AFM 400-Questions Final PDF

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Q1. According to the 'American Institute of Certified Q5. Which among the following statements is incorrect
Public Accountants', which among the following is not about Management Accounting?
a fundamental part of the accounting process? a) It is forward looking and generally follows more
a) Recording
stringent accounting standards.
b) Analysing
c) Summarising b) It generally includes cost accounting and budgeting.
d) Classifying c) It assists management in the formulation of policies
and in decision making.
d) All the statements given above are true.
Q2. Which among the following is not a primary
objective of accounting?
a) To record, classify and summarise the data related
Q6. Who made the first attempt to include figures on
to economic transactions.
human capital in the company balance sheets?
b) To provide financial information to help decision
a) Hermansson
making about deployment of resources.
b) Morisson
c) To decide on the personal choices made by the
c) Johansson
promoters in a company.
d) Alfredson
d) To communicate the information about economic
activities of a firm to all concerned stakeholders.
Q7. Presently, 'Fair Value Accounting' does not enjoy
wide degree of acceptance due to
Q3. During fifteenth century, wealthy people employed a) increased cost and delays.
trained officers to keep records of their transactions, b) non availability of reliable information.
property, debts they owed, and the debts others owed c) fast changes in the market prices.
them. This system developed in Italy and was later d) All of the above
adopted by the other European nations. It also came to
be known as 'Double Entry Bookkeeping'.
What is the type of accounting system described Q8. Which among the following statements is incorrect
above? about the definition of accounting given by AICPA?
a) Stewardship Accounting 1. Accounting is a service activity which provides
b) Financial Accounting quantitative financial information.
c) Cost Accounting 2. Accounting is an analytical discipline which
d) Management Accounting defines, classifies and summarises data relating
to economic transactions.
3. Accounting is an information system which
Q4. What is the most important social purpose of collects and communicates economics
financial accounting? information to concerned people.
a) To manage the debt owed by the company to a) 1 and 3 only
maintain fiscal prudence. b) 1 and 2 only
b) To relay reliable information to investors to enable c) 2 and 3 only
them to take efficient investment decisions. d) None of the above
c) To limit the liability of the members to the nominal
values of their shares.
d) To give a legal form to the doctrine of stewardship. Q9. Which section of the Companies Act 2013 casts a
responsibility on the Board of Directors to comply with
mandatory accounting standards?
a) Section 134 (5)
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b) Section 120 (1) c) 1-b; 2-a; 3-d; 4-c
c) Section 137 (4) d) 1-b; 2-d; 3-c; 4-a
d) Section 141 (1)
Q14. Match the following:

Q10. The 'Accounting Standards Board (ASB)' was 1. AS 16 a. Related party disclosure
constituted by 'Institute of Chartered Accountants of 2. AS 17 b. Segment Reporting
India (ICAI)' in 3. AS 18 c. Borrowing Cost
a) 1967 a) 1-a; 2-c; 3-b
b) 1977 b) 1-c; 2-b; 3-a
c) 1987 c) 1-a; 2-b; 3-c
d) 1997 d) 1-b; 2-a; 3-c
Q11. Which among the following Accounting Standards Q15. Which Accounting Standard deals with effects of
is incorrectly matched? changes in Foreign Exchange Rates?
a) AS 3 – Cash Flow Statements a) AS 3
b) AS 4 – Contingencies b) AS 10
c) AS 5 – Revenue Recognition c) AS 7
d) AS 7 – Construction Contracts d) AS 11
Q12. Which of the following statements is/are

incorrect? Q16. Match the following:
1. Additional guidance given in Ind AS over and 1. Ind AS 101 a. Business Combinations
above what is given in IFRS, is termed as ‘Carve 2. Ind AS 103 b. First Time Adoption
in’. 3. Ind AS 105 c. Non-Current Assets Held for Sale
2. Differences that are in deviation to the a) 1-a; 2-b; 3-c
accounting principles and practices stated in b) 1-b; 2-a; 3-c
IFRS, are commonly known as ‘Carve-outs’. c) 1-c; 2-b; 3-a
3. The Government of India in consultation with the d) 1-c; 2-a; 3-b
ICAI decided to converge and not to adopt IFRS
issued by the IASB. Q17. Which among the following Ind AS deals with
a) 1 and 2 Statement of Cash Flows?
b) 2 and 3 a) Ind AS 107
c) 1 and 3 b) Ind AS 108
d) None of the above c) Ind AS 7
d) Ind AS 8

1. AS 9 a. Revenue Recognition Q18. Match the following:
2. AS 10 b. Property Plant and Equipment 1. Ind AS 21 a. Property, Plant & Equipment
3. AS 12 c. Accounting for government grants 2. Ind AS 33 b. Change in Foreign Exchange
4. AS 13 d. Accounting for Investments Rates
a) 1-a; 2-b; 3-c; 4-d 3. Ind AS 12 c. Income Taxes
b) 1-b; 2-a; 3-c; 4-d 4. Ind AS 16 d. Earnings per share

a) 1-a; 2-b; 3-c; 4-d b) Tangible Real Accounts
b) 1-b; 2-a; 3-c; 4-d c) Intangible Real Accounts
c) 1-b; 2-a; 3-d; 4-c d) Artificial Personal Accounts
d) 1-b; 2-d; 3-c; 4-a
Q22. Which among the following is not an essential

Q19. Which of the following given statements is/are item that must be recorded in an accounting voucher?
correct? a) Date of transaction.
1. Quantitative Characteristics are the attributes b) Name of the accounts to be credited and debited.
of accounting information that tend to enhance c) The page number of the journal where the voucher
its understandability and usefulness. is recorded.
2. Relevance means information should be free d) Name of person who prepared the voucher.
from error and bias.
3. Relevance, Understandability, Reliability, and
Comparability are the Qualitative Q23. Arrange the following processes in the correct
Characteristics of accounting information. order from first to last according to the accounting
Choose the correct answer using the codes given below: cycle:
a) 1 and 2 1. Entries are posted to appropriate ledger account.
b) 2 only 2. All transactions are entered into journal or
c) 1 and 3 subsidiary books.
d) 3 only 3. Preparation of trial balance and income
statement.
a) 1 - 2 - 3
Q20. Which of the following given statements is/are b) 2 - 1 - 3
incorrect? c) 1 - 3 – 2
1. Balance Sheet is a financial statement that d) 2 - 3 - 1
provides aggregate data regarding all cash
inflows and outflows of a company.
2. A trial balance is a financial statement that Q24. The owner withdraws Cash and Goods from the
reports a company's assets, liabilities, and office for personal use.
shareholder equity at a specific point in time. Journalise the above transaction.
3. The Cash Flow Statement only shows the a) The Cash and Sales account will be debited and the
company's outflows. Drawings account will be credited.
4. Income Statement that shows the company's b) The Cash and Purchases account will be debited and
income and expenditures. the Drawings account will be credited.
Choose the correct answer using the codes given below: c) The Drawings account will be debited and the Cash
a) 1,2 and 4 and Purchases account will be credited.
b) 2 and 3 d) The Drawings account will be debited and the Cash
c) 1 and 3 and Purchases account will be credited.
d) 1, 2 and 3
Q25. Which of the following given statements is/are

Q21. Which among the following is not a type of incorrect?
account that is commonly used in accountancy? 1. As per the modern approach of rules of
a) Tangible Personal Accounts journalizing accounts are divided into 3 categories.

2. In the journal, in each transaction, a brief Choose the correct answer using the codes given below:
description of the transaction is given which is a) 1 and 2
known as narration. b) 2 and 3
3. Wages paid for the erection of machinery are c) 1 and 3
debited to the profit and loss account. d) 2 only
a) 1 and 2
b) 2 and 3
c) 1 and 3 Q29. A trader has made a sale of Rs 50,000 out of which
d) Only 1 cash sales amounted to Rs 15,000. He showed trade
receivables on 31st March at Rs 35,000. Which concept
is followed by him?
Q26. Which of the following given statements is/are a) Revenue Recognition Concept
correct? b) Accrual Basis
1. An Account is in the form of L shape. c) Money Measurement Concept
2. Trial Balance is prepared from Ledger. d) Matching Concept
3. When an entry is made in journal accounts to be
debited are listed first.
4. Balancing of Accounts means the difference in the Q30. When a person invests money in his business as
total of debit and credit. capital, it is recorded in the accounting records as
a) 1, 2 and 3 ________ of the business to the owner.
b) 2, 3 and 4 a) Asset
c) 1, 3 and 4 b) Liability
d) Only 1 c) Income
d) Loss
Q27. Which among the following statements is Q31. A company purchases a new computer for Rs
incorrect? 10,000 in 2019. The computer is expected to last 10
a) The process of recording a transaction in a journal is years, meaning it will produce projects for the
known as Journalising. projected decade. The company should charge the
b) The transfer of Journal Entry to a Ledger account is computer's price tag to the depreciation expense of Rs
called Posting. 1,000 per year, adding up to 10 years.
c) Journal reduces the possibility of an error. Which accounting concept is highlighted above?
d) In Journal, all entries are recorded in random order. a) Business Entity Concept
b) Materiality Concept
c) Going Concern Concept
Q28. Which of the following given statement is/are d) Matching Concept
incorrect?
1. The Objectivity concept requires that the same
accounting method should be used from one Q32. Which of the following statement is incorrect?
accounting period to the next. a) It is assumed that a business follows Going Concern
2. The Full Disclosure Principle states that Concept.
financial statements should disclose all b) Personal Transactions and Business transactions are
significant information. distinguished according to Business Entity Concept.
3. The Prudence concept is also known as
Consistency Concept.

c) Materiality Concept states that expenses incurred in b) 1-b; 2-a; 3-c
an accounting period should be matched with c) 1-c; 2-b; 3-a
revenues during that period. d) 1-c; 2-a; 3-b
d) The Cost concept requires that all assets are
recorded in the book of accounts at their purchase Q37. Which of the following given statements is/are
price. incorrect?
1. Salary is a liability.
2. Bank Overdraft is a liability.
Q33. With reference to the 'Cost Concept', which of the 3. Furniture is an asset.
following statements is incorrect? 4. Cash and Cash equivalents are assets.
a) Fixed assets are kept at the historical cost of a) 1 only
purchase. b) 1, 2 and 3
b) Every transaction is recorded with present value. c) 2, 3 and 4
c) Unrealised gains are recorded with the value of d) 1 and 4
estimated realisation.
d) An item which has no cost, is not recorded in books.
Q38. Things that cannot be touched but can be
measured in monetary terms, like goodwill, patent
Q34. Which of the following statement is incorrect? rights, trademarks etc., are recorded in which type of
a) As per the money measurement concept, non- account?
monetary transactions are recorded in the books of a) Real Account
accounts. b) Personal Account
b) Going Concern assumes that business would not be c) Nominal Account
liquidated in the foreseeable future. d) None of the above
c) The Business Entity Principle is also known as the
Separate Entity Principle.
d) The Cash Basis of accounting violates GAAP. Q39. The Journal Entry to record the purchase of
equipment (asset) for Rs 2,00,000 cash and a balance of
Rs 8,00,000 due in 30 days include
Q35. Which of the given above following statement is a) Equipment A/c Dr. 2,00,000
correct in respect of Double entry accounting? To Cash A/c 2,00,000
a) All transactions that create debits to asset accounts b) Equipment A/c Dr. 10,00,000
must create credits to liability or capital accounts. To Cash A/c 2,00,000
b) A transaction that requires a debit to a liability To Creditors A/c 8,00,000
account require a credit to an asset account. c) Equipment A/c Dr. 10,00,000
c) Every transaction must be recorded with equal To Cash A/c 2,00,000
debits equal total credits. To Debtors A/c 8,00,000
d) All of the statements are correct. d) Equipment A/c Dr. 10,00,000
To Cash A/c 10,00,000

1. Rent Paid Account a. Real Account Q40. The business started with Cash of Rs 10,000,
2. Rent Receivable Account b. Personal Account Furniture worth Rs 4,000 and Goods worth Rs 6,000.
3. Cash Account c. Nominal Account Journalise the above transaction.
a) 1-a; 2-b; 3-c

a) The cash account, furniture account, and purchases What is the status of his capital as on 31st March 2017?
account will be debited and the Funds account will a) 25000
be credited. b) 20000
b) The cash account, and furniture account, will be c) 27500
debited and the Purchases account will be credited. d) 30000
c) The cash account will be debited and the furniture
account and purchases account will be credited.
d) None of the above is the correct journalisation. Q45. On 31st March 2017, the total assets and external
liabilities were Rs 2,00,000 and Rs 6,000 respectively.
During the year, the proprietor introduced additional
Q41. ‘Rent Receivable Account’ is a type of capital of Rs 20,000 and he withdrew Rs 12,000 for
a) Intangible Real Account personal use. He made a profit of Rs 20,000 during the
b) Representative Personal Account year. Calculate the capital as on 1st April 2016.
c) Nominal Account a) 1,66,000
d) None of the above b) 1,76,000
c) 1,56,000
d) 2,16,000
Q42. Profit and loss account contains various items
related to Expenses and Income. The nature of which is
a) Nominal Account Q46. Which of the following given statements is/are
b) Real Account correct?
c) Personal Account A bill of exchange is drawn by the drawer upon his
d) None of these debtor.
Transfer of a negotiable instrument to another person
by signing on it is known as Endorsement.
Q43. Which of the following given statements is/are Bill of exchange cannot be enchased from the bank.
incorrect? a) 1 and 2
1. Accounts related to an individual, firm, company, or b) 2 and 3
institution are called real accounts. c) 1 and 3
2. Accounts that relate to both tangible and intangible d) Only 2
assets to the firm are called personal accounts.
3. Accounts that relate to expenses, losses, revenue,
and gain are called nominal accounts. Q47. Which of the following given statements is/are
a) 1 and 2 incorrect?
b) 2 and 3 1. 5 days of grace are added in terms of the bill to
c) 1 and 3 calculate the date of its maturity.
d) Only 1 2. A person who endorses the promissory note in
favour of another is known as an Endorser.
3. A bill that is accepted by a party and for which
Q44. Kashyap started a business on 1st April 2015 with he has to pay the money is called a Bills
a capital of Rs 10,000 and a loan of Rs 5,000 borrowed Receivable.
from Ramesh. a) 1 and 2
During 2016 - 17, he introduced additional capital of Rs b) 2 and 3
7,500 and had withdrawn Rs 2,500 for personal use. c) 1 and 3
On 31st March 2017, his assets were Rs 30,000. d) Only 2

