MOST IMPORTANT AFB Recollected::

MOST IMPORTANT AFB Recollected::

1. Preference share option related voting rights were given

2. Foreign exchange dollar hkd and rupees cross currency was asked in rs

3. Eosp when it is issued or employees has buy predermined rates

4. Depreciation wdv 2 questions and sum of years 1

5. Error of principle

6. Gold loan rules for sanctioning

7. Bond volatility

8. spot rate meaning

9. Value date

10. e-commerce is?

11. Computer software is developed by?

12. Cost of sales gross profit net profit

13. Reconciliation

14. Closing stock apear-trading and balance sheat

15. Contingent liability-bank garanty

16. AS 13 relates to investment

17. Medium risk-8 years

18. SHG- kyc not required of all member

19. Sinking fund formula same as - FV anuity

20. Prepaid exp-current liability

21. Depriciation 2 qtns from wdv method and one from wtd average method

22. Outstanding salary - personal act

23. Expenses and incomes - nominal act

24. Real a/c debited-what comes in

25. Statement record all ledger balance-trial balance

26. Small account credit in a year - 1 lakh

27. Govt Company - 51% share

28. Question on kyc

29. Saving ac interest calculation....

30. Question in cash book and pass book

31. Long term Liabilities changes

32. Effect on assets

33. No question on SI, CI and EMI

34. Question from trial Balance

35. Real account, Personal account, Nominal account

36. 1 question is that Representative personal acc is 1

37. Question on wdv depreciation method

38. 2 marks question on foreign exchange rate

39. 1 question on ESOS

40. Floating rates are called ......

41. Back office may be situated in ......

42. Long term liabilities are payable after ......

43. High Financial Leverage means ......

44. Expenditure & Income reales to ......

45. Non Voting Shares

46. Double entry system means ......

47. Vaule date

48. Residual Value

49. YTM bond is ......

50. Spot

51. Call & Short Money

52. Credit & Debit Voucher

53. Chq clearing

54. Net profit value

55. Gross profit

56. Debt equity ratio

57. Issued shared

58. Banking manual

59. Question on cross currency rate 2 marks

60. Gross profit & net profit 2 marks

61. YTM 2 marks

62. Debit in real account refers to.....

63. KYC verification for shg group members....

64. CA cannot opened by....

65. Gross profit

66. Present value

67. Cash book passbook

68. Real nominal accounts

69. Fixed n floating rate

70. Call money notice money

71. Numerical Questions on gross profit, bond value, current yield, depreciation, present

value of some amount

72. Petty cash - 3question

73. Bank reconcile-2ques

74. 2 question from prepaid expenses

75. Main function of bank

76. Gross profit

77. Present annuity

78. Proprietorship firm

79. Meaning of holding company

80. Cash flow 55000, Useful Life 5 years, IRR 15%, Cost of capital 11%. Find NPV

81. What is consolidated voucher

82. Representative personal account

83. DE ratio owen fund current ratio total assets given n find the current asset

84. Sweat equity share

85. KYC - 2 questions

86. Salvage value in depreciation method 2 questions

87. Forex arithmetic 3ques's

88. Depreciation of machinery after 2 years written down value

89. kyc risks

90. STR report

91. Risk mgmt

92. BCSBI 1 question

93. Credit bal

94. Debit bal 2ques

95. Forfeiture of shares

96. Preference share

97. Dual concept

98. Accrual concept

99. Formula of depreciation

100. Sinking value 2 ques's

101. NPV VALUE OF Firm Calculation 2 Questions

102. Debt equity ratios...

103. Depreciations on fixed value...2-3ques...

104. Depreciation on straight line (residual value) ques...

105. Company having 51% share of another company...

106. Maximum limit of transaction in small (ovd )accounts in a year....

107. Current a/c cant be opened by....options were ...pardanashin women....minor

....blind...a ccompany..

108. Sweat equity shares...

109. GAAR full form...

110. Money market mutual funds are regulated by...

111. If a person transfer a/c frm one branch to another branch den required kyc???

112. Companiesare classified on the basis of...options were

...location...capital...managemnt...incorporation etc...

113. Bond value.....

114. Insurance premium for 45 days???

115. Typs of clerical errors.....

116. Periferal devices of computer...options were...keyboard windows..

117. A Suspesious Transion report where the report ( FIU-Ind)

118. Objective PMLA

119. When a minor open self operated account

120. Deleting Drawing 2 Questions debit or credit account

121. What is bond maturity value (YTM)

122. What is coupon rate

123. Prepaid expenses or outstanding account adjustment done or not

124. Samll account time

125. Rectification of error 4-5 Questions

126. Depreciation 4-5 Questions (3 Numerical)

127. Final Account 5-6 Questions

128. Foreign exchange 3 Questions all numerical

129. YTM 3 Questions

130. Education loan - 2 Question

131. Gold loan-1 Question

132. Consolidate voucher

133. Bank General ledger

134. Ratio 3 Question

135. How to improve current ratio

136. Inventory turnover ratio

Find cost of good sale if opening is80000; purchase is 120000;direct expense 5500;

indirect expense 4000 ;closing is9000

Bond par value is 100, market rate is 12% and 15% is .....find bond price

Ravi wants 500 at every quarter for 5 year , at the rate 10%.find initial deposite

When bond price is equal to Face value.

Interest paid in advance is a type of account

In which depreciation rate of interest is constant

Car purchase by a company is which type of expense

Auditor of a bank is appointed by

In cbs branch computer is connected to the server and all server are connected to main

data centre server

In India 1$=66.56-66.74and 1 euro=1.1456-1.1765$ then relation betwn rupee and

euro

Wages for installation of machine is debited wages acct is which type of error

Find closing balance if cost of goods sold ,puchase,indirect expense, opening balance is

given - For 1year, For 3years

A company deposited 5000at the beginning of the year to puchase amachinary for

20year at the rate 10% find present value of annuity

Schedule AS6 define

Which are the peripheral related to computer

Which of the work out sourced by bank - Ans loan recovery

Which work is not done at back office

Calculation of EMI

Calculation of interest on loan

E kyc is done at periodically to which type of customer

Why Ekyc is usefull

A loan is sanctioned and disbursed 100000 but after 1 year it shows outstanding of

101000. Than what is 1000

4 questions from identifying type of error

Gold loan eligibility

Bond face value one numerical pbm

Bank reconciliation statement given passbook balance and asked cash book balance and

viceversa-2numerical question and 2 case study type question in above

Cost sales netprofit numerical pbm

Given coupon rate,rate of interest and par value asked market price.

Accounting concepts AS29

Business entity,matching concept - give situation asked to find the type of concept

Benefits of CBS

Bill drawn by A on B endorsed it to c....After due date the entries are bills

receivable,noting charges-wat could have happened?

1. WDV Depreciation> 2problems

2. Who cannot open a Current a/c>minor, illiterate, blind or unregistered society

3. Balance sheet given. Calculate gross profit and net profit

4. Capital paid by shareholders >Paid up capital

5. Calculate PV and bond price>2 problems

6. Which is not true abou Company a/c

7. Cross currency problem

8. What is Spot

9. Due date of a bill from 29june(3months)

10. Suspicious transaction report to >FI UNIT

11. closing stock apear-trading and balance sheat

12. contingent liability-bank garanty

13. AS 13

14. medium risk-8 years

15. SHG- kyc not required of all member

16. sinking fund formula same as - FV anuity

17. Prepaid exp-current liability

18 depriciation 2 qtns from wdv method and one from wtd average method

19. outstanding salary - personal act

20. expenses and incomes - nominal act

21. real a/c debited-what comes in

22. statement record all ledger balance-trial balance

23. current yeild

24. bond value

25. mehod of accepting proposal-irr, npv,payback

Limited company pvt compny

account opening of huf

huf Kyc computerised a ccounting

simple interest que

wrongly credited de bited type question 3-4

Theoretical question on IRR and NPV

maximim 10 numericals 5 of 2 marks

2 marks numerical from ratio analysis

Depricition digit sum method numeric al

Acid test ratio=........... quick ratio

person who makes Promissory not e called - debtor (buyer)

gross profit, NPV numerical

related to cbs

according stan dards

capital or revenue ex penditure

earning per share theory quest ion

Dept turn over ratio problem

Bill receivable comes under a sset or liability

Under bills of exchange, which ac Dr.

Under bills of exchange, which ac Dr.

Sales and cost of goods sold gross pro fit

Foreign exchange and cross currency cal c

cross currency u have to add premiums an d sub discount

Composite voucher

Composition, redee mable, share preferential shares

1. Who prepared Bank Reconciliation Statement?

2. Who will bear the expenses charge creation?

3.cost of mationary is RS 12 lacs, scrap value is 0; useful life is 10 yrs; then find out the

book value for the 4th year.

4. P =10000; A= 11200; r=6℅ p.a then find out time?

5. Classification of ratios?

6. Credits = assets - ?

7. P= 10000 r= 8.5℅ pa compounded quarterly; T=4 yrs then find out A=?

8. Find out current yield on bond is RS 5000/- r = 12℅ pa and market value = 4500

9. Sweat equity shares will be given to ?

Document mgnrega card on identification on a/c opening.

