Question 1

Managerial accounting information is generally prepared for

Accepted Answer

Managerial accounting information is generally prepared for managers of an organization. It is also known as cost accounting, is the process of identifying, measuring, analyzing, interpreting, and communicating information to managers for the pursuit of an organization's goals.

Question 2

What opportunities does a financial downturn present to financiers?

Accepted Answer

In a market where the value of assets is falling, known as a bear market, traders might consider taking short positions, that is, borrowing assets they don’t own, selling them, and buying them back to return them at a later date when their price has fallen Meanwhile, those working in asset management or M&A might consider, or advise clients to consider, snapping up undervalued assets

Question 3

What is SLR rate?

Accepted Answer

SLR Rate is the minimum amount or percentage of the deposits that a bank has to keep with the RBI in the form of money,gold or any other approved security In simple terms it is the ratio between cash and some approved security

Question 4

What is ILOC (Irrevocable Letter Of Credit) ?

Accepted Answer

It is a letter of credit or a contractual agreement between financial institute (Bank) and the party to which the letter is handed The ILOC letter cannot be cancelled under any circumstance and, guarantees the payment to the party It requires the bank to pay against the drafts meeting all the terms of ILOC It is valid upto the stated period of time For example, if a small business wanted to contract with an overseas supplier for a specified item they would come to an agreement on the terms of the sale like quality standards and pricing, and ask their respective banks to open a letter of credit for the transaction The buyer’s bank would forward the letter of credit to the seller’s bank, where the payment terms would be finalized and the shipment would be made

Question 5

What are the different types of Loans offered by banks?

Accepted Answer

The different types of loans offered by banks are: a) Unsecured Personal Loan b) Secured Personal Loan c) Auto Loans d) Mortgage Loans e) Small business Loans

Question 6

What is ‘Crossed Cheque’ ?

Accepted Answer

A crossed cheque indicates the amount should be deposited into the payees account and cannot be cashed by the bank over the counter Here in the image, number#2, you can see two cross-lines on the left side corner of the cheque that indicates crossed cheque

Question 7

Bad loans in banking terminology are generally known as

Accepted Answer

Bad loans in banking terminology are generally known as NPA's. A Non - performing Asset (NPA) is defined as a credit facility in respect of which the interest and installment of principal have remained 'past due' for a specified period of time.

Question 8

Job cost sheets constitute the subsidiary ledger for the

Accepted Answer

The job cost sheets constitute the subsidiary ledger for the Work in Process Inventory Account A job cost sheet is a form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job Companies keep a separate job cost sheet for each job

Question 9

All of these are exemptions from local real property taxes EXCEPT :

Accepted Answer

Under state law limited exemptions from local real property taxes for individuals who qualify are senior citizens(blind and disabled persons), who may defer their taxes; Veterans, who receive $4000 off assessed value; and homeowners, who receive $7000 off assessed value.

Question 10

Explain What is the difference between debenture holders and creditors ?

Accepted Answer

Debenture holder are those who provides long term loan at specific interest rate in term of cash and creditor provides only short term credit in term of cash for purchasing of goods

Question 11

Which of the following is the oldest Joint Stock Bank of India ?

Accepted Answer

Oldest Joint Stock bank of India was Bank of Upper India that was established in 1863. But this bank failed in 1913. India's Oldest Joint Stock Bank which is still working is Allahabad Bank. It is also known as India's oldest public sector bank.

Question 12

Saving accounts usually offer ___ interest rates than checking accounts.

Accepted Answer

A savings account is the most basic type of account at a bank or credit union, allowing you to deposit money, keep the funds safe, and withdraw funds as needed. Savings accounts typically pay interest on your deposits, which helps you grow your money, but rates are relatively low on these low-risk accounts. A checking account is a deposit account held at a financial institution that allows withdrawals and deposits. Also called demand accounts or transactional accounts, checking accounts are very liquid and can be accessed using checks, automated teller machines and electronic debits, among other methods. Hence, Saving accounts usually offer higher interest rates than checking accounts.

Question 13

The yield to maturity on a discount bond is

Accepted Answer

Yield to maturity is a concept for fixed rate bonds and is the internal rate of return i.e. the rate at which future flows are discounted on a compound basis to give the present value of the bond including accrued interest.

Question 14

In preparing a bank reconciliation, outstanding checks are

Accepted Answer

If an outstanding check of the previous month clears the bank (is paid by the bank) in the current month, you simply remove that check from the list of outstanding checks. If an outstanding check of the previous month does not clear the bank in the current month, the check will remain on the list of outstanding checks until the month that it does clear the bank. In the bank reconciliation process, the total amount of the outstanding checks is deducted from the balance appearing on the bank statement.

Question 15

What is an example of an inflation risk?

Accepted Answer

Inflation risk, also called purchasing power risk, is the chance that the cash flows from an investment won't be worth as much in the future because of changes in purchasing power due to inflation HOW IT WORKS (EXAMPLE): For example, $1,000,000 in bonds with a 10% coupon might generate enough interest payments for a retiree to live on, but with an annual 3% inflation rate, every $1,000 produced by the portfolio will only be worth $970 next year and about $940 the year after that The rising inflation means that the interest payments have less and less purchasing power And the principal, when it is repaid after several years, will buy substantially less than it did when the investor first purchased the bonds

Question 16

The income and substitution effects account for

Accepted Answer

the downward sloping curve

Question 17

Transfer payments are included in

Accepted Answer

Transfer payments are included in GDP and not in GDP.

Question 18

In which of the following cases will total revenue increase?

Accepted Answer

In the case of, "Price rises and demand is inelastic", the total revenue increases.

Question 19

Devaluation of currency leads to

Accepted Answer

increase in domestic prices

Question 20

Fixed Foreign Exchange rate can be changed by

Accepted Answer

Fixed Foreign Exchange rate can be changed by Reserve Bank Of India (RBI).

Accounting and Finance Questions