Question Bank—1 (Assorted Multiple Choice questions) 1: If a minor admitted to a partnership firm for benefits becomes major and does not offer any declaration about either becoming the partner of the firm or about intention to leave the firm as a partner within 6 months of the date on which he became major or within 6 months of the date when he first got information about his status as beneficiary of the firm: a: It will be presumed that he is a partner b: It will be presumed that he is not a partner c: It will be presumed that his intention is not to become a partner d: b and c e None of the above 2: An attachment order of Rs.80000 on a partnership firm is received, whose current a/c shows a balance of Rs.8000. The individual accounts of the partners A, B and C are showing credit balance of Rs.40000, Rs.34000 and Rs.2500 respectively. To meet the payment stated in the order, how much amt will be payable from A’s account ? a Rs.32500 b Rs.35500 c Rs.37500 d Rs.40000 e Rs.39500 3 M/s Rahim Khan and Company import certain goods and after payment of the documents to the bank, send the shipping documents to their clearing agents M/s Shoab Clearing Agents with the instruction that they may dispose of the goods and also stipulate the minimum rate for which these goods can be sold. The clearing agents sell the goods for a price little less than the stipulated price. M/s Rahim Khan and Company claim the return of the goods from the buyer: a since the clearing agents have sold the goods for a price lower than the stipulated one, the buyer will have to return the goods. b since the clearing agents have sold the goods at a lower price without seeking confirmation from the principals, the goods will have to be returned c the buyer cannot be forced to return the goods, since they do not have any notice of the condition stipulated by the principals d the buyer cannot be forced to return even if he had the information about the condition e none of the above 4 A bill of exchange is drawn by M/s Kasturi Lal and Sons on M/s Shiva Traders in consideration of purchase of goods, Mr. Shayam Kumar being its payee. Shayam Kumar endorsed the bill in favour of Mr. Shanti Prakash who had endorsed it in blank. It is stolen by Mr. Sudhir Phatke, an employee of Shanti Prakash and delivered to M/s Dyal Traders for value, but it is dishonoured on presentation for payment. From whom can M/s Dyal Traders recover the amount on the bill? a From Mr. Shanti Prakash b From M/s Shiva Traders c From M/s Kasturi Lal & Sons d From Shyam Kumar e From all the above 5 Non performing advance is an advance (except Cash Credit) which remains over due for a period of more than a: 360 days b: 180 days c: 90 days d 30 days e: none of the above 6 Credit Bank maintains a current account of M/s Chitam Enterprises in which the firm deposits a cheque of Rs.52000. On careful examination, the bank finds that the words `non-negotiable’ are written on lower part of the cheque without the parallel transverse lines. The concerned officer of the bank is not sure about whether to accept it for collection or not: a it is uncrossed instrument and two parallel transverse lines should be drawn b it is not a clear direction from the drawer due to which the cheque should not be accepted for collection c the words `not-negotiable’ can be written without parallel lines. But this will not be considered as crossing. It can be accepted for collection. d the transferability of the instrument has been affected due to these words, due to which the instrument should not be accepted. e none of the above