Back office to be establised in ......

No of digits in Adhar, min no of persons in public ltd company

adhar card..bond value..irr.npv..com interest..cash book and passbook od..nominal act

real act ..expendture

balance sheet was given and profit was asked , how deaf is calculated, ytm npv,

bcsbi..kyc year..housing loan ...slm..and wdv method .interest differential..eroor

clerical...net profit ratio.5 qus on trial bal...

virus 1)affect hardware 2) is software 3) like virus of human 4) can not affect data - 2

Present value of bond

Which r 2 types of trial balance

Writing from journal to ledger is called?

2-3 qustns from foreign exchange arithmetic

Calculate amount given to petty cashier using imprest method

Current ratio based questions

Quick ratio is another name of -------?

Depreciation problems using wdv

Straight line method and sum of digits method

……………………………………………………………………

1) bond theorem -2 question 
2) bond sum
3) quick ratio 2sum
4) current ratio 1 sum
5) depreciation 4 sum
6) NPV
7) Pay back method 
8) ARR method _1 
9) Capital budgeting 1
10) Compound interest 2 sum 
11) Bond ARR value 
12) Concept of covertism 
13) Concept of consistency 
14) Full disclosure 
15) Accounting method -3 
16) Cost method 
17) Material method
18) Matching method 
19) Small savings bank account - who all can open , look 
20) EMI
21) Coupon rate 
22) Kyc 
23) Bcbsi account 
24) Trail balance error 
25) Company types - how it vil be registered 
26) LAN WAN - networking of 27)computreconcilation in which entry is required .... In which rectification entry not require 
28) Which error affects two accounts 
29) forward point - dollar to euro, euro to rupee 3 questions

Direct simple question on EMI
Twisted but very simple question in depreciation
Ratios some questions
KYC
LAN and WAN
Computer password
Reconsiliation
3 questions from cash book pass book. In this one question is sum others are theoretical
Conversion from euro to one unit of rupee
Direct questions on forward point
2-3 questions currency conversion dollars
Quick and current ratio - 4-5 questions
Emi 5 Lakhs 12% - monthly EMI for 2 years
Deprecation 3-4 questions numerical
The value get double at 9.75% in how many years
Single sided corr - 2-3 questions
RTGS related
Computer security related
Advantage of computerisation
Balance sheet
Prepaid expenses is what ...
Personal account
One more on real account based
Loan processing - 2 questions

