PSC Chief General Manager Model Questions and Answers – Part 2

76. The major player in Indian Money Market is ………..
(A) Cooperative Banks (B) Indigenous Banks
(C) Commercial Banks (D) Reserve Bank of India
Answer: C

77. Which among the following is not a category of NPA?
(A) Substandard Assets (B) Doubtful Assets
(C) Loss Assets (D) Devaluated Assets
Answer: D

78. Who is the chairman of 13th Finance Commission?
(A) Dr.C.Rangarajan (B) Mr.Bimal Jalan
(C) Dr.Vijay L Kelkar (D) None of the above
Answer: C

79. The minimum capital prescribed by the RBI for starting a new commercial bank is :
(A) Rs 1,000 Crore (B) Rs 100 Crore
(C) Rs 10 Crore (D) None of the above
Answer: Question Cancelled

80. Under DIR scheme, assistance is provided in the ratio of :
(A) 7% (B) 3%
(C) 8% (D) 4%
Answer: D

81. Capital adequacy norm is expressed as a percentage of …………
(A) Standard assets (B) Risk adjusted assets
(C) Sub standard assets (D) Investments.
Answer: B

82. Broad money has to be sensitized through …………..
(A) CRR (B) SLR
(C) REPO Rate (D) All of the above
Answer: D

83. “VSAT” Technology was first followed for online trading by …………..
(A) BSE (B) NSE
(C) OTCEI (D) ISE
Answer: B

84. NABARD has taken over the entire functions of ……………..
(A) ARDC (B) ACD of RBI
(C) RPCD of RBI (D) All of the above
Answer: Question Cancelled

85. Any complaint should be lodged with the Ombudsman when ……….
(A) There is any deficiency in banking services.
(B) No reply is received from the bank within two months of the receipt of complaint.
(C) The complaint is rejected and a period of one year has not been lapsed from the date of rejection.
(D) (B) & (C) together.
Answer: D

86. Decrease in the value of intangible asset is called ………….
(A) depreciation (B) depletion
(C) amortization (D) fluctuation
Answer: C

87. Which of the following is not an intangible asset
(A) goodwill (B) patent
(C) copy rights (D) preliminary expenses
Answer: D

88. Trial balance will detect
(A) error of commission (B) error of principle
(C) error of omission (D) compensating error
Answer: A

89. Transactions and other events are accounted and presented in accordance with
(A) legal form
(B) materiality
(C) substance and economic reality
(D) tax impact
Answer: Question Cancelled

90. Which of the following equation is correct?
(A) share premium = issue price + par value
(B) share premium = issue price – par value
(C) share premium = issue price / par value
(D) share premium =issue price x par value
Answer: B

91. The financing need is equal to
(A) fixed assets – current assets + current liabilities
(B) fixed assets – current assets – current liabilities
(C) fixed asset + current assets + current liabilities
(D) fixed asset + current assets – current liabilities
Answer: D

92. Which of the following statement is not true?
(A) The partnership agreement cannot override the 1890 Partnership Act
(B) capital contributions do not have to be equal from each partner
(C) interest on capital is a reward for the different amounts of work partners may perform
(D) Not all partners can have limited liability in a limited partnership
Answer: C

93. All of the following influence capital budgeting cash flow exept
(A) accelerated depreciation
(B) salvage value
(C) tax rate changes
(D) method of project financing used
Answer: D

94. When capital must be rationed, the firm should rank project according to their:
(A) profitability index (B) net present value
(C) internal rate of return (D) none of these
Answer: Question Cancelled

95. Which of the following does not make the firm more vulnerable to financial distress?
(A) High sensitivity of the company’s revenues to the general level of economic activity
(B) High proportion of fixed to variable costs
(C) physical capital assets which are relatively illiquid and difficult-to-market
(D) the tax shield
Answer: D

96. Which of the following is the main objective of cash management?
(A) Maximization of cash balance
(B) Minimization of cash balance
(C) Optimization of cash balance
(D) Zero cash balance
Answer: C

97. Which of the following is true for Net Income Approach?
(A) Higher Equity is better (B) Higher Debt is better
(C) Debt Ratio is irrelevant (D) None of the above
Answer: B

98. Financial Leverage is calculated as:
(A) EBIT ÷ Contribution (B) EBIT ÷ PBT
(C) EBIT ÷ Sales (D) EBIT ÷ Variable Cost
Answer: B

99. Which of the following items is not an appropriation of profit for a limited company?
(A) Debenture interest payable
(B) transfer to reserve
(C) preference dividend payable
(D) Ordinary dividend payable
Answer: A

100. Which of the following would not appear in the trial balance as debit balance
(A) returns outwards (B) carriage outwards
(C) returns inwards (D) carriage outwards
Answer: A