a) Suspense A/c Dr 1600
To Megha 1600
Q48. Which of the following given statements is/are b) Megha Dr 1600
incorrect? To Suspense A/c 1600
1. A trial balance is normally prepared at end of the c) Suspense A/c Dr 600
year. To Megha 600
2. In Trial Balance, the debit balance must be equal to d) Suspense A/c Dr 1000
the credit balance. To Megha 1000
3. Trial Balance helps in identifying all the errors.
a) 3 only
b) 1 and 2 Q52. What will be debited in the rectification entry if
c) 1 and 3 the Rent paid Rs. 2,000 was wrongly shown as payment
d) 1 only to the landlord in the cashbook?
a) Rent A/c
b) Expenses A/c
Q49. Which among the following statements is c) Payment A/c
incorrect? d) Landlord A/c
a) Trial Balance can be prepared in two ways.
b) Under totals method, the total of each side in the
ledger (debit and credit) is ascertained separately Q53. Sale of old machinery recorded as sales. This is an
and shown in the trial balance in the respective example of
columns. a) Error of Principle
c) Under the balances method, a trial balance is b) Error of Commission
prepared by showing the balances of all ledger c) Error of Omission
accounts and totaling up debit and credit columns. d) Compensating Error
d) Totals-cum Balances method is a combination of the
totals method and the balances method.
Q54. Which among the following statements is
incorrect?
Q50. Which among the following statements is correct? a) Compensating Error is not disclosed by a trial
a) Errors of Commission are the errors that are balance.
committed due to the wrong posting of b) Rectifying entries are passed in Journal proper.
transactions. c) A suspense account is used to balance the trial
b) Errors of Commission are the errors that are balance.
committed due to the wrong totaling or wrong d) The wrong casting of subsidiary books does not
balancing of the accounts. affect the trial balance.
c) Errors of Commission are the errors that are
committed due to the wrong casting of the
subsidiary books. Q55. Which of the following items is/are correct in
d) All of the above regard to property, plant, and equipment?
a) Computer software bought for use during a single
accounting period
Q51. What will be a rectified journal entry if sales b) A machine bought for use in more than one
returns from Megha Rs 1,600 were posted to her accounting period
account as Rs 1,000?

c) A machine bought for use during a single accounting b) Capital Expenditure is shown in the balance sheet.
period c) Revenue Expenditure gives benefit of enduring
d) A machine bought for resale to a customer nature.
d) Capital expenditure increases the earning capacity
of a business.
Q56. Entity A purchased an asset on 1st April 2015 for
1,00,000 and the asset had an estimated useful life of
10 years and a residual value of nil. On 1st January Q60. Which among the following statements is correct?
2019, the directors review the estimated life and decide a) The benefit of Revenue Expenditure extends to
that the asset will probably be useful for a further 4 periods beyond the accounting period.
years. b) Payment of Rent, Salaries, are examples of Revenue
Calculate the amount of depreciation for each year Expenditure.
starting from the 5th year, if the company charges c) Revenue Expenditure is shown in Balance Sheet.
depreciation on Straight Line basis. d) Revenue Expenditure is shown in the credit side of
a) Rs 10,000 the profit and loss account.
b) Rs 15,000
c) Rs 60,000
d) Rs 40,000 Q61. Which of the following is incorrect about financial
statements?
1. Profit and loss account shows the profit or loss of a
Q57. Which of the following statements is incorrect? business as on a given date.
1. Conversion of loan into equity results in change in 2. Balance sheet shows the position of assets and
liabilities but total liabilities remain the same. liabilities of a business as on a particular date.
2. Purchase of fixed assets on credit results in change 3. Trading account shows a net profit or a net loss.
in total liabilities only. a) 1 and 2
3. Repayment of loan results in change in both assets b) 2 and 3
and liabilities. c) 1 and 3
a) 1 only d) Only 2
b) 2 only
c) 3 only
d) None of the above Q62. Which of the following is not a contingent liability?
1. Uncalled liability on investments in partly paid
shares.
Q58. Which of the following statements is incorrect? 2. Cost of issue of debenture
a) In case of a business entity, an asset is created by 3. Preliminary expenses incurred
taking a lability of an equal amount. 4. Statutory liability under dispute
b) The liabilities consist of claims of owners and claims a) 1 and 2
of outsiders. b) 2 and 3
c) If assets increase and liabilities do not, Capital will c) 1 and 3
decrease. d) Only 1
d) None of the above.
Q63. Rectify the following errors by making suitable

Q59. Which of the following statements is incorrect? rectification entry:
a) Legal expenses are capital expenditures. Rent paid ₹200 is posted in the ledger account as ₹2000.

a) Rent A/c Dr. 200 3. Debit balance in Suspense account is shown in
To Cash A/c 200 balance sheet on Asset side.
b) Cash A/c Dr. 1800 a) 1 and 2
To Rent A/c 1800 b) 2 and 3
c) Rent A/c Dr. 1800 c) 1 and 3
To Cash A/c 1800 d) Only 2
d) Cash A/c Dr. 200
To Rent A/c 200
Q67. Which of the following given statements is/are
incorrect?
Q64. Which of the following given statement is/are 1. Personal account balances at closing are
correct? transferred to next account period.
1. Net Profit = Gross Profit + Other Income - Indirect 2. Nominal accounts balances at closing are
Expenses. transferred to the asset side of the balance
2. Earning Before Interest and Tax is also known as sheet.
Operating Profit a) 1 only
3. Operating Profit = Net Sales- Operating Cost b) 2 only
a) 1 and 2 c) Both 1 and 2
b) 2 and 3 d) Neither 1 nor 2
c) 1 and 3
d) All of the above
Q68. What is the objective to form a ‘Profit & Loss
Adjustment Account’?
Q65. Rectify the following errors by making suitable a) To rectify errors in nominal accounts of the
rectification entry: preceding accounting period.
Goods purchased from Sohanlal wrongly recorded in b) To rectify the compensating errors in the trial
sales register with amount ₹500. balance of current accounting period.
a) Sales A/c Dr. 500 c) To rectify errors in the profit & loss account in the
Purchase A/c Dr. 500 current accounting period.
To Sohanlal A/c 1000 d) To assimilate entries in Suspense account in the
b) Sales A/c Dr. 500 Journal proper.
To Sohanlal A/c 500
c) Purchase A/c Dr. 500
To Sales A/c 500 Q69. Which among the following reasons for
d) Sohanlal A/c Dr. 1000 differences in Cashbook and passbook do not require a
To Purchases A/c 500 change in the cashbook?
To Sales A/c 500 a) Interests earned in savings account.
b) Amount paid by banks on standing instructions.
c) Cheques issued but not presented for payment.
Q66. Which of the following given statements is/are d) Dishonour of cheques.
correct?
1. Suspense account is used to rectify one sided
errors in ledgers. Q70. Reconciliation of overcasting on receipts side of
2. If the trial balance debit total is more, it is shifted cash book ____________.
to the debit side of suspense account. a) increases the balance in cash book
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b) increases the balance in passbook What is the overdraft value as per the bank passbook?
c) decreases the balance in cash book a) Rs. 8,220
d) decreases the balance in passbook b) Rs. 7,390
c) Rs. 7,320
d) Rs. 13,320
Q71. A machine costing Rs 10,00,000 is purchased; Rs
2,00,000 is paid in cash and for the rest Rs 8,00,000, a
credit arrangement is made which would be paid after Q74. Aman Brothers has an overdraft of Rs. 40,000 as
6 months. How this transaction would impact the per the Cash Book on 31 March. On 22 March, a cheque
balance sheet? for Rs. 5,000 was issued to a supplier, but not presented
a) Total assets would increase by Rs 10,00,000 and for payment till 31 March. Dividend of Rs. 2,500 was
total Liabilities by 10,00,000 directly credited to the bank on 27 March but was
b) Total assets would increase by Rs 8,00,000 and total informed to Aman Brothers on 2 April. A cheque for Rs.
Liabilities by 8,00,000 3,600 was deposited in the bank on 29 March, but
c) Total assets would increase by 2,00,000 payment was realised on 4 April. The overdraft as per
d) Total Liabilities would increase by 10,00,000 passbook is:
a) 36,100
b) 46,100
Q72. When assets are listed in order of liquidity in a c) 38,900
balance sheet, in which order the following shall d) 43,900
appear?
1. Goodwill
2. Cash in Hand Q75. Repairs of second hand machinery purchased is
3. Machinery debited to repairs account. It is an error of
4. Bills Receivables a) Compensating
a) Cash in Hand, Bills Receivables, Machinery, b) Omission
Goodwill. c) Commission
b) Cash in Hand, Bills Receivables, Goodwill, d) Principle
Machinery.
c) Goodwill, Machinery, Bills Receivables, Cash in
Hand. Q76. Which of the following is an error of commission ?
d) Machinery, Goodwill, Bills Receivables, Cash in a) Sales book was overcast by Rs. 600 and purchase
Hand. book was undercast by the same amount
b) Treating charges as addition to asset
c) A sale of Rs. 6,000 omitted to be recorded
Q73. The following is the information available of X d) A purchase of Rs. 7,400 was wrongly posted
Limited as on 31st March 2018.
1. Overdraft as per the cash book Rs. 7,300
2. Cheques paid into the bank account but not credited Q77. Which of the following is the correct treatment for
Rs. 3,400 the adjustment of unpaid salaries as on 31 March 2021?
3. Cheques issued but not presented for payment Rs. a) Debit Outstanding salaries A/c, credit Salaries A/c
450 and show as Current assets in the balance sheet.
4, Bank charges debited in the passbook Rs. 70 b) Debit Salaries A/c, credit Outstanding salaries A/c
5. Cheques directly deposited by the customer into the and show as Current liabilities in the balance sheet.
bank account Rs. 3,000.

c) Debit Outstanding salaries A/c, credit Salaries A/c 2. Update and renovation
and show as Current liabilities in the balance sheet. 3. Accidents
d) Debit Salaries A/c, credit Outstanding salaries A/c 4. Inflation
and show as Current assets in the balance sheet. a) Only 4
b) Only 1
c) Only 3
Q78. It is given in adjustment that during the d) Only 2
accounting year, the trader distributed goods worth
₹5,000 as free samples. While preparing Final Accounts,
this will be shown in Q83. Which of the following is a need for accounting for
a) Profit and Loss Account depreciation of assets?
b) Both in Trading and Profit and Loss Account a) To correctly ascertain the profits or losses of the
c) Trading Account firm.
d) Balance Sheet b) To correctly determine the value of assets to depict
them in the balance sheet.
c) To make provision for replacement of assets.
Q79. Freight expenses for carrying Machinery is carried d) All of the above.
to Travel A/c, then rectification in trial balance is
_________.
a) Debit Machinery a/c and credit travel a/c Q84. Which of the following is a factor of depreciation?
b) Credit Machinery a/c and debit travel a/c 1. Cost of the assets
c) Credit Profit & Loss a/c and debit travel a/c 2. Residual cost of assets
d) Debit Profit and Loss a/c and credit travel a/c 3. Estimated years of useful life
a) 1 and 2
b) 2 and 3
Q80. Which of the following will not affect Trial c) 1 and 3
Balance? d) All of the above
a) Goods sold on credit not recorded in the books.
b) Overstating of sales register
c) Rent account credited instead on debit Q85. In which one of the following methods of
d) Salary debited to the extent of half the amount paid. calculating depreciation, the amount of depreciation
depends on the volume of production?
a) Sum of digits of years
Q81. Which of the following is an incorrect statement b) Units of production
about Depreciation? c) Written down value
a) Depreciation is a part of operating cost. d) Straight line
b) It is a reduction in the value of asset.
c) Depreciation occurs due to change in market values
due to inflation. Q86. A fixed percentage is charged as depreciation on
d) All assets depreciate in value with time. the diminishing value of the asset each year during the
useful life of the asset under _________.
a) Straight line method
Q82. Which of the following is not a cause for b) Annuity method
depreciation? c) Written down method
1. Wear & tear d) Sinking fund method

Q87. Which one of the following is not true? d) Debit the cost to the property, plant, and
a) Depreciation is an expense charged to the Profit & equipment account.
Loss account.
b) Depreciation is not a part of the operating costs.
c) All assets are not depreciated necessarily at the Q92. An asset has a useful life of 3 years.
same rate. Cost of the asset is Rs 3,000.
d) Depreciation is like an insurance expense. Residual Value is Rs 600.
Rate of depreciation is 50%.
Using Diminishing Balance Method, Depreciation
Q88. Depreciation shrinks the __________. expense for the 3rd year will be ______.
a) Scrap value of asset a) Rs 800
b) Market value of asset b) Rs 300
c) Residual value of asset c) Rs 600
d) Book value of asset d) Rs 900
Q89. Accounting Standards in India (AS10 and Ind AS Q93. Which one of the following statements best
16) recognize which of the following methods of describes the 'carrying value' of an asset?
calculating depreciation? a) The amount at which the asset is recognised in the
a) Straight line method balance sheet after deducting any accumulated
b) Diminishing balance method depreciation and accumulated impairment losses.
c) Units of production method b) The higher of the asset's value in use and its
d) All of the above recoverable amount.
c) The cost of the asset less its residual value.
d) The higher of the asset's NRV and its value in use.
Q90. Company A buys a piece of equipment for Rs
10,700. The equipment has an expected life of 10 years
and a salvage value of Rs 1400. Calculate the Q94. The objective of this Standard is to prescribe the
depreciation amount per year under straight line basis. accounting treatment for property, plant and
a) Rs 1,210 equipment so that users of the financial statements can
b) Rs 1,070 discern information about an entity’s investment in its
c) Rs 930 property, plant and equipment and the changes in such
d) Rs 1,033.33 investment.
Which of the following Ind AS constitutes the above
objective ?
Q91. An entity installed an assembly line in Year 1. Four a) Ind AS 10
years later, Rs 1,00,000 was invested to automate the b) Ind AS 107
line. The automation increased the market value and c) Ind AS 16
productive capacity of the assembly line but did not d) Ind AS 113
affect its useful life. Proper accounting for the cost of
the automation should be to ____________.
a) Report it as an expense in Year 5 Q95. The H&W Co. acquired a new industrial washing
b) Establish a separate account for the Rs 1,00,000. machine, the list price of which was Rs 52,000. The
c) Allocate the cost of automation between the asset supplier allowed a trade discount of Rs 4,000 off the list
and accumulated depreciation accounts.

