Chapter 18: Core Banking Systems And Accounting in Computerised Environment (JAIIB – Paper 3)
1. What is the primary purpose of computerised accounting in banks?
A. To reduce the number of employees in banks
B. To record, process, and report financial transactions efficiently
C. To replace manual cash counting entirely
D. To generate customer complaints reports automatically
Computerised accounting is used to record, process, and report financial transactions quickly and accurately, improving operational efficiency.
2. Which of the following is NOT a feature of computerised accounting?
A. Speed and accuracy of calculations
B. Instant generation of financial reports
C. Automatic approval of loans without human intervention
D. Integration with Core Banking Systems
While computerised accounting automates transaction recording and reporting, loan approvals still require human decision-making and compliance checks.
3. Which term in computerised accounting refers to a set of instructions that tells the computer how to process financial data?
A. Software
B. Hardware
C. Database
D. Module
Software consists of programs and instructions that guide the computer to perform accounting operations, unlike hardware which is physical equipment.
4. In computerised accounting, which term refers to the physical components like CPU, monitor, and printer?
A. Software
B. Database
C. Module
D. Hardware
Hardware refers to the physical parts of a computer system used in accounting operations, such as CPU, keyboard, monitor, and printer.
5. Which of the following is a key advantage of using computerised accounting in banks?
A. Reduces manual errors and enhances data accuracy
B. Eliminates the need for audits
C. Guarantees profits for banks
D. Automatically updates RBI regulations
Computerised accounting improves accuracy and reduces human errors, which is a primary advantage for banks in processing financial transactions.
6. In banking terminology, what does “module” mean in a computerised accounting system?
A. The physical storage unit of data
B. A self-contained program or component performing specific functions
C. The overall bank policy
D. A type of interest rate
A module is a separate component of a computerised accounting system that handles a specific function, like deposits, withdrawals, or loan processing.
7. Which of the following is a common feature of computerised accounting systems in banks?
A. Manual ledger preparation only
B. Limited access to authorized staff only
C. Real-time processing of transactions
D. No need for backups
Real-time transaction processing allows banks to update accounts instantly, a key feature of computerised accounting systems.
8. Which of the following is a major difference between computerised and manual accounting?
A. Computerised accounting automates calculations, whereas manual accounting requires human calculations
B. Manual accounting can generate reports instantly
C. Computerised accounting does not require any record keeping
D. Manual accounting eliminates human errors completely
In computerised accounting, calculations and report generation are automated, whereas manual accounting relies on humans for calculations and posting entries.
9. One of the advantages of computerised accounting is:
A. Requires more paper usage
B. Slower processing of transactions
C. Faster processing and instant reporting of financial data
D. Reduces security of financial data
Computerised accounting speeds up transaction processing and allows instant generation of reports, which is a key advantage over manual systems.
10. Which of the following is a limitation of computerised accounting?
A. Human errors in calculations
B. Dependence on electricity and system availability
C. Cannot generate financial reports
D. Requires more manual posting
Computerised accounting relies on computers, electricity, and software. Power failures or system crashes can interrupt accounting operations.
11. Which of the following statements is true regarding manual vs computerised accounting?
A. Manual accounting is faster than computerised accounting
B. Computerised accounting cannot maintain ledgers
C. Manual accounting eliminates all errors
D. Computerised accounting ensures higher accuracy and efficiency
Computerised accounting reduces human errors, increases processing speed, and enhances accuracy compared to manual accounting systems.
12. Which of the following is an advantage of computerised accounting over manual accounting?
A. Ability to store and retrieve large volumes of data easily
B. Requires only paper records
C. Transactions are updated manually
D. Cannot integrate with other banking systems
Computerised accounting can handle large volumes of transactions and store historical data efficiently, making retrieval and reporting faster and easier.
13. One disadvantage of computerised accounting is:
A. Eliminates human errors completely
B. Slower report generation
C. Vulnerability to hacking and cyber threats
D. Requires more manual posting
Computerised systems can be vulnerable to cyber attacks, unauthorized access, and data breaches, which is a key limitation compared to manual systems.
14. Which of the following improves efficiency the most in computerised accounting?
A. Increased paper records
B. Automation of repetitive tasks and real-time processing
C. Manual ledger checks
D. Manual posting of transactions
Automation and real-time processing reduce manual effort, minimize errors, and speed up banking operations, which improves overall efficiency.
15. Which statement highlights a limitation of computerised accounting systems?
A. Cannot process large data volumes
B. Requires slow calculations
C. Cannot integrate with CBS
D. High initial setup cost and need for trained staff
While computerised accounting improves speed and accuracy, banks need significant investment in hardware, software, and staff training.
16. Which of the following is a primary function of computerised accounting software in banks?
A. Recording transactions, maintaining ledgers, and generating reports
B. Approving loans automatically
C. Printing currency notes
D. Managing RBI regulations directly
Computerised accounting software primarily records financial transactions, maintains ledgers, and generates accurate and timely reports.
17. Which feature of accounting software allows banks to track multiple customer accounts simultaneously?
A. Payroll module
B. Inventory management
C. Multi-account ledger management
D. Compliance check module
Multi-account ledger management allows simultaneous tracking of numerous customer accounts efficiently, a key function of banking software.
18. Which of the following is a typical function of computerised accounting software in banks?
A. Conducting audits automatically without staff
B. Controlling interest rates
C. Printing cheques
D. Generating balance sheets and trial balances
Accounting software helps in generating trial balances, balance sheets, and other financial statements automatically, reducing manual effort.
