Commerce Accountancy · 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
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cash
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bank
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wages
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miscellaneous
C
Correct answer
Explanation
Wages are an expense for the business. According to the rules of nominal accounts, all expenses and losses must be debited, while the bank account is credited because the payment is made by cheque.
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back to square one
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above board
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blank cheque
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sticking point
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.
B
Correct answer
Explanation
Here, 'above board' is the correct option as it implies dealings that are open, honest and legal.
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debit
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deficit
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deposit
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demote
C
Correct answer
Explanation
To 'deposit' money is to put it into a bank account.
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Civil Offence
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Criminal offence
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Both
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None of the above
B
Correct answer
Explanation
Under the Negotiable Instruments Act in India, the dishonour of a cheque due to insufficient funds is a criminal offence punishable by imprisonment or fines.
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a personal loan
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an ordinary loan
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discounting a bill of exchange
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an overdraft
D
Correct answer
Explanation
An overdraft is a credit facility that allows a bank customer to withdraw more money than is available in their current account, up to an approved limit.
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bank drafts made of plastic coated paper
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credit cards issued by banks
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currency notes printed with special plastic thread
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none of these
B
Correct answer
Explanation
The term 'Plastic Money' is a common colloquialism for credit cards, debit cards, and other payment cards made of plastic.
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counterfeit currency
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illegally earned money
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income on which payment of tax is evaded
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money earned through underhand deals
C
Correct answer
Explanation
Black money is income on which tax has been evaded - it's legally earned but illegally concealed from tax authorities. Counterfeit currency is fake money, not undeclared income. Money from underhand deals is one source of black money, but 'black money' specifically refers to the tax evasion aspect, not how it was obtained.
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Cash
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Cheque
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Electronic Clearing Services
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Both (a) and (b)
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All (a), (b) and (c)
E
Correct answer
Explanation
LIC accepts premium payments through various modes, including cash, cheque, and electronic clearing services (ECS), making all listed options valid.
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Deposit of money in the bank
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To withdraw more than the customer has deposited
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Charges imposed by bank for its services
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A lump-sum advance repayable after a fixed period
B
Correct answer
Explanation
Right answer Because in overdraft, money is withdrawn more than deposited. It is for current a/c holders.
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A person can deposit any amount any number of times<o:p></o:p>
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A fixed amount has to be deposited for a fixed period <o:p></o:p>
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A fixed amount has to be deposited every month<o:p></o:p>
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Cash loan is recieved
B
Correct answer
Explanation
Right answer Because in Fixed Deposit a fixed amount has to be deposited for a fixed time. For instance a fixed amount of Rs 20,000 is deposited in abnk for a period of five years. The rate of interest is higher on it, since it cannot be withdrawn before the expiry of that fixed time.
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Credit Card
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Shop Card;
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Debit Card;
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ATM Card
A
Correct answer
Explanation
A credit card allows a user to purchase goods or services on credit, meaning they pay for the items at a later date.
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MCIR cheques;
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Post dated chepues;
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Bankers Cheques;
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MICR cheques
D
Correct answer
Explanation
MICR stands for Magnetic Ink Character Recognition. The white band at the bottom of a cheque contains the MICR code, which is printed with magnetic ink to allow for high-speed automated processing by cheque clearing systems.
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Bearer cheques
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Credit cards
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Demand drafts
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Gift cheques
B
Correct answer
Explanation
Correct Answer: Credit cards
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If a cheque drawn by him is dishonored for insufficiency of funds in his account
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If a cheque is not crossed
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If a post dated cheque is issued
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None of these
A
Correct answer
Explanation
Under the Negotiable Instruments Act in India, the dishonor of a cheque due to insufficient funds is a criminal offence.
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thrice
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four times
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twice
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six times
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None of these
C
Correct answer
Explanation
Yes, it is the correct option. In case of dishonouring of cheque, a court can punish the defaulter with a prison term of two years or fine which can be twice the cheque amount.