277

Objective Questions Answers

0.1.Choose the most appropriate alternative from those below
sndrewrite the sentences :-
(1) P& .Alc of abank requires -
(a) 5 schedules (c) 9 schedules
(b) 6 schedules (d) 4 schedules
(2) The person whose risk is insured is an
(a) Insured (c) Risk bearer
(b) Insurer (d) none of the above
(3)Commission on Re-insurance accepted is added to
(a) Commission (c) Interest
(b) Claims (d) none of the above
(M.Com. Mumbai, April 2012)
Ans. (1) - d; (2) - a; (3)-;
Q.2. Choose the most appropriate alternative from those below
and rewrite the sentences :
(1) Number of schedules forming part of Balance Sheet of Bank are
(a) 12 schedules (b) 16 schedules
(c) 20 scheduies (d) 24 schedules
(2) In case of Banking company final A/c Term Loan are disclosed
under
(a) Investments (b)Fixed Assets
(c) Advances (d) Other Assets
(3) Incase of Banking company finalAccounts Saving Bank Deposits
are disclosed under
(a) Deposits (b) Fixed Assets
(c)Current liabilities (d) Current Assets
 Objective Questions Answerg
278

ck of stationery
Accounts stock
company Final
(4) In case of Banking under
stamps should be disclosed (b) FixedAssets
and
(a) Current Assets
(d)Cash &Cash Equivalent
(c) Other Assets
society is
(5) The aim of co-operative
(a) To provide Service
(b) To make profit
(c)To do charity
community
(d) To care for minority (M.Com. Mumbai, October 2012)
- c: (5) - d.
Ans.(1) - a: (2) - c: (3) - a: (4)
most appropriate alternative from those below
Q.3. Choose the
and rewrite the sentences: does not include
the heading 'Other Assets'
(1) In Banking Co., (b)Interest accrued
(a) Silver
due (d) Gold
(c) Interest accrued but not
Demand drafts, telegraphic transfer, mail transfers and Travellers
(2) payment till the year end
cheques issued by the bank but not presented for
are known as
(a) Bills Receivable (b) Bills Payable
(c) Bills Collected (d) Bills Purchased and Discounted
ofaco-operative
(3) The first item on Assets side of the balance sheet
society is
(a) Fixed Assets (b)Cash at Bank
(c) Cash in Hand (d) Deposits
ofaco
(4) Tools and Equipments are shown in the balance sheet
operative society
(a) Under Fixed Assets (b) Under Current Assets
(c) Separately (d) Miscellaneous Expenditure
(5) Claims outstanding is shown in the balance sheet of an Insurance
Company under
(a) Current Assets (b)Current Liabilities
(c) Advances (d) Other Assets
(6) Agent Balance is shown in the balance sheet of an Insurance
 dvanced Financial Accounting
279

Companyunder
(a) Current Assets
(c) Advances (b) Current Liabilities
(d) Other Assets
(7) Reserve for
Unexpired
GeneralInsurance Company underRisk is shown in the balance sheet of a
(a) Reserves and Surplus
(b) Capital
(c) Misc. Expenditure not
(d) Provisions
written off
(8) Under Maharashtra
can be conducted by:- Co-operative Societies Act, the audit of society
(a) Achartered Accountant
(b) Aperson holding
andAudit Govermment diploma in Co-operative Accounts
(c)Aperson who has served as Auditor in the co-operative
of the state Govt. department
(d) Anyone of the above
(9)Premium received in advance is in shown in the
the insurance company under
balance sheet of
(a) Loans (b) Current liabilities
(c) Advances (d) None of these
(M.Com. Mumbai, April 2013)
ns. (1) -d; (2) - b; (3) - c; (4)- b; (5) - b; (6) - b: (7)- d; (8)- d;
(9) - b.
Q.4. Cho0se the mOst appropriate alternative from those below
and rewrite the sentences :
(1) A member who holds jointly a share of sociaty with others, but
Whose name does stand first in share certificate.
(a) Nominal Member (b) Sympathizer Member
(c) Associate Member (d) Co-member
(2) Proper custody and maintenance of property belonging to the
s0ciety is the function of
(a) The chairman (b) The managing committee
(c) The secretary (d) The treasurer
280 Objective Questions Answers

