Jaiib Questions Accounting & Finance Module D Part 1: Current Investments

JAIIB QUESTIONS ACCOUNTING & FINANCE MODULE D part 1
JAIIB SPECIMEN QUESTIONS

ACCOUNTING & FINANCE FOR BANKERS
MODULE D
1.
(a)
(b)
(c)
(d)
2.
(a)
(b)
(c)
(d)
Select from the following, a statement which speaks about liabilities of an entity.
The liabilities consist of claims of the owners
The liabilities consist of claims of the owners and outsiders
The liabilities consist of claims of the outsiders
None of the above
If the net worth of the business is Rs.500, fixed assets are Rs. 500, current assets Rs.300, investments
Rs.300, current liabilities Rs. Nil, what is the amount of claim to outsiders?
Rs. Nil
Rs. 1100
Rs.500
Rs.600.
Select from the following a sentence which is wrong
If assets increase and liabilities do not , the capital will increase
If assets increase and liabilities also increase by same sum , the capital will remain same
A reduction in the amount of assets will amount to equivalent reduction in the net worth
An increase in the amount of liabilities with no corresponding increase in liabilities will increase the
amount of capital
The firm sells goods on credit for Rs.50000, the cost of the goods sold is Rs.30000.The effect of the
transaction is that, the capital of the firm----increases by Rs.50000
reduces by Rs.40000
increases by Rs. 20000
reduces by Rs. 20000
Mr.Ghatge commenced his business on 1st April, 2006 with Capital of Rs.1,00,000. He did good business
during the year and earned handsome profit. At the end of 31 st March, 2007, his financial position was:
Fixed Assets Rs.1, 20,000 and bank balance of Rs.33000 and Creditors Rs. 17000. What was his net
profit for the year 05-06?
Rs. 36000
Rs.70000
Rs.53000
None of the above.
6.
(a)
(b)
(c)
(d)
One of the pairs given below is wrong. Select the wrong pair.
Outstanding expenses - Nominal account
Profit and Loss Account (Dr. balance) Application of funds
Net worth less reserves & surplus - Capital
Balance sheet - Financial position
7.
(a)
(b)
(c)
(d)
Choose the sentence which speak about illegal association

The unregistered association of 10 persons to do banking business
The unregistered association of 50 persons to do non banking business
The unregistered association of 20 persons to do business other than banking
(a)
(b)
(c)
(d)
3.
(a)
(b)
(c)
(d)
4.
(a)
(b)
(c)
(d)
5.
8. From the following ,find a sentence which is false in respect of partnership

(a) If the partnership is following the Fixed Capital Account Method salary payable to a partner is credited to
the partners current account
(b) Drawings made by partners are never entered in the Profit and Loss Appropriation Account.
(c) In the Fluctuating Capital Account Method the balance in the capital account always remains the same
(d) The capital account of a partner is required to be opened in both the Fixed Capital Account Method and
Fluctuating Capital Account Method
9. From the account given below, select the account which is wrongly included in Profit & Loss
Appropriation Account at the debit side
a. Drawings Account
b. Partners Salary Account
c. Interest on Loan Account
d. Commission to Partners Account
10. The average net profits expected are Rs.108000 per annum before charging remuneration of Rs. 18000 to
partner . The capital employed in the business is Rs.6,00,000. The rate of return expected on capital
employed of a firm is 10%. What is the value of goodwill on the basis of two years purchase of super
profits.
a. Rs.108,000
b. Rs.60,000
c. Rs.78,000
d. None of the above
11. A and B are two partners in a firm sharing profits and losses as 2:1. they admitted C as a partner with 25%
share in the profits of the firm. Hence , the new profit sharing ratio , after admission of C would be ----(a) 15:15:10
(b) 20:10:10
(c) 3:1:1
(d) None of the above
12. Mr. Q and Mr. R were partners of a firm sharing profit and losses in the ratio of 3:2. They take S into
partnership. It was agreed that S will pay Rs.1,00,000 as his share of goodwill which will be retained in
business and also bring Rs.3,00,000 as capital for one fourth share in the future profits. The book value
of the stock was 41,000 but was to be revalued at Rs.50,000, Accountant has passed following entries, but
Mr. Q feels that one of the entry is wrong. Select the wrong entry from the following.
(a) Debit cash and credit Goodwill for Rs.1,00,000
(b) Debit cash and credit Ss Capital for Rs.3,00,000
(c)
Debit Goodwill for Rs.1,00,000 and credit Qs Capital by Rs. 60000 & Rs Capital by Rs. 40,000
(d) Debit Stock and credit Profit & Loss Adjustment A/c by Rs.9,000
13. Read the following four journal entries which are passed to consider revaluation of assets and liabilities at
the time of admission of a partner. One of the journal entries is wrong, choose the entry which is wrong.
(a)
For increase in the value of assets-Debit Asset Account and Credit Revaluation Account.
(b) For decrease in the value of liabilities- Debit Liabilities Account and Credit Revaluation Account.
(c)
For Profit on revaluation of assets and liabilities Debit Old Partners Capital Account in old profit
sharing ratio and Credit Revaluation Account
(d) For decrease in the value of assets -Debit Revaluation Account and Credit Asset Account
14. Any facts, observations, occurrences are called ----(a)
data
(b) record
(c)
file
(d) system
15. In the books of ABC Enterprises, a partnership firm, when Mr. C, a partner decided to resign from the
firm, a revaluation of assets and liabilities was done and Revaluation account was prepared which showed
(a)
(b)
(c)
(d)
16.
(a)
(b)
(c)
(d)
17.
(a)
(b)
(c)
(d)
18.
(a)
(b)
(c)
(d)
19.
(a)
(b)
(c)
(d)
20.
(a)
(b)
(c)
(d)
the following position: At the credit side of Revaluation Account, Stock A/c Rs.25000, Premises A/c
Rs.52000 and Creditors A/c Rs. 8000 were shown while at debit side of Revaluation Account Reserve for
Doubtful Debts A/c. Rs.15000, As Capital A/c.Rs.20000, Bs Capital A/c. Rs.20,000 and Cs Capital A/c.
Rs.20000 were shown. Accountant has interpreted the Revaluation Account as follows. One of the
interpretations by him is incorrect. Select the incorrect sentence.
Stock is revalued upwardly by Rs. 25000
Creditors are revised upwardly by Rs.8000
Premises are revised upwardly by Rs.52000
A provision on debtors of Rs. 15,000 is made for doubtful debts
Select the True statement from the following
Interest on drawing is an income to the partnership firm
Joint Venture is a permanent partnership firm
Goodwill is a tangible asset of the firm
In the absence of partnership agreement , partners share profit and loss in proportion to the capital
contributed by the partners.
Select the incorrect statement in respect of companies.
A member of a company can enter into contract with a company
It is compulsory to register a joint stock company
If all but one member of a private company becomes insolvent ,it affects the existence of the
organisation
Shareholders are not liable for the acts of the company
Select the incorrect sentence
Whenever, there is no profit or inadequate profit, dividend cannot be declared
The right to claim dividend lapses when there is no profit in case of cumulative preference shares
When the company makes profit , arrears of preference dividend are cleared first
The Act prohibits the issue of any preference shares which are irredeemable
Select the incorrect statement
Authorized capital is the capital with which the company is registered
Issued capital is equal to its authorized capital
Authorized capital, issued capital, subscribed capital, called up capital and paid up capital cannot be same
The amount which the company has asked its shareholders to pay is called up capital of the company.
Following are the journal during the process of application to allotment stage . One of the entries is
wrong. Select the wrong entry.
Debit bank account and credit share application account ( when application money is received)
Debit share application account and credit share capital account (application transferred to share capital
account)
Debit share capital and credit share allotment account ( for recording allotment money being fallen due )
Debit bank account and credit share allotment account ( for receipt of allotment money)
21. Select the incorrect statement in respect of calls in advance

(a)
The company may accept from shareholders , the uncalled amount on shares even before it is fallen due
(b) The article of association must permit such acceptance of advance call money
(c)
Interest on calls in advance can be paid but the maximum is upto 6%
(d) The amount of calls in advance is part of the paid up share capital
22. Select the incorrect statement in respect of utilization of share premium
(a)
it is used for the purpose of buy back of shares
(b) it used for payment of dividend in case of inadequacy of profits
(c)
it is used for writing off preliminary expenses
(d) it is used for issue of fully paid bonus shares
23.
Mr. X was issued 100 shares of Rs.10 each. He failed to pay call money of Rs. 5 per share. The shares
were forfeited and re-issued to Mr. Y at Rs.9. When the entry recording the re-issue of shares was passed
in all, four accounts were affected. The debit and credit effect of these four accounts is given below. One
of the accounts is given wrong effect. Select that account from the following.
(a)
Debit bank account by Rs.900
(b) Debit forfeited shares by Rs.500
(c)
Credit share capital by Rs.1000
(d) Credit forfeited shares by Rs.400
24. DT Ltd. issued shares of Rs.10 each at 10 % premium, payable on application Rs.2, on allotment Rs.3
(including premium), on first call Rs.2 and on final call Rs.4. One of the shareholders, applied for 100
shares but fail to pay allotment and first call money. At this stage, the said shares were forfeited. Select
the account which was wrongly credited.
(a)
Credit Forfeited shares Account by Rs.200
(b) Credit Share allotment Account by Rs.200
(c)
Credit share premium Account by Rs.100
(d) Credit Share first call Account by Rs.200
25. Select the source which is not valid for issue of bonus shares
(a)
Share premium
(b) Revaluation reserve created by revaluation of fixed assets
(c)
Capital reserve
(d) Capital redemption reserve
26. The liability side of the balance sheet of ABC International Ltd. is showing following position: Paid up
share capital Rs.25 Lakh ( 25,000 shares of Rs.100 each fully paid up)Share premium Rs.5 Lakh, Capital
Reserve Rs. 3 Lakh, General Reserve Rs. 15 Lakh and Profit & Loss account Rs. 15 Lakh .It was decided
to use minimum free reserve for issue of 1:1 bonus shares.. The accounts and the amount with which the
account is debited are given below in sets. One of the set is correct. Select the same.
(a)
(b)
(c)
(d)
27.
(a)
(b)
(c)
(d)
Share Premium Account (Rs.5 Lakh), Capital Reserve Account ( Rs. 1 Lakh), General Reserve Account
(15 Lakh) & Profit & Loss Account by Rs. 4 Lakh
Share Premium Account (Rs. Nil Lakh), Capital Reserve Account ( Rs. Nil Lakh), General Reserve
Account (10 Lakh) & Profit & Loss Account by Rs. 15 Lakh
(4 Lakh) & Profit & Loss Account by Rs. 15 Lakh.
Select the incorrect statement in case of Share Capital and Reserves and Surplus as shown in the balance
sheet.
Under share capital, the following order is maintained: Authorised capital, issued capital, subscribed
capital
The called up amount per share is indicated and in the amount column total amount i.e. number of shares
multiplied by amount called up per share is shown
The amount of unpaid calls is deducted from (b) above
The amount of forfeited shares account is shown under Reserves & surplus
28. Select the incorrect statement in respect of form of balance sheet of companies(Liabilities side).
(a)
sinking fund is shown under unsecured loans
(b) Loans and Advances from banks are grouped under the head Secured Loans
(c)
Unclaimed Dividend is grouped under the head current liabilities
(d) Proposed dividend is grouped under provisions.
29. Select the incorrect statement in respect of form of balance sheet of companies ( Asset side).
(a)
Live Stock is grouped under the head current Asset
(b) Balance of unutilized monies raised by issue is grouped under the head Investments
(c)
Interest paid out of capital during construction is grouped under the head Miscellaneous Expenditure
(d) Vehicles are grouped under the head Fixed Asset
30. In case any sum has been written off on a reduction of capital or revaluation of assets, each balance sheet
subsequent to such reduction or revaluation must show the reduced figures and date of reduction for a
period of ----(a)
1 year thereafter
(b) 2 years thereafter
(c)
3 years thereafter
(d) 5 year thereafter
31. One of the accounts is wrongly grouped under the head Investments while preparing the balance sheet
of the company. Single out the wrong account.
(a)
Investments in government or trust securities
(b) Investments in shares ,debentures or bonds
(c)
Immovable properties
(d) Interest accrued on investments
32.
One of the accounts is wrongly debited to Profit and Loss Appropriation A/c of a company. Name the
wrong account debited
(a)
Interim dividend
(b) Proposed dividend
(c)
Provision for tax
33. Select the false statement in respect of assets
(a)
a banking company is allowed to acquire assets for its own use
(b) a banking company is allowed to grant loans against the security of assets belonging to its customers
(c)
a banking company is allowed to take possession of such assets in case of default committed by the
borrower
(d) a banking company is not allowed to sale the assets against the security of which it has granted loans
34.
a.
b.
c.
d.
The scheduled banks are required by RBI to transfer at least ------ of their disclosed profit after
adjustment/provision towards bonus to staff
20%
15%
10%
None of the above
35. Select the incorrect statement in respect of financial Statements of Banks

(a) a banking company is not required to prepare financial statements in accordance with Schedule
VI of the Companies Act , 1956.
(b) The Act prescribes special forms of balance sheet and profit and loss account for the preparation
of its final accounts
(c) These are set out in form A and form B of the first schedule to the Banking regulation Act, 1949
(d) Form A gives format of a balance sheet and form B gives the format of a profit and loss account
36. The financial statement of bank consists of ------- schedules
(a)
(b)
(c)
(d)
37.
18 Schedules
16 Schedules
17 Schedules
Schedules
Investments, Advances, Fixed Assets and other Assets are part of Schedule Nos.--respectively
a.
b.
c.
d.
38.
6,7,8,9
7,8,9,10
8,9,10,11
9,10,11,12
Liability for partially paid investments in respect of banking companies is grouped under the
head-----
(a)
(b)
(c)
(d)
39.
Investments
Other assets
Other liabilities and provisions
Contingent liabilities
One of the items is a misfit in a group namely other income of a banking company. Select this
item from the following
Income on Investments
Profit on sale of investments
Profit on revaluation of investments
Profit on exchange transactions
In banking company, matured term deposit to be shown under----demand deposits
saving bank deposits
term deposits
other liabilities and provisions
(a)
(b)
(c)
(d)
40.
(a)
(b)
(c)
(d)
PRINCIPLES OF BANKING MODULE A & B cont...

26) The apex institution which handles refinance for agriculture and rural
development is called:
a) RBI
b) SIDBI
c) NABARD
d) SEBI
(c)
27) Long Form Audit Report (LFAR) is prepared and submitted by

a) RBI inspectors
b) Internal inspectors
c) Statutory auditors
(c)
d) Concurrent auditors
28) As per FIMMDAs guidelines, the Mid-Office is responsible for:
a) Dealing activities
b) Risk Management
c) Reconciliation
d) Confirmation of deals
(b)
29) Interest is calculated on actual/365 days basis in respect of the

following products, except one :
a) Call Money
b) Notice Money
c) Term Money
d) GOI dated securities
30) Which was the first Mutual Fund started in India:
(d)
a) SBI Mutual Fund

b) Kotak Pioneer Mutual Fund
c) Indian Bank Mutual Fund
d) None of the above
(d)
31) The regulator for Mutual Funds in India is:

a) FIMMDA
b) AMFI
c) RBI
d) SEBI
(d)
32) FIMMDAs general principles and procedures are applicable to:

a) Fixed Income Markets
b) Money Markets
c) Derivatives Markets
d) All of the above
(d)
33) Your banks customer XYZ Ltd, enjoys a CC limit of Rs.1,00,000.00

The CC account shows a credit balance of Rs,10,205.00.
The relationship between your bank and XYZ Ltd is:
a) Debtor/Creditor
b) Creditor/Debtor
c) Bailor/Bailee
d) Bailee/Bailor
(a)
34) The right of set-off is:

a) Customers Right
b) Customers Obligation
c) Bankers Right
d) Bankers Discretion
(d)
35)Which of the following forms of business are permissible under BR Act:

a) Borrowing
b) Issuance of Letters of Credit
c) Buying and selling of bullion
d) All of the above
(d)
36) A Co-Operative Bank operating in different States are regulated by:

a) State Co-Operative Societies Act
b) Banking Regulation Act
c) Multi Unit Co-Operative Societies Act
d) Banking Laws (applicable to Co-Operative Societies)
(c)
37) In respect of Regional Rural Banks, the share holding pattern is:
a) Central Government 50%,State Government 35%,Sponsoring Bank 15%
b) Central Government 50%,State Government 15%,Sponsoring Bank 35%
(b)
38) Law of limitation is not applicable in respect of :
a) Advance against pledge of shares
b) CC granted against hypothecation of inventory
c) Term loan secured by mortgage of Plant & Machinery
d) Bank Term Deposit
(d)
39) A bank in India, wants to undertake capital market activities, it should:

a) Obtain special license from AMFI
b) Obtain special license from FIMMDA
c) Both a and b
d) Register with SEBI
(d)
40) FIMMDA stands for:

a) Foreign Exchange Markets and Derivative Markets
b) Fixed Income Markets Money Markets and Derivatives Markets
c) Fixed Income Markets and Derivatives Markets
(b)
41) The Capital Adequacy Ratio is :

a) 6%
b) 8%
c) 9%
d) 10%
(c)
42) Except one of the following others are known as Non Fund based facilities:
a) Letters of Credit
b) Bank Guarantees
c) Co-acceptance of Bills
d) Trust Receipt
(d)
43) FIMMDAs guidelines cover the following products, except one:

a) Call Money
b) Cross Currency Interest Rate swaps
c) Commercial Paper
d) Certificate of Deposit
(b)
44) Except one of the following others are part of Public Sector Banks:
a) State Bank of Hyderabad
b) Central Bank of India
c) Regional Rural Bank, sponsored by a nationalized bank
d) HDFC Bank
(d)
45) A banker is expected to honour the cheques within the specified banking
hours as per Section of NI Act,1881
a) 22
b) 25
c) 31
d) 65
(d)
PRINCIPLES OF BANKING MODULE A & B

