Banking Financial Awareness · Commerce Accountancy

Credit, Debt, and Finance

1,382 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 commerce performance of contract who will perform the contract performance, discharge, breach and remedies of contract business law and contract act

Demand Documentary Bill Limits _________.

  1. should be taken as a part of the permissible bank finance

  2. should be taken into account also for the purposes of receivable norms

  3. Both (a) and (b)

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

Demand Documentary Bill Limits are considered part of the permissible bank finance and must be accounted for in receivable norms to ensure accurate credit assessment.

Multiple choice elements of book keeping and accountancy trial balance develop the skill of preparing trial balance by balance method methods of preparing trial balance preparation of trial balance

Lease which includes a third party (a lender) is known as:

  1. Sale and Leaseback

  2. Direct Lease

  3. Inverse Lease

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

A leveraged lease is a lease agreement that is financed through the lessor with help from a third-party financial institution. In a leveraged lease, an asset is rented with borrowed funds.

Multiple choice book keeping and accountancy accounting equation and business transactions introduction to final accounts meaning, objectives and importance of final accounts meaning, objectives, importance and preparation of final accounts

Financial leverage is also known as ________________.

  1. Trading on equity

  2. Trading on debt

  3. Interest on equity

  4. Interest on debt
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Financial leverage, which involves using debt to increase the potential return on equity, is commonly referred to as trading on equity.

Multiple choice economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

Balance of payment on capital account deals with the borrowings or lending of the country in question (true/false)

  1. True

  2. False

  3. Cant say

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

The capital account in the balance of payments records all international transactions involving the purchase or sale of assets, including foreign borrowing and lending.

Multiple choice economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

There is no repayment obligation in ___________.

  1. grants

  2. loans

  3. both grant and loans

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

Grants are non-repayable funds provided by one party to another, often for specific projects or development purposes. Unlike loans, there is no obligation to pay back the principal or interest.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

When saving are given as a loan and borrower repays the amount, money serves the function of  ________.

  1. unit of measurement

  2. store value

  3. standard of deferred payment

  4. medium of exchange
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Deferred payments refer to payments made on loans, salaries, pensions, insurance premium, interests, and rents. The necessary condition for deferred payment is that the amount of repaid money should be the same as it was at the time of purchase of the good or at the time of taking loan. Since all the goods and services can be expressed in terms of money, it makes the future payments easy and functional. Moreover, the value of currency does not change with time which makes it easy for the borrower to take money and repay it in future. Therefore, money serve as a standard of deferred payment. 

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

When we say that Money serves as a standard for deferred payments, we are considering the _________ aspect of Money.

  1. static

  2. dynamic

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The standard of deferred payments is considered a static function because it provides a fixed unit to settle debts and contracts, maintaining consistency in accounting.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

Money is a standard of deferred payments. This means that:

  1. Future transactions can be settled In terms of money

  2. Loans given and repayments thereof can be established in terms of money

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

As a standard of deferred payments, money allows for the settlement of future obligations and the formalization of credit and loan agreements.

Multiple choice commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

A person who is unable to pay his debts, is called_______. 

  1. insolvent

  2. solvent

  3. well to do

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

A person or firm whose liabilities exceed the value of owned assets is termed as insolvent. It is the inabilities of the company or person to pay liabilities as they become due. 

Multiple choice commercial studies basic accounting terms basic accounting terminologies introduction to financial accounting and financial accounts basic accounting terminology meaning and features of balance sheet income-expenditure account meaning, importance and specimen of journal objectives, functions, and importance of accounting stages and functions of accounting qualitative characteristics, objectives and roles of accounting

What rate of commission is charged by the bank issuing the credit card?

  1. 1% to 3%

  2. 3% to 6%

  3. 2% to 5%

  4. 1% to 4%
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The bank issuing the credit card charges a commission from anywhere between 1% to 4% for each such transaction. The commission charged is immediately debited to the seller's bank account.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Interest receivable from Mohan ( a Borrower) Account is -

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expense Account
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Interest receivable from Mohan is an accrued income for the business, it is treated as an Asset.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Interest received in advance from Mohan (a borrower) Account is _________________.

  1. An Asset Account

  2. A Liability Account

  3. A Revenue Account

  4. An Expense Account
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Interest received in advance is income that has been collected but not yet earned. Until the service is provided, it remains an obligation to the business, classified as a liability.

Multiple choice elements of book keeping and accountancy ledger and posting develop the understanding for posting of transactions and balancing of accounts classification of ledger (subdivision of ledger) and balancing of account meaning and importance of ledger

Which account is the odd one out?

  1. Interest Received A/c

  2. Interest Receivable A/c

  3. Interest Outstanding A/c

  4. Unaccrued Interest A/c
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Interest received is a nominal account (revenue). The others are representative personal accounts (accruals/deferrals).