price. On delivery, the cost of installing the machine in b) the number of production or similar units expected
its desired location was Rs 950. to be obtained from the asset by an enterprise
According to AS - 10 - 'Property, Plant and Equipment', c) It is the higher of an asset’s net selling price and its
what is the cost of the machine to be capitalised? value in use.
a) Rs 48,000 d) Both A and B
b) Rs 52,950
c) Rs 48,950
d) Rs 56,950 Q100. Which of the following is the correct formula for
straight-line depreciation?
a) Straight-Line Depreciation = (Purchase Price +
Q96. An ___________ is the amount by which the Salvage Value) / Useful Life
carrying amount of an asset exceeds its recoverable b) Straight-Line Depreciation = (Purchase Price –
amount. Salvage Value) / Useful Life
a) impairment profit c) Straight-Line Depreciation = Purchase Price –
b) impairment loss Salvage Value
c) impairment income d) Straight-Line Depreciation = Purchase Price/ Useful
d) impairment gain Life
Q97. Which of the following statements is/are Q101. An expenditure is decided to be ‘capital’ or
incorrect? ‘revenue’ depending upon which of the following
1. AS 10 is also known as Accounting Standard for factors?
Fixed Assets. 1. Nature of expense
2. AS 6 was withdrawn after the issuance of AS 10 2. Effect of revenue earning capacity
Property Plant and Equipment. 3. Benefit from expenditure
3. Ind AS 16 deals with Property Plant and a) 1 and 2 only
Equipment. b) 2 and 3 only
a) 1 and 2 c) 1 and 3 only
b) 2 and 3 d) 1, 2 and 3
c) 1 and 3
d) Only 1
Q102. Which of the following statement is incorrect?
1. Non – recurring expenditure is capital expenditure
Q98. ____________ is the estimated book value of an in nature.
asset after depreciation is complete. 2. Purchase of motor cars or buildings is capital
a) Premium Value expenditure.
b) Salvage Value 3. Expenses which help to generate income in the
c) Par Value current year are capital in nature.
d) Final Value a) Only 1
b) Only 3
c) Only 2
Q99. What is the useful life of an asset? d) 1, 2 and 3
a) the period over which an asset is expected to be
available for use by an enterprise.

Q103. A wall clock is purchased for ₹500 for use in office Q108. If the bill is drawn on 28th April 2023 Payable
for 10 years. But it may be treated as a revenue after 30 days, what is the final maturity date of the bill?
expenditure based on the provisions of which of the a) 31st May 2023
following concept? b) 30th May 2019
a) Going concern concept c) 29th May 2019
b) Materiality concept d) 31st March 2019
c) Matching concept
d) Consistency concept
Q109. What is the accounting entry in the books of the
creditor on the date of final maturity of the bill, in case
Q104. Freight expenses for moving machinery to the Creditor Retains the Bill till Maturity?
factory is ________. a) Cash/Bank A/c Dr. to Bills Receivable A/c
a) Revenue expenses b) Bills Receivable A/c Dr. to Debtors A/c
b) Deferred revenue expenditure c) Debtors A/c Dr. to Creditors A/c
c) Capital expenditure d) Creditors A/c Dr. to Debtors A/c
d) None of the above
Q110. What is the accounting entry when the creditor

Q105. Which one of the following is incorrect? discounts the bill in a bank?
a) Replacement of defective part of machinery is a) Bank A/c Dr. To Discount A/c To Bills Receivable A/c
revenue expenditure. b) Bills Receivable A/c Dr. To Discount A/c To Bank A/c
b) Daily wages paid for erection/installing of c) Bank A/c Dr. Discount A/c Dr. To Bills Receivable A/c
machinery is capital expenditure. d) Bank A/c Dr. Bills Receivable A/c Dr. To Discount A/c
c) Underwriting commission for issue of shares is
revenue expenditure.
d) Excess of sale price of Machinery over is written – Q111. When a bill is drawn and accepted, which of the
value but less than cost price is treated as revenue following journal entry is passed in the books of the
receipt. drawer?
a) Debtors A/c Dr. to Bills Receivable A/c
b) Creditors A/c Dr. to Debtors A/c
Q106. For an expense to be classified as revenue or c) Bills Receivable A/c Dr. to Acceptor's A/c
capital depends on _________. d) Acceptor's A/c Dr. to Creditor's A/c
a) Kind of expense
b) Duration of benefit of expenditure
c) Effect on revenue earning capacity Q112. Which of the following given statements is/are
d) All of the above incorrect?
1. There are three parties in a bill of exchange.
2. Drawer is the person upon whom the bill of
Q107. Which among the following statements is/are exchange is drawn.
correct? 3. Drawee is the maker of the bill of exchange.
a) Acceptance by other person is must, otherwise, it a) 1 and 2
would not be a valid bill of Exchange b) 2 and 3
b) A bill of exchange must be in writing. c) 1 and 3
a) The order to make payment is unconditional. d) Only 2
b) All of the above.

Q113. Which among the following statements is/are Q117. Mahesh draws a bill on Sanjay for Rs.3000.
incorrect? Mahesh endorsed it to Suresh. Suresh endorsed it to
a) Normally, the drawer and the payee are the same Ramesh. The payee of the bill will be
person. a) Suresh
b) Drawer and Drawee cannot be the same parties in a b) Ramesh
bill of exchange. c) Mahesh
c) According to the Reserve Bank of India Act, a d) Sanjay
promissory note payable to the bearer is legal.
d) A promissory note does not require any acceptance.
Q118. Which of the following options are available to
the receiver of a Bill of Exchange?
Q114. Which among the following statements is/are a) Retain the bill till maturity
incorrect? b) Discounting the bill with the bank
a) There are two parties to a promissory note. c) Endorse the bill in favour of a creditor
b) Drawee is the person who makes or draws the d) All of the above
promissory note.
c) Payee is the person in whose favour the promissory
note is drawn. Q119. Which of the following given statements is/are
d) Generally, the drawee is also the payee. incorrect?
1. Bills Receivable is a liability.
2. Bills Payable is an asset.
Q115. Which among the following statements is/are 3. From an Accounting point of view, Bills of
incorrect? Exchange are of two types.
a) Noting authenticates the fact of dishonour. a) 1 and 2
b) A fees is charged by the Notary Public which is called b) 2 and 3
Noting Charges. c) 1 and 3
c) When a bill is dishonored, it is customary to get it d) 1, 2 and 3
Noted by Notary Public.
d) Noting charges are ultimately borne by the drawer.
Q120. Which act governs the Bills of Exchange in India?
a) Companies Act 2013
Q116. Which of the following given statements is/are b) Indian Negotiable Instruments Act, 1881
incorrect? c) Foreign Exchange Management Act, 1999
1. Kite Bill is an informal name for Accomodation d) Consumer Protection Act, 1986
Bill.
2. Accommodation Bill is a bill drawn and
accepted for mutual help. Q121. A bill of exchange was drawn on 11th July 2013;
3. Due date is the period between the dates of its term was 1 month. What will be the date of
drawing the bill and when it becomes due for maturity?
payment. a) 14th August
a) 1 and 2 b) 15th August
b) 2 and 3 c) 11th August
c) 1 and 3 d) 16th August
d) Only 3

Q122. If the due date is a public holiday what will be the Q127. Goods sold for cash Rs 30,000. Plus 5% GST. Sales
due date of the bill? account will be credited by:
a) The same day a) 30,000
b) Preceding day b) 31,500
c) Following day c) 33,000
d) After 3 days d) 28,000
Q123. Ramesh drew on Suresh three Bills of Exchange Q128. Match the following:
respectively on 29th, 30th, and 31st January, 2013. The 1. Defective goods returned by Raja a. Journal
term in each case is 1 month. What will be the due date Proper
of payment in each case? 2. Providing interest on capital b.
a) 1st March Purchase Book
b) 2nd March 3. Sold goods to Ravi c.
c) 3rd March Sales Return Book
d) 4th March 4. Purchased goods from Asha Traders d. Sales
Book
a) 1-c, 2-a, 3-d, 4-b
Q124. Which of the following will be the journal entry b) 1-b, 2-a, 3-d, 4-c
for the cancellation of the old bill in the books of c) 1-c, 2-d, 3-a, 4-b
Drawee? d) 1-a, 2-c, 3-d, 4-b
a) Bills Payable A/c Dr To Drawer's A/c
b) Bills Payable A/c Dr To Drawee's A/c
c) Bills Receivable A/c Dr To Drawer's A/c Q129. M/s Randeep & Sons sold 40 ink pads @ Rs 8
d) Bills Receivable A/c Dr To Drawee's A/c each, 50 files @ Rs 10 each, 20 colour books @ Rs 20
each to Ishan Stationary and provided 5% trade
discount.
Q125. The act of signing and transferring the bill is How this transaction will be recorded in the Ishan
called an _________. Stationary Ledger Account?
a) Honoured a) To Sales A/c 1,159
b) Dishonoured b) By Sales A/c 1,220
c) Endorsement c) To Sales A/c 1,161
d) Discounted d) By Sales A/c 1,227
Q126. In which book of original entry, will you record a Q130. In which, books of original entry the following
bill receivable of Rs 10,000, which was received from a transactions will be recorded:
debtor in full settlement for a claim of Rs 10,100, is 1. Goods purchased from Suyash for Rs 50,000 on
dishonored? credit.
a) Purchases Return Book 2. Provisions for doubtful debts created @10% on
b) Bills Receivable Book debtors.
c) Journal Proper a) Journal Proper, Bills Receivable Book
d) Purchases Book b) Sales Book, Journal Proper
c) Purchases Book, Journal Proper
d) Purchases Return Book, Sales Book

Q131. Which of the following given statement is/are d) None of the above.
incorrect?
1. A cash book is both a subsidiary book and a
principal book. Q135. Which one of the following is not a debit
2. The debit Side of the cash book shows payments voucher?
made in cash. a) Challans for deposits into Government accounts.
3. The credit side of the cash book shows the receipts b) Cheques issued by customers.
of the cash. c) Drafts issued by other branches of bank payable at
a) 1 and 2 the branch.
b) 2 and 3 d) Term deposit receipts presented for payment.
c) 1 and 3
d) 1, 2 and 3
Q136. Which one of the following is not a credit
voucher?
Q132. In which, books of original entry the following a) Pay in slip filled by customers for deposit in their
transactions will be recorded: accounts.
1. Defective goods sold to Parul on credit worth Rs b) Application for issue of term deposits.
40,000 were returned by her. c) Letter of authority signed by the customer
2. Purchased furniture on credit from Mr. Ratan for Rs containing standing instructions.
15,000. d) None of the above.
a) Sales Return Book, Journal Proper
b) Journal Proper, Purchases Book
c) Purchase Return Book, Purchases Book Q137. Which of the following statements is/are not
d) Sales Book, Journal Proper correct about accounting systems in the banks?
a) Accounting systems in different banks vary in terms
of nature of transactions processed.
Q133. Which one of the following is true? b) The software used in accounting systems do not
a) An insolvent is a person from whom some portion differ amongst different banks.
of the debt is recoverable. c) Accounting system in a bank is designed considering
b) Drawer drags the drawee to court in case of the nature and volume of operations.
dishonour of accommodation bill. d) All the above statement are correct.
c) When the due date of a bill falls on a public holiday,
it is payable on the preceding day.
d) Drawee is a person to whom bill is endorsed. Q138. Which one of the following functions in a bank is
normally not performed by the Back office?
a) Reminders for renewals of term deposits.
Q134. Banks follow the accounting procedure of b) Deposit of cash by the customers at the counter.
‘voucher posting’ under which the vouchers are c) Calculation and posting of interest in loan accounts.
_______. d) Maintenance of General Ledger and other books of
a) First posted in General Ledger and then to the account.
individual accounts in subsidiary ledgers.
b) Straightway posted to the individual accounts in
subsidiary ledgers. Q139. Which one of the following transactions does not
c) First posted in the Day – book and then to the result in Inter-Office debit or credit entry?
accounts in the subsidiary ledgers.

a) Advance to a staff member by debit to suspense a) Ensure that the financial statements give a true and
account. fair view.
b) Payment of travellers’ cheques issued by other b) Detect of errors.
branches. c) Detect and prevent frauds.
c) Receipts from other branches of the proceeds of the d) Enhance the shareholder value.
instruments sent for collection.
d) Issue of drafts.
Q145. Internal audit is aimed at __________.
a) Improving profitability
Q140. The problem about reconciliation at the branch b) Tax planning
level, which has not been resolved by computerization, c) Ensuring accuracy of books of accounts
is that of d) Ensuring equitable distribution of loans to weaker
a) Savings Bank accounts sections of society.
b) Current accounts
c) Drafts issued accounts
d) Suspense and Sundry deposit accounts Q146. Which one of the following statements is not
correct?
a) Forensic audit is an examination and evaluation of
Q141. Which of the following is/are the typical and financial information for use of evidence in court.
most common types of errors observed in Inter – office b) Tax audit is an analysis of tax returns submitted.
accounts? c) Only large borrower accounts are normally
a) Recording of particulars in incorrect fields. subjected to stock and receivables audit.
b) Double recording of the same transaction. d) Management audit is conducted by the
c) Posting of transactions in incorrect office accounts. management of bank.
d) All of the above
Q147. The book ‘An Introduction to Indian Government

