Certified Professional in Cooperative

Banking (CPCB)-Level-I Certification Course

2022-23 Batch

Questions
1. According to accrual concept of accounting, financial or business
transaction is
recorded

a. When cash is received or c. When profit is

computed
paid d. When balance sheet is
b. When transaction occurs prepared

2. M/S ABC Company provides advertising services to an investment

company in
the month of March 20 but receives advertising fee in the month of April
20. M/S
ABC recognizes this revenue in financial year 19-20. This action of M/S
ABC is
justified by

a. Business entity concept c. Economic entity

concept
b. Revenue recognition
d. Going concern concept
principle

3. A company is a going concern if

c. There is no evidence
a. Its balance sheet shows a
that it
strong financial position
will or will have to
b. Its income statement for cease
the current year operations within
shows huge profit
foreseeable
future.
d. It is a public limited
company
4. Which accounting concept or principle states that the transactions of a
business
must be recorded separately from those of its owners or other
businesses?
a. Materiality concept of c. Matching principle of
accounting accounting
b. Time period concept of d. Business or economic
accounting entity concept of
accounting

5. The business or economic entity concept is applicable to:

a. Sole proprietorship form c. Corporate form of

of business business
b. Partnership form of d. All of the above
business
6. The revenue is not recognized until it is earned and realized or at least
realizable.
To which accounting principle/concept this statement belongs?
a. Separate entity concept c. Going concern concept
d. Conservatism concept
b. Revenue
recognition
principle
7. In certain situations, companies might recognize losses but not gains.
This action
belongs to:
a. Revenue recognition c. Conservatism principle
principle d. Matching principle
b. Monetary unit assumption

8. Which accounting principle/concept allows accountants to ignore other

accounting principle/concept if the amount in question is immaterial?
a. Materiality concept c. Conservatism principle
b. Monetary unit assumption d. Matching principle
 9. The art of recording, classifying and summarizing is called:
a. Journalizing c. Bookkeeping
b. Accounting d. Record Keeping
10. The position of assets and liabilities during an accounting period is
shown in
a. Balance sheet c. Cash flow statement
b. Profit and loss account d. None of the above.
11. The position of income and expenditure as on particular date can be
depicted
from
a. Balance sheet c. Cash flow statement
b. Profit and loss account d. None of the above.
12. The position of income and expenditure during an accounting
period can be
depicted from
a. Balance sheet c. Cash flow statement
b. Profit and loss account d. None of the above
13. The position of assets and liabilities on particular date is shown in
a. Balance sheet c. Cash flow statement
b. Profit and loss account d. None of the above.
14. What the company owns is called?
a. Asset c. Capital
b. Liability d. Capital expenditure
15. What the company owes is called?
a. Asset c. Capital
b. Liability d. Capital expenditure
16. Benefits if expenditure is received over a long period is called
a. Asset c. Capital
b. Revenue expenditure d. Capital expenditure
 17. The person to whom goods are sold on credit and owe money to the
organisation
a. Debtor
c. Prepaid expenses
b. Creditor
d. Advance payment
18. The person to whom organisation owes
money:

c. Prepaid expenses
a. Debtor
d. Advance payment
b. Creditor
19. Debtor is
c. Contingent liability
a. Current asset
d. Fixed asset
b. Current liability
20.Creditor is
c. Contingent liability
a. Current asset
d. Fixed asset
b. Current liability
21. Plant & Machinery is
c. Contingent liability
a. Current asset
d. Fixed asset
b. Intangible asset

1.1.10 Answer keys

1-b 2-b 3-c 4-d 5 6-b 7-c 8-a 9-b 10-d
11-d 12-b 13-a 14-a 15-b 16-d 17-a 18-b 19-a 20-b
21-d
Questions
1. Identify the affected accounts When goods are purchased on cash,
a. Stock account & Cash c. Bank account & stock
account account
b. Cash account & bank d. Supplier account & stock
account account

