No verified paper has been uploaded for AJKPSC-PMS Paper Accountancy & Auditing 2008 MCQs yet.
The MCQs below are drawn from the Accountancy & Auditing subject category.
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3751
Which type of bank account typically provides an overdraft facility to the account holder?
A current account is designed for business entities that engage in frequent transactions. Banks often provide an overdraft facility to these account holders, allowing them to withdraw more money than is available in the account up to a sanctioned limit, which is not a standard feature for personal savings accounts.
3752
Which instrument allows a bank account holder to withdraw funds or make payments to third parties?
A cheque is a negotiable instrument containing an order to a bank to pay a specific amount of money from the drawer's account to the person named on the cheque. It is the standard method for account holders to authorize the bank to transfer funds to various parties. Pay-in-slips are used for deposits, and overdrafts are a credit facility, not an instrument for payment.
3753
Which of the following is a common method for a business to arrange short-term financing?
Short-term financing refers to capital raised to meet immediate operational needs, typically for a period of less than one year. A bank loan, such as an overdraft facility or a short-term line of credit, is a primary method for businesses to secure this liquidity. Conversely, the sale of shares (equity) and debentures (long-term debt) are typically categorized as long-term financing methods used for capital investments or permanent expansion.
3754
Under standard banking regulations, after what duration is a cheque typically considered stale?
In many jurisdictions, including the current banking standards in Pakistan and India, the validity period for a cheque is three months from the date of issue. If a cheque is presented for payment after this three-month period, it is classified as a stale cheque and will not be honored by the bank.
3755
Financing the import and export trade of a country is classified under which category of banking functions?
While primary functions involve accepting deposits and lending, general utility functions include services like foreign exchange support, trade financing, and locker facilities. These services assist in the broader economic activities of the country beyond basic banking operations.
3756
Which of the following is considered a non-banking asset?
Non-banking assets are typically assets acquired by a bank in satisfaction of claims, such as property taken over from a defaulting borrower. Office equipment and bank premises are standard operating assets used for the bank's own business operations, not non-banking assets. Therefore, neither option A nor B fits the definition.
3757
What is the term for a fixed amount automatically paid from a UK bank account at regular intervals, as defined by the payer?
A standing order is an instruction from a customer to their bank to pay a fixed amount to a specific recipient at regular intervals. It is controlled by the payer, distinguishing it from a direct debit, where the recipient initiates the collection of variable amounts.
3758
Accepting deposits and providing loans is considered which type of banking function?
The core business of a bank is financial intermediation. Accepting deposits from the public and lending those funds to borrowers constitutes the primary function of a bank, as it is the fundamental activity that defines its existence and role in the economy.
3759
Which of the following entities is generally not considered a primary party to a standard bank check?
The three primary parties to a check are the drawer (payer), the drawee (bank), and the payee. While a seller might act as a payee, 'Seller' is a commercial role rather than a formal legal party defined in the instrument of a check.
3760
When a business settles a credit purchase liability with a supplier, which document is typically used?
A cheque is a negotiable instrument used to make payments. When a business settles a debt owed to a supplier for goods purchased on credit, a cheque is a common method of transferring funds to discharge that liability.