JAIIB AFB

JAIIB AFB


1. Commission received in advance is of the nature of
a. AReal account
b. Personal account
c. Nominal account
d. Intangible account
2. A money lender lent some amount in simple interest of @ 8% p.a. After 18 months,
he got Rs. 14000 in full payment of interest and principal amount. Find out the sum
lent by the money lender.
a. Rs. 11500
b. Rs. 12000
c. Rs. 12500
d. Rs. 13000
3. What annual rate of simple interest was paid if Rs. 10000 earned Rs. 1100 as interest in 2 Years and 9 months?
a. 2%
b. 3%
c. 4%
d. 5%
4. Sequence of payments made at regular periods over a given time interval is called
a. Principal
b. Interest
c. Annuity
d. None of the above
5. Due to a fall in the rate of interest from 11% to 10.5%, a money-lender's yearly
income from interest falls by Rs. 240. What is his principal amount?
a. Rs. 42,800
b. Rs. 41,600
c. Rs. 44,600
d. Rs. 48,000
6. Under written down value method of Depn., the W D V of the asset is always
a. equal to zero
b. < zero
c. > zero
d. None of these
7. In how many years will a sum of money double itself at 8% per annum compound
Interest?
a. 8 Years
b. 8 Years 6 months.
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c. 9 Years
d. 9 Years 6 months
8. Which of the following is not true
a. Depreciation is an expense charged to the P & L a/c.
b. Depreciation is not a part of the operating costs.
c. Assets that are depreciated are tangible assets.
d. Depreciation is like an insurance expense.
9. Which one is not among the three pillars of BASEL II ?
a. Minimum Capital Requirement
b. Supervisory Review Process
c. Risk Based Supervision
d. Market Discipline
10. At a certain rate of simple interest, a sum doubles itself in 5 years. It will be four
times of Itself in
a. 10 Years
b. 15 Years
c. 20 Years
d. 25 Years
11. According to IRR, undertake those investments that has highest IRR, provided the IRR is ...... the cost of capital
a. Greater than
b. Equal to
c. Less Than
d. None of these
12. What is the principal amount which earns Rs. 1320 as compound interest for the
second year @ 10% p.a.?
a. Rs. 10,000
b. Rs. 12,000
c. Rs. 14,000
d. Rs. 16,000
13. A sum of money doubles itself in 16 years at simple interest with yearly rate of...
a. 5.25 %
b. 6.25 %
c. 7.25 %
d. 8.25 %
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14. A sum of Rs. 25,400 is lent out into two parts, one at 12% p.a. and the other at
12.5% p.a. If the total annual income from interest is Rs. 3,116, the money lent at
12% is
a. Rs. 10,800
b. Rs. 11,800
c. Rs. 12,400
d. Rs. 13,400
15. Private Sector Companies can issue .......... bonds.
a. Secured
b. Unsecured
c. Any one of the above
d. None of these
16. According to NPV, undertake those investments for which the NPV is
a. Positive
b. Negative
c. Either positive or Negative
d. None of these
17. Which is not one of the approaches proposed for measurement of operational risks ?
a. Basic Indicator Approach
b. Standardised Approach
c. Advanced Measurement
d. Internal Rating Based Approach
18. A sum of money at simple interest amounts to Rs. 2,800 in 2 years and to Rs. 3,250
in 5 years. Find the sum and the rate of interest.
a. Rs. 2,500; 5%
b. Rs. 2,500; 6%
c. Rs. 3,000; 5%
d. Rs. 3,000; 6%
19. The method in which depreciation rate is constant is
a. straight line method
b. Declining Balance Method
c. Double Declining Balance Method
d. Accelerated Depriciation
20. In SPOT, the exchange of currencies take place on
a. Same Day
b. Next Day
c. Second Working Day
d. Third Working Day
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21. Which is not Tax deductible?
a. Interest Payments on Debts
b. Dividend Payments
c. Both
d. None of these
22. Operation of borrowing in one centre and lending in another at higher rate, is called as
a. Spot
b. Forward
c. Arbitrage
d. None of these
23. A bond carries a specific rate of interest is called as...
a. Yield-to-Maturity
b. Face Value
c. Coupon Rate
d. Redemption Value
24. Debt which is due to us is called...
a. Active
b. Passive
c. Any of the above
d. None of the above
25. The price at which two unrelated and non-desperate parties would agree to a
transaction is called
a. Transfer Pricing
b. Arm's Length Price
c. Deal Price
d. None of these
26. The asset lose an equal amount of value each year in case of
a. straight line method
b. Declining Balance Method
c. Double Declining Balance Method
d. Accelerated Depriciation
27. When a currency is at premium in future or for a future value date, it is
a. Costlier
b. Cheaper
c. Equal
d. None of these
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28. The main objective of providing depreciation is
a. To allocate true profit.
b. To show the true financial position in the balance sheet.
c. To reduce tax burden.
d. To provide funds for replacement of fixed assets.
29. When a currency is at discount in future or for a future value date, it is
a. Costlier
b. Cheaper
c. Equal
d. None of these
30. The exchange of currencies takes place on the date of the deal in
a. SPOT
b. TOM
c. Cash
d. Forward
31. In TOM, the exchange of currencies take place on
a. Same Day
b. Next Day
c. Second Working Day
d. Third Working Day
32. If the rates in Mumbai are US $1=Rs.42.850. In London market are US $1=Euros
0.7580 Therefore for one Euro we will get
a. Rs.56.45
b. Rs.56.53
c. Rs.56.38
d. Rs.56.50
33. Depreciation is a process of:
a. Valuation.
b. Allocation.
c. Both valuation and allocation.
d. Non of these.
34. Which of the following depreciation methods is NOT an accelerated method?
a. Double-declining balance
b. Straight-line
c. Sum-of-the-years' digits
d. None of these
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35. The value which bond holder gets on maturity is called as...
a. Market Value
b. Face Value
c. Intrinsic Value
d. Redemption Value
36. A capital equipment costing Rs. 200,000 today has Rs. 50,000 salvage value at the
end of 5 years. If the straight line depreciation method is used, what is the book value
of the equipment at the end of 2 years?
a. Rs. 200,000
b. Rs. 170,000
a. Rs. 140,000
c. Rs. 50,000
37. The concept of deriving the rate of currency A in terms of currency C through currency B is called as
a. Direct Quote
b. Indirect Quote
c. Chain Rule
d. Arbitrage
38. Rate of return earned by an investor who purchases a bond and holds it till maturity is called as
a. Intrinsic Value
b. Coupon Rate
c. YTM
d. Redemption Value
39. In exchange of currencies deal, "cash" is also called as
a. TOM
b. Ready
c. Spot
d. Forward
40. What is the Present Value of Rs. 115,000 to be received after 1 year at 10%?
a. 121,000
b. 100,500
c. 110,000
d. 104,545
41. At 10% p.a. 2 year discount factor is
a. 0.826
b. 1.00
c. 0.909
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d. 0.814
42. Minimum capital requirement is expressed in terms of...
a. Credit Risk
b. Specific Risk
c. General Market Risk
d. Both b & c
43. If 1 year discount is 0.8333, what is the discount rate?
a. 10%
b. 20%
c. 30%
d. 15%
44. The relationship between the bond prices and interest rates is one of the Following
a. direct & linear
b. inverse & linear
c. direct and curvilinear
d. no relationship
45. Annuity is defined as
a. Equal cash flows at equal intervals forever
b. Equal cash flows at equal intervals for a specified period
c. Unequal cash flows at equal intervals for specified period
d. Unequal cash flows at equal intervals forever
46. Present Value is defined as
a. Future cash flows discounted to the present at an appropriate discount rate
b. Inverse of future cash flows
c. Present cash flows compounded into the future
d. Discounting of compounded future cash flows
47. The yield to maturity is a rate of return which
a. gives the current yield
b. Is the discount rate at which the present value, of the coupons and the final payment at face value, equals the current price
c. gives the return at maturity on the bond for the original holder
d. b or c
48. A bond holder of a company has one of the following relationship with It. Identify
a. shareholder
b. depositor
c. creditor
d. employee
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49. Cost of Car is Rs. 300,000, Depn. Rate is 10% on WDV. What is the book value of car after 3 years ?
a. 210,000
b. 220,00
c. 214,300
d. 218,700
50. Which of the following investment rules does not use the time value of the money concept?
a. The payback period
b. Internal rate of return
c. Net present value
d. All of the above use the time value concept
51. What does the rate of return equal to if interest rates do not change during the pendency of the bond ?
a. yield to maturity
b. coupon rate
c. compounded rate
d. current yield
52. Accounting Standards are mandatory for the enterprises, whose turnover for the
accounting period exceeds
a. 50 Lakhs
b. 5 Crores
c. 50 Crores
d. 500 Crores
53. While recording transactions, all possible losses must be taken into consideration but
all anticipated profit should be ignored. This is called as
a. Convention of Conservatism
b. Principle of Prudence
c. Both a & b
d. Neither a nor b
54. Transaction are first recorded in the ........... and then they are posted to the .........
a. Ledger, Journal
b. Journal, Ledger
c. Any one of the above
d. None of these
55. Italian Method of accounting is also known as
a. Cose Accounting
b. Double entry book-keeping
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c. Financial Accounting
d. None of these
56. Common non-traditional methods available for determining arm's length price is/are
a. Profit Spilit Method
b. Transactional Net Margin Method
c. Both a and b
d. None of these
57. Accounting assumes that the business will continue to operate for a long time in
future. This concept is called as
a. Going concern concept
b. Entity going concept
c. Both a & b
d. Neither a nor b
58. GAAP stands for
a. Governmental Accepted Accounting Principles
b. Generally Accepted Accounting Principles
c. Governmental Adopted Accounting Principles
d. Generally Adopted Accounting Principles
59. The set of rules for recording of events in accounts are called as
a. Accounting Rules
b. Accounting Standards
c. Accounting laws
d. None of these
60. Accounting cycle includes
a. Recording
b. Classifying
c. Summarising
d. All the above
61. In cash book, all receipts are recorded on the ......... side and all payments are
recorded on the .......... side
a. debit, credit
b. credit, debit
c. debit, debit
d. credit, credit
62. ............. is time saving and economical
a. Single Entry System
b. Double Entry System
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c. Both a & b
d. Neither a nor b
63. Accounting standard AS 6 deals with
a. Cash Flow statements
b. Valuation of Inventories
c. Depreciation Accounting
d. Accounting for investments
64. Commission received is a
a. Personal Account
b. Real Account
c. Nominal Account
d. None of these
65. Both Real Accounts and Nominal Accounts are
a. Personal Accounts
b. Impersonal Accounts
c. Any one of the above
d. None of these
66. Bills receivable is a
a. Personal Account
b. Real Account
c. Nominal Account
d. None of these
67. Accounts generally prepared for ....... months
a. 6
b. 9
c. 12
d. 18
68. Under which system, in every transaction, an account is debited and some other
account is credited.
a. Single Entry System
b. Double Entry System
c. Both a & b
d. Neither a nor b
69. Accounting standard AS 3 deals with
a. Cash Flow statements
b. Valuation of Inventories
c. Depreciation Accounting
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d. Accounting for investments
70. In Double entry system of Book Keeping every business transaction affects
a. Two accounts
b. Two sides of the same account
c. The same account on two different dates
d. one personal and one real account
71. A person who owes money to the firm is called
a. Creditor
b. Debtor
c. Shareholders
d. Owner
72. Capital account is a ...........a/c.
a. Real.
b. Nominal.
c. personal.
d. Both B and D
73. In double entry, the entry is balanced with a corresponding entry, which is called
a. reverse entry
b. adjusting entry
c. contra entry
d. double entry
74. For nominal accounts, the fundamental rule of Debit and credit is,debit expenses and
losses and Credit......
a. the giver
b. what goes out
c. incomes and gains
d. none
75. Where a withdrawal of cash from business by the proprietor be credited?
a. Proprietor's A/c
b. Cash A/c
c. Capital A/c
d. Drawings
76. Where does the Net Profit appear in the balance sheet?
a. liabilities side
b. assets side
c. either a or b
d. none
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77. What is Nominal account?
a. an account of each person or firm with whom the trader deals
b. an account of each head of expense or source of income
c. an account of each property or possession dealt in by the trader in his business
d. none
78. Nama, the old method of accounting used in India, is also called as
a. Mahajani
b. Marwari
c. Deshi
d. All of these
79. "Debit all expenses and losses and credit all incomes and gains", in
a. Personal Account
b. Real Account
c. Nominal Account.
d. None of these
80. Salaries outstanding account belongs to the category of
a. Real account
b. Personal account
c. Nominal account
d. Intangible account
81. Capital at the start of business-Rs.6,00,000.
At the end of the year, worth of the Assets-Rs.10,00,000 and liabilities-Rs.2,00,000.
Then Capital at the end of the year........
a. Rs. 8,00,000
b. Rs. 10,00,000
c. Rs. 12,00,000
d. Rs. 6,00,000
82. Following is known as the book of prime entry
a. Journal
b. Cash book
c. Subsidiary book
d. all
83. Prepaid expenses are shown as
a. Debit
b. Credit
c. Either Debit or Credit
d. Intangibles
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84. Value of the asset is increased or the business has acquired more of that asset, then
there is a ........
a. Credit in Real Account
b. Debit in Real Account
c. Credit in Nominal Account
d. Debit in Nominal Account
85. Rebate on bills discounted account is of the nature of
a. Real account
b. Personal account
c. Nominal account
d. Intangible account
86. To determine how long an investment will be double, you have to divide number
........ by annual rate of interest.
a. 62
b. 64
c. 72
d. 74
87. Rent prepaid account is of the nature of
a. Real account
b. Personal account
c. Nominal account
d. Intangible account
88. Accounting standard AS 13 deals with
a. Cash Flow statements
b. Valuation of Inventories
c. Depreciation Accounting
d. Accounting for investments
89. The columns available in a three columnar cash book are...
a. Cash, Discount, Bank
b. Cash, Bank, Discount Paid
c. Cash, Discount Received, Bank
d. None of these
90. Intangible Assets are dealt in Accounting Standard
a. AS 9
b. AS 19
c. AS 26
d. AS 28
.
`` 14
91. Which is not a type of petty cash book are
a. Simple petty cash book
b. Columnar petty cash book
c. Two columnar petty cash book
d. None of these
92. A journal generally has ........ columns
a. 3
b. 4
c. 5
d. 6
93. Patents right account is of the nature of
a. Real account
b. Personal account
c. Nominal account
d. Intangible account
94. Balance in the petty cash book is
a. Expense
b. Profit
c. Asset
d. Liability
95. Revenue Recognition is dealt in Accounting Standard
a. AS 9
b. AS 19
c. AS 26
d. AS 28
96. Accounting Standards Board is constituted by
a. National Advisory Committee
b. Law
c. Institute of Chartered Accountants of India
d. Professional Accounting Bodies
97. As per accounting standards which of the following is not a preferred method
a. LIFO
b. FIFO
c. WACM
d. All of them
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`` 15
98. Freight expenses for moving new machinery to factory is
a. Revenue expenses
b. Deferred revenue expenditure
c. Capital expenditure
d. None of the above
99. Invoice journal is used for recording....purchases
a. Cash
b. Credit
c. Discount on
d. All
100. Which of the following will not affect Trial Balance
a. Goods sold on credit not recorded in books.
