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JAIIBSamplePapers2012withAnswers,Solutions,JAIIBQuestionPapers,SamplePapersofJAIIB.
JAIIBSamplePapers2012II:
1.Selectfromthefollowing,astatementwhichspeaksaboutliabilitiesofanentity.
(a)Theliabilitiesconsistofclaimsoftheowners
(b)Theliabilitiesconsistofclaimsoftheownersandoutsiders
(c)Theliabilitiesconsistofclaimsoftheoutsiders
(d)Noneoftheabove

2.IfthenetworthofthebusinessisRs.500,fixedassetsareRs.500,currentassetsRs.300,investmentsRs.300,current
liabilitiesRs.Nil,whatistheamountofclaimtooutsiders?
(a)Rs.Nil
(b)Rs.1100
(c)Rs.500
(d)Rs.600

3.Selectfromthefollowingasentencewhichiswrong
(a)Ifassetsincreaseandliabilitiesdonot,thecapitalwillincrease
(b)Ifassetsincreaseandliabilitiesalsoincreasebysamesum,thecapitalwillremainsame
(c)Areductionintheamountofassetswillamounttoequivalentreductioninthenetworth
(d)Anincreaseintheamountofliabilitieswithnocorrespondingincreaseinliabilitieswillincreasetheamountofcapital

4.ThefirmsellsgoodsoncreditforRs.50000,thecostofthegoodssoldisRs.30000.Theeffectofthetransactionisthat,the
capitalofthefirm
(a)increasesbyRs.50000
(b)reducesbyRs.40000
(c)increasesbyRs.20000
(d)reducesbyRs.20000

5.Mr.Ghatgecommencedhisbusinesson1stApril,2006withCapitalofRs.1,00,000.Hedidgoodbusinessduringtheyear
andearnedhandsomeprofit.Attheendof31stMarch,2007,hisfinancialpositionwas:FixedAssetsRs.1,20,000andbank
balanceofRs.33000andCreditorsRs.17000.Whatwashisnetprofitfortheyear0506?
(a)Rs.36000
(b)Rs.70000
(c)Rs.53000
(d)Noneoftheabove

6.Oneofthepairsgivenbelowiswrong.Selectthewrongpair.
(a)OutstandingexpensesNominalaccount
(b)ProfitandLossAccount(Dr.balance)Applicationoffunds

(c)Networthlessreserves&surplusCapital
(d)BalancesheetFinancialposition

7.Choosethesentencewhichspeakaboutillegalassociation
(a)Theunregisteredassociationof10personstodobankingbusiness
(b)Theunregisteredassociationof50personstodononbankingbusiness
(c)Theunregisteredassociationof20personstodobusinessotherthanbanking
(d)Theunregisteredassociationof10personstodobusinessotherthanbanking

8.Fromthefollowing,findasentencewhichisfalseinrespectofpartnership
(a)IfthepartnershipisfollowingtheFixedCapitalAccountMethodsalarypayabletoapartneriscreditedtothepartners
currentaccount
(b)DrawingsmadebypartnersareneverenteredintheProfitandLossAppropriationAccount.
(c)IntheFluctuatingCapitalAccountMethodthebalanceinthecapitalaccountalwaysremainsthesame
(d)ThecapitalaccountofapartnerisrequiredtobeopenedinboththeFixedCapitalAccountMethodandFluctuating
CapitalAccountMethod

9.Fromtheaccountgivenbelow,selecttheaccountwhichiswronglyincludedinProfit&LossAppropriationAccountatthe
debitside
a.DrawingsAccount
b.PartnersSalaryAccount
c.InterestonLoanAccount
d.CommissiontoPartnersAccount

10.TheaveragenetprofitsexpectedareRs.108000perannumbeforechargingremunerationofRs.18000topartner.The
capitalemployedinthebusinessisRs.6,00,000.Therateofreturnexpectedoncapitalemployedofafirmis10%.Whatisthe
valueofgoodwillonthebasisoftwoyearspurchaseofsuperprofits.
a.Rs.108,000
b.Rs.60,000
c.Rs.78,000
d.Noneoftheabove

