Practice Test

Q1) As per the Banking Regulations Act, 1949, a bank can engage in the following banking business Show Answer

Q2) Every banking company in India is required to transfer at least _____ of its current year’s profit to the reserve fund Show Answer

Q3) A banking company can pay dividend on its shares Show Answer

Q4) Every non-scheduled bank has to maintain a cash reserve of at least ¬¬¬¬-_____ of its demand and time liabilities in India. Show Answer

Q5) The General Ledger of a bank contains Show Answer

Q6) Rebate on bill discounted is Show Answer

Q7) The first item under ‘Assets’ in the balance sheet of a Bank is Show Answer

Q8) The items under ‘Liabilities’ in the balance sheet of a Bank are shown in the following order Show Answer

Q9) Bills for collection are shown Show Answer

Q10) The figures in final accounts of a bank Show Answer

Q11) Capital is classified under Authorised, Issued, Subscribed, Called up etc. Show Answer

Q12) Amount of deposit kept with the RBI under Section 11(2) of Banking Regulation Act, 1949 is shown under Capital for Show Answer

Q13) The items under ‘Reserves and Surplus’ in Schedule 2 of the balance sheet of a Bank are shown in the following order Show Answer

Q14) Bills payable are shown in the balance sheet of a Bank Show Answer

Q15) Balances with RBI are shown in the final accounts of a Bank in Show Answer

Q16) Interest accrued is shown in the final accounts of a Bank in Show Answer

Q17) Money at call and short notice is shown in the final accounts of a Bank in Show Answer

Q18) Bills purchased and discounted are shown in the balance sheet of a Bank Show Answer

Q19) Advances in India are classified in the balance sheet of a bank under Show Answer

Q20) Advances outside India are classified in the balance sheet of a bank under Show Answer

Q21) Inter-office Adjustments (net) will appear in the balance sheet of a bank Show Answer

Q22) Discount on bills is shown by a bank Show Answer

Q23) Loss on Revaluation of Investments Show Answer

Q24) Which of the following statements are true?
(1) Provisions for doubtful advances are deducted from the advances to the extent
(2) Provisions for doubtful advances are made on a net basis, after deducting Tax relief available
Show Answer

Q25) Contingency funds will appear Show Answer

Q26) Surplus on revaluation should be treated as Show Answer

Q27) Credit balances in overdrafts are shown by a bank as Show Answer

Q28) Inoperative current account balances are shown by a bank as Show Answer

Q29) Interest payable on deposits which is accrued but not due is shown under Show Answer

Q30) Unclaimed dividend is shown by a bank under Show Answer

Q31) Endorsements are shown by a bank under Show Answer

Q32) Rebate on bill discounted is shown in the Show Answer

Q33) Employee security deposit is shown by a bank under Show Answer

Q34) Building acquired in satisfaction of a claim is shown by a bank under Show Answer

Q35) Letters of credit are shown by a bank under Show Answer

Q36) The heading ‘Other Assets’ does not include Show Answer

Q37) A banking company is statutorily required required to transfer ¬____ % of its profits to its Reserve Fund, each year before declaring dividends or transferring profit to the Central Government Show Answer

Q38) Demand drafts, telegraphic transfers, mail transfers and Travellers cheques issued by the bank but not presented for payment till the year end are known as Show Answer

Q39) Banks should, classify an account as NPA only if the interest charged during any quarter is not serviced fully within _____days from the end of the quarter. Show Answer

Q40) Which of the following statements is false?
(1) Income from non-performing assets (NPA) is recognized on accrual basis
(2) Interest on advances against term deposits may be taken to income account on the due date, provided adequate margin is available in the accounts
(3) If Government guaranteed advances become NPA, the interest on such advances should not be taken to income account unless the interest has been realized
Show Answer

Q41) A _____ asset would be one, which has remained NPA for a period less than or equal to 12 months. Show Answer

Q42) Banks should make general provision for standard assets in the form of direct advances to agricultural and SME sectors at Show Answer

Q43) Banks should make general provision for standard assets in the form of commercial real sector at Show Answer

Q44) Banks should make general provision for standard assets in the form of housing loans at teaser rates, at Show Answer

