- If a person gets selected in an European or US business school, does he/she has to show financial statement/proof of the expected amount for 1st year (or whole course) with living expenses to the school for acceptance ?

Yes colleges ask for it. Check this with your respective colleges. At some stage it will be checked anyways.

- for visa purposes, do we have to show liquid, assets to support that we can afford the financial cost of the studies.

Yes, many get rejected for producing fake financial documents

- If somebody has accounts in 2 different countries (say US and India), he/she can show statements from banks from those respective countries but then US accounts will show money in dollars and Indian banks in Rupees. Will it be acceptable to schools/visa officers?

I think its acceptable. Why dont you bring them in one account? Exchange rate??