Tag: banking and taxation

Questions Related to banking and taxation

The profit on interest charged on the hire purchase should appear in the profit and loss account in what manner?

maths banking and taxation types of accounts banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account

  1. The total interest levied should be divided equally over the total period the for purchase agreement

  2. The interest charged in that period only should be included

  3. Final instalment is paid

  4. Interest should be apportioned in proportion to the repayment totals

Show answer
Correct Option: B
Explanation:

The profit on interest charged on the hire purchase should appear in the profit and loss account. when the interest charged in that period only should be included.

The deposit is fixed and is repayable only after a specific period is over is called

maths banking and taxation types of accounts banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account

  1. current account

  2. fixed deposit account

  3. recurring deposit account

  4. savings account

Show answer
Correct Option: B
Explanation:

The deposit is fixed and is repayable only after a specific period is over is called fixed deposit account.

Overdraft, loans, cash credits and discounting of bill of exchange is an example of ______ functions.

maths banking and taxation types of accounts banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account

  1. primary

  2. secondary

  3. ordinary

  4. mandatory

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Correct Option: A
Explanation:

Overdraft, loans, cash credits and discounting of bill of exchange is an example of primary functions.

Bank allow the prematurity of fixed deposits. Then they usually collect penal of interest on _____ for the premature withdrawal of fixed deposits.

maths banking and taxation types of accounts banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account

  1. principal

  2. maturity amount

  3. rate of interest

  4. profit

Show answer
Correct Option: C
Explanation:

Bank allow the prematurity of fixed deposits. Then they usually collect penal of interest on rate of interest for the premature withdrawal of fixed deposits.

Portfolio management is a __________ function of a bank.

maths banking and taxation types of accounts banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account

  1. secondary

  2. primary

  3. mandatory

  4. non-mandatory

Show answer
Correct Option: A
Explanation:

Portfolio management is a secondary function of a bank.
The banks also undertakes to purchase and sell the shares and debentures on behalf of the clients and accordingly debits or credits the account. This facility is called portfolio management.

The minimum amount required to open a fixed deposit is

maths banking and taxation types of accounts banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account

  1. Rs. $1000$

  2. Rs. $500$

  3. Rs. $2000$

  4. Rs. $300$

Show answer
Correct Option: A
Explanation:

The minimum amount required to open a fixed deposit is  Rs. $1000$.

Which one of the following is used as a short term savings account?

maths banking and taxation types of accounts banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account

  1. savings bank account

  2. fixed deposit account

  3. recurring deposit account

  4. current bank account

Show answer
Correct Option: A
Explanation:

Savings bank account is used as a short term savings account.

The money deposited in this account can not be withdrawn before the expiry of period is called

maths banking and taxation types of accounts banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account

  1. current deposit account

  2. savings deposit account

  3. recurring deposit account

  4. fixed deposit account

Show answer
Correct Option: D
Explanation:

The money deposited in this account can not be withdrawn before the expiry of period is called fixed deposit account.

The purpose of a _______ is to accumulate funds, there is no such restriction on deposits or incoming transfers.

maths banking and taxation types of accounts banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account

  1. recurring deposit

  2. fixed deposit

  3. savings account

  4. current account

Show answer
Correct Option: C
Explanation:

A saving account is an account in which account holder can earn a modest interest on the money he/she keeps  in a bank or other financial institution. There is no such restrictions on deposits of money. Money can be deposited as well as withdrawn at any time.
Thus, option C is correct.

Option A and B are not correct as these are deposited for certain time period and and  thus there is a restriction to withdraw money before the fixed period..

Option D is not correct as it is not used to accumulate money.

Fixed deposit account will give you

maths banking and taxation types of accounts banks introduction, recurring deposit accounts and calculation of interest on a fixed deposit account

  1. lowest interest rate

  2. highest interest rate

  3. no interest rat

  4. low income

Show answer
Correct Option: B
Explanation:

Fixed deposit account will give us highest interest rate.