Office of the Comptroller of the Currency - Ensuring a Safe and Sound Federal Banking System for All Americans Site Map | Text Size: S M L

Knowledge Test for Entry-Level Bank Examiner Candidates

An important factor in the success of an entry-level bank examiner is the ability to understand certain business and financial concepts. To determine whether candidates possess the knowledge required, we administer a knowledge test. Entry-level candidates have 90 minutes to complete the 75-question, multiple-choice test. The total number of questions answered correctly determines a candidate’s score, and the test is graded on a pass/fail basis.

The entry-level knowledge test will evaluate a candidate’s knowledge of:

  • components of a balance sheet
  • components of an income statement
  • relationships between balance sheet and income statement items
  • bookkeeping entries
  • general ledgers
  • conceptual definitions of key financial statement ratios
  • concepts of amortization, accretion, and depreciation
  • knowledge of different types of bank products and services
  • concept of time value of money (present value, net present value, and future value)
  • loan concepts (repayment capacity, interest, collateral)

A candidate must pass this test to be eligible to take the WCST.

The knowledge test is neither extremely difficult, nor easy. If some time has passed since your formal business studies, you may want to refresh your memory. Because the knowledge test is accounting oriented, it may help you to include accounting principles in your review.

The following sample questions are provided to familiarize entry-level applicants with the types of questions on the knowledge test. Answers are provided by clicking here.

  1. Which one of the following is generally NOT considered a current liability?
    1. Interest payable.
    2. Current maturities of long-term debt.
    3. Mortgages payable.
    4. Accounts payable .
  2. Which one of the following is generally considered an intangible asset?
    1. Plant, property, and equipment.
    2. Purchased goodwill.
    3. Petroleum deposits.
    4. Mineral rights.
  3. Zeta Incorporated paid three months’ rent in advance on its new store. At the beginning of the next month, one month’s rent must be recorded as:
    1. A prepaid asset.
    2. A liability.
    3. An expense.
    4. Revenue.
  4. To a bank, the allowance for loan and lease losses account is similar to:
    1. Bad debt expense.
    2. Bad debt accretion.
    3. Provision expense.
    4. Allowance for bad debts.
  5. Depreciation is an accounting procedure that:
    1. Allocates the cost of an asset over its useful life.
    2. Distributes the market value of an asset over its useful life.
    3. Records the increase in value of real estate holdings.
    4. Divides equipment cost over an accounting period.
  6. General and administrative expenses on the income statement generally do NOT include which of the following?
    1. Store display costs.
    2. Telephone and communication costs.
    3. Heat, light, and power costs.
    4. Postage and office supplies.
  7. Gross profit is calculated as:
    1. Revenues minus extraordinary items.
    2. Gross profits divided by net sales X 100.
    3. Revenues minus cost of goods sold.
    4. None of the above.
  8. Which of the following pieces of information do you need to know to calculate the return on assets for the year?
    1. The total current assets and the net income at the end of the year.
    2. The total assets and the net income at the end of the year.
    3. The total assets and the net operating income at the end of the year.
    4. The current assets and the net income at the end of the year.
  9. Possible future claims against a business are:
    1. Contingent liabilities.
    2. Loans.
    3. Investments.
    4. Interest income.
  10. A major reason for business borrowing is:
    1. Increase in accounts receivable caused by a decrease in inventory days on hand.
    2. Growth in inventory caused by a decrease in inventory days on hand.
    3. Decreases in accounts receivable caused by an increase in inventory days on hand.
    4. Growth in inventory caused by an increase in inventory days on hand.