Paid-up Capital means amount of capital actually paid by ......

ca
a. Shareholders
b. Equity Shareholders
c. Preference Shareholders
d. All of the above
iib
Ans - a
.............................................
.ja
annual income from interest is Rs. 3116. the money lent at 12% is......
w
a. Rs. 10,000
b. Rs. 11,800
c. Rs. 12,400
w
d. Rs. 13,400
w
Ans - b
.............................................

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A sum of Rs. 26,000 is lent out in two parts in such a way that the interest on one Part @ 10% for 5 years
is equal to the on another part @ 9% for 6 years. The sum lent out at 10% is......
t.c
a. Rs. 10,500
b. Rs. 11,500
c. Rs. 12,500
es
d. Rs. 13,500
Ans - d
kt
.............................................
If Rs. 7,500 are borrowed at compound interest at the rate of 4% p.a. then after 2 years the amount to
oc
be paid is ......
a. Rs. 7,800
b. Rs. 8,082
m
c. Rs. 8,100
d. Rs. 8,112
iib
Ans - d
.............................................
ca
Which is not an Advance?
a. Over-drafts
b. Cash Credit
iib
c. Bills discounted and purchased

d. None of these
Ans - d
.ja
.............................................
w
Calculate the depreciation for 1st year using sum of the digits Method.
a. Rs. 100000
w
b. Rs. 300000
c. Rs. 500000
w
d. Rs. 700000
Ans - c
Let me explain :

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E(sigma)n = 1+2+3+4+5 = 15
t.c
1st year = 5/15(1500000) = 500000

2nd year = 4/15(1500000) = 400000
es
3rd year = 3/15(1500000) = 300000
4th year = 2/15(1500000) = 200000
5th year = 1/15(1500000) = 100000
kt
.............................................
A starts business with Rs. 3500 and after 5 months, B joins with A as his partner. After a year, the profit
oc
is divided in the ratio 2:3. What is B's contribution in the capital ?
A. Rs 9000
B. Rs 7000
m
C. Rs 5000
D. Rs 4000
iib
Ans - a
Explanation:
ca
Let B contribution is x.
3500*127x=23
iib
=>14x=126000
=>x=Rs9000
.............................................
.ja
Anand and Deepak started a business investing Rs.22,500 and Rs.35,000 respectively. Out of a total
profit of Rs. 13,800. Deepak's share is ...
w
A. Rs 9600
B. Rs 8500
C. Rs 8450
w
D. Rs 8400
w
Ans - d
Explanation:
Ratio of their shares

= 22500 : 35000

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= 9 : 14
t.c
Deepak's share
= Rs.(1380014/23)
= Rs. 8400
.............................................
es
A started a business with Rs.21,000 and is joined afterwards by B with Rs.36,000. After how many
months did B join if the profits at the end of the year are divided equally?
kt
A. 4
B. 5
oc
C. 6
D. 7
Ans - b
m
Explanation:
iib
Suppose B joined after x months. Then,
21000*12=36000*(12-x)
ca
=> 36x = 180

=> x = 5
.............................................
iib
Sacrificing Ratio is equal to
a. Old Ratio
b. New Ratio
.ja
c. Old Ratio - New Ratio

d. New Ratio - Old Ratio
w
Ans - c
.............................................
w
Final accounts of a limited company consist of ......

w
a. Balance Sheet
b. Profit and Loss account
c. Trading account
d. Both a and b
Ans d

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...... of the companies Act prescribes the form of balance sheet.
t.c
a. Schedule V
b. Schedule VI
c. Schedule VII
d. Schedule VIII
es
Ans - b
.............................................
kt
In money at call and short notice, money is borrowed for
oc
a. 1 to 5 days
b. 1 to 7 days
c. 1 to 14 days
d. 1 to 21 days
m
Ans - c
.............................................
iib
What is the market value of a bond that will pay a total of fifty semiannual coupons of Rs. 80 each over
the remainder of its life? Assume the bond has a Rs. 1,000 face value and a 12% yield to maturity.
ca
a. Rs. 734.86
b. Rs. 942.26
c. Rs. 1,135.90
iib
d. Rs. 1,315.24
Ans - a
.............................................
.ja
ABC Company just issued a bond with a Rs. 1,000 face value and a coupon rate of 8%. If the bond has a
life of 20 years, pays annual coupons, and the yield to maturity is 7.5%, what will the bond sell for?
w
a. Rs. 951
b. Rs. 975
w
c. Rs. 1,020
d. Rs. 1,051
w
Ans - b
.............................................

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What would you pay for a share of ABC Corporation stock today if the next dividend will be Rs. 3 per
share, your required return on equity investments is 15% and the stock is expected to be worth Rs. 90
t.c
one year from now?
a. Rs. 60.00
b. Rs. 68.12
es
c. Rs. 78.26
d. Rs. 80.87
kt
Ans - c
.............................................
oc
Calculate the depreciation for 3rd year using sum of the digits Method.
a. Rs. 100000
m
b. Rs. 300000
c. Rs. 500000
d. Rs. 700000
iib
Ans - b
ca
Let me explain :
E(sigma)n = 1+2+3+4+5 = 15
iib
1st year = 5/15(1500000) = 500000

2nd year = 4/15(1500000) = 400000
.ja
3rd year = 3/15(1500000) = 300000

4th year = 2/15(1500000) = 200000
5th year = 1/15(1500000) = 100000
w
.............................................
Nominal Partners are also called as

w
a. Active Partners
w
b. Quasi Partners
c. Sleeping Partners
d. Working Partners
Ans - b
.............................................

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Purchase of office furniture for Rs. 2000 has been debited to General Expenses ac. It is
t.c
a. A clerical error
b. An error of principle
c. An error of omission
d. A mathematical error
es
Ans - b
.............................................
kt
Errors of part omission do not permit
oc
a. Correct totaling of the Balance sheet
b. Correct totaling of the Trial Balance
c. The trial balance to agree
d. Preparation of final accounts
m
Ans - c
.............................................
iib
Errors which affect one account can be

ca
a. Errors of full omission

b. Errors of principle
c. Errors of posting
iib
Ans - c
.............................................
.ja
Which is not a type of petty cash book are
a. Simple petty cash book

w
b. Columnar petty cash book

c. Two columnar petty cash book
d. None of these
w
Ans - c
w
.............................................
Capital = Rs. 65,000, Assets = Rs.80,000, then Liabilities = Rs......
a. Rs. 25,000
b. Rs. 35,000

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c. Rs. 5,000
d. Rs. 15,000
t.c
Ans - d
Solution :
es
Assets = Capital + Liabilities
Liabilities = Assets - Capital
kt
= 80000+65000
= 15000
.............................................
oc
A truck cost 8,900 with a residual value of 500. it is estimated the useful life of the truck is 4 years. The
amount of depreciation expense in year 2 by using the declining balance at twice the straight line rate
is...
m
a. 2,225
b. 4,200
iib
c. 4,450
d. 8,400
ca
Ans - c
.............................................
A sum amounts to Rs. 2,916 in 2 years and to Rs. 3,149.28 in 3 years at Compound interest. The sum
iib
is......
a. Rs. 1,500
b. Rs. 2,000
.ja
c. Rs. 2,500
d. Rs. 3,000
w
Ans - c
.............................................
w
Accounting Standards Board is constituted by

w
a. National Advisory Committee

b. Law
c. Institute of Chartered Accountants of India
d. Professional Accounting Bodies
Ans c

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A journal generally has ........ columns
t.c
a. 3
b. 4
c. 5
d. 6
es
Ans - c
.............................................
kt
Revenue Recognition is dealt in Accounting Standard
oc
a. AS 9
b. AS 19
c. AS 26
d. AS 28
m
Ans - a
.............................................
iib
A,B and C enter into a partnership investing Rs. 35000, Rs. 45000 and Rs. 55000. Find the their
respective shares in annual profit of Rs. 40,500.
ca
A. 10500, 13500, 19500

B. 10500, 13500, 18500
C. 10500, 13500, 17500
iib
D. 10500, 13500, 16500
Ans - d
.ja
Explanation:
A:B:C = 35000:45000:55000
w
= 7:9:11
A's share = (7/27) *40500 = Rs 10500

w
B's share = (9/27) *40500 = Rs 13500

C's share = (11/27)*40500 = Rs 16500
w
.............................................
Rs. 700 is divided among A, B, C so that A receives half as much as B and B half as much as C. Then C's
share is ...
A. Rs 200

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B. Rs 300
C. Rs 400
t.c
D. Rs 500
Ans - c
es
Explanation:
Let C = x.
kt
Then B = x/2
and A = x/4
oc
A:B:C = 1:2:4.
C's share Rs.[(4/7)*700) = 400
.............................................
m
A and B started a partnership business investing some amount in the ratio of 3 : 5. C joined them after
six months with an amount equal to that of B. In what proportion should the profit at the end of one
year be distributed amount A, B and C.
iib
A. 3:7:5
B. 6:10:5
ca
C. 6:10:7
D. 6:7:5
Ans - b
iib
Explanation:
Let initial investment of A is 3x and B is 5x, then C investment is also 5x, but most important to note in
.ja
this question is the time duration of investment. Like, A invested for 12 months, B invested for 12
months and C invested for 6 months.
w
A:B:C = (3x*12):(5x*12):(5x*6)
= 36:60:30
= 6:10:5
w
.............................................
w
Three partners A,B and C shared the profit in a software business in the ratio 5:7:8. They had partnered
for 14 months, 8 months and 7 months respectively. Find the ratio of their investments?
A. 19:49:64
B. 20:49:64
C. 20:49:65

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D. 20:50:64
t.c
Ans - b
Explanation:
es
Let their investments be Rs. x for 14 months, Rs. y for 8 months and Rs. z for 7 months respectively
Then, 14x : 8y : 7z = 5 : 7 : 8
kt
Now, 14x/8y = 5/7
y = (49/20)x
oc
14x/7z = 5/8
z = (16/5)x
m
x:y:z = x:(49/20)x:(16/5)x
= 20:49:64
.............................................
iib
Prepaid expenses are shown as

ca
a. Debit
b. Credit
c. Either Debit or Credit
d. Intangibles
iib
Ans - a
.............................................
.ja
Capital at the start of business-Rs.6,00,000.

At the end of the year, worth of the Assets-Rs.10,00,000 and liabilities-Rs.2,00,000.
Then Capital at the end of the year........
w
a. Rs. 8,00,000
b. Rs. 10,00,000
w
c. Rs. 12,00,000
d. Rs. 6,00,000
w
Ans - a
.............................................

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On dishonour of a bill, the holder in due course presents the bill to a notary public to record the facts of
dishonour on the bill or on paper attached to the bill , it is called
t.c
a. Dishonour
b. Noting
c. Noting charges
es
d. Protesting charges
Ans - b
kt
.............................................
oc
the depreciation for 4th year using sum of the digits Method.
a. Rs. 1,20,000/-
b. Rs. 60,000/-
m
c. Rs. 30,000/-
d. Rs. 15,000/-
iib
Ans - c
Solution :
ca
E(sigma)n = 1+2+3+4 = 10
iib
1st year = 4/10(330000-30000) = 4/100*300000 = 120000

2nd year = 3/10(330000-30000) = 3/100*300000 = 90000
3rd year = 2/10(330000-30000) = 2/100*300000 = 60000
4th year = 1/10(330000-30000) = 1/100*300000 = 30000
.ja
.............................................
The cost of a van is 3,250 with a residual value of Rs. 750. The van has an estimated useful life of 5 years.
w
The amount of depreciation expense using sum-of-the-year's digit to nearest dollar in year 5 is...
a. 167
w
b. 333
c. 500
w
d. 833
Ans - a
.............................................

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A truck cost Rs 1,05,000 with a residual value of Rs. 1,00,000. it has an estimated useful life of 5 years. If
the truck was bought on july 9, what would be the book value at the end of year 1?
t.c
a. Rs. 1,00,000
b. Rs. 85,000
c. Rs. 80,000
es
d. Rs. 25,000
Ans - a
kt
.............................................
The facility to get bill of exchange discounted puts them into the category of
oc
a. Fixed assets
b. Intangible assets
c. Wasting assets
m
d. Current assets
Ans - d
iib
.............................................
Three partners A,B and C shared the profit in a software business in the ratio 5:7:8. They had partnered
ca
for 14 months, 8 months and 7 months respectively. Find the ratio of their investments?
A. 19:49:64
B. 20:49:64
iib
C. 20:49:65
D. 20:50:64
Ans - b
.ja
Explanation:
w
Let their investments be Rs. x for 14 months, Rs. y for 8 months and Rs. z for 7 months respectively
Then, 14x : 8y : 7z = 5 : 7 : 8
w
Now, 14x/8y = 5/7

y = (49/20)x
w
14x/7z = 5/8
z = (16/5)x
x:y:z = x:(49/20)x:(16/5)x
= 20:49:64

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is divided in the ratio 2:3. What is B's contribution in the capital ?
t.c
A. Rs 9000
B. Rs 7000
C. Rs 5000
es
D. Rs 4000
Ans - a
kt
Explanation:
oc
Let B contribution is x.
3500127x=23
=>14x=126000
m
=>x=Rs9000
.............................................
iib
Anand and Deepak started a business investing Rs.22,500 and Rs.35,000 respectively. Out of a total
profit of Rs. 13,800. Deepak's share is ...
ca
A. Rs 9600
B. Rs 8500
C. Rs 8450
D. Rs 8400
iib
Ans - d
Explanation:
.ja
Ratio of their shares

= 22500 : 35000
w
= 9 : 14
Deepak's share
w
= Rs.(1380014/23)
= Rs. 8400
w
.............................................
Ascertaining value of stock from accounting record is known as
a. Continuous stock taking

b. Periodic inventory

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c. Perpetual inventory
d. Stock audit
t.c
Ans - c
.............................................
es
...... capital is the amount with which Company is formed.
a. Authorised
kt
b. Subscribed
c. Both a & b
d. All the above
oc
Ans - a
.............................................
m
Profits are shown in ........ side of balance sheet:
a. Asset side
iib
b. Capital a/c
c. Liabilities side
d. Loan capital
ca
Ans - c
.............................................
iib
Aman started a business investing Rs. 70,000. Rakhi joined him after six months with an amount of Rs.
1,05,000 and Sagar joined them with Rs. 1.4 lakhs after another six months. The amount of profit earned
should be distributed in what ratio among Aman, Rakhi and Sagar respectively, 3 years after Aman
started the business?
.ja
A. 7 : 6 : 10
B. 12 : 15 : 16
w
C. 15 : 12 : 16
D. 12 : 16 : 15
w
Ans - b
w
Explanation:
Aman : Rakhi : Sagar = (70,000 x 36) : (1,05,000 x 30) : (1,40,000 x 24)

= 12 : 15 : 16.
.............................................