1) Reserve Bank of Indias functions are classified into:
a) Supervisory & Regulatory
b) Promotional & Developmental
c) Refinance Activities
d) All of the above
(d)
2) Minimum Bank Rate is:

a) 3%
b) 4%
c) 5%
d) None
(d)
3) Sec ---- of RBI Act,1934 gives sole power to RBI to issue currency notes
a) 10
b) 18
c) 22
d) 26
(c)
4) KYC means
a) Know Your Customer very well
b) Know Your existing Customer very well
c) Know Your prospective Customer very well
d) Satisfy yourselves about the customers identity and activities. (d)
5) In a Garnishee Order, the banker on whom garnishee order served is:

a) Judgement Debtors
Creditor
b) Judgement Creditors Creditor

c) Judgement Creditors Debtor
d) Judgement Debtors
Debtor
(d)
6) Sec 131 of NI Act,1881 extends protection to the

a) Paying Banker
b) Collecting Banker
c) Advising Banker
d) Issuing Banker
7) Hypothecation is applicable in the case of
(b)
a) Movable goods
b) Immovable property
c) Book debts
d) Corporate guarantee
(a)
8) A cheque is dated 12/05/05.the due date is:

a) 12/08/05
b) 14/09/05
c) 12/11/05
d) None
(d)
9) Charge created on LIC Policy is:

a) Hypothecation
b) Pledge
c) Assignment
d) Mortgage
(c)
10) Your bank grants a working capital finance to ABC & Co, a partnership firm, against
hypothecation of inventory. The charge is to be registered with Registrar of Companies
within
a) 30 days from the date of advance
b) 30 days from the date of hypothecation agreement
c) 30 days from the date of sanction of loan
d) None
(d)
11) Which one of the following is not barred by law of limitation?

a) Pledge
b) Hypothecation
c) Bankers lien
d) Guarantee
(c)
12) The term Credit Management covers

a) Capital adequacy norms
b) Risk management including Asset/Liability management
c) Credit appraisal decision and review of loans & advances
d) All of the above
(d)
13) Banks Assets are classified in to standard assets, substandard assets doubtful assets
and loss assets, based on the recommendations of -------------------- Committee
a) Rangarajan
b) Narasimham
c) Ghosh
d) Tandon
(b)
14) The time taken to convert cash into raw materials, semi finished goods, finished goods
and into cash , is known as
a)
Trade cycle
b)
Cash cycle
c)
Operating cycle
d)
Revolving cycle
(c)
15) A company which pools money from investors and invests in stocks,
bonds, shares is called
a) A bank
b) An insurance company
c) Bancassurance
d) Mutual Fund
(d)
16) Bancassurance is
a)
An insurance scheme to insure bank deposits
b)
An insurance scheme to insure bank advances
c) A composite financial service offering both bank and insurance products

d) A bank deposit scheme exclusively for employees of insurance companies
(c)
17) John & James are friends aged 14 & 15 respectively. They want to open a joint account in
your bank. You will
a)
Allow them to open a joint account to be operated jointly
b)
Allow them to open a joint account with operating instructions Either or Survivor
c)
Allow them to open a joint account with operating instructions Former or Survivor
d) Allow them to open a joint account with operating instructions Any one or
Survivor
(a)
18) Mr.Atmaram as director of a Ltd company expired. Bank received a cheque signed by
Mr.Atmaram as director of the Ltd company. The bank
a)
Can honour the cheque only after obtaining confirmation from other directors
b)
Can honour the cheque
c)
Cannot hounour the cheque
d)
The company should issue a stop payment instructions to the bank
(b)
19) Tele banking service is based on
a)
Virtual Banking
b)
Online Banking
c)
Voice processing
d)
Core Banking
(c)
20) In a securitisation deal, the role of a Special Purpose Vehicle (SPV) is

a) To acquire large Non Performing Loans (NPA)
b) To acquire such loans from a bank or financial institution
c) To acquire such loans for a transfer price, with or without recourse
d) To manage the acquired loans for the purpose of realization or holds them as investment till
maturity
(d)
21)Securitisation is a process of acquiring the loans classified as

a) Bookdebts
b) Performing debts
c) Bad debts
d) Non performing debts
(d)
22)The minimum percentage of Priority Sector advances to be

maintained by foreign banks in India
a) 40%
b) 18%
c) 32%
d) 60%
(c)
23) Loan for fish rearing is covered under Prirority Sector as ----------- advances
a) Direct Agriculture
b) Indirect Agriculture
c) Self Employment Scheme
d) Allied to indirect Agriculture
(a)
24) Cash Budget is a statement of

a) Cash-Non cash funds
b) Cash receipt and Cash payments
c) Another name for cash flow
d) None
(b)
25) In banks parlance credit risk in lending is

a) Default of the banker to maintain CRR
b) Default of the banker to maintain SLR
c) Default of the banker to release credit to the customer
d) Default of the customer to repay the loan
(d)
JAIIB QUESTIONS ACCOUNTING & FINANCE MODULE D_cont...

58. The two portion of each pair relating to admission of a partner has got some relationship. However
one of the pairs is mismatch and has no relationship. Select this pair from the following
(a) Admission of a partner - gain ratio
(b) Reserves & surplus - Old partners
(c) Goodwill - new partner
(d) Revaluation of assets & liabilities - Profit & Loss adjustment account
59. The two portion of each pair relating to retirement of a partner has got some relationship.
However one of the pair is mismatch and has no relationship. Select this pair from the following
(a) Retirement - voluntary action
(b) Gain - retiring partner
(c) Share of goodwill - borne by continuing partners
(d) Reserve & surplus - belong to all partners
60. If the partners capital accounts are fixed, where will you record (either debit side or credit side of
which account ) the following transactions (i) Salary payable to partner (ii) Fresh capital
introduced by a partner (iii) Drawing made by a partner (iv) Share of profit earned by a partner.
The effect to one of the journal entries is wrongly given. Identify that account from the
following.
(a) Debit side of partners current account
(b) Credit side of partners capital account
(c) Debit side of partners current account
(d) Credit side of partners current account
61. L,K and P are partners. The following differences as listed at (i) to (iv) have arisen due to
misunderstanding. The answer to each point is given at (a) to (d). One of the solutions is
incorrect. Identify the wrong solution. (i) L used Rs.25,000 belonging to the firm and made a
profit of Rs.4,000. K wants the amount to be given to the firm (ii) P used Rs.10,000 belonging to
the firm and suffered a loss of Rs. 3000. He wants the firm to bear the loss (iii) L & K wishes to
appoint S as new partner. P does not agree (iv) L has given loan of Rs. 50,000 to the firm, he
wants interest at 6% ( there is no partnership deed)
(a) K is right .L must pay Rs.29,000 to the firm
(b) P is right . Firm should bear profit as well as losses.
(c) P is right. No new partner can be admitted without the consent of all.
(d) L is right. He is entitled for interest at 6% in the absence of partnership agreement.
62. Below are some statements about partnership. One of them is correct, identify that statement.
(a) Partnership arises from reputation
(b) A partnership is formed only for a legal business
(c) The liability of partners is limited
(d) The business of the firm is conducted by two partners
63. O and P are two partners sharing profits in the ratio of 7:3. They admit Q into partnership as a
partner from 1st April 2006 on 3/7th share in the profit. What is the new profit sharing ratio
(a) 14: 6 : 15
(b) 7: 3: 3
(c) 2: 2: 3
.
64. A firm earns Rs.10,000 as its normal profits. The rate of normal return being 10%. The assets of
the firm amount to Rs.72,000 and liabilities to Rs.24,000. Find out the value of goodwill.
(a) Rs.52,000
(b) Rs.1,00,000
(c) Rs.28,000
(d) Nil
65. When a new partner gives cash for goodwill, the amount is credited to----(a) Goodwill account
(b) Capital account of new partner
(c) Cash account
66. If the goodwill account is raised for Rs.50,000, the amount is debited to----(a) The capital accounts of partners
(b) Goodwill account
(c) Cash account
67. A and B sharing profits and losses in the ratio of 2:1. C is admitted as partner giving him share.
The new profit sharing ratio will be----(a) 2:1:1
(b) 4: 4:3
(c) 3: 3: 2
68. If the adjustment in the values of assets at the time of the admission of a partner shows a profit, it
should be credited to the capital accounts of----(a) The old partners in their new profit-sharing ratio
(b) All partners in their new profit sharing ratio
(c) The old partners in their old profit sharing ratio
69. A, B and C are three partner sharing profits in the ratio of 3:1:1. C retires and his share is
purchased by B. the new profit sharing ratio shall be----(a) 3:1
(b) 7:3
(c) 3:2
.
70. On the retirement of the partner, the profits on revaluation of assets should be credited to the
accounts of----(a) All the partners in their profit sharing ratio
(b) The remaining partners in their new profit sharing ratio
(c) The remaining partners in their old profit sharing ratio
71. A, B and C share profits as 3:2:1. C retires. Calculate the gain ratio of A and B
(a) 3:2
(b) 1:1
(c) 2:1
.
72. Choose the incorrect statement in case of dissolution of partnership from the following statements
(a) On the dissolution of the firm , first creditors like wages outstanding etc. will have to be paid
(b) Goodwill will be raised in the books when a firm is dissolved
(c) The loan from the spouse of a partner is treated just like a loan from outside parties
(d) After the books are closed, no account will show any balance.
73. Choose the incorrect statement from the following statement which are pertaining to company
accounts
(a) The company is an artificial person
(b) A member of a company may bind the company by its actions.
(c) The shareholders are not liable for the acts of the company
(d) The premium received on shares may be distributed among shareholders.
76. A new company cannot issue shares----(a) at par
(b) at discount
(c) at premium
(d) none of the above
77. A company wishes to pay dividend on shares. State which of the following may be used for the
purpose.
(a) Premium of shares
(b) Profit on re-issue of forfeited shares
(c) General Reserve
78. If Rs.10 share has been issued at a premium of Rs.5, on which entire amount has been called up,
has been forfeited for non payment of Rs. 4, the Share Capital Account will be debited by----(a) Rs.15
(b) Rs.10
(c) Rs.4
(d) Rs.6 .
79. Money received in advance from shareholder before it is actually called up by the company is ----(a) Debited to Calls in arrears Account
(b) Debited to Calls in Advance Account
(c) Credited to Calls in Advance Account
(d) Credited to Share Capital Account
80. If a share of Rs.10 issued at a premium of Rs.1 on which Rs.9 ( including premium) have been
called and Rs.7( including premium) paid is forfeited, the capital account should be debited
by----(a) Rs.8
(b) Rs.10
(c) Rs.9
(d) Rs.7
81. Dividend are usually paid on
(a) Called up capital
(b) Paid up capital

(c) Authorised capital
82. Preliminary Expenses is----(a) Fictitious Asset
(b) Current liability
(c) Current asset
83. A and B are partners sharing profits in the ratio of 3:2. C is admitted as a partner. The new profit
sharing ratio among A, B and C is 4:3:2. Find out the sacrificing ratio
(a) 7:3
(b) 4:3
(c) 1:1
.
84. Choose the correct treatment for premium paid on Joint Life Policy when premium paid is
treated as an expense.
(a) Premium amount is debited to P & L account every year and when claim becomes due then to be
shared by all partners
(b) Every year amount debited to Joint Life Policy Account and balance is shown on asset side at
surrender value . The difference between surrender value and premium paid is written off to
Profit and Loss account
(c) Joint Life Policy and Joint Life reserve Account are adjusted to bring them down to surrender
value of policy.
(d) None of the above.
JAIIB QUESTIONS ACCOUNTING & FINANCE MODULE D_cont...

33.
(a)
(b)
(c)
(d)
Advances given to a staff by a bank as a employer should be included in----other assets

advances
investments
none of the above
34. 87.Depreciation on banks property is part of Operating Expenses. Some of the items included
under this category are listed below. One of the expenses is wrongly included. Identify that item
of expense.
(a) depreciation on motor cars
(b) depreciation on stationary and stamps
(c) depreciation on furniture
(d) depreciation on non-banking assets
35. Select the correct statement in respect of doubtful debts
(a)
(b)
(c)
(d)
36.
Which has remained NPA for a period not exceeding 18 months?

Which has remained NPA for a period exceeding 18 months
Which is considered uncollectible by bank/ internal auditor or RBI Inspection
None of the above
The provisional requirement for standard asset is-----
(a)
(b)
(c)
(d)
37.
0.40%(revised) of total outstanding

10%(revised) of total outstanding
The investment under held to maturity should not exceed -----of banks total investment.
(a)
(b)
(c)
(d)
38.
25%
75%
5%
None of the above
The list given below consists of various securities. Identify the security which is SLR security
(a)
(b)
(c)
(d)
39.
Securities issued by local authorities

Shares
Bonds
subsidiaries
Acceptances, endorsements and guarantees are shown as-----
(a)
(b)
(c)
(d)
40.
other assets
contingent liabilities
advances
Select the false statement in respect of banking
(a) A company accepting deposits for the purpose of lending or investment is a banking company
(b) A manufacturing company accepting deposits from the public and some portion of it is lending to
its employees as home loans is a banking company
(c) A company besides accepting deposits and lending is dealing in goods in connection with the
realisation of a security is a banking company
(d) A company besides accepting deposits and lending is in the business of collections or negotiating
bills of exchange is a banking company.
41. The list given below provides the close relationship between the items of each pair. One of the
pairs has no such close relationship. Identify this pair.
(a)
(b)
(c)
(d)
42.
Banking company trustees and executors

Form B - Profit and Loss Account
Ledger book - Letter of credit register
Other liabilities and provisions - Schedule 5
Choose the wrong pair from the following. The information given in the pair is pertaining to
banking companies
(a)
(b)
(c)
(d)
43.
Reserves & surplus - Share premium

Time deposits - Matured time deposits
Borrowings in India - Refinance from NABARD
Other Liabilities & Provisions - Inter office/branch adjustments(net
Choose the wrong pair from the following. The information given in the pair is pertaining to
banking companies
(a)
(b)
(c)
(d)
44.
Demand Deposits Compulsory deposits under excise rules

rebate on bills discounted - unexpired discount
Operating Expenses
Schedule 14
Other Income - Profit on sale of investments less loss on sale of investments
The name of the accounts with the coverage of various items in building that account is given
below. One of the items covered in on of the accounts is wrong. Select this account
(a) Closing balance of provisions held towards NPA - Opening Balance plus provisions made
during the year less write off of bad debts/write back of excess provisions
(b) Interest Earned - interest on advances plus income on investments plus interest on deposit with
RBI plus income earned by way of dividends from subsidiaries plus discount on bills less
unexpired discount
(c) Reserves & surplus - Opening balance plus additions during the year less deductions during the
year
(d) Term deposits - from banks and from Others
45. Identify a pair which is mismatch from the following pairs in respect of Company Accounts
(a)
(b)
(c)
(d)
46.
Miscellaneous Expenditure Preliminary Expenses

Contingent Liabilities footnote to balance sheet
Debentures Unsecured Loans
Outstanding Expenses Current Liabilities
Identify a pair which is mismatch from the following pairs in respect of Company Accounts
(a)
(b)
(c)
(d)
47.
Discount on issue of shares Profit and Loss Account

Bill discounted contingent liabilities
Interest accrued and due on debentures Secured Loans
Mortgage Loan Secured Loans
Companies are required to transfer certain percentage of their profit after tax to reserves, to
declare dividend. The various rates of transfer based on the rates of dividend are given below in
pair. Select the wrong pair.
(a) Rate of dividend exceeds 10% but not 12.50- Transfer to reserve @ Nil%
(b) Rate of dividend exceeds 12.50% but not 15%- Transfer to reserve @ 5%
(c) Rate of dividend exceeds 15% but not 20%- Transfer to reserve @ 7.50%
(d) Rate of dividend exceeds 20% - Transfer to reserve @ 10%

48. While preparing the final accounts of the company, the adjustments [(i) to (iv)] are to be made by
passing necessary entries. One of the entries passed is wrong entry. Select the wrong entry.(i)
Depreciate plant ,WDV of which is Rs.3,30,000 at 15% (ii) Write off Rs.5,000 from Preliminary
Expenses (iii) Half years debenture interest due (12% debentures of Rs. 3,00,000) (iv) a claim of
Rs. 25,000 for workmens compensation is disputed by the company.
(a) Debit Depreciation on plant by Rs.49,500 credit plant by 49,500 AND Debit Profit & Loss
Account by 49,500 and Credit Depreciation on plant by 49,500
(b) Debit Profit and Loss Account by Rs.5,000 and Credit Preliminary Expenses
(c) Debit Debenture Interest by Rs.18,000 & Outstanding Liability for Deb. Interest by 18,000 AND
Debit Profit and Loss Account by Rs.18,000 and Credit Debenture Interest by Rs.18000
(d) Debit Wages by Rs.25,000 & Credit Outstanding Liability for Workers compensation AND Debit
Profit and Loss Account by Rs.25,000 and Credit Wages by Rs.25,000
.
49. While preparing the final accounts of the company, the adjustments [(i) to (iv)] are to be made by
passing necessary entries. One of the entries passed is wrong entry. Select the wrong entry.(i)
Provide dividend 5% of paid up share capital (Share capital of Rs. 5,00,000 consisting of shares
of Rs. 10 each fully paid) (ii) Insurance for unexpired period is Rs.2000 (iii) A provision of Rs.
25,000 is to be made for income tax (iv) a provision of Rs. 5000 is to be made for doubtful debts
(a)
(b)
(c)
(d)
Debit Dividend by Rs.25000 & Credit Bank by Rs.25000