2. When goods are purchased on cash, which account shall be credited

a. Stock account c. Bank account

b. Cash account d. Supplier account

3. When goods are purchased on cash, which account shall be debited

a. Stock account c. Bank account

b. Cash account
d. Supplier account

4. When goods are sold on cash, which account shall be credited

a. Stock account c. Bank account

b. Cash account
d. Supplier account

5. When goods are sold on cash, which account shall be debited

a. Stock account c. Bank account

b. Cash account d. Supplier account

6. Identify real account/s

a. Insurance premium c. Commission received
b. Properties d. Drawing
7. Identify nominal account/s
a. Income tax account c. Commission received
b. Properties d. Drawing
8. Identify personal account/s
a. Income tax account c. Outstanding salaries
b. Drawing d. All of the above
9. Identify nominal account/s
a. Provision of depreciation c. Loans and advances
b. Investments d. All of the above
10. "Drawing" is
a. Real account c. Nominal account
b. Personal account d. Tangible account
11. Identify the affected accounts when Purchased goods from Mr X

a. Purchase account & Mr. X c. Purchase account & cash

account account
b. Sales account & Mr. X d. None of the above
account
12. Identify the affected accounts when paid shop rent
a. Rent account and bank c. Rent account and Mr. X
account account
b. Rent account & cash d. Cash account and bank
account account
13. Identify the affected accounts when goods bought from Mr. X
a. Sale account & Mr. X c. Bank account and Mr. X
account account
b. Cash account & Mr. X d. Purchase account and
Mr.
account X account
14. Which accounts shall be debited when goods sold to Mr. X
a. Sales account c. Cash account
b. Mr. X account d. None of the above
15. Identify the affected accounts when ₹. 10000/ deposited in bank
a. Capital account & c. Capital account &
bank cash
account account
b. Bank account & d. None of the above
cash
account
 16. Identify the types of affected accounts when interest earned on bank
account
a. Nominal & Real account c. Real & personal account
b. Nominal & Personal d. All of the above
account
17. Which account shall be debited when interest earned on bank account
a. Interest received account c. Personal account
b. Bank account d. Intangible account
18. Which account shall be credited when interest earned on bank account
a. Interest received account c. Personal account
b. Bank account d. Intangible account
19. Identify the affected accounts when purchased furniture for cash from
Mr. X
a. Purchase account & bank c. Furniture & cash
account
account d. Any one of the above
b. Purchase account &
MR X
account
20. Identify the types of affected accounts when purchased furniture
for cash from
Mr. X
a. Real & Real account
b. Nominal & Personal account
c. Real & personal account
d. All of the above

1.2.12 Answer keys

1-a 2-b 3-a 4-a 5-b 6-b 7-c 8-d 9-a 10-b
11-a 12-b 13-d 14-b 15-b 16-a 17-b 18-a 19-c 20-a

Questions
1. A book where business transactions are recorded on the basis of source
documents
a. Ledger c. P & L a/c
b. Journal d. Balance sheet
2. Brief description of the transaction is called
a. Source document c. Narration
b. Evidence d. Banker

3. Mr. ABC’s account would be _____________ for the loan given by him.

a. Credited c. Nullified

b. Debited d. Netted off

4. When goods are sold on cash basis to XYZ ltd. ___________ account
would be
debited.
a. Goods c. Cash
b. XYZ ltd. d. Creditor