b. Overstating of sales register.
c. Rent account credited instead of debit.
d. Salary debited to the extent ½ the amount.
101. In LIFO method of inventory valuation
a. Issue of stocks to production is at latest price
b. Closing stock is at latest price
c. Both a & b
d. Neither a nor b
102. For an expense to be classified as revenue or capital depends on
a. Kind of expense
b. Duration of the benefit of the expenditure
c. Effect on revenue earning capacity
d. All of the above
103. Cost of goods sold is
a. Opening stock + purchases + closing stock
b. Opening stock + purchases – closing stock
c. Opening stock – purchases + closing stock
d. None of above
104. The amount brought by the proprietor of the business is credited to
a. Proprietor's a/c
b. Cash a/c
c. Capital a/c
d. Drawings a/c
105. Which of the following is not a deferred revenue expenditure
a. Preliminary expenses for setting up a company.
.
`` 16
b. Amount raised through Rights issue.
c. Huge sales promotion expenditure in launch of new product
d. Cost of preparing project report
106. Cost of replacement of defective parts of the machinery is
a. Capital expenditure
b. Revenue expenditure
c. Deferred revenue expenditure
d. None of these
107. Goods lost in transit is
a. Nominal loss
b. Abnormal loss
c. Casual loss
d. Conditional loss
108. Noting charges are
a. Paid to bank for dishonour
b. Paid to drawer for dishonour
c. Paid to notary public for recording dishonour
d. None of the above.
109. Due to heavy flooding a truck carrying consignment goods sinks. This loss is called
a. contingent loss
b. Nominal loss
c. Abnormal loss
d. Casual loss
110. A clerical error committed while posting, totalling or balancing of an account is
a. Error of commission
b. Error of omission
c. Error of principle
d. Compensating error
111. Sale of Rs.20000 to Suresh is posted to his credit, then rectification is
a. Credit Suresh to the extent of Rs.40,000
b. Credit Suresh to the extent of Rs.20,000
c. Debit Suresh to the extent of Rs.40,000
d. Debit Suresh to the extent of Rs.20000
.
`` 17
112. Match the following pairs:
Column 'A' - Column 'B'
(1) Error of omission (a) Not disclosed by trial balance
(2) Suspense ale (b) Disclosed by trial balance
(3) Error of principle (c) Rectified by passing journal entries
(4) Two sided errors (d) Debit or credit balance
(5) Posting on wrong side (e) Accounting rules not followed
(l)-(a), (2)-(d), (3)-(e), (4)-(c), (5)-(b)
113. Match the following pairs:
Column 'A' - Column 'B'
(1) Trial balance (a) Difference in trial balance
(2) Net trial balance (b) Always shows debit balance
(3) Gross trial balance (c) Debit or Credit Balances
(4) Suspense a/c (d) Debit and credit totals
(5) Real a/c (e) Statement of balances of ledger accounts
(l)-(c), (2)-(e), (3)-(d), (4)-(a), (5)-(b)
114. Legal expenses incurred in connection with raising debenture loans is
a. Capital Expenditure
b. Revenue Expenditure
c. Deferred Revenue Expenditure
d. None
115. The overhauling expenses of machines is...
a. Capital expenditure
b. Revenue expenditure
c. Deferred revenue expenditure
d. None of the above
116. Accounts in personal names indicative of trusteeship capacity of a/c holders
a. Can be opened after obtaining trust deed.
b. Can be opened after permission of zo.
c. Can be opened after permission of ho.
d. Should not be opened.
117. Labour welfare expenses is ...
a. Capital expenditure
b. Revenue expenditure
c. Deferred revenue expenditure
.
`` 18
d. None of the above
118. A sale of Rs. 20,000 was omitted from recording in the Sales Book. The existing total of debit side of the trial balance is Rs. 15,00,000. Presently, what will be the total of credit side?
a. Rs 15,20,000
b. Rs.14,80,000
c. Rs.15,40,000
d. Rs.14,60,000
119. The closing debit balance falls on the
a. Debit Side
b. Credit Side
c. Either Debit or Credit Side
d. None of these
120. Expenditure incurred on issue of equity shares is
a. Revenue expenditure
b. Capital expenditure
c. Deferred capital expenditure
d. None
121. The removal of stock from old works to new site is...
a. Capital expenditure
b. Revenue expenditure
c. Deferred revenue expenditure
d. None of the above
122. Goods worth Rs. 5,000 returned by Mr. Thomas were taken into stock, but no entry was passed. This is an error of ...
a. Compensation
b. Commission
c. Omission
d. Principle
123. How much is the Capital or/and Revenue Expenditure in "Fixtures of the book value of Rs. 20000 were sold off at Rs. 14000 and new fixtures of the value of Rs. 10000 were acquired.
a. Capital expenditure - Rs.16000
b. Revenue expenditure - Rs.16000
c. Capital expenditure - Rs.10000 and Revenue expenditure - Rs.6000
d. Capital expenditure - Rs.6000 and Revenue expenditure - Rs.10000
.
`` 19
124. X co .was maintaining account with KRB Bank Ltd. On 31st December, 2013, Bank column of cash book of company showed a debit balance of Rs. 26000. Cheques deposited into the bank but not credited before 31st December,2006 amounted to Rs.4000. Bank charges of Rs. 500 were debited by the bank but no entry was made by the accountant of the company. From the above particulars, find out the balance as per KRB Bank’s books.
a. Rs.30500
b. Rs.25500
c. Rs.21500
d. Rs.22500
125. An expenditure charged to P&L a/c over a period of 5 to 6 years is an example of ...
a. Revenue expenditure
b. Capital expenditure
c. Deferred revenue expenditure
d. All of the above
126. Which of the following is true for leasing
a. Lessor only can claim depreciation.
b. Lessee only can claim depreciation.
c. Both lessor and lessee can claim depreciation.
d. Neither lessor and lessee can claim depreciation.
127. Which of the following is true for Hire-Purchase
a. Seller only can claim depreciation.
b. Hire-Purchaser only can claim depreciation.
c. Both Seller and Hire-Purchaser can claim depreciation.
d. Neither Seller and Hire-Purchaser can claim depreciation.
128. An expenditure is a revenue expenditure because ...
a. The amount is very small
b. The amount is paid in instalments
c. It is intended to benefit in the current period
d. It is intended to benefit in the future period
129. Which one is also called as "Liquidity Ratios"?
a. Profitability Ratios
b. Turnover Ratios
c. Short-term Solvency Ratios
d. Long-term Solvency Ratios
130. Purchase of machinery is ...
a. Capital expenditure
.
`` 20
b. Revenue expenditure
c. Deferred revenue expenditure
d. None of the above
131. In FIFO method of inventory valuation
a. Closing stock is at latest price
b. Issue of stocks to production is at earliest price
c. Both a & b
d. Neither a nor b
132. Which one is not the uses of Accounting Ratios?
a. Facilitate Inter-Firm comparison
b. Facilitate Intra-Firm comparison
c. Help in Planning
d. None of these
133. Ideal ratio for "Fixed Asset Ratio" is
a. 0.5
b. 1
c. 2
d. 0.67
134. Which is not a Solvency Ratio?
a. Debt-Equity Ratio
b. Current Ratio
c. Debtor's Turnover Ratio
d. Liquidity Ratio
135. Acid test ratio is also called as
a. Quick Ratio
b. Liquidity Ratio
c. Both a and b
d. Neither a not b
136. Retiring a bill under rebate means...
a. dishonouring the bill
b. making payment of the bill after the due date
c. making payment of the bill before the due date
d. making payment of the bill on the due date
137. Ideal ratio for "Acid test ratio" is
a. 0.5
b. 1
c. 2
d. 0.67
.
`` 21
138. Consignment Account is of the nature of a...
a. Real Account
b. Personal Account
c. Representative Personal Account
d. Nominal Account
139. Consignee's Account is a...
a. Real Account
b. Personal Account
c. Representative Personal Account
d. Nominal Account
140. "Return on Investment" is also called as
a. Overall Profitability Ratio
b. Earnings per Share
c. Gross Profit Ratio
d. Net Profit Ratio
141. For payment of noting charges to the notary public...
a. Noting charges a/c is debited
b. Bank a/c is debited
c. Noting charges a/c is credited
d. Cash a/c is credited
142. Undercasting of the credit side of Cash Book has the same effect as overcasting of the
a. Debit side of the pass book.
b. Credit side of the pass book.
c. There is no relevance between the two
d. None of the above
143. The Pass book of an account holder is the copy of
a. the bank columns in the cash book of the account holder
b. the relevant account in the books of a bank
c. the cash column in the cash book of a customer
d. none
144. Assets kept for short term for converting into cash or for resale are called as...
a. Operating Assets
b. Fixed Assets
c. Current Assets
d. Liquid assets
.
`` 22
145. Entries for issuance of cheques are made immediately by the customer to the credit of cash book,but the bank debits the customer account
a. immediately
b. on presentation over counter
c. on presentation in clearing
d. on presentationon counter or in clearing
146. Loss of goods due to fire for Rs.50000 is
a. Capital expenditure
b. Revenue expenditure
c. Deferred revenue expenditure
d. None of these
147. The payment of Promissory Note is made by its...
a. Maker
b. Payee
c. Bank
d. None of above
148. The relationship between the Consignor and Consignee is that of...
a. Principal and agent
b. Seller and buyer
c. Bailor and bailee
d. Creditor and debtor
149. When an entry is passed on credit side of passbook or on debit side of Cash book, the bank balance
a. increase
b. decrease
c. has no effect
d. can decrease or increase
150. Debit balance in the cash books means
a. Overdraft
b. Favourable balance
c. Balancing error
d. None of the above
151. Subscription outstanding of a club during the previous year was Rs. 50,000 and received During the current year Rs. 3,50,000. Subscription shown in the credit side of income & Expenditure a/c will be
a. Rs. 50,000
b. Rs. 3,00,000
c. Rs. 3,50,000
.
`` 23
d. Rs. 4,00,000
152. Loss of goods due to fire, Rs. 25,000 - Revenue expenditure as
a. It is recurring
b. Amount involved is small
c. It is revenue loss arising out of business operation
d. None of the above
153. Wages paid for installation of machinery Rs. 500 - Capital expenditure as
a. It is non-recurring
b. It is necessary to put the asset in working condition
c. It is incidental of acquiring a new asset
d. None of the above
154. Payment for purchase of car, Rs. 4,00,000 - Capital expenditure as
a. It is non-recurring
b. Benefit is of long duration
c. Increases earning capital
d. None of the above
155. In retail business, widely followed method of inventory valuation is
a. FIFO
b. weighted average
c. adjusted selling price
d. None of the above
156. The benefit of an expenditure incurred is of long duration and its purpose is to
increase the earning capacity of the business, it is
a. Revenue expenditure
b. Capital expenditure
c. Deferred capital expenditure
d. None of the above
157. The rate of discount on share cannot exceed...
a. 5%
b. 8%
c. 10%
d. 12%
158. The test of 'objectivity' and 'verifiability' is satisfied by valuing stock at
a. historical cost
b. current replacement price
c. net realisable value
d. None of the above
.
`` 24
159. The cost formulae recommended by Accounting Standard 2 for valuation of
inventories are
a. FIFO or weighted average
b. Standard cost
c. LIFO or latest purchase price
d. None of the above
160. Professional fees paid in connection with acquisition of lease hold premises is a
a. Capital expenditure
b. Deferred revenue expenditure
c. Revenue expenditure
d. Current expenditure
161. Historical cost concepts are reduced to net realisable value because of the accounting principle of...
a. consistency
b. conservatism
c. realisation
d. None of the above
162. The ascertainment of value of stock from accounting record is known as...
a. continuous stock taking
b. periodic inventory
c. perpetual inventory
d. None of the above
163. The difference between subscribed capital and called-up capital is called.
a. Paid up capital
b. Uncalled capital.
c. Calls in advance
d. Calls in arrear
164. A company incorporated out side India but has a place of business in india, is termed as ......
a. Statutory Company
b. Foreign Company
c. Holding Company
d. Subsidiary Company
165. Rights shares mean the shares which are...
a. Issued to directors of the company
b. Issued for a consideration other than cash
c. Offered to the exiting shareholders
d. Issued to promoters of the company for their services.
.
`` 25
166. ...... is called the Charter of the company.
a. Memoradum of Association
b. Articles of Association
c. Prospectus
d. All of the above.
167. Discount on issue of shares is a ...
a. Revenue loss
b. Capital loss
c. Deferred revenue expenditure.
d. Revenue and capital loss both
168. A company comes into existence when it gets the certificate of......
a. Incorporation
b. Commencing the business
c. Income-tax department
d. None of the above
169. The main object of permitting the company to issue non-voting equity shares is
a. To give higher dividend
b. To give perference on re-payment
c. To raise resources without losing management control
d. All of the above
170. Difference between income and expenses, if income is more is called
a. Net Revenue
b. Profit
c. Surplus
d. All of the above
171. Active Partners are also called as
a. Nominal Partners
b. Quasi Partners
c. Sleeping Partners
d. Working Partners
172. Premium received on issue of shares is shown in ...
a. Assets side of Balance Sheet
b. Liabilities side of balance sheet
c. Debit side of P & L a/c
d. Credit side of P & L a/c
.
`` 26
173. Under Fluctuating Capital Method, for each partner, the following account/s is/are maintained.
a. Partner's Capital A/c
b. Partner's Current A/c
c. Both a & b
d. Any one of the two
174. Shareholders get ...
a. Fees
b. Commission
c. Interest
d. Dividend
175. For a bank, Rebate on bills discounted is an item of ...
a. an income
b. an expenditure
c. an accrued income
d. an income received in Advance
176. Purchased a printer having price as Rs.10,000 at a discounted price of Rs.9,000. The entry for this will be
a. Debit Office Equipment a/c Rs.10,000, Credit Cash a/c Rs.9,000, Credit Discount Received Rs.1,000.
b. Debit Purchases a/c Rs.10,000, Credit Cash a/c Rs.9,000, Credit Discount Received Rs.1,000.
c. c. Debit Office Equipment a/c Rs.9,000, Credit Cash a/c Rs.9,000.
d. d. Debit Purchases a/c Rs.9,000, Credit Cash a/c Rs.9,000.
177. In the event of death of a partner, the accumulated profits and losses are shared by the partner in ...
a. new ratio
b. old ratio
c. sacrifice ratio
d. gaining ratio
178. Gold appears under
a. Other assets
b. Investments
c. Fixed assets
d. None of these
179. Assets-Rs.3,20,000, Liabilities-Rs.1,40,000, then Capital...........
a. Rs.4,60,000
b. Rs.1,80,000
.
`` 27
c. Rs.1,60,000
d. Rs.4,80,000
180. Unless otherwise stated, a preference share is always deemed to be ...
a. Cumulative, participating and non-convertible
b. Non-cumulative, participating and non-convertible
c. cumulative, non-participating and non-convertible
d. Non-cumulative, non participating and non-nonconvertible
181. Application software is concerned with ...
a. the programming used to control input unit
b. the programming used to control output unit
c. the programming to execute specific functions
d. the programming used to control the operations of the control unit
182. The central processing unit in a computer comprises of the following ...
a. Control unit and logical unit
b. Control unit, logical unit and output unit
c. Control unit, Input unit and output unit
d. Control unit, logical unit and storage unit
183. A non - banking asset is ...
a. Furniture, Fixture and Fittings
b. Office equipment
c. Money at call and short notice
d. Asset acquired from the debtors in satisfaction of claims against them
184. Discount allowed on issue of shares is shown in ...
a. Assets side of Balance Sheet
b. Liabilities side of balance sheet
c. Debit side of P & L a/c
d. Credit side of P & L a/c
185. share Allotment Account is ...
a. Real Account
b. Personal Account
c. Nominal Account
d. Asset Account
.

