Free Online Commerce tests

Free Objective test Questions on Economics

2012-11-17T16:55:00.001-08:00

Free Objective test Questions on Economics

Multiple choice questions on indian economics

1. The sequencing process of Schumpeter model of development is

(A) Swarm like Clusters, Innovation, Bank credit, Breaking circular flow

(B) Breaking circular flow,Innovation, Bank credit, Swarm like Clusters

(D) Bank credit, Innovation, Swarm like Clusters, Breaking circular flow

Ans :B

2. Arrange the following in chronological order :

I. CES production function.

II. Cobb-Douglas production function

III. Tronslog production function

IV. The law of variable proportions

Codes :

(A) III, I, IV, II

(B) I, IV, II, III

(D) II, III, I, IV

Ans :C

3. Assertion (A) : Investment has also a supply effect.

Reason (R) : Because it raises capacity to produce.

Codes :

(A) Both (A) and (R) are correct and (R) is not the correct explanation

of (A).

(B) Both (A) and (R) are correct and (R) is the correct explanation of

(A).

(D) (A) is not correct, but (R) is correct.

Ans :B

4. Assertion (A) : K/L ratio will adjust through time in the direction of

equilibrium ratio.

Reason (R) : Because the technical coefficient of production are variable.

Codes :

(A) Both (A) and (R) are correct and (R) is not the correct explanation

of (A).

(B) Both (A) and (R) are correct and (R) is the correct explanation of

(A).

(D) (A) is incorrect, but (R) is correct.

Ans :B

5. Assertion (A) : Effective demand can be increased by more equitable

distribution of wealth.

Reason (R) : Thirty or forty entities with income averaging between 1 lakh and 5 lakhs would create much more effective demand than a single entity having

income of 10 lakhs a year.

Codes :

(A) Both (A) and (R) are correct and(R) is not the correct explanation

of (A).

(B) Both (A) and (R) are correct and (R) is the correct explanation of

(A).

(D) (A) is incorrect, but (R) is correct.

Ans :B

6. The Planning Commission of India has recently made announcement regarding Poverty Line :

I. Rs. 42 per capita per day in urban area

II. Rs. 26 per capita per day in rural area

III. Rs. 32 per capita per day in urban area

IV. Rs.32 per capita per day in rural area

Codes :

(A) I and II are correct.

(B) I and III are correct.

(D) III and IV are correct.

Ans :C

7. In Keynesian system speculative demand for money arises because of

I. Uncertainty of future interest rates

II. Unexpected expenditures

III. To bridge the gap between income

and eventual expenditure

IV. Relationship between changes in

the interest rates and bond prices

Codes :

(A) I and III are correct.

(B) I and IV are correct.

(D) III and IV are correct.

Ans :B

8. The doctrine of unbalanced growth was propounded by

I. Hirschman

II. Robert Solow

III. Singer

IV. Ragnar Nurkse

Codes :

(A) I and II are correct.

(B) II and III are correct.

(D) I and III are correct.

Ans :D

9. Fiscal policy relates to the Government decision in respect of

I. Taxation

II. Government spending

III. Government borrowing

IV. Public Debt

Codes :

(A) III and IV are correct.

(B) II, III and IV are correct.

(D) All the above are correct.

Ans :D

10. Improvement in the BOP deficit may be effected through

I. Import control

II. Export promotion

III. Foreign exchange control

IV. Devaluation

Codes :

(A) I and II are correct.

(B) I, II, III and IV are correct.

(D) I, II and III are correct.

Ans :B

11. For an inferior goods, income consumption curve and Engles curves

are

(A) Positively sloped

(B) Negatively sloped

(D) Income consumption curve is positively sloped and the Engles curve is negatively sloped

Ans :B

12. If the demand for money is perfectly interest inelastic, the LM schedule will

(A) Upward sloping

(B) Downward sloping

(D) Vertical line

Ans :D

13. In calculating the buoyancy of a tax,we consider

(A) Only discretionary changes

(B) Only automatic changes

(D) Neither (A) nor (B)

Ans :C

14. Comparative cost advantage in Ricardo’s international trade theory

arises due to

(A) Labour cost differences

(B) Differences in factor endowment

(D) All of the above

Ans :A

15. A point of ‘Kink’ in the kinked demand curve indicates

I. Price rigidity

II. Quantity rigidity

III. Price flexibility

IV. Quantity flexibility

Codes :

(A) I and II are correct.

(B) II and III are correct.

(D) I and IV are correct.

Ans :A

16. HDI is entrusted with reference to :

I. Life expectancy at birth

II. Real GDP/per capita

III. Infant mortality

IV. Morbidity

Codes :

(A) I and II are correct.

(B) II and III are correct.

(D) All the above

Ans :D

17. According to Milton Friedman Theory of permanent component of

consumption-expenditure depends on

I. Transitory income alone

II. Transitory and permanent income

III. Permanent income alone

IV. Windfall gains

Codes :

(A) I and II are correct.

(B) I and III are correct.

(D) Only III is correct.

Ans :D

18. Assertion (A) : According to the Life Cycle Theory of consumption, an

individual level of consumption depends not just on current income but also on long run expected earnings.

Reason (R) : Individuals are assumed to plan a pattern of expenditure

based on expected earnings over life time.

Codes :

(A) (A) is true, but (R) is false.

(B) Both (A) and (R) are false.

(D) Both (A) and (R) are correct and

(R) is correct explanation of (A).

Ans :D

19. Assertion (A) : Stationary state is the end of the process of capital

formation.

Reason (R) : Scarcity of natural resources as also capital leads the

economy to the stationary state.

Codes :

(A) Both (A) and (R) are correct and (R) is not the correct explanation

of (A).

(B) Both (A) and (R) are correct and (R) is the correct explanation of

(A).

(D) (A) is not correct, but (R) is correct.

Ans :B

20. Arrange the following theories in the

chronological order :

I. Restatement of Quantity Theory

II. Income Theory

III. Quantity Theory

IV. Cash Balance Approach

Select the correct answer from the

given codes :

Codes :

(A) I, II, IV, III

(B) III, I, II, IV

(D) III, IV, II, I

Ans :D

BEd Entrance Exam previous questions Commerce group

2012-02-19T06:32:00.001-08:00

BEd Entrance Exam previous questions Commerce group
B.Ed. Entrance Question Bank
BEd Exam online Solved Paper prepare for BEd Entrance by Answering old and previous Questions
1. According to the concept of conservation, the stock in trade is valued at—
(A) Cost price
(B) Market price
(C) Cost or market price which ever is higher
(D) Cost or market price which ever is lower
Ans. (D)

2. The concept of conservation will have the effect of—
(A) Over statement of assets
(B) Understatement of assets
(C) Understatement of liabilities
(D) Understatement of provision for bad and doubtful debts
Ans. (B)

3. Non-financial information is not recorded in accounts due to—
(A) Accrual concept
(B) Entity concept
(C) Dual aspect concept
(D) Money measurement concept
Ans. (D)

4. Balance in ‘Nazrana a/c’ in the books of lessee is shown in—
(A) Landlords a/c
(B) P & L a/c
(C) Balance sheet assets side
(D) Balance sheet liabilities side
Ans. (C)

5. The hire-buyer charges depreciation on —
(A) Cash price of the asset
(B) Hire purchase price of the asset
(C) Higher of the two
(D) Lower of the two
Ans. (A)

6. In hire-purchase system, hire-buyer can maintain his accounts under—
(A) Asset accrued method
(B) Total cash price method
(C) Any of the two methods
(D) None of these
Ans. (C)

7. If the rate of gross profit for department X is 25% of cost, the amount of gross profit on sales of Rs. 100000 will be-—
(A) Rs. 16667
(B) Rs. 20000
(C) Rs. 25000
(D) Rs. 33333
Ans. (B)

8. Provision for bad debts of a foreign branch is converted at—
(A) Opening rate of exchange
(B) Closing rate of exchange
(C) Average rate of exchange
(D) Rate applicable to debtors
Ans. (B)

9. If goods are transferred from ‘X’ department to ‘Y’ department at cost + 25%, the amount of stock reserve on closing stock of Rs. 20000 in ‘Y’ department will be—
(A) Rs. 4000
(B) Rs. 5000
(C) Rs. 6000
(D) Rs. 3333
Ans. (A)

10. If out of the bills of Rs. 10000 discounted by the insolvent bills of Rs. 4000 are likely be dishonored, unsecured creditors will include in respect of them an amount of—
(A) Rs. 10000
(B) Rs.6000
(C) Rs. 4000
(D) None of the above
Ans. (C)

11. Partnership firm engaged in banking business can have maximum—
(A) 5 partners
(B) 10 partners
(C) 20 partners
(D) Any number of partners
Ans. (B)

12. Suppose, the partnership deed provides for a salary of Rs. 5000 p.m. to partner ‘X’. If ‘X’ withdraws only Rs. 3000 in a month, the remaining Rs. 2000 will be—
(A) Debited to his capital a/c
(B) Credited to his drawing a/c
(C) Credited to his current a/c
(D) Credited to P & L adjustment a/c
Ans. (A)

13. In absence of any provisions in the partnership agreement, partners can charge on the loans given by them to the firm—
(A) Interest at 6% p.a.
(B) Interest at 12% p.a.
(C) Interest at 15% p.a.
(D) No interest
Ans. (A)

14. A, B and C are partners sharing profits and losses in the ratio 4 : 3 : 2 D is admitted for 1/10th share, the new ratio will be—
(A) 4: 4: 3: 2
(B) 4: 3: 2: 1
(C) 5: 4: 3: 2
(D) None of the above
Ans. (B)

15. A and B shared profit in the ratio of 3: 2 C was admitted as a partner for 1/5th share. He acquires 3/20th from A and 1/20th from B. The new profit sharing ratio would be—
(A) 10:6:4
(B) 6:10:4
(C) 8:8:4
(D) 9:7:4
Ans. (D)

16. Goodwill of a firm of A and B is valued at Rs. 60,000. Goodwill appears in the books at Rs. 24,000. C is admitted for 1/4th share. He will be required to bring for goodwill—
(A) Rs.21, 000
(B) Rs.9, 000
(C) Rs. 15,000
(D) Rs. 6,000
Ans. (D)

17. A plant worth Rs. 800000 has been insured for Rs. 600000. The loss on account of fire is Rs. 500000. The insurance company under average clause will bear the loss to extent of—
(A) Rs. 500000
(B) Rs.600000
(C) Rs. 800000
(D) Rs. 375000
Ans. (A)

18. It is not an item of Income with reference to a voyage a/c—
(A) Passage money
(B) Freight
(C) Primage
(D) Address commission
Ans. (D)

19. The formats of the profit and loss account and Balance sheet in the case of a banking
company have been revised w.e.f.—
(A) 1st April 1949
(B) 1st April 1991
(C) 1st April 1992
(D) 1st April 1956
Ans. (C)

20. If accrued outstanding premium is given in• the trial balance of a general insurance company, then it will be shown in—
(A) Revenue Account
(B) Balance Sheet
(C) Both revenue Account & Balance Sheet
(D) None of the above
Ans. (B)

Commerce Free Tests For Jobs

2011-08-25T17:58:00.001-07:00

Commerce Free Tests For Jobs
Based on Actual test paper of MPPSC

1. Alfa Company Limited acquired the business of M/s Bharat Traders. The valuation of the items acquired was—building Rs. 1,20,000; machinery Rs. 80,000 and stock-in-trade Rs. 30,000. The company issued in lieu of the above items 800, 10% debentures of Rs. 100 each at par and 1 5000 equity shares of Rs. 10 each.

How much was the flow of funds in the above transaction?

(a) Rs. 2,30,000

(b) Rs. 1,00,000

(c) Rs. 50,000

(d) Rs. 30,000

Ans. (d)

2. What are the aspects to be considered while qualifying the audit report on the accounts of a company?

1. An item requiring specific disclosure under the Companies Act is not so disclosed

2. Where the auditor has not been able to form an opinion due to his inability to obtain sufficient, appropriate evidence information and explanation

3. An auditor realizes that items in a financial statement are misstated to such an extent that the financial statement does not give a true and fair view

Select the correct answer using the Code given below:

Code:

(a) 1 only

(b) 1 and 2

(c) 2 and 3

(d) 1, 2 and 3

Ans. (d)

3. Analytical review by an auditor mainly includes:

(a) examining vouchers and other documents

(b) physical verification of assets

(c) examining day books with ledgers

(d) study of ratios and trends

Ans. (d)

4. Statements on Standard Auditing Practices (SAPs) are important while discharging the auditing function by a member of the ICAI in case of a company, because SAPs are:

(a) prescribed by the ICAI

(b) contained in the Companies Act, 1956

(c) approved by the Department of Company Affairs

(d) approved by the Central Government in consultation with Comptroller and Auditor-General

Ans. (a)

5. Which audit is carried out during the accounting period with some interval, it is called:

(a) periodic audit

(b) partial audit

(c) continuous audit

(d) interim audit

Ans. (c)

6. Which one of the following pairs is NOT correctly matched?

(a) Suppression of invoices : Window dressing

(b) Overcharging depreciation : Secret reserves

(c) Omission of cash receipts from debtors : Understatement of sales

(d) Omission of credit sale : Understatement of debtors

Ans. (a)

7. Internal audit report is submitted to:

(a) Government

(b) Shareholders

(c) Creditors

(d) Board of Directors

Ans. (d)

8. The main purpose of auditing is to:

(a) detect accounting offences and to punish the offender

(b) prepare and authenticate the accounts

(c) prepare the accounts and authenticate their true and fair view

(d) certify the financial position of the business

Ans. (d)

9. Every auditor appointed under Section 224 (1) of the Companies Act, 1956 shall inform in writing as to whether he has accepted or refused to accept the appointment. Such an intimation shall be given by him to the

(a) company within 30 days of receipt from the company of the intimation of his appointment

(b) Company Law Board within 30 days of receipt from the company of the intimation of his appointment

(c) company within 7 days of receipt from the company of the intimation of his appointment

(d) Registrar within 30 days of receipt from the company of the intimation of his appointment

Ans. (d)

10. If an auditor does something wrongfully in the performance of his duties resulting in financial loss to the company, he will be held guilty of:

(a) civil negligence

(b) misfeasance

(c) criminal negligence

(d) financial irregularity

Ans. (b)

11. Audit Committee shall act in accordance with the terms of reference to be specified by:

(a) Statutory Auditors

(b) SEBI

(c) Board of Directors

(d) Central Government

Ans. (c)

12. The selection of items, to be included in the audit on a subjective basis without consideration of sample size of method of selection, is:

(a) probability sampling

(b) systematic sampling

(c) random sampling

(d) judgment sampling

Ans. (a)

13. The scope of audit in a partnership firm is governed by:

(a) partnership act

(b) partnership deed

(c) agreement between partnership firm and auditor

(d) number of partners of the firm

Ans. (c)

14. While establishing the statistical sampling plan, the degree of precision required is determined by:

(a) keenness of the management

(b) suitability of accounting systems and. procedures

(c) allowable margin of error the auditors are willing to accept

(d) random number table used for the purpose

Ans. (d)

15. Match List- I with List -II and select the correct answer using the Code given below the Lists:

List—I List—II

A. Inspection of books of account under 1. Central government

Section 209A of the Companies Act, 1956

B. Constitution of National Advisory Committee 2. Registrar of Companies

on Accounting Standards

C. Books of account 3. Registered office

D. Reasons for failure to buy back shares 4. The ICAI

5. Directors’ Report

Code:

A B C D

(a) 2 1 3 5

(b) 3 1 2 4

(c) 2 4 3 5

(d) 3 4 2 1

Ans. (c)

16. The scope of ‘management audit’ is determined by the:

(a) shareholders

(b) Board of Directors

(c) Comptroller and Auditor-General (C & AG)

(d) Comptroller and Auditor-General in consultation with the Central Government

Ans. (b)

17. In the case of an auditor appointed under Section 619 of the Companies Act, 1956 by the Comptroller and Auditor-General of India, the remuneration shall be fixed by the

(a) company in general meeting

(b) comptroller and Auditor-General of India

(c) comptroller and— Auditor-General of India consultation with the Central Government

(d) Company Law Board

Ans. (d)

18. Test checking reduces:

(a) the work of an auditor

(b) tie liability of an auditor

(c) both work and liability of an auditor

(d) the remuneration of an auditor

Ans. (a)

19. X is proposed to be appointed as the auditor of ABC Co. Ltd. at the ensuing AGM in place of the retiring auditor Y. This requires:

(a) a special resolution and approval of the Company Law Board

(b) a special notice

(c) an ordinary resolution and approval of the Company Law Board

(d) a special resolution and approval of Central Government

Ans. (b)

20. Test checking of entries in the audit work refers to:

(a) the internal checks

(b) the internal controls

(c) checking some sample items from a large number of similar items

(d) checking the cash flow of business

Ans. (c)

21. The First Standard Auditing Practice (SAP-I) is related to:

(a) objectives and scope of the audit of financial statements

(b) basis principles governing an audit

(c) documentation

(d) detecting fraud and error

Ans. (a)

22. Which of the following relating to Audit’ Programme is NOT correct?

(a) The auditor cannot defend himself on the basis of audit programme if there is a charge of negligence against him

(b) it is useful basis for planning the programme for ‘the subsequent year

(c) It helps in the final review before the report is signed

(d) it simplifies the allocation of work amongst the audit staff

Ans. (a)

23. Who is ‘bull’?

(a) A stock broker who deals or specializes in a few shares

(b) An investor who sells securities in anticipation of being able to re-buy them later at a lower price

(c) An investor who buys securities in anticipation of being able to sell them at a higher price

(d) An investor who expects the price of a security or of the market as a whole to fall

Ans. (c)

24. Commercial paper is a:

(a) long-term corporate security meant for small investors

(b) medium-term corporate security meant for institutional investors

(c) treasury paper meant for corporate investors

(d) short-item corporate security meant for large-scale investors

Ans. (c)

25. A cartel is a combination of firms:

(a) which are functioning in a particular industry

(b) whose combined assets are worth more than 90% of total assets of the industry

(c) who control major chunk of the market

(d) whose combined profits are enormous

Ans. (d)

26. Social responsibility of business assumes considerable importance towards:

(a) owners and workers

(b) consumers and community

(c) government and nation

(d) All the above

Ans.(d)

27. The distinctive characteristic of ‘perpetual succession’ of a joint stock company refers to:

(a) uninterrupted business in spite of continuous losses

(b) immunity from government direction for the closure of the company

(c) immunity from resolution passed in the annual general body meeting for closure of the company

(d) uninterrupted existence not affected by the death or insolvency of members of the company

Ans. (d)

28. A statutory corporation is one which comes into being

by:

(a) registration under Companies Act, 1956

(b) virtue of enactment of a Special Act

(c) registration under any enforceable Act operating in India

(d) the entrepreneurial effort of the government

Ans. (d)

29. Consider the following statements:

An unregistered partnership firm suffers from the following disabilities4.