Prepaid Insurance by Rs.2000 & Insurance by Rs.2000
Debit Profit & Loss Account by Rs.25,000 & Credit Provision for Tax by Rs.25,000
Debit Profit & Loss by Rs.5,000 & Credit Provision for doubtful debts by Rs.5,000
50. In respect of asset side of the balance sheet one of the items is presented in a proper order, rests
are disorderly. Select the orderly presented item from the following.
(a) Investments, Fixed Assets, Current Assets & Loan Advances, Profit & Loss Account(Dr. balance),
Miscellaneous Expenditure
(b) Fixed Assets, Investments, Current Assets & Loan Advances, Profit & Loss Account(Dr.
balance) , Miscellaneous Expenditure
(c) Fixed Assets, Investments, Current Assets & Loan Advances, Miscellaneous Expenditure, Profit
& Loss Account(Dr. balance)
(d) Fixed Assets, Current Assets & Loan Advances, Profit & Loss Account(Dr. balance),
Miscellaneous Expenditure
59. One of the statements in respect of Profit & Loss Adjustment account is incorrect, rest are correct.
Mark the incorrect sentence.
(a) The account is credited with closing balance of profit and loss account of last year
(b) The account is credited with current years net profit
(c) The account is debited with provision for taxes
(d) The account is debited with provision for dividend
60. The two portion of each pair relating to partnership accounts has got some relationship. However
one of the pairs is a mismatch and has no relationship. Select this pair from the following
(a) Management of business - business may be run by one or some or all partner
(b) Treatment of losses - insolvency of a partner

(c) Loan from partners - No interest as partners are owners
(d) Goodwill - super profit method
61. The two portion of each pair relating to admission of a partner has got some relationship. However
one of the pairs is mismatch and has no relationship. Select this pair from the following
(a) Admission of a partner - gain ratio
(b) Reserves & surplus - Old partners
(c) Goodwill - new partner
(d) Revaluation of assets & liabilities - Profit & Loss adjustment account
62. The two portion of each pair relating to retirement of a partner has got some relationship.
However one of the pair is mismatch and has no relationship. Select this pair from the following
(a) Retirement - voluntary action
(b) Gain - retiring partner
(c) Share of goodwill - borne by continuing partners
(d) Reserve & surplus - belong to all partners
63. If the partners capital accounts are fixed, where will you record (either debit side or credit side of
which account ) the following transactions (i) Salary payable to partner (ii) Fresh capital
introduced by a partner (iii) Drawing made by a partner (iv) Share of profit earned by a partner.
The effect to one of the journal entries is wrongly given. Identify that account from the
following.
(a) Debit side of partners current account
(b) Credit side of partners capital account
(c) Debit side of partners current account
(d) Credit side of partners current account
64. L,K and P are partners. The following differences as listed at (i) to (iv) have arisen due to
misunderstanding. The answer to each point is given at (a) to (d). One of the solutions is
incorrect. Identify the wrong solution. (i) L used Rs.25,000 belonging to the firm and made a
profit of Rs.4,000. K wants the amount to be given to the firm (ii) P used Rs.10,000 belonging to
the firm and suffered a loss of Rs. 3000. He wants the firm to bear the loss (iii) L & K wishes to
appoint S as new partner. P does not agree (iv) L has given loan of Rs. 50,000 to the firm, he
wants interest at 6% ( there is no partnership deed)
(a) K is right .L must pay Rs.29,000 to the firm
(b) P is right . Firm should bear profit as well as losses.
(c) P is right. No new partner can be admitted without the consent of all.
(d) L is right. He is entitled for interest at 6% in the absence of partnership agreement.
65. Below are some statements about partnership. One of them is correct, identify that statement.
(a) Partnership arises from reputation
(b) A partnership is formed only for a legal business
(c) The liability of partners is limited
(d) The business of the firm is conducted by two partners
JAIIB QUESTIONS ACCOUNTING & FINANCE MODULE D part 1

JAIIB SPECIMEN QUESTIONS
ACCOUNTING & FINANCE FOR BANKERS
MODULE D
1.
(a)
(b)
(c)
(d)
2.
(a)
(b)
(c)
(d)
Select from the following, a statement which speaks about liabilities of an entity.
The liabilities consist of claims of the owners
The liabilities consist of claims of the owners and outsiders
The liabilities consist of claims of the outsiders
None of the above
If the net worth of the business is Rs.500, fixed assets are Rs. 500, current assets Rs.300, investments
Rs.300, current liabilities Rs. Nil, what is the amount of claim to outsiders?
Rs. Nil
Rs. 1100
Rs.500
Rs.600.
Select from the following a sentence which is wrong
If assets increase and liabilities do not , the capital will increase
If assets increase and liabilities also increase by same sum , the capital will remain same
A reduction in the amount of assets will amount to equivalent reduction in the net worth
An increase in the amount of liabilities with no corresponding increase in liabilities will increase the
amount of capital
The firm sells goods on credit for Rs.50000, the cost of the goods sold is Rs.30000.The effect of the
transaction is that, the capital of the firm----increases by Rs.50000
reduces by Rs.40000
increases by Rs. 20000
reduces by Rs. 20000
Mr.Ghatge commenced his business on 1st April, 2006 with Capital of Rs.1,00,000. He did good business
during the year and earned handsome profit. At the end of 31 st March, 2007, his financial position was:
Fixed Assets Rs.1, 20,000 and bank balance of Rs.33000 and Creditors Rs. 17000. What was his net
profit for the year 05-06?
Rs. 36000
Rs.70000
Rs.53000
None of the above.
6.
(a)
(b)
One of the pairs given below is wrong. Select the wrong pair.
Outstanding expenses - Nominal account
Profit and Loss Account (Dr. balance) Application of funds
(a)
(b)
(c)
(d)
3.
(a)
(b)
(c)
(d)
4.
(a)
(b)
(c)
(d)
5.
(c)
(d)
Net worth less reserves & surplus - Capital

Balance sheet - Financial position
7.
Choose the sentence which speak about illegal association
(a)
The unregistered association of 10 persons to do banking business
(b) The unregistered association of 50 persons to do non banking business
(c)
(d) The unregistered association of 10 persons to do business other than banking
8. From the following ,find a sentence which is false in respect of partnership
(a) If the partnership is following the Fixed Capital Account Method salary payable to a partner is credited to
the partners current account
(b) Drawings made by partners are never entered in the Profit and Loss Appropriation Account.
(c) In the Fluctuating Capital Account Method the balance in the capital account always remains the same
(d) The capital account of a partner is required to be opened in both the Fixed Capital Account Method and
Fluctuating Capital Account Method
9. From the account given below, select the account which is wrongly included in Profit & Loss
Appropriation Account at the debit side
a. Drawings Account
b. Partners Salary Account
c. Interest on Loan Account
d. Commission to Partners Account
10. The average net profits expected are Rs.108000 per annum before charging remuneration of Rs. 18000 to
partner . The capital employed in the business is Rs.6,00,000. The rate of return expected on capital
employed of a firm is 10%. What is the value of goodwill on the basis of two years purchase of super
profits.
a. Rs.108,000
b. Rs.60,000
c. Rs.78,000
d. None of the above
11. A and B are two partners in a firm sharing profits and losses as 2:1. they admitted C as a partner with 25%
share in the profits of the firm. Hence , the new profit sharing ratio , after admission of C would be ----(a) 15:15:10
(b) 20:10:10
(c) 3:1:1
12. Mr. Q and Mr. R were partners of a firm sharing profit and losses in the ratio of 3:2. They take S into
partnership. It was agreed that S will pay Rs.1,00,000 as his share of goodwill which will be retained in
business and also bring Rs.3,00,000 as capital for one fourth share in the future profits. The book value
of the stock was 41,000 but was to be revalued at Rs.50,000, Accountant has passed following entries, but
Mr. Q feels that one of the entry is wrong. Select the wrong entry from the following.
(a) Debit cash and credit Goodwill for Rs.1,00,000
(b) Debit cash and credit Ss Capital for Rs.3,00,000
(c)
Debit Goodwill for Rs.1,00,000 and credit Qs Capital by Rs. 60000 & Rs Capital by Rs. 40,000
(d) Debit Stock and credit Profit & Loss Adjustment A/c by Rs.9,000
13. Read the following four journal entries which are passed to consider revaluation of assets and liabilities at
the time of admission of a partner. One of the journal entries is wrong, choose the entry which is wrong.
(a)
For increase in the value of assets-Debit Asset Account and Credit Revaluation Account.
(b) For decrease in the value of liabilities- Debit Liabilities Account and Credit Revaluation Account.
(c)
For Profit on revaluation of assets and liabilities Debit Old Partners Capital Account in old profit
sharing ratio and Credit Revaluation Account
(d) For decrease in the value of assets -Debit Revaluation Account and Credit Asset Account
14. Any facts, observations, occurrences are called ----(a)
data
(b) record
(c)
file
(d) system
15. In the books of ABC Enterprises, a partnership firm, when Mr. C, a partner decided to resign from the
firm, a revaluation of assets and liabilities was done and Revaluation account was prepared which showed
the following position: At the credit side of Revaluation Account, Stock A/c Rs.25000, Premises A/c
Rs.52000 and Creditors A/c Rs. 8000 were shown while at debit side of Revaluation Account Reserve for
Doubtful Debts A/c. Rs.15000, As Capital A/c.Rs.20000, Bs Capital A/c. Rs.20,000 and Cs Capital A/c.
Rs.20000 were shown. Accountant has interpreted the Revaluation Account as follows. One of the
interpretations by him is incorrect. Select the incorrect sentence.
(a)
Stock is revalued upwardly by Rs. 25000
(b) Creditors are revised upwardly by Rs.8000
(c)
Premises are revised upwardly by Rs.52000
(d) A provision on debtors of Rs. 15,000 is made for doubtful debts
16. Select the True statement from the following
(a)
Interest on drawing is an income to the partnership firm
(b) Joint Venture is a permanent partnership firm
(c)
Goodwill is a tangible asset of the firm
(d)
In the absence of partnership agreement , partners share profit and loss in proportion to the capital
contributed by the partners.
17. Select the incorrect statement in respect of companies.
(a)
A member of a company can enter into contract with a company
(b) It is compulsory to register a joint stock company
(c)
If all but one member of a private company becomes insolvent ,it affects the existence of the
organisation
(d) Shareholders are not liable for the acts of the company
18. Select the incorrect sentence
(a)
Whenever, there is no profit or inadequate profit, dividend cannot be declared
(b) The right to claim dividend lapses when there is no profit in case of cumulative preference shares
(c)
When the company makes profit , arrears of preference dividend are cleared first
(d)
The Act prohibits the issue of any preference shares which are irredeemable
19. Select the incorrect statement
(a)
Authorized capital is the capital with which the company is registered
(b) Issued capital is equal to its authorized capital
(c)
Authorized capital, issued capital, subscribed capital, called up capital and paid up capital cannot be same
(d) The amount which the company has asked its shareholders to pay is called up capital of the company.
20. Following are the journal during the process of application to allotment stage . One of the entries is
wrong. Select the wrong entry.
(a)
Debit bank account and credit share application account ( when application money is received)
(b) Debit share application account and credit share capital account (application transferred to share capital
account)
(c)
Debit share capital and credit share allotment account ( for recording allotment money being fallen due )
(d) Debit bank account and credit share allotment account ( for receipt of allotment money)
21. Select the incorrect statement in respect of calls in advance
(a)
(b)
The company may accept from shareholders , the uncalled amount on shares even before it is fallen due
The article of association must permit such acceptance of advance call money
(c)
Interest on calls in advance can be paid but the maximum is upto 6%
(d) The amount of calls in advance is part of the paid up share capital
22. Select the incorrect statement in respect of utilization of share premium
(a)
it is used for the purpose of buy back of shares
(b) it used for payment of dividend in case of inadequacy of profits
(c)
it is used for writing off preliminary expenses
(d) it is used for issue of fully paid bonus shares
23. Mr. X was issued 100 shares of Rs.10 each. He failed to pay call money of Rs. 5 per share. The shares
were forfeited and re-issued to Mr. Y at Rs.9. When the entry recording the re-issue of shares was passed
in all, four accounts were affected. The debit and credit effect of these four accounts is given below. One
of the accounts is given wrong effect. Select that account from the following.
(a)
Debit bank account by Rs.900
(b) Debit forfeited shares by Rs.500
(c)
Credit share capital by Rs.1000
(d) Credit forfeited shares by Rs.400
24. DT Ltd. issued shares of Rs.10 each at 10 % premium, payable on application Rs.2, on allotment Rs.3
(including premium), on first call Rs.2 and on final call Rs.4. One of the shareholders, applied for 100
shares but fail to pay allotment and first call money. At this stage, the said shares were forfeited. Select
the account which was wrongly credited.
(a)
Credit Forfeited shares Account by Rs.200
(b) Credit Share allotment Account by Rs.200
(c)
Credit share premium Account by Rs.100
(d) Credit Share first call Account by Rs.200
25. Select the source which is not valid for issue of bonus shares
(a)
Share premium
(b) Revaluation reserve created by revaluation of fixed assets
(c)
Capital reserve
26. The liability side of the balance sheet of ABC International Ltd. is showing following position: Paid up
share capital Rs.25 Lakh ( 25,000 shares of Rs.100 each fully paid up)Share premium Rs.5 Lakh, Capital
Reserve Rs. 3 Lakh, General Reserve Rs. 15 Lakh and Profit & Loss account Rs. 15 Lakh .It was decided
to use minimum free reserve for issue of 1:1 bonus shares.. The accounts and the amount with which the
account is debited are given below in sets. One of the set is correct. Select the same.
(a)
(b)
(c)
(d)
27.
(a)
(b)
(c)
(d)
Share Premium Account (Rs. Nil Lakh), Capital Reserve Account ( Rs. Nil Lakh), General Reserve
Account (10 Lakh) & Profit & Loss Account by Rs. 15 Lakh
(4 Lakh) & Profit & Loss Account by Rs. 15 Lakh.
Select the incorrect statement in case of Share Capital and Reserves and Surplus as shown in the balance
sheet.
Under share capital, the following order is maintained: Authorised capital, issued capital, subscribed
capital
The called up amount per share is indicated and in the amount column total amount i.e. number of shares
multiplied by amount called up per share is shown
The amount of unpaid calls is deducted from (b) above
The amount of forfeited shares account is shown under Reserves & surplus
28. Select the incorrect statement in respect of form of balance sheet of companies(Liabilities side).
(a)
sinking fund is shown under unsecured loans
(b) Loans and Advances from banks are grouped under the head Secured Loans
(c)
Unclaimed Dividend is grouped under the head current liabilities
(d) Proposed dividend is grouped under provisions.
29. Select the incorrect statement in respect of form of balance sheet of companies ( Asset side).
(a)
Live Stock is grouped under the head current Asset
(b) Balance of unutilized monies raised by issue is grouped under the head Investments
(c)
Interest paid out of capital during construction is grouped under the head Miscellaneous Expenditure
(d) Vehicles are grouped under the head Fixed Asset
30. In case any sum has been written off on a reduction of capital or revaluation of assets, each balance sheet
subsequent to such reduction or revaluation must show the reduced figures and date of reduction for a
period of ----(a)
1 year thereafter
(b) 2 years thereafter
(c)
3 years thereafter
(d) 5 year thereafter
31. One of the accounts is wrongly grouped under the head Investments while preparing the balance sheet
of the company. Single out the wrong account.
(a)
Investments in government or trust securities
(b) Investments in shares ,debentures or bonds
(c)
Immovable properties
(d) Interest accrued on investments
32.
One of the accounts is wrongly debited to Profit and Loss Appropriation A/c of a company. Name the
wrong account debited
(a)
Interim dividend
(b) Proposed dividend
(c)
Provision for tax
33. Select the false statement in respect of assets
(a)
a banking company is allowed to acquire assets for its own use
(b) a banking company is allowed to grant loans against the security of assets belonging to its customers
(c)
a banking company is allowed to take possession of such assets in case of default committed by the
borrower
(d) a banking company is not allowed to sale the assets against the security of which it has granted loans
34.
a.
b.
c.
d.
The scheduled banks are required by RBI to transfer at least ------ of their disclosed profit after
adjustment/provision towards bonus to staff
20%
15%
10%
None of the above
35. Select the incorrect statement in respect of financial Statements of Banks
(a) a banking company is not required to prepare financial statements in accordance with Schedule
VI of the Companies Act , 1956.
(b) The Act prescribes special forms of balance sheet and profit and loss account for the preparation
of its final accounts
(c) These are set out in form A and form B of the first schedule to the Banking regulation Act, 1949
(d) Form A gives format of a balance sheet and form B gives the format of a profit and loss account
36. The financial statement of bank consists of ------- schedules
(a)
(b)
(c)
(d)
37.
18 Schedules
16 Schedules
17 Schedules
Schedules
Investments, Advances, Fixed Assets and other Assets are part of Schedule Nos.--respectively
a.
b.
c.
d.
38.
6,7,8,9
7,8,9,10
8,9,10,11
9,10,11,12
Liability for partially paid investments in respect of banking companies is grouped under the
head-----
(a)
(b)
(c)
(d)
39.
Investments
Other assets
Other liabilities and provisions
Contingent liabilities
One of the items is a misfit in a group namely other income of a banking company. Select this
item from the following
Income on Investments
Profit on sale of investments
Profit on revaluation of investments
Profit on exchange transactions
In banking company, matured term deposit to be shown under----demand deposits
saving bank deposits
term deposits
(a)
(b)
(c)
(d)
40.
(a)
(b)
(c)
(d)
JAIIB-ACCOUNTING & FINANCE FOR BANKERS-MOD-C

MODEL QUESTIONS
1)
a)
b)
c)
d)
Which of the following may not be part of the Bank reconciliation process.
Interest on overdraft
Dishonour of cheque
Cash drawn from bank
Cheque deposited but not collected
2)
a)
b)
c)
d)
Reconciliation of overcasting on receipts side of cash book

Increases the balance in the cash book.
Increases the balance in the passbook.
Decreases the balance in the cash book.
Decreases the balance in the passbook.
3) Which of the following is true

a) Bank Reconciliation Statement(BRS) is an account.
b) BRS is prepared by the bank.
c) BRS shows causes of disagreement between cash book & passbook.
d) BRS shows only excess of cash book over passbook.
4)
a)
b)
c)
d)
If a trader enjoys an overdraft facility, then