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Simran started a software business by investing Rs. 50,000. After six months, Nanda joined her with a
capital of Rs. 80,000. After 3 years, they earned a profit of Rs. 24,500. What was Simran's share in the
t.c
profit?
A. Rs. 9,423
B. Rs. 10,250
es
C. Rs. 12,500
D. Rs. 10,500
kt
Ans - d
Explanation:
oc
Simran : Nanda = (50000 x 36) : (80000 x 30)
= 3 : 4.
Simran's share = Rs. 24500 x 3 / 7
m
= Rs. 10,500
.............................................
iib
Sumit and Ravi started a business by investing Rs 85000 and 15000 respectively. In what ratio the profit
earned after 2 years be divided between Sumit and Ravi respectively ?
ca
A. 17:1
B. 17:2
C. 17:3
D. 17:4
iib
Ans - c
Explanation:
.ja
Sumit : Ravi = 85000:15000

= 17:3
w
Important to note there that if both have invested for different period of times then we had to multiply
with number of months to get the desired ratio.
w
.............................................
w
Under Fixed Capital Method, for each partner, the following account/s is/are maintained.
a. Partner's Capital A/c

b. Partner's Current A/c
c. Both a & b
d. Any one of the two

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Ans - c
t.c
.............................................
Composite Vouchers
es
a. Evidences only debit to an account
b. Evidences only crebit to an account
c. Evidences both debit and credit to different accounts
kt
d. None of these
Ans - c
oc
.............................................
A, B and C jointly thought of engaging themselves in a business venture. It was agreed that A would
invest Rs. 6500 for 6 months, B, Rs. 8400 for 5 months and C, Rs. 10,000 for 3 months. A wants to be the
m
working member for which, he was to receive 5% of the profits. The profit earned was Rs. 7400.
Calculate the share of B in the profit.
iib
a. Rs. 1900
b. Rs. 2660
c. Rs. 2800
ca
d. Rs. 2840
Ans - b
iib
Explanation:
For managing, A received = 5% of Rs. 7400 = Rs. 370.

Balance = Rs. (7400 - 370) = Rs. 7030.
.ja
Ratio of their investments = (6500 x 6) : (8400 x 5) : (10000 x 3)

= 39000 : 42000 : 30000
= 13 : 14 : 10
w
B's share = Rs. 7030 x 14/37 = Rs. 2660.

.............................................
w
A company had issued and received share capital of shares (face value RS.10) and called application@
Rs5/- and allotment money Rs 5-/ Holders of 200 shares failed to pay the allotment money. What amont
w
will the company forfeit?
a. Rs. 500
b. Rs. 1,000
c. Rs. 2,000
d. Rs. 10.000

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Ans - b
t.c
.............................................
A company issues 3,00,000 share of Rs. 10 each at discount of Rs. 1 per share. What will be the amount
of paid up capital?
es
a. Rs. 3,00,000
b. Rs. 2,70,000
kt
c. Rs. 30,00,000
d. Rs. 27,00,000
oc
Ans - c
.............................................
A sum of money amount to Rs.2,240 @ 4% simple interest in 3 years. Find the interest on the same sum
m
for 6 months @ 3.5% p.a.
a. Rs. 35
iib
b. Rs. 40
c. Rs. 45
d. Rs. 50
ca
Ans - a
.............................................
iib
A and B are partners sharing profits in 6 : 3. C is admitted for 1/4th and ratio of A and B will be .... and
the new ratio of all the partners will be....
a. 2 : 3; 15 : 8 : 9
.ja
b. 3 : 5; 15 : 8 : 9
c. 5 : 3; 9 : 8 : 15
d. 5 : 3; 15 : 9 : 8
w
Ans - d
w
Solution :
w
Here, C is admitted for 1/4th.
So, a+b=3/4 = (6*3/4:3*3/4:

.............................................

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At a certain rate of simple interest, a sum doubles itself in 10 years. It will trible Itself in......
t.c
a. 10 Years
b. 15 Years
c. 20 years
d. 25 Years
es
Ans - c
.............................................
kt
The Receipts & Payment a/c of a cricket club shows the following details :
oc
Subscriptions :
Current received Rs. 21,000

Arrears received Rs.1,000 Advance received Rs. 1,600
m
There are 12,000 members each of them paying an annual subscription of Rs. 20. The amount to be
credited to Income & Expenditure a/c will be ...
iib
a. Rs. 21,600
b. Rs. 22,600
ca
c. Rs. 23,600
d. Rs. 24,000
Ans - d
iib
.............................................
Stock of stationery of a club on 1st January 2005 Rs. 3,000;

Creditors for stationery on 31st December 2005 Rs. 2,000;
.ja
Opening balance of creditors for stationery Rs. 3,000;

Payment for stationery during the year 2005 Rs.14,000;
Stock of stationery on 31st December 2005 Rs. 2,000.
w
The amount to be charged for stationery to the income & Expenditure a/c ...
w
a. Rs. 13,000
b. Rs. 14,000
w
c. Rs. 15,000
d. Rs. 16,000
Ans - b
.............................................

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How much value of stock having face value of Rs. 100/- at Rs. 85 can be purchased for Rs. 1,360?
t.c
a. Rs. 1,156 stock
b. Rs. 1,360 stock
c. Rs. 1,600 stock
d. Rs. 1,660 stock
es
Ans - c
.............................................
kt
Rs. 400 at 5% p.a. compound interest will amount to Rs. 441 in......
oc
a. 1 year
b. 2 years
c. 3 years
d. 4 years
m
Ans - b
.............................................
iib
What is the principal amount which earns Rs. 264 as compound interest for the second year @ 10%
p.a.?
ca
a. Rs. 2,000
b. Rs. 2,200
c. Rs. 2,400
iib
d. Rs. 2,600
Ans - c
.ja
Solution :
A = P(1+r/100)n
w
In the formula, A represents the final amount in the account after n years at interest rate 'r' with starting
amount 'p'.
w
P 2nd year = 2640

A 1st Year = 2640
w
P 1st = (2640/110*100) = 2400

.............................................

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A watch purchased for Rs.3,000 for the son of a partner, was debited to trade expenses account with
Rs.300. The partners drawing account should be debited in the rectifying entry with ......
t.c
a. Rs. 300
b. Rs. 2700
c. Rs. 3300
es
d. Rs. 3000
Ans - d
kt
.............................................
A sum of Rs.3,000 written off as bad debts now received, credited to the debtor should result in ...
oc
a. increase the net profit by Rs. 3000
b. decrease the net profit by Rs. 3000
c. no effect on net profit
m
d. increase in the balance of debtor's account
Ans - b
iib
.............................................
Rs. 1,000 was posted to Depreciation a/c as depreciation on furniture but was not posted to Furniture
ca
a/c. If total of debit side of the trial balance is Rs. 13,000, what should it be after rectification of error?
a. Rs. 13,000
b. Rs. 14,000
iib
c. Rs. 15,000
Ans - d
.ja
.............................................
A man purchased 9,500 shares at Rs.12 per share in the open market, the face Value of shares being Rs.
w
10. The company declared a dividend of 8%. What amount of dividend will he receive?
a. Rs. 7,600
w
b. Rs. 9,120
c. Rs. 9,500
w
d. Rs. 11,400
Ans - a
.............................................

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A and B share profits in the ratio of 4/5th and 1/5th. C is admitted for 1/2 share. The profit sharing ratio
will be......
t.c
a. 1 : 5 : 4
b. 4 : 1 : 5
c. 5 : 1 : 4
es
d. 5 : 4 : 1
Ans - b
kt
.............................................
X, Y, Z are partners sharing profits equally. Y retires, Goodwill appearing in the books is Rs. 60,000. It is
oc
valued at Rs. 1,20,000. Y will be credited with......
a. Rs. 60,000
b. Rs. 40,000
m
c. Rs. 30,000
d. Rs. 20,000
iib
Ans - d
.............................................
ca
Mr. X purchased a machine worth Rs. 2,00,000 on 1st January 2012. The machine is depreciated at 10%
p.a.; on original cost. On 1st July 2014, the machinery was sold for Rs. 1,20,000. What is the amount of
loss to be written off, assuming that the books are closed on 31st December.
iib
a. Rs. 25,000
b. Rs. 30,000
c. Rs. 35,000
d. Rs. 40,000
.ja
Ans - b
.............................................
w
A company purchased a car for Rs. 2,00,000 on 1st January 2013. Depreciation is charged at 20% p.a.
under written down value method. The car was sold on 1st July 2014 for Rs. 1,60,000. calculate the
w
amount Profit/loss on the sale of the car.

w
a. (-) Rs. 10,000

b. (-) Rs. 12,000
c. Rs. 14,000
d. Rs. 16,000
Ans d

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Mr. X Purchased a machinery for Rs. 1 lakh, its effective life being 5 years and scrap value at the end of 5
years Rs. 10,000. The machinery is sold at the end of 3rd year for Rs. 45,000. If depreciation is charged
t.c
on straight line method, what is the profit/loss on this sale?
a. Profit Rs. 18,000

b. Profit Rs. 1,000
es
c. Loss Rs. 1,000
d. Loss Rs. 18,000
kt
Ans - c
.............................................
oc
calculate :
a. cost of goods sold

b. gross profit
m
c. Net profit from the following figures
opening Rs 40,000
iib
purchases Rs 2,00,000
purchases returns Rs 20,000
direct expenses Rs 30,000
ca
closing stock Rs 20,000

indirect expenses RS 20,000
sales Rs 2,50,000
sales returns 10,000
iib
a. Rs 2,30,000 Rs 10,000 Rs 5,000

b. Rs 2,30,000 Rs 5,000: Rs 10,000
c. Rs 2,30,000 Rs 10,000 (-) Rs 10,000
.ja
d. Rs 2,10,000 Rs 10,000 Rs 5,000
Ans - c
w
.............................................
What will be the capital of the proprietor if his her assets are Rs 1,90,00 and liabilities Rs 1,25,000
w
a. Rs 50,000
w
b. Rs 65,000
c. RS 75,000
d. Rs 1,90,000
Ans - b
.............................................

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Certain principal amount plus its 5 Year's simple interest makes an amount of Rs.500. If the interest is
1/4th of its principal, find out the rate of interest and the principal amount.
t.c
a. 4% ; Rs. 400
b. 5% ; Rs. 400
c. 4% : Rs. 600
es
d. 6% : Rs. 400
Ans - b
kt
.............................................
Purchases book is overcast by Rs. 10,000. The present gross profit is Rs. 90,000. What would be the
oc
correct amount of gross profit after rectification of the error?
a. Rs. 80,000
b. Rs. 90,000
m
c. Rs. 1,00,000
d. Rs. 1,10,000
iib
Ans - c
.............................................
ca
Simple interest on a sum at 4% p.a. for two years is Rs.800. The compound interest on the same sum,
rate of interest and for the same period is......
a. Rs. 81.60
iib
b. Rs. 816
c. Rs. 1,600
d. Rs. 1,816
.ja
Ans - b
.............................................
w
the depreciation for 3rd year using Straight-line Method.
w
a. Rs. 80,250/-
b. Rs. 75,000/-
w
c. Rs. 90,000/-
d. Rs. 72,250/-
Ans - b
.............................................

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the depreciation for 2nd year using double declining Method.
t.c
a. Rs. 72,500/-
b. Rs. 72,250/-
c. Rs. 82,250/-
es
d. Rs. 82,500/-
Ans - d
kt
.............................................
Capital subscribed by the public is called ...... capital.
oc
a. Authorised
b. Subscribed
c. Preference
m
d. Any of the above
Ans - b
iib
.............................................
Preparation of Trial balance is :

ca
a. Compulsory
b. Important
c. Optional
iib
d. Situational
Ans - c
.............................................
.ja
Rent paid Rs.900 was credited to rent a/c will be rectified by:
w
a. Debiting Rent A/c with 1800

b. Crediting suspense a/c with 900
c. Debiting Rent a/c with 900
w
d. Debiting rent a/c with 1000

w
Ans - a
.............................................
Excess debit in Suspense a/c is written as:
a. To balance b/d

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b. To balance c/d
c. By balance b/d
t.c
d. By balance c/d
Ans - c
.............................................
es
A partner can:
kt
a. Borrow money
b. Endorse bills of exchange
c. Sell goods on credit
oc
d. Either (a. or (b. or (c)
Ans - d
.............................................
m
Partnership deed does not contain term:
iib
a. Name of partner
b. Rights, duties of partner
c. Appointment of arbitrator
ca
d. Audit of A/c
Ans - d
.............................................
iib
A man deposits Rs. 500 every six months into a bank which allows him 1 interest payable quarterly at
the rate of 2 % p.a. Find the sum which will 2 stand to his credit and the end of 10 years from his first
payment.
.ja
a. Rs. 10,000 approx

w

w
Ans - b
.............................................
w
A farmer could not pay annual installments worth Rs. 800 each for four years. If a simple rate of interest
is calculated at the rate of 5% p.a., how much has he to pay now?
a. Rs. 3,200
b. Rs. 3,440

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c. Rs. 3,640
d. Rs. 3,840
t.c
Ans - b
.............................................
es
......... a/c can show negative balance:
a. Fixed capital a/c
kt
b. Fluctuating capital a/c
c. Cash a/c
d. Balance sheet
oc
Ans - b
.............................................
m
Profits are shown in ........ side of balance sheet:
a. Asset side
iib
b. Capital a/c
c. Liabilities side
d. Loan capital
ca
Ans - c
.............................................
iib
A company has issued debentures for Rs. 1,000,00 on 1st January 2005 which are redeemable on 31st
December, 2008. The company has created Debenture Redemption fund for the redemption of
debentures at the end of the year. 10% annual interest will be received on the investment.
Calculate the annuity amount.
.ja
a. Rs. 17,547 approx.

w

w
Ans - c
.............................................
w
The income derived from a 6 --- % bond at Rs. 95 is...
a. Rs. 1.50
b. Rs. 6.30
c. Rs. 6.50

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d. Rs. 11.50
t.c
Ans - c
.............................................
Aman started a business investing Rs. 70,000. Rakhi joined him after six months with an amount of Rs.
es
1,05,000 and Sagar joined them with Rs. 1.4 lakhs after another six months. The amount of profit earned
should be distributed in what ratio among Aman, Rakhi and Sagar respectively, 3 years after Aman
started the business?
kt
A. 7 : 6 : 10
B. 12 : 15 : 16
oc
C. 15 : 12 : 16
D. 12 : 16 : 15
Ans - b
m
Explanation:
iib
Aman : Rakhi : Sagar = (70,000 x 36) : (1,05,000 x 30) : (1,40,000 x 24)

= 12 : 15 : 16.
.............................................
ca
Simran started a software business by investing Rs. 50,000. After six months, Nanda joined her with a
capital of Rs. 80,000. After 3 years, they earned a profit of Rs. 24,500. What was Simran's share in the
profit?
iib
A. Rs. 9,423
B. Rs. 10,250
C. Rs. 12,500
.ja
D. Rs. 10,500
Ans - d
w
Explanation:
w
Simran : Nanda = (50000 x 36) : (80000 x 30)

= 3 : 4.
w
Simran's share = Rs. 24500 x 3 / 7

= Rs. 10,500
.............................................