11.AandBaretwopartnersinafirmsharingprofitsandlossesas2:1.theyadmittedCasapartnerwith25%shareinthe
profitsofthefirm.Hence,thenewprofitsharingratio,afteradmissionofCwouldbe
(a)15:15:10
(b)20:10:10
(c)3:1:1
(d)Noneoftheabove

12.Mr.QandMr.Rwerepartnersofafirmsharingprofitandlossesintheratioof3:2.TheytakeSintopartnership.Itwas
agreedthatSwillpayRs.1,00,000ashisshareofgoodwillwhichwillberetainedinbusinessandalsobringRs.3,00,000as

capitalforonefourthshareinthefutureprofits.Thebookvalueofthestockwas41,000butwastoberevaluedatRs.50,000,
Accountanthaspassedfollowingentries,butMr.Qfeelsthatoneoftheentryiswrong.Selectthewrongentryfromthe
following.
(a)DebitcashandcreditGoodwillforRs.1,00,000
(b)DebitcashandcreditSsCapitalforRs.3,00,000
(c)DebitGoodwillforRs.1,00,000andcreditQsCapitalbyRs.60000&RsCapitalbyRs.40,000
(d)DebitStockandcreditProfit&LossAdjustmentA/cbyRs.9,000

13.Readthefollowingfourjournalentrieswhicharepassedtoconsiderrevaluationofassetsandliabilitiesatthetimeof
admissionofapartner.Oneofthejournalentriesiswrong,choosetheentrywhichiswrong.
(a)ForincreaseinthevalueofassetsDebitAssetAccountandCreditRevaluationAccount.
(b)FordecreaseinthevalueofliabilitiesDebitLiabilitiesAccountandCreditRevaluationAccount.
(c)ForProfitonrevaluationofassetsandliabilitiesDebitOldPartnersCapitalAccountinoldprofitsharingratioandCredit
RevaluationAccount
(d)FordecreaseinthevalueofassetsDebitRevaluationAccountandCreditAssetAccount

14.Anyfacts,observations,occurrencesarecalled
(a)data
(b)record
(c)file
(d)system

15.InthebooksofABCEnterprises,apartnershipfirm,whenMr.C,apartnerdecidedtoresignfromthefirm,arevaluationof
assetsandliabilitieswasdoneandRevaluationaccountwaspreparedwhichshowedthefollowingposition:Atthecredit
sideofRevaluationAccount,StockA/cRs.25000,PremisesA/cRs.52000andCreditorsA/cRs.8000wereshownwhileat
debitsideofRevaluationAccountReserveforDoubtfulDebtsA/c.Rs.15000,AsCapitalA/c.Rs.20000,BsCapitalA/c.
Rs.20,000andCsCapitalA/c.Rs.20000wereshown.AccountanthasinterpretedtheRevaluationAccountasfollows.One
oftheinterpretationsbyhimisincorrect.Selecttheincorrectsentence.
(a)StockisrevaluedupwardlybyRs.25000
(b)CreditorsarerevisedupwardlybyRs.8000
(c)PremisesarerevisedupwardlybyRs.52000
(d)AprovisionondebtorsofRs.15,000ismadefordoubtfuldebts

16.SelecttheTruestatementfromthefollowing
(a)Interestondrawingisanincometothepartnershipfirm
(b)JointVentureisapermanentpartnershipfirm
(c)Goodwillisatangibleassetofthefirm
(d)Intheabsenceofpartnershipagreement,partnersshareprofitandlossinproportiontothecapitalcontributedbythe
partners.

17.Selecttheincorrectstatementinrespectofcompanies.
(a)Amemberofacompanycanenterintocontractwithacompany

(b)Itiscompulsorytoregisterajointstockcompany
(c)Ifallbutonememberofaprivatecompanybecomesinsolvent,itaffectstheexistenceoftheorganisation
(d)Shareholdersarenotliablefortheactsofthecompany

18.Selecttheincorrectsentence
(a)Whenever,thereisnoprofitorinadequateprofit,dividendcannotbedeclared
(b)Therighttoclaimdividendlapseswhenthereisnoprofitincaseofcumulativepreferenceshares
(c)Whenthecompanymakesprofit,arrearsofpreferencedividendareclearedfirst
(d)TheActprohibitstheissueofanypreferenceshareswhichareirredeemable

19.Selecttheincorrectstatement
(a)Authorizedcapitalisthecapitalwithwhichthecompanyisregistered
(b)Issuedcapitalisequaltoitsauthorizedcapital
(c)Authorizedcapital,issuedcapital,subscribedcapital,calledupcapitalandpaidupcapitalcannotbesame
(d)Theamountwhichthecompanyhasaskeditsshareholderstopayiscalledupcapitalofthecompany.

