According to the Indian Financial System, 'Repo Rate' is the rate at which: MCQ with Answer and Explanation

According to the Indian Financial System, 'Repo Rate' is the rate at which:
A. Banks lend to each other overnight
B. RBI lends short-term funds to commercial banks
C. Commercial banks lend to the public
D. RBI borrows from commercial banks
Answer: Option B
Solution (By JKSSB Mock Tests)
The Repurchase (Repo) rate is the rate at which the RBI lends money to commercial banks to manage short-term liquidity.

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Practice More Accountancy and Book Keeping Questions

Question #1
Assertion (A): The Public Financial Management System (PFMS) integrates with the Core Banking Solutions (CBS) of banks. Reason (R): This integration ensures that funds are credited directly to the beneficiary's account, eliminating leakages. Choose the correct option.
A. A is true but R is false
B. A is false but R is true
C. Both A and R are true and R is the correct explanation of A
D. Both A and R are true but R is NOT the correct explanation of A

Correct Answer: Option C


Explanation:
PFMS integrates with CBS to enable Direct Benefit Transfer (DBT). This direct credit to beneficiary accounts ensures transparency and eliminates middlemen, correctly explaining the purpose of the integration.

Question #2
Under the imprest system of petty cash, the petty cashier is reimbursed with:
A. Half of the original float
B. A fixed arbitrary amount every week
C. The exact amount spent during the period
D. Ten percent of total cash sales

Correct Answer: Option C


Explanation:
In the imprest system, the chief cashier reimburses the petty cashier the exact amount disbursed so the float returns to its original fixed amount.

Question #3
In a common size income statement, all items are expressed as a percentage of:
A. Total assets
B. Revenue from operations (net sales)
C. Gross profit
D. Net profit

Correct Answer: Option B


Explanation:
Common size income statement base is net sales/revenue from operations.