1. A partner of such firm cannot file a suit for the dissolution of the firm

2. The firm cannot file a suit against any third party for realization of its dues

3. A partner cannot file a suit against any other partner to enforce any right arising out of partnership deed

Which of the above statements are correct?

(a) 1, 2 and 3

(b) 1 and 3

(c) 1 and 2

(d) 2 and 3

Ans. (d)

30. Exim Bank of India provides financial assistance to exporters and importers in India:

(a) in foreign currency only

(b) both in Indian currency and foreign currencies

(c) as zero-interest loans

(d) as subsidies

Ans. (d)

31. In life insurance, the risk insured is:

(a) certain to occur and also the timing of its occurrence is known

(b) certain to occur, but its timing of its occurrence is not known

(c) not certain to occur and also the timing of its occurrence is not known

(d) not likely to occur

Ans. (c)

32. The national re-insurer in India is:

(a) General Insurance Corporation of India

(b) United India Insurance Company Ltd.

(c) Insurance Regulatory and Development Authority

(d) Oriental Fire and General Insurance Company Ltd.

Ans. (a)

33. Which one of the following risks is not insured by the Export Credit and Guarantee Corporation?

(a) The risk of non-payment by the foreign buyer

(b) The risk that the importer may return the goods on the ground of lower quality

(c) The political risk that the import license may be revoked

(d)The risk of war, revolution, etc.; in the buyer’s country

Ans. (b)

34. Which one of the following indicates the correct chronological order of the ‘system’ designed for purchasing ‘office supplies’?

(a) Select sources of supply, initiate requisition, order supplies, receive supplies and pay vendor

(b) Initiate requisition, order supplies, select sources of supply, receive supplies and pay vendor

(c) Select sources of supply, initiate requisition order supplies, pay vendor and receive supplies

(d) Initiate requisition, select sources of supply, order supplies, receive supplies and pay vendor

Ans. (b)

35. Which one among the following is an instance of Participative Management?

(a) Board of Directors

(b) Trade Unions

(c) Work Committees

(d) Task Force

Ans. (c)

36. The size of an office can be measured in which of the following ways?

1. Production capacity of the organization

2. Number of employees

3. Investment in equipment and machines

4. Total administrative expenses

Select the correct answer using the Code given below:

Code:

(a) 1 and 4 are correct

(b) 1 and 2 are correct

(c) 1, 2 and 3 are correct

(d) 2, 3 and 4 are correct

Ans. (d)

37. Contingency School of Management

(a) practice-oriented

(b) principle-oriented

(c) result-oriented

(d) profit and loss-oriented

Ans. (a)

38. The term ‘organizational climate’ best represents:

(a) human environment prevailing in an organization

(b)union management relations within an organization

(c) problems introduced by faulty organizational structure

(d) socio-cultural environment in an organization

Ans. (d)

39. Which one of the following is the correct sequence in terms of the four management functions, first identified by Henry Fayol?

(a) Planning, Organizing, Leading and Controlling

(b) Planning, Organizing, Staffing and Coordinating

(c) Planning, Motivating, Directing and Reporting

(d) Planning, Staffing, Communicating and Leading

Ans. (b)

40. Match List-I (Office records) with List-II (Need of such record) and select the correct answer using the Code given below the Lists:

List-I List-II

A. File 1. Recording small and necessary expenses

B. Ledger 2. Recording transactions

C. Petty cash book 3. Keeping necessary documents

D. Office manual 4. Computerizing office system

Code:

A B C D

(a) 3 2 1 4

(b) 4 5 3 1

(c) 3 5 1 2

(d) 4 2 3 1

Ans. (a)

41. Organizations require narrow span of control if there are:

(a) mature subordinates within

(b) competent and trained managers

(c) unclear plans for non repetitive operations

(d) well defined plans for repetitive operations

Ans. (b)

42. Which one f the following traits describes properly organic or behavioral structure of organization?

(a) Wider spans of control

(b) More centralization

(c) Higher degree of specialization

(d) Taller hierarchy

Ans. (a)

43. People resist change in organization because of:

(a) fear of unemployment

(b) increase in responsibility

(c) need for new social adjustments

(d) All the above

Ans. (d)

44. When there are large number of smaller projects and the activities of those projects are to be accomplished by setting up some temporary departments, the appropriate organizational structure should be:

(a) project organization

(b) functional organization

(c) matrix organization

(d) divisional organization

Ans. (c)

45. The managerial function of organizing involves:

(a) reviewing and adjusting plan in the light of changing conditions

(b) establishing programme for the accomplishment of objectives

(c) creating a structure of functions and duties to be performed by a group

(d) getting things done through others

Ans. (c)

46. Which one of the following is the major consideration for decentralization?

(a) Organization’s environment

(b) Nature of management function

(c) Size of the organization

(d) Ability of higher-level managers

Ans. (c)

47. Which among the following is the most popular approach for accomplishing the results?

(a) Management by exception

(b) Reward system

(c) Management by objectives

(d) Mentor system

Ans. (c)

48. Which among the following is the oldest and simplest device for achieving coordination?

(a) Hierarchy

(b) Planning

(c) Incentives

(d) Rules

Ans. (b)

49. Centralizing the office work is desirable mostly because it:

(a) fixes responsibility

(b) avoids duplication

(c) permits better supervision

(d) permits better delegation

Ans. (a)

50. Match List-I with List-II and select the correct answer using the Code given below the List:

List- I List-II

A. F.W. Taylor 1. Principles of Management

B. Maslow 2. Team Work

C. Esprit de Corps 3. Scientific Management

D. V Henry Fayol 4. Theory of Human Motivation

Code:

A B C D

(a) 1 4 2 3

(b) 3 2 4 1

(c) 1 2 4 3

(d) 3 4 2 1

Ans. (d)

commerce solved question paper

2011-08-02T07:11:00.000-07:00

commerce solved question paper
Solved Sample Question Paper : Commerce

1. Assertion (A): ROI has aptly been regarded as the primary ratio as it specifies the relative net profit earned on capital employed. Du Pont Chart shows the manner in which the key elements coverage into the ROI
Reason (R): An approximate measure of Return on Equity (ROE) cannot be derived from ROI as the portion of assets financed by equity is difficult to determine.
Ans. (b)

2. Assertion (A): The cost of demolishing an old building preparatory to the construction of a new building in that place is to be treated as Capital Expenditure.
Reason (R): Such cost is not incidental to the construction of the new building.
Ans. (c)

3. Assertion (A): Once incorporated, the name of a Public Limited Co. cannot be changed.
Reason (R): The name of a public limited company must be distinct and should not mislead or resemble that of any other Company.
Ans. (d)

4. Assertion (A): An office system is a standard sequence of operations in a particular business activity and is concerned with how these operations are performed as well as by whom and when they are performed.
Reason (R): Systems include operations; people and purpose.
Ans. (b)

5. Assertion (A): Franking Machines are used for printing postage on mailed letters.
Reason (R): Franking Machines are to be purchased from the market and if doesn’t require a license from the postal deptt.
Ans. (c)

6. Assertion (A): Organization and Methods .is a conscious attempt to improve the quality of management and maintains efficient administrative machinery.
Reason (R): It involves detailed investigation with regard to the subject to be investigated, say proce4ures already being followed.
Ans. (a)

7. Assertion (A): A transferee of shares cannot sue the promoters of a Company for misinformation in the prospectus.
Reason (R): The information provided by the company promoters in the prospectus is addressed only to the original allottees.
Ans. (a)

8. Assertion (A): Effective motivation is moderated by organizational complexity and conflicts.
Reason (R): An individual’s motives may be complex and conflicting.
Ans. (b)

9. Assertion (A): According to theory ‘X’ all employees dislike work and must be coerced, controlled or threatened to make them work.
Reason (R): Theory X makes an assumption about the basic human nature which is relevant to the employees also.
Ans. (d)

10. Assertion (A): Everything that goes to increase the importance of the subordinate’s role is delegation.
Reason (R): Subordinates can be trained by delegation.
Ans. (b)

12. Douglas McGregor made five basic assumptions about people in his theory. First four assumptions are:
1. People are ambitious
2. They seek responsibility
3. They are dynamic
4, They recognize and accept organizational goals
The fifth assumption is:
(a) people are always cooperative and cheerful at their work
(b) People are not self-centered
(c) People are by nature resistant to change
(d) People are intelligent and possess creative potential
Ans. (a)

13. Which one of the following statements is not correct?
(a) Management by objectives is a philosophy of management
(b) Management by objectives is an approach of management
(c) Management by objectives is a process of participative management
(d) Management by objectives is a control technique
Ans. (b)

14. Management by objectives is implemented in an organization by stages.
One such stage action planning includes:
1. assigning responsibilities for achieving objectives
2. choosing strategies appropriate to the objectives
3. allocating resources for achieving objectives
4. scheduling specific activities to achieve maximum resourceful utilization.
Identify from the following combinations the correct sequence in which the action planning stages are implemented:
(a) 1, 2, 3, 4
(b) 2, 3, 4, 1
(c) 3, 4, 1, 2
(d) 2, 1, 3, 4
Ans. (b)

15. Various plans that an organization may formulate are for—purpose or mission, objective, strategies, policies, rules and procedures, programmes or projects and budget. These can be arranged in a hierarchy because higher level plans give/generate lower level plans. -
Identify the correct order according to hierarchy of plans from amongst the following:
(a) Purpose or mission, objective, strategies, policies, rules and procedures, programmes or projects and budget
(b) Budget, objectives, policies, rules and procedures, purpose or mission, strategies and programmes or - projects
(c) Purpose or mission, objectives, policies, strategies, programmes or projects, budget, and rules and procedures
(d) Strategies, objectives, policies, purpose or mission, programmes or projects, rules and procedures, and budget
Ans. (c)

Sample ugc net commerce solved question paper

2011-08-02T07:09:00.000-07:00

Sample ugc net commerce solved question paper
UGC NET Solved Sample Question Paper : Commerce
UGC NET Commerce Question Papers with answers
1. Which one of the following is the oldest form of organization?
(a) Functional Organization
(b) Line Organization
(c) Line and staff organization
(d) Departmentation
Ans. (b)

2. Which one of the following is the latest and most reliable form of communication?
(a) Speed post
(b) Telex
(c) Fax
(d) E-Mail
Ans. (d)

3. A planned sequence of operations for handling recurring business transactions uniformly and consistently is known as:
(a) System
(b) Procedure
(c) Routine
(d) Control
Ans. (a)

4. O & M in office management refers to:
(a) operating and management planning
(b) organization and management
(c) office orders and manuals
(d) none of the above
Ans. (d)

5. Which one of the following pairs is correctly matched?
(a) Manual of office procedures : in its absence the work load cannot be distributed
equitably and full day’s work cannot be assigned to
different employees.
(b) Methods study : determine the shape of things pertaining to office
activities and provides a broad guide to the course of
future operation.
(c) Organizing : undertaken by the office manager in respect of office
services only.
(d) Office policies : compiled for the information and guidance of all office
personnel.
Ans. (d)

6. To card indexing system in improvement over simple indexing system?
(a) Yes, because it facilitates location of any name a subject with the minimum of searching as the cards are arranged in an alphabetical order
(b) Yes, because the cards can be arranged in a particular order and the order cannot be changed at will
(c) No, because the cards wanted for reference cannot be taken out without holding up the works of recording of information as the other cards are left behind
(d) No, because the system has a limited capacity for expansion as the number of drawers cannot be increased as desired.
Ans. (b)

7. In the case of a deemed public limited company, the maximum number of members is restricted to:
(a) 10
(b) 50
(c) 100
(d) 200
Ans. (b)

8. Which one of the following types of registered companies will be the most appropriate for the promotion of science, culture, religion etc.?
(a) Company limited by share
(b) Company limited by Guarantee
(c) Unlimited company
(d) Government company
Ans. (b)

9. A joint stock company’s letterhead must by law, have the address of the:
(a) Managing Director
(b) Factory
(c) Registered office
(d) Head office
Ans. (c)

10. Which of the following are stated in the objects clause of Memorandum of Association of a Public Limited Company?
1. General and specific objects
2. Main objects
3. Secondary objects
4. Objects incidental to main objects
5. Other objects
(a) 2, 4 and 5
(b) 1, 3 and 5
(c) 2, 3 and 4
(d) l, 2, and 4
Ans. (a)

11. Who among the following has no right to speak at the AGM?
(a) Chairman of the company
(b) Whole time director of the company
(c) Proxy holder
(d) None of the above, as everybody has a right to speak at the AGM
Ans. (c)

12. Which one of the following is the correct sequence of steps in the formation and commencement of business of a public limited Company?
(a) Memorandum, issue of Prospectus, Filing of Prospectus, Minimum subscription.
(b) Memorandum, Minimum subscription, Filing of Prospectus, Issue of Prospectus
(c) Memorandum, Filing of prospectus, Issue of Prospectus, Minimum subscription.
(d) Memorandum, Issue of. Prospectus, Minimum subscription, filing of prospectus.
Ans. (c)

13. Those preference shares which do not enjoy the right to share additional profits come under the category of:
(a) Irredeemable Preference Shares
(b) Participating Preference Shares
(c) Non-cumulative Preference Shares
(d) Non-participating Preference Shares
Ans. (d)

14. Clauses in the Articles of Association can be altered by:
(a) a special resolution of the Board of Directors
(b) an ordinary resolution in the general meeting
(c) a special resolution in the general meeting
(d) obtaining permission from the Central Government
Ans. (c)

15. Under the Companies Act, 1956, the financial years of a company:
(a) must be exactly 12 months
(b) must not be less than 12 months
(c) may be more or less than a calendar year, but its shall not exceed 15 months
(d) may be more or less than a calendar year, but it shall not exceed 20 months.
Ans. (c)

16. Blue chip security is one which:
(a) given assured high returns
(b) almost every investor is willing to buy
(c) offers the highest liquidity and sells always much above par
(d) is issued by the reputed and profit making companies.
Ans. (c)

17. ‘Doctrine of constructive Notice’ is the notice:
(a) of alteration of ‘objects clause’ to the Registrar of companies
(b) of change of name to the members of the company
(c) to the public as to the issue of prospectus
(d) to outsiders dealing with the company as to the contents of the Memorandum and Articles of Association
Ans. (d)

18. Under the guidelines of SEBI, pricing of first capital issues should be on par value only in the case of:
(a) an existing company with no past reserves
(b) a private company converting into a public company
(c) a new company promoted by an existing company
(d) a new company with no connections with other companies
Ans. (d)

19. Which of the following statements are correct?
I. A mirror is not competent to become a member of a company.
2. A firm cannot be treated as a member of a company
3. A foreigner may become*member of a company
4. A partnership firm cannot hold shares in a company in the individual il5ames of partners as joint holders
(a) l and 2
(b) 2, 3 and 4
(c) 1, 3 and 4
(d) 1, 2 and 3
Ans. (d)

20. In the case of a company making a public issue, ‘Minimum Subscription’ must provide for which of the following?
1. Investments to be made
2. Preliminary expenses
3. Repayment of money borrowed for preliminary expenses
4. Working capital
5. Any other expenditure if it is specifically stated
(a) 1, 2, 3, 4 and 5
(b) l, 3 and 5
(c) 1, 2 and 4
(d) 2, 3, 4 and 5
Ans. (d)

21. A meeting of the Board of Director must be held at least once every
(a) two months
(b) four months and at least three such mt tings must be held every year
(c) three months and at least four such meeting must be held every year
(d) six months
Ans. (c)

22. The power to make calls on share can be exercised by the:
(a) shareholders of the company in general meeting
(b) Company Secretary on his own
(c) Board of Directors of the company
(d) Managing Directors of the company
Ans. (c)

23. One of the important powers that must be exercised by the Board of Directors and cannot be delegated to a committee or any of the managerial personnel is the power to:
(a) issue debentures
(b) take decisions on investment of company funds
(c) make loans
(d) declare dividends
Ans. (a)

24. The annual general meeting can be called by the:
(a) Company secretary
(b) Board of Directors
(c) Managing Directors
(d) Non-executive directors of the company
Ans. (a)

25. Under the Companies Act, 1956, the Balance Sheet and Profit and Loss Account of a company are required to be signed by the manager or the secretary of the company and by how many directors including the Managing Director?
(a) One
(b) Two
(c) Three
(d) All
Ans. (b)