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To produce an annual income of Rs. 1,000 in a 4% stock at 90, the amount of stock needed is ...
t.c
a. Rs.22,500
b. Rs.25,000
c. Rs.27,500
d. Rs 36,000
es
Ans - b
.............................................
kt
A man invests in a 4.5% stock at 96. The interest obtained by him is ......
oc
a. 0.5%
b. 1%
c. 4.5%
d. 4.69%
m
Ans - d
.............................................
iib
By investing Rs. 3,300 in a 5.5% stock, a man earns Rs. 231. The stock is then quoted at ......
ca
a. Rs. 78
b. Rs. 4
c. Rs. 93
d. Rs. 3
iib
Ans - b
.............................................
.ja
Sumit and Ravi started a business by investing Rs 85000 and 15000 respectively. In what ratio the profit
earned after 2 years be divided between Sumit and Ravi respectively ?
w
A. 17:1
B. 17:2
C. 17:3
w
D. 17:4
w
Ans - c
Explanation:
Sumit : Ravi = 85000:15000
= 17:3

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Important to note there that if both have invested for different period of times then we had to multiply
with number of months to get the desired ratio.
t.c
.............................................
A,B and C enter into a partnership investing Rs. 35000, Rs. 45000 and Rs. 55000. Find the their
respective shares in annual profit of Rs. 40,500.
es
A. 10500, 13500, 19500
B. 10500, 13500, 18500
kt
C. 10500, 13500, 17500
D. 10500, 13500, 16500
oc
Ans - d
Explanation:
m
A:B:C = 35000:45000:55000
= 7:9:11
iib
A's share = (7/27) *40500 = Rs 10500

B's share = (9/27) *40500 = Rs 13500
C's share = (11/27)*40500 = Rs 16500
ca
.............................................
A machine costs Rs. 5,00,000 and would fetch Rs. 2,50,000 in the first year; Rs.1,50,000 in second year
and Rs. 1,00,000 in third year. Payback period would be ...
iib
a. 1 year
b. 2 years
c. 3 years
.ja
d. 4 years
Ans - c
w
.............................................
The economic life of a plant is 8 years and its cost is Rs. 10,00,000. Annual savings (cash inflow) is
w
Rs.2,00,000. Post payback profit would be ...

w
a. Rs. 2,00,000
b. Rs. 3,00,000
c. Rs. 4,00,000
d. Rs. 6,00,000
Ans d

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The total flows of a plant after tax but before depreciation for 5 years are Rs. 45,800 and total
depreciation amounts to Rs.32,000. Initial investment in the plant is Rs. 30,000. The average rate of
t.c
return would be ...
a. 6.3 %
b. 9.2 %
es
c. 18.4 %
d. 20.2 %
kt
Ans - c
.............................................
oc
Rs. 700 is divided among A, B, C so that A receives half as much as B and B half as much as C. Then C's
share is ...
A. Rs 200
m
B. Rs 300
C. Rs 400
D. Rs 500
iib
Ans - c
ca
Explanation:
Let C = x.
Then B = x/2
iib
and A = x/4
A:B:C = 1:2:4.
C's share Rs.[(4/7)*700) = 400
.ja
.............................................
A and B started a partnership business investing some amount in the ratio of 3 : 5. C joined them after
w
six months with an amount equal to that of B. In what proportion should the profit at the end of one
year be distributed amount A, B and C.
w
A. 3:7:5
B. 6:10:5
w
C. 6:10:7
D. 6:7:5
Ans - b
Explanation:

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Let initial investment of A is 3x and B is 5x, then C investment is also 5x, but most important to note in
t.c
this question is the time duratiojn of investment. Like, A invested for 12 months, B invested for 12
months and C invested for 6 months.
A:B:C = (3x*12):(5x*12):(5x*6)
es
= 36:60:30
= 6:10:5
.............................................
kt
The journal entries passed for transferring the balances of income & expenditure accounts are called
oc
a. Transfer entries
b. Adjusting entries
c. Rectifying entries
d. Closing entries
m
Ans - d
.............................................
iib
A partner can:
ca
a. Borrow money
b. Endorse bills of exchange
c. Sell goods on credit
d. Either (a. or (b. or (c)
iib
Ans - d
.............................................
.ja
Partnership deed does not contain term:
a. Name of partner
w
b. Rights, duties of partner

c. Appointment of arbitrator
d. Audit of A/c
w
Ans - d
w
.............................................
......... a/c can show negative balance:
a. Fixed capital a/c

b. Fluctuating capital a/c

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c. Cash a/c
d. Balance sheet
t.c
Ans - b
.............................................
es
According to IRR, undertake those investments that has highest IRR, provided the IRR is ...... the cost of
capital
kt
a. Greater than
b. Equal to
c. Less Than
oc
d. None of these
Ans - a
.............................................
m
Salaries outstanding account belongs to the category of
iib
A. Real account
B. Personal account
C. Nominal account
ca
Ans - b
.............................................
iib
If Dissolution expenses are paid by any partner, then they are transferred to:
a. His capital a/c

.ja
b. Cash a/c
c. Bank a/c
d. None of these
w
Ans - a
.............................................
w
A person purchased 40 shares of Rs. 50 each at a discount of 5%, the rate of dividend being 4.75%. The
w
rate of income on invested amount is ......
a. 4.25%
b. 4.50%
c. 4.75%
d. None of the above.

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Ans - d
t.c
.............................................
A man wants to buy Rs. 20 shares, the dividend being 9%. He wants to have an income of 12% on his
investment. At what market price should he purchase each share.
es
a. Rs. 12
b. Rs. 15
kt
c. Rs. 18
d. Rs. 20
oc
Ans - b
.............................................
Trading account is a:
m
a. Personal a/c
b. Real a/c
iib
c. Nominal a/c
d. None
ca
Ans - c
.............................................
At the time of death of a partner, his total share is given to:

iib
a. His loan a/c

b. His executor a/c
c. His capital a/c
.ja
d. His current a/c
Ans - b
w
.............................................
Mr. Raj wants to purchase a 6% stock which must yield 5% on his capital. At What price must he buy the
w
stock?
w
a. Rs. 100
b. Rs. 105
c. Rs. 110
d. Rs. 120
Ans d

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Which is better investment - 3% stock at 81 or 4% stock at 135?
t.c
a. 3% stock at 81
b. 4% stock at 135
c. Both ate equally good
es
Ans - b
.............................................
kt
Which is better stock - 5% at 286 or 3.5% at 186?
oc
a. 5% at 286
b. 3.5% at 186
c. Both are equally good
m
Ans - b
.............................................
iib
Opening Stock includes:

ca
a. Stock of raw material

b. Work in progress stock
c. Finished goods
d. All above
iib
Ans - d
.............................................
.ja
A and B are partners in the ratio of 7:3. C is admitted for 2/7th share of profits. What is the new ratio?
a. 7:2:2
w
b. 7:3:2
c. 7.4.5
d. 7 3,4
w
Ans - d
w
.............................................
Direct expenses form a part of .........
a. Selling & distribution expenses

b. Goods manufactured

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c. Administrative expenses on sales

d. Goods purchased and manufactured
t.c
Ans - d
.............................................
es
By investing in 6% stock at 96, an income of Rs. 100 will be derived by making An investment of ...
a. Rs. 1,504
kt
b. Rs. 1,600
c. Rs. 1,667
d. Rs. 3,200
oc
Ans - b
.............................................
m
An investment of Rs. 12,000 in a stock quoted at 120 produces an income of Rs. 780. Find the rate of
interest.
iib
a. 6.5%
b. 7.8%
c. 8.0%
ca
d. 8.3%
Ans - b
.............................................
iib
A invested some money in 4% stock at 96. B wants to invest in equally good 5% stock. B must buy a
stock worth ...
.ja
a. Rs. 77
b. Rs. 80
c. Rs. 100
w
d. Rs. 120
Ans - d
w
.............................................
w
Partner capital a/c do not contain:
a. Interest on capital
b. Balance of capital
c. Salary paid
d. Increase in asset

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Ans - d
t.c
.............................................
Q, R wants to admit C in firm but M does not agree:
es
a. C will not be admitted
b. C will be admitted
c. M will be retired
kt
d. M will be agreed & C will be admitted
Ans - a
oc
.............................................
At least ........ persons are needed to form a partnership:

m
a. 4
b. 3
c. 2
iib
d. 1
Ans - c
ca
.............................................
By investing in 3.75% stock at 96, Shubhra earns Rs. 1,000. The investment made is.
iib
a. Rs. 9,600
b. Rs. 10,000
c. Rs. 25,600
d. Rs. 30,000
.ja
Ans - c
.............................................
w
A man invested Rs. 3,880 in a stock at 97 to obtain an income of Rs. 220. The rate of dividend on stock is
...
w
a. 22.5%
w
b. 15%
c. 12%
d. 5.5%
Ans - d
.............................................

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Maya invested Rs. 8,910 in Rs. 10 shares quoted at Rs. 8.25. If the rate of Dividend is 6%, her annual
income is ......
t.c
a. Rs. 208
b. Rs. 534
c. Rs. 648
es
d. Rs. 656
Ans - c
kt
.............................................
In Govt. Company, has paid-up capital of:
oc
a. 51 %
b. 49 %
c. 50 %
m
d. 25 %
Ans - a
iib
.............................................
Registered companies do not include:

ca
a. Unlimited pubic companies

b. Unlimited private companies
c. Limited private companies
iib
d. Company Limited by guarantee
Ans - d
.............................................
.ja
Rs. 140 discount allowed to a customer wrongly credited to Discount a/c, Total of debit side of the trial
balance is Rs. 39,280. What should it be after rectification?
w
a. Rs. 39,340
b. Rs. 39,420
w
c. Rs. 39,560
d. Rs. 39,400
w
Ans - c
.............................................

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A bill for Rs. 10,000 was dishonoured with Rs. 150 as noting charges. It was renewed with interest of Rs.
250. The amount of the new bill will be ...
t.c
a. Rs. 10,000
b. Rs. 10,150
c. Rs. 10,250
es
d. Rs. 10,400
Ans - d
kt
.............................................
A company issued shares of Rs 100 each on which Rs 80 per share is called up. A shareholder has not
oc
paid the call Rs. 20 per share on 100 shares. The amount credited to share capital in respect of him will
be ...
a. Rs. 2,000
m
b. Rs. 6,000
c. Rs. 8,000
d. Rs. 10,000
iib
Ans - c
.............................................
ca
An equity share of Rs 100 on Which Rs. 100 on which Rs. 80 is called up, is forfeited for non-payment of
the first call of Rs. 20 per share. If the share is to be re-issued as fully paid up, the minimum amount to
be collected will be ...
iib
a. Rs. 20
b. Rs. 40
c. Rs. 60
.ja
d. Rs. 80
Ans - b
w
.............................................
A and B are partners in the ratio of 5 : 3. They admit C for 1/4th share which he acquires 3/4th from A
w
and 1/4th from B. C pays Rs. 20,000 for his share of goodwill. A and B will be credited by Rs...... and
Rs...... , respectively ...
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a. Rs. 5,000: Rs; 15,000

b. Rs. 10,000; Rs. 10,000
c. Rs. 15,000; Rs. 5,000
d. Rs. 12,000; Rs. 8,000

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Ans - c
.............................................
t.c
On the incoming of new partner, assets and liabilities of the firm are revalued for the ...
a. benefit of the new partner
es
b. benefit of the old partners
c. benefit of the old partners who are sacrificing
d. benefit of the of new and the old partners
kt
Ans - d
.............................................
oc
The minimum subscription is required to be received in ........ period:
a. 5 days
m
b. 10 days
c. 1 month
d. 120 days
iib
Ans - d
.............................................
ca
A applied for 200 shares but was allotted only 60 shares. If application money is Rs 2, then share
application will be debited with:
iib
a. 120
b. 400
c. 280
d. 450
.ja
Ans - b
.............................................
w
If Article of Association is not given then ........ will apply:

w
a. Table B of companies Act

b. Table C of companies Act
w
c. Table A of companies Act

d. Table D of companies act
Ans - c
.............................................