....from
(3)Non-Banking asscts must be disposed off within
the date of acquisition.
(a) 5 years (c) 10 years
(b) 7 yearS (d) 2 years
(4) Forcign currency isa currency -
(a) used in reporting foreign transaction
(b) in presenting foreign financial statements
(c) other than the reporting currency
(d) None of the above.
(M. Com. Mumbai, October 2013)
Ans. (1)- c; (2) - b; (3) - b; (4) -c.
Q.5. Choose the most appropriate alternative from those below
and rewrite the sentences :
()Abanking company must hold a licence issued by
(a) RBI (b) SBI
(c) Central Government (d) State Government
(2) The currency of the enterprise preparing account is called
(a) Foreign currency (b) Home currency
(c) Reporting currency (d) Own currency
(3) Co-operative Society's register of membersshould be maintained
in form
(a) A (b) I
(c) D (d) C
(4)General insurance includes
(a) Fire insurance (b) Marine insurance
(c) Misc. insurance (d) All of the above
(6) Income from temporary investment of borrowings that are eligible
for capitalization is treated as
(a) Deduction from borrowing cost incurred
(b)Added to general reserve
(c) Credited to Profit & Loss Alc
(d) Deferred income (M.Com. Mumbai, April 2014)
Ans. (1) - a; (2) - c; (3) - b; (4) - d; (5) - a.
Advanced Financial Accounting
281

Q.6.Choose the most

the sentences :-appropriate
nd rewrite
and re alternative from those below
() Exchange difference of
(a) Transter to Internal foreign operation is
suspense account
(b) Transferred to profit and
(c) Transfeerred to
loss
account
foreign
(d) Transferred to Net currency translation reserve
account. Investment integral foreign
in operation
(2) In consumer s
recorded in CO-operative societies sales made to members are
(a) Cash memos
(c) Pass books (b) Credit notes
(d) Debit notes
(3)In the case of fire
unexpired risk is insurance the provision required to make against
(a) 40%
(b) 50%
(c) 100%
(d) 30%
(4)In consumer's cO-operative
societies
Iransferred to »dividend equalisation reserve'. %of net profit is
(a) 2 (b) 25
(c) 10 (d) 20
(5) In marine insurance business
income is carried towards as provision for and thepercentage of premium
balance is transferred
toprofit and loss account.
(a) 100 (b) 50
(c) 25 (d) 10
(6) In financial statement of an Insurance company Underwriting
commitments outstanding are shown as
(a) Advances (b) Contingent Liabilities
(c)Current Liabilities (d) Provisions
(M. Com. Mumbai, April 2015)
Ans. (1) - b; (2) - c; (3) - b; (4) - a; (5) - a; (6) - b.
Q.7.Choose the most appropriate alternative from those below
and rewrite the sentences :
()Interest payable on deposits which is accrued but not due is shown
282 Objective Questions Answers

by the bank under

(a) Deposits (b) Advances
(c) Other Liabilities (d) Contingent Liabilities
(2) AS 11 defines 'Foreign operation' as an entity whose activities
are based in a foreign country includes
(a) Subsidiary of reporting enterprises
(b) Joint venture of the reporting enterprises
(c) Branch of the reporting enterprise
(d) All of above
(3) Dead stocks is shown in the balance sheet of aco-operative socjety
(a) Under Fixed Assets (b)Under Current Assets
(b) Separately (d) Miscellaneous Expenditure
(4) Alife insurer shall prepare the Revenue Account (Policyholders
Account) in
(a) Form A-RA (b) Form A-PL
(c) Fom A-BS (d) Form B-RA
(M. Com. Mumbai, April 2016)
(5) The Maharashtra Co-operative Society Act was passed in
(a) 1950 (b) 1960
(c) 1972 (d) 1978
(M.Com. Mumbai, October 2016)
Ans. (1) -c; (2) -c; (3) - a; (4) - b; (5) - b.
Q.8. State Whether the following statement are True or False:
(1) Every banking company in India is required to transfer atleast
40% of its Current Year's profit tothe reserve fund.
(2)Commission, Exchange and Brokerage is shown by a bank in
Schedule of Operating Expenses.
(3) Surplus on revaluation should be treated as Revenue Reserve.
(4) Reporting currency is the currency used in presenting the financial
statements.
(5) Interest Accrued is shown in the final accounts of a Bank in
scheduleV.
(6) Exchange difference of Non-Integral foreign operation is
transferred to suspence account.
4dvancedFinancial|Accounting
283
() Accountingsstandard 1lis Recommendatory.

