JAIIB Accounting and Finance for Bankers Mock Tests Set 15

Consider the following data pertaining to a company for the month of March 2010:

The Sales of the company during the month are


Options are :

  • ? 1,41,250
  • ? 1,35,600
  • ? 1,35,600
  • ? 1,35,600

Answer :? 1,35,600

You have a choice between 2 mutually exclusive investments. If you require a 15% return, which investment should you choose?


Options are :

  • Project A, because it has a smaller initial investment .
  • Project B, because it has a higher NPV.
  • Either one, because they have the same profitability indexes.
  • Project A, because it has the higher internal rate of return.
  • Project B, because it pays back faster.

Answer :Project A, because it has a smaller initial investment .

JAIIB Accounting and Finance for Bankers Mock Tests Set 2

EFG Ltd is considering two possible projects but can only raise enough funds to proceed with one of them. Investment appraisal techniques have been used and the following results found:

Which of the following is the most logical interpretation of the results?


Options are :

  • Which of the following is the most logical interpretation of the results?
  • Project W should be selected because it will yield the highest NPV
  • Project X should be selected because it will yield the lowest NPV
  • The ARR is the most meaningful investment appraisal technique and hence Project W should be selected.

Answer :Project W should be selected because it will yield the highest NPV

What should an analyst recommend based on the following information for two independent projects?


Options are :

  • Accept A and reject B.
  • Reject A and accept B.
  • Accept A and accept B.

Answer :Accept A and accept B.

From the following details, find out credit sales during the financial year 2010-2011:

1. Opening balance of sundry debtors on 1.4.10 ? 12,000.

2. Bills receivable accepted by customer ? 13,000.

3. Closing balance of sundry Debtors on 31.3.11 ? 14,000.

4. Cash received from debtors during the year ? 38,400.


Options are :

  • ? 39,400
  • ? 27,000
  • ? 65,400
  • ? 65,400

Answer :? 65,400

JAIIB Accounting and Finance for Bankers Mock Tests Set 3

Windsor Ltd is considering a project, which will involve the following cash inflows and (out) flows:

What will be the NPV (net present value) of this project if a discount rate of 15% is used?


Options are :

  • +? 60.8k
  • +? 60.8k
  • +? 240k
  • +460.8k

Answer :+? 60.8k

466. From the following information calculate the amount received from debtors.

? Opening balance of cash ? 56,000

? Bills discounted ? 21,000

? Bills payable honoured ? 14,000

? Cash purchase ? 1,26,000

? Other expenses ? 1,84,000

? Payment to creditors ? 2,32,000

? Cash sales ? 3,95,000? Closing balance of cash ? 47,000


Options are :

  • ? 1,31,000
  • ? 1,10,000
  • ? 1,10,000
  • ? 1,10,000

Answer :? 1,31,000

O Ltd. Maintains the inventory records under perpetual system of inventory. Consider the Following data pertaining to inventory of O Ltd. held for the month of March 2010:

O Ltd. Maintains the inventory records under perpetual system of inventory. Consider the Following data pertaining to inventory of O Ltd. held for the month of March 2010:



Options are :

  • ?5,200
  • ?5,200
  • ?5,800
  • ?5,950

Answer :?5,950

JAIIB Accounting and Finance for Bankers Mock Tests Set 4

The Accountant of the firm M/s ABC is unable to tally the following trial balance:

The above difference in trial balance is due to


Options are :

  • The above difference in trial balance is due to
  • Wrong placing of salaries account
  • Wrong placing of miscellaneous expenses account
  • Wrong placing of all accounts

Answer :Wrong placing of salaries account

Find out the total of Debit side of the Trial Balance from the following list of balances extracted from the books of Mr. Yoshin as on 31st March, 2014.


Options are :

  • ? 1,65,160
  • ? 1,65,160
  • ? 1,65,160
  • None of the above

Answer :? 1,65,160

M/s ABC Brothers, which was registered in the year 2000, has been following Straight Line Method (SLM) of depreciation. In the current year it changed its method from Straight Line to Written Down Value (WDV) Method, since such change would result in the additional depreciation of ? 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation. The objection of the auditor is justified because


Options are :

  • Change in the method of depreciation should be done only with the consent of the auditor
  • Depreciation method can be changed only from WDV to SLM and not vice versa
  • Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standard
  • Method of depreciation cannot be changed under any circumstances

Answer :Change in the method of depreciation should be done only if it is required by some statute or change would result in more appropriate presentation of financial statement or for compliance with the accounting standard

JAIIB Accounting and Finance for Bankers Mock Tests Set 5

North Bank is analyzing Belle Corp.’s financial statements for a possible extension of credit. Belle’s quick ratio is significantly better than the industry average. Which of the following factors should North consider as a possible limitation of using this ratio when evaluating Belle’s creditworthiness?