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A and B are partners sharing profits in the ratio 2 : 1. They add C as a partner for one-third share which
he receives equally from A and B. The new profit sharing ratio will be ...
t.c
a. 2 : 3 : 4
b. 3 : 2 : 4
c. 4 : 2 : 3
es
d. 4 : 3 : 2
Ans - c
kt
.............................................
A, B and C are partners sharing profits and loss in the ratio of 4: 3: 2. D is admitted for 1/10 share. The
oc
new ratio will be ...
a. 4 : 4 : 3 : 2
b. 4 : 3 : 2 : 1
m
c. 5 : 4 : 3 : 2
d. 1 : 2 : 3 : 4
iib
Ans - b
.............................................
ca
Sale of goods to Mohan for Rs 500 is passed in books only with Rs 50. It is:
a. Compensating error
b. Omission error
iib
c. Principal error
d. None
Ans - a
.ja
.............................................
........ has credit balance:

w
a. Drawing a/c
b. Sales A/c
c. Debtor A/c
w
d. Purchase A/c
w
Ans - b
.............................................
In Double entry system of Book Keeping every business transaction affects
A. Two accounts

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B. Two sides of the same account

C. The same account on two different dates
t.c
D. One personal and one real account
Ans - a
.............................................
es
A man invested Rs. 1552 in a stock at 97 to obtain an income of Rs. 128. The dividend from the stock is:
kt
a. 7.5%
b. 8%
c. 8.5%
oc
d. 9.7%
Ans - b
m
Explanation:
By investing Rs. 1552, income = Rs. 128.

iib
By investing Rs. 97, income = Rs. 128/1552 x 97 = Rs. 8.
Dividend = 8%
ca
.............................................
A, B, C subscribe Rs. 50,000 for a business. A subscribes Rs. 4000 more than B and B Rs. 5000 more than
C. Out of a total profit of Rs. 35,000, A receives:
iib
a. Rs. 8400
b. Rs. 11,900
c. Rs. 13,600
.ja
d. Rs. 14,700
Ans - d
w
Explanation:
w
Let C = x.
w
Then,
B = x + 5000 and
A = x + 5000 + 4000 = x + 9000.
So, x + x + 5000 + x + 9000 = 50000

3x = 36000

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x = 12000
t.c
A : B : C = 21000 : 17000 : 12000 = 21 : 17 : 12.
A's share = Rs. 35000 x 21/50 = Rs. 14,700.
.............................................
es
Preparation of Trial balance is :
a. Compulsory
kt
b. Important
c. Optional
d. Situational
oc
Ans - c
.............................................
m
Rent paid Rs.900 was credited to rent a/c will be rectified by:
a. Debiting Rent A/c with 1800

iib
b. Crediting suspense a/c with 900

c. Debiting Rent a/c with 900
d. Debiting rent a/c with 1000
ca
Ans - a
.............................................
iib
Excess debit in Suspense a/c is written as:
a. To balance b/d
b. To balance c/d
.ja
c. By balance b/d
d. By balance c/d
w
Ans - c
.............................................
w
Revaluation of goodwill must be effected through ......

w
a. Revaluation a/c
b. Realisation a/c
c. Partners' Capital a/cs
d. P & L a/c
Ans c

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A and B are partners sharing profits and losses in the ratio of 2 : 3. They admit C into the firm giving him
25% share. If C brings in Rs 30,000 as his share of capital and capitals are to be kept in the profit sharing
t.c
ratio, B's capital should be ......
a. Rs. 36,000
b. Rs. 45,000
es
c. Rs. 48,000
d. Rs. 54,000
kt
Ans - d
.............................................
oc
A and B are partners in th ratio of 4 : 3. They admit C who brings in Rs. 35,000 towards goodwil. The new
profit sharing ratio is 3 : 3 : 2. A will get ......
a. Rs. 15,000
m
b. Rs. 20,000
c. Rs. 27,000
d. Rs. 30,000
iib
Ans - c
.............................................
ca
A and B are partners in the ratio of 4 : 1. They admit C into partnership and decide to share the profit
equally in the new firm. C pays for premium/goodwill Rs. 30,000. In the connection ...
iib
a. A and B will receive Rs. 15,000 each.

b. A will receive Rs. 24,000 and B RS. 6,000.
c. B will receive the entire Rs. 30,000
d. A will receive Rs. 42,000 and B will pay Rs. 12000.
.ja
Ans - d
w
Solution :
Sacrifice Ratio = Old Ratio-New Ratio

w
Gaining Ratio = New Ratio -Old Ratio

A's scrifice = 4/5-1/3=7/15
w
P's gain = 1/3 /5=2/15
C pay for goodwill for 1/3 ratio = Rs. 30,000
Therefore, for 1 it will be 30,000 X 3/1

for 2/15th gain, it will be 30,000 X 3/1X2/15 = Rs. 12,000

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Thus, B wil pay Rs. 12,000

C will pay Rs. 30,000
t.c
A will receive 12,00+30,000=Rs. 42,000
.............................................
es
The sacrifices of old partners is equal to ...
a. new share-old share
kt
b. old share-new share
c. Both a and b
oc
Ans - b
.............................................
m
If new partners brings the amount of goodwill in capital, goodwill is transferred to the old partners in ...
a. old ratio
iib
b. new ratio
c. sacrifice ratio
d. gaining ratio
ca
Ans - c
.............................................
iib
If Goodwill a/c is raised after the admission of a new partner, it will be credited to ...
a. New Partner's Capital a/c

b. Old Partner's Capital a/cs
.ja
c. All Partner's Capital a/cs

d. New Partner's Drawings a/cs
w
Ans - c
.............................................
w
If nothing otherwise mentioned, on admission of a new partner, the old ratio is itself ...
w
a. new ratio
b. sacrifice ratio
c. gaining ratio
d. All of the above
Ans b

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On the admission of a new partner, an increase on the value of an asset is debited to ...
t.c
a. Revaluation a/c
b. Old Partner's Capital a/cs
c. Asset a/c
d. New Partner's Capital a/c
es
Ans - c
.............................................
kt
In which method amount of depreciation decreases every year:
oc
a. Straight line method
b. Written down value method ,
c. Annuity method
d. Sinking fund method
m
Ans - b
.............................................
iib
Shares can be issued at discount within..........month of sanction of Company Law Board:

ca
a. 1
b. 2
c. 4
d. 5
iib
Ans - b
.............................................
.ja
Discount on issue of share is a a/c:
a. Real
w
b. Nominal
c. Personal
d. Loss
w
Ans - b
w
.............................................
A and B shared profit in the ratio of 3 : 2. C was admitted as a partner for1/5th share. He acquires
3/20th from B. The new profit sharing ratio would be ...
a. 10 : 6 : 4

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b. 6 : 10 : 4
c. 8 : 8 : 4
t.c
d. 9 : 7 : 4
Ans - d
.............................................
es
Goodwill of a firm of A and B is valued at Rs. 60,000. Goodwill appears in th books at Rs. 24,000. C is
admitted for 1/4th share. He will be required to bring for goodwill ...
kt
a. Rs. 21,000
b. Rs. 9,000
oc
c. Rs. 15,000
d. Rs. 6,000
Ans - b
m
.............................................
If depreciation is not charged, Profit & loss a/c will show:

iib
a. More profits
b. Less profits
ca
c. Nominal profits
d. Original profits
Ans - a
iib
.............................................
A public company having a share capital:

.ja
a. Must issue a prospectus

b. Cannot file a statement in lieu of prospectus
c. May file a statement in lieu of prospectus
w
d. Doesn't need prospectus
Ans - c
w
.............................................
w
Share premium is used for:
a. To issue fully paid bonus shares

b. To write off preliminary expenses
c. To issue shares at discount
d. Both a & b

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Ans - d
t.c
.............................................
A and B are partners sharing profits in the ratio of 3 : 1. C is admitted for 1/4th share. The profit sharing
ratio will be ...
es
a. 9 : 3 : 4
b. 3 : 4 : 9
kt
c. 4 : 9 : 3
d. 3 : 9 : 4
oc
Ans - a
.............................................
On the death of a Partner, the amount received from join life policy should be credited to the capital
m
accounts of ...
a. all Partners including the deceased Partner`

iib
b. only continuing Partners

c. only the deceased Partner
d. All of the above
ca
Ans - a
.............................................
iib
A, B, C rent a pasture. A puts 10 oxen for 7 months, B puts 12 oxen for 5 months and C puts 15 oxen for
3 months for grazing. If the rent of the pasture is Rs. 175, how much must C pay as his share of rent?
A. Rs. 45
.ja
B. Rs. 50
C. Rs. 55
D. Rs. 60
w
Ans - a
w
Explanation:
w
A : B : C = (10 x 7) : (12 x 5) : (15 x 3)

= 70 : 60 : 45
= 14 : 12 : 9
C's rent = Rs. 175/35 x 9

= Rs. 45

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A and B started a business in partnership investing Rs. 20,000 and Rs. 15,000 respectively. After six
months, C joined them with Rs. 20,000. What will be B's share in total profit of Rs. 25,000 earned at the
t.c
end of 2 years from the starting of the business?
A. Rs. 7500
B. Rs. 9000
es
C. Rs. 9500
D. Rs. 10,000
kt
Ans - a
Explanation:
oc
A : B : C = (20,000 x 24) : (15,000 x 24) : (20,000 x 18)
=4:3:3
m
B's share = Rs. 25000 x 3/10
= Rs. 7,500
.............................................
iib
A, B and C are Partners sharing the Profit in the ratio of 2 : 2 : 1. C retired. The new profit sharing ratio
between A and B will be ...
ca
a. 1 : 1
b. 2 : 1
c. 3 : 1
iib
d. 1 : 1
Ans - d
.............................................
.ja
A, B and C are partners sharing profits and losses in the ratio of 5 : 3 : 2. B retires. His share was taken up
by A and C in the ratio of 2 : 1. The new share between A and C will be ...
w
a. 3 : 7
b. 5 : 2
w
c. 7 : 3
d. 2 : 5
w
Ans - c
.............................................

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is divided in the ratio 2 : 3. What is B's contribution in the capital?
t.c
A. Rs. 7500
B. Rs. 8000
C. Rs. 8500
es
D. Rs. 9000
Ans- d
kt
Explanation:
oc
Let B's capital be Rs. x
Then,
m
3500 x 12/7x = 2/3
14x = 126000
x = 9000
iib
.............................................
A and B started a partnership business investing some amount in the ratio of 3 : 5. C joined then after six
ca
months with an amount equal to that of B. In what proportion should the profit at the end of one year
be distributed among A, B and C?
A. 3 : 5 : 2
iib
B. 3 : 5 : 5
C. 6 : 10 : 5
D. 6 : 5 : 10
.ja
Ans - c
Explanation:
w
Let the initial investments of A and B be 3x and 5x.
A : B : C = (3x x 12) : (5x x 12) : (5x x 6)

w
= 36 : 60 : 30
= 6 : 10 : 5.
w
.............................................
Old profit sharing ratio minus new profit sharing ratio is equal to ...
a. sacrificing ratio
b. gaining ratio

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c. capital ratio
d. old ratio
t.c
Ans - a
.............................................
es
A retiring Partner continues to be liable for obligation incurred after his retirement, if ...
a. he does not give Public notice
kt
b. he starts a similar business
c. unpaid amount is transferred to his loan a/c
d. he gives a public notice
oc
Ans - a
.............................................
m
What income will be derived from Rs. 75,000 of 4 --- stock? 2
a. Rs. 3,357
iib
b. Rs. 3,537
c. Rs. 3,573
d. Rs. 3,375
ca
Ans - d
.............................................
iib
What income can be derived from an investment of Rs. 11,628 in the 6% stock at Rs. 153?
a. Rs. 722
b. Rs. 756
.ja
c. Rs. 345
d. Rs. 543
w
Ans - a
.............................................
w
Premium paid on Joint Life Policy of Partners is ...

w
a. credited to Partners' Capital a/cs

b. debited to P & L a/c
c. credited to P & L a/c
d. debited to Partners' Capital a/cs
Ans b

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On the retirement or death of a partner, Profit or loss on revaluation is transferred to Partners' Capital
a/cs/ Current a/cs in ...
t.c
a. old Profit sharing ratio
b. sacrificing ratio
c. gaining ratio
es
d. capital ratio
Ans - a
kt
.............................................
Capital Rs. 40,000, Liabilities Rs. 15,000, then Assets Rs......
oc
a. Rs. 25,000
b. Rs. 65,000
c. Rs. 55,000
m
d. Rs. 45,000
Ans - c
iib
Solution :
ca
Assets = Capital + Liabilities

= 40000+15000
= 55000
.............................................
iib
When an entry is passed on credit Side of Passbook or on debit side of Cash book, the bank balance
a. Increases
.ja
b. Decreases
c. Has no effect
d. Can increase or decrease
w
Ans - a
.............................................
w
As per companies Amendment Bill 2003, maximum number of partners consisting of professionals can
w
be
a. 10
b. 20
c. 40
d. 50

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Ans - d
t.c
.............................................
A company has a perpetual ......
es
a. Profits
b. Losses
c. Succession
kt
d. All the above
Ans - c
oc
.............................................
A and B invest in a business in the ratio 3 : 2. If 5% of the total profit goes to charity and A's share is Rs.
855, the total profit is...
m
a. Rs. 1425
b. Rs. 1500
iib
c. Rs. 1537.50
d. Rs. 1576
ca
Ans - b
Explanation:
iib
Let the total profit be Rs. 100.

After paying to charity, A's share = Rs.95 x 3/5 = Rs. 57.
If A's share is Rs. 57, total profit = Rs. 100.
If A's share Rs. 855, total profit = 100/57 x 855 = 1500.
.ja
.............................................
By investing Rs. 1620 in 8% stock, Michael earns Rs. 135. The stock is then quoted at:
w
a. Rs. 80
b. Rs. 96
w
c. Rs. 106
d. Rs. 108
w
Ans - b
Explanation:
To earn Rs. 135, investment = Rs. 1620.

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To earn Rs. 8, investment = Rs.

1620/135 x 8 = Rs. 96.
t.c
Market value of Rs. 100 stock = Rs. 96.
.............................................
es
A non - banking asset is ...
a. Furniture, Fixture and Fittings
kt
b. Office equipment
c. Money at call and short notice
d. Asset acquired from the debtors in satisfaction of claims against them
oc
Ans - d
.............................................
m
Share of a limited company can be classified into ......
a. Equity
iib
b. Preference
c. Equity and Preference
ca
Ans - c
.............................................
iib
Purchase book is an example of ......journal
a. General
b. Special
.ja
c. Common
d. Cash
w
Ans - b
.............................................
w
Credit sale of Rs. 50000 to Anand wrongly debited to Ramesh's account. Trial balance Crebit side
presently shows a total of Rs. 2458650. Actually it should be ......
w
a. 2408650
b. 2508650
c. 2458650

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Ans - c
.............................................
t.c
The relationship between the Consignor and Consignee is that of...
a. Principal and agent
es
b. Seller and buyer
c. Bailor and bailee
d. Creditor and debtor
kt
Ans. a
.............................................
oc
Bank Reconciliation Statement is prepared by ......
a. Creditor
m
b. Debtor
c. Customer
d. Bank
iib
Ans - c
.............................................
ca
A bank Reconciliation is prepared, so that the difference in the under noted balances is reconciled
a. The difference in the balance in the cash column and bank column of the Cash book
iib
b. The difference in the balance in the pass book at the beginning and at the end
c. The difference in the cash book and pass book balances as on the date
d. The differences in the bank ledger and pass book
.ja
Ans - c
.............................................
w
Discount allowed on issue of shares is shown in ...
a. Assets side of Balance Sheet

w
b. Liabilities side of balance sheet

c. Debit side of P & L a/c
w
d. Credit side of P & L a/c
Ans - a
.............................................

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Unless otherwise stated, a preference share is always deemed to be ...
t.c
a. Cumulative, participating and non-convertible
b. Non-cumulative, participating and non-convertible
c. cumulative, non-participating and non-convertible
d. Non-cumulative, non participating and non-nonconvertible
es
Ans - c
.............................................
kt
The ...... is affixed on all important documents and contracts of a company.
oc
a. Registered seal
b. Common Seal
c. Govt. seal
d. All the above
m
Ans - b
.............................................
iib
The rate of interest on a sum of money is 4% p.a .for the first 2 years, 6% p.a. for The next 4 years and
8% p.a. for the period beyond 6 years. If the simple interest accrued by the sum for a total period of 9
ca
years is Rs, 1,120, what is the sum?
a. Rs. 1,000
b. Rs. 1,500
iib
c. Rs. 2,000
d. Rs. 2,500
Ans - c
.ja
Solution :
w
4*2=8,
6*4=24,
8*3=24
w
8+24+24=56
w
1120/56*100=2000
.............................................