His passbook will show debit balance.
His cash book will show debit balance .
excess of deposits over withdrawals
None of the above
5)
a)
b)
c)
d)
Direct deposit by a customer in the bank

Shows a higher passbook balance than cash book.
Shows a lesser passbook balance than cash book.
Shows no difference.
None of the above.
6) Goods worth Rs.2000 sold to Vijay was entered in purchase account;

The rectification is
a) Credit purchases and credit sales to the extent of Rs.2000 each & debit Vijay by Rs.2000
b) Debit purchases and debit sales to the extent of Rs.2000 each & credit Vijay.
c) Debit sales to the extent of Rs.4000.
d) Credit purchases to the extent of Rs.4000.
7)
a)
b)
c)
d)
Machinery worth (WDV) 1000/- sold for 1200/- is entered in sales register. The rectification is
Credit sales 1200/-, debit machinery 1000/- and debit P&L a/c 200/-.
Debit sales 1200/- , credit machinery 1000/- and credit P&L a/c 200/-.
Credit machinery 1200/-, debit sales 1000/- and debit P&L a/c 200/-.
Debit machinery 1200/-, credit sales 1000/- and credit P&L a/c 200/-.
8. Sales return of amount Rs.1000 from Vijay was wrongly entered in purchase book.
The rectification is
a) Debit sales to the extent of Rs.2000.
b) Credit purchases to the extent of Rs.2000
c) Credit Vijay Rs.2000, debit sales and purchases to the extent Rs.1000, each.
d) Debit sales return by Rs.1000 and credit purchases by Rs.1000
a)
b)
c)
d)
9) Which of the following will not affect Trial Balance

Goods sold on credit not recorded in books.
Overstating of sales register.
Rent account credited instead of debit.
Salary debited to the extent the amount.
a)
b)
c)
d)
10) Suspense a/c is not used in which of the following cases.

before trial balance.
after trial balance.
before final accounts.
none of the above.
a)
b)
c)
d)
11)
Which of the following is true
Trial balance ensures arithmetical accuracy.
Trial balance errors are not located then the difference is sent to suspense a/c.
Trial balance is base for final accounts.
All of the above.
12) Which of the following are true

a) Nominal accounts always have credit balances.
b) Real accounts always have debit balances.
c) Debit balance in ledger account is credit balance in trial balance.
d) P&L a/c appears in trial balance.
a)
b)
c)
d)
a)
b)
c)
d)
a)
b)
c)
d)
13) Freight expenses for moving new machinery to factory is

Revenue expenses
Deferred revenue expenditure
Capital expenditure
None of the above
14) Which of the following is false
Replacement of defective part of machinery is revenue expenditure
Daily wages paid for erection /installing of machinery is capital expenditure
Underwriting commission for issue of shares is revenue expenditure
Excess of sale price of Machinery over its W D Value but less than cost price is treated as
revenue receipt
15) Which of the following is not a deferred revenue expenditure
Preliminary expenses for setting up a company.
Amount raised through Rights issue.
Huge sales promotion expenditure in launch of new product
Cost of preparing project report
16) Match the columns:
a) Purchase of land for premises
1) Deferred Revenue Expenditure (c)
b) Purchase of machinery for sale

c) Legal expenses for issue of shares
d) Excess of sale price of asset over
W D Value
e) Excess of sale price of asset over
cost price
2) Capital Expenditure (a)

3) Revenue Expenses (b)
4) Capital Receipt (e)
5) Revenue Receipt (d )
17) 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
18) 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
19) 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)
20) 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)
21)Which of the following is most desirable
a) Pricing issue of goods to match current material costs
b) Overstating profits
c) Understating profits
d) none of the above
22) As per accounting standards which of the following is not a preferred method
a) LIFO
b) FIFO
c) WACM
d) All of them
23) Consider the following:
01/04 Opening stock of 1000 units at Rs. 10/- each
10/04 Purchases of 500 units at Rs. 9/- each
16/04 Purchases of 300 units at Rs. 11/- each

18/04 Goods of 300 units released to production
31/04 Books closed
Answer the following:
under LIFO under FIFO under WACM
Goods released to production
@ Rs 11/- @ Rs. 10/- @ Rs. 9.89/Closing stock
@ Rs.10/- @ Rs. 11/- @ Rs. 9.89/
24) Read the following and answer :
Drawer is A
Drawee is B
Endorsee is C
In the books of A, Bills receivable a/c is debited and Bs a/c is credited, then
a) Bill accepted by A
b) Bill accepted by B
c) Bill retired by B
a)
b)
c)
d)
a)
b)
c)
d)
In the books of B , Bills payable a/c is debited and bank account is credited
Bill accepted by B
Bill retired by B
Bill dishonoured by B
Bill sent by A for payment
25) Which of the following is not true
there is no difference in appearance between trade
and accommodation bill.
A bill of exchange must be accepted
Drawee is maker of a bill
Accommodation bill is for an imaginary transaction
26. Noting charges are
a)
b)
c)
d)
Paid to bank for dishonour

Paid to drawer for dishonour
Paid to notary public for recording dishonour
None of the above.
27. Goods lost in transit is
a)
b)
c)
d)
Nominal loss
Abnormal loss
Casual loss
Conditional loss
28. Due to heavy flooding a truck carrying consignment goods sinks. This loss is called
a)
b)
c)
d)
contingent loss
Nominal loss
Abnormal loss
Casual loss
29. Which of the following is true for leasing and hire purchase
a)
b)
c)
d)
Lessor and vendor can claim depreciation.

Lessor and hirer can claim depreciation.
Lessee and hirer can claim depreciation.
Lessee and vendor can claim depreciation.
30. In sum of digits method for 5 years which of the following is the 1st years allocation
ratio.
a)
b)
c)
d)
e)
1/15
2/15
3/15
4/15
5/15
31. Which of the following is true

a)
b)
c)
d)
Total lease rent = cost of asset - total finance income + residual value
Total finance income = total lease rent cost of asset + residual value
Total finance income = cost of asset total lease rent + residual value
Cost of the asset = total lease rent + residual value + total finance income
32. In operating lease the period is
a) Less than the useful life of the asset.

b) Greater than the useful life of the asset.
c) Equal to the useful life of the asset.
33. In comparing lease & hire purchase (H P) there are differences & similarities.
a)
b)
c)
d)
Of the following which one is not true?

In lease the user of the asset does not retain it, while in H P he does.
In lease the user does not claim depreciation while he does in H P.
Payment of rentals is on instalment basis in both.
The users of assets in both lease & H P run the risk of obsolescence.
34. Receipts and payments statement shows
a)
b)
c)
d)
Only revenue receipts and payments during a year.

Only capital receipts & payments during a year.
Both capital and revenue receipts during a year.
Cash Only transactions.
35. Income for the year = I, Outstanding Income for previous year = Id,
a)
b)
c)
d)
Outstanding Income of current year = Idi, then Receipts for the year is
I Idi + Id
I + Idi Id
I + Idi + Id
None of the above.
36. Opening balance of asset = Oi, Closing balance of asset = Oc, Depn. = D,
a)
b)
c)
d)
Then addition to the asset during the year is

Oc D Oi
Oi + D Oc
Oc + D Oi
Oi D Oc
37) Tick in the appropriate column for a Non-Trading Organization
Item
Revenue Receipt Capital Receipt
a) Donations for sports meet
b) Donations by Legacy/Will
c) Grant for playground
d) Life membership fees
e) Profit on sale of fixed assets
(a)
(b)
(c)
(d)
38) For a Non- Trading Organization, a P & L A/c called an Income & Expenditure A/c because.
They often make losses.
They are forbidden by statute to make profits
By object of their association they are non profit making bodies.
Their income & expenditure statement are a combination of capital & revenue receipts.
39) 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.
40) Under written down value method of Depn., the W D V of the asset is always
a) equal to zero
b) < zero
c) > zero
JAIIB Model Questions - LEGAL_Module D
378. A _________ is free when the parties to the contract agree to the same thing in
the same sense.
Marks: 2+ 0.5consent
contract
agreement
The Correct Answer is :
consent Module : Module D Chapter : Chapter1
379. A contract without _________ is void.

cash
consideration
indemnity
guarantee
Marks: 2+ 0.5-
consideration Module : Module D Cha. : Chapter1
380. A person who makes a proposal is known as _______.
Marks: 2+
promisor
principal debtor
surety
guarantor
promisor Module : Module D Chapter : Chapter1
381. A person is said to be competent to contract if ___________.

he is a major
he is of sound mind
he is a major and of sound mind
Module : Module D
he is a major and of sound mind
Chapter : Chapter1
382. A enters into an agreement with B to rob C and share money. B runs away with
all the moeny. A can suit against B to recover the money.
True
False
False
Module : Module D Chapter : Chapter1
383. Mr X (aged 17) can enter into an agreement with Mr Y (aged 25) to buy a car.
Marks: 2+ 0.5True
False
False Module : Module D Chapter : Chapter1
384. A contract is concluded only when the party to whom the proposal is made,
accepts the proposal.
Marks: 2+ 0.5True
False
The Cor rect Answer is :
True Module : Module D Chapter : Chapter1
385. Insurance policies are contracts in the nature of _____.

guarantee
plede
bailment
indemnity
indemnity Module : Module D Chapter : Chapter2
386. There are ________ parties in a contract of indemnity.
Marks: 2+
2
3
4
5
2 Module : Module D Chapter : Chapter2
387. A person who is indemnified can recover damages as well as costs for claming
the damages.
Marks: 2+ 0.5True
False
388. In a contract of indemnity the indemnifier is primarily labile

True
False
389. In a contract of guarantee the liability of the surety is secondary.

False
True
390. Anything done for the benefit of the principal debtor, is a sufficient
consideration to the surety for giving the guarantee.
Marks: 2+ 0.5True
False
391. Where there are co-sureties, a release by the creditor of one of them does not
discharge the others.
Marks: 2+ 0.5True
False
392. Principal debtor need not pay the surety after the surety has paid to the
creditor.
Marks: 2+ 0.5True
False
393. Surety is also known as the __________.

indemnifier
bailor
guarantor
bailee
Marks: 2+ 0.5-
guarantor Module : Module D Chapter : Chapter3
394. Liability of the surety is ________ that of the principal debtor.

co-extensive with
primary to
secondary to
co-extensive with
Module : Module D Chapter : Chapter3

395. Surety is _________ if the principal debtor is released by the creditor.
discharged
liable
discharged Module : Module D Chapter : Chapter3
396. Guarantee obtained by _________ is invalid.

misrepresentation
consent
agreement
contract
Marks: 2+ 0.5-
misrepresentation Module : Module D Cha:Chap3
397. Bailor is a person who delivers his goods to the surety to enable him to give a
guarantee.
Marks: 2+ 0.5True
False
398. Bailee can use the goods given by the bailor, in the manner as he likes.
True
False
399. The bailee can keep the goods bailed to him and he need not return the same
to the bailor.
Marks: 2+ 0.5True
False
400. Giving a product on rent for use to another person is a contract of bailment.
True
False
401. If ornaments kept in the safe locker of bank is stolen in spite of due care by the
bank, the bani is liable to the depositor of ornaments.
True
False
402. It is the obligation of the bailee to keep his goods separate from the goods of
the bailor.
Marks: 2+ 0.5True
False
403. The bailor is liable for any loss to the bailee if the goods bailed are defective
and the bailor knowingly does not disclose this fact to the bailee.
True
False
404. If the bailee has rendered any service involving the exercise of labour or skill in
respect of the goods bailed to him, he has to right to retain such goods until the
receives due remuneration for the services the has rendered.
Marks: 2+ 0.5True
False
405. In a pledge the goods are delivered to be kept as security for a debt or
borrowing.
Marks: 2+ 0.5True
False
406. The pawnee can sell the goods if the pawnor fails to pay.
True
False
407. The pawnee can sell the goods without giving notice to the pawnor.
True
False
408. The pawnee can keep the goods even after the pawnor has paid the dues.
Marks: 2+ 0.5True
False
409. Agent can be appointed by __________.

express appointment
implication of law
ratification by principal
any of the three modes
Marks: 2+ 0.5-
any of the three modes
Module : Module D Chapter : undefined

410. The usual form of contract of agency is by way of a _________.
power of attorney
indemnity bond
guarantee bond
power of attorney

411. When a person by his words or conduct appoints someone as his agent it is
known as agency by ________.
Marks: 2+ 0.5estoppel
promise
conduct
action
estoppel Module : Module D Chapter : undefined
412. Consideration is the most essential element in any contract of agency.

True
False
False Module : Module D Chapter : undefined
413. A contract of agency is terminated if the agent does not wish to continue as
agent any more.
Marks: 2+ 0.5True
False
True Module : Module D Chapter : undefined
414. An agent can have a lien on the goods of the principal for the dues payable by
the principal to the agent.
Marks: 2+ 0.5True
False
415. Minor can be a principal or an agent.

True
False
Marks: 2+ 0.5-
416. The principal has to indemnify the agent for all the lawful acts done by the
agent int he course of his duties.
Marks: 2+ 0.5True
False
417. ________means the consideration for a sale of goods.

Price
Lien
Delivery
Shares
Price Module : Module D Chapter : undefined
418. Goods as defined under Sale of Goods Act does not include ________
actionable claims
shares
stock
grass
actionable claims Module :D Chapter : undefined
419. ________ goods are to be manufactured/produced/acquired by the seller after

making of the contract of sale.
Marks: 2+ 0.5Future
Specific
Moveable
Immoveable
Future Module : Module D Chapter : undefined
420. __________ goods means goods identified and agreed upon at the time a
contract of sale is made.
Marks: 2+ 0.5Future
Specific
Moveable
Immoveable
Specific Module : Module D Chapter : undefined
421. _________ means voluntary transfer of posession from one person to another.
Delivery
Lien
Indemnity
suit
Delivery Module : Module D Chapter : undefined
422. When the transfer of the property in the goods is to take place at a contract is
called ________.
Marks: 2+ 0.5agreement to sell
contract of sale
conract of future goods
contract of specific goods
Module : Module D
agreement to sell
Chapter : undefined
423. In ________ the ownership of goods is yet to pass from the seller to the buyer.
agreement to sell
contract of sale
contract of future goods
contract of specific goods
agreement to sell

424. Shares are goods within the meaning of the Sale of Goods Act.
False
True
425. Fixtures can be regarded as moveable goods only if they are intended to be
severed and sold separately.
Marks: 2+ 0.5True
False
426. If the stipulation agreed to between the parties is essential to the main
purpose of the contract then such a stipulation is known as a _________.
condition
warranty
implied condition
guarantee
condition Module : Module D Chapter : undefined
427. A ________ is a stipulation collateral to the main purpose of the contract.

condition
warranty
implied condition
guarantee
warranty Module : Module D Chapter : undefined
428. There is an implied condition on the part of the seller that he has a right to
_________ the goods.
Marks: 2+ 0.5use
sell
retain
resale
sell Module : Module D Chapter : undefined
429. If the sale of goos is by ________ there is an impled condition that the goods
shall correspond with the desription.
Marks: 2+ 0.5description
sample
oral agreement
written contract
description Module : Module D Chapter: undefined
430. In every contract of sale it is impled that the seller has got the right to sell the
goods.
Marks: 2+ 0.5True
False
431. An implied warranty as to quality or fitness for particular purpose may be

annexed by the usage of trade.
Marks: 2+ 0.5True
False
432. The seller of goods is deemed to be an unpaid seller when the ________ has not
been paid
Marks: 2+ 0.5-
price
interest
damages
penalty
price Module : Module D Chapter : undefined
433. There is no _____ as to the quality or fitness of goods for any particular
purpose.
Marks: 2+ 0.5implied condition
implied warranty
express condition
express warranty
implied condition

434. When the _______ is in possession of goods, a lien can be exercised.
buyer
agent of the buyer
carrier
seller
seller Module : Module D Chapter : undefined
435. _________ is terminated when the buyer gets the possession of the goods
lien
agreement
condition
warranty
lien Module : Module D Chapter : undefined
436. When property in the goods has not passed to the buyer and the buyer
becomes insolvent before the price is paid, the seller can withhold the delivery of
goods.
Marks: 2+ 0.5True
False
437. A seller who has accepted negotiable security as an abosolute payment is no

longer an unpaid seller.
Marks: 2+ 0.5True
False
438. If one partner cheats a customer of the partnership firm then all the partners of
the partnership firm are liable to compensate the customer.
True
False
439. Registration of firms is compulsory under the Partnership Act.

False
440. It is compulsorily to enter into a partnership deed.

True
False
Marks: 2+ 0.5-
441. The partners are free to decide their mutual rights and liabilities.
False
True
True
442. A partnership deed can even provide that a particular partner would not take
part in the day-to-day business decision of the partnership firm.
True
False
443. Consent of all the partners is necessary to change the nature of business
carried on by the firm.
Marks: 2+ 0.5True
False
444. A partnership at will can be dissolved by notice.

True
False
445. Every partner has a right to receive remuneration`

True
False
Marks: 2+ 0.5-
Marks: 2+ 0.5-
446. It is necessary that all the partners in the partnership firm must receive equal
share of profit in the partnership firm.
Marks: 2+ 0.5True
False
447. No partner is entitled to use the partnership property for his private purposes.
True
False
448. A single partner can be authorised to carry on business and sign documents on
behalf of the firm.
Marks: 2+ 0.5True
False
449. Every partner is liable jointly with all the other partners and also severally for
all acts of the firm done while he is a partner.
True
False
450. A minor can be a partner in a partnership firm.

True
False
Marks: 2+ 0.5-
451. A minor can be admitted to the benefits of a partnership firm.

True
False
452. A minor is personally liable like other partners to pay the debts of the firm.
True
False
453. A minor who is admitted to the benefits of a partnership firm, has a choice
when he attains majority as to whether he wants to continue as a partner or not.
True
False
454. The partners can mutually agree and dissolve the firm.
True
False
455. On the death of a partner the partnership firm is compulsorily dissolved.