26. A law graduate with specialization is company can be appointed as company secretary of a company having a paid up capital of:
(a) above one crore rupees
(b) above two crores rupees
(c) above five crores rupees
(d) None of the above
Ans. (d)

REASONI’NG

Directions: The following fourteen items consist of two statements are labelled the ‘Assertion A’ and the other labelled the ‘Reason R’. You are to examine these two statements carefully and decide if the Assertion A and the Reason. R are individually true and if so, whether the Reason is a correct explanation of the Assertion. Select your answer to these items using the codes given below and mark your answer sheet accordingly.
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and R are true but l. is not a correct explanation of A
(c) A is true but R is false
(d) A is false but R is true

27. Assertion (A): A construction company, which by its Memorandum and Articles had powers to borrow and lend, carries on a banking business. This is considered to be ultravires the memorandum.
Reason (R): The borrowing and lending should be related to the main (construction) activity only.
Ans. (a)

28. Assertion (A): A minor can be admitted to the benefits of partnership with the consent of all the partners.
Reason (R): His liability is confined only to the extent of his share in the profits and property of the firm.
Ans. (a)

29. Assertion (A): The auditor should examine the objects Clause of the Memorandum of Association.
Reason (R): This would ensure that the company is carrying on business as specified in the Memorandum of Association.
Ans. (a)

30. Assertion (A): The auditor of a proprietary firm need not be bound by professional propriety.
Reason (R): Proprietary auditor is responsible only to the person(s) who appoint(s) him.
Ans. (d)

31. Assertion (A): The main purpose of auditing is to verify that the accounts have been prepared according to the principles of accounting and to see whether the financial statements so prepared reflect a true and fair view of the state of affairs of a business.
Reason (R): Auditing starts after the completion of recording to transactions in the books of account.
Ans. (b)

32. Assertion (A): The auditor should visit the particular concern at intervals and check the book of accounts.
Reason (R): Some precaution is required to be taken by the auditor to avoid weaknesses of. continuous audit.
Ans. (b)

33. Assertion (A): Return on investment is the ultimate relationship between earnings and investment.
Reason (R) Sales play the pivotal role in such a relationship as sales govern the earnings and investments in turn govern sales.
Ans. (b)

34. Assertion (A): In accounting, a distinction is made between the business and the owner.
Reason (R): Accounting concepts are based on objectivity and not on subjectivity.
Ans. (a)

35. Assertion (A): The investors in the capital market have been showing a decisive shift in favour of fixed income instruments.
Reason (R): The debt instruments have active secondary market.
Ans. (b)

36. Assertion (A): Materiality concept refers to the state of ignoring relatively small items and values from accounts.
Reason (R): The effort involved in allocating the cost of a small item over a long period should be justified in terms of the benefit 4erived from this operation. Therefore cost of such items may be treated as expenses for the period in which they are acquired.
Ans. (a)

37. Assertion (A): In a joint stock company, the shareholders have very restricted powers.
Reason (R): The personality of the company is separate and distinct from the humans who compose it.
Ans. (a)

38. Assertion (A): Prediction of share price movement in a stock exchange s almost impossible.
Reason (R): Speculative activity has made the fundamentals of share quite insignificant.
Ans. (c)

39. Assertion (A): The floating policy protects the policy holders against errors and omissions.
Reason (R): Goods are insured even if the policy holder fails to report that goods have already been forwarded from the place of shipment:
Ans. (c)

40. Assertion (A): Social responsibility of business is an idea that cannot be put into practice by most of the business.
Reason (R): There is no norm to measure the extent of responsibility forwards each segment of the society.
Ans. (d)

41. The fundamental accounting equation:
Assets = Equities, is the formal expression of:
(a) Dual aspect concept
(b) Matching concept
(c) Going concern concept
(d) Money Measurement concept
Ans. (a)

42. Which of the following pairs are correctly matched?
1. Business entity : Accounting standard
2. Stock Valuation : Consistency
3. Capital : Drawings
4. Going concern : Assumption
Select the correct answer using the codes given below Codes:
(a) 2, 3 and 4
(b) 1, 2, and 3
(c) l, 2 and 4
(d) 1, 3 and 4
Ans. (c)

43. Money Measurement concept of Accounting Theory is based on the assumption that the value of money will:
(a) remain constant
(b) fluctuate
(c) decrease
(d) go up
Ans. (a)

44. Given that:
M = Opening Stock
N Purchase
O = Closing Stock
P = Cost of goods sold
The correct equation will be:
(a) M-N0+P
(b) M-OP-O
(c) M—O = P—N
(d) P—M = N + O
Ans. (c)

45. An asset is purchased for Rs. 50,000 on which depreciation is to be provided annually according to the Straight Line Method. The useful life of the asset is 10 years and the residual value is Rs. 10,000. The rate of depreciation is:
(a) 20%
(b) 18%
(c) 10%
(d) 8%
Ans. (c)

46. An asset in never reduced to zero in the:
(a) Fixed installment method
(b) Reducing balance method
(c) Annuity Method
(d) Sum of year’s method
Ans. (b)

47. The main objective of providing depreciation is to:
(a) Create secret Reserves
(b) Reduce the book value of assets
(c) Value the assets properly
(d) Allocate cost of the assets
Ans. (c)

48. Revaluation method of depreciation is generally used in the case of:
(a) Plant
(b) Land and building
(c) Stock
(d) Loose tools
Ans. (d)

49. Rate of consumption of materials is one of the most important factors while fixing:
(a) maximum level
(b) maximum level and recorder level
(c) minimum level and reorder level
(d) maximum level, minimum level and re-order level
Ans. (d)

50. During a period of declining prices, which one of the following inventory pricing methods will result in lower cost of goods scold?
(a) FIFO
(b) LIFO
(c) Simple average method
(d) Inflated price method
Ans. (b)

mcq on commerce

2011-08-02T07:07:00.000-07:00

mcq on commerce
UPSC Commerce MCQ Quiz Test
MCQ Commerce Quiz For Exams
1. The statutory meeting of the company must be held within six months:
(a) From filing of statement in lieu of prospectus
(b) Of obtaining the certificate of commencement of business
(c) Of obtaining the certificate of incorporation
(d) From the date when the first Board of Directors meeting was held
Ans. (b)

2. Which one of the following reports is tc be placed before the Parliament by a Government Company?
(a) Director’s Report
(b) Annual Report
(c) Income Report
(d) Statutory Report
Ans. (b)

3. Under the Companies Act, which one of the following powers can be exercised by the Board of Directors?
(a) Power to sell any of the company’s undertakings
(b) Power to make call
(c) Power to borrow money in excess of the paid up capital
(d) Power to reappoint an auditor
Ans. (b)
MISCELLANEOUS

4. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List-II
A. Screen trading 1. Capital market reforms
B. G.V. Ramakrishna Committee Report 2. Industrial sickness
C. BIFR 3. Disinvestment of PSU shares
D SEBI 4. Stock Exchange
Code:
A B C D
(a) 3 4 1 2
(b) 4 3 2 1
(c) 4 3 1 2
(d) 3 4 2 1
Ans. (b)

5. Which one of the following does not constitute the purpose of setting up SEBI?
(a) To protect the interests of the investors in securities
(b)To promote the development of the securities markets
(c) To regulate the global securities markets
(d) To deal with matters connected with fraudulent and unfair trade practices relating to securities markets
Ans. (c)
6. Members of the WTO/GATT have not agreed even in principle on which one of the following issues?
(a) Observance of minimum labour standards
(b) Protection of intellectual property rights
(c) Dispute settlement mechanism
(d) Export subsidies to agricultural produce
Ans. (d)

7. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List-II
A. Statutory functions of 1. Secretary
B. Advice to the Managing 2. Body
C. Filing tax returns 3. Functions imposed by
D. Image of organization 4. Public Relations Officer
Codes:
A B C D
(a) 1 2 3 4
(b) 3 2 1 4
(c) 4 3 2 1
(d) 3 4 1 2
Ans. (b)

8. Minimum Alternative Tax (MAT) is applicable to the:
(a) joint stock company
(b) co-operative society
(c) partnership firm
(d) sole proprietary concern
Ans. (a)

9. The latest generation of Personal Computers (PCs) being used in an office set-up is:
(a) PC XT
(b) PC Pentium
(c) PC AT
(d) PC 486
Ans. (b)

Directions: The following 11 (eleven) items consist of two statements one labelled the ‘Assertion A’ and the other labelled the ‘Reason R’. You are to examine these two statements carefully and decide if the Assertion A and the Reason R are individually true and if so, whether the Reason is a correct explanation of the Assertion. Select your answers to these items using the Code given below and mark your answer sheet accordingly.
Code:
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and R are true but R is not a correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
Ans. (d)

10. Assertion (A): Amount realized on the disposal (sale) of a discarded machine of the factory should be treated as revenue receipt.
Reason (R): Sale proceeds are usually of revenue in nature.
Ans. (a)

11. Assertion (A): If the directors of a company commit any irregular act but within the provisions of the Companies Act or Memorandum of Articles, such acts will be binding on the company. But, in turn, the company may claim damages from the directors for such acts.
Reason (R): The directors have to conduct the affairs of the business in a manner which is not detrimental to the interests of the company.
Ans. (a)

12. Assertion (A): Programmed decisions are under conditions of certainty.
Reason (R): Conditions of certainty provide reliable information about consequences of alternatives.
Ans. (a)

13. Assertion (A): Internal audit must be carried out by a qualified Chartered Accountant.
Reason (R): It is a management tool.
Ans. (d)

14. Assertion (A): An accounting principle is that the relatively small item and values should be ignored from accounts.
Reason (R): The cost of the effort in the allocation of small items over a long period does not justify the benefit derived from this operation and the cost of such items is treated as expense for the period in which they are acquired.
Ans. (d)

15. Assertion (A): Break-even chart merely depicts the relationship between sales and expenses in such a way as to show at what volume revenues exactly cover expenses.
Reason (R): The break-even chart shows that at any lesser volume of sale, the company would suffer a loss, and at a greater volume of sale it would enjoy a profit.
Ans. (b)

16. Assertion (A): Financial leverage is beneficial only when the rate of earning is higher than the cost of debt.
Reason (R): Debt-equity ratio indicates the short-term financial soundness of a business concern.

17. Assertion (A): Management by Exception is not a control technique.
Reason (R): The principles of Management by Exception was first propounded by F.W. Taylor.
Ans. (d)

18. Assertion (A): Now-a-clays, it is obligatory on the part of companies to disclose in their Annual Reports, work done for the benefit of the society.
Reason (R): Annual Reports are used by members of the society in one capacity or another.
Ans. (d)

19. Assertion (A): Co-ordination implies the avoidance of all splintering efforts.
Reason (R): One of the four benefits of co-ordination is unity of direction.
Ans. (a)

20. Assertion (A): Audit is conducted to find out the financial position of a concern.
Reason (R): The objects of audit are the detection and prevention of errors and frauds.
Ans. (d)

Civil Services (Pre) Examination
Commerce
Solved Question Paper
1997
ACCOUNTING CONCEPTS,
EQUATIONS, S3ANDARDS

21. Accounting is:
(a) the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are, in the at part at best financial in character, and interpreting thereof.
(b) A systematic and regular record of events affecting a firm with a view to obtaining a clear financial picture.
(c) preparation of various financial statements over a period of time of a firm to measure its performance in monetary terms.
(d) nothing but book-keeping
Ans. (a)

22. In stock valuation application of the principle at cost price or market price whichever is lower’ will result in the valuation of stock sometimes at cost price and at other times at market price.
This is an application of the principle of:
(a) Consistency
(b) Materiality
(c) Conservatism
(d) Disclosure
Ans. (c)

23. On using reducing balance method on an asset of Rs. 20,000 at the rate of 10% per annum, depreciation after three year will be:
(a) Rs. 6,000
(b) Rs. 1,800
(c) Rs. 1,620
(d) Rs. 2,000
Ans. (c)

24. Which one of the following depreciation methods is most suitable for a coal mine?
(a) Diminishing Balance Method
(b) Depletion Method
(c) Fixed installment Method
(d) Sum of years’ digits method
Ans. (b)

25. Which one of the following statements is correct?
(a) Depreciation is not the process of valuation of assets
it is a process of allocation of cost of assets to the period of its economic life.
(b) If the cost of machinery is more than the book value, then depreciation need not be provided.
(c) When the plant and machinery are maintained in good condition, through repairs and renewals, depreciation need not be provided.
(d) In the absence of any legal provisions, if the auditor finds that provision made for depreciation is inadequate then he is not required to refer to it in his report.
Ans. (a)

26. Social obligation of accounting refers to:
(a) the completion of journal entries
(b) the preparation of final accounts
(c) cost recording
(d) servicing the needs of various state holders
Ans. (d)

CLASSIFICATION OF EXPENSES,
RECEIPTS, PROFITS (CAPITAL/REVENUE)

27. Match List-I with List-II and select the correct answer:
List- List-II
A. Heavy amount of premium on 1. Capital expenditure
redemption of preference shares
B. Excess of sale proceeds of fixed 2. Deferred Revenue Expenditure
assets over their original cost
C. Cost of installation of an old machine 3. Capital Gain
D. Freight paid on purchase of raw material 4. Revenue Expenditure
Codes:
A B C D
(a) 2 3 4 1
(b) 3 2 4 1
(c) 2 3 1 4
(d) 3 2 1 4
Ans. (c)

28. Which one of the following is capital expenditure?
(a) Cost of advertisement
(b) Purchase of a delivery van
(c) Purchase of raw material
(d) Purchase of machine oil
Ans. (b)

29. Amount spent on an advertisement companies, the benefits of which is likely to last for three years is a:
(a) capital expenditure
(b) revenue expenditure
(c) deferred revenue expenditure
(d) contingent expenditure
Ans. (c)

30. Revenue is generally recognized as being earned at the point of time when:
(a) sale is affected
(b) cash is received
(c) production is completed
(d) debts are collected
Ans. (a)

31. Which one of the following will be treated as revenue expenditure?
(a) Cost incurred for a new exit as required under the local bodies’ bye laws
(b) Interest paid on loan during the construction of works
(c) Cost of pulling down an old building as also the payment made to the architect for the plan of a new building
(d) A dealer in sewing machines purchases sewing machines and spends some money on the repair of ten machines damaged while in transit
Ans. (d)

32. Match List-I with List-II and select the correct answer:
List—I List—II
A. Preliminary expenses 1. Capital expenditure
B. Travelling expenses of the salesman 2. Revenue Expenditure
C. Profit on sale of a part of 3. Capital gain
the business building
D. Nazrana paid on the 4. Deferred revenue expenditure
purchase of land for business
Codes:
A B C D
(a) 4 2 3 1
(b) 4 2 1 3
(c) 2 4 3 1
(d) 2 4 1 3
Ans. (a)

ACCOUNTS OF NON-PROFIT ORGAN4SATION, PARTNERSHIP

33. A person started business with a cash of Rs. 22,000 and stock of Rs. 3,000 on 1st January, 1996. During the year he made a profit of Rs. 6,000. His creditors were paid Rs. 4,500 for the office furniture supplied. He took goods worth Rs. 3,500 for his daughter’s
wedding on 30th June, 1996, the gross assets of his business on 31st December, 1996 was:
(a) Rs. 27,500
(b) Rs. 26,500
(c) Rs. 23,500
(d) Rs. 20,500
Ans. (a)

34. In the case of a sole proprietorship, Assets in Balance sheet items are conveniently shown in
(a) order of fixity
(b) order of Liquidity
(c) alphabetical order
(d) order of dates of acquisition
Ans. (b)

35. Match List-I (Names of accounts) with List-II (Matter with which the accounts are concerned) and select the correct answer:
List-I List-II
A. Partners’ current accounts 1. Dissolution of Partnership
B. Goodwill account 2. Revaluation of assets on the admission of-a partner
C. Partners’ drawings accounts 3. Fixed capital of partners
D. Profit and Loss 4. Goods taken by partners for private consumption
adjustment account
Codes:
A B C D
(a) 1 3 2 4
(b) 1 3 4 2
(c) 3 1 4 2
(d) 3 1 2 4
Ans. (c)

36. Match List-I (Transaction) with List-II (Entry to be made) and select the correct answer:
List-I List-II
A. Loss on realization 1. Debit Partners capital A/c
B. Profit on realization 2. Credit Realization A/c
C. Assets sold 3. Credit Partners Capital A/c
D. Creditors paid 4. Debit Realization A/c
Codes:
A B C D
(a) 1 3 2 4
(b) 3 1 2 4
(c) 3 1 4 2
(d) 1 3 4 2
Ans. (a)

37. A business concern provides that following details:
Cost of goods sold Rs. 1, 50,000
Sales Rs. 2, 00,000
Opening Stock 60,000
Closing Stock 40,000
Debtors 45,000
Creditors 50,000
The concerns purchases would amount to (in Rs.):
(a) 1, 30,000
(b) 2, 20,000
(c) 2, 60,000
(d) 2, 90,000
Ans. (a)

38. Which of the following statements are appropriate in respect of partnership accounts?
1. In the absence of any provision in the partnership agreement to the contrary, partners can charge
interest at 6% per annum on loans given by them to the partnership firm.
2. An ordinary partnership firm can have not more than 50 partners.
3. A banking partnership firm can have not more than 10 partnerships.
4. In the absence of any provision in the partnership agreement to the contrary, profits and losses are shared by the partners in the ratio of their capitals.
Select the correct answer from the codes given below:
(a) 1 and 2
(b) 1 and 3
(c) 2, 3 and 4
(d) 1, 3 and 4
Ans. (b)