Ans. True: 4, 5 (M.Com. Mumbai, October 2013)

False : 1, 2, 3, 6, 7

0.9. State Whether the following

(1) Every society deriving
the Reserve Fund.
statement are True or
profits shall transfer 25% of the False:
(2) Deadstocks is shown in profit to
under Fixed Assets. the balance sheet
ofa
(3) Associate
Member is a
co-operative e:society
society with others, but whose namemember who holds jointly a share of
(A) Liabilities under the does not stand first in
share certificate.
valuation in case of life existing
insurance. policies are determined by average
(5) In fire
insurance
forward as provision for andbusiness 25% of premium income is
Account.
the balance is
transferred to Profit andcarried
Loss
(6) In marine insurance
forward as provision for and business 50l% of premium income is carried
the balance is transferred to Profit
Account. and Loss
(7) Bills for collection are shown in the balance sheet of abank
under liabilities.
(8) Closing Rate is the rate of exchange at the
balance sheet date.
(M. Com. Mumbai, October 2014)
Ans. True: 1,2, 3, 8
False : 4, 5, 6, 7
Q.10. State Whether the following statement are True or False:
() Claims outstanding is shown in the balance sheet of Insurance
Company under CurTent Liabilities.
(2) Reserve for Unexpired Risk is shown in the balance sheet of a
General Insurance Company under provisions.
(3) Every banking company in India is required to transfer at least
40% of its Current Year's profit to the reserve fund.
(4) There is no restriction on payment of dividend by banking
Companies.
284 Objective QuestionsAnswers

(5) ABanking company is allowed to deal in buying and selling of

goods. (M.Com. Mumbai, October 201S)
Ans. True: 1,2
False: 3, 4, 5
0.11. State Whether the following statement are True or False:
(1) Balance sheet of Co-operative society should be prepared in Form
N.
(2)Average clause is introduce to discourage over insurance.
(3) Direct borrowing cost should be capitalized.
(4) The person whose risk is covered is an insurer.
(M.Com. Mumbai, April 2017)
Ans. True : 1,3
False : 2, 4
Q.12. Match the following :
Group A Group B
(1) Non banking assets (a) Co-operative Society
(2) Education Fund (b)IRDA
(3) Bank Guarantee (c) Banking Company
(4) Insurance Companies (d) Contingent Liability
(M.Com. Mumbai, April 2012)
Ans. (1) - c; (2) - a; (3) - d; (4) - b.
Q.13. Match the Column :
Group A Group B
(1)Share Capital (a) Schedule 6
(2) Deposits (b) Schedule 11
(3) Borrowings (c) Schedule 1
(4)Cash and Balance with RBI (d) Schedule 4
(5) Advances (e) Schedule 12
(6)Fixed Assets () Schedule 9
(7) Other Assets (g) Schedule 3
(8) Contingent Liabilities (h) Schedule 10
Advanced Financial Accounting 285