True
False
456. A partner of an unregistered firm can file a suit against other partners to get
his share of profits.
Marks: 2+ 0.5True
False
457. It is compulsory for a person to hold qualification shares to get appointed as a

director in a private company.
Marks: 2+ 0.5True
False
458. Directors are the actual owners of a company

True
False
Marks: 2+ 0.5-
459. Private company can make a issue of shares by prospectus.

True
False
460. A company has to be compulsorily registered under the Companies Act, 1956.
True
False
461. A company cannot enter into contracts in its own name.

True
False
462. If all the members of a company die, then the company has to be wound up.
(i.e. dissolved).
Marks: 2+ 0.5True
False
463. In case of a company limited by shares the creditors of the company can
recover the money from the members if the company is not making profits.
True
False
464. A member cannot transfer shares in a public company without the consent of
other members.
Marks: 2+ 0.5True
False
465. The minimum number of members required in a private company is __

3
7
12
2
2 Module : Module D Chapter : undefined
466. The minimum number of members required in a public company is-3

7
12
2
467. The maximum number of members in a private company can be _____.

7
12
50
2
468. The maximum number of members in a public company can be _____.

number
12
50
51
any number Module : D Chapter : undefined
469. A private company should have a minimum paid-up capital of Rupees _

five crore
five lakh
one crore
one lakh
one lakh Module : Module D Chapter : undefined
470. A public company should have a minimum paid-up capital of Rupees __

five crore
five lakh
one crore
one lakh
any
five lakh Module : Module D Chapter : undefined
471. In a government company the government holds at least_____ per cent.

12
15
50
51
472. In case of conflict between the Memorandum of Association and Articles of

Association, the Articles of Association prevails.
True
False
473. Doctrine of ultra vires lays down that every outsider is assumed to have read
the Memorandum of Association and Articles of Association.
True
False
474. Doctrine of constructive notice states that the outsiders are not required to see
the compliance of internal regulations of the company.
True
False
475. Doctrine of indoor management lays down that a company cannot carry on the
objects not permitted by its Memorandum of Association.
True
False
476. A minor can be a member of a private company but not of a public company.
True
False
477. A member can inspect the register of members.

True
False
Marks: 2+ 0.5-
478. There are no remedies available for misstatements in prospectus by directors.

True
False
479. The maximum number of directors in a private company can be _____

3
7
12
5
480. The maximum number of directors in a public company can be _____.

7
12
15
481. The minimum number of dirctors required in a public company is __

3
7
12
2
482. The minimum number of directors required in a private company is ___

3
7
12
2
483. At least _____. of the total number of directors of a public company are to be
persons whose periof of office is liable to determination by retirement by rotation.
Marks: 2+ 0.52
7
two-third
two-third Module : Module D Chapter : undefined
484. Every public company, or a private company which is a subsidiary of a public

company, having a paid-up share capital of Rupees _____ must have a managing or
whole-time director or a manager.
Marks: 2+ 0.5five crore
five lakh
one crore
one lakh
five crore Module : Module D Chapter : undefined
485. Additional directors are appointed by the ________.

board of directors
promoters
underwriters
shareholders
board of directors Module : D Chapter : undefined
486. Alternate directors are appointed by the _______.

board of directors
promoters
underwriters
shareholders
Marks: 2+ 0.5-
Marks: 2+ 0.5-
board of directors

487. Casual vacancies in the board of directors is filled in by the
board of directors
promoters
underwriters
shareholders
board of directors

488. authorised person is an individual apointed by RBI to deal in foriehn exchange
True
False
489. A current account tranaction alters the assets or liabilities outside india of
person resident in india
Marks: 2+ 0.5True
False
490. A capital account transaction includes payment dur in connection with forighn
trade in the ordinary course of business
Marks: 2+ 0.5True
False
491. Foreign exchange includes traveller's cheques.

True
False
Marks: 2+ 0.5-
492. RBI can revoke any authorisation given to an authorised person.

True
False
493. Civil Court is having jurisdiction to entertain any suit or proceeding in respect
ofa ny amtter under FEMA.
Marks: 2+ 0.5True
False
494. A person resident in India in the preceding in India for more than ________ days
in the preceding financial year.
Marks: 2+ 0.5180
182
60
62
495. An Aujudicating Authority can enquire contravention under FEMA only if a

complaint is filed by ________.
Marks: 2+ 0.5RBI
High Court
Special Director (Appeals)
Central Government
Central Government

496. Adjudicating Authority has to endeavour to dispose off the complaints within
________ from the date of receipt of the complaint.
one year
182 days
six months
four weeks
one year Module : Module D Chapter : undefined
497. Any person aggrieved by an order of Adjudicating Authority can appeal to _

RBI
High Court
Appellate Tribunal for Foreign Exchange
Module : Module D
Chapter : undefined
498. Transfer of Property Act basically contains provisions relating to transfer of

moveable property and goods.
Marks: 2+ 0.5True
False
499. Mortgage is a transfer of an interest in specific immoveable property to secure

the payment of money given by way of loan.
Marks: 2+ 0.5True
False
500. In a simple mortgage the mortgagor does not deliver possession of the
mortgaged property to the mortgagee.
Marks: 2+ 0.5True
False
501. In a mortgage by conditional sale the property is transferred the condition of

sale is that on default of payment of the mortgage-moeny on a certain date the sale
shall become absolute.
Marks: 2+ 0.5True
False
502. In a usufructuary mortgage the mortgagor delivers possession of the

mortgaged property to the mortgagee.
Marks: 2+ 0.5True
False
503. In an English mortgage the property is transferred absolutely by the mortgagor

to the mortagee with a conditionfor retransfer.
True
False
504. In a morgage by deposit of title-deed the property given as a mortgage has to

be situated in notified towns.
Marks: 2+ 0.5True
False
505. A lease of from year to year or for any term exceeding one year can be made
by transfer of possession.
Marks: 2+ 0.5True
False
506. The debtor has to be given a notice of transfer of actionable claim.

True
False
507. A lease for agricultural or manufacturing purpose can be terminated by the

lesor or lessee by giving _______ notice to one another.
six months
15 days
six months Module : D Chapter : undefined
508. A Memorandum recording mortgage by deposit of title deeds does not require-registration
stamping
registration Module : D Chapter : undefined
509. The essentials of valid equitable mortgage is debt, deposit of title deeds and
_________.
Marks: 2+ 0.5Intention as security
intention of sale deposit
Intention as security

510. In case of accession to the mortgaged property, where the mortgagee is in
possession of the mortgaged property, the mortgagee is __________ of the accession.
Marks: 2+ 0.5entitled
not entitled
entitled Module : Module D Chapter : undefined
511. A mortgagor, while lawfully in possession of the mortgaged property, shall

have _______ to make leases thereof.
Marks: 2+ 0.5power
no power
power Module : Module D Chapter : undefined
512. The power of sale without intervention of the Court is given to the mortgagor
in the case of the following mortgage:
Marks: 2+ 0.5Equitable mortgage
English mortgage
Simple mortgage
Usufructuary Mortgage
English mortgage Module : D Chapter : undefined
513. A lease for agricultural or manufacturing purpose is deemed to be a lease

year to year
month to month
week to week
with infinite period
year to year Module : D Chapter : undefined
JAIIB Model Questions - LEGAL_Module C
257. Banks obtain security while lending so that in case of need the money can be
________ of securities.
Marks: 2+ 0.5realized
Module : Module C Chapter : Chapter1
258. The SARFAESI Act is applicable to the housing finance companies whose names
are notified by the Central Governmnet .
Marks: 2+ 0.5True
False
True

259. In Mardia Chemical Case the Supreme Court decided that condition of deposit
of amount is fully invalid.
Marks: 2+ 0.5True
False
True Module : Module C Chapter : Chapter1
260. After Mardia Chemical Case, the amendment made in the SARFAESI Act
stipulates deposit of _______ amount before preferring application to DRT.
50 per cent
261. Whether moveable securities in possession of the bank can be sold by the
Bank without intervention of the Court ?
Marks: 2+ 0.5No. The Court order is required to sale the security.
Yes. Bank can sale as provided in the Contract ACt, 1872.
Yes. As the SARFAESI Act, 2002 has made provisions to that effect.
No. Till the account is not declared as NPA by the Bank.
Yes. Bank can sale as provided in the Contract ACt, 1872.

262. As per the laws existing today the mortgaged security cannot be sold without
Court intervention. Is this correct ?
Marks: 2+ 0.5Yes. Court intervention is required as per the provisions of the Transfer of
Properties Act.
No. SARFAESI Act, 2002 has now made enabling provisions.
Yes. Since the Contract Act has made no provision about any Court intervention.
No. Due to recent amendments in the Transfer of Property Act no Court
intervention is required.
provisions.
No. SARFAESI Act, 2002 has now made enabling

263. Provisions of SARFAESI Act, 2002 apply to which securities ?
Any moveable or immoveable security charged to the bank or financial
institution.
To mortgage securities only.
Where security interests are created for repayement of financial assistance given
by bank or financial institution.
To the properties owned by defaulter borrower but that area not charged to the
bank.
Where security interests are created for repayement of
financial assistance given by bank or financial institution.
264. In Mardia case what the Supreme Court declared as invalid ?

Entire SARFAESI Act, 2002.
Creation of security interest.
Formation of Reconstruction Companies.
Condition to pay 75 per cent of the amount as pre-condition while preferring
appeal to the DRT.
Condition to pay 75 per cent of the amount as precondition while preferring appeal to the DRT.
265. The SARFAESI Act is applicable to pledge securities also.
True
False
False Module : Module C Chapter : Chapter2
266. For enforcement of mortgage security court intervention is required even for
action under SARFAESI Act.
Marks: 2+ 0.5True
False
267. Banks and Financial Institutes can issue notice for enforcement over security
under SARFAESI Act only if these securities are not_____ creditor and only when the
account is classified as _____
Marks: 2+ 0.5in possession
in possession
268. If the borrower does not pay within _______ days after notice by the secured
creditor the creditor can ____ of the security.
Marks: 2+ 0.560, take possession
269. After receipt of notice from the secured creditor for repayment of dues by the
borrower, the borrower is legally prevented from transferring his property in any
way.
Marks: 2+ 0.5True
False
270. On request of the secured creditor the District Magistrate or the Chief Judical
Magistrate can take possession of the security for handing over it to the creditor.
Marks: 2+ 0.5True
False
271. When the management of the company is taken over by the secured creditor,
the directors of such company are entitled to compensation for loss of office.
Marks: 2+ 0.5True
False
272. When any bank or financial institution creates a charge against property, with
which authority the transaction will have to be registered under the SARFAESI Act,
2002?
Marks: 2+ 0.5With the Central Registry.
With the ROC.
With the Registrar of Assurances within whose jurisdiction the property lies.
With the Reserve Bank of India.
With the Central Registry.

273. When the provisions of SARFAESI Act, 2002 can be invoked for proceeding
against the charged property?
Marks: 2+ 0.5When the bank feels that it is necessary for the recovery at any time.
When the RBI directs to do so.
When there is default in repayment by the borrower.
When there is default in repayment and the bank declares the account as NPA.
the account as NPA.
When there is default in repayment and the bank declares

274. Whether existing or future receivables are property?
Yes.
No.
Yes, but if and when charged to the lender.
No, if hypothecated to the lender.
Marks: 2+ 0.5-
Yes. Module : Module C Chapter : Chapter2
275. From the following which function is of securitisation company?

Acquisition of loan transaction from the lender.
Help the lender in recovery by sale of charged property.
Take legal steps against the defaulter borrower on behalf of the lender.
Acquisition of financial assest from the originator.
Acquisition of financial assest from the originator.

276. Securitisation company or reconstruction company needs registration from RBI
for commencement of business.
Marks: 2+ 0.5True
False
277. Right of acquisition of finanical asset by Securitisation company or

reconstruction company is subject to the prior agreements or contracts about the
asset.
Marks: 2+ 0.5True
False
278. Acquisition of financial asset by securitisation company or reconstruction

company is with the liability also over such asset.
True
False
279. Which are the four documents involved in the securitisation transaction?
Marks: 2+ 0.5offer document, debenture, agreement and security receipt
280. For each asset acquired or to be acquired by the Securitisation company or
reconstruction company there should be _______ scheme.
separate
separate Module : Module C Chapter : Chapter3
281. When the securitisation company or reconstruction company issues security
receipts, the holder therof is entitled to an _______ in the financial asset.
Marks: 2+ 0.5undivided interest
282. The security receipt issued by the securitisation company or reconstruction
company require registration.
Marks: 2+ 0.5True
False
283. Any direction issued by the RBI under SARFAESI Act has _____ effect and is
________ on the parties concerned.
Marks: 2+ 0.5statutory, binding
284. After application of SARFAESI Act what existing companies have to do about
registration with RBI?
Marks: 2+ 0.5They are automatically deemed to be registered.
They are required to stop functioning.
Existing companies do not require registration.
They have to get registered within six months from commencement of the Act.
They have to get registered within six months from
commencement of the Act.
285. Which from amongest the following is a reason for cancellation of registration
of the Securitisation company and reconstruction company without giving hearing
opportunity?
Marks: 2+ 0.5The company does not keep accounts as per RBI norms.
The company ceases to carry on the business of securitisation or reconstruction.
The company falls to hodl investment from qualities investor.
The company does not fulfill any of the conditions imposed at the time of
registration.
The company ceases to carry on the business of
securitisation or reconstruction.
286. Asset reconstruction means ________ by any Securitisation company or or
reconstruction company of any right or interest of the creditor in any________.
Marks: 2+ 0.5acquisition, financial assistance
acquisition, financial assistance
287. SARFAESI Act is applicable to Regional Rural Banks.
True
False
Marks: 2+ 0.5-
288. Mortgage or asset backed debt instruments can be issued by the Securitisation
company or reconstrcution company to the general public.
True
False
289. A guarantor to the loan is within the meaning of the word borrower under
SARFAESI Act.
Marks: 2+ 0.5True
False
290. SARFAESI Act is applicable only when there is security.

True
False
291. Has SARFAESI Act defined hypothecation and whether the Act is applicable to
hypothecation security?
Marks: 2+ 0.5True
False
292. On giving default notice by the creditor, the borrower gives a reply to it. what
the creditor should do?
Marks: 2+ 0.5Ignore the notice as the law does not provide for any reply option to the bank.
Wait till the borrower initiates any legal action based on his reply.
Give due consideration case by the Supreme Court and reply to it.
Take the matter before DRT for resolving issues raised in reply.
reply to it.
Give due consideration case by the Supreme Court and
Module : Module C
Chapter : Chapter4
293. On sale of security asset, the sale proceeds are appropriated firstly.
Towards satisfaction of dues of secured creditor.
Towards payment of dues of labour.
Towards payment of cost, charges and expenses for preservation and protection
of securities, insurance premiums, etc
Towards payment of legal costs incurred by the creditor for taking possession and
for effecting sale.
Towards payment of cost, charges and expenses for
preservation and protection of securities, insurance premiums, etc

294. After coming into operation the provision relating to central registry the banks
and financial institutes will have to register all security interest created in the asset.
Marks: 2+ 0.5True
False
295. The period stipulated in the Act for filing details of security interest is ___ days.
Marks: 2+ 0.530
Module : Module C
Chapter : Chapter5
296. Duty to report satisfaction of charge to the central registrar is on creditor or on
the borrower?_______
Marks: 2+ 0.5creditor
297. Besides the SARFAESI Act some other laws require some registration of charge
created in the property. if such double registration is avoidable?
Yes, the
creditor can choose under which law he needs registration.
No. registration under SARFAESI Act as well as any other applicable law will have
to be made as SARFAESI Act is not substitution of any other law.
Yes, if one charge noting is by a registered document.
No, as the Civil Courts and DRT still have jurisdiction against the properties both
registration are required.
No. registration under SARFAESI Act as well as any other
applicable law will have to be made as SARFAESI Act is not substitution of any other
law.
Module : Module C
Chapter : Chapter5
298. Is there any punishment provided in the Act for not following RBI directions?
Marks: 2+ 0.5Yes,
Module : Module C Chapter : undefined
299. Can the Honorary Magistrate take cognizance of offcence under SARFAESI Act?
Marks: 2+ 0.5No
300. Whether breach of RBI directives is punishable offence and to what extent?
Marks: 2+ 0.5-
Yes, fine up to five lakh rupees and for continuation of offence per day fine up to
rupees ten thousand.
Yes, by cancellation of licences of the company.
No, these are the administrative directions.
No, the Act has not provided for any punishment in specifc.
Yes, fine up to five lakh rupees and for continuation of
offence per day fine up to rupees ten thousand.
301. For challenging action initiated by seured creditor against the defaulter
borrower under SARFAESI Act, the borrower can go to the Civil Court for injunction.
Marks: 2+ 0.5True
False
False Module : Module C Chapter : undefined
302. Can the bank take action under SARFAESI Act against a deposit under lien with
it
Marks: 2+ 0.5Yes
No
No Module : Module C Chapter : undefined
303. Are hire-purchase and lease contracts covered under SARFAESI Act?
No
No
Yes
304. After Bank's notice a defaulter borrower has paid within 60 days substantial
amount and present dues are Rs 1 lakh which are 15% of the claimed amount. Can
bank proceed to take possession of the security?
Yes
No
305. If on some point the provisions of Transfer of Property Act and SARFAESI Act are
different, which Act will prevail?
Marks: 2+ 0.5SARFAESI Act
SARFAESI Act
306. Can a bank proceed to take possession of the security after four years of cause
of action?
Marks: 2+ 0.5-
Yes
No
307. Provision of SARFAESI Act are applicable to which of the following?

goods.
Only mortgaged properties.
Securities that are not otherwise charged to the creditors.
Securities charged to creditors and not in possession of the creditor.
the creditor.
Module : Module C
Pledges
Securities charged to creditors and not in possession of
Chapter : undefined
308. when the Rules, framed by the Central Government, under the Act get validity?
Marks: 2+ 0.5After the Appellate Tribunal of DRt approves them.
On Supreme Court approving the same.
Immediately on framing of the Rules by the government and notifying the same.
When the both the houes of Parliament approve the Rule so framed.
so framed.
When the both the houes of Parliament approve the Rule

309. Disputes amongest two banks can be taken up before the Banking
Ombudsman.
Marks: 2+ 0.5True
False
True Module : Module C Chapter : undefined
310. Cooperative banks are not covered by the Banking Ombudsman Scheme.
Marks: 2+ 0.5True
False
311. Banking Ombudsman is appointed by a committee of Supreme Court Judges.