39. A and B are equal partners in a firm. They submitted C is one-sixth partner who brought in Rs. 60,000 as goodwill; The new profit sharing ratio 3:2:1. If goodwill of Rs. 60,000 is to be paid to the old partners as per profit sacrificing ratio, B will receive:
(a) Rs. 30,000
(b) Rs. 60,000
(c) Rs. 45,000
(d) Nil
Ans. (b)

40. R admitted as a new partner for one fourth share of future profits, fails to bring in cash of Rs. 5,000 towards goodwill but the existing (old) partners S and T, sharing profits in the ratio of 3:2, raise the goodwill accounts at its full value. Therefore, the partners will be credited for goodwill as:
S (Rs.) T (Rs.) R (Rs.)
(a) 3,000 2,000 Nil
(b) 9,000 6,000 5,000
(c) 12,000 8,000 Nil
(d) 2,250 1,500 1,250
Ans. (a)

41. The following figures (all in Rs) relate to a non-trading concern:
1st January, 1995 stock of Medicines 5,000
1st January, 1995 outstanding creditors for medicines 3,000
Amount paid for medicines during the years 15,000
Value of medicines spoiled during the year 400
Stock of medicines on 31st December, 1995 3,500
The amount to be debited to Income and Expenditure Account would be:
(a) Rs. 15,000
(b) Rs. 18,500
(c) Rs. 18,000
(d) Rs. 13,500
Ans. (d)

42. Which of the following items should be entered in the Receipts and Payments account of a club?
1. Sale of old newspapers
2. Loss on sale of some assets
3. Payments for investment
Select the correct answer from the codes given below:
(a) 1, 2 and 3
(b) 1 and 3
(c) 1 and 2
(d) 2 and 3
Ans. (b)

43. A cultural club discloses that subscription received during a particular accounting period as per receipts and payments account amount to Rs. 57,360.
Subscription outstanding (opening and closing) was Rs. 4,800 and Rs. 6,000 respectively. Subscription received in advance (opening balance and closing balance) amounted to Rs. 3,600 and Rs.2, 160 respectively.
The amount to be posted to income and expenditure account would be:
(a) Rs. 57,360
(b) Rs. 54,000
(c) Rs. 60,000
(d) Rs. 63,360
Ans. (c)
FINANCIAL STATEMENTS
(FINAL ACCOUNTS)
44. If the operating expenses exceed gross profit, the excess is referred to as
(a) operating Income
(b) operating loss
(c) non-operating expenses
(d) non-operating income
(a) 1, 2 and 3
(c) 1 and 2
(b) 1 and 3
(d) 2 and 3
Ans. (b)

45. Ansh started business on 1st April 1995 with a capital a Rs. 25,000 and a loan of Rs. 12,500. Total assets and total liabilities at the end of 31st March, 1996 amounted to Rs. 75,000 and Rs. 12,500 respectively. He invested a further capital of Rs. 12,500 during the year and withdrew Rs. 7,500 during the relevant financial period. His closing capital and profits would be respectively:
(a) Rs. 62,500 and Rs. 32,500
(b) Rs. 50,000 and Rs. 40,000
(c) Rs. 70,000 and Rs. 47,500
(d) Rs. 55,000 and Rs. 42,500
Ans. (a)

46. Match List-I with List-II and select the correct answer:
List—I List—II
(Item) (Type of Asset)
A. Brand equity 1. Tangible
B. Plant and Machinery 2. Current
C. Advances to suppliers 3. Intangible
D. Deferred Revenue Expenditure 4. Fictitious
Codes:
A B C D
(a) 3 1 4 2
(b) 1 3 2 4
(c) 3 1 2 4
(d) 1 3 4 2
Ans. (c)

47. Which one of the following is an intangible asset?
(a) Furniture
(b) Patent right
(c) Investment in shares
(d) Loose tools
Ans. (b)

48. What is the correct sequence of the following actions required for the preparation of Final Accounts?
(1) Preparation of Trial Balance
(2) Balancing of Accounts
(3) Preparation of Annual Financial Statements
(4) Making Adjusting Entries
Select the correct answer from the codes given below:
(a) 4, 2, 1, 3
(b) 2, 4, 3, 1
(c) 2, 1, 4, 3
(d) 4, 2, 3, 1
Ans. (a)

49. Consider the following items:
1. Debentures
2. Prepaid rent
3. Accrued interest
4. Bank overdraft
Current liabilities would include:
(a) 2, 3 and 4
(b) 1, 2 and 3
(c) 1 and 4
(d) 1, 2, 3 and 4
Ans. (c)

ACCOUNTING OF SHARES
AND DEBENTURES

50. Having reissued all forfeited shares, the credit balance remaining in forfeited shares account is transferred to:
(a) General reserve
(b) Reserve capital
(c) Capital reserve
(d) None of the above
Ans. (c)

Commerce Frauds :How Secret Reserves are created?

2011-06-23T16:30:00.001-07:00

Commerce Frauds :How Secret Reserves are created?
• By undervaluation of Assets! By undervaluation of liabilities
• By incorporating fictitious liabilities.
• By charging higher depreciation
• By charging capital items to revenue items
• By making excessive provisions for contingent liabilities etc.

commerce Exam practice test using MCQ

2011-06-07T09:08:00.001-07:00

commerce Exam practice test using MCQ
Commerce MCQ Practice Test for exams
Free online commerce MCQ test
1. Which one of the following functions is served most by information technology?
(a) Replacement of human labour
(b) Provision for a handle to the management to improve industrial relations
(c) Substitution of human information processing
(d) Rationalization of office work
Ans. (d)

2. Match List-I with List -II and select the correct answer using the Code given below the lists:
List- I List-II
A. Simple Association 1. Amalgamation
B. Federation 2. Cartels
C. Complete consolidation 3. Chamber of Commerce
D. Partial Consolidation 4. Holding company
Codes:
A B C D
(a) 3 2 4 1
(b) 2 3 1 4
(c) 2 3 4 1
(d) 3 2 1 4
Ans. (b)

3. Which one of the following NOT a feature of sole proprietorship business?
(a) Undivided risk
(b) No government regulation
(c) Separate entity of the firm
(d) Unlimited liability
Ans. (c)

FOREIGN TRADE (IMPORT & EXPORT)

4. Dumping is an example of:
(a) monopolistic practice in international trade
(b) monopoly in international trade
(c) oligopoly in international trade
(d) perfect competition in international trade
Ans. (b)

INSURANCE (LIFE, FIRE, MARINE GENERAL)

5. Who among the following does NOT have insurable rest in fire insurance?
(a) A shop owner in the property of his customers
(b) A creditor in the property mortgaged with him
(c) A trustee in the property of the trust
(d) An insurance company in the property
Ans. (d)

6. In marine insurance, warranty means a guarantee:
(a) against the loss of the ship in the voyage
(b) for the safety of the captain of the ship
(c) for payment of shipping freight
(d) to comply with conditions mentioned in the policy
Ans. (d)

7. In a consequential loss policy which one of the following losses is indemnified?
(a) Loss of corporate image
(b) Loss of net profits due to fire
(c) Loss due to theft during fire
(d) Loss due to damage around the venue of fire
Ans. (b)

MANAGEMENT

8. One of the major disadvantages of the Matrix form of organization structure is that:
(a) it does not pinpoint product - profit responsibility
(b) it is not oriented towards results
(c) there is possibility of disunity of command
(d) it generates rivalry between line and staff members
Ans. (c)

9. Which of the following gives the correct sequence with respect to communication process?
(a) Sender, Message, Encoding Receiver, Channel, Decoding and Feedback.
(b) Message, Sender, Encoding, Receiver, Channel, Decoding and Feedback.
(c) Encoding, Message, Sender, Decoding, Feedback, Receiver and Channel.
(d) Sender, Message, Encoding, Channel, Receiver, Decoding and Feedback
Ans. (d)

10. Maintenance of intended delegation requires that decisions lying within the individual manager’s authority should be made by them and not referred upwards in the organizational hierarchy. This is known as:
(a) principle of unity of command
(b) scalar principle
(c) authority level principle
(d) principle of absoluteness of responsibility
Ans. (c)

11. In which one of the following, Crisis Management is reflected?
(a) Future expansion plans of business
(b) Organization Development Programme
(c) Short-term Manpower Planning
(d) Prudent managerial leadership
Ans. (d)

12. David C. McClelland’s motivating needs are:
(a) Needs for power, affiliation and growth
(b) Needs for affiliation, achievement and security
(c) Needs for power, achievement and relatedness
(d) Needs for power, affiliation and achievement
Ans.(d)

13. Which one of the following, correctly signifies the purpose of an Organization Chart?
(a) Office Decor
(b) Indication of available Office Services
(c) Flow of Authority
(d) High Morale
Ans. (c)

14. Informal organization is as necessary as formal organization chiefly for the reason that it:
(a) resists change
(b) builds morale
(c) has close association with decision making
(d) fulfils separate goals and standards
Ans. (b)

15. Increase in the installation of Personal Computer is mainly due to:
(a) monotony of work
(b) reduction of fatigue
(c) improvement of efficiency
(d) lowering work load
Ans. (c)

16. The most important advantage of centralization of office services is:
(a) specialization
(b) higher departmental loyalty
(c) no delay in providing services
(d) less burden of work
Ans. (c)

17. Management by Exception is to improve:
(a) control over personnel
(b) strategic management
(c) steady flow of information
(d) high morale
Ans. (b)

18. Which one of the following indicates the correct chronological order of management approaches in the History of Management Thoughts?
(a) Classical, Human Relations, Behavioral, Systems, Contingency
(b) Contingency, Systems, Behavioral, Human Relations, Classical
(c) Classical, Behavioral, Human Relations, Systems, Contingency
(d) Classical, Human Relations, Behavioral, Contingency, Systems
Ans. (a)

19. The degree of decentralization in an organization
depends most on:
(a) technology
(b) size of workforce
(c) volume of transactions
(d) competence of subordinates
Ans. (d)

20. Job Evaluation is carried on mainly for:
(a) identifying geographical locational factors of business enterprise
(b) promoting job satisfaction
(c) simplifying wage administration
(d) meeting competition effectively
Ans. (c)

21. Consider the following stages of planned change:
1. Moving
2. Refreezing
3. Unfreezing
According to Kurt Lewin, the correct sequence of these is
(a) l, 2, 3
(b) 2, 3, l
(c) 3, 1, 2
(d) 1, 3, 2
Ans. (c)

22. Wider span of control is effective in organizations
(a) a1thority delegation is inadequate
(b) tasks are complex
(c) through subordinate training scheme exists
(d) the leadership style authoritarian
Ans. (c)

23. The most suitable method of filing for a transnational corporation is:
(a) numerical
(b) alphabetical-numerical
(c) numerical—territorial
(d) territorial
Ans. (b)

24. Which one of the following aims is achieved most through Office Record keeping ?
(a) Efficiency of operations on shop floor
(b) Business reputation
(c) Storage of documents
(d) Helping decision making
Ans. (c)

25. Greater mechanization of offices, results in:
(a) better house keeping
(b) greater accuracy in the work
(c) making employees cogs of the machines
(d) higher cost of running office
Ans. (b)

26. Which one of the following is the most appropriate
task of office management?
(a) Creation of profit centre
(b) Creation of control centre
(c) Making office supplies available
(d) Supervision of production Quality Control
Ans. (b)

27. O & M can be strengthened chiefly through:
(a) wage incentive plans
(b) good store-keeping
(c) improved office-layout
(d) better work measurement
Ans. (d)
COMPANY LAWS INCLUDING
SECRETARIAL PRACTICES

28. A director having direct or indirect, interest or concern in a transaction of the company, has to disclose his interest in a meeting to the:
(a) Board of Directors
(b) Shareholders
(c) Company Secretary
(d) Registrar of Companies
Ans. (a)

29. Match List-I with List-II and select the correct answer using the Code given below the lists:
List-I List-II
A. Company Secretary 1. In charge of statutory and administrative duties
B. Director 2. Reports to the shareholders
C. Managing Director 3. Reports to the Management
D. Internal Auditor 4. Trustee of Company’s assets
5. Reports to the Board of Directors
Codes:
A B C D
(a) 1 5 2 3
(b) 3 5 2 1
(c) 1 4 5 3
(d) 3 4 5 1
Ans. (c)

30. Which one of the following reports should have “responsibility statement” under the Companies Act, 1956?
(a) Auditor’s report
(b) Board of Director’s report
(c) Company Secretary’s report
(d) Audio Committee’s report
Ans. (b)

31. Consider the following statements:
1. Board of Directors appoints the first auditor of the company
2. A shareholder of a company can become member of the Board
3. Board of Directors can act as auditors
4. Directors of one company can be appointed as Director to any number of companies
Which of the above statements are correct?
(a) 1,2 and 3
(b) 1 and 3
(c) 1 and 2
(d) 2, 3 and 4
Ans. (c)

32. The capital of a public limited company can be reduced with the confirmation of the:
(a) Registrar of Companies
(b) Company Law Board
(c) Securities and Exchange Board of India
(d) High Court
Ans. (b)

33. Match List-I (Concept relating to company meetings) with List-II (Meaning) and select the correct answer using the Code given below the lists:
List-I List-II
A. Proxy 1. Minimum number of members required to be present
B. Quorum 2. Getting the right to vote only
C. Statutory Meeting 3. Conducted once in a year
D. Annual General Meeting 4. Once in the life time of a company
5. Meeting of a particular group of shareholders
Codes:
A B C D
(a) 5 3 2 1
(b) 2 1 4 3
(c) 5 1 2 3
(d) 2 3 4 1
Ans. (

34. Minimum paid-up capital required to incorporate a public-limited company is:
(a) Rs. 20,000
(b) Rs. 1 ,00.00
(c) Rs. 5,00,000
(d) Rs. 10,00,000
Ans. (d)

35. Consider the following statements:
1. The minimum number of directors in a public company is three.
2. The first directors are appointed by the first general meeting.
3. An official director appointed by the government in a public company is required to possess qualification shares within 2 months of his appointment.
4. The Company Secretary is appointed by Board of Directors.
Which of the above statements are correct?
(a) 1 and 2
(b) l and 4
(c) 2 and 3
(d) 2 and 4
Ans. (b)

36. After the commencement of the Companies Act, 1956 no person, save as otherwise provided in Section 276, shall hold office as director at the same time in more than:
(a) 5 Companies
(b) 10 Companies
(c) 15 Companies
(d) 20 Companies
Ans. (d)

37. Match List-I (Company having paid-up capital more than) with List-II (Must have/be a) and select the correct answer using the Code given below the lists.
List-I List-II
A. One lakh rupees 1. Whole-time Director
B. Ten lakh rupees 2. Secretarial compliance report
C. Fifty lakh rupees 3. Qualified Company Secretary
D. Five crore rupees 4. Public Limited Company
5. Private Limited Company
Codes:
A B C D
(a) 5 4 3 1
(b) 3 4 1 5
(c) 5 2 3 1
(d) 3 2 1 5
Ans. (a)

38. Match List—I with List—II and select the correct answer using the Code given below the lists:
List-I List-II
A. SEBI 1. Apex institution of development banks
B. OTCEI 2. Credit rating
C. IDBI 3. Trading in securities of small company and government
D. CRISIL 4. Regulation and development of capital market
Codes:
A B C D
(a) 4 3 1 2
(b) 3 4 1 2
(c) 4 3 2 1
(d) 3 4 2 1
Ans. (a)

MISCELLANEOUS

39. Merchant Banker does NOT offer services in regard to:
(a) project appraisal
(b) capital issue
(c) project preparation
(d) subscription of Equity shares
Ans. (a)

40. Match List—I with List—II and select the correct answer using the Code given below the lists:
List—I List—II
A. Reducing capital 1. Contribution margin
B. Sales> Variable cost 2. Reorganization
C. Sales> Break even sales 3. Absorption
D. Take-over of firm 4. Margin of safety
Codes:
A B C D
(a) 2 1 3 4
(b) 1 2 3 4
(c) 1 2 4 3
(d) 2 1 4 3
Ans. (d)

41. Mechanistic structures are designed to:
(a) promote flexibility and quick responses to fast changing situations
(b) induce people to behave in predictable and accountable manner
(c) make people happy by assigning specific tasks to. them
(d) perform assigned tasks within the scheduled time
Ans. (d)

42. The Net asset Value (NAV) of a unit of mutual fund scheme is computed as:
Market value of the fund’s investments ± Receivables + Accrued income —
(a) Liabilities — Accrued expenses
No. of units outstanding
(b) Market value of the fund’s investment
No. of units outstanding
(c) Assets of the fund — Liabilities of the fund
No. of units outstanding
(d) Face value of the unit + Dividend per unit
Ans. (a)

43. Which one of the following reports deals with “Corporate government”?
(a) Sabhanayagam Report
(b) Kurmaramangalam Birla Report
(c) Narasimham Report
(d) L. C. Gupta Report
Ans. (b)

REASONING

The following Seventeen (17) items consist of two statements one labelled the ‘Assertion A’ and the other labelled the Reason R’. You are to examine these two statements carefully and decide the Assertion (A) and the Reason (R)are individually true and if so, whether the Reason is a correct explanation of the Assertion. Select your answers to these items using the Code given below and mark your answer sheet accordingly:
Code:
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and R are true but R is NOT the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true

44. Assertion (A): The best way of reporting of social responsibility is to prepare a Value Added Statement (VAS) to show the income earned by the providers of capital, the employees and the government.
Reason (R): A business is accountable to the society since it makes use of community-owned assets such as roads, railways, communication and other infrastructural facilities and concessions provided by the state from the taxpayer’s money.
Ans. (a)

45. Assertion (A): The interest on borrowed funds can be capitalized upto the completion of fixed assets.
Reason (R):The completion of fixed assets has been possible only because of these funds.
Ans. (b)