Q142. Which of the following are the common errors in Accounts and Audit’ is issued by
the branch daily statements? a) Reserve Bank of India
a) Wrong identification of the type of transaction b) Comptroller and Auditor General of India
b) Recording of particulars in incorrect fields c) Controller of Accounts
c) Difference between the closing and opening d) Statistical Institute of India
balances in success
d) After 3 days
Q148. Which chapter of the Companies Act 2013 deals
with appointment of auditors, their removal,
Q143. Long Form Audit Report is issued by ________. resignation, powers etc.?
a) Concurrent Auditor a) Chapter IX
b) Statutory Auditor b) Chapter X
c) Internal Auditor c) Chapter XI
d) Tax Auditor d) Chapter XII
Q144. Primary objective of financial audit is to Q149. Which among the following statements is
_________. incorrect?

a) Auditor must exercise judgement and only express Q154. Internal audit is generally undertaken by
an opinion. _________.
b) Auditor has to depend on explanation by others. a) Tax experts
c) Auditors must check each and every transaction to b) Auditors approved by RBI
determine their accuracy. c) Company secretary
d) All of the above statements are correct. d) Bank’s own staff
Q150. Which among the following statements is Q155. When the balance as per the cash book is staring
incorrect regarding Ind AS 16? point, in the reconciliation, the amount of cheques
a) Each part of PPE with a cost significant in relation to issued and not presented are
the total cost of the item shall be depreciated a) Subtracted
separately. b) Added
b) Depreciation charge for each period shall be c) Ignored
mentioned in the Balance sheet. d) Either added or subtracted
c) Depreciation methods used should be disclosed in
the financial statements.
d) Depreciation rates and useful life of assets should Q156. Which of the following is true when a debtor
be disclosed in the financial statements. pays his dues?
a) Assets side of balance sheet will decrease.
b) Asset side of the balance sheet will increase.
Q151. According to AS 10, an item of PPE that qualifies a) Liability side of balance sheet will increase.
as an asset should be measured at cost which includes b) There is no change in total assets or total liabilities.
a) Purchase cost including import duties
b) Non refundable taxes
c) Cost of dismantling Q157. Based on which of the following concepts, is
d) All of the above share capital account shown on the liability side of a
balance sheet?
a) Business entity concept
Q152. Banks are encouraged to adopt International b) Money measurement concept
Internal Audit Standards, like those issued by c) Cost concept
a) Basel Committee on Banking Supervision d) Going concern concept
b) Institute of Internal Auditors
c) Both a & B
d) None of the above Q158. Which one of the following is not considered as
Research & Development costs?
a) Testing in search for product alternatives
Q153. Which one of the following is not true? b) Legal work on patent application
a) Head of Internal Audit shall be an outside person c) Modification of design of a process
approved by RBI. d) Searching for application of new research findings
b) Head of Internal Audit has access to all records or
files.
c) Head of Internal Audit has authority to Q159. Which among the following is not a type of bank
communicate with any staff member. audit?
d) All of the above mentioned statements are true. a) Concurrent audit

b) Legal audit 4. Foreign Exchange transactions
c) Internal audit a) 1, 2 and 3
d) Statutory audit b) 2, 3 and 4
c) 1, 2 and 4
d) 1, 3 and 4
Q160. Which among the following is not a regular stage
of statutory audit?
a) Detection of revenue leakages Q164. The scope of work to be entrusted to concurrent
b) Understanding Risk Management Processes auditors, coverage of business/branches, etc. is left to
c) Determining Audit Materiality the discretion of the
d) Assessing risks associated with outsourcing of a) Head of Internal Audit
activities. b) Chief Executive Officer
c) Chairman of Board of Directors
d) Banking Ombudsman
incorrect about the internal audit in banks?
a) The internal audit function should not be Q165. Which among the following system is incorrect?
outsourced. a) Banks’ Internal Audit Department should develop a
b) Experts, including former employees, can be hired reporting system for concurrent auditors.
on contractual basis for internal audit. b) Minor irregularities pointed out by the concurrent
c) The Head of Internal Audit should be appointed for auditors shall be brought to the notice of Head
a long period, preferably for a minimum of three Office/Controlling Office.
years. c) The zone-wise findings of concurrent audit may be
d) Remuneration of internal audit staff should be reported to ACB/LMC on a quarterly basis.
linked to financial performance of business lines. d) Whenever fraudulent transactions are detected,
they should immediately be reported to Internal
Audit Department and also to the Chief Vigilance
Q162. Which of the following statements are incorrect Officer.
about ‘Concurrent Audit’?
a) It shortens the interval between a transaction and
its examination. Q166. Risk-Based Internal Audit (RBIA) system has been
b) There is emphasis on test checking rather than mandated by RBI for which of the following?
substantive checking in key areas. 1. All Scheduled Commercial Banks
c) It is a continuous audit which goes on all the year 2. All Regional Rural Banks
around. 3. All Non-Deposit Taking NBFCs
d) Any exceptions found are recorded in the 4. All Urban Cooperative Banks with asset size of
Concurrent Audit Report. ₹500 crore and above
a) 1, 3 and 4
b) 1, 2 and 3
Q163. Which among the following are included in the c) 2, 3 and 4
Minimum areas of coverage under Concurrent Audit, d) 1, 2 and 4
according to RBI guidelines?
1. Cash transactions
2. Treasury operations Q167. A firm has deposited with the bank ₹50000 cash
3. Outsourcing of operations but bank credited this amount to another account. A

cheque issued by the firm for ₹43000 has been
dishonoured due to the above reason. The balance as
per cash book is ₹9745. What is the balance as per pass Q172. On 1st January 2018, Abhinav & Co purchased a
book? machinery by cheque for ₹4 lakhs. The estimated scrap
a) ₹8765 value of the machinery is ₹60000. Depreciation is
b) ₹2755 provided @15% p.a. by diminishing balance method.
c) ₹6577 Calculate the value of machinery at the beginning of 3rd
d) ₹2745 year.
a) ₹360000
b) ₹340000
Q168. The depreciation method in which the c) ₹245650
depreciation is calculated on the principle value and d) ₹289000
assets lose equal value every year is called as ______.
a) Straight line method
b) Written down value method Q173. A machine is purchased for ₹10 lakhs. Installation
c) Sum of years’ digits method charges of ₹100000 were incurred. Depreciation @10%
d) Double declining method was provided on Straight line basis. The machine was
sold for ₹600000 after 5 years. Calculate the profit or
loss on sale of machine?
Q169. The __________ is the scrap value of the asset a) ₹ 50000 loss
after end of the useful life of that asset. b) ₹100000 loss
a) Book Value c) ₹50000 profit
b) Residual value d) ₹60000 profit
c) Market value
d) None of these
Q174. An equipment purchased is to be depreciated on
fixed instalment system. The journal entry for charging
Q170. A machinery costs ₹5 lakh and its life is 15 years depreciation is ________?
& scrap value is ₹50000. What is the depreciated value a) Depreciation a/c Dr. To P&L a/c
of the machinery at the end of 4th year as per straight b) P&L a/c Dr. To Depreciation a/c
line method? c) P&L a/c Dr. To Equipment a/c
a) ₹410000 d) Depreciation a/c Dr. To Equipment a/c
b) ₹380000
c) ₹350000
d) ₹320000 Q175. The rule ‘Credit the Giver’ would be applicable in
which of the following transactions?
a) Purchase of goods on credit from Mr. X
Q171. A new machine is purchased for ₹5 lakh. b) Introduction of capital by the promoter
Depreciation is provided @10% by diminishing balance c) Taking a loan from bank
method. If machine is sold for ₹450000 at the end of 3rd d) All of the above
year then what will be the profit or loss?
a) 45000 loss
b) 45000 profit Q176. Ram sold goods to Shyam on credit worth
c) 85500 loss ₹50000. Which among the following is correct Journal
d) 85500 profit entry made by Ram?

a) Shyam a/c Dr. To Sales a/c Q182. Which among the following statements is
b) Shyam a/c Dr. To Goods a/c incorrect?
c) Sales a/c Dr. To Shyam a/c a) Recording is the process of entering business
d) None of the above transactions in the books of original entry.
b) Communication involves communicating the
financial statements to various users.
Q177. Which of the following is a nominal account? c) Identifying involves analyzing and interpreting
a) Rent payable financial data.
b) Salary receivable d) Measuring means quantification of business
c) Commission outstanding transactions into financial terms.
Q183. A Which of the following statement will be

Q178. What type of account is “Goodwill Account”? recorded in the books of Accounts?
a) Real Account a) A new communication channel was implemented
b) Personal Account by the company.
c) Nominal Account b) Rajlaxmi was appointed as the Manager of the
d) None of the above company.
c) Company paid salary to Ratan.
d) Rohit was shifted from Manufacturing Department
Q179. Credit means to Sales Department.
a) Increase in asset account
b) Decrease in liability account
c) Decrease in capital account Q184. The increasing awareness on the part of
d) None of these entrepreneurs and industrial managers for using
scientific principles of management led to the
development of
Q180. A firm allows discount of 5% to its customer a) Cost Accounting
whenever they make payment before the due date. It b) Financial Accounting
is called c) Scientific Accounting
a) Trade discount d) Value Accounting
b) Commission on sales
c) Cash discount
d) Discount on sales Q185. Which of the following given statements is/are
correct?
1. Measurement means the quantification of
Q181. Which among the following is not a feature of business transactions into financial terms by using
Bank Reconciliation Statement? monetary units.
a) It helps in arriving at the actual position of the bank 2. Communication means determining what
balance. transactions to record.
b) It is prepared by the bank. 3. Recording is the process of entering business
c) It will record any delays in clearing. transactions in the books of accounts.
d) BRS helps in fraud detection of cheques. Choose the correct answer using the codes given below:
a) 1 and 2
b) 2 and 3

c) 1 and 3 a) Banks may adopt appropriate system and practices
d) Only 1 for conducting IS audit on annual basis.
b) The banks may adopt an IS audit policy (if not done
already) appropriate to its level of computerization.
Q186. Inflation accounting is concerned with the c) Information systems audits should be preferably
overcoming of limitations arising in financial undertaken after the statutory audit.
statements because of d) The IS audit reports should be placed before the top
a) changes in interest rates. management and the compliance should be
b) changes in labour turnover. ensured within the time frame as outlined in the
c) assumption of stable monetary unit. audit policy
d) losses because of depreciation.
Q191. Which of the following systems is incorrect?

Q187. Which of the following statement is/are a) An institution’s board of directors establishes an
incorrect? “Audit Committee” to oversee audit functions.
a) Financial Accounting is concerned with generating b) A designated member of an Audit Committee needs
accounting information. to possess the knowledge of Information Systems,
b) Cost Accounting helps in price-fixation decisions. related controls and audit issues.
c) Management Accounting addresses the needs of c) Internal Audit is a part of the Board’s assurance
the management. process with regard to the integrity and
d) All of the statements above are correct. effectiveness of systems and controls.
Q188. Fair Value Accounting is also known as

a) Fixed Value Accounting Q192. Which among the following is a critical
b) Nominal Value Accounting component or process related to Information Systems
c) Real Value Accounting Audit?
d) Current Value Accounting a) System Characterisation
b) Vulnerability Identification
c) Impact Analysis
Q189. Which of the following statements is/are d) All of the above
correct?
1. The traditional method of 'double entry
bookkeeping originated in Greece. Q193. Which among the following is not a benefit of
2. Kautilya wrote a book on accountancy which was doing a Computer Assisted Audit?
named ‘Arthashastra’. a) Reduces the time to complete the audit.
Choose the correct answer using the codes given below: b) Less need of professional skills on part of auditors.
a) 1 only c) Increases accuracy of the audit.
b) 2 only d) Improves compliance and lessens chance of making
c) Both 1 and 2 errors.
d) Neither 1 nor 2
Q194. Which among the following is not among the

