Commerce Accountancy ยท 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

What are the consequences of not paying Stamp Duty on Cheques?

  1. The cheque will be invalid

  2. The drawer of the cheque will be fined

  3. The payee of the cheque will be fined

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

Not paying Stamp Duty on Cheques can result in the cheque being invalid, the drawer of the cheque being fined, and the payee of the cheque being fined.

Multiple choice

When should Stamp Duty be paid on Cheques?

  1. Before the cheque is issued

  2. Within 15 days of issuing the cheque

  3. Within 30 days of issuing the cheque

  4. Within 60 days of issuing the cheque
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Stamp Duty on Cheques should be paid before the cheque is issued.

Multiple choice

How can Stamp Duty be paid on Cheques?

  1. By affixing a Stamp Duty stamp to the cheque

  2. By using a franking machine

  3. By paying online

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

Stamp Duty on Cheques can be paid by affixing a Stamp Duty stamp to the cheque, by using a franking machine, or by paying online.

Multiple choice

What is the penalty for issuing a cheque without paying Stamp Duty?

  1. A fine of up to Rs. 10,000

  2. Imprisonment for up to 6 months

  3. Both a fine and imprisonment

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

The penalty for issuing a cheque without paying Stamp Duty is both a fine and imprisonment.

Multiple choice

What is the Stamp Duty Act that governs the Stamp Duty on Cheques?

  1. The Indian Stamp Act, 1899

  2. The Stamp Duty Act, 1955

  3. The Stamp Duty Act, 1989

  4. The Stamp Duty Act, 2009
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Stamp Duty on Cheques is governed by the Indian Stamp Act, 1899.

Multiple choice

Which of the following is not a consequence of not paying Stamp Duty on Cheques?

  1. The cheque will be invalid

  2. The drawer of the cheque will be fined

  3. The payee of the cheque will be fined

  4. The cheque will be honoured by the bank
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Not paying Stamp Duty on Cheques does not result in the cheque being honoured by the bank.

Multiple choice

Which of the following is not an example of a document that requires a Stamp Duty?

  1. Cheques

  2. Agreements

  3. Leases

  4. Invoices
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Invoices do not require a Stamp Duty.

Multiple choice

Who is liable to pay stamp duty on a bill of exchange?

  1. The drawer

  2. The acceptor

  3. The payee

  4. The endorser
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The drawer is liable to pay stamp duty on a bill of exchange.

Multiple choice

When is stamp duty payable on a bill of exchange?

  1. At the time of drawing the bill

  2. At the time of acceptance of the bill

  3. At the time of payment of the bill

  4. At the time of endorsement of the bill
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Stamp duty is payable on a bill of exchange at the time of drawing the bill.

Multiple choice

What is the procedure for paying stamp duty on a bill of exchange?

  1. Affixing a stamp of the appropriate value on the bill

  2. Writing the amount of stamp duty on the bill

  3. Paying the stamp duty to the stamp vendor

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

The procedure for paying stamp duty on a bill of exchange is to affix a stamp of the appropriate value on the bill, write the amount of stamp duty on the bill, and pay the stamp duty to the stamp vendor.

Multiple choice

How are unemployment insurance benefits paid?

  1. By check.

  2. By direct deposit.

  3. By debit card.

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

Unemployment insurance benefits can be paid by check, direct deposit, or debit card. The method of payment is determined by the state's unemployment insurance agency.

Multiple choice

Which of the following is an example of a control activity related to cash receipts?

  1. Segregation of duties between cash handling and record keeping

  2. Authorization of all cash disbursements

  3. Reconciliation of bank statements

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

Segregation of duties between cash handling and record keeping is an example of a control activity related to cash receipts.

Multiple choice

In the United States, child support payments are typically made through which of the following methods?

  1. Wage garnishment

  2. Direct deposit

  3. Check

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

In the United States, child support payments can be made through wage garnishment, direct deposit, check, or a combination of these methods.

Multiple choice

In the United States, child support payments are typically made through which of the following methods?

  1. Wage garnishment

  2. Direct deposit

  3. Check

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

In the United States, child support payments can be made through wage garnishment, direct deposit, check, or a combination of these methods.

Multiple choice

In the United States, child support payments are typically made through which of the following methods?

  1. Wage garnishment

  2. Direct deposit

  3. Check

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

In the United States, child support payments can be made through wage garnishment, direct deposit, check, or a combination of these methods.