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
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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Right answer Because in overdraft, money is withdrawn more than deposited.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 The rate of interest is higher on it, since it cannot be withdrawn before the expiry of that fixed time.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.
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Article 124
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Article 110
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Article 112
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Article 142
B
Correct answer
Explanation
Article 110 of the Indian Constitution defines the procedure and content of a Money Bill.
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Dr. cash A/c and Cr. S & Co.
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Dr. cash A/c and Cr. R & Co.
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Dr. R. & Co. and Cr. S. & Co.
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No rectifying entry needs to be passed.
C
Correct answer
Explanation
This is the rectifying entry after the correction of wrong credit to R. & Co. for the amount received from S. & Co.
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Single column cash book
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Two column cash book
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Three column cash book
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Four column cash book
D
Correct answer
Explanation
There is no cash book with four columns. There can be maximum three columns in the cash book - ( cash, bank and discount columns ).
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posted in debit side of cash book and credited in pass book
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debit side of cash book only
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credit side of cash book only
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None of these
B
Correct answer
Explanation
It would be posted in debit side of cash book only.The customer would make the entry when it is sent to bank for collection. But it would be credited in pass book only when it is collected by bank. Its amount is not yet collected by bank and so it would not be posted in pass book.
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posted in credit side of cash book only
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debited in pass book only
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posted in credit side of cash book and debited in pass book
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None of these
C
Correct answer
Explanation
It would appear both in credit side of cash book and debited in pass book. As the cheque has been issued it would be posted in credit side of cash book by the customer. The cheque has been presented for payment so it would be debited in pass book.
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remain with the holder always
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may be shared by drawer and drawee
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may be shared by drawer, drawee and banker
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None of these
B
Correct answer
Explanation
The accomodation bills are drawn for financial assistance without any consideration. So, the amount received from discounting of bill could be shared by drawer and drawee in a proportion as decided.
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Cash transaction
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Credit transaction
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Both (1) & (2)
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None of these
B
Correct answer
Explanation
Credit transaction is a non-cash transaction, which never affect the balance of cash/bank.
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Cash paid to Rajesh
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Cash recieved from Hari
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Goods sold for cash
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Paid salary
C
Correct answer
Explanation
A cash memo is issued for this transaction.