19. Which of the following best describes the scope of computerisation in banking?
A. Limited to teller operations only
B. Covers core banking, accounting, customer services, and risk management
C. Only for generating statutory reports
D. Exclusively for loan processing
Computerisation in banks extends across core banking systems, accounting, customer services, and risk management, enabling faster and accurate operations.
20. One major benefit observed from computerisation in banks is:
A. Faster processing of customer transactions and improved service delivery
B. Eliminating the need for trained staff
C. Automatic investment decisions
D. Reduction of all banking regulations
Banks experience faster transaction processing and improved customer service as a direct result of computerisation and integration of software systems.
21. Which of the following experiences is commonly reported by banks after implementing computerised accounting systems?
A. Increase in manual paperwork
B. Slower transaction processing
C. Reduction in errors and improved data accuracy
D. Less dependency on technology
Computerised accounting helps banks reduce manual errors, ensures accurate postings, and improves data reliability and reporting.
22. Which of the following functions can most computerised banking software perform simultaneously?
A. Only deposits
B. Deposits, withdrawals, ledger updates, and report generation
C. Only withdrawals
D. Only balance checking
Computerised banking software can handle multiple operations like deposits, withdrawals, ledger updates, and generate financial reports in real-time.
23. Which of the following is a key aspect of the scope of computerisation in banking?
A. Only for branch-level cash operations
B. Only for customer relationship management
C. Only for generating audit reports
D. Across banking operations including accounting, loans, deposits, and reporting
Computerisation in banks has a broad scope, covering accounting, loan processing, deposit management, reporting, and overall operational efficiency.
24. Which experience is often highlighted by banks using computerised accounting systems?
A. Increased errors due to automation
B. Faster reconciliation and real-time data updates
C. Need for more manual calculation
D. Reduced need for trained staff
Banks report faster reconciliation of accounts and real-time updates of customer transactions after adopting computerised accounting systems.
25. A bank plans to computerise its accounting system. Which of the following experiences should it expect based on industry reports?
A. Elimination of all operational risks
B. No need for staff training
C. Increased operational efficiency and reduced manual errors
D. Complete replacement of human decision-making
Computerised systems enhance operational efficiency and accuracy, though human oversight and decision-making remain essential.
26. Which of the following is a primary component of a Core Banking System (CBS)?
A. Payroll processing only
B. Centralised database, transaction processing, and customer accounts management
C. Hardware maintenance only
D. Only ATM networks
Core Banking Systems integrate a centralised database with transaction processing and customer account management, enabling banks to operate across multiple branches seamlessly.
27. Which of the following best describes the function of a CBS module for deposits?
A. Handles account opening, deposits, withdrawals, and interest calculation
B. Approves loans automatically
C. Generates only audit reports
D. Controls RBI policy directly
The deposit module in CBS manages customer account operations such as opening accounts, accepting deposits, processing withdrawals, and calculating interest automatically.
28. Information security in banking primarily aims to:
A. Eliminate the need for banking staff
B. Automate interest rate decisions
C. Protect data confidentiality, integrity, and availability
D. Replace the need for audits
Information security ensures that sensitive banking data is confidential, accurate, and available only to authorized personnel.
29. Which of the following is a common threat to information security in banks?
A. Faster transaction processing
B. Hacking, phishing, and malware attacks
C. Automated report generation
D. Real-time account updates
Banks face security threats such as hacking, phishing, malware, and unauthorized access, which must be managed to protect customer and bank data.
30. How has the Internet influenced banking operations?
A. Enabled online banking, mobile apps, and digital transactions
B. Eliminated the need for banks entirely
C. Only improved cash counting at branches
D. Reduced regulatory requirements
Internet banking has transformed banking operations, allowing customers to perform transactions online, use mobile apps, and access services 24/7.
31. Which of the following is a key component of Internet banking?
A. Only branch-based operations
B. Physical cash handling only
C. Online fund transfer, account statements, and bill payments
D. Manual ledger updates
Internet banking enables customers to transfer funds, view account statements, pay bills, and manage accounts digitally without visiting branches.
32. Which of the following influences on banking is provided by the World Wide Web?
A. Only cash transactions at branches
B. Customer access to financial information and online services globally
C. Manual reconciliation of accounts
D. Elimination of computerised systems
The World Wide Web allows banks to offer services and information to customers worldwide, enabling digital banking, e-statements, and global connectivity.
33. Which of the following best practices ensures information security in online banking?
A. Sharing passwords with bank staff
B. Using unsecured public Wi-Fi for transactions
C. Disabling multi-factor authentication
D. Using strong passwords and two-factor authentication
Strong passwords and two-factor authentication protect customer accounts from unauthorized access and enhance online banking security.
34. Which of the following is an advantage of computerisation and Internet banking for customers?
A. Increased need to visit the branch frequently
B. Slower processing of transactions
C. 24/7 access to accounts and faster transactions
D. Higher manual errors
Internet banking allows customers to access accounts anytime and perform transactions quickly, enhancing convenience and efficiency.
35. Which of the following is a critical component for secure online banking?
A. Encryption of data during transmission
B. Only using paper-based records
C. Avoiding software updates
D. Publicly sharing account credentials
Encryption ensures that sensitive data is protected during transmission, preventing unauthorized access in online banking.