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Goods costing Rs. 8,000 were damaged by fire. Insurance company admitted a claim of Rs. 6,500. Profit
& Loss a/c will be debited with...
t.c
a. Rs. 8,000
b. Rs. 6,500
c. Rs. 4,500
es
d. Rs. 1,500
Ans - d
kt
8000-6500
.............................................
oc
annual income from interest is Rs. 3,116, the money lent at 12% is
m
Rs. 10,800
Rs. 11,800
Rs. 12,400
iib
Rs. 13,400
Ans - b
ca
.............................................
Which is not Tax deductible?

iib
a. Interest Payments on Debts

b. Dividend Payments
c. Both
d. None of these
.ja
Ans - b
.............................................
w
Debt which is due to us is called...

w
a. Active
b. Passive
w
c. Any of the above

Ans - a
.............................................

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Which bond would most likely possess the least degree of interest rate risk?
t.c
a. 8% coupon rate, 10 years to maturity
b. 10% coupon rate, 10 years to maturity
c. 8% coupon rate, 20 years to maturity.
d. 12% coupon rate, 20 years to maturity.
es
Ans - b
.............................................
kt
Three partners shared the profit in a business in the ratio 5 : 7 : 8. They had partnered for 14 months, 8
months and 7 months respectively. What was the ratio of their investments?
oc
A. 5 : 7 : 8
B. 20 : 49 : 64
C. 38 : 28 : 21
m
D. None of these
Ans - b
iib
.............................................
Balance in the petty cash book is
ca
a. Expense
b. Profit
c. Asset
d. Liability
iib
Ans - c
.............................................
.ja
...... of a partner means joining of a new person into an existing partnership as a partner.
a. Admission
w
b. Submission
c. Permission
d. Retirement
w
Ans - a
w
.............................................

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A manager is entitled to receive a commission @ 5 % on net profit after charging such commission.
Gross profit of the firm is Rs. 2,00,000 and selling and administrative expense amount to Rs. 1,47,000.
t.c
His commission will be ...
a. Rs. 5,250
b. Rs. 2,625
es
c. Rs. 2,500
d. Rs. 10,000
kt
Ans - c
.............................................
oc
In how many years will a sum of money double itself at 12% per annum simple Interest?
a. 7 Years 6 months
b. 8 Years
m
c. 8 Years 4 months
d. 8 Years 6 months
iib
Ans - c
100/12
ca
.............................................
For a bank, Rebate on bills discounted is an item of ...

iib
a. an income
b. an expenditure
c. an accrued income
d. an income received in Advance
.ja
Ans - d
.............................................
w
Partnership is a ...... between two or more persons.

w
a. Friendship
b. Relationship
w
c. Both a & b
Ans - b
.............................................

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Cost of sales is Rs. 40,000 net sales amount to Rs. 60,000 and Closing stock is valued at Rs. 10,000. The
gross profit will be ......
t.c
a. Rs. 10,000
b. Rs. 20,000
c. Rs. 30,000
es
d. Rs. 40,000
Ans - b
kt
.............................................
If a receipt of Rs. 20,000 from Manan (our debtor) has not been recorded in the books, the profit will
oc
show ...
a. An increase of Rs. 20,000

b. A decrease of Rs. 20,000
m
c. Neither an increase nor a decrease
d. An increase of Rs. 10,000
iib
Ans - c
.............................................
ca
share Allotment Account is ...
a. Real Account
b. Personal Account
iib
c. Nominal Account
d. Asset Account
Ans - b
.ja
.............................................
In the Partnership firms, liability of each partner is ......

w
a. Limited
b. Unlimited
w
c. Overhead
d. Maximum
w
Ans - a
.............................................

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On a machinery, depreciation @ 10% is Rs. 30,000 for the first year, Rs. 27,000 for the second year.
What will be amount of depreciation for the third year?
t.c
a. Rs. 30,000
b. Rs. 24,300
c. Rs. 20,400
es
d. Rs. 22,600
Ans - b
kt
.............................................
Mr. A purchased a second hand machinery for Rs. 80,000 on 1st April 2001 and spent Rs. 35,000 on its
oc
over-hauling and installation. Depreciation is charged @ 10% on original cost. On 30th June 2004, the
machinery was sold off for Rs. 65,000. What is the amount of loss to the written of, presuming the
accounting ear ends on 31st March every year?
m
a. Rs. 15,500
b. Rs. 12,625
c. Rs. 13,095
iib
d. Rs. 13,505
Ans - b
ca
.............................................
A limited company is a/an ...... person.

iib
a. Original
b. Duplicate
c. Artificial
.ja
Ans - c
.............................................
w
Sales Journal is also called as ......... book.

w
a. Stock
b. Invoice
w
c. Inventory
d. None of these
Ans - b
.............................................

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Which is better investment - 4% stock at par with an income-tax at 5% or 4.5% stock at 110 free from
income-tax.?
t.c
a. 4% stock at par
b. 4.5% stock at 110
c. Both are equally good
es
Ans - b
kt
.............................................
The payment of Promissory Note is made by its...
oc
a. Maker
b. Payee
c. Bank
m
d. None of above
Ans. a
iib
.............................................
Simple interest on a sum at 6% p.a. for 6 years is Rs.2160. The compound interest on the same sum, rate
ca
of interest and for the same period is......
a. Rs. 2115
b. Rs. 2151
iib
c. Rs. 2511
d. Rs. 2521
Ans - c
.ja
Let me Explain :
w
Let us first find the printcipal Amount

w
So, for 1 year @ 6% = 2160/6 = 360

w
A = P(1+r/100)^n
= 6000 (1+6/100)^6
= 6000 (1.06)^6
= 6000 (1.4185)

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= 8511
t.c
CI = Amount - Principal
= 8511 - 6000
= 2511
es
So, compound interest on Rs. 6000 at 6% p.a for 6 years is : Rs. 2511
.............................................
kt
When an entry is passed on credit side of passbook or on debit side of Cash book, the bank balance
a. increase
oc
b. decrease
c. has no effect
d. can decrease or increase
m
Ans. a
.............................................
iib
the depreciation for 5th year using Straight-line Method.
ca
a. Rs. 70,000
b. Rs. 80,000
c. Rs. 3,50,000
d. Rs. 4,00,000
iib
Ans - b
Let me Explain :
.ja

w

w
So, Depreciation for 5th year also will be Rs. 70000/-

.............................................
w
Cost of the goods - Rs. 99000, Opening Stock - Rs. 13500, Purchases - Rs. 75000, Sales - Rs. 112500. Find
other expenses.
a. 10000
b. 10500

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c. 13500
d. 24000
t.c
Ans - b
.............................................
es
Trial Balance is prepared to detect ......
kt
oc
Ans - d
.............................................
m
Cash book records
a. All cash receipts

iib
b. All cash payments

c. All cash receipts and payments
d. All types of transaction
ca
Ans - c
.............................................
iib
The ...... form of Balance Sheet and Profit and Loss account of a banking company is prescribed in Forms
A and B of schedule of the Banking Regulation Act, 1949.
a. First
.ja
b. Second
c. Third
d. Fourth
w
Ans - c
.............................................
w
A sales of Rs. 3,000 to Mr. X has been omitted from recording in the Sales Book. The existing total of
w
debit side of the trial balance is Rs. 2,00,000. What will be the total of credit side, presently?
a. Rs. 2,03,000
b. Rs. 1,97,000
c. Rs. 2,06,000
d. Rs. 1,94,000

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Ans - b
t.c
.............................................
es
a. Rs. 2,500 ; 5%
b. Rs. 2,500 ; 6%
kt
c. Rs. 3,000 ; 5%
d. Rs. 3,000 ; 6%
oc
Ans - b
Solution :
m
Int for 3 years = 3250-2800=450.
So, int for 1 year = 450/3=150.
Amount including interest for 2 years = 2800.
iib
So, the Principle amount = 2800-150-150=2500.

Int Rate = 150/2500*100 = 6%
.............................................
ca
Shareholders get ...
a. Fees
iib
b. Commission
c. Interest
d. Dividend
.ja
Ans - d
.............................................
w
Premium received on issue of shares is shown in ...
a. Assets side of Balance Sheet

w
b. Liabilities side of balance sheet

c. Debit side of P & L a/c
w
d. Credit side of P & L a/c
Ans - b
.............................................

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Discount amounting to Rs. 100 allowed by the creditors has been posted to the debit to Discount a/c. By
how much amount will the total of credit side of trial balance increase after rectification?
t.c
a. Rs. 100
b. Rs. 200
c. (-) Rs. 100
es
d. (-) Rs. 200
Ans - b
kt
.............................................
In the balance sheet, various items of assets are arranged according to ...... order.
oc
a. Sales
b. Purchase
c. Stock
m
d. Liquidity
Ans - d
iib
.............................................
A bond carries a specific rate of interest is called as...

ca
a. Yield-to-Maturity
b. Face Value
c. Coupon Rate
iib
d. Redemption Value
Ans - c
.............................................
.ja
The income from a 6% stock of Rs 18,360 is Rs. 720. Find the price stock of Rs. 100
w
a. Rs. 125
b. Rs. 130
c. Rs. 135
w
d. Rs. 153
w
Ans - d
.............................................
The method in which depreciation rate is constant is
a. straight line method

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b. Declining Balance Method

c. Double Declining Balance Method
t.c
d. Accelerated Depriciation
Ans - b
es
Depreciation rate is constant in "Declining Balance Method". In "straight line method" depreciation
amount is constant.
.............................................
kt
In SPOT, the exchange of currencies takes place on
oc
a. Same Day
b. Next Day
c. Second Working Day
d. Third Working Day
m
Ans - c
.............................................
iib
A balance sheet discloses ...

ca
a. Cash position of the business

b. Financial position of the business
c. Profit earning capacity of the busiess
d. Risk taking capacity of the business
iib
Ans - b
.............................................
.ja
No adjustment entry was passed for an amount of Rs. 500 relating to outstanding salary. The gross profit
which is presently Rs. 18,500 will now be ...
w
a. Rs. 17,500
b. Rs. 19,500
c. Rs. 18,000
w
d. No change
w
Ans - d
.............................................
Operation of borrowing in one centre and lending in another at higher rate, is called as
a. Spot

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b. Forward
c. Arbitrage
t.c
d. None of these
Ans - c
.............................................
es
The asset lose an equal amount of value each year in case of
kt
a. straight line method
b. Declining Balance Method
c. Double Declining Balance Method
oc
d. Accelerated Depreciation
Ans - a
.............................................
m
What is Nominal account?
iib
A. an account of each person or firm with whom the trader deals

B. an account of each head of expense or source of income
C. an account of each property or possession dealt in by the trader in his business
ca
D. none
Ans - b
.............................................
iib
Wrong balancing of an account is an ......
.ja
w
Ans - a
.............................................
w
For payment of noting charges to the notary public...

w
a. Noting charges a/c is debited

b. Bank a/c is debited
c. Noting charges a/c is credited
d. Cash a/c is credited.

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Ans. d
.............................................
t.c
Rs. 5,000 received from Ramesh, whose account was previously written off as bad debts, should be
credited to ...
es
a. Bad Debts a/c
b. Bad Debts Recovered a/c
c. Bad Debts Provision a/c
kt
d. Ramesh a/c
Ans - b
oc
.............................................
Maintenance of fixed assets is a ......

m
iib
Ans - b
ca
.............................................
Goods worth Rs. 15000 is returned by the customer. It is taken into stock but no entry passed. It is an
......
iib
.ja
Ans - b
w
.............................................
Interest of Rs. 3000 is credited in the passbook but not yet entered in cashbook. Bank passbook shows
w
credit balance of Rs. 7500. The said amount should be ...... from the passbook balance, to reconcile the
same with cashbook.
w
a. Added
b. Deducted
c. No entry required

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Ans - b
.............................................
t.c
Cost of the goods - Rs. 89000, Opening Stock - Rs. 13500, Purchases - Rs. 75000, Sales - Rs. 112500. Find
the gross profit.
es
a. 10000
b. 23500
c. 24000
kt
d. 37500
Ans - b
oc
.............................................
Where does the Net Profit appear in the balance sheet?

m
A. liabilities side
B. assets side
C. either a or b
iib
D. none
Ans - a
ca
.............................................
For nominal accounts, the fundamental rule of Debit and credit is, debit expenses and losses and
Credit......
iib
A. the giver
B. what goes out
C. incomes and gains
.ja
D. none
Ans - c
w
.............................................
Ledger is the book of ..... entry.

w
a. Original
w
b. Final
c. Daily
d. Monthly
Ans - b
.............................................