Q45) Banks should make general provision for standard assets in the form of loans and advances qualifying as Capital Market exposures at Show Answer

Q46) Banks should make general provision for standard assets at Show Answer

Q47) What percentage of provision is required on performing assets? Show Answer

Q48) The Balance Sheet of Alpha Banking Co. has doubtful advances amounting Rs.300 lakhs (classified as outstanding for more than three years on 31-03-2005). The provision will be made for Rs. Show Answer

Q49) What will be the amount of provision to be shown in Profit and Loss Account of Dena Bank Ltd. in respect of doubtful asset aging 1-3 years of Rs.1,000? Show Answer

Q50) When income is to be recognized on cash basis by Safe Trust Bank, a distinction should be made between Show Answer

Q51) For the year ended 31st March, 2010 non-performing assets classified as sub-standard in Centura Bank Ltd. will be classified as doubtful after Show Answer

Q52) On 1-4-2009 Bills for collection were Rs.10,000. During 2009-2010 bills received for collection amounted to Rs.1,00,000 , bills collected were Rs.80,000 and bills dishonored and returned were Rs.5,000. What will be the amount of bill for collection (assets) to be shown in the Balance Sheet as on 31-3-2010? Show Answer

Q53) Capital Adequacy Ratio is equal to Show Answer

Q54) Tier I Capital includes Show Answer

Q55) The quantum of Tier II capital is limited to a maximum of ______ of Tier I Capital. Show Answer

Q56) The risk adjusted value for any category of assets is equal to the Show Answer

Q57) A Banking company must hold a license issued by Show Answer

Q58) Non Banking assets must be disposed off within- from the date of acquisition. Show Answer

Q59) A banking company incorporated in India having place of business in more than one state including the city of Mumbai or Kolkata or both must paid up capital of Rs. Show Answer

Q60) Paid up capital of a banking company must be at least ______ of subscribed capital. Show Answer

Q61) The rate of commission in respect of shares issued by a banking company must be at least Show Answer

Q62) Every banking company must transfer at least ______ % profit to Reserve fund. Show Answer

Q63) The CRR to be maintained by the banking company is Show Answer

Q64) Every banking company has to maintain a statutory liquid Ratio of Show Answer

Q65) Balance sheet & P & L A/c must be prepared as per the form given in Show Answer

Q66) Every banking company must submit P & L A/c and Balance sheet together with Auditors Report in Show Answer

Q67) Personal ledgers include Show Answer

Q68) General ledgers contains Show Answer

Q69) General ledger facilities preparing Show Answer

Q70) Balance sheet of a bank is prepared in form Show Answer

Q71) P & L A/c of a bank is prepared in form Show Answer

Q72) Balance sheet of a bank requires Show Answer

Q73) P & L A/c of a bank requires Show Answer

Q74) Share premium is disclosed under Show Answer

Q75) Savings Bank deposits are disclosed under Show Answer

Q76) Money at call and short notice is disclosed under Show Answer

Q77) Debentures & bonds are disclosed under Show Answer

Q78) Term loans are disclosed under Show Answer

Q79) Cash credits and overdraft are shown under Show Answer

Q80) Non banking assets are shown under Show Answer

Q81) Acceptances & endorsements are shown under Show Answer

Q82) Interest on loans & advances is an Show Answer

Q83) Interest on deposit is an Show Answer

Q84) Law charges are shown under Show Answer

Q85) Inter-branch transactions should be disclosed under Show Answer

Q86) Figures in final statements are rounded off to the nearest Show Answer

Q87) Bills payable should be shown under Show Answer

Q88) Stationery and stamps should be disclosed under Show Answer

Q89) Commission, exchange and brokerage is shown under Show Answer

Q90) An assets become non-performing when Show Answer

Q91) NPA stands for Show Answer

Q92) Discounted bills are shown under Show Answer

Q93) Rebate on bills discounted refers to Show Answer

Q94) Rebate on bills discounted is shown under Show Answer

Q95) CRR stands for Show Answer

Q96) Contingency fund appears Show Answer

Q97) Surplus on Revaluation should be treated as Show Answer

Q98) Employee security deposit is shown as Show Answer

Q99) The heading ‘other assets’ does not include Show Answer

Q100) The % of provision required on standard assets is: Show Answer

Q101) The % of provision required on sub-standard asset on secured portion is Show Answer