(i) Schedule 2
() Schedule 8
(M.Com. Mumbai. October 2013)
Ans. (1)- c; (2) - g; (3) - d; (4) - a; (5) - f: (6)- h: (7) -
b; (8) - e.
0.14. Match the Column :
Group A Group B
()Profit & Loss and B/S of
(a) Cannot pay dividend
co-operat1ve society
exceeding 15%
(2)P&L A/e ofbbanking
(3) Co-operative societies
company (b) N. Form
(c) FormB schedules 13 to 18
(4)Borrowing cost (d) AS- 16
(M.Com. Mumbai, April2014)
Ans. (1) - b; (2) - c; (3) - a; (4) - d;
Q.15. Match the Column :
Group A Group B
(1) AS 16 (a) Accounting for Taxes on income
(2) AS 22 (b) Foreign currency conversion
(3) AS 11 (c) Borrowing Costs
(M.Com. Mumbai, October 2014)
Ans. (1) - c; (2) - b; (3) - a.
Q.16.Match the Column :
Group A Group B
(1) Interest on deposit is (a) An expenses for banking company
(2) Bonus is declared on (b) Sum assured of life insurance policy
(3) AS-11 (c) The person whose risk in involved
(4) Insured (d) Conversion of currency
(M.Com. Mumbai, April 2015)
Ans. (1) - a; (2) - b; (3) - d; (4) - c.
Q.17. Match the Column :
286 Objective Questions Answers

GroupA Group B
(1) Re-insurance (a)Opened by businessman
(2)Curent account (b) In case of heavy risk
(M.Comn. Mumbai, April 2016)
(3)AS 22 (c) Recognition of tax liability
(d) 1949
(4)Register of Member (e) IForm
Act
(5) Banking Regulation (M. Com. Mumbai, October 2016)
(6) Insurance policy () Segment Reporting
(g) Terms and condition of Insurance
(7) AS 17
(M.Com. Mumbai, April 2017)

b; (2) a; (3) - c; (<) - e; (5) d; (6) g: (7) - f.

Ans. (1) -
 (1) True : Banking Company in India are governed by Banking
Regulation Act., 1949.
(2) True: Treasury bills are usually for 3 months
(3) True : Sum insured is the amount for which policy is taken
(4)True : Demand deposits are repayable on demand
(5) False :Rebate on billsdiscounted is unearned discount
(6) True:Closing inventory should be translated at closing rate
(7) True: Businessmen open Current A/c
(8) True : Banks maintain SLR of 25%
Ans. (B) Match the following :
Group A Group B
1. AS-11 (a) 100% reserve for unexpired risk
2. Marine Insurance (b) Foreign Currency Conversion
3. Fire Insurance (c) Opening Rate
4. Opening Stock (d) 50% reserve for unexpired risk
5. Contingent Liabilities (e) Rate on date of purchase
6.Depreciation () Schedule 12
7.Exchange difference (g) General Insurance
(h) Charged to P&L
Ans. (1) - b; (2) a; (3) - d; (4) - c; (5) - f; (6) - e; (7) - h.
 Ans.4. (a) Most appropriate answer :
(1)Discount on Bill is shown by a bank In
Earned
Schedule of Interest
(2) Balance with RBIare shown in the final account ofa bank
in Schedule 3
(3) Exchange difference of Integral foreign
transferred to profitand loss A/e
Operation
(4)Revenue A/c ofa life insurance company must be
in FormA-RA prepared
(5) Bonus payable to policy holder is shown under Provisions
(6)The aim of co-operativesocieties is Service
 M.Com. Examination,
336 October 2018
of members should be maintained in form I
(7)Register
currency of the enterprise preparing account is called
(8)The
foreigncurrency
True or False:
Ans. (b)
on bills is showed by abank in
(1) True:
interestearned.
Discount
Schedule of
(2) False: Employee security deposits is shown by a Bank
underOtherLiabilities.
Exchange difference of integralIforeign operation is
(3) True: loss A/c.
transferred to profit and
The insured gets compensation only in case of loss.
(4) True : societies cannot pay dividend
(5) True:
Co-operative lexceeding
15%. during certain period
rate =All transaction
(6) True: Average Society Act was
The Maharashtra Co-operative
() True:
(7)
passedin 1960.
OR