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Sales Return Book records
t.c
a. Return of goods to the suppliers
b. Return of goods by the customers
c. Return of anything sold
d. Return of anything purchased
es
Ans - c
.............................................
kt
Goods sold worth Rs.30,000 to Raju against cheque issued by him. The entry for this will be...
oc
a. Debit bank a/c Credit Sales a/c
b. Debit Raju's a/c Credit Sales a/c
c. Debit cheque received a/c Credit Sales a/c
d. Debit bank a/c Credit Raju's a/c
m
Ans - a
.............................................
iib
Patent Right a/c is

ca
a. Nominal a/c
b. Real a/c
c. Personal a/c
d. Intangible a/c
iib
Ans - b
.............................................
.ja
The difference between subscribed capital and called-up capital is called.
a. Paid up capital
w
b. Uncalled capital.
c. Calls in advance
d. Calls in arrear
w
Ans - b
w
.............................................
A company incorporated out side India but has a place of business in india, is termed as ......
a. Statutory Company
b. Foreign Company

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c. Holding Company
d. Subsidiary Company
t.c
Ans - b
.............................................
es
...... destroys computer data.
a. Software virus
kt
b. Hardware virus
c. Computer virus
oc
Ans - c
.............................................
m
...... is the value attached to the super profit earning capacity of business arising from its wide
connections, reputation and long standing in the business.
iib
a. Goodwill
b. Liblities
c. Losses
ca
d. All of the above
Ans - a
.............................................
iib
Rights shares mean the shares which are...
a. Issued to directors of the company

.ja
b. Issued for a consideration other than cash

c. Offered to the exiting shareholders
d. Issued to promoters of the company for their services
w
Ans - c
.............................................
w
Cost of the goods - Rs. 37500, Expenses - Rs. 2300, Sales - Rs. 43500. Find the net profit.
w
a. 3700
b. 4700
c. 6000
d. 8300

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Ans - a
.............................................
t.c
The banker's discount on a certain sum due 2 years hence is 11/10 of the true discount. The rate per
cent is ......
es
a. 5%
b. 5.33%
c. 6%
kt
d. 10%
Ans - a
oc
.............................................
In Dissolution payment is made:

m
a. To the outsiders
b. Capital of partner
c. Partner's loan
iib
d. Any balance
Ans - a
ca
.............................................
Albert invested amount of 8000 in a fixed deposit for 2 years at compound interest rate of 5 % per
annum. How much Albert will get on the maturity of the fixed deposit.
iib
A. Rs. 8510
B. Rs. 8620
C. Rs. 8730
.ja
D. Rs. 8820
Ans - D
w
Explanation:
w
=>(8000(1+5100)2)
=>800021202120
w
=>8820
.............................................
What will be the compound interest on Rs. 25000 after 3 years at the rate of 12 % per annum
A. Rs 10123.20

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B. Rs 10123.30
C. Rs 10123.40
t.c
D. Rs 10123.50
Ans - A
es
Explanation:
(25000(1+12100)3)=>25000282528252825=>35123.20
kt
So Compound interest will be 35123.20 - 25000
oc
= Rs 10123.20
.............................................
If partner has debit balance of capital a/c, then:

m
a. Debit side of capital a/c
b. Credit side of capital a/c
iib
c. Credit side of current a/c

d. Debit side of current a/c
ca
Ans - a
.............................................
Salary payable is a:
iib
a. Liability
b. Expense
c. Asset
.ja
d. Revenue
Ans - a
w
.............................................
The present worth of a sum due sometime hence is Rs.5,760 and the banker's gain is Rs. 10. The true
w
discount is ......
w
a. Rs. 160
b. Rs. 180
c. Rs. 240
d. Rs. 320
Ans c

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The present worth of a certain sum due sometime hence is Rs. 16,000 and the true discount is 1,600.
The banker's gain is ......
t.c
a. Rs. 100
b. Rs. 160
c. Rs. 200
es
d. Rs. 240
Ans - b
kt
.............................................
Sale of Rs. 8000 not recorded into sales book is an ......
oc
m
Ans - b
iib
.............................................
Bills receivable and Bills payable are part of ......

ca
a. Balance Sheet
b. P&L account
c. Journal
iib
d. Ledger
Ans - d
.............................................
.ja
Total of returns inward book was added Rs. 3000 short. Trial balance Debit side presently shows a total
of Rs. 6251280. Actually it should be?
w
a. 6254280
b. 6248280
w
c. 6251280
w
Ans - a
.............................................

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Balance with the bank as per cash book of the customer is Rs. 14700 and the bank has paid Rs. 2000 as
per standing instruction. The said amount should be ......, to reconcile the cashbook with bank passbook.
t.c
a. Added
b. Deducted
c. No entry required
es
Ans - b
kt
.............................................
Revenue is recognised only when .......... is made
oc
a. Profit
b. Sale
c. Loss
m
d. None of these
Ans - b
iib
.............................................
In double entry, the entry is balanced with a corresponding entry, which is called
ca
A. reverse entry
B. adjusting entry
C. contra entry
iib
D. double entry
Ans - c
.............................................
.ja
...... is called the Charter of the company.

w
a. Memorandum of Association
b. Articles of Association
c. Prospectus
w
d. All of the above

w
Ans - a
.............................................
A company comes into existence when it gets the certificate of......
a. Incorporation

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b. Commencing the business

c. Income-tax department
t.c
Ans - a
.............................................
es
Regular ...... of data is required to guard against loss of data.
kt
a. back up
b. Function
c. Up dating
oc
d. Control
Ans - a
.............................................
m
...... means accounting performed by a computer.
iib
a. Accounting
b. Computerised accounting
c. Manual accounting
ca
Ans - b
.............................................
iib
Capital account is a ...........a/c.
a. Real.
.ja
b. Nominal.
c. personal.
d. Both B and D.
w
Ans - c
.............................................
w
A person who owes money to the firm is called

w
A. Creditor
B. Debtor
C. Shareholders
D. Owner

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Ans - b
.............................................
t.c
When a currency is at premium in future or for a future value date, it is
a. Costlier
es
b. Cheaper
c. Equal
d. None of these
kt
Ans - a
.............................................
oc
The price at which two unrelated and non-desperate parties would agree to a transaction is called
a. Transfer Pricing
m
b. Arm's Length Price
c. Deal Price
d. None of these
iib
Ans - b
.............................................
ca
Trial Balance is a ......
a. Nominal Account
iib
b. Personal Account
c. Real Account
d. None of these
.ja
Ans - d
.............................................
w
Bank Reconciliation Statement is ......
a. Part of the cash book

w
b. A statement prepared to know the cause for the difference between balance as per bank column of
cash book and passbook
w
c. A ledger account
d. All the above
Ans - b
.............................................

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Acid test ratio is also called as
t.c
a. Quick Ratio
b. Liquidity Ratio
c. Both a and b
d. Neither a not b
es
Ans. c
.............................................
kt
Construction of building is a ......
oc
m
Ans - a
.............................................
iib
Trial balance validates ......

ca
a. Accuracy of the book keeper

b. Arithmetical accuracy of books
c. Honesty of the book keeper
d. None of these
iib
Ans - b
.............................................
.ja
Retiring a bill under rebate means...
a. Dishonouring the bill

w
b. Making payment of the bill after the due date

c. Making payment of the bill before the due date
d. Making payment of the bill on the due date
w
Ans. c
w
.............................................
Difference between income and expenses, if income is more is called
a. Net Revenue
b. Profit

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c. Surplus
d. All of the above
t.c
Ans - d
.............................................
es
The rate of discount on share cannot exceed...
a. 5%
kt
b. 8%
c. 10%
d. 12%
oc
Ans - c
.............................................
m
...... of a partner means that a partner breaks off his relations with all other partners and withdraws
himself from the firm.
iib
a. Admission
b. Submission
c. Permission
ca
d. Retirement
Ans - d
.............................................
iib
Present Value is defined as
a. Future cash flows discounted to the present at an appropriate discount rate

.ja
b. Inverse of future cash flows

c. Present cash flows compounded into the future
d. Discounting of compounded future cash flows
w
Ans - a
.............................................
w
Annuity is defined as
w
a. Equal cash flows at equal intervals forever

b. Equal cash flows at equal intervals for a specified period
c. Unequal cash flows at equal intervals for specified period
d. Unequal cash flows at equal intervals forever

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Ans - b
.............................................
t.c
A bond holder of a company has one of the following relationship with It. Identify
a. shareholder
es
b. depositor
c. creditor
d. employee
kt
Ans - c
.............................................
oc
If 1 year discount is 0.8333, what is the discount rate?
a. 10%
m
b. 20%
c. 30%
d. 15%
iib
Ans - b
.............................................
ca
The yield to maturity is a rate of return which
a. gives the current yield

iib
b. Is the discount rate at which the present value, of the coupons and the final payment at face value,
equals the current price
c. gives the return at maturity on the bond for the original holder
d. b or c
.ja
Ans - d
.............................................
w
The relationship between the bond prices and interest rates is one of the Following
w
a. direct & linear

b. inverse & linear
w
c. direct and curvilinear

d. no relationship
Ans - b
.............................................

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Which is not a Solvency Ratio?
t.c
a. Debt-Equity Ratio
b. Current Ratio
c. Debtor's Turnover Ratio
d. Liquidity Ratio
es
Ans. c
.............................................
kt
To know the cause for the difference between balance as per bank column of cash book and passbook,
...... is prepared.
oc
a. Balance Sheet
b. Trial Balance
c. Bank Reconciliation Statement
m
d. All the above
Ans - c
iib
.............................................
Over casting of Rs. 3500/- in total of sales book is an...

ca
iib
Ans - a
.............................................
.ja
Ideal ratio for "Acid test ratio" is

w
a. 0.5
b. 1
c. 2
w
d. 0.67
w
Ans - b
.............................................
If an expenditure helps in increasing the earning capacity of a firm, it is a ......

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t.c
Ans - a
.............................................
es
An entry of Rs. 25000 related to Bills payable account has been posted to the credit side of Bills
receivable account. Both Credit and debit sides of the trial balance presently shows a total of Rs.
kt
56785000. Actually it should be ......
a. 56810000
oc
b. 56760000
c. 56785000
m
Ans - b
.............................................
iib
Ideal ratio for "Fixed Asset Ratio" is
a. 0.5
ca
b. 1
c. 2
d. 0.67
iib
Ans - d
.............................................
What does the rate of return equal to if interest rates do not change during the pendency of the bond ?
.ja
a. yield to maturity
b. coupon rate
w
c. compounded rate
d. current yield
w
Ans - a
.............................................
w
Commission received is a
a. Personal Account
b. Real Account
c. Nominal Account

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d. None of these
t.c
Ans - c
.............................................
There are ......... Accounting standards in India
es
a. 27
b. 28
kt
c. 29
d. 30
oc
Ans - c
.............................................
Where a withdrawal of cash from business by the proprietor be credited?

m
a. Proprietor's A/c
b. Cash A/c
iib
c. Capital A/c
d. Drawings
ca
Ans - b
.............................................
"Debit all expenses and losses and credit all incomes and gains", in
iib
a. Personal Account
b. Real Account
c. Nominal Account.
.ja
d. None of these
Ans - c
w
.............................................
A Bond of face value Rs.5000 carries a coupon interest rate of 12%. It is quoted in the market at Rs.4500.
w
What is the current yield of the bond?

w
a. 12%
b. 10%
c. 13.3%
d. 14.2%
Ans - c

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Which of the following investment rules does not use the time value of the money concept?
t.c
a. The payback period
b. Internal rate of return
c. Net present value
d. All of the above use the time value concept
es
Ans - a
.............................................
kt
Discount on issue of shares is a ...
oc
a. Revenue loss
b. Capital loss
c. Deferred revenue expenditure.
d. Revenue and capital loss both
m
Ans - b
.............................................
iib
The main object of permitting the company to issue non-voting equity shares is ...
ca
a. To give higher dividend

b. To give preference on re-payment
c. To raise resources without losing management control
d. All of the above
iib
Ans - c
.............................................
.ja
......is the value of an established business over the above the value represented by its tangible assets.
a. Goodwill
w
b. Liabilities
c. Losses
d. All of the above
w
Ans - a
w
.............................................
Cost of Car is Rs. 300,000, Depreciation rate is 10% on WDV. What is the book value of car after 3 years ?
a. 210,000
b. 220,00

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c. 214,300
d. 218,700
t.c
Ans - d
.............................................
es
Which one is also called as "Liquidity Ratios"?
a. Profitability Ratios
kt
b. Turnover Ratios
c. Short-term Solvency Ratios
d. Long-term Solvency Ratios
oc
Ans - c
.............................................
m
Which one is not the uses of Accounting Ratios?
a. Facilitate Inter-Firm comparison

iib
b. Facilitate Intra-Firm comparison

c. Help in Planning
d. None of these
ca
Ans - d
.............................................
iib
"Return on Investment" is also called as
a. Overall Profitability Ratio

b. Earnings per Share
.ja
c. Gross Profit Ratio

d. Net Profit Ratio
w
Ans - a
.............................................
w
Depreciation is a process of:

w
a. Valuation.
b. Allocation.
c. Both valuation and allocation.
d. Non of these.
Ans b

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In TOM, the exchange of currencies take place on
t.c
a. Same Day
b. Next Day
c. Second Working Day
c. Third Working Day
es
Ans - b
.............................................
kt
A capital equipment costing Rs. 200,000 today has Rs. 50,000 salvage value at the end of 5 years. If the
straight line depreciation method is used, what is the book value of the equipment at the end of 2
oc
years?
a. Rs. 200,000
b. Rs. 170,000
m
c. Rs. 140,000
d. Rs. 50,000
iib
Ans - c
.............................................
ca
Nama, the old method of accounting used in India, is also called as
a. Mahajani
b. Marwari
iib
c. Deshi
d. All of these
Ans - d
.ja
.............................................
Rs. 25,000 paid as salary to Mr. Ravi has been debited to his personal account. The rectification entry
w
will be...
a. debit Cash a/c and credit Salary a/c

w
b. debit Salary a/c and credit Cash a/c

c. debit Ravi's a/c and credit Cash a/c
w
d. debit Salary a/c and credit Ravi's a/c
Ans. d
.............................................

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A sale of Rs. 20,000 was omitted from recording in the Sales Book. The existing total of debit side of the
trial balance is Rs. 15,00,000. Presently, what will be the total of credit side?
t.c
a. Rs 15,20,000
b. Rs.14,80,000
c. Rs.15,40,000
es
d. Rs.14,60,000
Ans - b
kt
.............................................
Goods worth Rs. 5,000 returned by Mr. Thomas were taken into stock, but no entry was passed. This is
oc
an error of ...
a. Compensation
b. Commission
m
c. Omission
d. Principle
iib
Ans - c
.............................................
ca
Expenditure incurred on issue of equity shares is
a. Revenue expenditure
b. Capital expenditure
iib
c. Deferred capital expenditure

d. None
Ans - C
.ja
.............................................
An expenditure is a revenue expenditure because ...

w
a. The amount is very small

b. The amount is paid in installments
w
c. It is intended to the benefit of current period

d. It is intended to the benefit of future period
w
Ans - c
.............................................

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An expenditure charged to P&L a/c over a period of 5 to 6 years is an example of ...
t.c
d. All of the above
es
Ans - c
.............................................
kt
In FIFO method of inventory valuation
oc
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
m
Ans - c
.............................................
iib
Under which system, in every transaction, an account is debited and some other account is credited.
ca
a. Single Entry System

b. Double Entry System
c. Both a & b
d. Neither a nor b
iib
Ans - b
.............................................
.ja
Bills receivable is a
a. Personal Account
w
b. Real Account
c. Nominal Account
d. None of these
w
Ans - b
w
.............................................


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t.c
Ans - a
.............................................
es
The main objective of providing depreciation is
a. To allocate true profit.
kt
b. To show the true financial position in the balance sheet.
c. To reduce tax burden.
d. To provide funds for replacement of fixed assets.
oc
Ans - a
.............................................
m
Assets-Rs.3,20,000, Liabilities-Rs.1,40,000, then Capital...........
a. Rs.4,60,000
iib
b. Rs.1,80,000
c. Rs.1,60,000
d. Rs.4,80,000
ca
Ans - b
.............................................
iib
Purchased a printer having price as Rs.10,000 at a discounted price of Rs.9,000. The entry for this will be
a. Debit Office Equipment a/c Rs.10,000, Credit Cash a/c Rs.9,000, Credit Discount Received Rs.1,000.
b. Debit Purchases a/c Rs.10,000, Credit Cash a/c Rs.9,000, Credit Discount Received Rs.1,000.
.ja
c. Debit Office Equipment a/c Rs.9,000, Credit Cash a/c Rs.9,000.

d. Debit Purchases a/c Rs.9,000, Credit Cash a/c Rs.9,000.
w
Ans - c
.............................................
w
The Pass book of an account holder is the copy of

w
a. the bank columns in the cash book of the account holder

b. the relevant account in the books of a bank
c. the cash column in the cash book of a customer
d. none
Ans. B

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Entries for issuance of cheques are made immediately by the customer to the credit of cash book, but
the bank debits the customer account
t.c
a. immediately
b. on presentation over counter
c. on presentation in clearing
es
d. on presentation at counter or in clearing
Ans. d
kt
.............................................
Professional fees paid in connection with acquisition of leasehold premises
oc
b. Deferred revenue expenditure
c. Revenue expenditure
m
d. Current expenditure
Ans. a
iib
.............................................
Debit balance in the cash books means

ca
a. overdraft
b. favourable balance
c. balancing error
iib
d. none
Ans. b
.............................................
.ja
The benefit of an expenditure incurred is of long duration and its purpose is to increase the earning
capacity of the business, it is
w
w
c. Deferred capital expenditure

d. None
w
Ans. b
.............................................

