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COM QUESTION PAPERS SOLVED PAPERS CLASS 11/12
In this Post You will Get Accounts of Banking Companies MCQs which is useful for BCOM CBCS
Pattern, BBA, MBA, MCOM and other Competitive and Career Oriented Exams for Commerce
stream students.
Introduction to Banking Companies
As per Section 5(b) of the Banking Regulation Act, 1949, "banking" means the accepting, for the
purpose of lending or investment, of deposits of money from the public, repayable on demand or
otherwise, and withdrawable by cheque, draft, order or otherwise.
As per Section 5(d) of the Banking Regulation Act, 1949, "company" means any company as defined
in Section 3 of the Companies Act, 1956 and includes a foreign company within the meaning of
Section 591 of that Act.
As per Section 5(c) of the Banking Regulation Act, 1949 a "Banking Company" means any company
which transacts the business of banking in India.
Accounts of Banking Companies MCQs 2023
1. Banks prepare the accounts for
a) Calendar year.
b) Financial year.
c) Cooperative year.
d) Diwali year.
Ans: b) Financial year.

2. As per Sec. 17 of the Banking Regulation Act every bank has to transfer of profit to statutory
HOME B.COM QUESTION PAPERS SOLVED PAPERS CLASS 11/12
reserve fund account:
a) 10%
b) 15%
c) 20%
d) 25%
Ans: d) 25%
A
3. Banks show the provision for income-tax under the head:
a) Contingency accounts.
b) Contingent liabilities.
A
c) Other liabilities and provisions.
d) Borrowings.
Ans: c) Other liabilities and provisions.
4) The heading other assets does not include
a) Silver.
b) Interest accrued.
c) Inter-office adjustment (Dr.)
d) Gold.
Ans: d) Gold.
5. A scheduled bank shall maintain deposit with RBI equal to at least ____ of the time and demand
liabilities.
a) 1%
b) 1.5%
c) 2%
d) 3%
Ans: d) 3%
6. Present Cash Reserve Ratio (CRR) is:
a) 2%
b) 3%
c) 4.5%
d) 5%
Ans: c) 4.5% [May 21, 2023]
Also Read: Multiple Choice Questions and Answers
- Advanced Financial Accounting MCQs 2023
- Accounts of Banking Companies MCQs
- Accounts of Life Insurance Companies MCQs
- Accounts of General Insurance Companies MCQs
- MCQ on Investment Accounting
- Advanced Financial MCQs (Dibrugarh University 2013 to 2023)
7. Present Statutory Liquidity Ratio (SLR) is:
a) 12%
b) 15%
c) 18%
d) 30%
Ans: c) 18% [May 24, 2023]
8. Rebate on bills discounted is
a) An item of income.
b) A liability.
c) Income received in advance.
d) Income outstanding.
Ans: c) Income received in advance.
9. A non-banking asset is
a) An item of office equipment.
b) Any asset acquired from the debtors in satisfaction of claim.

