Tag: banking and bank transactions

Quizzes (4) Questions (51)

Questions Related to banking and bank transactions

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

One outgoing cheque of Rs. 112 sent to a creditor but omitted to be recorded in the Cash Book. ( Note: This cheque was presented in the Bank ). When the balance as per Cash Book is the starting point __________ .

  1. Rs. 112 to be added to cash book

  2. Rs. 112 to be subtracted from&nbsp;<span>cash book</span>

  3. No adjustment is required

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

This is an error of omission. In the given question a cheque of rupees 112 has been omitted to be entered. When balance as per cash book is the starting point the adjustments are to be made in the cash book hence Rs 112 is to be subtracted from the balance of cash book.

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

A crossed cheque is always payable across the bank counter.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

False. A bearer cheque is always payable across the bank counter. A cross cheque is a cheque which has to be directly deposited in the bank account of the person so mentioned. It cannot be made payable over the counter.

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

When balance as per Pass Book is the starting point which of the following is subtracted _______________.

  1. Uncollected Cheques

  2. Unpresented Cheques

  3. Direct payments by Bank

  4. Interest Charged by Bank
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When balance as per passbook is the starting point adjustments are to be made in the passbook. Unpresented cheques are the cheques which are issued to a person and he/she has not presented it for payment. In this case the cash book is credited by the cheque issued and passbook is not. So the cash book balance is less than passbook, hence unpresented cheques are subtracted from the passbook balance. 

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

The process of recording is done ____________________.

  1. Two times a year

  2. Once a year

  3. Frequently during the accounting period

  4. At the end of a accounting period
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In accounting, transactions are recorded chronologically in journals or books of original entry as they occur throughout the accounting period.

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

When balance as per Cash Book is the starting point which of the following is subtracted ________________.

  1. Uncollected Cheques

  2. Unpresenred cheques

  3. Direct Deposits by customers

  4. Interest Allowed by Bank
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When balance as per cashbook is the starting point adjustments are to be made in the cashbook. Uncollected cheques are the cheques which are deposited in the bank but not cleared by the bank or not credited in the bank account. In this case the cash book is debited by the cheque deposited and passbook is not so the cash book balance is more than passbook, hence uncollected cheques are subtracted from the cashbook balance so that both the books come at par.

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

When balance as per Pass Book is the starting point which of the following is added ______________.

  1. Uncollected cheques

  2. Unpresented cheques

  3. Direct Deposits by customers

  4. Interest Allowed by Bank
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When balance as per passbook is the starting point adjustments are to be made in the passbook. Uncollected cheques are the cheques which are deposited in the bank but are not yet cleared by the bank or credit in the account. In this case the cash book is debited by the cheque deposited and passbook is not so the cash book balance is more than passbook, hence uncollected cheques are added from the passbook balance to bring both the books at par.

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

Withdrawal of Cash from Bank for personal use should be credited to ________________.

  1. Cash Account

  2. Bank Account

  3. Drawings Account

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

When cash is withdrawn from the bank, the bank balance decreases. According to the rules of accounting, a decrease in an asset (bank) is credited.

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

Withdrawal of cash from Bank should be debited to _______________.

  1. Cash Account

  2. Bank Account

  3. Drawings Account

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

When cash is withdrawn from the bank, the cash balance increases. According to the rules of accounting, an increase in an asset (cash) is debited.

Multiple choice commercial applications banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks meaning, definition and characteristics of promissory note promissory note

For the purpose of attracting the provisions of section 138 of the Negotiable Instruments Act, 1881, a cheque has to be presented to the bank _____________________.

  1. Within a period of six months

  2. Within a period of six months from the date on which it is drawn or within the period of its validity, whichever is earlier.

  3. Within a period of 15 days from the date on which it is drawn

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

Under the Negotiable Instruments Act, a cheque must be presented within its validity period, which is currently three months in India, or six months as per older statutory references often cited in textbooks.

Multiple choice commercial applications banking and bank transactions nature, advantages and types of cheques bills of exchange and promissory note meaning and types of banks meaning, definition and characteristics of promissory note promissory note

A cheque is drawn only on the bank in which the drawer has his account. But the bill of exchange can be drawn on _______________ including a ___________.

  1. any person; bank

  2. drawee; payee

  3. drawee: drawer

  4. payee: drawer
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A cheque is specifically drawn on a bank, whereas a bill of exchange is a more general instrument that can be drawn on any person, including a bank.