46. Assertion (A): A claim lodged with Railways in March 1998 for loss of goods of Rs. 2,00,000 had been passed for payment in March 2001 for Rs. 1,50,000. No entry was passed in 1998.
Reason (R): The collectability of the claim was not certain in 1998.
Ans. (a)

47. Assertion (A): Life-membership fees is to be capitalized.
Reason (R) : Often these are non-recurring receipts and the members take advantage of the services provided during the tenure of membership.
Ans.(b)

48. Assertion (A): The company is said to be trading on equity.
Reason (R): The capital structure of the company is highly geared.
Ans. (b)

49. Assertion (A): R.O.I. measures the final outcome of all recorded business activities. It is the ratio that measures the performance of the firm that generates returns.
Reason (R): However, interpretation regarding the amount of capital invested and size of returns generated by a firm differ from one interpreter to another and one organization to another. In other words, practices are not uniform and as such the acceptability of the concept is being questioned.
Ans. (b)

50. Assertion (A): An auditor of a company gives a critical review of accounts.
Reason (R): He gives collaborative evidence that accounts are properly drawn up.
Ans. (c)

commerce objective questions with answers

2011-06-07T09:06:00.000-07:00

commerce objective questions with answers
Solved Objective Questions Commerce For UPSC PGT TGT
Multiple choice questions: basic Commerce
1. A file which contains rules governing the organization under audit is known as:
(a) Current file
(b) Permanent file
(c) Routine file
(d) Precedence file
Ans. (b)

2. In so far as a company is concerned, which one of the following pairs is not correctly matched?
(a) Internal audit — Obligatory
(b) Statutory audit — Mandatory
(c) Continuous audit — Optional
(d) Management audit — Voluntary
Ans. (a)

3. Where the auditor places a high degree of reliance on an internal control procedure, the acceptable risk of over-reliance would be:
(a) Low
(c) Moderate
(b) High
(d) Nil
Ans. (c)

4. Management audit is ordered by the:
(a) Workers of a company
(b) Government
(c) Board of Directors
(d) Securities Exchange Board of India.
Ans. (c)

5. When an auditor detects material weaknesses in the internal checks and control system of the company under audit, he should report his findings as per:
(a) ICAI orders
(b) SEBI orders
(c) MAOCAR orders
(d) ICWAI orders
Ans. (c)

CAPITAL MARKET (STOCK EXCHANGE)
6. A company can invest money in another company only if it is so authorized by its
(a) Memorandum of Association
(b) Articles of Association
(c) Auditors
(d) Company Secretary
Ans. (a)
7. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List-II
(Type of Mutual Fund) (Features)
A. Open-ended fund 1. Maximizes short term return to investors
B. Income fund 2. Can sell unlimited number of units
C. Close-ended fund 3. The units are not redeemable at their NAV
D. Growth fund 4. Maximizes long-term return to investors
Codes:
A B C D
(a) 3 4 2 1
(b) 3 4 1 2
(c) 2 1 4 3
(d) 2 1 3 4
Ans. (d)

8. Which one of the following best supports the theory that the Stock Exchange is a secondary market?
In a Stock Exchange:
(a) securities are bought and sold by way of transfer
(b) an existing holder of securities can dispose of the holdings to another investor who intends to buy them
(c) no new investment is created
(d) securities are dealt in for dual purposes— investment and speculation
Ans. (d)

9. LIBOR refers to:
(a) liberalized system of foreign exchange transfer between Banks
(b) inter-bank lending rate for Euro-dollars at London
(c) lowest rate of interest at which banks in London lend Pound Sterling
(d) lowest rate of interest prescribed by the Reserve Bank of India
Ans. (b)

10. Financial disintermediation results in larger:
(a) access to financial institutions
(b) participation of foreign financial institutions
(c) free-based income
(d) securities-related income
Ans. (a)

BUSINESS ORGANISATION
AND COMBINATION

11. Match List-I with List-II and select the correct answer using the Code given below the Lists:

List-I List-II
(Organization) (Associated with)
A. Joint stock company 1. Memorandum of Association (M/A)
B. Co-operative society 2. Special Act
C. Statutory corporation 3.Mutual contract
D. Partnership 4. Bye-laws
5. Shareholding
Codes:
A B C D
(a) 1 4 3 2
(b) 5 2 4 3
(c) 1 4 2 3
(d) 5 2 3 4
Ans. (c)

12. The basic flow of activities of a business firm follows a certain cyclical sequence. A business would like to have as many such cycles as possible during a given time period, say a year. What will be the sequential flow of some of these activities in the cycle?
1. Financing decision
2. Investment decision
3. Disposal or output
4. Acquisition of resources
Select the correct answer using the Code given below:
Code:
(a) 2, 1, 4, 3
(b) 4, 1, 2, 3
(c) 1, 3, 4, 2
(d) 2, 3, 1, 4
Ans. (a)

13. Which one of the following types of Companies deals with only its shareholders for their benefit?
(a) Private Limited Company
(b) Chit Fund Company
(c) Nidhi Company
(d) Banking Company
Ans. (b)

14. In addition of Consumer Forums which one of the following looks after the interests of consumers?
(a) High courts
(b) Company Law Board
(C) MRTP
(d) Bureau of Industrial Costs and Prices
Ans. (c)

15. Which one of the following is NOT an advantage of the incorporation of a company?
(a) Perpetual succession
(b) Limited liability of Members
(c) Capital contributions forming part. of the joint stock of the company
(d) Freedom to do any business
Ans. (d)

16. Economic oligarchy, fraudulent practices, bureaucratic management and difficulty in formation are the limitations of a:
(a) sole proprietary concern
(b) partnership firm
(c) joint stock company
(d) co-operative society
Ans. (c)

17. Which one of the following is not the distinctive feature of the co-operative form of business organization?
(a) Service before self
(b) Democratic management
(c) Corporate status
(d) One-share one-vote system
Ans. (d)

18. The liability of the Karta in a joint Hindu family is:
(a) limited to his interest in the joint Hindu family
(b) unlimited
(c) limited to the entire property of the family
(d) limited to the private properties of all the members
Ans. (b)

19. Those companies which can register themselves without the word “limited” under license granted by the Central Government are:
(a) Private Companies
(b) Charitable Companies
(c) Public Companies
(d) None of the above
Ans. (b)

20. A, B, C. D are partners sharing profits and losses in the ratio 3 : 3 : 2: 1. The partnership is dissolved and D becomes insolvent. C brings only his share of loss and shows his inability to contribute anything towards D’s deficiency. According to Garner vs. Murray rule, D’s deficiency in the total will be shared by:
(a) A and B in their capital ratio
(b) A, B and C in their profit sharing ratio
(c) A, B and C in their capital ratio
(d) A, B and C equally
Ans. (a)

21. Non-registration of a partnership does not affect:
(a) the right of a partner to sue the firm
(b) the right of the firm to sue third parties
(c) the right of the third party to proceed against the firm or its partners
(d) any of the above
Ans. (c)

22. If a minor chooses to continue as a partner on attaining the age of majority, he will be liable to the debts of the firm from the date of his:
(a) attaining majority
(b) admission to profits of the firm
(c) choosing to become a partner at a subsequent date
(d) guardian giving the option
Ans. (b)

23. Which one of the following is not a feature of Private
company as per Indian Companies Act?
(a) Limitation on the number of its members
(b) Restriction on the right to transfer its shares
(c) Ban on floating of debentures
(d) Prohibition of any invitation to the public
Ans. (c)

24. Combination of Printing and Dyeing Companies is a type of:
(a) vertical combination
(b) horizontal combination
(c) circular combination
(d) allied combination
Ans. (d)

25. According to the Companies Act, which one of-the following companies can commence allotment of shares even before the minimum subscription is subscribed or paid?
(a) Chartered Company
(b) Private Company
(c) Government company’
(d) Public Limited Company
Ans. (b)

26. Which one of the following documents is known as
Doctrine of constructive notice?
(a) The prospectus of the company
(b) The certificate of commencement of business
(c) The Memorandum and the Article of Association
(d) List of working directors
Ans. (c)

27. Consider the following statements regarding Indian industries
1. Industrial modernization has not come up even in a modest way.
2. A support system and a regulatory framework have been developed so as to encourage and direct the industrial houses to modernize their plants.
3. Considerable advances have been made in the fields of managerial and technological skills in the country.
4. No effort has so far been made towards attaining the goal of self-reliance in the manufacture of consumer items.
Of these statements:
(a) 1 and 2 are correct
(b) 2 and 3 are correct
(c) 3 and 4 are correct
(d) 1 and 4 are correct
Ans. (b)

28. Which one of the following is a joint stock company as per Companies Act, 1956?
(a) A charitable trust
(b) A partnership firm with fixed capital
(c) A society with fixed reserve fund
(d) None of the above
Ans. (d)

FOREIGN TRADE (IMPORT& EXPORT)

29. Steps to be taken in a selling system include:
1. Receipt of order
2. Processing order
3. Shipment of merchandise
4. Accounting for sale
The correct chronological sequence of these steps is:
(a) 1, 4, 3. 2
(b) 1, 4, 2, 3
(c) 1, 2, 4, 3
(d) 1, 2, 3, 4
Ans. (c)

30. Which one of the following is not a commercial risk?
(a) Insolvency of the buyer
(b) New restrictions placed on import-export trade
(c) Damage to goods in transit
(d) Change in the exchange rate
Ans. (d)

INSURANCE (LIFE, FIRE, MARINE & GENERAL)

31. Match List-I with List-II and select the correct answer using the Code given below the list:
List-I List-II
(Some usages in trade & marine insurance) (Practical implication or name)
A. Ex- works contract 1. C.I.F.
B. Freight paid by Importer 2. Method of settlement of disputes
C. Force majeure 3. Minimum obligation for the exporter
D. Arbitration 4. Condition to be included in the contract if
natural calamities are to be covered
5. F O B contract
Code:
A B C D
(a) 3 5 2 1
(b) 1 2 3 4
(c) 1 2 4 3
(d) 3 5 4 2
Ans. (d)

32. The average clause in a fire policy states that the insured can get back:
(a) only that portion of the actual loss suffered as the sum insured bears to total value
(b) the entire amount of the total loss suffered
(c) the entire amount of partial loss suffered
(d) a fixed percentage of loss suffered
Ans. (a)
MANAGEMENT

33. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List-II
A. Span of control 1. The superior helps, through continuous guidance, the
subordinate to reach his goals
B. M.B.O. 2. Numerical limit of subordinates to be supervised by
an executive
C. M.B.E. 3. Subordinate remains accountable to his superior and
the superior has the authority to demand
accountability from his subordinate
D. Delegation of authority 4. The management will concern itself of and confine
its activities to those areas and operations where the
actual performance is short of the target

Code:
A B C D
(a) 1 2 3 4
(b) 1 2 4 3
(c) 2 1 3 4
(d) 2 1 4 3
Ans. (d)

34. According to Peter Principle, managers tend to:
(a) work late as they go higher up the hierarchy
(b) work even beyond their retirement age
(c) get promoted to the level of their incompetence
(d) loss their competence with successive promotions
Ans. (c)

35. Which of the following advantages could be derived from the use of Franking machine?
t. It saves time because of its speed
2. Valuable facts and figures can be obtained
3. It is very convenient to use
4. It ensures much greater accuracy
Select the correct answer using the Cod. given
below:
Code:
(a) 1 and 4
(b) 1 and 3
(c) l and 2
(d) 2 and 3
Ans. (b)

36. Consider the given structure of an organization:

Which one of the following is represented by the same?
(a) Druckers’ effective structure
(b) Span of effective control
(c) Functional form of organization
(d) General Manager’s view of the organization
Ans. (c)

37. According to Graicuna’s theory, total, number of relations among superiors and subordinates can be found by the formula:
(a) n (2 n + n + 1)
n
(b) n (2 n -1 + n -1)
2
(c) n (2 n -1 + n +1)
2
(d) n (2 n + n +1)
2
Ans. (d)

38. Which of the following pairs are correctly matched?
1. Henri Fayol — Administration Industrial et General
2. F.W. Taylor — The Functions of the Executive
3. Douglas McGregor — The Human side of Enterprise
4. Peter Drucker — Management: Tasks, Responsibilities and Practices
Select the correct answer using the Code given below:
Code:
(a) 1, 2, 3 and 4
(b) 3 and 4
(c) 2 and 4
(d) 1 and 3
Ans. (a)

39. Match List-I and List-II and select the correct answer using the Code given below the Lists:
List-I List-II
A. Line authority 1. Some people in an organization are vested with primary
source of authority
B. Staff authority 2. Some people in an organization have legitimate right to exert
influence on others

C. Functional authority 3. Some people in an organization lack independent, formal
authority
D. Formal authority 4. Some people have right to control activities of other
departments as they relate to specific staff
Code:
A B C D
(a) 1 2 3 4
(b) 2 4 3 1
(c) 1 3 4 2
(d) 2 3 4 1
Ans. (c)

40. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I (Names) List-II (Model)
A. Kurt Lewin 1. Action Research process model
B. H.J. Leavitt 2. Sequential profess model
C. Larry Greiner 3. System model
D. Floyd C. Mann 4. Three-step model
Codes:
A B C D
(a) 1 2 3 4
(b) 1 4 3 2
(c) 3 2 1 4
(d) 4 3 2 1
Ans. (c)

41. Understanding control does Not signify understanding:
(a) how one controls
(b) what is meant by control
(c) who controls
(d) what is controlled
Ans. (c)

42. Consider the following statements:
The social responsibility of business is to:
1. do a business as per the public policy
2. obey all the rules and regulations of the Government
3. make payment of the taxes imposed by the Government
4. provide not necessarily adequate but good quality of goods
Of these statements:
(a) 2 and 3 are correct
(b) 1 and 4 are correct
(c) 1, 2 and 3 are correct
(d) 1, 2, 3 and 4 are correct
Ans. (d)

43. In the process of controlling office management, certain steps are normally taken. These include:
1. analyzing the actual performance
2. finding out the reasons for discrepancies.
3. evaluating the performance
4. establishing the standards of work performance
The correct sequence in which these steps are usually taken is:
(a) 4, 1, 2, 3
(b) 1, 4, 2, 3
(c) 1, 4, 3, 2
(d) 4, 1, 3, 2
Ans. (d)

44. Which of the following constitute manpower planning?
1. Determining human resource requirements both quantitatively and qualitatively
2. Finding the source of talented individuals
3. Planning for the human resource, needs of an organization
4. Reaching out to the right source for procuring the right people
Select the correct answer using the Code given below:
Code:
(a) 1, 2 and (c) l and 3
(b) 2 and 3
(d) 1, 2, 3 and 4
Ans. (a)

45. Organization and methods aim at simplification of office procedures through:
(a) elimination of all unnecessary work, minimizing the number of forms and direct communication
(b) elaboration of specific work processes for better implementation
(c) discarding all the records and treating each work merit
(d) allowing existing procedures to continue without adding any new procedures or amendments.
Ans. (a)

46. Consider the following statements:
1. MBO is a control technique in which managers devote time only on the areas of deviation.
2. MBO integrates the individual with the organization, and the organization with the environment.
3. In MBO the control over people is shifted to control over operations.
4. The MBO principle must be accompanied in practice by the principle of critical-point control.
Of these statements:
(a) 1 and 2 are correct
(b) 2 and 3 are correct
(c) 3 and 4 are correct
(d) 1 and 4 are correct
Ans. (c)

47. Which of the following advantages accrue from vertical filing?
1. The system has universal application, as all types of papers and documents can be field
2. It provides ample scope for the expansion of the filling facility
3. It is comparatively a heap method
4. The papers are kept in a chronological order
Select the correct answer using the Code given below.
Code:
(a) 1 and 3
(b) 1 and 2
(c) 2, 3 and 4
(d) 1, 2, 3 and 4
Ans. (b)

48. Consider the following statements:
A strategic management piece comprises:
1. goal settling, strategy formulation, administration and strategic control
2. setting courses of action attaining objective, process of seeking key areas and strategy formulation
3. integrating the organization with culture
4. strategic planning and acting on these plans
Of these statements:
(a) 1, 2 and 3 are correct
(b) 2, 3 and 4 are correct
(c) 1, 2 and 4 are correct
(d) 1, 3 and 4 are correct.
Ans. (c)

49. Which one of the following may not necessarily be an advantage of co-ordination?
(a) Effective supervision
(b) Unity of direction
(c) Creative force
(d) Summarization of all management functions
Ans. (c)

COMPANY LAWS INCLUDING
SECRETARIAL PRACTICES

50.A qualified company Secretary is needed to be appointed as Secretary to a company only on the basis of the:
(a) business of the company
(b) paid up capital of the company
(c) location of the company
(d) listing of the company on any stock exchange
Ans. (b)

commerce multiple choice questions with answers

2011-06-07T09:04:00.000-07:00

commerce multiple choice questions with answers
Commerce Multiple Choice Questions solved as a practice for exams
Multiple Choice Questions With Answers On Commerce
1. Rights issue refers to the shares issued to:
(a) Employees
(b) Public
(c) Existing directors
(d) None of the above
Ans. (d)

2. That portion of the state capital which can be called up only on the winding up of the company is the:
(a) Authorized capital
(b) Issued capital
(c) Subscribed capital
(d) Reserve capital
Ans. (d)

3. If vendor are issued fully paid shares of Rs. 80,000 in consi1eration of net assets of Rs. 60,000, then the balance of Rs. 20,000 will be:
(a) Debited to profit and loss account
(b) Debited to goodwill account
(c) Credited to capital reserve account
(d) Credited to share premium account.
Ans. (b)