Options are :

  • Fluctuating market prices of short-term investments may adversely affect the ratio.
  • Increasing market prices for Belle’s inventory may adversely affect the ratio.
  • Belle may need to sell its available-for-sale investments to meet its current obligations.
  • Belle may need to liquidate its inventory to meet its long-term obligations.

Answer :Fluctuating market prices of short-term investments may adversely affect the ratio.

Given below are the ledger balances of a professional firm:

Capital ? 4,00,000, Computer ? 25,000, Air Conditioner and Furniture ? 1,00,000, Fixed deposits ? 2,00,000, Salaries ? 8,00,000, Fees received ? 12,00,000, Travelling expenses ? 1,50,000, Rent and office expenses ? 2,40,000, Cash balances ? 1,80,000, Bank overdraft ? 95,000. The total of the Trial Balance will be:



Options are :

  • ? 16,00,000
  • ? 16,95,000
  • ? 14,50,000
  • ? 14,50,000

Answer :? 16,95,000

Pole Co. is investing in a machine with a three-year life. The machine is expected to reduce annual cash operating costs by ?30,000 in each of the first two yearsand by ?20,000 in year three. Present values of an annuity of ?1 at 14% are

Period 1             0.88

             2             1.65

             3             2.32

Using a 14% cost of capital, what is the present value of these future savings?


Options are :

  • ?59,600
  • ?60,800
  • ?62,900
  • ?69,500

Answer :?62,900

JAIIB Accounting and Finance for Bankers Mock Tests Set 6

Given the following data and assuming a periodic inventory system, what is the ending inventory value using the FIFO method?


Options are :

  • ?3,600.
  • ?3,250.
  • ?3,200.

Answer :?3,250.

Mr. A purchased a machinery costing ? 1,00,000 on 1st October, 2009. Transportation and installation charges were incurred amounting ? 10,000 and ? 4,000 respectively. Dismantling charges of the old machine in place of which new machine was purchased amounted ? 10,000. Market value of the machine was estimated at ? 1,20,000 on 31st March 2010. While finalising the annual accounts, A values the machinery at ? 1,20,000 in his books. Which of the following concepts was violated by A?


Options are :

  • Cost concept
  • Matching concept
  • Matching concept
  • Matching concept

Answer :Cost concept

ABC Ltd. makes payments to its Sundry Creditors through cheques and the Cash Discount received on these payments is recorded in the Triple-columnar Cash Book. In the event of dishonour of any such cheques, the discount so received should be written back through

(i) A debit to discount column of the Cash Book

(ii) A credit to discount column of the Cash Book

(iii) A credit to bank column of the Cash Book

(iv) A debit to Discount Account through Journal Proper

(v) A credit to Creditor‘s Account through Journal Proper



Options are :

  • Only (i) above
  • Only (ii) above
  • Both (i) and (iii) above
  • Both (iv) and (v) above

Answer :Both (iv) and (v) above

JAIIB Accounting and Finance for Bankers Mock Tests Set 1

The accountant of Leo Ltd. recorded a payment by cheque to a creditor for supply of materials as ?1,340.56. The bank recorded the cheque at its correct amount of ?3,140.56. The Company has not passed any rectification entries and the error is not detected through the bank reconciliation. The impact of this error is


Options are :

  • The Trial Balance will not agree
  • The balance of creditors is understated
  • The purchases are understated
  • The favourable bank balance as per Pass Book is less than the Bank balance as per Cash book

Answer :The favourable bank balance as per Pass Book is less than the Bank balance as per Cash book

M/s Kapoor Bros, which was registered in the year 2019, has been following straight line method (SLM) of depreciation. In the current year it changed its method from SLM to written down value (WDV) method, since such change would result in the additional depreciation of ? 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation

Auditors objection is justified because -


Options are :

  • Change in the method of depreciation should be done only with the consent of the auditor.
  • Depreciation method can be changed only from WDV to SLM and not Vice Versa.
  • Change in the method of depreciation should be done only if it is required by some statute and change would result in appropriate presentation of financial statement.
  • Method of depreciation cannot be changed under any circumstances.

Answer :Change in the method of depreciation should be done only if it is required by some statute and change would result in appropriate presentation of financial statement.

