Banking Financial Awareness · Commerce Accountancy

Credit, Debt, and Finance

1,435 Questions

This topic covers essential concepts of credit, debt, and finance including bankruptcy, debt recovery, and financial acts. These questions are frequently asked in banking and IBPS exams. Test your knowledge of financial terminology and loan classifications.

Debt recovery actsBankruptcy filing proceduresFinancial classificationsMedium term financeCredit loss management

Credit, Debt, and Finance Questions

Multiple choice business organisation and correspondence banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks bills of exchange, promissory notes and hundis cheques

Generally, the use of withdrawal slips is restricted to __________ account.

  1. Fixed

  2. Current

  3. Savings

  4. Recurring
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Generally, the use of withdrawal slips are restricted to savings account. Many times a cheque is not issued to savings account holders to help customers withdraw money they are generally used in savings account.

 In case of current accounts, there is no need of withdrawal slips because cheque books are given by default and money can be withdrawn by a bearer cheque.

Multiple choice book keeping and accountancy banking transactions and accounts relating to cheque functions and services of modern banking meaning of passbook and cashbook journal entries for transactions through bank and for loans

When credit balance as per pass book is the starting point, interest allowed by bank is?

  1. Subtracted

  2. Not required to be adjusted

  3. Added

  4. None of these
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

In case of interest allowed by bank, the entry for the same would have been entered in the pass book due to which the pass book balance would be higher than the cash book balance.

So, when credit balance as per pass book is the starting point, interest allowed by bank is to be subtracted.

Multiple choice business economics and quantitative methods public economics components of budget and budgetary procedure government budget and taxation government budget and economy

Which of these is major component of external debt?

  1. Short term debt

  2. Long term debt

  3. Commercial borrowings

  4. NRI deposits
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

External debt is the portion of a country's debt that was borrowed from foreign lenders, including commercial banks, governments, or international financial institutions. These loans, including interest, must usually be paid in the currency in which the loan was made.

Multiple choice commerce micro, medium and small enterprises (msmes) nabard and kvic funding and assistance to small businesses privileges and other promotional measures for msmes

Group loan under Mahila Bachat Gat is borrowed from bank at __________ lending rate.

  1. Co-operative

  2. Reverse Repo

  3. Repo

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

Mahila Bachat Gat groups often access credit through cooperative banks or institutions that provide loans at cooperative lending rates, which are designed to be affordable for small-scale groups.

Multiple choice book keeping and accountancy bills of exchange renewal of the bill retirement and renewal of a bill accounting treatment of bill transaction

__________ of the bill occurs when drawee has funds at disposal and makes a request to drawer or holder to accept the payment before its due date.

  1. Retirement

  2. Renewal

  3. Discounting

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

Retirement of a bill occurs when the drawee pays the bill before its due date. This is often done to receive a discount or rebate for early payment.

Multiple choice book keeping and accountancy bills of exchange renewal of the bill retirement and renewal of a bill accounting treatment of bill transaction

Rebate on bills discounted is _______ from interest and discount in the P/L Account .

  1. added

  2. deducted

  3. not deducted

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

Rebate on bills discounted is also known as discount received in advance i.e. discount received but not earned.

In such a situation, the rebate on bills discounts will be deducted from interest and discount in profit & loss account and shown as liability in the balance sheet.

Multiple choice book keeping and accountancy bills of exchange renewal of the bill retirement and renewal of a bill accounting treatment of bill transaction

At the time of the renewal of a bill, interest account is ____________ in the books of the drawee.

  1. credited

  2. totalled

  3. debited

  4. posted
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In the books of Acceptor

1] Entry for Cancellation of Bill:

Bills Payable A/c ……….………….. Dr

To Drawer Personal A/c

2] Entry for part payment in cash:

Drawer’s Personal A/c……………… Dr

To Cash A/c

3] Entry for Interest Paid:

Interest A/c …………………………. Dr

To Cash A/c

4] Interest not paid:

Interest A/c …………………………. Dr

To Drawer’s Personal A/c

Multiple choice book keeping and accountancy bills of exchange renewal of the bill retirement and renewal of a bill accounting treatment of bill transaction

The cancellation of the old bill maturity in return for a new bill (which includes interest) for an extended period is called ________________.

  1. Retiring of a bill

  2. Renewal of a bill

  3. Dishonor of a bill

  4. Rebate on bill
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Sometimes, acceptor of a bill finds himself unable to meet his acceptance on the due date. So he may approach the drawer of the bill before the maturity date arrives, to cancel the old bill and draw a new bill with extended date. The acceptor in this case will of course have to pay interest for the extended period. Thus the cancellation of the old bill maturity in return for a new bill (which includes interest) for an extended period is called "renewal of a bill of exchange".