RATIO ANALYSIS

4. Owner’s equity stands for:
(a) Fixed Assets minus Fixed Liabilities
(b) Fixed Assets minus Current Liabilities
(c) Current Assets minus Fixed Liabilities
(d) Total Assets minus Total liabilities
Ans. (d)

5. Match List-I with List-II and select the correct answer:
List-I List-II
A. G.P. Ratio 1. Convention of conservatism
B. Cash Budget 2. Profitability
C. EOQ 3. Inventory Management
D. Provision for Bad debts 4. Management of Liquid Assets
Codes:
A B C D
(a) 2 4 1 3
(b) 4 2 3 1
(c) 4 2 I 3
(d) 2 4 3 1
Ans. (d)

6. Given that the current ratio is 2:1, if the net working capital is Rs. 60,600, then the amount of current liabilities would be:
(a) Rs. 30,300
(b) Rs. 60,600
(c) Rs. 1, 21,000
(d) Rs. 90,900
Ans. (b)

7. Project Engineering Ltd. has an adverse current ratio which one of the following would improve this ratio?
(a) Sale of fixed assets for cash
(b) Collection of some of the current accounts receivable
(c) Use of cash to pay off some long term debts
(d) Collection from sundry debtors
Ans. (a)

FUNDS FLOW STATEMENT

8. XYZ Ltd. incurs a net loss of Rs. 5,000 during are accounting years. Depreciation for the relevant year amount to Rs. 1000, preliminary expenses written off during the accounting years is Rs. 3,000 and a loss of Rs. 4,000 is due to sale of plant and machinery. Based on this data, found from operation would amount to:
(a) Rs. 3,000
(b) Rs. 2,000
(c) Rs. 5,000
(d) Rs. 4,000
Ans. (a)
AUDITING

9. Auditors of a company have to report to the:
(a) Board of Director
(b) Managing Director
(c) Institutional Investors
(d) Shareholders at the annual general meeting
Ans. (d)

10. Special Audit can be ordered by:
(a) preference shareholders
(b) the central Government
(c) SEBI
(d) debenture holders
Ans. (b)

11. System of internal check is said to exist in an organization when:
(a) an employee is specifically deputed to check the work of another employee
(b) the departmental head checks the works of his subordinate
(c) some outside experts check the work of employees
(d) another employee of the same department checks the work of an employee in routine office procedure.
Ans. (d)

12. Internal Auditor is appointed by the:
(a) shareholders of the company
(b) Statutory auditor
(c) Institute of internal Auditors of India
(d) Board of Directors of the Company
Ans. (d)

13. Which one of the following is true of the position of an auditor regarding the system of internal check in the organization?
(a) He should acquaint himself with the system of internal check
(b) He should monitor and supervise the system of internal check
(c) He himself should lay down the system of internal check
(d) He has nothing to do with the system of internal check
Ans. (b)

14. A continuous audit is most suitable where the:
(a) transactions are few but complicated
(b) there is no urgency to finalize the accounts on a particular date
(c) internal audit work is being carried On in a satisfactory manner
(d) system of internal check in operation is not satisfactory
Ans. (d)

15. Management audit is:
(a) an independent appraisal of the total management process
(b) a statutory requirement
(c) an investigation into the conduct of direction
(d) an independent appraisal of competitiveness of business
Ans. (a)

16. Management audit is conducted by:
(a) the statutory auditors
(b) government auditors
(c) cost auditors
(d) none of the above
Ans. (d)

17. The auditor has a right to ask for information and
explanation from the:
(a) past auditor of the company
(b) directors of the company
(c) officers of the company
(d) internal auditors of the company
Ans. (b), (c)

18. Working papers which contain a record of the audit works are the property of the:
(a) company
(b) auditor
(c) Registrar of companies
(d) Government of India
Ans. (b)

19. The first Auditors of a company are appointed by the:
(a) Registrar of Companies
(b) shareholders of the Company
(c) Promoters of the Company
(d) Board of Director of the Company
Ans. (d)

20. Sampling is used in the case of:
(a) collection of debts by the accountant
(b) test checks by the auditor
(c) supervision by the works manager
(d) checking pass book entries by the accountant
Ans. (b)

21. In the case of audit of Statutory Report, an auditor is expected to give his report on the:
(a) numbers of shares allotted, amount received in cash and summarized Receipts and Payments account
(b) authorized capital, subscribed capital and paid up capital
(c) Profit and loss account, Balance sheet and director’s report
(d) Directors’ qualification shares, Calls in arrears and Calls in Advance
Ans. (a)

CAPITAL MARKET (STOCK. EXCHANGE)

22. Match List-I (Activity) with list-II (Associated organization) and select the correct answer:
List-I List-II
A. Mutual fund 1. Stock Exchange
B. Public issue of capital 2. Assets Management Company
C. Forward Trading 3. Merchant Banking
D. Option Pricing 4. Forex Market
Codes:
A B C D
(a) 3 2 4 1
(b) 3 2 1 4
(c) 2 3 1 4
(d) 2 3 4 1
Ans. (d)

23. The scope of MRTP Act, since 1992, has been confined only to the regulation of:
(a) consumer monopolies
(b) monopolistic trade practices
(c) restrictive and unfair trade practices
(d) restrictive trade practices
Ans. (d)

24. EXIM bank can be described as a:
(a) non-banking financial company
(b) commercial bank
(c) non-banking non financial company
(d) scheduled bank
Ans. (a)

BUSINESS ORGANISATION AND COMBINATION

25. One of the consequences of non-registration of a partnership firm is that:
(a) a partner cannot such the other partner to enforce a right arising from a contract
(b) the partner of such a firm cannot sue third parties
(c) third parties cannot sue the firm for claims exceeding Rs. 100
(d) The official Assignee or Receiver will have no power on the property of the dissolved firm
Ans. (a)

26. Consider the following rights:
1. Right to take part in the business
2. Right to share profits
3. Right to interest on advances in excess of capital
4. Right to expel a non-cooperative partner
The legal rights of a partner would include:
(a) 1 and 2
(b) 2 and 4
(c) 1, 2 and 3
(d) 1, 3 and 4
Ans. (c)

27. Match List-I with List-II and select the correct answer.
List-I List-II
(Type of combination) (Illustrations)
A. Association 1.Cartel
B. Federation 2. Chamber of commerce and Industry
C. Partial consolidation 3.Holding company
D. Complete consolidation 4.Amalgamation
Codes:
A B C D
(a) 2 1 3 4
(b) 1 2 3 4
(c) 2 1 4 3
(d) 1 2 4 3
Ans. (a)

28. Which one of the following is an example of a company incorporated by a Special Act of Parliament?
(a) Life insurance Corporation of India
(b) Indian Oil Corporation
(c) State Trading Corporation of India
(d) Bharat Heavy Electricals Limited
Ans. (a)

29. Match List-I with List-II and select the correct answer:
List-I List-II
A. Contract of Uberrimae Fidei 1. Public Utility concern
B. Right of Eminent Domain 2. Co-operative society
C. Statement in lieu of prospectus 3. Partnership
D. System of ‘one man one vote’ 4. Sole trading concern
5. Public limited company
Codes
A B C D
(a) 1 3 5 4
(b) 3 1 5 2
(c) 3 2 1 4
(d) 1 2 5 3
Ans. (b)

30. Integration of various units of similar character producing similar products or engaged in the same sphere of business activity under a single form of management and control is called:
(a) vertical combination
(b) horizontal combination
(c) circular or mixed combination
(d) lateral or allied combination
Ans. (b)

FOREIGN TRADE (IMPORT & EXPORT)
31. Match List-I (Document) with List-II (Where used) and select the correct answer:
List-I List-II
A. Shipping Bill 1. To certify the country of origin of goods
B. Bill of Lading 2. For having loaded the cargo in the ship
C. Consular invoice 3. To Transport cargo by ship
D. Packing slip 4. To identify the cargo in transit
Codes:
A B C D
(a) 2 3 4 1
(b) 2 3 1 4
(c) 3 2 1 4
(d) 3 2 4 I
Ans. (c)

32. In the context of foreign trade, the CIF cost may be obtained by:
(a) adding freight and marine insurance premium to the FOB price
(b) deducting freight and marine insurance premium from the FOB price
(c) adding customs duties, freight and marine insurance premium to the cost
(d) deducting customs duties, freight and marine insurance premium from the price
Ans. (a)

INSURANCE (LIFE, FIRE,
MARINE & GENERAL)

33. Paid up value is payable on a life insurance policy:
(a) on. the maturity of the policy
(b) when the policy lapses
(c) when the policy is surrendered
(d) on maturity or expiry whichever is earlier
Ans. (a)

MANAGEMENT

34. Setting the mission which encompasses objectives, policies and goals is known as:
(a) operational planning
(b) strategic planning
(c) tactical planning
(d) contingency planning
Ans. (b)

35. Which one of the following statements is correct?
(a) Planning and controlling are essentially one and the same
(b) Controlling is a part of the planning process
(c) Controlling is a substitute for planning
(d) A control process is meaningless without pre-set goals
Ans. (d)

36. When jobs are broadened in scope and complexity so that the person’s overall area of job responsibility increases, it is a case of:
(a) job rotation
(b) job enrichment
(c) job specification
(d) job enlargement
Ans. (b)

37. Consider the following statements:
Planning involves:
1. Forecasting
2. Choice among alternative courses of action
3. Wishful thinking
4. Decision only by production manager
Of these statements:
(a) 1, 2, 3 and 4 are correct
(b) 1, 3 and 4 are correct
(c) 1 and 2 are correct
(d) 1, 2 and 3 are correct
Ans. (d)

38. Techniques of managerial control are useful in:
(a) selection of Plant location
(b) identifying appropriate technology
(c) profit Planning
(d) conducting shareholder’s meetings
Ans. (b)

39. Motivational process and not the motivators as such is associated with:
(a) need of Hierarchy theory
(b) two-factor theory
(c) ERG theory
(d) expectancy theory
Ans. (a)

40. “Perceived equity in reward results in satisfaction”. Which one of the following motivation theories takes this into account?
(a) Porter and Lawler Model
(b) Victor Varoom’s Expectancy Model
(c) F.W. Taylor’s incentive scheme
(d) Herzberg’s two-Factor Theory
Ans. (a)

41. One of the steps that may be required for achieving effective coordination is:
(a) reporting on performance and taking remedial measures
(b) training in leadership and supervisory abilities of controllers of activity
(c) transmission of messages in a full line communication channel
(d) making an honest appraisal and initiating rewards/punishments
Ans. (c)
42. Minimum wages are fixed by the:
(a) trade unions
(b) employers
(c) state governments
(d) courts of law
Ans. (c)

43. An important aspect of control is that the:
(a) manager motivates his subordinates to give better performance
(b) manager sets an effective management information system
(c) plans are checked before implementation against predetermined measures of performance
(d) performance is checked against predetermined standards
Ans. (d)

44. Consider the following steps:
1. Analysis of variances
2. Initiating corrective action
3. Measurement of actual performance
4. Establishment of standards
The correct sequence of these steps in process of control is
(a) 4, 3, 2, l
(b) 3, 4, 2, 1
(c) 4, 3, 1, 2
(d) 3, 4, 1, 2
Ans. (c)

45. According to the principle of “Span of control” there is:
(a) a tendency to overload supervisors with too much of works
(b) a limit to the number of subordinates a supervisor can effectively supervise
(c) no limit to the number of subordinate a supervisor can supervise
(d) a limit to delegation of authority to the subordinate
Ans. (b)

46. Establishment of management by objectives presupposes:
(a) that limits of authority are not defined
(b) that the employees are provided with result expected
(c) Unlimited freedom to operate in the assigned task
(d) Unlimited freedom to set goals
Ans. (b)

47. Each subordinate should have only one superior whose command he has to obey.
This is known as:
(a) acalar principle
(b) exception principle
(c) unity of command principle
(d) authority responsibility principle
Ans. (c)

48. Consider the following elements:
1. Indicators
2. Objectives
3. Controls
4. Key result Areas
5. Roles and Mission
6. Action Plans
Their correct sequence in Management by Objectives and Result is:
(a) 5, 4, 2, 1, 3, 6
(b) 4, 5, 2, 1, 3, 6
(c) 5, 4, 1, 2, 6, 3
(d) 4, 5, 1, 2, 6, 3
Ans. (d)

49. Delegation of authority takes place when a manager thinks that:
(a) the job is too difficult and hazardous
(b) the job requires the high skill that he does not possess
(c) he cannot look after all the demanding tasks by himself
(d) he needs to punish his subordinate
Ans. (c)

50. Brain storming is used by the management for:
(a) work allocation on the shop floor
(b) generating alternative for problem solving
(c) the promotion of research and development
(d) training employees
Ans. (b)

SSC Section Officer Commercial Audit Model Practice test

2011-05-30T18:57:00.000-07:00

SSC Section Officer Commercial Audit Model Practice test
1. The liability of auditor can be:
(a) only civil
(b) only crimi9al
(c) either civil or criminal
(d) civil and/or criminal
Ans. (d)

2. Who among the following is not a speculator in stock exchange?
(a) Broker
(b) Bull
(c) Bear
(d) Stag
Ans. (a)

3. Match List-I with List-II and select the correct answer using the codes given below the lists:
List—I List—II
A. Option dealing 1. Stock Exchange
B. Private Placement 2. Bonds of big companies
C. Deep Discount 3. New Public Limited companies
D. Law of large numbers 4. Statistical probability
Codes:
A B C D
(a) 1 2 3 4
(b) 4 2 3 1
(c) 1 3 2 4
(d) 4 3 2 1
Ans. (c)

4. It is compulsory for a share broker to register with the:
(a) concerned stock exchange
(b) securities and Exchange Board of India
(c) department of Company Affairs
(d) concerned Stock Exchange in concurrence with the securities and Exchange Board of India
Ans. (d)

5. One of the uses of ‘Commercial Paper’ is that it can:
(a) help to understand business news
(b) transactions
(c) be circulated to raise money just like a Bill of Exchange
(d) be issued to finance an important transaction
Ans. (c)

6. The Gilt-edged market refers to the market for:
(a) industrial securities
(b) government and semi-government securities
(c) shares and debentures
(d) public limited securities
Ans. (b)

7. A ‘Co-partner’ is one who is:
(a) an active member of a partnership
(b) a member of a Joint Hindu Family Firm
(c) a member of a Joint Stock Con1pany
(d) a member of a co-operative society
Ans. (b)

8. Every partner must account to the firm for any benefit derived by him without. the consent of the other partners and thus make no secret profits. This is based on:
(a) the general law of contract
(b) the general law of agency
(c) the law of sale of goods
(d) business ethics
Ans. ()

9. In a broader sense, the activities of a co-operative organization are expected to ensure primarily:
(a) profitability to the members
(b) socialism in the economy
(c) equity to the members
(d) productivity to the society
Ans. (c)

10. Which of the following statements are correct?
1. A trust form of organization cannot do business
2. A society registered under the Societies Registration Act can be formed only for non-profit purpose
3. A partnership does not require registration
4. A company limited by guarantee is almost always registered for non-profit activities
Select the correct answer using the codes given below:
Codes:
(a) 2, 3 and 4
(b) 1 and 4
(c) 2 and 3
(d) 1, 2, 3 and 4
Ans. (d)

11. The basic characteristics of a partnership firm include:
(a) existence bf relationship, plurality of persons, contract and profit maximization
(b) Unlimited liability, contractual binding principal-agent relationship and profit motive
(c) existence of business contractual relationship, group of persons, task orientation and employment conditions
(d) existence of business, plurality of persons, contractual relationship, profit motive and principal-agent relationship.
Ans. (d)

12. Match List-I with List-II and select the correct answer using the codes given below the lists:
List—I List—II
A. Simple Association 1. Pool
B. Federation 2. Chamber of commerce
C. Partial consolidation 3. Merger
D. Complete consolidation 4. Holding company
Codes:
A B C D
(a) 3 1 2 4
(b) 2 4 1 3
(c) 2 1 4 3
(d) 3 2 4 1
Ans. (c)

13. The combination of firms n successive stages of the same industry may be referred to as:
(a) horizontal integration
(b) vertical integration
(c) forward integration
(d) backward integration
Ans. (b)

14. Modernization of an industrial unit involves mainly:
(a) technological up gradation of its production process
(b) technological reorientation towards low cost production
(c) reengineering the basics of production and procedures
(d) reduction in labour and cost to the absolute minimum
Ans. (b)

15. Which one of the following statements is true?
(a) Supplier’s credit and buyer’s credit are one and the same thing
(b) EXIM bank generally deals with export transactions above Rs. 5 crore
(c) The. main focus of EXIM bank is on Export and Import credits for short-term
(d) ECGC provides no protection against hazards of nature
Ans. (c)

16. Which one of the following statements is true in the context of Import-Export Trade?
(a) Under a C & F contract, the cost of insurance is to be borne by the buyer or the importer.
(b) Marine insurance covers the risks during the sea voyages only
(c) The standard call risks cover automatically covers war risk as well
(d) Under a C & F contract, the exporter need not bother about insuring goods
Ans. (a)

17. The special facilities and benefits provided to approve Export Houses (EH), Trading Houses (TH) and Star Trading Houses (STH) may be arranged in descending order as:
(a) EH, TH and STH
(b) STH, EH and TH
(c) TH, STH and EH
(d) STH, TH and EH
Ans. (a)

18. A letter of credit is opened on behalf of:
(a) an exporter
(b) an importer
(c) a buying agent
(d) a bank
Ans. (b)

19. Which of the following guarantees are offered by the ECGC which help the banks to extend credit to exporters?
1. Packing credit Guarantee
2. Post shipment Export Credit Guarantee
3. Export production Finance Guarantee
4. Transfer of funds guarantee
Select the correct answer using the codes given below:
Codes:
(a) l, 2 and 3
(b) 2 and 3
(c) 1, 3 and 4
(d) 1, 2, 3 and 4
Ans. (a)

20. Which of the following statements are correct?
1. Bill of lading is a document of title
2. Green shipping bill is used for export of goods entitled to duty draw back
3. An airway bill is not a document of title.
4. A consular invoice and a proforma invoice are one and the same.
Codes:
(a) 2 and 4
(b) 1, 3 and 4
(c) 1, 2 and 4
(d) 1, 2 and 3
Ans. ?