Information system for bankers recollected

Information system banker exam.
Some questions.....shared by members

CyAT
CAA
Digital Signature
BCP
Digital forensics
Normalisation
Internal audit
DBA responsibility
Telecommunications system audit
Power off switches
Cyber terbunal judge or magistrate
DS reissuance
Central depository of DS
Audit trail significance
Bottom up methodology
Audit plan
BCP
IDS
Virtual keyboard
IFMS full from
EFT
RBIA
Inherent risk
Insider threat
IS Audit policy
Information security officer role
DBA responsibility
Stress testing
BCNF
Critical applications
Poor architecture system
SDLC
Prototyping model
RTO application
IT Act 2000
Punishment for copyright as per IT Act
Controller of Certifying Authorities operates the National Repository of Digital Signatures (NRDC)
Function of modem, which is not an OOP Lang. C C++ Java C#, questns abt DRP, Trojan horse, sniffing, spoofing, availability, integrity, DBMS, preventive, corrective, detective controls, BCP
DDL DML DCL TCL commands, CA CCA-Digital certificates
Digital signature complete
Cyber apellate tribunal presiding officer
System testing
Compliance testing
Substantive testing
Telecom control
Db forms
Db commands
Risk based audit
It audit
Dba roles n resp
Prototyping model
Sdlc full
Interface testing
Rbeit ltd reg it subsidiary of rbi
Non repudiation
Bot stroke worms
Certified information System Banker

13.01.2019 3 PM Batch
Moderate Difficulty
Passing Mark 60
Each question carries 1 mark ( 100 questions )

Scored 55 marks

Recollected questions
DR centre location
Data warehouse
Audit charter/policy
Is audit 5 -10 questions
RAM and cache memory
Static RAM
Metadata
Which DB model used in CBS
Characteristics of a table
Many to Many relationship in DB
Simple ,self,outer join
Adaptive maintenance
Multiplexing
Packet switching
Full Duplex method
Bridge,router,switch,gateway
Diff between router and switch
Function of osi model layers 5 questions
Which protocol used in banking http,smtp,tcp/ip
Real time processing
Emergency response
Mirror site and reciprocal agreement
Trojan horse
E money
INFINET
CFMS
SFMS
Spoofing, piggybagging
Pervasive principle in GASSP
Classification of control
Boundary sub system
Audit trail
Attenuation
Types of noise (cross talk)
False positive and negative
Firewall
Intrusion detection systems and tuning
In what circumstances user ID and password will be given to user(emergency access)
Remote Access
OS tasks
Travelling virus procedure
Public and private key encryption

