Banking and Cash Transactions

Real deposits are deposits that are backed by actual cash reserves held by the bank. This distinguishes them from paper deposits which may not have full cash backing. Cash deposits would be a literal answer, but 'real deposits' is the technical economic term.

Both the accounts are real accounts. Debit what comes in and credit what goes out.

Purchases a/c is debited as it is an expense. Cash a/c and bank a/c are credited as payment is made and both the cash and the bank balance are decreasing.

A Proforma Invoice is different insofar as it is for the sake of form only. It is neither entered into books nor charged to the account of the recipients. It may be used for several purposes including: as a quotation, to enable calculation of taxes and duties payable, etc.

Non-repudiation disallows A to refuse this claim that he had not written the check.

 When a bill is drawn 'after date', the term of the bill commences from the date of drawing the bill and when the bill is drawn aftersight, the term of the bill begins from the date of 'sighting', i.e. when the bill is accepted.

 When a Bill gets dishonored, holder of the bill pays the notory charges, but Notory charges are recovered from drawee.

Mutual funds impose two main check writing constraints: the account balance must not fall below the minimum capital required to maintain the account, and checks issued must be for at least the minimum amount specified by the fund. These requirements ensure operational efficiency and maintain account viability.

Under Section 14 of the Evidence Act, facts showing the existence of a state of mind or intention are relevant. In criminal breach of trust cases, the defendant's intent is a crucial element. Evidence showing a pattern of false entries (showing receipts less than actually received) is highly relevant to establishing that the specific false entry in question was intentional rather than accidental, as it demonstrates a consistent course of conduct indicating dishonest intent. The systematic nature of multiple false entries makes it difficult to accept that the charged entry was an isolated mistake.

At-the-Money is related to stock market. A situation where an option's strike price is identical to the price of the underlying security. Both call and put options will be simultaneously "at the money." For example, if XYZ stock is trading at 75, then the XYZ 75 call option is at the money and so is the XYZ 75 put option.

MICR or the Magnetic Ink Character Reader is used in the cheque clearing process in banks.

Demand deposits are bank deposits that can be withdrawn on demand without any prior notice or penalty. These include checking accounts and current accounts where account holders can withdraw funds anytime through checks, ATMs, or electronic transfers. In contrast, fixed deposits (term deposits) lock funds for a specified period, while 'account payee' and 'variable deposits' are not standard banking terminology for withdrawal categories.

The statement is whether the customer wants to pay by cash or by card. The answer would be either cash or card.  Option 1 is the correct answer, which says that the customer will pay by card.

This is the correct answer. It means Magnetic Ink Character Recognition. It is widely used by banks to process the cheques.

Negotiable instrument is an unconditional order to pay a certain sum of money to the payee by the payer at a specified future date, which is transferable. Bill of exchange, bearer cheque, demand draft and promissory note are transferable and unconditional orders. Correct option is 4 (crossed cheque, i.e., account payee cheque).