Q190. Which among the following statements is Computer assisted audit techniques?
incorrect about Information Systems Audit? a) Stratification

b) Duplicate Record Checks Q199. For the bank as a whole, the transactions which
c) Sampling remained unmatched/unreconciled appears as inter
d) Ranging office adjustments balance in “Branch Adjustment
Account” in the balance sheet of the bank – under the
head ‘Other Assets’ if it is debit and under ‘Other
Q195. ________ represents the difference on account Liabilities and Provisions’ if it is credit.
of incomplete recording of transactions between one a) Other Assets ; Other Liabilities and Provisions
branch and another branch or between one branch and b) Other Incomes ; Other Expenses
head office. c) Other Liabilities and Provisions ; Other Assets
a) Incomplete Transactions A/c d) Deferred Assets ; Deferred Liabilities and Provisions
b) Inter Office Adjustment (Net) A/c
c) Pending Adjustments A/c
d) None of the above Q200. Which among the following statements is
incorrect?
a) A company has separate legal entity.
Q196. Which of the following is not a transaction that b) Shareholders are the owners of the company.
will result in Inter Office debit or credit entry? c) Liability of a shareholder is limited to paid-up value of
a) Transactions through NEFT,ECS and RTGS the shares allotted to him.
b) Payment of instruments like gift cheques/bankers’ d) Maximum number of members in a private company
cheque is 200.
c) Deposit made by customers at home branches.
d) Head Office interest receivable and payable by
branches Q201. Which among the following statements is not
correct?
a) An asset is created by taking a liability of an equal
Q197. RBI had instructed the banks to reconcile the amount.
entries outstanding in their inter branch accounts b) Net worth of a business is the liability of the
within a period of business towards its owners.
a) Three months c) The claim of owners do not include the balance of
b) Six months reserves and surplus.
c) Nine months d) The liabilities consist of claims of owners and claims
d) Twelve months of outsiders.
Q198. Banks have been advised by RBI to segregate the Q202. Which among the following is an incorrect
credit entries outstanding for more than 5 year in inter representation of Balance sheet equation?
branch accounts and transfer them to a separate a) Assets = Total Claims on the Company
__________. b) Outside Liabilities = Assets – Capital
a) Open account c) Claims of owners = Assets + Claims of Creditors
b) Blocked account d) Net worth = Assets - Creditors
c) Pending Transactions account
d) None of these
Q203. If assets increase and liabilities do not, the capital
will _________.
a) increase

b) decrease Q209. At the end of an accounting period, the balances
c) do not change of _______ are transferred to the Profit & Loss Account.
d) change depending upon the change in revenues. a) All the ledger accounts
b) All the income and expense accounts
c) Only the tangible real accounts and some income
Q204. Conversion of loan into equity results in and expense accounts
_________. d) Some intangible real accounts and some income
a) Change in both assets and liabilities and expense accounts
b) Change in total assets only
c) Change in total liabilities only
d) Change in liabilities but total liabilities remain the Q210. Which one of the following accounts is used for
same providing dividend?
a) Profit & Loss Appropriation account
b) Profit & Loss Account
Q205. Purchase of fixed assets on credit results in c) Profit & Loss Adjustment account
_______. d) Reserves and surplus account
a) Change in total assets only
b) Change in both assets and liabilities
c) Change in total liabilities only Q211. Which one of the following is correct about
d) Change in liabilities but total liabilities remain the methods of valuation of closing stocks, permitted by
same Ind AS 2?
a) It permits use of only LIFO method for inventory
valuation.
Q206. Repayment of loan results in _________. b) It permits use of only FIFO method for inventory
a) Change in both assets and liabilities valuation.
b) Change in total assets only c) It permits use of FIFO or Weighted Average method
c) Change in total liabilities only also for inventory valuation.
d) Change in liabilities but total liabilities remain the d) It is silent about the methods of valuation of closing
same stocks.
Q207. Sale of goods on credit results in _______. Q212. Which one of the following entries in the ledger
a) Change in both assets and liabilities is made without any financial transaction?
b) Change in total assets only a) Purchase of raw material during the year.
c) Change in total liabilities only b) Sale of goods on credit during the year.
d) Change in assets but total assets remain the same c) Discounts received during the year.
d) Depreciation during the year.
Q208. Which among the following is not an example of

liability for a business? Q213. A firm has received advance rent from a tenant,
a) Creditors for the month of April, in March. Which of the following
b) Bills payable adjustment entries is correct while preparing the
c) Stock in trade accounts for the year ending in March?
d) Bank overdraft a) Debit ‘Advance Rent Received’ account; credit ‘Rent
Received’ account.

b) Debit ‘Rent Payable’ account; credit ‘Advance Rent c) 70,000
Received’ account. d) 50,000
c) Debit ‘Rent Received’ account; credit ‘Bank’
account.
d) Debit ‘Rent Received’ account; credit ‘Advance Rent Q218. Which among the following statements is
Received’ account. incorrect?
a) Trading account consists of two sides.
b) The trading account helps to compare closing stock
Q214. ________ is an entry in a company's general and opening stock.
ledger that occurs at the end of an accounting period to c) Trading account is prepared at the end of the
record any unrecognized income or expenses for the period.
period. d) 'Wages and Salaries' account is treated as an
a) Adjustment entry indirect expense.
b) Pending entry
c) Closing entry
d) Contra entry Q219. Which among the following is shown in the debit
side of the profit & loss appropriation account?
a) Surplus balance brought forward from previous
Q215. Which among the following statements is year.
incorrect? b) Transfer to dividend / interim dividend.
a) Ind AS 1 requires that financial statements must be c) Net profit for the year.
prepared using the accrual basis of accounting. d) Amount withdrawn from general reserve.
b) Adjustment entries are made prior to preparing the
financial statements.
c) Accrual accounting is based on the revenue Q220. Which of the following documents is not part of
recognition principle. the complete set of financial statements as prescribed
d) Adjustment entries involve balance sheet accounts by Ind AS 1?
only. a) Profit & Loss Appropriation statement
b) Statement of changes in equity
c) Statement of cash flows
Q216. Which of the following statement is incorrect d) Profit & Loss statement
regarding the objective of inventory valuation?
a) To determine true profit and Loss
b) To show true financial position of the business Q221. Which one of the following is not a feature of a
c) To properly value closing stock joint stock company?
d) To evade tax liability a) It has an independent legal status.
b) Common seal is mandatory to be affixed on all
important documents.
Q217. Ram started his business on April 1, 2016 with his c) Members’ liability is limited.
own capital of Rs 60,000 and took a loan from the bank d) It has perpetual succession.
of Rs 50,000. On 31st march, 2017 Total assets were Rs
1,80,000. Calculate profit earned during the year ending
31st March 2017. Q222. Food Corporation of India is an example of
a) 1,10,000 a) Statutory company
b) 1,80,000 b) Chartered company

c) Private limited company Q227. Which among the following statements is/are
d) Holding company incorrect.
a) Company’s shares are generally transferable.
b) Share application account is a personal account.
Q223. When can a company issue equity shares at a c) The director of a company must be a shareholder.
discount? d) Paid up capital can exceed called up capital.
a) If the company has not begun commercial
production.
b) If the company is in loss for last 3 years. Q228. A salient characteristic of the capital of a
c) If the shares are issued to its own staff. company is that the amount on its shares can be
d) If the shares are issued as sweat equity. gradually collected in easy instalments spread over a
period of time depending upon its growing financial
requirement. The first instalment is collected along
Q224. In which of the following situations can a with application and is known as
company forfeit the shares already issued? a) Front money
a) When a shareholder becomes insolvent. b) Allotment money
b) When a company is under liquidation. c) Application money
c) When a shareholder does not pay dues on shared d) Call money
which he holds.
d) Shares once issued cannot be forfeited.
Q229. Which among the following is shown in the debit
side of the profit & loss appropriation account?
Q225. Which one of the following statements is correct a) Surplus balance brought forward from previous
about minimum paid up capital of a company? year.
a) It is ₹1 lakh for a private limited company. b) Transfer to dividend / interim dividend.
b) It is ₹10 lakh for a public limited company. c) Net profit for the year.
c) It is ₹5 lakh for a private limited company. d) Amount withdrawn from general reserve.
d) No minimum paid up capital is prescribed.
Q230. All money received along with application for

Q226. Which among the following statements is issue of shares is deposited with a scheduled bank in a
incorrect? separate account opened for the purpose.
a) The total capital that a corporation accepts from its The journal entry is as follows:
investors by issuing shares that are listed in the a) Bank A/c Dr.
firm’s official documents is known as authorized To Share Application A/c
share capital. b) Share Application A/c Dr.
b) The portion of Authorized Share Capital that is To Share Capital A/c
issued to the public for subscription is known as c) Share Application A/c Dr.
Issued Share Capital. To Bank A/c
c) The portion of issued capital that has been sold to d) Share Allotment A/c Dr.
the public is known as subscribed capital. To Share Capital A/c
d) All the statements are correct.
Q231. Which one of the following is not classified under

‘Intangible Assets’?

a) Brands / Trademarks Q236. For the purpose of preparing cash flow
b) Computer hardware statement, which one of the following is considered as
c) Mining rights ‘Financing Activity’?
d) Goodwill a) Issue of fresh capital
b) Processing of goods
c) Redemption of debentures
Q232. In the balance sheet of a company the trade d) Sale of manufactured goods
receivables are required to be sub-classified into 3
categories. Which one of the following is not amongst
these? Q237. For the purpose of preparing cash flow
a) Unsecured, considered good statement, which one of the following is considered as
b) Doubtful ‘Investment activity’?
c) Secured, considered good a) Buyback of shares
d) Loss b) Redemption of debentures
c) Manufacture of goods
d) Disposal of machinery
Q233. Which one of the following entities is required to
present consolidated financial statements, as per Ind
AS 110? Q238. Which one of the following is a source of funds?
a) All companies having more than one division. a) Increase in fixed assets
b) All government companies. b) Increase in inventory
c) Entity that controls one or more other entities. c) Increase in current liabilities
d) All the companies are required to present d) Decrease in capital
consolidated financial statements.
Q239. Which one of the following is a use of funds?

Q234. In the prescribed format of the Statement of a) Increase in capital
Profit & Loss of a company, which one of the following b) Increase in current liabilities
items is not included? c) Increase in term loans
a) Earnings per equity share d) Increase in receivables
b) Profit before tax
c) Profit (loss) for the period Q240. Which among the following is not a correct
d) Price earnings ratio statement regarding Cash Flow or Fund Flow
statements?
a) Both Cash flow and Fund flow statements are
Q235. For the purpose of preparing cash flow mandatory part of financial statements.
statement, which one of the following is considered as b) Cash flows from operating, financing and investing
‘Operating Activity’? activities to be shown separately.
a) Acquisition of machinery c) Funds flow statement used the accrual system of
b) Purchase of goods for sale accounting.
c) Issue of debentures d) Funds flow statement determines the changes in
d) Repayment of term loan working capital through a specific period.

Q241. Which one of the following is not considered to d) None of the above
be a ‘Subsidiary book’ in the banks?
a) Current account ledger
b) General ledger Q247. For the core banking system of a large bank,
c) Loan ledger which one of the following statements is true?
d) Bills discounted and purchased ledger a) Each branch has its own server connected directly
to servers of other branches.
b) There is only one powerful server at centralized
Q242. Schedule 10 of the balance sheet of a bank data centre.
provides details of _______. c) Each branch has a server connected to the server at
a) Fixed assets centralized data centre.
b) Current assets d) None of the above
c) Investments
d) Other assets
Q248. Which one of the following is not amongst the
benefits of core banking?
Q243. Rebate on bills discounted refers to a) It supports multi-currency operations.
a) Concessional rate of discount for priority sector b) It provides 24x7 operations.
b) Rebate provided to priority customers of the bank c) It provides improved customer satisfaction.
c) Unexpired discount d) It increases bank’s profit as customers are charged
d) None of the above extra for core banking.
Q244. ‘Operating expenses’ shown in one of the Q249. Which one of the following statements is not
schedules of the Profit & Loss account of the bank, do correct regarding computerized accounting?
not include _________. a) Business transactions are captured in the form of
a) Law charges accounting entries.
b) Printing and stationary expenses b) It offers benefits of speed and accuracy.
c) Payments to employees c) Higher costs, as compared to human labour, is a
d) Interest expenditure disadvantage of it.
d) Mostly, digital computers are used in computerized
accounting.
Q245. Interest earned by a bank is shown under which
schedule of the Profit & Loss account?
a) Schedule 13 Q250. Which one of the following is not amongst the
b) Schedule 14 disadvantages of computerized accounting?
c) Schedule 15 a) Requirement of qualified staff for operations.
d) Schedule 16 b) Costly computer peripherals and stationery.
c) Regular back up is required.
d) Secrecy of customers’ transactions is lost.
Q246. In a computerized bank, we should ___________.
a) Change our password at least once a month
b) Not share our password with anyone under any Q251. Which Section of the Banking Regulation Act
circumstance (1949) defines Banking as “the accepting, for the
c) Not allow anyone to use our computer purpose of lending or investment, of deposits of money

from the public repayable on demand or otherwise and d) None of the statements are incorrect.
withdraw able by cheque, draft, order or otherwise’ ?
a) Section 3
b) Section 5 Q256. Which among the following is an incorrect pair
c) Section 7 with regards to the schedules furnished with the
d) Section 10 balance sheet?
1. Schedule 1 - Capital
2. Schedule 2 - Borrowings
Q252. Which among the following statements is 3. Schedule 3 - Deposits
incorrect regarding the accounting system followed in a) 1 and 3 only
banks? b) 2 only
a) Entries in the personal ledgers are made directly c) 2 and only
from the vouchers. d) 1 only
b) The general ledger’s trial balance is extracted and
agreed every day.
c) Single voucher is prepared for every transaction not Q257. A banking company has to disclose ‘Cash in hand’
involving cash. and ‘Balances with RBI’ under which of the following
d) All the statements given above are correct. schedule?
a) Schedule 4
b) Schedule 5
Q253. The ‘General Ledger’ in banking companies does c) Schedule 6
not usually include which of the following books? d) Schedule 7
a) Personal ledgers
b) Profit & Loss accounts
c) Bill for collection register Q258. Which among the following is not included under
d) Loan ledger ‘Other Assets’ disclosed under Schedule 11?
a) Interest accrued
b) Stationery and stamps
Q254. A trial balance is prepared in a bank every day. In c) Inter office adjustments
case the trial balance does not tally and there is a short d) Leased assets
credit, the difference is temporarily transferred to
a) Sundry credits account
b) Unreconciled account Q259. The amount of provision for taxation is charged
c) Adjustment account to the Profit & Loss Account under __________, and in
d) Sundry deposit account the Balance Sheet it will be shown under __________.
a) ‘Outstanding Expenses’ ; ‘Other Liabilities &
Provisions’
Q255. Which among the following statements is b) ‘Outstanding Expenses’ ; ‘Contingent Liabilities’
incorrect? c) ‘Provisions & Contingencies’ ; ‘Other Liabilities &
a) All deposits accepted at the branch are deemed to Provisions’
have been passed on to head office. d) ‘Provisions & Contingencies’ ; ‘Contingent
b) All loans made at the branch are deemed to have Liabilities’
been made from funds received from head office.
c) Head office pays interest to the branch for its
deposits.