20.Followingarethejournalduringtheprocessofapplicationtoallotmentstage.Oneoftheentriesiswrong.Selectthe
wrongentry.
(a)Debitbankaccountandcreditshareapplicationaccount(whenapplicationmoneyisreceived)
(b)Debitshareapplicationaccountandcreditsharecapitalaccount(applicationtransferredtosharecapitalaccount)
(c)Debitsharecapitalandcreditshareallotmentaccount(forrecordingallotmentmoneybeingfallendue)
(d)Debitbankaccountandcreditshareallotmentaccount(forreceiptofallotmentmoney)

21.Selecttheincorrectstatementinrespectofcallsinadvance
(a)Thecompanymayacceptfromshareholders,theuncalledamountonsharesevenbeforeitisfallendue
(b)Thearticleofassociationmustpermitsuchacceptanceofadvancecallmoney
(c)Interestoncallsinadvancecanbepaidbutthemaximumisupto6%
(d)Theamountofcallsinadvanceispartofthepaidupsharecapital

22.Selecttheincorrectstatementinrespectofutilizationofsharepremium
(a)itisusedforthepurposeofbuybackofshares
(b)itusedforpaymentofdividendincaseofinadequacyofprofits
(c)itisusedforwritingoffpreliminaryexpenses
(d)itisusedforissueoffullypaidbonusshares

23.Mr.Xwasissued100sharesofRs.10each.HefailedtopaycallmoneyofRs.5pershare.Theshareswereforfeitedand
reissuedtoMr.YatRs.9.Whentheentryrecordingthereissueofshareswaspassedinall,fouraccountswereaffected.
Thedebitandcrediteffectofthesefouraccountsisgivenbelow.Oneoftheaccountsisgivenwrongeffect.Selectthat

accountfromthefollowing.
(a)DebitbankaccountbyRs.900
(b)DebitforfeitedsharesbyRs.500
(c)CreditsharecapitalbyRs.1000
(d)CreditforfeitedsharesbyRs.400

24.DTLtd.issuedsharesofRs.10eachat10%premium,payableonapplicationRs.2,onallotmentRs.3(including
premium),onfirstcallRs.2andonfinalcallRs.4.Oneoftheshareholders,appliedfor100sharesbutfailtopayallotment
andfirstcallmoney.Atthisstage,thesaidshareswereforfeited.Selecttheaccountwhichwaswronglycredited.
(a)CreditForfeitedsharesAccountbyRs.200
(b)CreditShareallotmentAccountbyRs.200
(c)CreditsharepremiumAccountbyRs.100
(d)CreditSharefirstcallAccountbyRs.200

25.Selectthesourcewhichisnotvalidforissueofbonusshares
(a)Sharepremium
(b)Revaluationreservecreatedbyrevaluationoffixedassets
(c)Capitalreserve
(d)Capitalredemptionreserve

26.TheliabilitysideofthebalancesheetofABCInternationalLtd.isshowingfollowingposition:PaidupsharecapitalRs.25
Lakh(25,000sharesofRs.100eachfullypaidup)SharepremiumRs.5Lakh,CapitalReserveRs.3Lakh,GeneralReserve
Rs.15LakhandProfit&LossaccountRs.15Lakh.Itwasdecidedtouseminimumfreereserveforissueof1:1bonus
shares..Theaccountsandtheamountwithwhichtheaccountisdebitedaregivenbelowinsets.Oneofthesetiscorrect.
Selectthesame.
(a)SharePremiumAccount(Rs.5Lakh),CapitalReserveAccount(Rs.1Lakh),GeneralReserveAccount(15Lakh)&Profit
&LossAccountbyRs.4Lakh
(b)SharePremiumAccount(Rs.NilLakh),CapitalReserveAccount(Rs.NilLakh),GeneralReserveAccount(10Lakh)&
Profit&LossAccountbyRs.15Lakh
(c)SharePremiumAccount(Rs.5Lakh),CapitalReserveAccount(Rs.3Lakh),GeneralReserveAccount(15Lakh)&Profit
&LossAccountbyRs.2Lakh
(d)SharePremiumAccount(Rs.5Lakh),CapitalReserveAccount(Rs.1Lakh),GeneralReserveAccount(4Lakh)&Profit&
LossAccountbyRs.15Lakh