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Accounts in personal names indicative of trusteeship capacity of a/c holders
t.c
a. Can be opened after obtaining trust deed.
b. Can be opened after permission of zo.
c. Can be opened after permission of ho.
d. Should not be opened.
es
Ans. d
.............................................
kt
Simple interest on a sum at 5% p.a. for two years is Rs.500. Find the total amount for the compound
oc
a. Rs. 5125.50
b. Rs. 5152.50
c. Rs. 5512.50
m
d. Rs. 5521.50
Ans - c
iib
Let me Explain :
ca

So, for 1 year @ 5% = 500/2 = 250
iib
.ja
A = P(1+r/100)^n
= 5000 (1+5/100)^2
= 5000 (1.05)^2
w
= 5000 (1.1025)
= 5512.50
w
So, Total Amount on Rs. 5000 at 5% p.a for 2 years is : Rs. 5512.50
.............................................
w
Which of the following depreciation methods is NOT an accelerated method?
a. Double-declining balance
b. Straight-line
c. Sum-of-the-years' digits

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d. None of these
t.c
Ans - b
.............................................
The exchange of currencies takes place on the date of the deal in
es
a. SPOT
b. TOM
kt
c. Cash
d. Forward
oc
Ans - c
.............................................
If the rates in Mumbai are US $1=Rs.42.850. In London market are US $1=Euros 0.7580 Therefore for
m
one Euro we will get
a. Rs.56.45
iib
b. Rs.56.53
c. Rs.56.38
d. Rs.56.50
ca
Ans - b
.............................................
iib
The value which bond holder gets on maturity is called as...
a. Market Value
b. Face Value
.ja
c. Intrinsic Value
d. Redemption Value
w
Ans - d
.............................................
w
The concept of deriving the rate of currency A in terms of currency C through currency B is called as
w
a. Direct Quote
b. Indirect Quote
c. Chain Rule
d. Arbitrage
Ans c

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Match the following pairs:
t.c
Column 'A' - Column 'B'
(1) Error of omission (a) Not disclosed by trial balance

(2) Suspense ale (b) Disclosed by trial balance
es
(3) Error of principle (c) Rectified by passing journal entries
(4) Two sided errors (d) Debit or credit balance
(5) Posting on wrong side (e) Accounting rules not followed
kt
Answers: (l)-(a), (2)-(d), (3)-(e), (4)-(c), (5)-(b)
.............................................
oc
Sale of Rs.20000 to Suresh is posted to his credit, then rectification is
a. Credit Suresh to the extent of Rs.40,000

m
b. Credit Suresh to the extent of Rs.20,000
c. Debit Suresh to the extent of Rs.40,000
d. Debit Suresh to the extent of Rs.20000
iib
Ans. c
.............................................
ca
Cost of replacement of defective parts of the machinery is
iib
d. None of these
.ja
Ans. b
.............................................
w
Application software is concerned with ...
a. the programming used to control input unit

w
b. the programming used to control output unit

c. the programming to execute specific functions
w
d. the programming used to control the operations of the control unit
Ans - c
.............................................

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Loss of goods due to fire for Rs.50000 is
t.c
d. None of these
es
Ans. b
.............................................
kt
Under casting of the credit side of Cash Book has the same effect as over casting of the
oc
a. Debit side of the pass book.
b. Credit side of the pass book.
c. There is no relevance between the two
m
Ans. a
.............................................
iib
Simple interest on a sum at 10% p.a. for 4 years is Rs.1600. Find the total amount for the compound
ca
a. Rs. 5586
b. Rs. 5856
c. Rs. 6585
iib
d. Rs. 6856
Ans - b
.ja
Let me Explain :

w

So, for 1 year @ 10% = 1600/4 = 400
w

w
A = P(1+r/100)^n
= 4000 (1+10/100)^4
= 4000 (1.1)^4
= 4000 (1.4641)

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= 5856
t.c
.............................................
Simple interest on a sum at 8 % p.a. for 3 years is Rs.960. Find the total amount for the compound
es
a. Rs. 5029
kt
b. Rs. 5039
c. Rs. 5049
d. Rs. 5092
oc
Ans - b
Let me Explain :
m
iib
So, for 1 year @ 8% = 960/3 = 320

ca
A = P(1+r/100)^n
= 4000 (1+8/100)^3
iib
= 4000 (1.08)^3
= 4000 (1.2597)
= 5039
.ja
.............................................
w
How much is the Capital or/and Revenue Expenditure in "Fixtures of the book value of Rs. 20000 were
sold off at Rs. 14000 and new fixtures of
the value of Rs. 10000 were acquired.
w
a. Capital expenditure - Rs.16000

w
b. Revenue expenditure - Rs.16000

c. Capital expenditure - Rs.10000 and Revenue expenditure - Rs.6000
d. Capital expenditure - Rs.6000 and Revenue expenditure - Rs.10000
Ans. c
.............................................

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Subscription outstanding of a club during the previous year was Rs. 50,000 and received During the
current year Rs. 3,50,000. Subscription shown in the credit side of income & Expenditure a/c will be
t.c
a. Rs. 50,000
b. Rs. 3,00,000
c. Rs. 3,50,000
es
d. Rs. 4,00,000
Ans. b
kt
.............................................
oc
m
Ans - c
iib
.............................................
............. is time saving and economical

ca
a. Single Entry System

b. Double Entry System
c. Both a & b
iib
d. Neither a nor b
Ans - a
.............................................
.ja
Both Real Accounts and Nominal Accounts are

w
a. Personal Accounts
b. Impersonal Accounts
w
d. None of these
w
Ans - b
.............................................
Rate of return earned by an investor who purchases a bond and holds it till maturity is called as
a. Intrinsic Value

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b. Coupon Rate
c. YTM
t.c
d. Redemption Value
Ans - c
.............................................
es
In exchange of currencies deal, "cash" is also called as
kt
a. TOM
b. Ready
c. Spot
oc
d. Forward
Ans - b
.............................................
m
Minimum capital requirement is expressed in terms of...
iib
a. Credit Risk
b. Specific Risk
c. General Market Risk
ca
d. Both b & c
Ans - d
.............................................
iib
What is the Present Value of Rs. 115,000 to be received after 1 year at 10%?
a. 121,000
.ja
b. 100,500
c. 110,000
d. 104,545
w
Ans - d
.............................................
w
As per accounting standards which of the following is not a preferred method

w
a. LIFO
b. FIFO
c. WACM
d. All of them

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Ans - a
.............................................
t.c
Match the following pairs:
Column 'A' - Column 'B'
es
(1) Trial balance (a) Difference in trial balance
(2) Net trial balance (b) Always shows debit balance
kt
(3) Gross trial balance (c) Debit or Credit Balances
(4) Suspense a/c (d) Debit and credit totals
(5) Real a/c (e) Statement of balances of ledger accounts
oc
Answers: (l)-(c), (2)-(e), (3)-(d), (4)-(a), (5)-(b)
.............................................
m
Noting charges are
a. Paid to bank for dishonour

iib
b. Paid to drawer for dishonour

c. Paid to notary public for recording dishonour
d. None of the above.
ca
Ans - c
.............................................
iib
Due to heavy flooding a truck carrying consignment goods sinks. This loss is called
a. contingent loss
b. Nominal loss
.ja
c. Abnormal loss
d. Casual loss
w
Ans - c
.............................................
w
Goods lost in transit is

w
a. Nominal loss
b. Abnormal loss
c. Casual loss
d. Conditional loss
Ans a

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Capital Rs. 1,20,000, Liabilities Rs. 75,000, then Assets Rs......
t.c
a. Rs. 45,000
b. Rs. 75,000
c. Rs. 1,20,000
d. Rs. 1,95,000
es
Ans - d
kt
Let me Explain :
A = C+L
oc
= 120000 + 75000
= 195000
.............................................
m
Simple interest on a sum at 6% p.a. for 6 years is Rs.2160. Find the total amount for the compound
iib
a. Rs. 8115
b. Rs. 8511
c. Rs. 8521
ca
d. Rs. 8581
Ans - b
iib
Let me Explain :

.ja

So, for 1 year @ 6% = 2160/6 = 360
w
w
A = P(1+r/100)^n
= 6000 (1+6/100)^6
w
= 6000 (1.06)^6
= 6000 (1.4185)
= 8511
.............................................

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the depreciation for 3rd year using Straight-line Method.
t.c
a. Rs. 90,000
b. Rs. 1,00,000
c. Rs. 2,70,000
es
d. Rs. 3,00,000
Ans - a
kt
Let me Explain :
oc
m
So, Depreciation for 3rd year also will be Rs. 90000/-
.............................................
iib
A clerical error committed while posting, totaling or balancing of an account is

ca
a. Error of commission
b. Error of omission
c. Error of principle
d. Compensating error
iib
Ans.a
.............................................
.ja
Legal expenses incurred in connection with raising debenture loans is
w
d. None
w
Ans. c
w
.............................................
At 10% p.a. 2 year discount factor is
a. 0.826
b. 1.00

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c. 0.909
d. 0.814
t.c
Ans - a
.............................................
es
Transaction are first recorded in the ........... and then they are posted to the .........
a. Ledger, Journal
kt
b. Journal, Ledger
d. None of these
oc
Ans - b
.............................................
m
Italian Method of accounting is also known as
a. Cost Accounting
iib
b. Double entry book-keeping

c. Financial Accounting
d. None of these
ca
Ans - b
.............................................
iib
Common non-traditional methods available for determining arm's length price is/are
a. Profit Spilt Method

b. Transactional Net Margin Method
.ja
c. Both a and b
d. None of these
w
Ans - c
.............................................
w
In cash book, all receipts are recorded on the ......... side and all payments are recorded on the ..........
side
w
a. debit, credit
b. credit, debit
c. debit, debit
d. credit, credit

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Ans - a
.............................................
t.c
What is the N P V of the following at 15%
t=0 t=1 t=2
es
-120,000 -100,000 300,000
a. 19,887
kt
b. 80,000
c. 26,300
d. 40,000
oc
Ans - a
.............................................
m
Which of the following will not affect Trial Balance
a. Goods sold on credit not recorded in books.

iib
b. Overstating of sales register.

c. Rent account credited instead of debit.
d. Salary debited to the extent the amount.
ca
Ans - a
.............................................
iib
A sum of money at simple interest amounts to Rs. 815 in 3 years and to Rs. 854 in 4 years. The sum is:
A. Rs. 650
B. Rs. 690
.ja
C. Rs. 698
D. Rs. 700
w
Ans - C
Explanation:
w
S.I. for 1 year = Rs. (854 - 815) = Rs. 39.

w
S.I. for 3 years = Rs.(39 x 3) = Rs. 117.
Principal = Rs. (815 - 117) = Rs. 698.

.............................................

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Discount received in advance is a:
t.c
a. Real a/c
b. Personal a/c
c. Nominal a/c
d. None
es
Ans - b
.............................................
kt
Dual concept records transaction on bases of:
oc
a. Single entry system
b. Double a/c system
c. Double entry system
d. All of these
m
Ans - c
.............................................
iib
Which of the following is an accounting equation?

ca
a. Assets = Liabilities
b. Assets = Equity - Liability
c. Assets = Capital + Liabilities
d. Liability = Asset + Capital
iib
Ans - c
.............................................
.ja
A woman invests some money partly in 4% stock at 120 an partly in 3% stock at 96. To get equal
dividends from both, she must invest the money in the ratio ...
w
a. 2:3
b. 3:4
c. 4:5
w
d. 15:16
w
Ans - d
.............................................
Return of goods from customer should be credited to
a. Sales Return a/c

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b. Purchases Return a/c

c. Goods a/c
t.c
d. Customer's a/c
Ans - d
.............................................
es
Freight expenses for moving new machinery to factory is
kt
a. Revenue expenses
b. Deferred revenue expenditure
c. Capital expenditure
oc
Ans - c
.............................................
m
For an expense to be classified as revenue or capital depends on
iib
a. Kind of expense
b. Duration of the benefit of the expenditure
c. Effect on revenue earning capacity
ca
d. All of the above
Ans - d
.............................................
iib
Cost of goods sold is
a. Opening stock + purchases + closing stock

.ja
b. Opening stock + purchases closing stock

c. Opening stock purchases + closing stock
d. None of above
w
Ans - b
.............................................
w
In LIFO method of inventory valuation

w
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

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Ans - a
.............................................
t.c
Which of the following is not true
a. Depreciation is an expense charged to the P & L a/c.
es
b. Depreciation is not a part of the operating costs.
c. Assets that are depreciated are tangible assets.
d. Depreciation is like an insurance expense.
kt
Ans - b
.............................................
oc
...... is the interest that is paid each year as a fixed % of the amount deposited or borrowed.
a. Annuities
m
b. Interest
c. Simple Interest
d. Compound Interest
iib
Ans - c
.............................................
ca
If Rs. 50000 is lent at 10% interest, on which one the interest will be lowest?
a. Yearly compounding
iib
b. Half-Yearly compounding
c. Quarterly compounding
d. Monthly compounding
.ja
Ans - a
.............................................
w
Under written down value method of Depn., the W D V of the asset is always
a. equal to zero
w
b. < zero
c. > zero
w
d. None of these
Ans - c
.............................................

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Accounting Standards are mandatory for the enterprises, whose turnover for the accounting period
exceeds
t.c
a. 50 Lakhs
b. 5 Crores
c. 50 Crores
es
d. 500 Crores
Ans - c
kt
.............................................
Accounting cycle includes
oc
a. Recording
b. Classifying
c. Summarising
m
d. All the above
Ans - d
iib
.............................................
GAAP stands for

ca
a. Governmental Accepted Accounting Principles

b. Generally Accepted Accounting Principles
c. Governmental Adopted Accounting Principles
iib
d. Generally Adopted Accounting Principles
Ans - b
.............................................
.ja
Purchase of machinery is ...

w
w

w
Ans - a
..................................................................
Labour welfare expenses is ...