5. When shares of Infosys are sold ___________ account is credited.

a. Fixed asset c. Purchases

b. Sales d. Investments

6. Transfer of transaction entry from journal to ledger is called

a. Accounting c. Transfer

b. Book keeping d. Posting

7. First entry of financial transaction is recorded in

a. Cash book c. Journal

b. Sales book d. Ledger

8. Which book of accounts are more important

a. Journal c. Purchase book

b. Ledger d. Sales book

9. The format of ledger is

a. T shape c. M shape
 b. I shape d. N shape

10. Ledger is called

a. Book of original entry c. Book of tertiary entry

b. Book of secondary entry d. Book of intermediate entry

11. Recording in journal is in

a. In the order of account c. Chronological order

b. In the order of entries d. As per convenience

12. Narration is mandatory in

a. Journal c. Both a & b

b. Ledger d. All of the above

13. Balancing is mandatory in

a. Journal c. Both a & b

b. Ledger d. All of the above

14. The ledger column that links the entry with the journal is called as.

a. J.F column c. Credit column

b. L.F column d. Debit column

15. The left hand side of the ledger account is referred to as.

a. Footing c. Debit side

b. Credit side d. Balance

16. Accounts that have credit balance are closed by using the statement.

a. By balance b/d c. To balance b/d

b. By balance c/d d. To balance c/d

17. The book maintained for recording small expenses such as conveyance,
postage etc
is called

a. Journal c. Cash book

b. Ledger d. Petty cash book

18. To justify the principle of match cost and revenue------------------ is made.

a. Journal entry b.
b. Adjustment entry Descrip
tion of
19. In journal
entry is
a. The entry is
recorded
sequentially optiona

b. The entry is recorded l

in
chronological order

20. In ledger

a. Balancing at the end of

the
period is necessary
c. Ledger entry

d. All of the above

c. The entry recorded account

wise

d. Both a & b

c. Narration is necessary

d. All of the above

1.3.13 Answer Keys

1-b 2-c 3-a 4-c 5-d 6-d 7-c 8-a 9-a 10-b
11-c 12-a 13-b 14-a 15-c 16-d 17-d 18-b 19-d 20-a

Questions
1. In case of an overdraft, the bank column of the cash book
will show a
__________ balance.
a. Credit c. Positive
b. Debit d. None of the above
2. Interest on bank deposit is entered in the cash book on ____________
side.
a. Credit c. Positive
b. Debit d. None of the above
3. A debit balance in the pass book represents ____________
a. Bank over draft c. Sales turnover
b. Cash balance d. Expenses incurred
4. An entry in the credit side of the cash book would be matched with the
_______
side of the pass book.
a. Credit c. Both a & b
b. Debit d. All of the above

5. On the bank statement, cash deposited by the company is known as

a. Credit c. Liability

b. Debit d. Expenses

6. . Bank reconciliation statement compares a bank statement with

_________

a. Cash payment journal c. Financial statements

b. Cash receipt journal d. Cashbook

7. In cash book, bank charges of ₹5,000 were not recorded. Name the
correct cash
book adjustment

a. It will be deducted in cash c. No adjustment needed in

 book the cash book

b. It will be added in cash d. Charges will be debited

to
book the cash book balance

8. A bank pass book is a copy of

a. A customer's account in c. Cash book relating to
each
the bank's book column
b. Cash book relating to d. None of these
bank column
9. Debit balance as per cash book of ABC Co. on 31.03.2020 is ₹. 1500.
Cheque
deposited but not cleared amounts to ₹. 100 and cheque issued but not
presented of ₹. 150. Balance as per pass book should be
a. 1750 c. 1650
b. 1550 d. None of these
10. A bank reconciliation statement is prepared with the help of
a. Bank statement and bank c. Bank column of cash
book
column of cash book and cash column of cash
b. Bank statement and cash book
column of cash book d. None of these
11. Bank reconciliation statement is a
a. Part of cash book c. part of cash account
b. Part of bank account d. None of the above
12. In cash book, the favorable balance indicates
a. Credit balance c. Bank overdraft
b. Debit balance d. Adjusted balance
13. If cheque is issued but not cleared. The action in bank statement for
the purpose
of bank reconciliation will be
a. Addition c. Either a or b
b. Subtraction d. None of the above
14. If cheque is issued but not cleared. The action in cash book for the
purpose of
bank reconciliation will be
 a. Addition c. Either a or b
b. Subtraction d. None of the above
15. If Check is deposited but not realised, the action in cash book for the
purpose of
bank reconciliation will be
a. Addition c. Either a or b
b. Subtraction d. None of the above

16. If cheque is issued but not cleared. The action in bank statement
(in case of
overdraft) for the purpose of bank reconciliation will be
a. Addition c. Either a or b
b. Subtraction d. All of the above

1.4.9 Answer keys

1-a 2-b 3-a 4-b 5-a 6-d 7-a 8-a 9-b 10-a
12-a 13-b 14-a 15-b 16-a
11-d

questions

1. On balance sheet, accruals, notes payable, and account payable are

listed under
which category?