c) Money at call and short notice.
d) Furniture and fixtures.
Ans: b) Any asset acquired from the debtors in satisfaction of claim.
10. A non-performing asset is:
a) Money at call and short notice.
b) An asset that ceases to generate income.
c) Cash balance in nil.
d) Cash balance with RBI.
Ans: b) An asset that ceases to generate income.
11. Provision is created for standard assets @:
a) 10%
b) 20%
c) 30%
d) 0.40%
Ans: d) 0.40%
12. Provision is created for sub-standard assets @:
a) 10%
b) 15%
c) 20%
d) 30%
Ans: b) 15%
13. Provision created against loose assets and unsecured doubtful debts is:
a) 10%
b) 20%
c) 30%
d)100 %
Ans: d)100 %
14. Which one of the following is correct?
a) Provision created for assets doubtful upto one year is 25%.
b) Provision created for assets doubtful above one year and upto three year is 40%.
c) Provision created for assets doubtful for more than 3 years is 100%.
d) All of the above
Ans: d) All of the above
15. When income is to be recognized on cash basis, a distinction should be made between
a) Performing and non-performing assets.
b) Banking and non-banking assets.
c) Monetary and non-monetary assets.
d) Current and non-current assets.
Ans: a) Performing and non-performing assets.
16. Doubtful asset is one which has remained in the sub-standard category for:
a) 12 months
b) 18 months
c) 24 months
d) 48 months
Ans: a) 12 months
17. Sub-standard asset is one which has been classified as NPA for a period not exceeding:
a) 1 year
b) 2 years
c) 3 years
d) 4 years
Ans: a) 1 year
18. Income from standard asset is to be recognised on:
a) Cash Basis
b) Accrual Basis
Ans: b) Accrual Basis
19. A term loan will be treated as NPA if interest and installment of principal amount remain
overdue for a period more than:
a) 90 days
b) 180 days
c) 270 days
d) 360 days
Ans: a) 90 days
20. A cash credit amount will be treated as NPA if interest and installment of principal amount
remain overdue for a period more than:
a) 90 days
b) 180 days
c) 270 days
d) 360 days
Ans: a) 90 days
Fill in the blanks:
1. A banking company cannot grant loan to any of its directors.
2. Banking companies are governed by the Banking Regulation Act, 1949.
3. The maximum number of Partners in a banking business is 10.
4. Rebate on Bills Discounted for a banking company is not an income.
5. No banking company shares pay any dividend unless its capital expenses and fictitious assets are
written off.
6. Statutory reserve required = 25%
7. Cash reserve with RBI = 4% of its time and demand liabilities.
8. Limit on investments in shares of other companies: 30% of paid up capital and reserves.
9. Rebate on bills discounted is shown under the head “other liabilities” of the balance sheet as
unexpired discounts.

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HOME B.

COM QUESTION PAPERS SOLVED PAPERS CLASS 11/12

Introduction to Banking Companies

Accounts of Banking Companies MCQs 2023

1. Banks prepare the accounts for

Ans: b) Financial year.

3. Banks show the provision for income-tax under the head:

Ans: c) Other liabilities and provisions.

4) The heading other assets does not include

c) Inter-office adjustment (Dr.)

6. Present Cash Reserve Ratio (CRR) is:

Ans: c) 4.5% [May 21, 2023]

Also Read: Multiple Choice Questions and Answers

- Advanced Financial Accounting MCQs 2023

- Accounts of Banking Companies MCQs

- Accounts of Life Insurance Companies MCQs

- Accounts of General Insurance Companies MCQs

- MCQ on Investment Accounting

- Advanced Financial MCQs (Dibrugarh University 2013 to 2023)

7. Present Statutory Liquidity Ratio (SLR) is:

Ans: c) 18% [May 24, 2023]

8. Rebate on bills discounted is

c) Income received in advance.

Ans: c) Income received in advance.

a) An item of office equipment.

b) Any asset acquired from the debtors in satisfaction of claim.

Ans: b) Any asset acquired from the debtors in satisfaction of claim.

10. A non-performing asset is:

a) Money at call and short notice.

b) An asset that ceases to generate income.

c) Cash balance in nil.

d) Cash balance with RBI.

Ans: b) An asset that ceases to generate income.

11. Provision is created for standard assets @:

12. Provision is created for sub-standard assets @:

d) All of the above

Ans: d) All of the above

a) Performing and non-performing assets.

b) Banking and non-banking assets.

c) Monetary and non-monetary assets.

d) Current and non-current assets.

Ans: a) Performing and non-performing assets.

18. Income from standard asset is to be recognised on:

Fill in the blanks:

1. A banking company cannot grant loan to any of its directors.

2. Banking companies are governed by the Banking Regulation Act, 1949.

3. The maximum number of Partners in a banking business is 10.

4. Rebate on Bills Discounted for a banking company is not an income.

6. Statutory reserve required = 25%

7. Cash reserve with RBI = 4% of its time and demand liabilities.

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