Regular Study - Accounting & Finance for Bankers

Regular Study - Basic Accounting Terms
The understanding of the subject becomes easy when one has the knowledge of a few
important terms of accounting. Let us go through some of them.
Transactions
Transactions are those activities of a business, which involve transfer of money or goods or
services between two persons or two accounts. For example, purchase of goods, sale of
goods, borrowing from bank, lending of money, salaries paid, rent paid, commission
received and dividend received. Transactions are of two types, namely, cash and credit
transactions.
Cash Transaction is one where cash receipt or payment is involved in the transaction. For
example, When You buys goods from a seller paying the price of goods by cash
immediately, it is a cash transaction.
Credit Transaction is one where cash is not involved immediately but will be paid or
received later. In the above example, if You, do not pay cash immediately but promises to
pay later, it is credit transaction.
Proprietor
A person who owns a business is called its proprietor. He contributes capital to the business
with the intention of earning profit.
Capital
It is the amount invested by the proprietor/s in the business. This amount is increased by the
amount of profits earned and the amount of additional capital introduced. It is decreased by
the amount of losses incurred and the amounts withdrawn. For example, if Mr. Ram starts
business with Rs.10,00,000, his capital would be Rs.10,00,000.
Assets
Assets are the properties of every description belonging to the business. Cash in hand, plant
and machinery, furniture and fittings, bank balance, debtors, bills receivable, stock of
goods, investments, Goodwill are examples for assets. Assets can be classified into tangible
and intangible.
Tangible Assets: These assets are those having physical existence. It can be seen and
touched. For example, plant & machinery, cash, etc.
Intangible Assets: Intangible assets are those assets having no physical existence but their
possession gives rise to some rights and benefits to the owner. It cannot be seen and
touched. Goodwill, patents, trademarks are some of the examples.
Liabilities
Liabilities refer to the financial obligations of a business. These denote the amounts which a
business owes to others, e.g., loans from banks or other persons, creditors for goods
supplied, bills payable, outstanding expenses, bank overdraft etc.
Drawings
It is the amount of cash or value of goods withdrawn from the business by the proprietor for
his personal use. It is deducted from the capital.
Debtors
A person (individual or firm) who receives a benefit without giving money or money’s
worth immediately, but liable to pay in future or in due course of time is a debtor. The
debtors are shown as an asset in the balance sheet. For example, Mr. Ravi bought goods on
credit from Mr. Ram for Rs.10,000. Mr. Ravi is a debtor to Mr. Ram till he pays the value
of the goods.
Creditors
A person who gives a benefit without receiving money or money’s worth immediately but
to claim in future, is a creditor. The creditors are shown as a liability in the balance sheet. In
the above example Mr. Ram is a creditor to Mr. Ravi till he receive the value of the goods.
Purchases
Purchases refers to the amount of goods bought by a business for resale or for use in the
production. Goods purchased for cash are called cash purchases. If it is purchased on
credit, it is called as credit purchases. Total purchases include both cash and credit
purchases.
Purchases Return or Returns Outward
When goods are returned to the suppliers due to defective quality or not as per the terms of
purchase, it is called as purchases return. To find net purchases, purchases return is
deducted from the total purchases.
Sales
Sales refers to the amount of goods sold that are already bought or manufactured by the
business. When goods are sold for cash, they are cash sales but if goods are sold and
payment is not received at the time of sale, it is credit sales. Total sales includes both cash
and credit sales.
Sales Return or Returns Inward
When goods are returned from the customers due to defective quality or not as per the terms
of sale, it is called sales return or returns inward. To find out net sales, sales return is
deducted from total sales.
Stock
Stock includes goods unsold on a particular date. Stock may be opening and closing stock.
The term opening stock means goods unsold in the beginning of the accounting period.
Whereas the term closing stock includes goods unsold at the end of the accounting period.
For example, if 5,000 units purchased @ Rs. 30 per unit remain unsold, the closing stock is
Rs. 1,50,000. This will be opening stock of the subsequent year.
Revenue
Revenue means the amount receivable or realised from sale of goods and earnings from
interest, dividend, commission, etc.
Expense
It is the amount spent in order to produce and sell the goods and services. For example,
purchase of raw materials, payment of salaries, wages, etc.
Income
Income is the difference between revenue and expense.
Voucher
It is a written document in support of a transaction. It is a proof that a particular transaction
has taken place for the value stated in the voucher. It may be in the form of cash receipt,
invoice, cash memo, bank pay-in-slip etc. Voucher is necessary to audit the accounts.
Invoice
Invoice is a business document which is prepared when one sell goods to another. The
statement is prepared by the seller of goods. It contains the information relating to name and
address of the seller and the buyer, the date of sale and the clear description of goods with
quantity and price.
Receipt
Receipt is an acknowledgement for cash received. It is issued to the party paying cash.
Receipts form the basis for entries in cash book.
Account
Account is a summary of relevant business transactions at one place relating to a person,
asset, expense or revenue named in the heading. An account is a brief history of financial
transactions of a particular person or item. An account has two sides called debit side and
credit side.
Regular Study - Classification of Accounts
Classification of Accounts
Transactions can be divided into three categories.
i. Transactions relating to individuals and firms
ii. Transactions relating to properties, goods or cash
iii. Transactions relating to expenses or losses and incomes or gains.
Therefore, accounts can also be classified into Personal, Real and Nominal. The
classification may be illustrated as follows
Personal Accounts:
Accounts recording transactions relating to individuals or firms or company are known as
personal accounts. Personal accounts may further be classified as:
(i) Natural Person’s personal accounts: The accounts recording transactions relating to
individual human beings e.g., Anand’s a/c, Ramesh’s a/c, Pankaj a/c are classified as natural
persons’ personal accounts.
(ii) Artificial Persons’ Personal accounts: The accounts recording transactions relating to
limited companies, bank, firm, institution, club, etc., Delhi Cloth Mill; M/s Sahoo & Sahoo;
Hans Raj College; Gymkhana Club are classified as artificial persons’ personal accounts.
(iii) Representative Personal Accounts: The accounts recording transactions relating to
the expenses and incomes are classified as nominal accounts. But in certain cases (due to
the matching concept of accounting) the amount, on a particular date, is payable to the
individuals or recoverable from individuals. Such amount (i) relates to the particular head of
expenditure or income and (ii) represent persons to whom it is payable or from whom it is
recoverable. Such accounts are classified as representative personal accounts e.g., “wages
outstanding account”, pre-paid Insurance account, etc.
The proprietor being an individual his capital account and his drawings account are
also personal accounts.
Impersonal Accounts
All those accounts which are not personal accounts. This is further divided into two types
viz. Real and Nominal accounts.
i. Real Accounts: Accounts relating to properties and assets which are owned by the
business concern. Real accounts include tangible and intangible accounts. For example,
Land, Building, Goodwill, Purchases, etc.
ii. Nominal Accounts: These accounts do not have any existence, form or shape. They
relate to incomes and expenses and gains and losses of a business concern. For example,
Salary Account, Dividend Account, etc.
Rules of debit and credit (classification based)
1. Personal accounts : Debit the receiver - Credit the giver (supplier)
2. Real accounts : Debit what comes in - Credit what goes out
3. Nominal accounts : Debit expenses and losses - Credit incomes and gains

JAIIB – AFB (ACCOUNTING & FINANCE FOR BANKERS)