21. Actuary is a person who:
(a) acts as an insurance agent
(b) certifies the loss incurred by the insured
(c) audits claims relating to insurance claims
(d) computer the net liability of an insurance claims
Ans. (d)

22. Life insurance is a contract n the life of a man in which the insurer promises to pay a sum of money. For the consideration of a definite premium, to the insured person on his death or an attaining a particular age. Which one of the following assumptions is implicit in the above definition?
(a) It is a contract of Indemnity
(b) It is a contract of guarantee
(c) It is a contract of compensation
(d) It is a contract of return on investment
Ans. (a)

23. “Causa Proxima” implies that the loss must arise from:
(a) the nearest place
(b) an ascertainable source
(c) the cause insured against
(d) unforeseen sources
Ans. (c)

24. Which of the following risks are not covered by a marine insurance policy?
1. Damage caused by delay in ships transit
2. Damage caused by unsuitable package
3. Loss due to sinking of the vessel
4. Loss due to jettison
Select the correct answer using the codes given below:
(a) 1, 3 and 4
(b) l and 2
(c) 2 and 4
(d) 1, 2, 3 and 4
Ans. (a)

25. Which of the following pairs are correctly matched?
1. Planning : sets out the objectives and a complete set of policies.
2. Organization : Enables the owner or top executive of a business to interview
men, money, materials and method.
3. Coordination : Orderly arrangement of group effort to provide unity of action.
4. Control : Verifying whether everything occurs in conformity with the plan
adopted, the instructions issued and principles established.
Select the correct answer using the codes given below:
Codes:
(a) 2, 3 and 4
(b) 2 and 4
(c) 1, 3 and 4
(d) 1, 2 and 3
Ans. (c)

26. A written statement of the main duties and responsibilities which a particular job entails is called:
(a) job Analysis
(b) job specification
(c) job description
(d) job evaluation
Ans. (c)

27. Selection process in any organization is usually preceded by the preparation of:
(a) human resources audit
(b) operations audit
(c) human resources inventory
(d) human resources accounting
Ans. (c)

28. Which one of the following monitors critical inputs and suggests. prevention measures in the form of corrective action to correct inputs and processes?
(a) Feed back control
(b) Feed forward control
(c) Budgetary control
(d) Operational control
Ans. (a)

29. Consider the following elements in a feed back loop:
1. Identification of deviations ‘
2. Measurement of actual performance
3. Actual performance
4. Comparison of actual against standards
The correct sequence of these elements in the feedback loop is:
(a) 3, 2, 1, 4
(b) 3, 2, 1, 4
(c) 2, 3, 1, 4
(d) 2, 3, 4, 1
Ans. (b)

30. Span of management may be. larger in the case of:
(a) hardworking subordinates
(b) loyal subordinates
(c) centralized works and less responsibility
(d) repetitive work and clear responsibility
Ans. (d)

31. If the span of control is narrow, a number of manager would be required in each unit of the organization and there would be many managerial levels or layers.
Such an organizational structure is referred to as:
(a) flat structure
(b) tall structure
(c) matrix structure
(d) project structure
Ans. (b)

32. Span of management means that:
(a) an organization must have well defined goals or objectives.
(b) each person in the organization must manage within a clearly defined-functional area
(c) each subordinate should report to only one supervision
(d) manager can supervise only a limited no of subordinates
Ans. (d)

33. The following steps are involved in the process of organizing:
1. Forming supportive objective
2. Delegating to the head of each group the authority necessary to perform the activities
3. Establishing enterprise objectives
4. Identifying and classifying activities
The correct sequence of these steps is:
(a) 3, 1, 2, 4
(b) 3, 1, 4, 2
(c) 1, 3, 4, 2
(d) 1, 3, 2, 4
Ans. (b)

34. When management pays attention to more important areas and when the day-to-day routine problems are looked after by lower level management, it is known as:
(a) management by objectives
(b) management by exception
(c) participative management
(d) critical path method
Ans. (b)

35. The following steps are involved in managing by objectives:
1. Preliminary setting of objectives at the top
2. Setting subordinate’s objectives
3. Trying resources with the goals
4. Clarifying the organizational roles
The correct sequence of these steps is:
(a) 1, 2, 3, 4
(b) 1, 2, 4, 3
(c) 1, 3, 2, 4
(d) 1, 4, 2, 3
Ans. (b)

36. A company secretary must always be:
(a) a part of a secretarial agency
(b) a firm or corporation
(c) registered with the securities and Exchange Board of India
(d) an individual with specified professional qualifications
Ans. (d)

37. The Company Secretary is the agent of the
(a) managing Director
(b) shareholders
(c) board of Directors
(d) promoters
Ans. (c)

38. In the case of transmission of shares, the company secretary is required to check:
(a) the letter of request’ submitted by the executor
(b) whether the transfer form submitted by the administrator is duly stamped
(c) the deed of settlement between the parties
(d) if everything is in conformity with the orders of the Central Government
Ans. (a)

39. Declaration of Dividend is an important part of the agenda of:
(a) Statutory Meeting
(b) Annual General Meeting
(c) Extraordinary General Meeting
(d) Joint meeting of the shareholders and debenture
Ans. (b)

40. In principle, in the case of transfer of shares, the company secretary, after he is satisfied that everything is in order, is required to issue
(a) transfer receipt to the transferee and the transferor
(b) letter of probate receipt to the transferee and the transferor
(c) ‘Notices of Lodgment of transfer’ to the transferee and the transferor
(d) an advertisement by way of public notice regarding the transfer
Ans. (c)

41. The minutes of the proceedings of very general meeting should be recorded in the books of kept for that purpose within:
(a) 30 days of every such meeting
(b) 3 months of any such meeting
(c) the intervening period between that meeting and next meeting’
(d) such time as approved by the Chairman of the company
Ans. (a)

42. Which one of the following statements is correct?
(a) Minutes has the legal recognition by virtue of the provisions contained in the Company’s Act, while reports have no such legal sanctity
(b) Minutes have no legal sanctity but reports have legal sanctity by virtue of the provisions contained in the Company’s Act.
(c) Minutes contain a much more detailed account of all matters of the meeting whereas reports have fewer details
(d) There is very little difference between the minutes and reports except that one is brief and contains only action points while the other (reports) contains details including pros and cons of a particular decision
Ans. (d)

43. Principle of constructive notice means:
(a) notice of the objects clause of the Memorandum of Association
(b) Any notice issued/published in newspapers
(c) notice to outsiders dealing with the company as to the contents of the Memorandum and Articles of Association
(d) Notice to the public regarding the issue of the prospectus
Ans. (c)

44. Which one of the following statements illustrates the Doctrine of Indoor Management?
Persons dealing with the company are:
(a) bound to enquire whether the internal proceedings of the company are regular or not
(b) bound to enquire whether the decisions of the management are taken with proper authority
(c) entitled to assume that what has been done, has been regularly done by the company
(d) always to presume that the internal affairs of a company cannot be questioned
Ans. (c)

45. Converting a public company into a private company requires a special resolution:
(a) passed by members
(b) passed by members and approval of the Registrar of Companies
(c) of the member and approval of the Company Law Board
(d) of the members and approval by the creditors
Ans. (c)

46. The contents of the prospectus of a public limited company should be approved by the:
(a) Registrar of companies
(b) Merchant Banker
(c) Stock exchange in which the company is to be listed
(d) Securities and Exchange Board of India
Ans. (d)

47. It is compulsory for a share broker to register with the:
(a) concerned stock exchange
(b) Securities and Exchange Board of India
(c) Department of Company Affairs
(d) concerned Stock Exchange in concurrence with the securities and Exchange Board of India
Ans. (d)

Directions : The following items consist of two statements, one labelled the ‘Assertion A’. and the other labelled ‘Reason R’. You are to examine these two statements carefully and decide if the Assertion A and the Reason R are individually true and if so, whether the Reason is a correct explanation of the Assertion. Select your answers to these items using the codes given below and mark your answer sheet accordingly.
Codes:
(a) Both A and R are true and R is the correct explanation of A.
(b) Both A and R are true but R is not a correct explanation of A.
(c) A is true but R is false
(d) A is false but R is true

48. Assertion (A): The Balance Sheet fails to reveal the worth of a business.
Reason (R): Assets are merely unamortized costs.
Ans. (d)

49. Assertion (A): For ascertaining the correct profit, current costs are to be matched with current revenues.
Reason (R): LIFO method ensures matching of current costs with current revenues.
Ans. (a)

50. Assertion (A): An equal increase in both current asset and current liabilities decreases current ratio.
Reason (R): Equal decrease in current assets and current liabilities also decreases current ratio.
Ans. (c)

Commerce For Accountant Jobs Model paper

2011-05-27T04:34:00.000-07:00

Commerce For Accountant Jobs Model paper
Sample Paper For Accountant Jobs
1. Which one of the following pairs is not correctly matched?
(a) Company : Authorized capital
(b) Shares : Face value
(c) Bonus shares : Market value
(d) Preference shares : Fixed dividend
Ans. (c)

2. The phenomenon of the stock market in which almost the entire supply of a particular security is held by a few people is named as:
(a) Wash sales
(b) Cornering
(c) Rigging
(d) Arbitrage
Ans. (b)

3. Which one of the following statements is not correct in respect of private limited companies?
(a) Number of members is limited to 50
(b) Operations are restricted to a particular State
(c) Invitation to public for subscription to capital is prohibited
Ans. (?)

4. Premium Method is used for goodwill treatment in the case of:
(a) Retirement of partner
(b) Admission of partner
(c) Dissolution of partnership firm
(d) Sale of partnership to a company
Ans. (b)

5. The source of the rules relating to internal management of a company is known from:
(a) Memorandum of Association
(b) Prospectus
(c) Articles of Association
(d) Fundamental Rules
Ans. (c)

6. When a company exceeds the powers granted to it by its Memorandum of Association, it is called:
(a) Intra vires
(b) Ultra vires
(c) Lien
(d) Mutatis mutandis
Ans. (b)

7. In case the partnership deed does not specify the rights and obligations, the provisions of the Partnership Act, 1932 lay down which of the following rights and duties of a partner?’
I. Every partner has a right to take part in the conduct and management of the firm’s business
2. Every partner has the right to receive interest on loans and advances made b him to the firm. The rate of interest should be 8% unless otherwise agreed to by the parties.
3. Every partner has the right to be indemnified or the loss sustained by him in the firm’s business.
Code:
(a) 1 and 3
(b) 2 only
(c) 1, 2 and 3
(d) 2 and 3
Ans. (a)

8. Which of the following chief characteristics of a Joint-stock Company are false?
1. A company is a legal person
2. A company has its separate entity
3. A company has its citizenship
4. A company owns, enjoys, sells and purchases properties in its name
5. A company has voting rights and casts votes in its favour
6. A company can sue and be sued against
Select the correct answer using the .Code given
below:
Code:
(a) 1, 3 and 6
(b) 2, 4 and 5
(c) 3 and 5
(d) 2 and 4
Ans. (c)

9. Which of the following is not the legal position of sole proprietorship?
(a) The proprietor and his. business has separate personality
(b) Free from legal formalities in operation
(c) The liability is unlimited
(d) Not governed by any Special Act
Ans. (a)

10. For which of the following industry/industries, I. G. Patel Enquiry Committee was constituted by the Government of India for examining the justification of existence of Managing Agency System in the Company?
1. Sugar Industry
2. cotton-textile Industry
3. Jute Industry
4. Cement Industry
Select the correct answer using the Code given below:
Code:
(a) 1 and 2
(b) 5 only
(c) 1, 2, 3, 4 and 4
(d) 3 and 4
Ans. (c)

11. One of the important weaknesses of the decentralized structure is:
(a) unsuitability in a fast-changing environment
(b) difficulty in pinpointing responsibilities
(c) difficulty in coordinating common functions
(d) difficulty in promoting innovations
Ans. (c)

12. Match List-I with List-II and select the correct answer using the Code given below the lists:
List-I List-II
A. Holding Company 1. Maximum of 50 Members
B. Government Company 2. Minimum of 7 Members
C. Public Company 3. Partly Public
D. Private Company 4. Business Combination
Code:
A B C D
(a) 2 1 4 3
(b) 4 1 2 3
(c) 2 3 4 1
(d) 4 3 2 1
Ans. (d)

13. Match List-I (Different Types of Shares/Events) with List-Il (Transactions by the Company) and select the correct answer using the Code given below the lists:
List—I List—II
(Different Types of Shares/Events) (Transactions by the Company)
A. Sweat equity shares 1. A company gives its shares to the
shareholders in the form of extra dividend
B. Bonus shares 2. Shares issued by the company at a discount
C. Right shares 3. A company provides an opportunity to the
existing shareholders to purchase subsequent
issues of shares on priority basis
D. Buy-back of shares 4. A company exercises its call option to buy
shares from the shareholders
5. Paper Industry
Codes:
A B C D
(a) 3 1 2 4
(b) 2 4 3 1
(c) 3 4 2 1
(d) 2 1 3 4
Ans. (d)

14. Match List-I and List-II and select the correct answer using the Code given below the lists:
List-I List—II
A. Partners and Firm 1. Agent and Principal relationship
B. Sole Proprietorship 2. Prospectus
C. Public Limited Company 3. Personal supervision
D. Nominal Partnership 4. Firm image
Codes:
A B C D
(a) 1 3 2 4
(b) 4 2 3 1
(c) 1 2 3 4
(d) 4 3 2 1
Ans. (a)

15. The quotation that includes all charges for delivery of goods at the buyer’s stated place is known as:
(a) Franco randu
(b) Landed price
(c) CIF price
(d) FOB
Ans. (a)

16. The main function of the Export Credit and Guarantee Corporation is:
(a) to provide clearing facility to exporters
(b) to cover the risk related to exports
(c) to act as a trade association
(d) to finance directly the exports and imports
Ans. (b)

17. Under which principle is the insurer entitled to succeed to all the rights of the insured regarding the subject matter of insurance after the claim of insurance has been fully and finally settled 2
(a) Principle bf indemnity
(b) Principle of subrogation
(c) Principle of insurance
(d) Principle of causa proxima
Ans. (b)

18. Insurable interest in a Life Insurance Contract should:
(a) at the time of contract
(b) at the time of maturity
(c) at the time of claim
(d) at the time of surrender
Ans. (a)

19. The principle that a natural and unbroken series of events is responsible for a loss or damages is known as:
(a) principle of subrogation
(b) principle of mitigation of loss
(c) principle of contribution
(d) principle of causa proxima
Ans. (d)

20. The Mechanistic Model of organizational design achieves high levels of production and efficiency because:
(a) of its de-emphasis of specialization and its emphasis on increasing job range
(b) it is highly decentralized and informal
(c) of both (a) and (b) above
(d) it is highly complex, centralized and formalized
Ans. (c)

21. The traditional concept is that authority flows from top to bottom. But a new concept of authority has been developed. This is known as acceptance theory. Who is the exponent of this view?
(a) Herbert A. Simon
(b) Douglas McGregor
(c) Chester Barnard
(d) Keith Davis
Ans. (c)

22. Which one of the following functions does not relate to O & M Division?
(a) To enlarge the organization
(b) to improve organization
(c) To simplify methods
(d) To create and maintain an efficient administrative machinery
Ans. (a)

23. An organizational manual is designed to promote:
(a) better clientele for a company
(b) better relationship between the units in an industry
(c) better understanding of basic organizational structures
(d) better information about business of the company
Ans. (c)

24. The type of control that provides a means for taking corrective action even after viability of the programme is known as:
(a) pre-action control
(b) post-action control
(c) screening control
(d) steering control
Ans. (b)

25. Which one of the following statements explains the concept of unity of command?
(a) All the workers focus on a common goal
(b)All the workers receive instructions from one authority
(c) All the workers are accountable to one authority
(d) All the workers aim at one objective at a time
Ans. (b)

26. The undertaking by insurer to compensate the insured for the loss caused to him by the damage or destruction of the property insured is under the:
(a) principle of utmost good faith
(b) principle of insurable-interest
(c) principle pf indemnity
(d) principle of contingency
Ans. (c)

27. Kurt Lewin’s three phases of organizational change consists of:
(a) unfreezing, changing, feedback
(b) changing, refreezing, feedback
(c) unfreezing, evaluation, refreezing
(d) unfreezing, changing, refreezing
Ans. (d)

28. The most complex and widely used method of job evaluation is:
(a) the job ranking method
(b) the job classification method
(c) the market pricing method
(d) the point’s method
Ans. (d)

29. The psychologist A. H. Maslow has developed a widely acclaimed conceptual framework for understanding human motivation. Human needs, according to Maslow, tend to follow the classification of five categories of needs given as under:
1. Egoistic needs
2. Safety needs
3. Social needs
4. Physiological needs
5. Self-fulfillment needs
These needs, according to Maslow, follow a basic hierarchical pattern from the most basic to the highest level needs as follows
(a) 1, 2, 3, 4, 5
(b) 4, 2, 3, 1, 5
(c) 5, 4, 3, 2, 1
(d) 1, 3, 2, 4, 5
Ans. (b)

30. A planned sequence of operations for handling recurring business trrnbsactions uniformly and consistently is known as:
(a) system
(b) procedure
(c) routine
(d) control
Ans. (a)

31. Douglas McGregor made five basic assumptions about people in his theory. First four assumptions are:
1. People are ambitious
2. They seek responsibility
3. They are dynamic
4. They recognize and accept organizational goals The fifth assumption is:
(a) people are always cooperatives and. cheerful at their work
(b) People are not self-centered
(c) People are by nature resistant to change
(d) People are intelligent and possess creative potential
Ans. (a).

