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

What is the Cashier's Office's role in the accounts receivable process?

  1. To bill customers for goods or services.

  2. To collect payments from customers.

  3. To maintain a record of all accounts receivable transactions.

  4. To write off uncollectible accounts.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Cashier's Office is responsible for collecting payments from customers, typically by cash, check, or credit card.

Multiple choice

What is the most common method used to enforce child support payments?

  1. Wage garnishment

  2. Tax refund intercept

  3. Property lien

  4. Bank account levy
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Wage garnishment is the most common method used to enforce child support payments. It involves withholding a portion of the non-custodial parent's wages and sending it directly to the custodial parent or child support agency.

Multiple choice

Which cheques are exempt from Stamp Duty?

  1. Cheques issued by banks

  2. Cheques issued by government departments

  3. Cheques issued by public sector undertakings

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

Cheques issued by banks, government departments, and public sector undertakings are exempt from Stamp Duty.

Multiple choice

What is the rate of Stamp Duty on Cheques?

  1. 0.1%

  2. 0.2%

  3. 0.3%

  4. 0.4%
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The rate of Stamp Duty on Cheques is 0.1%.

Multiple choice

How is Stamp Duty on Cheques calculated?

  1. On the face value of the cheque

  2. On the amount of the cheque

  3. On the sum of the face value and the amount of the cheque

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

Stamp Duty on Cheques is calculated on the amount of the cheque.

Multiple choice

Who is responsible for paying Stamp Duty on Cheques?

  1. The drawer of the cheque

  2. The payee of the cheque

  3. The bank that issues the cheque

  4. The bank that collects the cheque
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The drawer of the cheque is responsible for paying Stamp Duty on Cheques.

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.