Q260. Which among the following is an incorrect pair Q264. Which among the following is not a category
with regards to the schedules furnished with the Profit under which SLR and Non-SLR securities are classified in
& Loss Account? banks?
1. Schedule 13 - Operating expenses a) Available for sale
2. Schedule 14 - Other Incomes b) Held to maturity
3. Schedule 15 - Interest earned c) Held for security
a) 1 and 3 only d) Held for trading
b) 2 only
c) 2 and only
d) 1 only Q265. Which among the following statements is
incorrect?
a) Investments under ‘Held to Maturity’ should not
Q261. Which among the following statements is exceed 50% of total investments in banks.
incorrect? b) Securities held by banks for trading should be sold
a) A bank’s advances are divided between performing within ninety days.
and non-performing assets. c) Securities held by banks till maturity need not be
b) A term loan is treated as NPA, if the interest remains marked to market.
overdue for more than 90 days. d) None of the statements are incorrect.
c) The income for performing assets is recognized on
accrual basis.
d) Interest income from non-performing assets is Q266. Which among the following is an incorrect pair
recognized on accrual basis. with regards to disclosure requirements prescribed by
BASEL III Capital regulations?
1. Pillar 1 - Minimum Capital Requirements
Q262. Which among the following is correctly matched? 2. Pillar 2 - Supervisory Review Process
1. Sub - Standard Asset - Asset which has remained 3. Pillar 3 - Market Discipline
NPA for less than 12 months a) 1 and 3 only
2. Doubtful Asset - Asset which has remained sub- b) 2 only
standard for 12 months c) 2 and only
3. Loss Asset - Identified by auditors or RBI but not d) 1 , 2 and 3
written off wholly
a) 1 and 2 only
b) 2 and 3 only Q267. Banks are required to make Pillar 3 disclosures at
c) 1 and 3 only least on a half yearly basis, with the exception of which
d) 1, 2 and 3 of the following?
a) Capital adequacy
b) Credit Risk: General disclosures for All banks
Q263. What is the provisioning requirement prescribed c) Credit Risk: Disclosures for Portfolios subject to
for ‘Loss assets’ in the balance sheets of banks? Standardised Approach
a) 0.25% to 1% depending on type of advance d) All of the above
b) 15% general provision on total outstanding
c) 25% general provision on total outstanding
d) 100% of total outstanding Q268. Which among the following items is not shown in
the Assets side of the Balance sheet of Banking
companies?

a) Lockers or Safe Deposit Vaults a) Conflict of interest between the company and its
b) Acceptance Endorsements suppliers
c) Reserve Funds b) Conflict of interest between the company and its
d) Loan Advances customers
c) Conflict of interest between the company and
government
Q269. Which among the following is not recognized as d) Conflict of interest between the shareholders and
an operating expense in Profit & Loss Accounts of the management of the company.
Banking companies?
a) Interest on Inter-bank Borrowings
b) Depreciation of Bank’s property Q274. Risk return trade-off implies which of the
c) Rent, taxes and lighting following?
d) Auditor’s fees and expenses a) Aiming at high return and low risk
b) Aiming at low risk and low return
c) Striking a balance between risk and return
Q270. Which among the following is a systems layer d) None of the above
between the Head office server and the branch server?
a) Presentation layer
b) Delivery layer Q275. Capital structure implies which one of the
c) Application layer following?
d) All of the above a) Proportion of fixed and current assets.
b) Proportion of current assets and liabilities.
c) Proportion of long term and short term liabilities.
Q271. Which one of the following statements about d) Proportion of debt and capital.
Corporate Social Responsibility (CSR), is not correct?
a) Companies Act 2013, specifies the companies which
are required to spend money on CSR. Q276. Which among the following statement is wrong
b) CSR spend is totally voluntary and there is no legal about ‘Sole Proprietary Firm’?
requirement to spend money on CSR. a) There is a legal distinction between the owner and
c) Only specified activities are eligible to be covered the firm.
under CSR. b) Profit of the firm is taxed as personal income of the
d) Companies are required to spend at least 2% of their proprietor.
average net profits on CSR. c) This type of firm is subject to minimum regulations.
d) Proprietor exclusively owns all the assets and profits
of the business.
Q272. Which one of the following is not amongst
business ethics?
a) Philanthropy Q277. What can be the maximum number of members
b) Honesty in a Partnership Firm as per the Companies Act 2013
c) Integrity and Companies (Miscellaneous) Rules 2014?
d) Trustworthiness a) 25
b) 50
c) 75
Q273. Which one of the following can be considered as d) 100
an Agency Problem in Financial Management?

Q278. Which among the following is not one of the c) While calculating Quick Ratio, all current liabilities
fundamental principles of Finance? are not taken into account.
a) A rupee received today is more valuable than a d) Debtors’ Turnover Ratio is higher if the company
rupee received in future. sells more goods on credit basis than on cash basis.
b) An investment contains both rewards of profit and
risk of loss.
c) Risk should be diversified over many investments. Q283. Which one of the following is true?
d) Short term fund requirements should be met with a) Higher debt/equity ratio increases the profit margin
long term sources to maintain prudence. of a company.
b) Debt/equity ratio is an indicator of solvency of a
company.
Q279. Which among the following is not recognized as c) A high current ratio is always an indicator of the
a building block of the modern financial management? efficient management.
a) Accountability d) Depreciation is not an expense and should be
b) Integrity excluded while calculating profitability ratios.
c) Stability
d) Viability
Q284. Which one of the following statements is correct
about Fixed Assets Ratio?
Q280. If return from existing assets is lower than a) It is a ratio of fixed assets and net worth.
potential returns from some other asset, a finance b) It is a ratio of fixed assets and long term funds.
manager may decide to dispose existing assets and shift c) A ratio of less than 1 indicates that short term
to the other assets. Which fundamental principle of resources have been diverted for creation of fixed
finance will be followed to take such a decision? assets.
a) Return Cost d) None of the above statements is correct.
b) Potential Investment Incentive
c) Uncertainty Cost
d) Opportunity Cost Q285. An amount of ₹40,000 for 3 years fetches a
simple interest of 11% p.a. The total interest at the end
of 3 years is ₹_______.
Q281. DSCR Ratio is used in which of the following? a) 14,400
a) Judging the margin of safety available before there is b) 13,200
default in repaying the loan. c) 10,200
b) Judging whether the firm has borrowings d) 8,800
disproportionate to its net worth.
c) Judging the capacity of the firm to service the interest
on debt. Q286. Which one of the following is not a type of
d) All of the above. Annuity?
a) Special annuity
b) Annuity due
Q282. Which one of the following is true? c) Ordinary annuity
a) Both EPS and PE Ratio vary with the stock market d) All of the above are types of annuities
price of company’s share.
b) While calculating Debt/Equity ratio, fixed deposits
from Shareholders are taken as part of debt.

Q287. Which one of the following statements is correct b) Bonds are part of the net worth of an enterprise.
about compounding of interest? c) A bond is issued for a specified period of time.
a) When the period of compounding is reduced, the d) A bond carries a specific rate of interest.
amount of total interest is more.
b) Compounding of interest means that interest is paid
on the principal and the accumulated interest. Q292. The duration of a bond is ______.
c) If the rate of interest is same, the total amount of a) The holding period for which interest rate risk
interest is more under compound interest disappears.
compared to that under the simple interest. b) The period remaining for the maturity.
d) All of the above statements are correct c) The period for which the bond has been issued.
d) The gap between two interest payments.
Q288. Which one of the following is a method of

repayment of a debt? Q293. When the required rate of return (market
a) Equal monthly/quarterly installment plus interest rate) is equal to the coupon rate, the value of
accumulated interest. the bond is ________.
b) Equated monthly/quarterly installment covering a) Less than its par value.
both the principal and the interest. b) More than its par value.
c) Buffet/balloon repayment. c) Equal to its par value.
d) All of the above. d) Decided by its unexpired period.
Q294. Which one of the following statements is

Q289. A sinking fund is created ____________. correct?
a) When there is a need for a specified amount of a) Bonds can be issued only with call option.
money at a specified future date. b) Bonds can be issued only with put option.
b) When the profit of an enterprise is more than its c) Bonds can be issued with both call and put option.
requirements. d) Bonds can be issued with either call or out option.
c) As it is mandatory.
d) To take care of future working capital needs.
Q295. Which one of the following statements is correct
about zero-coupon bonds?
Q290. Which among the following statements is a) Zero-coupon bonds pay no regular interest.
incorrect? b) They are issued at a discount to par value.
a) Ratios provide data for inter-firm comparison but c) The bondholder receives the full principal amount
not for intra firm comparison. on the redemption rate.
b) Ratios help in planning and forecasting for the d) All of the statements are correct.
future investments.
c) Ratios simplify the comprehension of financial
statements. Q296. When the exchange of currencies takes place on
d) All of the statements given above are correct. the next working day, it is known as _____.
a) SPOT
b) TOM
Q291. Which one of the following statements about c) CASH
bonds is not correct? d) READY
a) Bonds are debt instruments.

Q297. When the exchange of currencies takes place on Q301. Calculate Working Capital from the following
the second working day, after the date of the deal, it is data:
known as ________.
a) SPOT
b) TOM
c) CASH
d) READY
a) 1,64,900
Q298. Which one of the following statements is correct b) -28,300
about forward rate? c) 28,300
a) In case of direct rates, if the forward rate is more d) 79,700
than the spot rate, the base currency is at a
premium.
b) In case of direct rates, if the forward rate is less than Q302. Match the following:
the spot rate, the base currency is at a discount. A. Subscribed share 1. The part of authorized
capital capital that has not yet
c) The forward premium or discount, expressed in
been called up by the
basis points, is called Forward Points. company.
d) All of the above B. Issued share capital 2. Difference between
issued capital and
unsubscribed capital
Q299. Which one of the following factors determine the C. Uncalled capital 3. The amount of capital
forward points? that the company has
Offered to the public for
a) Supply and demand for the currency for the
subscription
settlement date. a) A-2; B-3; C-1
b) Market view, i.e. expectations, about the future.
b) A-3; B-2; C-1
c) The interest rate differential between the countries,
c) A-1; B-3; C-2
whose currencies are being exchanged. d) A-3; B-1; C-2
d) All of the above.

Q300. Decision on capital structure of a firm is affected incorrect?
by _______.
a) Cash flow statement shows inflows and outflows of
a) Banking requirements
the cash and cash equivalents.
b) Cost of debt b) Cash Flow Statements are prepared in accordance
c) Taxation
with Accounting Standard- 5 (AS-5).
d) All of the above
c) The primary objective of cash flow statement is to
provide useful information about cash flows of an
enterprise during a particular period under various
heads.
d) Cash flow statement classifies cash flows into
operating, investing and financing activities.

Q304. Which of the following given statement is/are Q308. While preparing the Cash Flow Statement,
correct? 'interest paid on debentures' will be considered as
1. Cash flow information is useful in assessing the a) Operating Activity
ability of the enterprise to generate cash and cash b) Investing Activity
equivalents. c) Financing Activity
2. The Cash flow statement enhances the d) Both A and C
comparability of the reporting of
operating performance by different enterprises.
3. The Cash flow statement does not help in Q309. Which of the transactions will result into a 'flow
of cash' into the business?
balancing its cash inflow and cash outflow.
a) 1 and 2 a) Deposited 10,000 into the bank.
b) 2 and 3 b) Withdrew cash from bank Rs 15,000.
c) 1 and 3 c) Sale of Machinery of the book value of Rs 74,000 at a
d) Only 2 loss of Rs 9,000
d) Converted Rs 2,00,000, 10% debentures into equity
shares.
Q305. Which of the following given statement is/are