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t.c
Ans - b
..................................................................
es
The amount brought by the proprietor of the business is credited to
kt
a. Proprietor's a/c
b. Cash a/c
c. Capital a/c
oc
d. Drawings a/c
Ans - c
.............................................
m
Invoice journal is used for recording....purchases
iib
a. Cash
b. Credit
c. Discount on
ca
d. All
Ans - b
.............................................
iib
Which of the following is not a deferred revenue expenditure ?
a. Preliminary expenses for setting up a company.

.ja
b. Amount raised through Rights issue.

c. Huge sales promotion expenditure in launch of new product
d. Cost of preparing project report
w
Ans - b
.............................................
w
Accounting assumes that the business will continue to operate for a long time in future. This concept is
w
called as ?
a. Going concern concept

b. Entity going concept
c. Both a & b
d. Neither a nor b

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Ans - c
t.c
.............................................
Sequence of payments made at regular periods over a given time interval is called ......
es
a. Principal
b. Interest
c. Annuity
kt
Ans - c
oc
.............................................
To determine how long an investment will be double, you have to divide number ........ by annual rate of
interest.
m
a. 62
b. 64
iib
c. 72
d. 74
ca
Ans - c
.............................................
Mr. Ravi borrowed a sum of Rs. 30000 from Mr. Raj at the rate of 11% p.a. for 3 years. Total amount of
iib
interest payable is ......
a. Rs. 9000
b. Rs. 9600
.ja
c. Rs. 9900
d. Rs. 10200
w
Ans - c
.............................................
w
At a certain rate of simple interest, a sum doubles itself in 5 years. It will be four times of Itself in
w
a. 10 Years
b. 15 Years
c. 20 Years
d. 25 Years
Ans b

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Due to a fall in the rate of interest from 11% to 10.5%, a money-lender's yearly income from interest
falls by Rs. 240. What is his principal amount?
t.c
a. Rs. 42,800
b. Rs. 41,600
c. Rs. 44,600
es
d. Rs. 48,000
Ans - d
kt
.............................................
The removal of stock from old works to new site is...
oc
m
Ans - b
iib
..................................................................
The overhauling expenses of machines is...

ca
iib
Ans - b
..................................................................
.ja
Legal expenses incurred in connection with raising of debenture loans is ...

w
w

w
Ans - c
..................................................................

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t.c
a. Rs. 475
b. Rs. 512.50
c. Rs. 525
es
d. Rs. 537.50
Ans - b
kt
Let me Explain :
oc

So, for 1 year @ 5% = 500/2 = 250
m
iib
A = P(1+r/100)^n
= 5000 (1+5/100)^2
= 5000 (1.05)^2
ca
= 5000 (1.1025)
= 5512.50
iib
= 5512.50 - 5000
= 512.50
So, compound interest on Rs. 5000 at 5% p.a for 2 years is : Rs. 512.50
.ja
.............................................
...... is the interest that is paid on the principal amount and also on the accumulated part of interest.
w
a. Annuities
b. Interest
w
c. Simple Interest
d. Compound Interest
w
Ans - d
.............................................

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In book keeping, Capital account is a ................account.
t.c
A. nominal
B. real
C. personal
D. intangible
es
Ans - b
.............................................
kt
Joint venture account is
oc
a. Nominal
b. personal
c. Real
d. Intangible account
m
Ans - a
.............................................
iib
The set of rules for recording of events in accounts are called as

ca
a. Accounting Rules
b. Accounting Standards
c. Accounting laws
d. None of these
iib
Ans - b
.............................................
.ja
...... %
w
a. 6
b. 7
c. 8
w
d. 9
w
Ans - b
Explanation:


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Dividend = 8%
t.c
.............................................
A man invested Rs. 90,000 in a stock at 90 to obtain an income of Rs. 4,500. The dividend from the stock
is ...... %
es
a. 3.5
b. 4.5
kt
c. 5.5
d. 6.7
oc
Ans - b
Explanation:
m
By investing Rs. 90,000, income = Rs. 4,500
By investing Rs. 90, income = Rs. 4500/90000 x 90 = Rs. 4.5
iib
Dividend = 4.5 %
.............................................
ca
Simple interest on a sum at 8 % p.a. for 3 years is Rs.960. The compound interest on the same sum, rate
of interest and for the same period is......
a. Rs. 1029
iib
b. Rs. 1039
c. Rs. 1049
d. Rs. 1092
.ja
Ans - b
Let me Explain :
w

w

So, for 1 year @ 8% = 960/3 = 320
w
A = P(1+r/100)^n
= 4000 (1+8/100)^3
= 4000 (1.08)^3

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= 4000 (1.2597)
= 5039
t.c
= 5039 - 4000
= 1039
es
.............................................
kt
Simple interest on a sum at 10% p.a. for 4 years is Rs.1600. The compound interest on the same sum,
oc
a. Rs. 1586
b. Rs. 1658
c. Rs. 1856
m
d. Rs. 1685
Ans - c
iib
Let me Explain :
ca

So, for 1 year @ 10% = 1600/4 = 400
iib
A = P(1+r/100)^n
.ja
= 4000 (1+10/100)^4
= 4000 (1.1)^4
= 4000 (1.4641)
w
= 5856
w
= 5856 - 4000
= 1856
w
.............................................

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t.c
a. Rs. 25,000
b. Rs. 65,000
c. Rs. 55,000
d. Rs. 45,000
es
Ans - c
kt
Let me Explain :
A = C+L
oc
= 40000+15000
= 55000
.............................................
m
a. Rs. 35,000
iib
b. Rs. 60,000
c. Rs. 80,000
d. Rs. 85,000
ca
Ans - d
Let me Explain :
iib
A = C+L
= 60000+25000
= 85000
.ja
.............................................
Capital Rs. 50,000, Assets Rs. 95,000, then Liabilities Rs......

w
a. Rs. 45,000
b. Rs. 50,000
w
c. Rs. 95,000
d. Rs. 1,45,000
w
Ans - a
Let me Explain :
A = C+L

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= 95000 - 50000
= 45000
t.c
.............................................
es
a. 1:2
b. 2:1
kt
c. 3:2
d. 3:7
oc
Ans - d
Let me Explain :
m
then
iib
Ratio = [(PR9/100):(PR21/100)]
ca
= 9PR:21PR
= 9:21
= 3:7
.............................................
iib
Assets Rs. 80,000, Liabilities Rs. 35,000, then Capital Rs......
a. Rs. 35,000
.ja
b. Rs. 45,000
c. Rs. 55,000
d. Rs. 1,15,000
w
Ans - b
w
Let me Explain :
w
A = C+L
= 80000+35000
= 45000
.............................................

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the total depreciation till 6th year using Straight-line Method.
t.c
a. Rs. 70,000
b. Rs. 80,000
c. Rs. 4,20,000
es
d. Rs. 4,80,000
Ans - c
kt
Let me Explain :
oc
m
So, Total Depreciation till 6th year also will be
iib
Rs. 70000 * 6 = Rs. 4,20,000/-

.............................................
ca
a. Rs. 81.60
iib
b. Rs. 816
c. Rs. 1,600
d. Rs. 1,816
.ja
Ans - b
Let me Explain :
w

w

So, for 1 year @ 4% = 800/2 = 400
w
A = P(1+r/100)^n
= 10000 (1+4/100)^2
= 10000 (1.04)^2

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= 10000 (1.0816)
= 10816
t.c
= 10816 - 10000
= 816
es
.............................................
kt
oc
a. 1:2
b. 2:1
c. 2:2
m
d. 2:3
Ans - b
iib
Let me Explain :
ca
then
iib
Ratio = [(PR12/100):(PR6/100)]
= 12PR:6PR
= 12:6
= 2:1
.ja
.............................................
If the benefit of an expenditure is available for only one year, it is a ......

w
w

w
Ans - b
.............................................

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Sales - Rs. 150000, Operating expenses - Rs. 30000, Net Loss - Rs. 10000.
Find gross profit.
t.c
a. 10000
b. 20000
c. 40000
es
d. 110000
Ans - b
kt
.............................................
Consignee's Account is a...
oc
a. Real Account
b. Personal Account
c. Representative Personal Account
m
d. Nominal Account
Ans. b
iib
.............................................
Assets kept for short term for converting into cash or for resale are called as...
ca
a. Operating Assets
b. Fixed Assets
c. Current Assets
iib
d. Liquid assets
Ans. c
.............................................
.ja
X co .was maintaining account with KRB Bank Ltd. On 31st December,2006, Bank column of cash book of
company showed a debit balance of Rs. 26000. Cheques deposited into the bank but not credited before
w
31st December,2006 amounted to Rs.4000 Bank charges of Rs. 500 were debited by the bank but no
entry was made by the accountant of the company. From the above particulars, find out the balance as
per KRB Banks books.
w
Rs.30500
w
Rs.25500
Rs.21500
Rs.22500
Ans - c
.............................................

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t.c
a. 1:2
b. 2:1
c. 2:2
es
d. 2:3
Ans - d
kt
Let me Explain :
oc
Then, Ratio = [(PR6/100):(PR9/100)]

= 6PR:9PR
m
= 6:9
= 2:3
.............................................
iib
A sales of Rs. 3,000 to Mr. X has been omitted from recording in the Sales Book. The existing total of
debit side of the trial balance is Rs. 2,00,000. What will be the total of credit side, presently?
ca
a. Rs 2,03,000
b. Rs. 1,97,000
c. Rs. 2,06,000
iib
d. Rs. 1,94,000
Ans - b
.............................................
.ja
w
a. Rs. 2,500 ; 5%
b. Rs. 2,500 ; 6%
w
c. Rs. 3,000 ; 5%
d. Rs. 3,000 ; 6%
w
Ans - b
The Correct Answer is : Rs. 2,500 ; 6%
Int for 3 years = 3250 - 2800 = 450.

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So, int for 1 year = 450/3 = 150.

Amount including interest for 2 years = 2800.
t.c
So, the Principle amount = 2800-150-150 = 2500.
Int Rate = 150/2500*100
es
= 6%
.............................................
kt
Which bond would most likely possess the least degree of interest rate risk?
a. 8% coupon rate, 10 years to maturity
oc
b. 10% coupon rate, 10 years to maturity
c. 8% coupon rate, 20 years to maturity.
d. 12% coupon rate, 20 years to maturity.
m
Ans - b
.............................................
iib
the depreciation for 4th year using sum of the digits Method.
ca
a. Rs. 1,20,000/-
b. Rs. 60,000/-
c. Rs. 30,000/-
d. Rs. 15,000/-
iib
Ans - c
Let me explain :
.ja
E(sigma)n = 1+2+3+4 = 10
w
1st year = 4/10(300000) = 120000

2nd year = 3/10(300000) = 90000
w
3rd year = 2/10(300000) = 60000

4th year = 1/10(300000) = 30000
w
.............................................
A money lender lent some amount in simple interest of @ 8% p.a. After 18 months, he got Rs. 14000 in
full payment of interest and principal amount. Find out the sum lent by the money lender.
a. Rs. 11500

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b. Rs. 12000
c. Rs. 12500
t.c
d. Rs. 13000
Ans - c
.............................................
es
While recording transactions, all possible losses must be taken into consideration but all anticipated
profit should be ignored. This is called as
kt
a. Convention of Conservatism
b. Principle of Prudence
oc
c. Both a & b
d. Neither a nor b
Ans - c
m
.............................................
Mr. Akil borrowed a sum of Rs. 50000 from Mr. Anand at the rate of 12% p.a. for 4 years. Total amount
iib
repayable is ......
a. Rs. 72000
ca
b. Rs. 74000
c. Rs. 76000
d. Rs. 78000
iib
Ans - b
.............................................
In how many years will a sum of money double itself at 8% per annum compound Interest?
.ja
a. 8 Years
b. 8 Years 6 months.
w
c. 9 Years
d. 9 Years 6 months
w
Ans - c
.............................................
w


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Accounting & Finance for Bankers

Let us first find the principal Amount

By investing Rs. 1552, income = Rs. 128

When a currency is at discount in future or for a future value date, it is

Let the principal be P and rate be R

By investing Rs. 5000, income = Rs. 500

recorded in cash book ...

Expected Life = 5 Years

Total Depreciation = Cost of the Asset - Residual Value

So, Total Depreciation till 3rd year will be

Rs. 90000 * 3 = 2,70,000/-

...... means accounting performed by a computer.

connections, reputation and long standing in the business.

The set of instructions written by a programmer for a computer is called ......

...... destroys computer data.

A limited company is a/an ...... person.

A company has a perpetual ......

The ...... is affixed on all important documents and contracts of a company.

Share of a limited company can be classified into ......

...... capital is the amount with which Company is formed.

Paid-up Capital means amount of capital actually paid by ......

Final accounts of a limited company consist of ......

b. Profit and Loss account

...... of the companies Act prescribes the form of balance sheet.

Composite vouchers normally contain ......

a. Only Debit entries

c. Both Debit and Credit entries

FIU-Ind comes under the department of ......

Capital = Rs. 65,000, Assets = Rs.80,000, then Liabilities = Rs......

4th year = 2/15(1500000) = 200000

Which of the following is not an example for debit voucher?

Which activities should not be outsourced?

a. Management of investment portfolio

d. All the above

Which of the following is not an example for credit voucher?

Who is responsible for any shortage either in hand or Vault Balance?

EOD operations at CDC normally starts around ......

d. All of the above

Role of the concurrent auditors / Internal auditors with KYC is to ......

a. Review of compliance of KYC guidelines

the same rate for 2 years.

a. A gains Rs. 734

d. B gains Rs. 1,100.

Strict adherence to KYC norms is achieved through ......

a. Following the statutory authority guidelines

d. All of the above

a. Memorandum and Articles of Association of the Company

The branches of commercial banks should report suspicious transactions to ......

b. Banks respective authority

d. None of the above

sum and the rate of interest.

Let sum = x then Simple Interest = x

Rate = (100 * x) / (x * 8) = 12.5

So, S.I = 15500 - 12500 = 3000.

Let the present worth be Rs.x

a. Rs. 3,075; Rs. 3,000; Rs.1,23,000

c. Rs. 3,000; Rs. 3,075; Rs. 1,23,000

a. Declaration of all guardians on behalf of minors

d. Declaration can be exempted as per Hindu Succession Act

a. Rs.20,000/- & above

c. Rs.75,000/- & above

[Please note that we have divided by 12 as we converted 9 months in a year format]

A:B: C = 160003 + 110009:120003 + 170009:21000*6