Business and Finance MCQs Test 07 Preparation Online

1. In the balance sheet of a company, the items goodwill, patents and trade marks are shown under the heading:

A. Loans and advances

B. Investments

C. Fixed assets

D. Current assets

2. Which is the source of interest for a bank?

A. Advances

B. Bills discounted

C. All of the above

D. Investments

3. The following is not a bank liability?

A. Saving deposit

B. Demand deposit

C. Loans

D. Time deposit

4. When shares are forfeited, the share capital account is debited by:

A. Paid-up amount

B. Called-up-amount

C. Face value of shares

D. Calls-in-arrears

5. Demand deposits mean?

A. Profit loss account

B. Saving account

C. Time deposits

D. Chequeable deposits

6. The share application account is a:

A. Real account

B. Asset account

C. Personal account

D. Nominal account

7. Premium on redemption of debentures is accounted for in the:

A. Personal account

B. Nominal account

C. Assets account

D. Real account

8. A bank has Rs. 5 million in cash. The minimum reserve ratio is 20%. What is maximum potential increase in total deposits?

A. 10 m

B. 5 m

C. 25 m

D. 0 m

9. Which is a function of a commercial bank?

A. Issuing bank notes

B. A cting as a govt. banker

C. Making loans

D. Fixing the exchange rate

10. Total number of bank branches in Pakistan is?

A. More than 10,000 but less than 15,000

B. More than 20,000 but less than 25,000

C. More than 15,000 but less than 20,000

D. More than 5000 but less than 10,000

11. The excess of purchase price over net assets is:

A. Preliminary expense

B. Goodwill

C. Capital reserve

D. Revenue reserve

12. A preliminary expense is a:

A. Fictitious asset

B. Current asset

C. Non-current liability

D. Current liability

13. When a commercial bank creates credit, it immediately raises?

A. Money supply

B. Its liabilities

C. (a) and (b) of above

D. Its assets

14. To the extent redemption of preference shares takes place out of profits, an equal amount has to be transferred to:

A. Capital redemption reserve

B. General reserve

C. Development rebate reserve

D. Share premium account

15. Divisible profits do not include:

A. Post-incorporation profits

B. Reserve fund

C. None of the above

D. Profit on revaluation of assets

16. When a commercial bank creates credit, its immediate effect is that it raises?

A. The money supply

B. The interest rate

C. The real national income

D. The exchange rate

17. Commercial banks are able to create money by?

A. Selling government bonds

B. Making loans

C. Moral suasion

D. Printing money

18. The profit on re-issuing forfeited shares is transferred to:

A. Capital redemption reserve

B. Revaluation reserve

C. Capital reserve

D. General reserve

19. After debentures are redeemed, the balance in the sinking fund account is transferred to:

A. General reserve

B. Secret reserve

C. Capital reserve

D. Profit and loss account

20. An asset is liquid when it is?

A. Being traded frequently

B. Is money or easily converted into money

C. All of the above

D. Earning a good rate of return

Business and Finance MCQs Test 07 Preparation Online

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