correct? Q310. Which section of the Companies Act 2013 has
1. Principle revenue-producing activities mean prescribed that the Share Capital of a company is of two
types?
business activities being carried by the enterprise
to earn profit. a) Section 41
2. A single transaction does not include cash flow b) Section 43
under two different activities. c) Section 45
3. An inflow or outflow between the components of d) Section 50
Cash and Cash Equivalents is not considered while
preparing the cash flow statement. Q311. Which among the following statements is
a) 1 and 2 incorrect?
b) 2 and 3 a) Rate of dividend is fixed in Preference Shares.
c) 1 and 3 b) Equity Shares are convertible into debentures.
d) Only 2 c) Preference Shares are redeemed on the due date.
d) Equity Shareholders have the right to participate in
the management of the company.
Q306. Depreciation is a
a) Cash Operating Expenditure
b) Non-Cash Operating Expenditure Q312. Which of the following given statement is/are
c) Non- Cash Non-Operating Expenditure correct?
d) Cash Non Operating Expenditure 1. A company can issue redeemable equity shares.
2. A preference share that does not carry the right
of sharing in surplus profits is called Non-
Q307. Which of the following is not included in Cash Participating Preference Share.
and Cash Equivalents? 3. Reserve Capital is also known as Capital
a) Inventories Reserve.
b) Current Investments a) 1 and 2
c) Short-Term Deposits b) 2 and 3
d) Marketable Securities c) 1 and 3
d) Only 2 Q317. X limited spent Rs. 10,00,000 towards the
construction of the office building. It also spent Rs.
50,000 towards construction of temporary store and
Q313. Opening stock is ____________ used the store for building construction purpose. On
a) Debited in Trading A/c completion of building construction the store was
b) Credited in Trading A/c
dismantled and the materials were sold for Rs. 20,000.
c) Credited in Profit & Loss A/c Mr. A, a supervisor was paid Rs. 60,000 as his salary
d) Debited in Profit & Loss A/c during the period of construction and he devoted 2/3rd
of his time for the building construction.
Q314. Which of the following is true about financial The capitalized cost of office building is ____________.
statements? a) Rs 10,00,000
1. Financial statement gives a summary of accounts. b) Rs 11,10,000
2. Financial statements can be stated as recorded facts. c) Rs 10,90,000
a) 1 only d) Rs 10,70,000
b) 2 only
c) Both 1 and 2 Q318. Which of the following is an example of a liability
d) Neither 1 nor 2 ?
a) Creditors
Q315. From the given information, find the value of b) Debtors
Closing stock - c) Cash
Sales - Rs 15,000 d) Building
Opening Stock - Rs 6,000
Purchases - Rs 10,000 Q319. Which of the following will not be included in the
Closing Stock - Rs X Profit and Loss Account?
Cost of Goods sold - Rs 9,000 a) Salaries
Trade Expenses - Rs 4,000 b) Drawings
Gross Profit - Rs Y
c) Rent Received
Net Profit - Rs Z d) Carriage Outwards
a) Rs 9,000
b) Rs 8,000
c) Rs 4,000 Q320. A prepayment of insurance premium will appear
d) Rs 7,000 in the Balance Sheet and in the Insurance Account
respectively as _____________
a) a liability and a debit balance
Q316. Revenue Expenditure wrongly recorded as b) an asset and a debit balance
Capital Expenditure will result in ________________ c) an asset and a credit balance
a) Overstatement of net profit and understatement of d) a liability and a credit balance
assets
b) Understatement of net profit and overstatement of
assets Q321. Which one of the following is not considered to
c) Overstatement of net profit and overstatement of be a subsidiary book in the banks?
assets a) Current account Ledger.
d) Understatement of net profit and understatement of b) General Ledger.
assets c) Loan Ledger.
d) Bills discounted and purchased Ledger.
Q322. Schedule 10 of the balance sheet of a bank Q326. In a computerised accounting system, the
provides the details of ________. framework of storage and processing of data is called
a) Fixed assets. a) Recording environment
b) Current assets. b) Operating environment
c) Investments. c) Computing environment
d) Other assets. d) None of the above
Q323. Which of the following statements is incorrect? Q327. Core banking. Is delivered as a set of integrated
1. Banking Regulation Act has prescribed Form A for core banking components that are then tailored to fit
the format of Balance Sheet. the institution’s individual business requirements.
2. The Govt. has notified that account of the banking These components include
companies shall be closed on 31st March every a) Core bank financial institution infrastructure
year as against 31st December earlier. b) Core bank customer management and customer
overview
a) 1 only c) Core bank payments
b) 2 only d) All of the above
c) Both 1 and 2
d) Neither 1 nor 2
Q328. Which among the following is not amongst the
Q324. Match the Following: benefits of core banking?
Schedule in Form A Related to a) It supports multi-currency operations.
1. Schedule 1 a. Other Liabilities & provisions b) It provides 24x7 operations.
2. Schedule 3 b. Deposits c) It provides improved customer satisfaction.
3. Schedule 5 c. Capital d) it increases profits as customers are charged extra
4. Schedule 7 d. Balances with Banks & Money for core banking.
at call and Short Notice
a) 1-a; 2-b; 3-c; 4-d
Q329. Which of the following CBS systems are
b) 1-a; 2-c; 3-b; 4-d incorrectly matched with their development
c) 1-c; 2-b; 3-d; 4-a companies?
d) 1-c; 2-b; 3-a; 4-d a) BaNCS - Tata Consultancy services
b) Finacle - Wipro
c) Flexcube - Oracle
Q325. Match the Following: d) None of the above
Schedule in Form B Related to
1. Schedule 13 a. Operating Expenses Q330. ___________ provides the same set of services.
2. Schedule 14 b. Profit of sale of Land To customers across all channels come, whether digital
3. Schedule 15 c. Interest Earned or physical. Users can access all banking services via
4. Schedule 16 d. Interest Expended website., Mobile app, Bank, Branch, Call Center or even
a) 1-a; 2-b; 3-c; 4-d social media platforms, such as WhatsApp, Facebook,
b) 1-a; 2-c; 3-b; 4-d Instagram, etc.
c) 1-c; 2-b; 3-d; 4-a a) Omni Channel Banking
d) 1-c; 2-b; 3-a; 4-d b) Neo Banking
c) Multi Banking

d) Retail Banking c) Difference between Current Assets and Fixed Assets.
d) Cash and Bank Balance.
Q331. A ___________ is a bank that operates without

physical branch, i.e., the banking business is conducted Q336. Which of the following will impact the current
ratio?
entirely online.
a) Virtual bank a) Stock acquired for cash
b) Meta bank b) Machinery acquired on credit
c) Neo bank c) Stock sold on credit
d) Debentures converted into equity capital.
d) Digi Bank
Q332. _________ ratios are a measure of the speed Q337. Which of the following statements is incorrect?
with which various accounts are converted into sales or a) Liquidity ratios are calculated to measure the short-
cash. term solvency of the business.
a) liquidity b) Quick assets are defined as those assets which are
b) activity quickly convertible into cash
c) debt c) Quick Ratio is also known as liquid ratio or Acid-test
d) profitability ratio
d) A very high current ratio is good for a business.
Q333. The two basic measures of liquidity are:

a) inventory turnover and current ratio Q338. Which of the following statements is correct?
b) current ratio and liquid ratio a) Solvency ratios are calculated to determine the
c) gross profit margin and operating ratio ability of the business to service its debt in the long
d) current ratio and average collection period run.
b) The Interest Coverage Ratio measures the
relationship between long-term debt and equity.
Q334. Which of the following statements is incorrect? c) The Debt-Equity Ratio refers to the ratio of long-
1. Analysis of data provided in the financial statements term debt to the total of external and internal funds
is termed as financial analysis. (capital employed or net assets).
2. Long-term borrowings are concerned about the d) Debt to capital employed ratio expresses the
ability of a firm to discharge its obligations to pay relationship of proprietor’s (shareholders) funds
interest and repay the principal amount. to net assets
3. Ratios help in comparisons of a firm’s results over a
number of accounting periods as well as with other
business enterprises. Q339. Which of the following given statements is/are
a) 1 only incorrect?
b) 2 only 1. Liquidity ratios measure the long-term solvency
c) 3 only of a concern.
d) None of the above 2. Inventory is a part of liquid assets.
3. The rule of thumb for the acid test ratio is 1:1.
a) 1 and 2
Q335. Working Capital is the ________. b) 2 and 3
a) Capital borrowed from the Banks. c) 2 and 4
b) Difference between Current Assets and Current d) Only 1
Liabilities.
Q340. Which of the following statements is incorrect? 3. Municipalities and Panchayats
a) Activity or Turnover Ratio comprises of Dividend 4. Income Tax Tribunals
Payout Ratio. 5. Artificial Judicial Person
b) Total Assets to Debt Ratio is normally computed for Choose the correct answer using the codes given below
evaluating the solvency of the business. a) 1, 2, 3 and 5
c) A proprietary ratio is a type of Solvency Ratio. b) 2, 3, 4 and 5
d) Ratio analysis helps to understand efficacy of c) 1, 2, 4 and 5
decisions. d) 1, 2 and 5
Q341. Which among the following is not a limitation of Q345. Which among the following categories of income
Ratio Analysis? heads is exempt from income tax?
1. Income from house property
a) No additional data needs to be presented along with
2. Income from agriculture
ratios. 3. Income from professional practice
b) Window dressing of ratios 4. Scholarships received for education
c) Price level changes Choose the correct answer using the codes given below:
d) No fixed standards. a) 2 and 3
b) 1, 3 and 4
c) 2 and 4
Q342. Income tax is based on the ‘Ability-To-Pay’ d) 1, 2 and 4
principle. What does this principle state?
a) Those who spend more should pay more taxes.
Q346. _____________________ denotes the formal
b) Those who earn more should pay more taxes.
accounting mechanism by means of which costs are
c) Those who save more should pay more taxes.
ascertained by recording them in the books of account.
d) Those who invest more should pay more taxes.
a) Costing
b) Cost Analysis
c) Cost Control
Q343. Which among the following statements is d) Cost Accounting
correct?
1. As per the IT Act, any company making a payment is
required to deduct tax at source (TDS) for all the
Q347. Which of the following is/are the correct
payments.
objectives of cost accounting?
2. The provisions of TDS apply to payments like salary,
a) Ascertainment of the cost.
interest, commission, professional fees etc.
b) Determination of Selling Price and Profitability
Choose the correct answer using the codes given below:
c) Cost Reduction
a) 1 only
d) All of the above
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
correct?
1. Out-of-pocket costs are those costs that do not
Q344. Under Section 2 of the Income Tax Act, who
involve cash outlays or require the utilization of
among the following can be treated as a ‘Person’?
current resources.
1. Hindu Undivided Family
2. Implicit Costs are not recorded in the books of
2. Limited Liability Partnership
accounts.
3. All non-manufacturing costs such as general & Q352. ___________________ method is used in mass
administrative expenses, selling and production industries manufacturing standardized
distribution expenses are recognised as period products in continuous processes of manufacturing.
costs. a) Process Costing
a) 1 and 2 b) Job Costing
b) 2 and 3 c) Contract Costing
c) 1 and 3 d) Batch Costing
d) Only 2

incorrect?
Q349. Which of the following is incorrect regarding a) In Standard costing, we only consider these variable
the example of Indirect Costs? costs while calculating the production costs.
a) Lubricating Oil b) Marginal costing is a technique where the firm
b) Consumables compares the costs that were incurred for the
c) Nuts and Bolts production of the goods and the costs that should
d) Timber in Furniture have been incurred for the same.
c) Budgetary control is the preparation of budgets and
analysis of the actual performance of the firm in
Q350. Which of the following constitutes the formula of comparison to the budgeted numbers.
Overheads? d) Both A & B
a) Direct Materials + Direct Labour + Direct Expenses
b) Indirect Materials + Indirect Labour + Indirect
Expenses Q354. In this technique, the separation of costs into
c) Direct Materials + Indirect Labour + Indirect fixed and variable is of special interest and importance.
Expenses This is because _______ costing regards only variable
d) Indirect Materials + Direct Labour + Indirect costs as the cost of the products.
Expenses Which technique is being discussed above?
a) Standard Costing
b) Budgetary Control
Q351. Which of the following statements is/are c) Both A and B
incorrect? d) Marginal Costing
1. Cost bookkeeping is concerned with the
verification of cost accounts.
2. Costing is concerned with the ascertainment of Q355. Which of the following statement is/are correct?
the cost of products, processes, jobs, services, a) Financial accounts show the detailed cost and profit
etc. data for each product line.
3. Cost audit involves maintaining complete b) Maintenance of Cost Accounts is compulsory.
record of costs incurred. c) Cost Accounting provides detailed cost information
a) 1 and 2
to management.
b) 2 and 3 d) Both A and C
c) 1 and 3
d) Only 2

Q356. Which of the following statements is are correct? Q361. Standard Cost is a ______________ cost.
1. Variable Cost is a cost which remain constant a) Pre determined
and do not increase or decrease when volume b) Actual
of production changes. c) Historical
2. Direct Costs are those costs which can be easily d) short term
and conveniently identified with a unit of
product.
3. Indirect Costs cannot be identified with a unit Q362. Which of the following statements is/are
of product incorrect?
a) 1 and 2 1. The limitations of budgetary costing system
b) 2 and 3 have led to the development of standard
c) 1 and 3 costing system.
d) Only 1 2. The deviation of the actual cost or profit or
sales from the standard cost or profit or sale is
known as Mismatch.
Q357. Which of the following statement is correct ? 3. An unfavourable material price variance occurs
a) Cost accounting is a branch of financial accounting. because of Price increase in raw materials.
b) Conversion cost is the aggregate of direct labour, a) 1 and 2
direct expenses and manufacturing overhead. b) 2 and 3
c) Depreciation is an out-of-pocket cost. c) 1 and 3
d) Contract costing is used in oil refineries. d) Only 2
Q358. Which of the following costing relates to the Q363. Which of the following industries uses standard
ascertainment of costs after they have been incurred? costing?
a) Historical Costing a) service
b) Absorption Costing b) process
c) Contract Costing c) manufacturing
d) Both A and C d) All of the above
Q359. Which of the following is not an advantage of

cost accounting ? Q364. Material price variance is calculated by
a) Reveals what is profitable or not profitable _________________.
b) Decision making a) Standard Price * Actual Quantity - Actual Price *
c) Ignores futuristic situation of products cost Actual Quantity
d) Formulating policies b) Standard Price * Actual Quantity - Actual price *
Standard Quantity
c) Actual Price * Actual Quantity - Standard price *
Q360. If Profit is Rs 5000, Overheads are Rs 8000, Sales Standard Quantity
is Rs 26000 then what is the Prime Cost ? d) Actual price * Standard Quantity - Standard price *
a) 3000 Standard Quantity
b) 40000
c) 13000
d) 1500

Q365. Material Usage Variance is calculated by Q369. Calculate the standard yield from the following
_____________________. information:
a) Standard Price * Standard Quantity - Actual Price
* Standard Quantity
b) Standard Price * Actual Quantity - Actual Price * Standard Loss allowed is 10% of input and standard rate
Actual Quantity of scrap realisation is Rs 6 per unit. Actual Output is 440
c) Standard Quantity * Actual Price - Actual Quantity * units.
Actual Price a) 450 units
d) Standard Quantity * Standard Price - Actual b) 550 units
Quantity * Standard Price c) 350 units
d) 250 units
Q366. The standard material required to manufacture

one unit of Product X is 10 kgs. and the standard price Q370. Which of the following statements is/are correct
per kg of material is Rs 25. The cost accounts records, regarding the objectives of Standard Costing?
however, reveal that 11,500 kgs of materials costing Rs a) To provide basis for suitable cost comparisons.
2,76,000 were used for manufacturing 1,000 units of b) To introduce a system of management by
Product X. Calculate the material variances. exception.
Calculate the Material Cost Variance. c) To provide means of performance evaluation.
a) Rs 11500 Favourable d) All of the above
b) Rs 26000 Adverse
c) Rs 37500 Adverse
d) Rs 11500 Adverse Q371. Which of the following statements is/are correct
?
a) Standard Costing serves as a basis for measuring
operating performance and cost control.
Q367. Material Yield Variance is calculated by
b) Standard Costing aids price fixing.
___________________.
c) Standard Costing serves as a basis for inventory
a) Actual rate (Actual Yield - Standard Yield)
valuation.
b) Standard rate (Actual Yield - Standard Yield)
d) All of the above
c) Actual Quantity (Standard Price - Actual Price)
d) Standard Quantity (Standard Price - Actual Price)

incorrect?
1. Production Overhead= Variable Production
correct?
Overhead + Fixed Production Overhead.
1. An unfavourable material usage variance occurs
2. Administration Overhead= Variable
because of less usage than standard of materials.
Production Overhead - Fixed Production
2. There are 3 types of standards.
Overhead.
3. A manufacturing organization sets standards for only
3. Selling Overhead= Variable Selling Overhead -
direct materials.
Fixed Selling Overhead.
a) 1 and 2
a) 1 and 2
b) 2 and 3
b) 2 and 3
c) 1 and 3
c) 1 and 3
d) Only 2
d) Only 2
d) Only 1
Q373. Which of the following statement is correct?
a) Variance Analysis is done for Direct Labour only.
b) Cost Variance may exist due to Price Variance only. Q378. Which of the following statements is/are correct
c) Direct material total variance is also known as regarding the assumptions of marginal costing?
material cost variance. a) All the elements of cost can be divided into fixed
d) Both A and B and variable components.
b) Total fixed cost remains constant at all levels of
output.
Q374. ___________ Variances are those which can be c) Total variable costs varies in proportion to the
controlled by the departmental heads. volume of output.
a) Controllable d) All of the above
b) Uncontrollable
c) Traceable
d) Untraceable Q379. Which of the following statements is correct?
a) Marginal costing is not very useful in situations
where a very small proportion of total cost is
Q375. The deviation between standard and actual cost variable cost.
is known as ______________. b) In many organisations, the splitting of semi-variable
a) Variable Cost Analysis costs into fixed and variable may not be possible
b) Variance Analysis accurately.
c) Linear Trend Analysis c) Valuation of stock, WIP at marginal cost may not
d) Multiple Analysis show the true profit of the organisation.
d) All of the above are true.
Q376. Which of the following constitutes the formula of