Marks: 2+ 0.5True
False
312. It is not within the powers of Banking Ombudsman to deal with the complaint
unless both parties agree for his intervention.
Marks: 2+ 0.5True
False
313. If parties to the dispute agree Banking Ombudsman cen function as Arbitrator.
Marks: 2+ 0.5True
False
314. What is the object of introducting the Banking Ombudsman Scheme, 2002?
Marks: 2+ 0.5For effective monitoring of NPA accounts in the banks.
It is RBI agency to regulate the disputes amongst the banks.
To enable resolution of complaints relating to banking services.
For executing the orders passed by DRT.
services.
To enable resolution of complaints relating to banking

315. Can the Banking Ombudsman undertake any other work than of his office?
Marks: 2+ 0.5Yes, as the appointment of Banking Ombudsman is honorary.
Yes, if RBI permits can undertake honorary work.
No.
Yes, if the Banking Ombudsman can handle both the jobs property.
Yes, if RBI permits can undertake honorary work.

316. Can the Banking Ombudsman resolve the dispute between banks or between
bank and its customer by artitration reference?
Marks: 2+ 0.5No, the Banking Ombudsman has no arbitral powers.
Yes, if Banking Ombudsman himself feels and decides to so.
No, as the Banking Ombudsman has no powers of Civil Court.
Yes, if both the parties to the complaint agree for the same.
same.
Yes, if both the parties to the complaint agree for the
317. Bank can refuse acceptance of small denomination notes from the customer
and, therefore, on this ground there cannot be a complaint to Banking Ombudsman.l
Marks: 2+ 0.5True
False
318. On valid grounds bank can refuse opening new account on this ground
complaint before the Banking Ombudsman is maintainable.
True
False
319. Can a prospective borrower go before the Banking Ombudsman for nonsanction of his loan by the bank.
Marks: 2+ 0.5Yes
No
320. Banking Ombudsman has powers to call any information and certified copies
from bank when he is dealing with the complaint.
Marks: 2+ 0.5Yes
No
Yes Module : Module C Chapter : undefined
321. For setting the complaint Banking Ombudsman is bound by legal rules of
evidence.
Marks: 2+ 0.5True
False
322. What is the maximum amount the Banking Ombudsman can award as
compnesation.
Marks: 2+ 0.5Rs 10 lakh
Rs 10 lakh Module : Module C Chapter : undefined
323. Limitation period for filling of the review application against the award given by
the Banking Ombudman is _________ month/s.
Marks: 2+ 0.5One
324. For dealing with the review application against the award passed by the
Banking Ombudsman_________ is the review authority.
Marks: 2+
Reserve Bank of India.
325. Can a customer from whose account fraudulently someone has withdrawn
money make complaint before the Banking Ombudsman?
No, as the offence committed is of criminal nature FIR with police has to be filed.
Yes, but if the police authoirities who have received FIR permit filing of complaint
with Ombudsman.
Yes, as this aspect comes under the powers of Banking Ombudsman.
No, as the loss caused to the customer is of a civil nature for recovery, civil suit is
required to be filed.
Ombudsman.
Module : Module C
Yes, as this aspect comes under the powers of Banking
Chapter : undefined
326. Banking Ombudsman can act as arbitrator if the value of the claim in the
dispute is less than Rs _______
327. For agreeing to refer the matter to the Banking Ombudsman as arbitrator
parties to the dispute are required to give____.
Marks: 2+ 0.5affidavit of undertaking
Module : Module C
Chapter : undefined
328. The complainant is required to produce his documents in support of his claim
only at the time of hearing of the case.
Marks: 2+ 0.5True
False
329. Oppositte party to the dispute has to file a new claim if there is any counter
claim from his side.
Marks: 2+ 0.5True
False
330. Before dealing with the case the Banking Ombudsman has to draw up a
document defining________.
Marks: 2+ 0.5Terms of Reference
331. Once the dispute before the Banking Ombudsman is referred to arbitration can
new claim or counterclaim be made?
Marks: 2+ 0.5No, as the reference on the issues has already been made.
Yes, provided the claim and counterclaim are within the terms of reference.
Yes, provided additional stamp duty is paid thereon.
No, because arbitration is by mutual consent so stage of claim and counterclaim

does not arise.
Yes, provided the claim and counterclaim are Module :
Module C Chapter : undefined
332. DRT Act is applicable only if the debt recoverable is above Rs__________.
333. The debt recoverable through DRT may be secured or unsecured.
False
True
334. Overdrawn amount in an account is not a debt recoverable under DRT Act.
True
False
335. If a Civil Court has passed a decree it has to be executed through that court
only and cannot come to Recovery Tribunal
Marks: 2+ 0.5True
False
336. A Bank has allowed a current A/c holder ad hoc overdraft of Rs 15 lakh. The
amount is due. whether this is recoverable under provisions of DRT Act?
No, as it is not a regular loan.
No, as only secured loans can be recovered under the DRT Act.
Yes, as it is a legally recoverable amount by the Bank.
Yes, but if the tribunal grants special permission to lodge the case.
Yes, as it is a legally recoverable amount by the Bank.

337. Debt Recovery Tribunals are established by _______
Central Government
Marks: 2+ 0.5-

338. Debt Recovery Tribunals consist benches of three persons.
True
False
339. Jurisdiction of Appellate Tribunal is with the respective High Courts.

False
False
True
340. Can the order of Central Government appointing Presiding Officer of the
Tribunal be challenged in any Court?
Marks: 2+ 0.5Yes, before the Appellate Tribunal.
No.
No, unless the High Court permits for it
Yes, under Constitution Article 226 before the High Court.
No. Module : Module C Chapter : undefined
341. A decree passed by the foreign court can be executed by the Tribunal
False
True
True
342. For reasons the Chairperson of the Appellate Tribunal can transfer any case
from one Tribunal to other Tribunal within his jurisdiction.
True
False
343. For the matters of which the Tribunals are empowered the Civil Courts have no
jurisdiction.
Marks: 2+ 0.5True
False
344. When a civil suit filed in Civil Court is transferred to DRT, if fresh court fee is
required to be paid?
Marks: 2+ 0.5No
Yes, as the authorities are different.
No, if there is no counterclaim.
Yes, as the court fee stamps are different.
345. DRT jurisdiction for a bank is where the head office of the bank is located.
Marks: 2+ 0.5True
False
346. If a bank has filed recovery application, other bank can join the application if
the defendants are same.
Marks: 2+ 0.5True
False
347. When a case get transferred from Civil Court to tribunal fresh court fee is
required to be paid.
Marks: 2+ 0.5True
False
348. A counterclaim filed before DRT has the same effect as a _______.
cross-suit
Module : Module C
Chapter : undefined
plaint in
349. Since DRT is not a Civil Court it cannot pass interim orders such as attachment,
injunction, receiver, etc.
Marks: 2+ 0.5True
False
350. A person who has to file appeal before the Appellate Tribunal has to pay
Marks: 2+ 0.575 per cent of the debt ordered by the Tribunal.
Module : Module C
Chapter : undefined
351. While filling appeal before the appellate tribunal if any amount is required to
be depositted?
Marks: 2+ 0.5No, amount is required to be deposited till the appellate tribunal decides.
Yes, Court fee on the appeal amount is required to be paid.
Yes, 75 per cent of the amount determined by the tribunal is required to be
deposited at the timing of filling of the appeal.
Yes, after admission of the appeal 75 per cent of the amount determined by the
tribunal is required to be deposited.
Yes, 75 per cent of the amount determined by the tribunal
is required to be deposited at the timing of filling of the appeal.
352. Recovery Officers appointed under DRT Act can attach and sale movable as
well as immovable property of the person against whome order is passed even if the
property is not charged to the creditor.
True
False
353. The defendant can raise a plea before the Recovery Officer about correctness
of the amount ordered to be paid.
Marks: 2+ 0.5True
False
354. If the recovery certificate has clerical or arithmetical mistake _______ can
correct the same.
Marks: 2+ 0.5Preseding Officer of the Tribunal
355. For recovery the Recovery Officer can adopt the same methods as adopted for
recovery of income tax under the Income Tax Act.
Marks: 2+
True
False
356. Recovery Officer can aski the defendant to furnish by affidavit particulars of his
asset.
Marks: 2+ 0.5True
False
357. A company is under winding up process. Whether High Court permission is

required to a Bank to proceed against it before DRT?
No, as the DRT Act being a special Law having overriding effect over other laws.
Yes, as Companies Act specially provides to that effect.
Depends on the stage of winding up process.
No permission but concurrence of High Court required.
effect over other laws.
No, as the DRT Act being a special Law having overriding

358. If the books of the bank are maintained in the electronic form, does all the
provisions of this Act are applicable to it.
Marks: 2+ 0.5Yes
No
Module : Module C
Yes
Chapter : undefined
359. Does this Act apply to any investigation or inquiry under the Criminal
Procedure Code?
Marks: 2+ 0.5-
Yes
No
360. A certified copy of any entry in a Bankers' Books is received in legal proceeding
as ______ evidence for existence of such entry.
Marks: 2+
prima facie
361. Unless the Court otherwise directs, bank offier cannot be compelled to
produce____ to prove any banker's book's contents when copy is produced.
Original books
Module : Module C
Chapter : undefined
362. In a civil suit to which bank is not a party has produced certified copy of books
of account. One party to the suit wants to call bank officer as witness to prove the
contents of copy. Can it be done?
Marks: 2+ 0.5Yes, as it is right of the party to get it reaffirmed in evidence.
No, as the certified copy is a prima facie evidence that is admissible in evidence.
No, unless the bank volunteers to do so.
Yes, but if Court allows the application to call the witness.
admissible in evidence.
Module : Module C
No, as the certified copy is a prima facie evidence that is
Chapter : undefined
363. Consumer Protection Act is enacted to protect the manufacturing conditions of

the Industries.
Marks: 2+ 0.5True
False
364. The agencies appointed under Consumer Protection Act are quasi-judicial in
nature.
Marks: 2+ 0.5True
False
365. Can a voluntary consumer association file a complaint on behalf of consumer.

Marks: 2+ 0.5Yes
No
366. A consumer has purchased goods for resale. Can he file complaint?
No
Yes
367. 'A' has purchased a draft from a bank favouring 'B'. The draft is lost in transit
and for duplicate draft in lieu of first bank need some formalities to be completed
by'A'. Can 'B' file a consumer case against the formalities as at is delaying payment
to him.
Marks: 2+ 0.5No, as he is not conusmer of the bank and is not taking any service from the
bank.
No, as he has not paid the demand draft commission.
Yes, as because of bank his payment is getting delayed.
Yes, his money is lying in the bank, he is deemed as account holder of the bank.
No, as he is not conusmer of the bank and is not taking
any service from the bank.
Module : Module C
Chapter : undefined
368. Central Consumer Protection Council is the apex council having all India
Jurisdiction.
Marks: 2+ 0.5True
False
369. Minister in charge of consumer affairs in the Central Government is the

Chairman of Central Consumer Protection Council.
Marks: 2+ 0.5True
False
370. State Consumer Protection Council is appointed by Central Government

True
False
371. State Consumber Protection Council has to meet at least ____ in a year.
Marks: 2+ 0.5Twice
Module : Module C
Chapter : undefined
372. Who is the Chairman of the Central Consumer Protection Council?
Cheif
Justice of the Supreme Court.
Judge of the Supreme Court appointed by the Chief Justice of the Supreme Court.
Minister in charge of Law and Judiciary in the Central Government .
Minister in charge of consumer affairs in the Cenral Government

Government
Minister in charge of consumer affairs in the Cenral

373. To appoint a person as President of District Forum, he must be qualified to be a
District Judge.
Marks: 2+ 0.5True
False
374. Appointment of District Forum is made by the High Court.

True
False
375. Can few consumers file a representative complaint on behalf of general

consumers at large?
Marks: 2+ 0.5Yes, but with permission of District Forum
376. As the agencies appointed for under the Act are quasi-judicial, they do not
have powers of Civil Court while conducting the case.
Marks: 2+ 0.5True
False
377. District Forum has passed order to pay compensation. How recovery of the
ordered amount is made?
Marks: 2+ 0.5By filling execution in Civil Court.
By filling execution before District forum.
By filling civil Suit.
By referring the order toe collector for making recovery as if and revenue
recovery.
if and revenue recovery.
Module : Module C
By referring the order toe collector for making recovery as
Chapter : undefined
JAIIB Model Questions - LEGAL_Module B
126. The relating to payment of cheques and protection to a banker is contained in

the India Contract Act.
Marks: 2+ 0.5True
False
False Module : Module B Chapter : Chapter1
127. The responsibility of a banker to pay back the money of the customer
specifically state in the Negotiable Instrument Act, 1881
Marks: 2+ 0.5True
False
True Module : Module B Chapter : Chapter1
128. Section 31 of the Negotiable Instruments Act applies only on banker.

True
False
True
Module : Module B Chapter : Chapter1

129. The banker is first bound to honour a customer cheque and only thereafter
exercise him right of set off.
Marks: 2+ 0.5True
False
130. A forged signature is no mandate of the customer.

True
False
Marks: 2+ 0.5-
131. A customer is bound to inform the bank about lost cheque leaves.
True
False
132. Payment to be made in due course need not always be made to holder but can
be made to his agent or servant.
Marks: 2+ 0.5True
False
133. In case bank makes payment by mistake it can recover the same even if the
payee has changed his position.
Marks: 2+ 0.5True
False
134. If a bank makes payment without checking the instrument under an ultraviolet
lamp, it can be held liable on the grounds of negligence.
True
False
135. The statutory protection to a collecting banker is as per Section 6 of the Indian
Contract Act.
Marks: 2+ 0.5True
False
136. As per Section 131A of the Negotiable instruments Act the protection granted
to a banker while paying cheques has been made appliable to drafts.
Marks: 2+
0.5True
False
137. The duties of collecting bank to claim protection has been laid down under the
Indian Contract Act and Banking Regulation Act.
True
False
138. In the absence of proper reference the banker can be held liablke on the
grounds of negligence.
Marks: 2+ 0.5-
True
False
139. It is necessary for the banker to make enquiries regarding the references given
by the customer.
Marks: 2+ 0.5True
False
140. Section _________ of the Indian Contract Act defines and indemnity.
124 Module : Module B Chapter : Chapter3
124
141. A person promising to save another from loss is called _____.

indemnifier
142. _________ is a person who is promised to be saved from loss.
holder
indemnity
143. Contract of indemnity as defined in the Contract Act is exhaustive.

True
False
144. Insurance Contracts are not contracts of indemnity.

True
False
Marks: 2+ 0.5-
145. There are ____ parties to a contract of indemnity.

2
Marks: 2+ 0.5-
146. Indemnifiers liability in a contract of indemnity is _________.
Primary

147. There are three parties to a contract of indemnity the indemnifier, the
indemnity holder and the person on whose behalf the indemnity is given.
True
False
148. Indemnifier's liability occurs only if the indemnity holder suffers loss.
False
True
Module : Module B
True
Chapter : Chapter3
149. Customers as a matter of right and without ans indemnity can obtain duplicate
of Demand Drafts or Travellers' Cheques.
Marks: 2+ 0.5True
False
150. Indemnities are required by banks purely as a formality and does not seve any
other purpose.
Marks: 2+ 0.5True
False
151. The indemnity obtained by bankers only protects him from the actual value of
instrument.
Marks: 2+ 0.5True
False
152. An indemnity holder can act beyond his authority.

True
False
Marks: 2+ 0.5-
153. An indemnity holder can be compensated only for damages and not for the
costs incurred by him.
Marks: 2+ 0.5True
False
154. An indemnity holder is entilted to compromise a suit as thought fit by him

though contrary to the orders of the indemnifier.
Marks: 2+ 0.5True
False
155. In bank guarantees the bank makes payment on:

Marks: 2+ 0.5being convinced that the beneficiary has incurred loss
on being sued by the beneficiary.

on the guarantee being involked and after seeking concurrence of the debtor.
merely on demand by the beneficiary.
merely on demand by the beneficiary.

156. In case of bank guarantees on behalf of companies that is in liquidation the
bank on invocation of the guarantee by the beneficiary.
must pay the amount to the Liquidator and not the beneficiary.
must depost the amount in the court to avoid any controversy.
must pay the beneficiary.
need not pay, since the bank quarantee lapses on the company being liqidated
must pay the beneficiary.

157. In case of fraud committed by the debtor on whose behalf the bank.
need not pay the beneficiary.
has to pay the beneficiary.
direct the beneficiary to sue to debtor.
none of the above.
has to pay the beneficiary.

158. A Letter of Credit is a form of guarantee given by Banks on behafl of its
customer.
Marks: 2+ 0.5True
False
159. Letters of Credit are Bills of Exchange drawn by a seller on a buyer.

True
False
160. LCs are negotiable instruments.