Marsh Company had 150 units of product A on hand at January 1, 2003, costing ?21 each.

Purchases of product A during the month of January were as follows:

A physical count on January 31, 2003, shows 250 units of product A on hand. The cost of the inventory at January 31, 2003, under the LIFO method is


Options are :

  • ?5,850
  • ?5,850
  • ?5,350
  • ?5,350

Answer :?5,350

JAIIB Accounting and Finance for Bankers Mock Tests Set 10

During January 2013, Metro Co., which maintains a perpetual inventory system, recorded the following information pertaining to its inventory:

Under the LIFO method, what amount should Metro report as inventory at January 31, 2013?


Options are :

  • ?1,300
  • ?2,700
  • ?3,900
  • ?4,100

Answer :?2,700

XYZ Limited has a house for 3 years. It used it as guest house. Now it incurred an expenditure for ? 2,50,000 for repairing the roof of this house. Expenses incurred on such repairs are:-


Options are :

  • Capital Expenditure
  • Capital Expenditure
  • Capital Expenditure
  • None

Answer :Capital Expenditure

Cost of goods sold will be


Options are :

  • ? 35,000
  • ? 30,000
  • ? 40,000
  • None of the three

Answer :? 35,000

JAIIB Accounting and Finance for Bankers Mock Tests Set 11

Balance as per Pass Book is ? 2,430

Cheques paid but not yet credited ? 1,390

Bank Charges entered in pass book ? 260

Cheques issued but not presented for payment ? 1,710

Balance as per Cash Book will be


Options are :

  • ? 2,370
  • ? 2,370
  • ? 2,300
  • ? 2,380

Answer :? 2,370

The bank charged ? 1,000 as bank charges to a client and communicates the same to him. The accountant records it in the bank account in books. Later on the bank realizes that the charged and reverses the same, but forget to communicate the same to the client. If the accountant in starting with the bank balance as per bank account in books, Reconciliation statement to arrive at balance as per Bank statement:


Options are :

  • Reduce ? 1,000
  • Add ? 1,000
  • Add ? 2,000
  • No treatment

Answer :Add ? 1,000

A customer wants to sell a bill worth $ 1,000,000 to a bank. The bill matures at the end of the second month. If the bank charges a margin of 0.5% and exchange rates are as given below, determine the rate which the bank is likely to quote.

?/$ spot : 35.50/35.55 One-month forward : 15/10

Two-month forward : 20/ 15

(Please note- Rates used are for example purposes only and should not be compared with current

prevailing rates)


Options are :

  • ?35.12/$
  • ?35.12/$
  • ?35.12/$
  • ?35.12/$

Answer :?35.12/$

JAIIB Accounting and Finance for Bankers Mock Tests Set 12

During January 2016, Metro Co., which maintains a perpetual inventory system, recorded the following information pertaining to its inventory:

Under the moving-average method, what amount should Metro report as inventory at January 31,2016?



Options are :

  • ?2,640
  • ?2,640
  • ?2,640
  • ?3,900

Answer :?2,640

Mr. Rohit, owner of Rohit Furniture Ltd., owns a personal residence that cost ?6,00,000, but has a market value of ?9,00,000. During preparation of the financial statement for the business, the entire value of property was ignored and was not shown in the financial statements. The principle that was followed was



Options are :

  • The concept of the Business Entity
  • The concept of the Business Entity
  • The concept of Going Concern Principle
  • The concept of Duality Principle

Answer :The concept of the Business Entity

While finalizing the current year’s profit, the company realized that there was an error in the valuation of closing inventory of the previous year. In the previous year, closing inventory was valued more by ?50,000. As a result



Options are :

  • Previous year’s profit is overstated and current year’s profit is also overstated
  • Previous year’s profit is overstated and current year’s profit is also overstated
  • Previous year’s profit is understated and current year’s profit is also understated
  • Previous year’s profit is overstated and current year’s profit is understated

Answer :Previous year’s profit is overstated and current year’s profit is understated

JAIIB Accounting and Finance for Bankers Mock Tests Set 13

The balance in the cash book is ?30000 overdraft. It is observed that a cheque of ?2000 has been debited twice by the bank. Further the bank credited ?3500 to the account of the firm by mistake, while this amount was to be credited to personal account of the partner. What is the balance in the pass book:


Options are :

  • 35500 credit balance
  • 28500 debit balance
  • 31500 credit balance
  • 28500 credit balance

Answer :28500 debit balance

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