JAIIB - Accounting & Finance for Bankers - Module - A - Business
Mathematics and Finance
JAIIB-AFB-MOD-A-INTEREST CALCULATION
Simple Interest
'Simple' interest or 'flat rate' interest is the amount of interest paid each year in a fixed
percentage of the amount borrowed or lent at the start.
Formula for calculating simple interest :
Interest = Principal x Rate x Time (PRT), where:
'Interest' is the total amount of interest paid
'Principal' is the amount lent or borrowed
'Rate' is the percentage of the principal charged as interest each year.
'Time' is the time in years of the loan.
Example :
Principal: 'P' = Rs. 50,000, Interest rate: 'R' = 10% = 0.10, Repayment time: T = 3 years. Find
the amount of interest paid.
Interest = PRT
= 50,000x0.10x3
= Rs. 15,000/-
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Compound Interest
Compound interest is paid on the original principal and accumulated part of interest.
Formula for calculating compound interest :
P = A(1 +r/n)^nt, where
P = the principal
A = the amount deposited
r = the rate (expressed as fraction, e.g. 6 per cent = 0.06)
n = number of times per year that interest is compounded
t = number of years invested
Frequently compounding of Interest. If the interest is compounded :
Annually = P (1 + r)
Quarterly = P (1 + r/4)^4
Monthly = P (1 + r/12)^12
Example :
The compound interest on Rs. 30,000 at 7% per annum is Rs. 4347. The period (in years) is:
Amount = Rs. (30000 + 4347) = Rs. 34347.
Let the time be n years. Then
30000(1+7/100)^n = 34347
(107/100)^n = 34347/30000
(107/100)^n = 11449/10000
(107/100)^n = (107/100)^2
n = 2 years.
The Rule of 72: Allows you to determine the number of years before your money doubles
whether in debt or investment. Divide the number 72 by the percentage rate.
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EQUATED MONTHLY INSTALMENTS (EMIs)
Equated Monthly Installment (EMI) refers to the monthly payment a borrower makes on his loan.
Though it is a combination of interest payment and principal repayment, the total monthly
amount is calculated in such a way that it remains constant all through the repayment tenure. In
Equated Monthly Installments (EMIs), the principal and the interest thereon is repaid through
equal monthly installment over the fixed tenure of the loan. The benefit of an EMI for borrowers
is that they know precisely how much money they will need to pay toward their loan each month,
making the personal budgeting process easier.
Formula :
E = P×r×(1 + r)n/((1 + r)n - 1)
E is EMI
where P is Principle Loan Amount
r is rate of interest calculated in monthly basis it should be = Rate of Annual interest/12/100
if its 10% annual ,then its 10/12/100=0.00833
n is tenure in number of months
Example :
For 100000 at 10% annual interest for a period of 12 months, it comes to :
100000*0.00833*(1 + 0.00833)12/((1 + 0.00833)12 - 1) = 8792
JAIIB-AFB-MOD-A-PV-FV-Annuity
Present Value
Present value describes how much a future sum of money is worth today. Three most influential
components of present value are : time, expected rate of return, and the size of the future cash
flow. The concept of present value is one of the most fundamental and pervasive in the world of
finance. It is the basis for stock pricing, bond pricing, financial modeling, banking, insurance,
pension fund valuation. It accounts for the fact that money we receive today can be invested
today to earn a return. In other words, present value accounts for the time value of money.
The formula for present value is:
PV = CF/(1+r)n
Where:
CF = cash flow in future period
r = the periodic rate of return or interest (also called the discount rate or the required rate of
return)
n = number of periods
Example :
Assume that you would like to put money in an account today to make sure your child has enough
money in 10 years to buy a car. If you would like to give your child 10,00,000 in 10 years, and
you know you can get 5% interest per year from a savings account during that time, how much
should you put in the account now?
PV = 10,00,000/ (1 + .05)10 = 6,13,913/-
Thus, 6,13,913 will be worth 10,00,000 in 10 years if you can earn 5% each year. In other words,
the present value of 10,00,000 in this scenario is 6,13,913.
……………………………………………………………………………………………………………………………
………………
Future Value
The value of an asset or cash at a specified date in the future that is equivalent in value to a
specified sum today. It refers to a method of calculating how much the present value (PV) of
an asset or cash will be worth at a specific time in the future. There are two ways to calculate FV:
1) For an asset with simple annual interest: = Original Investment x (1+(interest rate*number of
years))
2) For an asset with interest compounded annually: = Original Investment x ((1+interest
rate)^number of years)
Example:
1) 10,000 invested for 5 years with simple annual interest of 10% would have a future value of
FV = 10000(1+(0.10*5))
= 10000(1+0.50)
= 10000*1.5
= 15000
2) 10,000 invested for 5 years at 10%, compounded annually has a future value of :
FV = 10000(1+0.10)^5)
= 10000(1.10)^5
= 10000*1.61051
= 16105.10
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………………
Annuities
Annuities are essentially a series of fixed payments required from you or paid to you at a specified
frequency over the course of a fixed time period. The most common payment frequencies are
yearly, semi-annually (twice a year), quarterly and monthly. There are two basic types of
annuities: ordinary annuities and annuities due.
Ordinary Annuity: Payments are required at the end of each period. For example, straight bonds
usually pay coupon payments at the end of every six months until the bond's maturity date.
Annuity Due: Payments are required at the beginning of each period. Rent is an example of
annuity due. You are usually required to pay rent when you first move in at the beginning of the
month, and then on the first of each
JAIIB-AFB-MOD-A-Present Value of an Annuity
Present Value of an Annuity
The present value an annuity is the sum of the periodic payments each discounted at the
given rate of interest to reflect the time value of money.
PV of an Ordinary Annuity = R (1 − (1 + i)^-n)/i
PV of an Annuity Due = R (1 − (1 + i)^-n)/i × (1 + i)
Where,
i is the interest rate per compounding period;
n are the number of compounding periods; and
R is the fixed periodic payment.
Example :
1. Calculate the present value on Jan 1, 2015 of an annuity of 5,000 paid at the end of
each month of the calendar year 2015. The annual interest rate is 12%.
Solution
We have,
Periodic Payment R = 5,000
Number of Periods n = 12
Interest Rate i = 12%/12 = 1%
Present Value
PV = 5000 × (1-(1+1%)^(-12))/1%
= 5000 × (1-1.01^-12)/1%
= 5000 × (1-0.88745)/1%
= 5000 × 0.11255/1%
= 5000 × 11.255
= 56,275.40
2. A certain amount was invested on Jan 1, 2015 such that it generated a periodic payment
of 10,000 at the beginning of each month of the calendar year 2015. The interest rate on
the investment was 13.2%. Calculate the original investment and the interest earned.
Solution
Periodic Payment R = 10,000
Number of Periods n = 12
Interest Rate i = 13.2%/12 = 1.1%
Original Investment = PV of annuity due on Jan 1, 2015
= 10,000 × (1-(1+1.1%)^(-12))/1.1% × (1+1.1%)
= 10,000 × (1-1.011^-12)/0.011 × 1.011
= 10,000 × (1-0.876973)/0.011 × 1.011
= 10,000 × 0.123027/0.011 × 1.011
= 10,000 × 11.184289 × 1.011
= 1,13,073.20
Interest Earned = 10,000 × 12 − 1,13,073.20
= 1,20,000 – 1,13,073.20
= 6926.80
JAIIB-AFB-MOD-A-Bond Value
Bond Value
Debt
DEBT means a sum of money due by certain and expresses agreement. In a less technical
sense, it means a claim for money. Loans from banks or financial institutions are one of the
popular forms of debt.
Bonds
Debt capital consists of mainly bonds and debentures. The holder of debt capital does not
receive a share of ownership of the company when they provide funds to the firm. Rather,
when a company first issues debt capital, the providers of debt capital purchase a
debenture, which involves lending money to the firm. In return for loaning this money, bond
holders have a right to certain guaranteed payments during the life of the bond.
For example : a company issued a bond of a face value of Rs. 100 carrying a coupon rate of
10 per cent for ten years. This entitles the bondholder to receive Rs. 10 (10 per cent of Rs.
100) for ten years as interest. At the end of tenth year, the bondholder is also entitled to
receive back the invested amount of Rs. 100. Irrespective of the level of profits or losses,
which company makes during that period of ten years, the bondholder is entitled to receive
the coupon interest during that period.
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TERMS ASSOCIATED WITH BONDS
Face Value: Also known as the par value and stated on the face of the bond. It represents
the amount borrowed by the firm, which it promises to repay after a specified period.
Coupon rate: A bond carries a specific rate of interest, which is also called as the coupon
rate.
Maturity: A bond is issued for a specified period. It is to be repaid on maturity.
Redemption Value: The value, which the bondholder gets on maturity, is called the
redemption value. A bond is generally issued at a discount (less than par value) and
redeemed at par.
Market Value: A bond may be traded on a stock exchange. Market value is the price at
which the bond is usually bought or sold in the market.
………………………………………………………………………………………………………………
Bond Value
A bond, whose par value is Rs. 1,000, bears a coupon rate of 12 per cent and has a
maturity period of 3 years. The required rate of return on the bond is 10 per cent. What is
the value of this bond?
Solution
Annual interest payable = 1,000 * 12% = 120
Principal repayment at the end of 3 years = Rs. 1,000
The value of the bond
= 120 (PVIFA 10%, 3 yrs) + Rs. 1,000 (PVIF 10%, 3 yrs)
= 120 (2.487)+1,000 (0.751)
= 298.44 + 751
= Rs. 1,049.44
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A bond, whose par value is Rs. 1000, bears a coupon rate of 12 per cent payable semiannually
and has a maturity period of 3 years. The required rate of return on bond is 10 per
cent. What is the value of this bond?
Solution
Semi-annual interest payable = 1,000 x 12 per cent/2= 60
Principal repayment at the end of 3 years = Rs. 1,000
The value of the bond
= 60 (PVIFA 10%/2, 6 pds) + Rs. 1,000 (PVIF 10%/2, 6 pds) =
60 (5.0746) + 1,000 (0.746) = 304.48 + 746 = 1,050.48

Important accounts related numericals

Important accounts related numericals
1.
Find total assets if DER = 2:1, CL = 8 lac, equity = 4 lac.

Since total assets = debt + equity + liability
=> total assets = debt + 4 + 8
=> debt = TA - 12

Since DER = debt / equity
=>2:1 = (TA - 12) / 4
so, TA = 20 lacs Ans

2.
Find equity, given assets = 200 lac, DER = 2:1, CL = 56 lac.

Since DER = debt / equity
=> 2:1 = debt / equity
so, debt = 2 × equity

Since total assets = debt + equity + liability
=> 200 = 2 × equity+ equity + 56
So, equity = 48 lacs Ans

3.
Find NWC, given CR = 2.5:1 & CA = 30 lac.

Since CR = CA / CL & NWC = CA - CL
=> 2.5:1 = 30 / CL
=> CL = 12
and NWC = 30 - 12 = 18 lac Ans

4.
Suppose CR is 4:1, NWC is Rs 30000/-, what is CA?

Since CR = CA / CL & NWC = CA - CL => CL = CA - NWC
=> 4:1 = CA / (CA - 30000)
so, CA = Rs 40000 Ans

5.
An account became NPA on 05042009. The outstanding in the account is 10 lacs. Realisable value of security is 7 lacs. The balance including Rs 50000 as recorded and suspended interest. How much provision is required to be made on 31032010?