A) Current Liabilities C) Noncurrent Liabilities

B) Accumulated Liabilities D) Accrued

2. Inventories, cash and equivalents, and accounts receivables are listed as

A) Earnings on Income Statement C) Assets on the Balance Sheet

B) Payments on Income D) Liabilities on the Balance

Statement Sheet
3. Position of assets and liabilities are shown in

A) Balance sheet C) P & L account

B) Trial Balance D) Journal paper

4. Financial performance are shown in

A) Balance sheet C) P & L account

B) Trial Balance D) Journal paper

5. Where is Gross profit calculated?

A) Balance sheet C) P & L account

B) Trial Balance D) Trading account

6. Net profit is shown in

A) Balance sheet C) P & L account

B) Trial Balance D) Trading account

7. ---------- is placed in two financial statements

A) Purchase account C) Closing stock

account
B) Sales account
D) Sales return
8. Gross profit is the part of account

A) Trading account

B) Profit & Loss account C) Both a & b

D) Balance sheet

9. Trial balance ensures _________________ of posting of ledger accounts.

A) Arithmetical accuracy C) Absence of fraud
B) True and fair view D) Logical accuracy
10. The balance of following account is generally not reflected in the Trial
balance.
A) Purchases C) Purchases returns
B) Closing stock D) Opening stock
11. Gross loss is transferred to the _____________ side of the Profit and
Loss
account.
A) Debit
C) Both
B) Credit
D) Right
12. Adjustment entry is passed just to

C) Matching concept
A) Comply with accruals
of
concept of accounting
accounting
B) Comply realization
D) All of the
concept of accounting above

13. liability is

A) What we owe
C) Source of fund
B) What we own
D) Both a & c
14. Net profit is

A) Added to the capital

C) Both a & b
B) Deducted from the
capital D) All of the above.

15. Balance sheet is prepared in

order of
C) Both a & b
A) Liquidity
D) None of the above
B) Permanence

16. The format of balance sheet is prescribed for

C) Company
A) Sole proprietorship
firm D) All of the above

B) Partnership firm

17. Wage & salary is

B) Direct expenses
A) Indirect expenses
 C) Variable expenses D) Fixed expenses

18. Salary wages is

A) Indirect expenses
C) Variable expenses
B) Direct expenses
D) Fixed expenses
19. Carriage inward is

A) Indirect expenses
C) Variable expenses
B) Direct expenses
D) Fixed expenses
20.The format of balance sheet is not prescribed for

A) Sole proprietorship
C) Company
firm
D) Both A & B
B) Partnership firm

1.5.13 Answer Key

1-A 2-C 3-A 4-B 5-D 6-B 7-B 8-C 9-A 10-B
11-A 12-A 13-D 14-A 15-B 16-C 17-B 18-A 19-B 20-D
Questions
1. Analysis of financial statement means
a. Classification of financial information
b. Organizing financial information
c. Segregating the financial information
d. Conversion of raw financial information into usable
information
2. Cash flow statement is similar to fund flow statement except
adjusting
a. Cash transaction c. Credit transaction
b. Non cash transaction d. Debit transaction
3. ---------------------activities are principal revenue producing activities
of the
enterprise:

a. Day to day b. Financing

c. Operating d. Investing

4. Analysis means

a. Establishing meaningful relationship between two relevant items

b. Establishing meaningful relationship between two irrelevant

items

c. Establishing relationship between two irrelevant items

d. All of the above

5. Net worth represents the stake of the -----------in the entity

a. Long term Lender c. Owner

b. Short term lender d. All of the above

6. Liability towards outside₹ may be

a. Long term c. Term loan

b. Short term d. All of the above

7. Short term liability may be

a. CC/OD limit c. Short duration deposit
b. Sundry creditor d. All of the above

8. Expenses payable is
a. Short term liability c. Long term liability
 b. Midterm liability d. None of the above

9. Recording of expenses that have been incurred but payment for which
is yet to be
made by the entity is called
a. Accrual c. Expenses payable
b. Provision d. All of the above
10. Advance payment from customer is
a. Current asset c. Short term liability
b. Current liability d. Both b & c
11. Quick asset is equal to
a. Current asset- stock + b. Current asset+ stock +
prepaid expenses prepaid expenses
c. Current asset+ d. Current asset- stock -
stock - prepaid expenses
prepaid expenses
12. Cash is c. Fixed asset
a. Current asset d. Both a & b
b. Quick asset
13. Stock is c. Fixed asset
a. Current asset d. Both a & b
b. Quick asset
14. Preoperative expenses is an example of c. Tangible asset
a. Capital d. Intangible asset
b. Revenue expenses
15. Net working capital is equal to d. Current asset- current
a. Gross working capital - liability
expenses
b. Current asst- expenses
c. Working capital - expenses
16. Comparative financial statements’ analysis is also called

a. Horizontal Analysis.
b. Vertical analysis
c. Both a & b
d. Common size statement analysis

17. Horizontal Analysis. Shows

a. Absolute figures of different periods of time
b. %age change in absolute figures in current year in comparison
to base
year
c. Both a & b
d. Horizontal format is prepared
18. Increase in current asset & current liabilities is in equal proportion
accompanied
with increase in quick asset shows
a. Improvement in liquidity c. No change in liquidity
position position
b. Deterioration of liquidity d. Improvement in working
position capital position
19. Increase in current asset is more than increase in current liabilities ,
shows
a. Improvement in working c. Both a & b
capital position d. No change in liquidity
b. Improvement in liquidity position
position
20. Fixed asset is equal to
a. Long term liability + short term liability+ equity shares
b. Long term liability + short term liability+ preference share
c. Long term liability + short term liability- equity shares
d. Long term liability + share capital

21. If an increase in Fixed Asset> increase in LTL & share capital, it

means
a. Fixed Asset has been financed from short term source i.e. from
working
capital
 b. Fixed Asset has been financed from working capital
c. Fixed Asset has been financed from long term source
d. Both a & b

22. Net profit is equal to

a. OP - Non operating expenses +Net Operating Income
b. OP + Non operating expenses - Net Operating Income
c. OP + Non operating expenses +Net Operating Income
d. None of the above
23. In common size statement analysis
a. Different items of assets and liabilities are shown with
reference to total
assets/total liabilities respectively
b. Different items of assets are shown with reference to total
assets & total
liabilities respectively
c. Different items of liabilities are shown with reference to total
assets&total
liabilities respectively
d. All of the above

24. Plotting the collected information on the horizontal line with the
objective to find
actionable patterns is called
a. Common size statement b. Comparative size
analysis statement analysis
c. Cash flow statement d. Trend analysis
analysis
25. There is no flow of fund, if
a. Transactions which involve current account only
b. Transactions which involve Non current account only
c. Transactions which involve one current account and one Non-
current
account
d. Both a & b

26. Fund flow statement is based on

 a. Accrual basis of c. Both a & b
accounting d. All of the above
b. Cash basis accounting
27. Cash flow statement is based on
a. Accrual basis of c. Both a & b
accounting d. All of the above
b. Cash basis of accounting

28. Cash movement occurs in the following types of activities

a. Operating activities c. Financing activities

b. Investing activities d. All of the above

29. Cash movement from Acquisition and disposal of long-term assets

belongs to

a. Operating activities c. Financing activities

b. Investing activities d. All of the above

30.Payment to creditors is an example of

a. Cash inflow c. No cash flow
b. Cash outflow d. Both a & b
31. Method/s of preparation of cash flow statement is/are
a. Indirect method c. Straight method
b. Direct method d. Both a & b
32. Starting point of Calculation the operating profit before
changes in working
capital is
a. NPBT c. EBIT
b. NPAT d. All of the above
33. Contingent liability is
a. off balance sheet item c. both a & b
b. on balance sheet item d. none of the above
34. current asset is also called
a. Net working capital c. Working capital
b. Gross working capital requirement
d. Working capital
finance
35. under ratio analysis, ratio is expressed in following mathematical
term/s
a. Percentage terms called