Overheads? Q380. Budgets must be prepared for a ___________.
a) Fixed a) definite period
b) Variable b) indefinite period
c) Semi Variable c) not less than a period of 24 months
d) Both A and B d) not less than a period of 36 months
Q377. Which of the following statements is/are Q381. ______________ also known as subsidiary
incorrect? budgets.
1. Marginal costs is taken as equal to Fixed a) Functional Budget
Overheads. b) Master Budget
2. Marginal Costing is also known as Variable c) Sales Budget
Costing. d) Either A or B
3. Marginal cost is calculated as the total
expenses required to manufacture one
additional good. Q382. __________________ is a practice of preparing
a) 1 and 2 the budget based on the evaluation of the productivity
b) 2 and 3 of the different operations in an organization.
c) 1 and 3 a) Performance Budgeting
b) Zero Based Budgeting Q387. Which of the following taxation systems imposes
c) Responsibility Accounting a flat tax rate irrespective of the income of an
d) None of the above individual?
a) Progressive taxation
b) Regressive taxation
Q383. Which of the following statement is/are correct? c) Proportional Taxation
a) A master budget is also known as cash budget. d) All of the above
b) Budgetary Control does not facilitate Management
by Exception
c) Budgeting is an expensive process Q388. With the passage of which constitutional
d) All of the above amendment act the parliament gave approval to the
Goods and services act?
a) 98th Constitutional amendment act
Q384. Production Overhead Budget includes b) 99th Constitutional amendment act
______________ c) 100th Constitutional amendment act
a) Cost of indirect material d) 101st Constitutional amendment act
b) Cost of indirect labour
c) Cost of indirect expenses
d) All of the above
Q389. Which of the following state indirect taxes has
been subsumed under Goods and Services Tax?
Q385. Which of the following statements is/are 1.Luxury tax
incorrect? 2.Entry tax
1. Activity Ratio= (Standard hours of actual 3.Purchase tax
production / Actual hours worked) * 100 4.Tax on advertisement.
2. Capacity Ratio= (Actual hours worked / a) 2, 3 and 4
Budgeted hours) * 100 b) 1, 2, 3 and 4
3. Efficiency Ratio= (Standard hours for actual c) 3 only
output / Budgeted hours) * 100 d) 1, 2 and 3
a) 1 and 2
b) 2 and 3
c) 1 and 3 Q390. GST is a consumption of goods and service tax
d) Only 2 based on?
a) Dividend
b) Development
Q386. Which of the following is one of the c) Duration
disadvantages of the progressive taxation method? d) Destination
a) Discourages more earnings.
b) It supports low growth and development.
c) Opens door for tax evasion Q391. What does “I” stands for in IGST?
d) All of the above a) International
b) Internal
c) Integrated
d) Intra

c) Only 4
d) Only 2
Q392. A bond that pays no interest and trades at a
discount to its face value is called __________ .
a) Coupon bonds
b) Zero coupon bond
c) Fixed Rate Bonds Q397. There are two bonds. One with maturity of 5
d) Floating Rate Bonds years and other with maturity of 10 years. The Face
value and Coupon rate are same on both the bonds. If
Q393. The yields on government bonds are usually less the yield decreases by 2% which bond will have larger
than yields on corporate bonds of similar maturity increase in the price?
because of which of the following reasons? a) Bond with 5 years Duration would have larger
a) Corporate bonds have greater maturity than that of increase in price
a government bonds b) Bond with 10 years Duration would have larger
b) Governments are non-profit-making institutions increase in price
c) Government bonds are riskier than corporate bonds c) Both the bonds will have same increase in price as
d) Government bonds are less risky than corporate both have same coupon rate and Face Value
bonds d) There will be no change in the bond's price
Q394. Which of the following is not a variable used in Q398. If you have a strong gut feeling that Interest rates
will decrease in coming times and you want to make
the pricing of bonds?
a) Time to maturity maximum profits by selling Bonds, then which of the
b) Quoted price following Bonds will give you maximum appreciation ?
a) Low Coupon and Low Maturity
c) Coupon payments
d) Yield to maturity b) High Coupon and High Maturity
c) Low Coupon and High Maturity
d) High Coupon and Low Maturity
Q395. What is assumption made while calculating Yield

to Maturity?
Q399. An 12% bond of Rs. 5000 has a maturity period
a) The interest rate will be the same as coupon rate
b) The coupon payments would be re-invested further of 5 years. The current price of bond is 4050. If the YTM
at the same rate as the current yield of the bond is 14% then find its duration ?
c) Both A and B a) 4.5 yrs
d) The interest rate would be floating in nature b) 2.5 yrs
c) 2 yrs
d) 3 yrs
Q396. Which among the following is the odd one out?

1. Puttable Bonds
2. Convertible Bonds Q400. Ram and Sham are 2 friends. Ram bought a bond
of 1000 with coupon payment of 6% annually which
3. Callable Bonds
4. Zero Coupon Bonds matures 3 years from now. Sham bought a bond of
a) 2 & 4 1000 with semi-annual coupon payment of 6% annual
b) 1 & 3 rate which also matures 3 years from now. If the

discount rate is assumed to be 5% then which of the
following statements is true?
a) Ram would be getting more money than Sham in
present value terms
b) Ram would be getting same money as Sham in
present value terms
c) Ram would be getting less money than Sham in
present value terms
d) Ram would get exactly twice the amount of money
sham will get in present value terms

SOLUTIONS
Question No. Answer Question No. Answer Question No. Answer Question No. Answer
1 B 101 D 201 C 301 D
2 C 102 B 202 C 302 A
3 A 103 B 203 A 303 B
4 B 104 C 204 D 304 A
5 A 105 C 205 B 305 C
6 A 106 D 206 A 306 B
7 D 107 D 207 D 307 A
8 D 108 A 208 C 308 C
9 A 109 A 209 B 309 C
10 B 110 C 210 A 310 B
11 C 111 C 211 C 311 B
12 D 112 B 212 D 312 D
13 A 113 C 213 D 313 A
14 B 114 B 214 A 314 C
15 D 115 D 215 D 315 D
16 B 116 D 216 D 316 C
17 C 117 B 217 C 317 D
18 D 118 D 218 D 318 A
19 D 119 A 219 B 319 B
20 D 120 B 220 A 320 C
21 A 121 A 221 B 321 B
22 C 122 B 222 A 322 A
23 B 123 C 223 D 323 D
24 C 124 A 224 C 324 D
25 C 125 C 225 D 325 C
26 B 126 C 226 D 326 B
27 D 127 A 227 D 327 D
28 C 128 A 228 C 328 D
29 B 129 A 229 B 329 B
30 B 130 C 230 A 330 A
31 D 131 B 231 B 331 C
32 D 132 A 232 D 332 B
33 C 133 C 233 C 333 B
34 A 134 B 234 D 334 D
35 C 135 A 235 D 335 B
36 C 136 C 236 A 336 B
37 A 137 B 237 D 337 B
38 A 138 B 238 C 338 A
39 B 139 A 239 D 339 A
40 D 140 D 240 A 340 A
41 B 141 D 241 B 341 A
42 A 142 D 242 A 342 B
43 A 143 B 243 C 343 B
44 A 144 A 244 D 344 A
45 A 145 C 245 A 345 C
46 A 146 D 246 A 346 D
47 C 147 B 247 C 347 D
48 A 148 B 248 D 348 B
49 A 149 C 249 C 349 D
50 D 150 B 250 D 350 B
51 C 151 D 251 B 351 C
52 A 152 C 252 C 352 A
53 A 153 A 253 C 353 D
54 D 154 D 254 D 354 D
55 B 155 B 255 D 355 C
56 B 156 D 256 D 356 B
57 B 157 A 257 C 357 B
58 C 158 B 258 D 358 A
59 C 159 B 259 C 359 C
60 B 160 A 260 D 360 C
61 C 161 D 261 D 361 A
62 B 162 B 262 D 362 A
63 C 163 C 263 D 363 D
64 D 164 A 264 C 364 A
65 A 165 B 265 A 365 D
66 C 166 A 266 D 366 B
67 B 167 D 267 D 367 B
68 A 168 A 268 C 368 D
69 C 169 B 269 A 369 A
70 C 170 B 270 D 370 D
71 C 171 D 271 B 371 D
72 A 172 C 272 A 372 B
73 C 173 C 273 D 373 C
74 A 174 D 274 C 374 A
75 D 175 B 275 D 375 B
76 D 176 A 276 A 376 B
77 B 177 A 277 B 377 D
78 C 178 A 278 D 378 D
79 A 179 B 279 C 379 D
80 A 180 C 280 D 380 A
81 D 181 B 281 A 381 A
82 D 182 C 282 B 382 A
83 D 183 C 283 B 383 C
84 D 184 A 284 B 384 D
85 B 185 C 285 B 385 C
86 A 186 C 286 A 386 D
87 B 187 A 287 D 387 C

88 D 188 D 288 D 388 D
89 D 189 B 289 A 389 B
90 C 190 C 290 A 390 D
91 C 191 D 291 B 391 C
92 C 192 D 292 A 392 B
93 A 193 B 293 C 393 D
94 C 194 D 294 C 394 B
95 C 195 B 295 D 395 B
96 B 196 C 296 B 396 C
97 D 197 B 297 A 397 B
98 B 198 B 298 D 398 C
99 D 199 A 299 D 399 A
100 B 200 C 300 D 400 B

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AFM 400-Questions Final PDF

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Email – hello@edutap.co.in, M - 8146207241 1|Page http://www.edutap.co.

Email – hello@edutap.co.in, M - 8146207241 2|Page http://www.edutap.co.in

Q14. Match the following:

Q12. Which of the following statements is/are

Q13. Match the following:

Email – hello@edutap.co.in, M - 8146207241 3|Page http://www.edutap.co.in

Q22. Which among the following is not an essential

Q25. Which of the following given statements is/are

Email – hello@edutap.co.in, M - 8146207241 4|Page http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 5|Page http://www.edutap.co.in

Q36. Match the following:

Email – hello@edutap.co.in, M - 8146207241 6|Page http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 7|Page http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 8|Page http://www.edutap.co.in

Q63. Rectify the following errors by making suitable

Email – hello@edutap.co.in, M - 8146207241 9|Page http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 10 | P a g e http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 11 | P a g e http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 12 | P a g e http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 13 | P a g e http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 14 | P a g e http://www.edutap.co.in

Q110. What is the accounting entry when the creditor

Email – hello@edutap.co.in, M - 8146207241 15 | P a g e http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 16 | P a g e http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 17 | P a g e http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 18 | P a g e http://www.edutap.co.in

Q147. The book ‘An Introduction to Indian Government

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Email – hello@edutap.co.in, M - 8146207241 20 | P a g e http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 21 | P a g e http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 22 | P a g e http://www.edutap.co.in

Q183. A Which of the following statement will be

Email – hello@edutap.co.in, M - 8146207241 23 | P a g e http://www.edutap.co.in

Q191. Which of the following systems is incorrect?

Q188. Fair Value Accounting is also known as

Q194. Which among the following is not among the

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Email – hello@edutap.co.in, M - 8146207241 25 | P a g e http://www.edutap.co.in

Q208. Which among the following is not an example of

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Email – hello@edutap.co.in, M - 8146207241 27 | P a g e http://www.edutap.co.in

Q230. All money received along with application for

Q231. Which one of the following is not classified under

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Q239. Which one of the following is a use of funds?

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Email – hello@edutap.co.in, M - 8146207241 30 | P a g e http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 31 | P a g e http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 32 | P a g e http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 33 | P a g e http://www.edutap.co.in

Email – hello@edutap.co.in, M - 8146207241 34 | P a g e http://www.edutap.co.in

Q288. Which one of the following is a method of

Q294. Which one of the following statements is

Email – hello@edutap.co.in, M - 8146207241 35 | P a g e http://www.edutap.co.in

Q303. Which among the following statements is

Email – hello@edutap.co.in, M - 8146207241 36 | P a g e http://www.edutap.co.in

Q305. Which of the following given statement is/are

Email – hello@edutap.co.in, M - 8146207241 39 | P a g e http://www.edutap.co.in

Q331. A ___________ is a bank that operates without

Q333. The two basic measures of liquidity are:

Q353. Which of the following statements is/are

Email – hello@edutap.co.in, M - 8146207241 42 | P a g e http://www.edutap.co.in