6.
Total current assets of a company is Rs 32 crore and the NWC is Rs 8 crore. The ratio is ___.
(Note:
Current asset = stock, debtors, loans etc
Total asset = current assets + non current assets
Non Current Assets = goodwill, preliminary exp)

Sol:
NWC = CA - CL
so, CA = 32 - 8 = 24
Current Ratio = Current Assets ÷ Current Liability
= 32÷24 =1.33:1 Ans

_______________________
Acronyms used:
NWC = Net Working Capital
TA = Total Assets
CL = Current Liability
CA = Current Assets
CR = Current Ratio

ACCOUNTING FROM INCOMPLETE RECORDS (SINGLE ENTRY SYSTEM)

ACCOUNTING FROM INCOMPLETE RECORDS (SINGLE ENTRY SYSTEM)

‘Single Entry System’ may be defined as any system which is not exactly the double entry system. In other words, Single entry system may consist of:
(i)  Double entry in respect of certain transactions such as cash received from debtors, cash paid to creditors, etc.
(ii)  Single entry in respect of certain transactions such as cash purchases, cash sales, expenses made, fixed assets purchased, etc.
(iii)  No entry in respect of certain such as depreciation, bad debts,etc.
Thus, a business is said to be using single entry system if it is not following completely the principles of double entry system of bookkeeping. Kohler defines the single entry system as, ‘A system of book- keeping in which, as a rule, only records of cash and of personal accounts are maintained, it is always incomplete double entry, varying with the circumstances.’

SALIENT FEATURES

The salient features of the single entry system are as follows:

(i) Maintenance of personal accounts
Usually under this system personal accounts are maintained while real and nominal accounts are avoided. On account of this reason some accountants define it as a system where only personal accounts are maintained.

(ii) Maintenance of cash book
A cash book is maintained, which usually mixes up both the personal transactions and the business transactions.

(iii) Dependence on original vouchers
In order to collect the necessary information one has to depend on original vouchers. For example, the figure of credit purchases may not be readily available; it may have to be found out on the basis of the original invoices received from the suppliers. Similarly, the total figure of sales at the end of a particular period may have to be found out on the basis of the invoices which have been issued by the business from time to time.

(iv) No uniformity
The system may differ from firm to firm as per their individual requirements and conveniences.

(v) Suitability
The system is suitable in case of small proprietary or partnership concerns. Limited companies cannot adopt this system on account of legal requirements.

LIMITATIONS

The system suffers from the following limitations:

(i) Arithmetical accuracy cannot be checked
In case of double entry system of bookkeeping, Trial balance is prepared to check the arithmetical accuracy of the books of accounts. This is possible because every transaction is recorded at two places. In case of the single entry system, this is not done. Hence, trial balance cannot be prepared and the arithmetical accuracy of the books of accounts cannot be checked. This increases the possibility of more frauds and misappropriations, as compared to the double entry system of bookkeeping.

(ii) True profits cannot be known
In the absence of complete information for sales, purchases and other expenses, it is not possible to draw the profit and loss account. Hence, the true profit or loss, made or suffered by   the business, cannot be known.

(iii) Financial position of the business cannot be judged
In the absence of a true figure of profit and correct information about the assets and liabilities of the business, the balance sheet cannot be drawn up to give a correct picture of the financial position of the business on a particular date.

(iv)  Makes planning and decision-making difficult
The system does not provide accurate figures about the performance of the business and its financial position. For example, separate figures of gross profit, net profit and sales are not available. Thus, the ratio of gross profit to sales or net profit to sales cannot be found out. Similarly in the absence of any information about the cost of goods sold, the proportion of different elements of cost of sales cannot be found out. In the absence of such information, it becomes difficult for the proprietor of the business to know the reasons of his improving or deteriorating profitability and financial position. Thus, he is not in a position to compare, plan and take sound decision for the prosperity of the business. Moreover, it may be difficult for him to find the real value of his business in the event of his deciding to sell the business.

COMPUTATION OF PROFITS UNDER SINGLE ENTRY SYSTEM

The profit or loss in case of business maintaining accounts according to single entry system can be computed by two methods:
(i)  Net Worth method, and
(ii)  Conversion method.

Net Worth Method
According to this method, the profit or loss made by the business is computed by comparing the net worth (or capital) of the business on two different dates.

Following adjustments are required for determination of the profit in case of this method:

(i)  Adjustment for drawings: The proprietor may withdraw money from the business for his personal use. In the absence of any such withdrawal, the capital at the end of accounting period would have been more by the amount of money withdrawn by him. Thus, the amount of drawings should be added back to the capital at the end of the accounting period to find out his true profit for that period.
Adjustment for capital introduced: The proprietor may introduce further capital in the business during the course of the accounting year. This will increase the capital of the proprietor at the end of the accounting year. It is, therefore, necessary to reduce the amount of capital, by the amount of capital introduced by the proprietor during the year, in order to ascertain the profit earned by him during the course of the accounting year.


Conversion Method
The Net Worth method, explained above, does not provide a clear picture of the operational results of a business. It does not give information about sales, purchases, gross profit, operating expenses, etc. of the business. As a result, neither a meaningful analysis of the financial statements can be done nor can effective steps be taken to improve the financial position of the business. It will, therefore, be better to collect all such information from the books of accounts, and other sources, which is necessary for preparing a ‘Trial Balance’ of the business. This is done by preparing a total debtors account, a total creditor’s account, a bills receivable account and a bills payable account and receipts and payments accounts etc. on the basis of double entry. Accounts relating to different expenses, incomes, fixed assets and fixed liabilities, and outstanding, are also prepared with the help of receipts and payments accounts and additional information available. Thus, the closing balances of different accounts are found out and a trial balance prepared. Final accounts can then be prepared in the usual way. Such a method of collecting information as per the requirements of the double entry system of bookkeeping is termed as the ‘Conversion Method’.
In practice, usually, an abridged conversion method is followed. Under this method, nominal   accounts are not opened in the ledger, nor is a trial balance prepared. Only such information is collected which is required for preparing the trading and profit and loss account, and balance sheet of the business.


PREPARATION OF STATEMENT OF AFFAIRS UNDER SINGLE ENTRY SYSTEM
Statement of affairs is a statement giving the assets and liabilities of the business on a particular date. It is virtually the Balance Sheet of the business. However, the term Balance Sheet is used for the statement of assets and liabilities in the double entry system of bookkeeping where balances are taken from the ledger. In case of single entry system, all the assets and liabilities, which appear in the statement of affairs, are not necessarily taken from the ledger accounts, on account of incomplete recording of the transactions. Moreover, the term Balance Sheet is used for statement which shows the correct financial position of the business. In case of the single entry system, it may not be possible to prepare a statement which shows the correct financial position of the business, since the information from different sources, which may include not only the books of accounts, but other sources, which may not be hundred per cent reliable. For example, estimate about drawings may have to be made on the basis of the estimated living expenses of the proprietor of the business and also other estimated payments which might have been paid on his behalf.

Steps for preparing Statement of Affairs
The following steps may be taken for preparing the statement of affairs:

 (i)  In most cases in single entry system, a cash book is maintained. In case, this has been done, the cash and the bank balances can be taken from the cash book. In the absence of a proper cash book, cash balance may have to be found out by preparing a receipts and payments account on the basis of information, collected from the proprietor of the business, and the statement of accounts, which might have been received or sent by the proprietor from/to his debtors and creditors. Information regarding other business expenses can be collected from the salaries register of his employees, petty cash book, if any, maintained by him, etc. and the actual cash balance available with the business. The balance at the bank can be verified from the bank pass book or statement of account from the bank.

(ii)  A list of sundry debtors and creditors should be prepared. This may not be difficult because in most cases, a record of personal accounts is maintained under the single entry system.

(iii)  The value of the fixed assets like building, plant, furniture, etc. should be ascertained from vouchers or other documents available with the business. A reasonable charge for depreciation should also be made and the assets should be shown in the statement of affairs after charging depreciation.

(iv)  A physical verification of the stock should be taken and the value of the stock should be ascertained on the basis of the different invoices received from suppliers from time to time, in respect of the goods purchased.

(v)  The amount of outstanding expenses and the accrued income should also be determined. Last year’s figures about these items may be of considerable help in this respect.

(vi) The excess of assets over liabilities should be found out and this will denote the net worth or the capital of  the business on the date on which the Statement of Affairs has been prepared.

Very important for caiib JAIIB high power value

Very important for caiib JAIIB high power value ::
How to calculate high power of given value.

This question was asked many times before and experts gave solution for this. But some members still didn't get it.
Here I am trying to present the same menthod symbolically.

Lets take the example:
We have to calculate 1.01^120

Step 1:
Make factors of power (here it is 120)
12*10
15*8
20*6

Factors may be any pair or in three digit as per your convenience.

Suppose we choose 12*10

Step 2:
Enter value (here it is 1.01)

Step 3:
Press sign of multiplication ( * )

Step 4:
Press equal sign ( = ) eleven times ( 11 times)

Step 5:
Press sign of multiplication ( * ) again

Step 6:
Press equal sign ( = ) nine  times ( 9 times) and U will get answer.