b. Number of times a.
Debtor
36. Liquidity ratio is also called
turnover ratio
a. Short term solvency
b. Creditor
ratio turnover ratio
b. Long term solvency ratio
37. Leverage ratio is also called 40. If book debt is
a. Short term solvency ratio realized in cash,
b. Long term solvency ratio there will be
38.While calculating DSCR, interest a. Change in
means current asset
a. Interest on short term b. Change in
quick asset
borrowing
b. Interest on long
term
borrowing
39. Debtors collection period is also
c. Proportions
d. All of the above

c. Leverage ratio
d. Solvency ratio

c. Solvency ratio
d. Both b & c

c. Interest on both short &

long term borrowing
d. All of the above

c. Debtor velocity
d. None of the above

c. Change in current ratio

d. No change
2.1.9 Answer Keys

1-d 2-b 3-c 4-a 5-c 6-d 7-d 8-a 9-a 10-d
11-d 12-d 13-a 14-d 15-d 16-a 17-c 18-a 19-c 20-d
21-d 22-a 23-a 24-d 25-d 26-a 27-b 28-d 29-b 30-b
31-d 32-a 33-a 34-b 35-d 36-a 37-d 38-c 39-c 40-d

Questions
1. The ultimate responsibility of ensuring proper internal controls
in the
organization lies with the _______________

a. Auditor c. Employees
b. Board of management d. Management
2. Which one is/are true
a. Internal check is part of the overall system of internal controls.

b. Internal controls are essential in all business organizations.

c. An effective internal control system helps external auditor to

design
suitable audit.

d. All of the above

3. Which one is/are false
a. Internal controls do not include accounting controls.

b. Employees should be discouraged to take leave.

c. Planning and budgeting ensure good internal check

d. Both a & b

4. ___________ ensures that the work of one person is checked by other

persons.

a. Internal audit c. Rotation

b. Delegation d. Internal check

5. In an organization where accounts are not reconciled/balanced at

periodical
internals, it is a sign of ___________ internal control.

a. Good c. Strong
b. Weak d. Proper
6. Which of the following are the essential financial and operational
internal
controls?

a. Rotation of duties b. Proper delegation of

authority

c. Independent check d. All of the above

7. Which of the following are the objectives of the internal controls?

a. Two safeguard assets

b. To ensure proper financial reporting
c. To prevent and detect fraud and error
d. All of the above
8. While framing a System of Internal Control, following point/s should be
kept in
mind
a. There should be independent control
b. Rotation of duties should not be insisted upon
c. There should be annual reconciliation of account
d. All of the above
9. The basic objective of internal check is

a. To detect fraud and errors easily and correct them promptly.

b. To exercise moral pressure among the members of the staff.

c. To have an accurate and reliable record of all business

transactions.

d. All of the above

10. The purpose of Internal controls is :

a. To ensure financial accuracy and operational efficiency,

b. To safeguard assets

c. To ensure compliance with regulatory requirements and

d. All of the above

11. -----------------------------is/are Limitations of internal control
a. Human error c. Illusion

b. Usual transaction d. All of the above

 12. -------------------------- is/are controls over human resource of the organization

a. Ensuring correct training for staff.

b. Appropriate supervision of staff.

c. Undertake regular annual performance reviews with staff.

d. All of the above

3.1.15 Answer keys

1-a 2-d 3-d 4-d 5-b

6-d 7-d 8-a 9-d 10-d

11-a 12-d

questions
1. ________________ means when testing is done based on the past trend,
projections and budgets:
a. Substantive testing c. Control testing
b. Analytical testing d. Sample testing
2. Based on controls test, the Auditor concludes that the Internal
Controls are
effective and he/she may decide to __________ the amount of substantive
testing to be done
a. Increase c. Skip
b. Reduce d. 100% check
3. Audit ___________ is an outline of all procedures to be followed in
verification
of each item in the financial statements and giving the estimated time
required.
a. Plan c. Technique
b. Programme d. Visit plan
4. Audit ___________ refers to the planning by the auditor to enable
them to
conduct an effective audit in an efficient and timely manner
a. Appointment c. Testing
b. Planning d. Technique
 5. Auditing is a ____________________examination of data, statements,
records, operations and performance of an enterprise for a stated
purpose
a. Haphazard c. Voluntary
b. Random d. Systematic & independent
6. Techniques of auditing are
a. Control c. Analytical
b. Substantive d. All of the above