True
False
Marks: 2+ 0.5-
161. The Letter of Credit is opened on the request of

Issuing bank
Applicant
Beneficiary
Confirming bank
Marks: 2+ 0.5-
Applicant

162. The LC issuing bank is also called
Marks: 2+ 0.5the importers bank or the opening bank
the advising bank or the confirming bank
the negotiating bank or the nominated bank
the reimbursement bank
Module : Module B
the importers bank or the opening bank
Chapter : Chapter5
163. The right to receive payment under a letter of credit or the right to draw bills
on a Letter of Credit is vested in
Marks: 2+ 0.5the opener of the LC
the issuing Bank only
the Buyer only
all the three parties
the Buyer only

164. The advising banks responsibility is
Marks: 2+ 0.5to inform the issuing bank as to whome to issue the letter of credit.
to advise the buyer the despatch of documents by the seller
to inform the beneficiary/seller about the letter of credit
None of the above
to inform the beneficiary/seller about the letter of credit

165. The advising bank is also called the
Confirming Bank
Notifying Bank
Reimbursing Bank
None of the above
Notifying Bank
Marks: 2+ 0.5-

166. Negotiating bank is the bank which
Marks: 2+ 0.5negotiates the preliminary contract of sale between the buyer and the seller
makes payment of the bills drawn by the seller and accepts the documents
guarantees payment by the issuing bank
None of the above
accepts the documents
makes payment of the bills drawn by the seller and

167. When the LC specifies the Bank that is to negotiate the bills drawn under the
LC then the bank is also called
Marks: 2+ 0.5Confirming Bank
Reimbursing Bank
Nominated Bank
None of the above
Nominated Bank

168. The confirming bank is
Marks: 2+ 0.5the issuing bank when it confirms the issue of the LC
the negotiating bank when it confirms the negotiation of the bills
the advising bank when it confirms the LC
None of the above
the advising bank when it confirms the LC

169. When the confirming bank confirm the credit it
Marks: 2+ 0.5does not take any liability
undertakes on its part the liability under the LC
undertakes to make timely of the documents and bills to the buyer or his bank
None of the above
undertakes on its part the liability under the LC

170. Reimbursing Bank is the Bank
Marks: 2+ 0.5that reimburses the seller
that reimburses the Negotiating/Paying or Confirming Bank
that reimburse the buyer on the goods being found defetive

None of the above
Bank
that reimburses the Negotiating/Paying or Confirming

171. Ordinary Letter of Credit are usually _____, i.e, the bills drawn thereunder have
to be immediately.
Marks: 2+ 0.5Sights credits
172. Letter of Credit under which usance bills can be drawn is called an ___
Acceptance credits
173. In a Revocable LC the credit can be amended or cancelled by the
issuing bank
174. Only ________ Letters of credit can be confirmed.
irrvocable
Marks: 2+ 0.5-

175. Credit in which the beneficiary is not liable for the bills drawn thereunder is
________ credit
Marks: 2+ 0.5without recourse
176. A back-to-back credit would involve at least ____ bank, viz., the ____ bank, the
_____ bank an dthe _____ bank.
Marks: 2+ 0.5Three ; issuing , advising, third
177. All parties to a Letter of Credit transaction need to comply with the terms only
as far as practical and not strictly.
Marks: 2+ 0.5True
False
False
178. In case the documents submitted by seller do not comply with the Letter of
Credit then the same can be accepted subject to confirmation of buyer.
Marks: 2+ 0.5True
False
179. A Bill of Exchange is a document to title to goods.

True
False
180. A Bill of Exchange is also called a 'bill' or a draft

True
False
Marks: 2+ 0.5-
Marks: 2+ 0.5-
181. Invoice in a Letter of Credit transaction is a document similar to a quotation

based on which the buyer places his order.
Marks: 2+ 0.5True
False
182. A Bill of Lading on a bona fide transfer confers on the transferee a right to the
goods.
Marks: 2+ 0.5True
False
True

183. An Airway bill is also a document evidencing title to goods.
True
False
Module : Module B
False
Chapter : Chapter5
184. UCP 500 being law is enforceable and cannot be excluded by contract
True
False
False

185. A standby Letter of Credit is also a credit coming under UCP 500.
True
False
186. In a Letter of Credit transaction banks if required have to verify and heck the
condition of goods physically though the documents certify their equality.
Marks: 2+ 0.5True
False
187. All Letters of Credit are irrevocable unless specifically stated otherwise.
Marks: 2+ 0.5True
False
188. In a deferred payment guarantee, the guarantee is to ensure delivery of goods

Marks: 2+ 0.5True
False
False Module : Module B Chapter : undefined
189. A deferred payment guarantee is mostly based on a primary contract between

the buyer and the seller.
Marks: 2+ 0.5True
False
True Module : Module B Chapter : undefined
190. A deferred payment guarantee differs from other kinds of guarantee issued by
banks as regards liability of the bank on invocation
True
False
191. In a deferred payment guarantee the banks liability comes into existence only
if all the instalments are not paid and not on the non-payment of any one
instalment by the customer.
Marks: 2+ 0.5-
True
False
Module : Module B
False
Chapter : undefined
192. Depending upon the place where the bills are made, they can be classified into
Marks: 2+ 0.5Inland Bills (no answer)
Foreign Bills
Inland Bills (no answer)
Module : Module B Chapter : undefined

193. Bills of exchange means a unconditional direction to the drawer to pay the
monies.
Marks: 2+ 0.5True
False
194. The maker of the Bill is called ________

Drawer
Marks: 2+ 0.5-
195. Bill purchase facility is granted in the case of demand bill.

True
False
196. _______ facility is granted in the case of usance bills.

Bill Discounting
197. ________ of the bill is bound in case of dishonour of bill.
Drawer
198.Ownership of goods can be transferred by endorsement and delivery of Document of title to goods
199. In bills co-acceptance facillity the banker becomes a surety for the value of bill.
Marks: 2+ 0.5True
False
True

200. If money lent is more than Rs 100 on the security of land, then the mortgage
deed has to be registered.
Marks: 2+ 0.5True
False
True

201. A mortgage deed need not be witnessed.
True
False
Marks: 2+ 0.5-
202. Permission from Income Tax Authorities under Section 230 to create mortgage
is required only if the land belongs to a company.
True
False
203. Arrears of tax constitute a preferential charge on the property.

True
False
204. There are three types of shares - ordinary, equity and preference.
True
False
False

205. Debenture is a kind of share issued by a company and has no voting rights.
Marks: 2+ 0.5True
False
206. Borrower can create a valid pledge with documents of title of goods.
True
False
207. Bills of Lading, Dock Warrants, warehouse-keeper's certificate, etc,. are some
examples of documents of title of goods.
Marks: 2+ 0.5True
False
208. Documents of title to goods are negotiable instruments.

True
False
209. Only LIC can issue life policies.

True
False
Marks: 2+ 0.5-
210. Insurance contracts are contracts of absolute good faith.

True
False
211. An assignee of a life policy can sue in his own name.

True
False
Marks: 2+ 0.5-
212. For a loan against Fixed Deposit Receipt, the stamp duty is very high.
False
213. Supply bills are Bills of Exchange.

True
False
Marks: 2+ 0.5-
True
214. Mortgage is __________ in the immoveable property.

Transfer of interest.
215. Simple mortgage is created by an instrument in writing.
True
False
216. Mortgage by deposit of title deeds is required to be registered.

True
False
217. In the case of Usufructuary mortgage the possession of the properties is given.
Marks: 2+ 0.5True
False
218. In mortgage by way of conditional sale the property is sold with a condition for
reconveyance.
Marks: 2+ 0.5True
False
219. All successive mortgage created will rank equally and no mortgage will have
no priority over the other.
Marks: 2+ 0.5True
False
220. To decide as to which mortgage will have priority over the other in the case of
two or more mortgages on the same immoveable property, the date of ________
mortgage is pertinent.
Marks: 2+ 0.5Execution of
221. Limitation period for filling a suit for sale of mortgaged properties in ____ years
from the dater the mortgage debt becomes due.
Twelve
222. Mortgage suits are filed in Court within whose jurisdiction the mortgaged
resides.
Marks: 2+ 0.5True
False
False

223. Pledge means ______________ of goods for purpose of securing a payment of
debt or performance of promise.
Marks: 2+ 0.5Bailment
224. The most important characteristic of plede is ____ of goods.
Possession
225. Owner of goods can not make a pledge.
True
False
Marks: 2+ 0.5-
226. Hypothecation is an implied pledge in cases where contructive possession of

goods is given.
Marks: 2+ 0.5True
False
227. Hypothecation letter gives a banker right to possession of goods in the event
of default.
Marks: 2+ 0.5True
false
228. Individual borrowers are governed by the ___________ Act.

Indian contract.
229.In a HinduUndivided Family the business of the fami8ly is managed by Karta
Marks: 2+ 0.5-
230. A company is ____ and _______ from its members.

Separate and distinct.
231. A Private Limited Company has minimum ________ number of members and a
maximum of _____ numbers of members.
Marks: 2+ 0.52 , 50
232. A Public Limited Company shares are ___________ transferable.
Freely
233. Statutory Corporations are established by Acts of ________.
Parliament
234. Private Trusts are governed by the _______ Act.
Indian Trust Act.
Marks: 2+ 0.5-
235. Trusts of Hindus are governed by the _______ Act.

Religious and Charitable Endowments Act
236. Trusts of Muslims are governed by the _______ Act.
Wakf
237. Cash Credit facility is a _________
Fund based facility
Marks: 2+ 0.5-
Marks: 2+ 0.5-
Marks: 2+ 0.5-
238. Bills co-acceptance facility is a __________.

Non-Fund based facility
Marks: 2+ 0.5-
239. Banker is entitled to charge interest on temporary overdraft under Banking Custom
240. Limitation period for filing a suit in Term Loans is _________ years from the date
of default of installment.
Marks: 2+ 0.53 (Three)
241. Period of repayment in the case of medium-term loan is _________.
5-7 Years
242. Only personal security of the borrower is available in the case of _______ loans.
Marks: 2+ 0.5Unsecured
243. Secured loans are normally secured by ___________.
Marks: 2+
Pledge, hypothecation, mortgage or assignment of debts.
244. Pledge is _________ of goods as a security for debt.
Bailment
245. Hypothecation is treated as _____ pledge.
Marks: 2+ 0.5-
Marks: 2+ 0.5-
Constructive
246. Personal obligation of Mortgage is a distinct feature of ___________.
Mortgage by deposit of title deeds.
247. Section 58 of Partnership Act, 1932 provides for ________.
partnership.
Registration of
248. A partner on behalf of firm institute a suit on contract, if the firm is registered.
Marks: 2+ 0.5True
False
249. Shares of public limited company are freely transferable.

True
False
250. Certificate of Incorporation is a document evidencing existence of company.

Marks: 2+ 0.5True
False
251. Certificate of commencement of business is required for private limited

company to start business.
Marks: 2+ 0.5True
False
252. Charge means any form of ________ for ________

Security, debt
Marks: 2+ 0.5-
253. Charges created by company shall be registered with _________.

of Companies
254. Under Companies Act a charge includes _______.
Mortgage
Registrar
Marks: 2+ 0.5-
255. Charge if not registered is not enforceable against company

True
False
False

256. Charge shall be registered within _________ days from the date of creation of
charge.
Marks: 2+ 0.530
JAIIB Model Questions - LEGAL_Module A

1. A public sector bank is a corporate created under a special statute.
False
True Module : Module A Chapter : Chapter1
2. A banking company is registered under the Banking Regulation Act.

True
False Module : Module A Chapter : Chapter1
True
False
3. Cooperative banks are registered under the Multi-State Cooperative Societies Act
or a State Cooperaytive Societies Act.
Marks: 2+ 0.5True
False
4. Subsidiaries of the State Bank are companies registered under the Companies
Act.
Marks: 2+ 0.5True
False
5. Accepting deposits for safe custody would fall within the definition of 'banking'
Marks: 2+ 0.5True
False
6. Reserve Bank was constituted under _____.

BR Act.
RBI Act
Companies Act
Marks: 2+ 0.5-
RBI Act Module : Module A Chapter : Chapter1
7. A Regional Rural Bank is _____.

Marks: 2+ 0.5a body corporate created under a special statute
a cooperative society
a company
a body corporate created under a special statute Module :
Module A Chapter : Chapter1
8. Banking companies are licensed by _____.
Marks: 2+ 0.5Reserve Bank
Registrar of Companies
Company Law Board Module : Module A Chapter : Chapter1
9. Business which a banking company may undertake other than banking is as
stipulated by ______.
Marks: 2+ 0.5Reserve Bank
BR Act
RBI Act
BR Act Module : Module A Chapter : Chapter1
10. BR Act was enacted for ________.

regulating banking companies
Marks: 2+ 0.5-
creating Reserve Bank

regulating acceptances of deposits from public
regulating banking companies
Module : Module A Chapter : Chapter1

11. Central Government can give direction to the Reserve Bank.
True
False
12. All kinds of business of banks is regulated only by the Reserve Bank.
True
False
13. Central Government is the primary regulator of banks

True
False
14. state governments have no control over cooperative banks.

True
False
15. On cancellation of license of any bank, an appeal lies to Central Government.

Marks: 2+ 0.5True
False
16. Cooperative banks operating in different states are registered under ___
State Cooperative societies Act
Multi-State Cooperative Societies Act
RBI Act
Multi-State Cooperative Societies Act

17. Government can exempt a bank from the provisions of BR Act_______.
recommendation of RBI
Whenever the government is satisfied
if requested by a bank
on the recommendation of RBI
on the

18. _________ exercise the central banking function in India.
State Bank
Central Bank of India
Reserve Bank
Reserve Bank Module : Module A
Chapter : chapter1
19. Company matters of a banking company are regulated by _______.
Reserve Bank
Authorities under the Companies Act
SEBI
Authorities under the Companies Act

20. Trading in shares and securities by banks is subject to regulation by -Controller of Capital issues.
SEBI
Company Law Board
SEBI Module : Module A Chapter : Chapter1
21. A company has to obtain a ________ from the Reserve Bank to commence
banking business in terms of Section 22 of the BR Act.
registration
licence
commencement certificate
licence Module : Module A Chapter : Chapter2
22. Shifting of a bank's branch in the _____ does not require Reserve Bank's
permission under Section 23.
same district
same state
same city , town or village
same city , town or village

23. Foreign banks are required under Section 11 of the BR Act to deposit ___________
arising out of their business in india with the Reserve Bank
20 per cent of profit of each year

30 per cent of profit for each year
20 per cent of the deposits collected each year.
Module : Module A
20 per cent of profit of each year

Chapter : Chapter2
24. Banks may float subsidiaries for carrying on the business specified in __
their Memorandum of Association
Section 6(1)(a) to (o) of the BR Act
their Articles of Association
Module : Module A
Section 6(1)(a) to (o) of the BR Act
Chapter : Chapter2
25. Shareholders of banking companies can exercise voting rights up to ______ of the
total voting rights of all shareholders.
Marks: 2+ 0.51 per cent
10 per cent
100 per cent
Module : Module A
10 per cent
Chapter : Chapter2
26. Banking companies are not permitted to give dividend until all _________ are
written off.
Marks: 2+ 0.5bad debts
expenses
capitalised expenses
capitalised expenses

27. A temporary branch for less than 30 days in a town where a bank has an
existing branch does not require permission from Reserve Bank.
True
False
28. A company to which banking licence is rejected can undertake business as a

moneylender or undertake other business.
Marks: 2+ 0.5True
False
True Module : Module A
Chapter : Chapter2
29. The decision of Reserve Bank to revoke licence is final and no appealies from it.
Marks: 2+ 0.5True
False
30. Banking companies are permitted to give brokerage up to 2.5 per cent of the
paid-up value of shares.
Marks: 2+ 0.5True
False
True

31. No person can hold the shares of banks beyond ceilling speciried under the BR
Act.
Marks: 2+ 0.5True
False
32. A banking company cannot hold share in any other company other than a
subsidiary.
Marks: 2+ 0.5True
False
33. A director of a banking company should not have ______ in any other company.
Marks: 2+ 0.5beneficial interest
any interest
substantial interest
Module : Module A
substantial interest
Chapter : Chapter2
34. At least ________ of the directors should have the qualifications prescribed under
Section 10A(2) of the BR Act.
Marks: 2+ 0.550 per cent
75 per cent
51 per cent
51 per cent Module : Module A Chapter : Chapter2
35. When the board of a banking company is ordered to be reconstituted under

Section 10A of the BR Act, directores will be removed _______ for the purpose of
reconstitution.
Marks: 2+ 0.5by rotation
by lots
by majority decision
by lots Module : Module A Chapter : Chapter2
36. Before removing the Chariman of a bank from office, Reserve Bank has to
_______.
Marks: 2+ 0.5give compensation for loss of office,
give opportunity of being heard
give an option to continue as director.
Module : Module A
give opportunity of being heard

Chapter : Chapter2
37. The provision of Section 36AA of the BR Act regarding removal of managerial
personnel have ______ over other laws.
Marks: 2+ 0.5no effect
overriding effect
persuasive effect
Module : Module A
overriding effect
Chapter : Chapter2
38. Reserve Bank is authorised to appoint ______ under SEction 36AB of the BR Act.
Marks: 2+ 0.5directors
additional directors
managing director
Module : Module A
additional directors
Chapter : Chapter2
39. The maximum period of office that may be held continuously by an ordinary
director in a banking company is 8 years.
Marks: 2+ 0.5True
False
40. The decisions of the Board of Directors, during the period when the boards'
constitution is defective shall be void.
Marks: 2+ 0.5True
False
41. The post Chariman of a banking company may be on part-time basis.