7 Your branch receives a dividend warrant of Rs.560 in favour of one Mrs. Rama Devi presented by State Bank in clearing. On the back side of the dividend warrant, it is stated that payee’s discharge is needed but the payee has not signed the same in giving discharge. a the dividend warrant will be returned unpaid as the requirement of discharge has not been met, which the drawer had imposed. Payment if made, will not be a payment in due course. b the dividend warrant will be returned as it has been presented by another bank which has not given its confirmation c the dividend warrant will be paid without discharge from the payee, as such discharge is not a legal requirement d the dividend warrant will be paid after confirmation from the collecting bank e none of the above 8 New Delhi branch of Modern Bank issued a fixed deposit of Rs.3 lac for 5 years in the name of Mr. S Subramaniam who raises a loan of Rs.50000 against the FDR with a view to meet exigencies at a later stage. He comes for addition of the name of his son, as he is not keeping good health for few months. a the request of the depositor will be accepted being a genuine reason b the request will be accepted since the addition is for the his son’s name c the request will be accepted since the FDR is to mature after long time d the request cannot be accepted till the loan is outstanding e any of the above 9 Universal Bank is approached by Sameer, a 17 old boy with his PAN card and other necessary information for opening a current account. He is having substantial investments in shares and receives regular dividend. His father has recently expired and his father’s investment will also be transferred in his name in future: a the account cannot be opened as it exposes the bank to undue risk b the account cannot be opened as it is for share transactions c the current account can be opened by the minor as he can draw, negotiate and give valid discharge d the current account can be opened by Sameer alongwith his mother, if she is willing to do the same e none of the above 10 What is the no. of minimum and maximum shareholders in a public limited joint stock company: a minimum 2 maximum 7 b minimum 3 maximum 50 c minimum 4 maximum 50 d minimum 7 maximum 50 e minimum 7 maximum no ceiling 11 A loan remains in sub-standard asset category for a period of one year. The provision is to be made at the rate of.... of the outstanding amount: a: 10% b: 15% c: 30% d: 25% if unsecured ab-initio e: b and d above 12 Which of the following is a situation that can be termed as negative working capital? a when current assets are equal to current liabilities b when current assets are less than current liabilities c when current assets are more than current liabilities d when there are losses and current ratio is 1:1 e when the current ratio is below the ideal ratio of 1.33:1 13 What is the maximum amount for which the CGTMSE guarantee cover is available when the SE unit is in NER and the amount of loan is Rs100lac. a: Rs.50 lac b: Rs.65 lac c: Rs75lac d: Rs.80 lac e: Rs60lac 14 Indirect finance to the micro and small (manufacturing as well as service) enterprises sector will include credit to a: Persons involved in assisting the decentralized sector in the supply of inputs to and marketing of outputs of artisans, village and cottage industries. b: Advances to cooperatives of producers in the decentralized sector viz. artisans, village and cottage industries.

c: Loans granted by banks to Micro Finance Institutions on, or after, April 1, 2011 for on-lending to micro and small enterprises (manufacturing as well as services) are eligible for priority sector status subject to the condition of ‘qualifying asset’. d: Loans sanctioned by banks to State Financial Corporations for on-lending to micro and small enterprises. e: a, b, c.

15 Premium is to be paid by the bank to DICGC for the half-year ended Sept 2012. As on which date the amount of deposits is to be taken into account: a last Friday of Mar 2012 b Last day of Sep 2011 c last working day of Mar 2012 d last Friday of Sep 2011 e none of the above 16 The term ‘firewall technology’ refers to: a computer software that protects a computer system from virus. b computer software that removes the computer virus. c computer operating software. d computer hardware to protect a computer from incident of fire e computer software that protects a computer system from outward intrusion. 17 What is the maximum no. of partners in a non-banking firm. a 20 b 20 excluding the minor partner c 10 d 10 including the minor partner e 20 including the minor partner 18 Risk arising from failure of computer system and loss of data is: a: credit risk b: system risk c: liquidity risk d: operational risk e computer risk 19 On which among the following, a garnishee order is not applicable? a funds in the account at the time of receipt of garnishee order b term deposit receipt which is yet to mature c recurring deposit the maturity of which will be 3 months after d a cheque realization advice that has not been credited to the account e amount deposited by the customer after receipt of the garnishee order 20 A mortgagor sells the property to the mortgagee under the condition that the sale would become absolute on fulfillment of specific conditions: a: This mortgage by conditional sale b: This is English mortgage c: This is a sale cum mortgage transaction d: This is a sale with promise to buy back e a and c 21 Who can deposit the title deed with the bank for creating an equitable mortgage: a: Owner b: His authorised agent c a person directed by the court d: a and b e: a to c 22 Whether a trustee can appoint agent: a: As a trustee, he cannot b: As individual person, he can c: Under all circumstances, he cannot d: a & b both e a to c 23 A state govt. guaranteed advances would be treated NPA if overdue for more than 90 days wef: a: 31.03.2005 b: 31.03.2006 c: 31.03.2007 d To be treated NPA for income recognition purpose only e: Such accounts are not to be treated as NPA. 24 Advances against their own shares are not allowed by banks because these are prohibited under: a RBI Act 1934 b Negotiable Instrument Act c Banking Regulation Act 1949 d SEBI Act e c and d 25 A returning non-resident Indian wants to open an account with you but wants to be sure about what can be repatriated by him in case of need.

a no repatriation allowed b only interest can be repatriated c only principal can be repatriated d principal and interest both can be repatriated e none of the above

Answers : 01 a 02 b 03 c 04 e 05 c 06 c 07 a 08 d 09 c 10 e 11 e 12 b 13 b 14 e 15 c 16 e 17 a 18 d 19 e 20 a 21 d 22 d 23 b 24 c 25 d