Q102) The % of provision on unsecured portion of sub-standard asset is Show Answer

Q103) The % of provision on unsecured portion of doubtful asset is Show Answer

Q104) The % of provision on doubtful assets upto 1 year is Show Answer

Q105) The % of provision on doubtful asset exceeding 1 year but not exceeding 3 years is Show Answer

Q106) The % provision on doubtful assets exceeding 3 years is Show Answer

Q107) The % of provision on loss asset is Show Answer

Q108) Bills for collection are shown in Balance sheet Show Answer

Q109) Bills purchased and discounted is treated as NPA when they remain unpaid for more than Show Answer

Q110) Cash credit and overdrafts is considered as NPA when is remains out of order for more than Show Answer

Q111) Letter of Credit is shown under Show Answer

Q112) Unclaimed dividend is shown by bank under Show Answer

Q113) Provision for standard Asset in respect of advances to commercial Real Estate sector is Show Answer

Q114) Provision for sub-standard asset in respect of unsecured infrastructure loan A/c where ESCROW A/c is available is Show Answer

Q115) Banking companies in India are governed by Banking Regulations Act, 1949. Show Answer

Q116) Any company which transacts the business of banking is called as a banking company. Show Answer

Q117) A banking company can carry business without a license issued by RBI. Show Answer

Q118) A banking company is allowed to deal in buying and selling of goods. Show Answer

Q119) A banking company in Mumbai must have Rs. 15 lakhs. Show Answer

Q120) Chairman of a banking company is appointed for a period not exceeding 10 years. Show Answer

Q121) Share capital of a banking company includes equity shares only. Show Answer

Q122) As per Section 17 of the Banking Regulations Act, at least 50% of the profit before declaration dividend must be transferred to Statutory Reserve. Show Answer

Q123) There are no restrictions on payment of dividend by banking companies. Show Answer

Q124) Rates of interest on fixed deposit is lowest. Show Answer

Q125) Current A/c is opened by businessmen. Show Answer

Q126) Term loan is an advance given by a bank to customers. Show Answer

Q127) Discounting of bill is converting the bill into cash. Show Answer

Q128) Demand draft is a mode of transfer of money from one place to another place. Show Answer

Q129) RBI can inspect books of accounts of a banking company at any time. Show Answer

Q130) Balance sheet of a banking company is prepared in Form ‘A’ of Third Schedule of Banking Regulations Act. Show Answer

Q131) Capital Reserve can be distributed as dividend. Show Answer

Q132) Demand Deposits are repayable on demand. Show Answer

Q133) Term Deposits are repayable after a certain period. Show Answer

Q134) Rebate on Bills discounted is unearned discount. Show Answer

Q135) Money at Call and Short Notice can be withdrawn by 24 hours notice. Show Answer

Q136) Treasury Bills are usually for 3 months. Show Answer

Q137) Standard assets are those assets which do not have any risk. Show Answer

Q138) Loss assets are those assets where loss has been identified by the bank or RBI. Show Answer

Q139) Banks need not maintain SLR of 25% Show Answer

Q140) Banking companies in India are governed by _______ _______ ______. Show Answer

Q141) A banking company requires a license from _____. Show Answer

Q142) Tier ______ capital is a bank’s highest quality fully available to cover losses. Show Answer

Q143) Perpetual Non- cumulative Preference Shares _______ eligible for inclusion as Tier I capital. Show Answer

Q144) Innovation Perpetual Debt Instruments _______ eligible for inclusion as Tier I capital. Show Answer

Q145) Capital reserves representing surplus arising out of sale proceeds of assets ______ eligible for inclusion as Tier I capital. Show Answer

Q146) Tier I Capital is ______ by intangible assets. Show Answer

Q147) Tier I Capital is ______ by losses in the current period. Show Answer

Q148) Tier II Capital includes______ reserves. Show Answer

Q149) Tier II Capital ______ Hybrid debt capital instruments. Show Answer

Q150) Subordinated debt instrument will be limited to ______ % of Tier- I capital. Show Answer

Q151) Banks can include the ‘ General Provisions on Standard Assets in Tier _____ capital Show Answer