True
False
42. The Chairman of a banking company can hold office only for a maximum period
of 8 years.
Marks: 2+ 0.5True
False
43. From the order removing Chairman of a banking company, appeal lies to Central
Government within 30 days of the order.
Marks: 2+ 0.5True
False
44. Reserve Bank has the power to remove any officer or other staff of a banking
company under Section 36AA of the BR Act.
Marks: 2+ 0.5True
False
45. Reserve Bank may issue directions to banking companies under Section 21 of
BR Act on _________.
Marks: 2+ 0.5audit
loans and advances
captial structure
Module : Module A
loans and advances
Chapter : Chapter3
46. ______ may regulate acceptance of deposits including rate of interest on deposit
by banking companies under Section 35A of the BR Act.
government
Reserve Bank
Board of Directors
Reserve Bank

47. The banking ombudsman can be an arbitrator in disputes between __________.
Marks: 2+ 0.5two banking companies
two or more customers
a bank and the government
two banking companies
Module : Module A
Chapter : Chapter3
48. Diretions can be issued to banking companies on loans and advances _______.
Marks: 2+ 0.5in strict confidence
in public interest
in the interst of borrowers
Module : Module A
in public interest
Chapter : Chapter3
49. The purpose of ________ is to make credit available to essential sectors of the
economy according to national priorities.
Marks: 2+ 0.5selective credit control
maintenance of cash reserve
reserve fund
Module : Module A
selective credit control
Chapter : Chapter3
50. _________ Act prohibits lending at exorbitant rates and empowers reopening of
such contracts.
Marks: 2+ 0.5BR Act
RBI Act
Usurious Loans Act
Module : Module A
Usurious Loans Act

Chapter : Chapter3
51. Reserve Bank can issue directions on loans and advances under Section 21 of
the Banking Regulation Act.
Marks: 2+ 0.5True
False
52. Regulation of credit to different sectors of the economy is known as selective

credit control.
Marks: 2+ 0.5True
False
True
Module : Module A
Chapter : Chapter3
53. Banks are free to lend to their directors.
True
False
Marks: 2+ 0.5-
54. Bank have to file a return to Reserve Bank regarding unclaimed deposits under
Section 26 of the BR Act.
Marks: 2+ 0.5True
False
55. Directions may be issued under RBI Act to banks in respect of loans and
advances in the interest of depositors.
Marks: 2+ 0.5True
False
56. _______ have to maintain cash reserve under Section 18 of the BR Act.
banks
Banking companies which are not scheduled banks
Nationalised banks
Module : Module A
Coop.
Banking companies which are not scheduled banks
Chapter : Chapter3
57. The liquid assets to be maintained under Section 24(2A) of BR Act are RBI Act.
Marks: 2+ 0.5-
inclusive
not inclusive
partly inclusive
Module : Module A
not inclusive
Chapter : Chapter3
58. The payment of penalty under Section 24 of BR Act can be enforced by making
an appliation before _____.
Marks: 2+ 0.5the government
civil court
high court
Module : Module A
civil court
Chapter : Chapter3
59. Only scheduled banks havea duty to maintain cash reserve under Section 42 of
the Reserve Bank of India Act.
Marks: 2+ 0.5True
False
60. Every banking compnay has to maintain the liquid assets as required under
Section 24 of the Banking Regulation Act.
Marks: 2+ 0.5True
False
61. The share capital and reserves of banking company from part of its demand and
time liabilities for the purpose of Section 42 of the RBI
True
False
62. Additional cash reserve required under Section 42 (1A) will be as notified by the
Central Government from time to time.
Marks: 2+ 0.5True
False
63. Interest is payable to scheduled banks on the additional cash reserve

maintained as required under Section 42 (1A) of the RBI Act.
True
False
64. No banking company incorporated in India is required to maintain reserve fund

under Section 17 (1) of the BR Act.
Marks: 2+ 0.5True
False
65. The diretions of Reserve Bank issued to the banking companies under Section
35A of the Banking Regulation Act are __________.
binding on them
not binding on them and are in the nature of guidelines
binding on the bnaks and the public
binding on them

66. A contract if entered into by a banking company with any party in contravention
of a direction issued by the Reserve Bank ________.
shall be invalid
shall render the banking co. liable to prosecution for violation of directions
shall render the bank and any other party to the contract liable to prosecution for
violation of directions.
shall render the bank and any other party to the contract
liable to prosecution for violation of directions.
Module : Module A
Chapter : Chapter3
67. Liquid assets required to be maintained in India under Section 24 of the BR Act
may be held in the form of _______.
Marks: 2+ 0.5cash only
cash and gold only
gold or unencumbered approved securities
gold or unencumbered approved securities

68. For the purpose of maintenance of liquid assets under Section 24 of the BR Act,
unencummbered approved securities shall be valued at ____.
face value
current market price

average of market price for previous six months
current market price

69. The penal interest chargeable on a banking company under Section 24 (4) of the
BR Act for not maintaining liquid assets as specified under Section Bank 24(2A)(a) of
the Act_________.
Marks: 2+ 0.5may be waived by the Reserve Bank if its is satisfied that the bank had sufficient
cause for the failure
has to be charged in all cases and the Reserve Bank has no option to waive penal
interest.
can be reduced by the Reserve Bank
may be waived by the Reserve Bank if its is satisfied that
the bank had sufficient cause for the failure
Module : Module A
Chapter : Chapter3
70. A banking company has to prepare profit and loss accounts nad balance sheet
as at the ________ or at the expiration of 12 months ending with such date as
notified by the Central Government.
Marks: 2+ 0.5end of calender year
end of March
end of June
Module : Module A
end of calender year
Chapter : Chapter4
71. The balance sheet and profit and loss account shall be audited by a person duly
qualified to be _______.
Marks: 2+ 0.5a certified financial analyst
auditor of companies
auditor of cooperative societies
Module : Module A
auditor of companies
Chapter : Chapter4
72. Three copies of balance sheet and accounts along with auditor's report sent to
Reserve Bank under Section 31 of the BR Act have also to be sent tothe Central Government
Company Law Board

73. Reserve Bank is empowered to conduct________ of a banking company under
Section 35(1) of the BR Act.
Marks: 2+ 0.5inspection
special audit
audit
Module : Module A
inspection
Chapter : Chapter4
74. A copy of the inspection report relating to a banking compnay ________ to that
banking company.
Marks: 2+ 0.5should be given
need not be given
should be given at request
should be given

75. The board for financial Supervision is constituted by ______________
government
Reserve Bank
Indian Banks Association
Reserve Bank
Module : Module A
Chapter : Chapter4
the
76. Under Section 35(4) of the BR Act, Central Government can prohibit a banking
company from accepting fresh deposits if the business of the banking company is
conducted _______.
Marks: 2+ 0.5not profitably
not in compliance with the Act
to the detriment of interest of its depositors
Module : Module A
to the detriment of interest of its depositors
Chapter : Chapter4
77. Foreign banks have to prepare account and balance sheet in respect of all
business transacted by them in india.
Marks: 2+ 0.5True
False

Module : Module A
True
Chapter : Chapter4
78. Reserve Bank requires the persmission of the Central Government for ordering
special audit of a banking company.
Marks: 2+ 0.5True
False
79. Three copies of the balance sheet and profit and loss account of a banking
company together with auditor's report have to be submitted to the Reserve Bank
as returns.
Marks: 2+ 0.5True
False
80. A copy of scrutiny report has to be given to the banking company whether
requested by it or not.
Marks: 2+ 0.5True
False
81. The Board for Financial Supervision is set up under the regulations framed by
the Reserve bank under Section 58 of the Banking Regulation Act.
True
False
82. The Central Government is not empowered to orde Reserve Bank for inspection
of a banking company.
Marks: 2+ 0.5True
False
83. Central Government has to give notice to the banking company before
publishing its inspection report or any part of it.
Marks: 2+ 0.5True
False
84. The undertaking of a banking company may be acquired by the Central

Government if it is satisfied on a report from the Reserve Bank that the banking
company has failed on more than one occasion to comply with the _
directions of the government
directions under Sections 21 and 35A of BR Act
provisions of the Companies Act
Module : Module A
directions under Sections 21 and 35A of BR Act
Chapter : Chapter4
85. The Central Government may make a _________ after consultation with the
Reserve Bank for carrying out the purposes of Part llC of the BR Act in relation on
ani acquired bank.
Marks: 2+ 0.5scheme
plan
memorandum
scheme Module : Module A Chapter : Chapter4
86. ________ may apply to the High Court for winding up of a banking company
under Section 38 of the BR Act.
Marks: 2+ 0.5Registrar of Companies
Reserves Bank
Central Government
Module : Module A
Reserves Bank
Chapter : Chapter4
87. The High court shall order winding up of a banking compnay if the banking
company is unable to _______ .
Marks: 2+ 0.5pay its debts
file returns in time
eliminate non-performing assets
pay its debts

88. In winding up proceedings the depositors shall ________ for the amounts shown
in the books of the bank standking to their credit.
be deemed to have filed claim
have to file claim
have no claim
be deemed to have filed claim
89. The ________ may apply to the Central Government for an order of moratorium in
respect of a banking company.
Marks: 2+ 0.5banking company
Regisrar of Companies
Reserve Bank
Module : Module A
Reserve Bank
Chapter : Chapter4
90. The provisions of a shceme of amalgamation sanctioned by the Central

Government under Section 45 of the BR Act will ________ the provisions of other
laws.
Marks: 2+ 0.5not affect
have overriding effect on
will be subject to
Module : Module A
have overriding effect on

Chapter : Chapter4
91. Central Government can acquire the undertaking of a banking company under
Section 36AE of the Banking Regulation Act in the interest of banking policy without
any report from the Reserve Bank on the affairs of the bankijng company.
Marks: 2+ 0.5True
False
92. The undertaking of an acquired bank may vest in the Central Government or in
any company or corporation as directed by the Central Government.
Marks: 2+
0.5
True
False
93. On the application of Reserve Bank, the High Court may stay the
commencement or continuance of proceedings against any banking company for
any period of time.
Marks: 2+ 0.5True
False
94. The Reserve Bank or State Bank or another person as specfied by the Reserve
Bank in its application before the High Court may be appointed as liquidator of a
banking company,
True
False
Marks: 2+ 0.5-
95. On winding uop of a banking company, all the depositors as a class get the first
preference for payment.
Marks: 2+ 0.5True
False
96. The Reserve Bank may prepare a scheme for reconstruction or amalgamation of
a banking company under moratorium under Section 45 of the BR Act.
Marks: 2+ 0.5True
False
97. Making any false statements in a return or other document submitted under the
provisions of the BR Act is punishable with imprisonment and fine also.
Marks: 2+ 0.5True
False
98. The State Bank of India is a __________ constituted under the State Bank of India
Act.
Marks: 2+ 0.5banking company
body corporate
society
body corporate Module : Module A:ch. undefined
99. The Chairman of the State Bank is appointed by ______ in consultation withe the
Reserve Bank.
Marks: 2+ 0.5the Central Board
Banking services Recruitment Board
Central Government
Module : Module A
Central Government
Chapter : undefined
100. State Bank has to act as ________ and carry out Central Government business
and other business entrusted by the Reserve Bank.
agent of Reserve Bank
agent of Central Government
advisor to the Central Government
agent of Reserve Bank
Module : Module A
Chapter : undefined
101. The provision of the _______ are applicable to State Bank as stipulated in
Section 51 of the BR Act.
Marks: 2+ 0.5RBI Act
Banking Regulation Act
Companies Act
Module : Module A
Chapter : undefined
102. The majority of shares of subsidiary banks are held by ________ .

Reserve bank
Central Government
State bank
Module : Module A
Reserve bank
Chapter : undefined
103. Regional rural banks operate in _______.

a notified area
the whole of a state
only a district
Marks: 2+ 0.5-
a notified area
Module : Module A Chapter : undefined

104. The management of the affairs of a regional rural bank is vested in ___
the Sponsor Bank
its Board of Directors
National Bank
Module : Module A
its Board of Directors

Chapter : undefined
105. The State Bank can make statutory regulations for carrying out this purposes
of the State Bank of India Act, in consultation with Reserve Bank and with previous
approval of the Central Government .

True
False
Marks: 2+ 0.5-
True Module : Module A Chapter : undefined
106. The Central Bank Government is not authorised to give any directions to the
State Bank in matters of policy involving public interest.
True
False
False Module : Module A Chapter : undefined
107. The provision of Sectionm 42 of the Reserve Bank of India Act relating to cash
reserve apply to State Bank
Marks: 2+ 0.5True
False
108. Subsidiary banks do not have to maintain liquid assets under Section 24 of the
BR Act.
Marks: 2+ 0.5True
False
109. Regional rural banks may transact the business of banking as defined in
Section 5(b) of the BR Act and also other business specified in Section 6(1) of that
Act.
Marks: 2+ 0.5True
False
110. Two regional rural banks may be amalgamated by the Reserve Bank by
notification in the gazette.
Marks: 2+ 0.5True
False
111. The management of nationalised is governed by the Nationalised Banks

(Management and Miscellaneous Provisions) Schemes of 1970 and 1980.
True
False
112. Unless the context otherwise require, the reference to a _______ in the Banking
Regulation Act shall be construed as reference to a cooperative bank.
Marks: 2+
0.5
cooperative society
banking company
body corporate
banking company

113. _________ in relation to a cooperative society, for the puposes of BR Act,
includes a member of any committee or body for the time being vested with the
management of the affairs of that society .
Marks: 2+ 0.5Director
Member
Manager
Director Module : Module A Chapter : undefined
114. The requirement of minimum paid-up capital and reserves for a cooperative
bank to commence or carry on banking business is _____
Rs 1 crore.
Rs 1 lakh.
Rs 10 lakh
Rs 1 lakh. Module : Module A Chapter : undefined
115. There are restrictions on cooperative banks on ____in other cooperative

societies under Section 49 of the BR Act.
Marks: 2+ 0.5holding of shares
keeping deposits
acquiring any interested
holding of shares Module : Module A Ch.undefined
116. Central and restrictions on cooperative banks have to submit their returns
under Section 31 of BR Act to______.
Marks: 2+ 0.5Reserve Bank and National Bank
National Bank only
Reserve Bank only
Module : Module A
Reserve Bank and National Bank

Chapter : undefined
117. Under Section 23 of the BR Act, without the permission of Reserve Bank, a ____
can open a new place of business within the area of its operation.
Marks: 2+ 0.5central cooperative bank
state cooperative bank
primary cooperative bank
Module : Module A
central cooperative bank

Chapter : undefined
118. Cooperative banks have to prepare their balance sheet and profit and loss
account in the forms setout in the Third Schedule to ________.
Reserve Bank of India Act.
State cooperative Society Act

119. Banking Regulation Act was made applicable to cooperative banks by the
Banking Laws (Application to Cooperative Societies ) Act, 1965.
True
False
Module : Module A
True
Chapter : undefined
120. A primary cooperative bank does not require licence from the Reserve Bank to
carry on banking business.
Marks: 2+ 0.5True
False
121. The provision of the Banking Regulation Act as provided in Section 56 of the
Act apply to cooperative banks.
Marks: 2+ 0.5True
False
122. A 'Cooperative Bank' means a primary cooperative bank, central cooperative

bank and a state cooperative bank.
Marks: 2+ 0.5True
False
123. There are no restrictions under the BR ACt on lending by cooperative banks to
their directors of firms in which they are interested.
True
False
124. A scheduled cooperative bank to maintian ash resrve as stipulated in Section

42 of tjhe Reserve Bank of India Act (as application to cooperative societies.
Marks: 2+ 0.5True
False
125. Inspection of cooperative banks is done by the state government under the
cooperative Societies Act and the Reserve Bank has no power to inspect under the
Banking Regulation Act.
Marks: 2+ 0.5True
False

Jaiib Questions Accounting & Finance Module D Part 1: Current Investments

Uploaded by

Copyright:

Available Formats

Jaiib Questions Accounting & Finance Module D Part 1: Current Investments

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Jaiib Questions Accounting & Finance Module D Part 1: Current Investments

Uploaded by

Copyright:

Available Formats

JAIIB QUESTIONS ACCOUNTING & FINANCE MODULE D part 1

JAIIB SPECIMEN QUESTIONS

Choose the sentence which speak about illegal association

8. From the following ,find a sentence which is false in respect of partnership

21. Select the incorrect statement in respect of calls in advance

35. Select the incorrect statement in respect of financial Statements of Banks

PRINCIPLES OF BANKING MODULE A & B cont...

27) Long Form Audit Report (LFAR) is prepared and submitted by

29) Interest is calculated on actual/365 days basis in respect of the

a) SBI Mutual Fund

31) The regulator for Mutual Funds in India is:

32) FIMMDAs general principles and procedures are applicable to:

33) Your banks customer XYZ Ltd, enjoys a CC limit of Rs.1,00,000.00

34) The right of set-off is:

35)Which of the following forms of business are permissible under BR Act:

36) A Co-Operative Bank operating in different States are regulated by:

39) A bank in India, wants to undertake capital market activities, it should:

d) Register with SEBI

40) FIMMDA stands for:

41) The Capital Adequacy Ratio is :

43) FIMMDAs guidelines cover the following products, except one:

PRINCIPLES OF BANKING MODULE A & B

2) Minimum Bank Rate is:

5) In a Garnishee Order, the banker on whom garnishee order served is:

b) Judgement Creditors Creditor

6) Sec 131 of NI Act,1881 extends protection to the

7) Hypothecation is applicable in the case of

8) A cheque is dated 12/05/05.the due date is:

9) Charge created on LIC Policy is:

11) Which one of the following is not barred by law of limitation?

12) The term Credit Management covers

An insurance scheme to insure bank deposits

An insurance scheme to insure bank advances

c) A composite financial service offering both bank and insurance products

Allow them to open a joint account to be operated jointly

Can honour the cheque

Cannot hounour the cheque

The company should issue a stop payment instructions to the bank

20) In a securitisation deal, the role of a Special Purpose Vehicle (SPV) is

21)Securitisation is a process of acquiring the loans classified as

22)The minimum percentage of Priority Sector advances to be

24) Cash Budget is a statement of

25) In banks parlance credit risk in lending is

JAIIB QUESTIONS ACCOUNTING & FINANCE MODULE D_cont...

(b) Paid up capital

JAIIB QUESTIONS ACCOUNTING & FINANCE MODULE D_cont...

Advances given to a staff by a bank as a employer should be included in----other assets

Which has remained NPA for a period not exceeding 18 months?

0.40%(revised) of total outstanding

Securities issued by local authorities

Banking company trustees and executors

Reserves & surplus - Share premium

Demand Deposits Compulsory deposits under excise rules

Miscellaneous Expenditure Preliminary Expenses

Discount on issue of shares Profit and Loss Account

(d) Rate of dividend exceeds 20% - Transfer to reserve @ 10%

Debit Dividend by Rs.25000 & Credit Bank by Rs.25000

(b) Treatment of losses - insolvency of a partner