Commerce Accountancy · General Awareness

Banking and Cash Transactions

990 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

Under Section 19 for the extended period of limitation, part payment must be

  1. in the handwriting of the person making the payment

  2. in the writing signed by the person making the payment

  3. Either (1) or (2)

  4. Neither (1) nor (2)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The words of section 19 state that where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly authorised in this behalf, a fresh period of limitation shall be computed from the time when the payment was made.

Multiple choice

In CCC's main entry tracing is given:

  1. At the bottom most line of the main entry card

  2. On the fresh card

  3. On the back of main entry card

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In Classified Catalogue Code (CCC), tracing is provided on the back of the main entry card. Tracing includes additional access points like subject, author, or title tracings that help users find the item through different search approaches. This convention maximizes the utility of each catalogue card.

Multiple choice

A finds a five-hundred rupee currency note near his office. A is guilty of criminal misappropriation if he

  1. puts the currency note in his pocket

  2. puts a notice on office notice board and waits for reasonable time before using the money

  3. purchases eatables with the money as he is hungry and has no money

  4. gives the money for charity after waiting for some time allowing the owner to claim the money
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A is guilty of criminal misappropriation if he purchases eatables with the money as he is hungry and has no money. It is punishable under section 403 of the Indian Penal Code.

Multiple choice

A person is not called an unpaid seller if

  1. the credit period as per contract is over

  2. a seller has refused to accept payment

  3. cheque received in consideration has been dishonoured

  4. All of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Option (2) is correct: If a seller has refused to accept valid tender of price, then he is not called an unpaid seller. In options (1) and (3), he will be called an unpaid seller.

Multiple choice

Bank must refuse payment of a cheque, where

  1. cheque is not dated

  2. where cheque is stale i.e. date has expired

  3. payment has been stopped by the customer

  4. the cheque is not presented during working hours of bank
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Banks must refuse payment when a customer has formally stopped payment through a valid instruction. The other scenarios (an undated cheque, stale cheque, or presentation outside working hours) do not constitute valid grounds for automatic refusal.

Multiple choice

When a cheque is returned by the bank marked 'Refer to Drawer', this means the drawer

  1. has instructed the bank not to pay the cheque

  2. whishes to be contacted before the cheque is cashed

  3. has improperly completed the cheque and must correct it before payment

  4. had insufficient funds in his account to pay the cheque
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

'Refer to Drawer' is standard banking terminology indicating that the cheque cannot be honored due to insufficient funds in the drawer's account. It instructs the payee to contact the person who wrote the cheque to arrange alternative payment.

Multiple choice

Credit note is an example of

  1. cash voucher

  2. non-cash voucher

  3. source documents

  4. none of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

 It is a non-cash voucher, since no cash is involved in it ( incoming or outgoing of cash ). It is issued to a customer, if he returns goods.

Multiple choice

In the pass book, the entries are made by

  1. the customer

  2. the bank

  3. both 1 and 2

  4. none of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

 The bank makes the entries in the pass book for the transactions relating with the customer. On a certain date the pass book and cash book are checked and the differences are tallied.  So, Bank Reconciliation Statement is prepared.

Multiple choice

Which of the following would credit the customer's balance?

  1. Direct deposit into customer's account .

  2. Cheques deposited into bank but not yet collected by bank.

  3. Charges imposed by bank.

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

If there is a direct deposit into customer's balance it would credit his account. Suppose Ramseh deposits Rs. 4,000 in cash into customer's account, it would credit  his account.