27.SelecttheincorrectstatementincaseofShareCapitalandReservesandSurplusasshowninthebalancesheet.
(a)Undersharecapital,thefollowingorderismaintained:Authorisedcapital,issuedcapital,subscribedcapital
(b)Thecalledupamountpershareisindicatedandintheamountcolumntotalamounti.e.numberofsharesmultipliedby
amountcalleduppershareisshown
(c)Theamountofunpaidcallsisdeductedfrom(b)above
(d)TheamountofforfeitedsharesaccountisshownunderReserves&surplus

28.Selecttheincorrectstatementinrespectofformofbalancesheetofcompanies(Liabilitiesside).

(a)sinkingfundisshownunderunsecuredloans
(b)LoansandAdvancesfrombanksaregroupedundertheheadSecuredLoans
(c)UnclaimedDividendisgroupedundertheheadcurrentliabilities
(d)Proposeddividendisgroupedunderprovisions.

29.Selecttheincorrectstatementinrespectofformofbalancesheetofcompanies(Assetside).
(a)LiveStockisgroupedundertheheadcurrentAsset
(b)BalanceofunutilizedmoniesraisedbyissueisgroupedundertheheadInvestments
(c)InterestpaidoutofcapitalduringconstructionisgroupedundertheheadMiscellaneousExpenditure
(d)VehiclesaregroupedundertheheadFixedAsset

30.Incaseanysumhasbeenwrittenoffonareductionofcapitalorrevaluationofassets,eachbalancesheetsubsequentto
suchreductionorrevaluationmustshowthereducedfiguresanddateofreductionforaperiodof
(a)1yearthereafter
(b)2yearsthereafter
(c)3yearsthereafter
(d)5yearthereafter

31.OneoftheaccountsiswronglygroupedundertheheadInvestmentswhilepreparingthebalancesheetofthecompany.
Singleoutthewrongaccount.
(a)Investmentsingovernmentortrustsecurities
(b)Investmentsinshares,debenturesorbonds
(c)Immovableproperties
(d)Interestaccruedoninvestments

32.OneoftheaccountsiswronglydebitedtoProfitandLossAppropriationA/cofacompany.Namethewrongaccount
debited
(a)Interimdividend
(b)Proposeddividend
(c)Provisionfortax
(d)Capitalredemptionreserve

33.Selectthefalsestatementinrespectofassets
(a)abankingcompanyisallowedtoacquireassetsforitsownuse
(b)abankingcompanyisallowedtograntloansagainstthesecurityofassetsbelongingtoitscustomers
(c)abankingcompanyisallowedtotakepossessionofsuchassetsincaseofdefaultcommittedbytheborrower
(d)abankingcompanyisnotallowedtosaletheassetsagainstthesecurityofwhichithasgrantedloans

34.ThescheduledbanksarerequiredbyRBItotransferatleastoftheirdisclosedprofitafteradjustment/provision

towardsbonustostaff
a.20%
b.15%
c.10%
d.Noneoftheabove

35.SelecttheincorrectstatementinrespectoffinancialStatementsofBanks
(a)abankingcompanyisnotrequiredtopreparefinancialstatementsinaccordancewithScheduleVIoftheCompaniesAct,
1956.
(b)TheActprescribesspecialformsofbalancesheetandprofitandlossaccountforthepreparationofitsfinalaccounts
(c)ThesearesetoutinformAandformBofthefirstscheduletotheBankingregulationAct,1949
(d)FormAgivesformatofabalancesheetandformBgivestheformatofaprofitandlossaccount

