Commerce Accountancy ยท General Awareness

Banking and Cash Transactions

1,011 Questions

This collection covers essential concepts related to banking and cash transactions. It includes questions on outstanding cheques, petty cash, bank reconciliations, and negotiable instruments. These topics are highly relevant for accounting exams and test practical financial knowledge.

Bank reconciliation statementsCheques and noting chargesPetty cash usageNegotiable Instruments ActCash book entriesStamp Duty Act

Banking and Cash Transactions Questions

Multiple choice general knowledge

In the UK, until the arrival of the Penny Post, the recipient was expected to pay for any mail they received.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

True is incorrect - the statement is actually false. Under the pre-Penny Post system, recipients DID have to pay for mail upon delivery based on distance. The 1840 Penny Post reform introduced prepayment by senders, shifting costs from recipients to senders. The question asks if recipients paid, which was true BEFORE the Penny Post.

Multiple choice general knowledge

Which of the following is known as plastic money?

  1. bearer cheques

  2. credit cards

  3. demand drafts

  4. gift cheques
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Credit cards are commonly called 'plastic money' because they are made of plastic and enable cashless transactions for purchases. Bearer cheques, demand drafts, and gift cheques are paper-based negotiable instruments, not plastic. Credit cards allow users to borrow funds up to a predetermined credit limit and repay later, making them a convenient alternative to cash.

Multiple choice general knowledge

"Odd Man Out" - Just tricky

  1. Passport

  2. Visa

  3. Mastercard

  4. Customs
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

This is an odd man out puzzle. Passport Visa and Customs are all government-related travel documents or processes. Mastercard is a commercial financial product from private companies making it the outlier. The question is about categorization.

Multiple choice general knowledge

Which of these is an example of a chargeback?

  1. You call your credit card bank and tell them that they charged you an invalid late fee, and they remove the fee.

  2. You write a letter to your credit card bank and tell them that you were charged for something you didn't buy, and they credit your account.

  3. You buy something at a local store with your credit card, but decide to return it later that day, and the merchant credits your account.

  4. I don't know!
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A chargeback is when you successfully dispute a charge (typically for fraud or goods not received) and your card issuer credits your account after investigation. It's different from fee removals or merchant returns - it's specifically a disputed transaction reversal.

Multiple choice general knowledge

Which of these statements about debit cards is NOT true?

  1. Debit card purchases take money directly out of your bank account.

  2. Debit cards offer the same kind of legal protections from fraud that credit cards do.

  3. The use of a debit card sometimes results in extra charges toward the consumer.

  4. Under federal law you risk unlimited loss if you fail to report an unauthorized transfer or withdrawal within 60 days after your debit card statement is mailed to you.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Debit cards have weaker fraud protections than credit cards under federal law. Your liability for unauthorized debit transactions can be unlimited if you don't report within 60 days, whereas credit cards have a $50 maximum liability and stronger dispute rights.

Multiple choice general knowledge

If a cheque issued by us is dishonoured the credit is given to:

  1. Customer's account

  2. Bank account

  3. Cash account

  4. Supplier's account
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

When a cheque issued to a supplier is dishonoured, the bank debits our account, reversing the original credit. To cancel the payment entry, we credit the supplier's account, which reverses the debit made when the cheque was originally issued and recorded.

Multiple choice general knowledge math & puzzles

to put your hand in your pocket

  1. to give money to charity

  2. to save money

  3. being miser in spending the money

  4. to make money by wrong means
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

To 'put your hand in your pocket' is an idiom meaning to spend money or give money to a cause, typically for charity or to help someone. It is the opposite of being a miser or saving money.

Multiple choice general knowledge math & puzzles

A confused bank teller transposed the dollars and cents when he cashed a check for Ms Smith, giving her dollars instead of cents and cents instead of dollars. After buying a newspaper for 50 cents, Ms Smith noticed that she had left exactly three times as much as the original check. What was the amount of the check? (Note: 1 dollar = 100 cents.)
  1. $28.26
  2. $18.56
  3. $19.87
  4. $12.00
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Let the check be D dollars and C cents. The teller gave C dollars and D cents, which is 100C + D cents total. After spending 50 cents, she has 100C + D - 50 = 3(100D + C). Solving: 100C + D - 50 = 300D + 3C, which gives 97C - 299D = 50. The unique valid solution is C=18, D=56, giving $18.56. This is a classic Diophantine equation problem.

Multiple choice general knowledge

You receive your Visa credit card statement on the 1st of the month and it is due 15 days later. Since you always send the minimum payment, there is no financial advantage in mailing your check early as long as it is received by the 15th.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Finance charges on credit cards are calculated based on the average daily balance, not just whether the minimum payment is made. Sending payment earlier reduces the average daily balance, thus reducing interest charges. There IS a financial advantage to paying earlier.

Multiple choice general knowledge

What is it called: Higher denominational notes (Rupees 20 onwards) display the note's denominational value in numerals when held horizontally at eye level.

  1. Security thread

  2. Watermark

  3. Latent image

  4. Optically variable ink
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A latent image is a security feature where the denominational value becomes visible only when the banknote is held horizontally at eye level and viewed at a specific angle. This hidden numeral is printed in a special way that it remains invisible under normal viewing conditions. The other options are different security features - security thread is a embedded metallic strip, watermark is a design visible when held against light, and optically variable ink changes color when tilted.

Multiple choice general knowledge

What is it known as: Notes of Rs. 500 and Rs. 1000 have their numerals printed. Number appears green when note is held flat but changes to blue when viewed at angle.

  1. Latent image

  2. Optically variable ink

  3. Microlettering

  4. Fluorescence
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Optically variable ink (OVI) is a special ink that changes color when viewed from different angles. On Rs. 500 and Rs. 1000 notes, the numeral appears green when viewed flat but changes to blue when the note is tilted. This color-shifting property is extremely difficult to replicate and serves as a key anti-counterfeiting measure. Latent image requires horizontal viewing, microlettering needs magnification, and fluorescence requires UV light.

Multiple choice general knowledge

Hundies are normally __________?

  1. Cheque

  2. Bills of Exchanges

  3. Bills of Purchase

  4. Bills of Lading
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Hundies are traditional financial instruments used in India and other countries, particularly in trade and commerce. They are a type of 'Bill of Exchange' - a written order used primarily in international trade that binds one party to pay a fixed amount of money to another party on demand or at a predetermined date. Cheques (A) are different instruments, while Bills of Purchase (C) and Bills of Lading (D) serve different purposes.