7. The audit process involves

a. Audit planning; c. Audit techniques
b. Audit programme d. All of the above
8. Before the end of the audit process
a. Discuss irregularities with auditor and try to remove it instantly.
b. Never attend the auditor's query during audit
c. Fix the board meeting to discuss audit point
d. Both a & c
9. Following is /are homework before audit on the part of official concerned

a. Review the findings of the last audit

b. Understanding the financials of the company in detail
c. Identifying the trend and variances with the projections, if any
d. All of the above

10. Control testing is

a. Based on the past trend, projections and budgets.
b. Based on checking handful of samples.
c. Based on the present trend, projections and budgets.
d. Based on the past trend, projections and achievements.
11. Bank should provide data to auditor in

a. Specified format only. c. Convenience format

b. An unorganized manner. d. All of the above
3.2.8 Answer keys

1-b 2-b 3-b 4-b 5-d

6-d 7-d 8-d 9-d 10-a
11-a
questions
1. RBI assesses and rates banks based on the _______________ rating model
every year.
a. CAMELSC c. Both a & b
b. External d. None of the above

2. ___________ Audit is one of the important parts of the overall internal

controls system.
a. Statutory c. Continuous
b. Balance sheet d. Internal
3. Audit of companies is an example of _____________
a. Statutory c. Continuous
b. Balance sheet d. Internal
4. "A" in the term CAMELSC stands
a. Average quality c. Asset quality
b. Adequate quality d. None of the above
5. "C" in the term CAMELSC stands
a. Capital adequacy c. Credit worthiness
b. Capability d. None of the above
6. Which one is true in respect of concurrent audit
a. It is test checking
b. It is substantial checking
c. It increases the gap between the occurrence of a
transaction and its
examination.
d. All of the above
7. forensic accountant has the skill in
a. Accounting c. Auditing
b. Investigation d. Both a & b
8. Audit safeguards the financial interest of
a. Investors c. Government
b. Customers d. All of the above
9. Audit can be used for
a. Settling of trade disputes c. Settling disputes
among
b. Settling dividend staff members
d. Al of the above
 10. Audit is
a. Systematic
b. independent
c. Covers financial statements and all related records
d. All of the above
11. The primary objective of an auditor is
a. To report to the owners whether the financial statements
gives a true and
fair view of the company’s state of affairs
b. To report to the owners whether the balance sheet and
profit and loss
statement gives a true and fair view of the company’s state of
affairs
c. To report to the customers whether the financial statements
gives a true
and fair view of the company’s state of affairs
d. Both a & b.

3.3.12 Answer keys

1-a 2-d 3-a 4-c 5-a

6-b 7-d 8-d 9-a 10-d
11-d
questions

1. While auditing a branch auditor should check "Cash " item on

a. Middle of the audit c. Any day during audit
b. End of the audit d. First day of audit
2. On the first day of audit auditor should check following
a. Cash c. Security forms
b. Stamps d. All of the above
3. Auditor must have
a. Autocratic approach c. Practical approach
b. Democratic approach d. All of the above
 b. Vendor is not allowed to
4. Auditor should check perform routine jobs.
a. An abnormal 9. Which one is false?
transaction
a. List of Authorized Use₹ is
in staff account
generated and checked
b. Untimely opening
&
closing of Branch
5. Auditor should check
a. Whether previous
inspection report is
closed within
prescribed time.
b. Whether previous
inspection report is
closed within weeks’
time.
6. Which one is true?
a. Daily / monthly /
quarterly concurrent
audit
reports are
promptly attended and
irregularities are
rectified
7. Which one is true?
a. List of Authorized Use₹
is
not generated and
checked.
b. Secrecy of Password
is
maintained
8. Which one is false?
a. Backups are maintained
as
prescribed
 Networking aspects.
d. None of the above

c. Whether CCTV
are non-
functional weekly.
d. All of the above b. Monthly updating of
pass

c. Whether
previous
inspection report is
closed within
fortnight time.
d. Whether
previous
inspection report is
closed within one
month time.