36.Thefinancialstatementofbankconsistsofschedules
(a)18Schedules
(b)16Schedules
(c)17Schedules
(d)Schedules

37.Investments,Advances,FixedAssetsandotherAssetsarepartofScheduleNos.respectively
a.6,7,8,9
b.7,8,9,10
c.8,9,10,11
d.9,10,11,12

38.Liabilityforpartiallypaidinvestmentsinrespectofbankingcompaniesisgroupedunderthehead
(a)Investments
(b)Otherassets
(c)Otherliabilitiesandprovisions
(d)Contingentliabilities

39.Oneoftheitemsisamisfitinagroupnamelyotherincomeofabankingcompany.Selectthisitemfromthefollowing
(a)IncomeonInvestments
(b)Profitonsaleofinvestments
(c)Profitonrevaluationofinvestments
(d)Profitonexchangetransactions

40.Inbankingcompany,maturedtermdeposittobeshownunder
(a)demanddeposits
(b)savingbankdeposits
(c)termdeposits
(d)otherliabilitiesandprovisions

41.Advancesgiventoastaffbyabankasaemployershouldbeincludedin
(a)otherassets
(b)advances
(c)investments
(d)noneoftheabove

42.87.DepreciationonbankspropertyispartofOperatingExpenses.Someoftheitemsincludedunderthiscategoryare
listedbelow.Oneoftheexpensesiswronglyincluded.Identifythatitemofexpense.
(a)depreciationonmotorcars
(b)depreciationonstationaryandstamps
(c)depreciationonfurniture
(d)depreciationonnonbankingassets

43.Selectthecorrectstatementinrespectofdoubtfuldebts
(a)WhichhasremainedNPAforaperiodnotexceeding18months?
(b)WhichhasremainedNPAforaperiodexceeding18months
(c)Whichisconsidereduncollectiblebybank/internalauditororRBIInspection
(d)Noneoftheabove

44.Theprovisionalrequirementforstandardassetis
(a)0.40%(revised)oftotaloutstanding
(b)10%(revised)oftotaloutstanding
(c)40%(revised)oftotaloutstanding
(d)100%(revised)oftotaloutstanding

45.Theinvestmentunderheldtomaturityshouldnotexceedofbankstotalinvestment.
(a)25%
(b)75%
(c)5%
(d)Noneoftheabove

46.Thelistgivenbelowconsistsofvarioussecurities.IdentifythesecuritywhichisSLRsecurity

(a)Securitiesissuedbylocalauthorities
(b)Shares
(c)Bonds
(d)subsidiaries

47.Acceptances,endorsementsandguaranteesareshownas
(a)otherassets
(b)contingentliabilities
(c)advances
(d)otherliabilitiesandprovisions

48.Selectthefalsestatementinrespectofbanking
(a)Acompanyacceptingdepositsforthepurposeoflendingorinvestmentisabankingcompany
(b)Amanufacturingcompanyacceptingdepositsfromthepublicandsomeportionofitislendingtoitsemployeesashome
loansisabankingcompany
(c)Acompanybesidesacceptingdepositsandlendingisdealingingoodsinconnectionwiththerealisationofasecurityisa
bankingcompany
(d)Acompanybesidesacceptingdepositsandlendingisinthebusinessofcollectionsornegotiatingbillsofexchangeisa
bankingcompany.

49.Thelistgivenbelowprovidesthecloserelationshipbetweentheitemsofeachpair.Oneofthepairshasnosuchclose
relationship.Identifythispair.
(a)Bankingcompanytrusteesandexecutors
(b)FormBProfitandLossAccount
(c)LedgerbookLetterofcreditregister
(d)OtherliabilitiesandprovisionsSchedule5

50.Choosethewrongpairfromthefollowing.Theinformationgiveninthepairispertainingtobankingcompanies
(a)Reserves&surplusSharepremium
(b)TimedepositsMaturedtimedeposits
(c)BorrowingsinIndiaRefinancefromNABARD
(d)OtherLiabilities&ProvisionsInteroffice/branchadjustments(net)