b. CCTV must be
functional.
c. Sub-Staff should
wear
proper uniform
d. All of the
above

c. Signature
scanning,
uploading &
verification are
being done
quarterly.
d. Internet may
available on
the CBS.

c. Security/Anti-Virus/
 book. quarterly.
c. Back ups are maintained d. All of the above
10. The auditor should have
a. No sense of integrity c. Average
communication
b. Great degree of common skill
sense d. Both a & c
11. Which of the following areas should be covered by auditor during
Computer
Audit?
a. Back ups are maintained c. No provision of
as prescribed Security/Anti Virus
b. Vendor is allowed to d. Both a & b
perform routine jobs.

3.4.8 Answer keys

1-d 2-d 3-c 4-a 5-a

6-d 7-b 8-d 9-d 10-b
11-a
questions
1. Reporting of frauds to NABARD involving an amount of less than ₹ 1.00
lakh is
a. Monthly d. Within 30 days
from
b. Quarterly detection
c. Half yearly
2. Reporting of frauds involving an amount of more than ₹ 1.00 lakh
is
a. Monthly d. Within 30 days
from
b. Quarterly detection
c. Half yearly

3. Frauds involving an amount of more than ₹ 1.00 lakh is reporting in

a. DoS-FMS-1. c. DoS-FMS-3.
b. DoS-FMS-2. d. DoS-FMS-4.
4. Cases of cash shortages --------------is treated as fraud
 a. More than ₹ 1000 c. More than ₹ 10000
b. More than ₹ 5000 d. All of the above

5. In case negotiable instrument is genuine but being not collected by

true owner, --
-------------- has to report
a. Collecting banker c. Both a & b
b. Paying banker d. All of the above
6. In case of frauds involving forged negotiable instruments-----------------
has to
report.
a. Collecting banker c. Both a & b
b. Paying banker d. All of the above
7. periodic legal audit and re- verification of title deeds and other
documents is
done in loan accounts exceeding
a. ₹ 20 lakh c. ₹ 100 lakh
b. ₹ 50 lakh d. ₹ 10 crore
8. UV lamp should be used in passing of cheques of
a. ₹ 1 lakh & above c. ₹ 5 lakh & above
b. ₹ 2 lakh & above d. None of the above
9. There should be multiple checking in passing of cheques of
a. ₹ 1 lakh & above c. ₹ 5 lakh & above
b. ₹ 2 lakh & above d. None of the above
10. In case of large value and or suspicious transactions, there should be
a. Alerting the customer confirmation from
by a the payee
phone call and getting c. Contacting base
the branch in
confirmation from case of non-home
the payer/drawer. cheques
b. Alerting the customer d. Both a & c
by a
phone call and getting
the
 11. In case of collection of altered/fake cheque involving two or
more CBS branches
of the same bank the branch --------------------- should report the
fraud to the
Head Office
a. Who has released the c. Base branch
payment d. Any one of the
above
b. Who has issued the cheque
12. In Case where amount involved is of ₹ 1 lakh and above,
committed by outside₹
on their own and / or with the connivance of bank staff / office₹,
-------------
should report to police.
a. Branch head c. General manager
b. Regional head d. Chief Executive
Officer
13. In Case where amount involved is of ₹10000 to less than ₹1
lakh, committed by
bank staff -------------should report to police.
a. Branch head c. General manager
b. Regional head d. Chief Executive
Officer

14. Banks are permitted to close the fraud cases (up to ₹1 lakh)
where the charge
sheet has not been filed in the Court for -----------------------from the
date of filing
of First Information Report (FIR) by the Police
a. More than three years c. More than two
years
b. Up to three years d. Up to two
years
3.5.15 Answer keys

1-b 2-d 3-b 4-c 5-a

6-b 7-c 8-b 9-c 10-d
11-a 12-b 13-a 14-a