32. Which one of the following statements is not correct?
(a) Management by objectives is a philosophy of management
(b) Management by objectives is an approach of management.
(c) Management by objectives is a process of participative management
(d) Management by objectives is a control technique
Ans. (b)

33. Management by objectives is implemented in an organization by stages. One such stage action planning includes:
1. assigning responsibilities for achieving objectives
2. choosing strategies appropriate to the objectives
3. allocating resources for achieving objectives
4. scheduling specific activities to .achieve maximum resource utilization.
Identify from the following combinations the correct sequence in which the action planning stages are implemented:
(a) 1, 2, 3, 4
(b) 2, 3, 4, 1
(c) 3, 4, 1, 2
(d) 2, 1, 3, 4
Ans. (b)

34. Various plans that an organization may formulate are for—purpose or mission, objective, strategies, policies, rules and procedures, programmes or projects and budget. These can be arranged in a hierarchy because higher level plans give/generate lower level plans.
Identify the correct order according to hierarchy of plans from amongst the following:
(a) Purpose or mission, objective, strategies, policies, rules and procedures, programmes or projects and budget
(b) Budget, objectives, policies, rules and procedures, purpose or mission, strategies and programmes or projects
(c) Purpose or mission, objectives, policies, strategies, programmes or projects, budget, and rules and procedures
(d) Strategies, objectives, policies, purpose or mission, programmes or projects, rules and procedures, and budget
Ans. (c)

35. The concept ‘Management by Exception’ implies:
(a) exceptional contributions by the top management
(b) achievement of objectives by participation of all concerned
(c) that the immediate superior has to deal with deviations only and not with details of the work assigned to the subordinate
(d) that the highest officer needs not worry about the results if he/she delegated his/her authority
Ans. (c)

36. Consider the following:
1. Measurement
2. Projection
3. Selection
4. Observation
5. Comparison
6. Decision making
The correct sequence of the above ingredients of management by exceptions is:
(a) 1, 2, 3, 4, 5, 6
(b) 1, 2, 3, 5, 4, 6
(c) 1, 2, 3, 6, 4, 5
(d) 1, 2, 3, 4, 6, 5
Ans. (a)

37. Consider the following two statements and select correct answer using the Code given below:
1. The office supervisor is concerned with the overall managerial functions of the office activities.
2. The office manager is concerned with guiding and directing the routine work assigned to this subordinates.
Code:
(a) Only 1 is correct
(b) Only 2 is correct
(c) Both 1 and 2 are correct
(d) Neither 1 nor 2 is correct
Ans. (d)

38. According to Section 33 (2) of the Companies Act, a declaration stating that all the requirements of the Companies Act and other formalities relating to registration have been complied with, shall be signed by which one of the following?
(a) An Advocate of the Supreme Court or High Court
(b) An Attorney or a Pleader entitled to appear before the High Court
(c) A whole-time practicing Secretary or a Chartered Accountant in India and engaged in the formation of the Company
(d) A person named in the Articles of the Company as a Director/ Manager/Secretary
Ans. (All)

39. Which one of the following types of duties is not to be performed by a duly-appointed Secretary of a Company?
(a) All statutory duties of the Company
(b) Duties towards Directors of the Company
(c) Duties towards Shareholders of the Company
(d) Duties towards Registrar of the Company
Ans. (d)

40. The importance of the Memorandum of Association of a Joint stock Company is that:
1. it is an unalterable Charter of the company
2. for the incorporation of every company, it is essential.
3. its objective is to express clearly the risks to its shareholders and members
4. it ascertains the limit within which the company works and deals
Which of these statements are correct?
(a) 1, 2 and 3
(b) 2 and 4
(c) 1 and 3
(d) 1, 2, 3 and 4
Ans. (b)

41. Within how much period a copy of the Profit and Loss Account and Balance Sheet of Company are to be filled with the Registrar?
(a) 1-4 days of Annual Meeting of the Company
(b) 21 days of Annual Meeting of the Company
(c) 30 days of Annual Meeting of the Company
(d) 45 days of Annual Meeting of the Company
Ans. (c)

42. Under which of the following circumstances, the Directors of a Company, being the agents/representatives become personally responsible?
1. When they act beyond their power
2. When they are convicted for any fraud
3. When they have given any false statement in the prospectus
4. When they have clearly accepted the responsibility of being liable for some fault of theirs
Select the correct answer using the Code given below:
Code:
(a) 2 and 3
(b) 1 and 4
(c) l, 2, 3 and 4
(d) 1, 3 and 4
Ans. (c)

43. A company needs to issue prospectus:
(a) for every Public issue
(b) for every Public issue as well Rights issue
(c) for every Public issue. Right issue and l3unus shares
(d) for every Public issue if it is a private limited company
Ans. (a)

44. According to the Company Law, the first Ordinary General Meeting of the Company must be convened within
(a) 18 months of its incorporation
(b) 12 months of its incorporation
(c) 9 months of its incorporation
(d) 3 months of its incorporation
Ans. (a)

45. According to Section 385 of the Companies Act, which one of the following is not disqualified for the post of Manger in a company?
(a) An undischarged insolvent, or one who has at any time within the preceding five years been adjudged an insolvent
(b) One who suspends, or has at any time within the preceding five years suspended, payment to his creditors, or makes, or has at any time within the preceding five years made, a composition with them
(c) One who has not attained the age of 48 years
(d) One who is, or has at any time within the preceding five years been, convicted by a Court in India of an offence involving moral turpitude
Ans. (c)
46. Consider the following statements
According to Section 34 of the Companies Act, when a company is registered and a certificate—of incorporation is issued by the Registrar, important consequence which follow are that:
1. the company becomes a distinct entity
2. the company acquires a perpetual succession
3. a private company can commence its business immediately
4. the company becomes owner of its properties
Which of these statements are correct?
(a) 1 and 2
(b) 3 and 4
(c) 1, 2 , 3 and 4
(d) 1 and 3
Ans. (c)

47. In case of winding up of a company an official liquidator realizes the amount due and proceeds from the sale of the assets and distributes the same among the following:
1. Preferential creditors
2. Debenture holders
3. Legal expenses and cost of liquidation
4. Shareholders
5. Unsecured creditors
The correct sequence of distribution is:
(a) 1, 2, 3. 4, 5
(b) 2. 4, 5, 1, 3
(c) 3, 1, 2, 5, 4
(d) 4, 2, 5, 3, 1
Ans. (c)

48. Consider the following statements:
In social accounting, the following are the measuring parameters:
1. Value added statement
2. Employee turnover ratio
3. Saving in the foreign exchange
4. Capital output ratio
Which of these statements are correct?
(a) l and 4
(b) 1 and 2
(c) 2, 3 and 4
(d) l, 2, 3 and 4

49. Which of the following pairs is correctly matched?
(a) Adjusted Profit and Loss Account : Fund from operations
(b) Proposed Dividend : Current liability
(c) Investment : Current assets
(d) Depreciation : Inflow of fund
Ans. (b)

50. Compatibility of technology refers to suitability of technology with respect to:
(a) consumption pattern of consumers
(b) skills of available human resource
(c) development of product line of the company
(d) changing taste of consumers
Ans. (b)

Commerce practice questions

2011-05-22T00:14:00.000-07:00

Commerce practice questions
Free Commerce Online Practice Test
Commerce Practice Paper For Civil Service Exam
1. Which one of the following is the first industrial organization to have conducted social audit of its performance?
(a) Associated Cement Companies
(b) Reliance Industries Limited
(c) Bharat Heavy Electricals Limited
(d) Tata Iron & Steel Company
Ans. (a)

2. Which of the following pairs are correctly matched?
1. Cash Compensatory scheme : It is allowed on a selective basis for compensation
the exporters for the elements of unrefunded taxes
and duties paid on the imports required for the
manufacture of goods exported.
2. Inland container depots : Confer all the facilities of dry ports and facilitate the
movement of exports.
3. Duty Drawback Scheme : The exporters are allowed reimbursement of customs
and central excise duties paid on raw materials,
components and packaging.
Select the correct answer using the Code given below:
Code:
(a) 1 and 3
(b) 1, 2 and 3
(c) 1 and 2
(d) 2 and 3
Ans. (b)

3. The following steps are normally taken in an import trade:
1. Indent and letter of credit
2. Ship’s report
3. Delivery and customs formalities
4. Exchange and bill of exchange
The correct sequence of these steps is:
(a) 1, 4, 2, 3
(b) 4, 1, 2, 3
(c) 4, 1, 3, 2
(d) l, 4, 3, 2
Ans. (a)

4. A Red clause letter of credit authorizes the:
(a) banker to transfer the L/C to some other person
(b) banker to take recourse to the drawer in case of default
(c) banker to fix the amount of credit
(d) negotiating banker to provide advance credit to the beneficiary for purchase of materials
Ans. (d)

5. Which one of the following is NOT the primary cause of India’s chronic balance of payments problem?
(a) Value of imports not matched by value of exports
(b) Deficits in merchandise trade
(c) Membership of W.T.O.
(d) POL imports
Ans. (a)

6. Which of the following pairs is/are corrects matched?
1. Presence of insurable interest in life policy : At the time of taking the policy and at
the time of making the claim

2. Presence of insurable interest in a fire policy : At the time of loss but may not be
required at the time of taking the policy

3. Presence of insurable interest in marine policy : At the time of taking the policy and
also at the time to loss
Select the correct answer using the Code given below:
Code:
(a) 1 and 2
(b) 2 alone
(c) 2 and 3
(d) 3 alone
Ans. (c)

7. Which one of the following generalizations can be drawn from the Principle of Subrogation?
(a) It is the principle by which the insurer, after having paid the loss to the insured, steps into the shoes of the ensured person and acquires all. rights and remedies as the insured would have enjoyed regarding the said loss
(b) A person who keeps a stock of inflammable material in his premises must mention the fact while taking out a fire policy
(c) The insured can get only the compensation against actual loss and he can’t make profit but of insurance
(d) In marine insurance the immediate c ise and not the remote cause shall be considered for bearing the loss
Ans. (a)

8. A clause included in the marine policy which covers all losses due to willful misconduct of the master or crew of the ship to the prejudice of the insured is called:
(a) jettison
(b) waiver
(c) preventive penalty
(d) barratry
Ans. (b)

9. Which one of the following clearly defines ‘organization’ as a function?
(a) Management of business
(b) Accomplishment of goals through means
(c) Centralized authority in the hands of an individual to achieve business .goals
(d) Process of assigning duties to individuals to achieve specific ends effectively
Ans. (b)

10. What is the correct sequence of .the following functions of a Manager in an organization?
1. Motivating
2. Controlling
3. Organizing
4. Planning
Select the correct answer using the Code given below:
Code:
(a) 4, 3, 2, 1
(b) 4, 3, 1, 2
(c) 3, 4, 2, 1
(d) 3, 4, 1, 2
Ans. (b)

11. According to Need Hierarchy Theory of Maslow, human needs arise in which one of the following order?
(a) Physiological needs- Social needs- Safety needs- Ego needs- Selfactualisation needs
(b) Physiological needs- Social needs- Ego needs- Safety needs- Selfactualisation needs
(c) Physiological needs—Safety needs—Social needs—Ego needs—Selfactualisation needs
(d) Physiological needs—Safety needs—Ego needs—Social needs—Selfactualisation needs
Ans. (c)

12. Scalar principle of organization implies that:
(a) all subordinates have only one supervisor
(b) line of authority is denied clearly
(c) manager can directly supervise only a limited number of persons
(d) the subordinates need not necessarily have a supervisor
Ans. (b)

13. Consider the following statements:
(1) Planning is looking ahead
(2) Controlling is looking back
(3) Delegation multiplies leadership
(4) Life insurance is a contract of indemnity
Of these statements:
(a) 1, 2 and 4 are correct
(b) 1, 2 and 3 are correct
(c) 1, 3 and 4 are correct
(d) 2, 3 and 4 are correct
Ans. (b)

14. To indicate the functions of management, the catch word POSDCORB was coined by:
(a) Luther Gulik
(b) Henri Fayol
(c) Ernest Dale
(d) None of the above
Ans. (a)

15. Job analysis involves:
1. developing training skills, knowledge and personal traits of the worker necessary for a specific job
2. identifying machines, tools and equipment to be used for the job
3. identification of the task to be performed by an individual
4. determination of the materials, products or services needed
The correct sequence of these steps while conducting job analysis is
(a) 3, 2, 4, 1
(b) 3, 2, 1, 4
(c) 2, 3, 4, 1
(d) 2, 3, 1, 4
Ans. (a)

16. Consider the following statements:
1. Authority flows downward but responsibility flows upward
2.. Authority should be equal to responsibility
3. Both authority and responsibility are divisible
4. If delegation is the end, then decentralization should be the means:
Of these statements:
(a) 1 and 2 are correct
(b) 3 and 4 are correct
(c) 1, 2 and 3 are correct
(d) 2, 3 and 4 are correct

17. Following are the steps in the process of Delegation of Authority:
1. Assignment of task
2. Creation of responsibility
3. Granting authority
4. Fixing accountability
The correct sequence of these steps is:
(a) 1, 3, 2, 4
(b) 1, 4, 2, 3
(c) 1, 3, 4, 2
(d) 1, 2, 3, 4
Ans. (d)

18. Globalization of financial services is being promoted by:
(a) World Trade Organization
(b) International Finance Corporation
(c) International Bank for Reconstruction and Development
(d) International Monetary Fund
Ans. (d)

19. Match List-I (Wage incentive plans) with List-Il (Name of contributors) and select the correct answer using the Code given below the Lists :
List-I List-II
A. Premium Plan 1. Gantt
B. Efficiency Bonus Plan 2. Emerson
C. Points Premium Plan 3. Bedaux
D. Task and Bonus Plan 4. Taylor
5. Halsey
Codes:
A B C D
(a) 5 3 2 1
(b) 1 2 3 4
(c) 2 3 4 1
(d) 5 2 3 1
Ans. (d)

20. Match List-I (Management terms) with List-II (Factors related to these terms) and select the correct answer using the Code given below the Lists:
List-I List-II
A. Resisting forces of change 1. Organization
B. O. D. 2. New Policy
C. Driving forces change 3. Fear
D. Conflict 4. Interpersonal relationship
Codes:
A B C D
(a) 3 1 2 4
(b) 1 2 3 4
(c) 1 3 2 4
(d) 3 4 2 1
Ans. (a)

21. Which one of the following routines best describes the chronology of steps taken in the selling process?
(a) Receipt of order, invoicing, processing order, shipment of goods.
(b) Invoicing, processing order, shipment of goods, accounting for sale
(c) Receipt of order, processing order, accounting for sale, shipment of goods
(d) Processing order, invoicing, shipment of goods, accounting for sale.
Ans. (d)

22. Is Card Indexing an improvement over .the simple indexing system?
(a) Yes, because the cards can be managed in a particular order and the order can’t be changed at will
(b) No, because the cards wanted for reference can’t be taken out without holding up the work of recording information as other cards are left behind
(c) Yes, because it facilitates location of any name or subject with the minimum of searching, as the cards are arranged in alphabetical order.
(d) No, because it facilitates location of any name or subject with the minimum of searching, as the cards are arranged in alphabetical order.
Ans. (c)

23. A person can act as Secretary for NOT more than:
(a) 2 companies
(b) 3 companies
(c) 5 companies
(d) None of the above
Ans. (d)

24. A Secretary’s duties under the Companies Act are:
(a) purely ministerial
(b) either ministerial or administrative
(c) managerial
(d) supervisors
Ans. (b)

25. The document required to be filed with the Registrar of Companies at the time of incorporation of a company includes:
(a) an agreement, if any, which the company proposes to enter into with any individual for appointment as manager or managing director
(b) the Prospectus
(c) an application for name availability
(d) a statement of minimum subscription
Ans. (c)

26. Consider thei1Iowing statements:
1 A Private Limited Co., must have at least 3 (three) directors and a Public Ltd., at least 7 (seven) directors.
2. Liability of shareholder of a Public Ltd. Co., is limited to the extent of the total authorized Capital and liability of the company.
3. Transfer of shares is restricted in case of Private Ltd. Co.
4. Statement in lieu of Prospectus must be issued by a Private Ltd. Co., before commencement of business.
Of these statements:
(a) 2 alone is correct
(b) 2, 3 and 4 are correct
(c) 3 alone is correct
(d) 1, 2 and 4 are correct
Ans. (c)

27. An exception to the application of Doctrine of Indoor Management is made when:
(a) a person represents the company with or without actual authority to do so
(b) outsiders have knowledge of irregularity of the conduct
(c) the seal of the company is not affixed on the documents issued to outsiders
(d) the directors of the company delegated authority for the internal management to the Managing Director
Ans. (b)

28. The Secretary of a company is generally appointed by:
(a) Registrar of Companies
(b) Central Government
(c) Board of Directors
(d) Board of Directors with the consent of the Institute of Company Secretaries of India.
Ans. (c)

29. Public company can be called as a body corporate after it:
(a) receives certificate of commencement of business
(b) issues prospectus
(c) receives certificate of incorporation
(d) receives approval from the Registrar for the prospectus
Ans. (c)

30. A director should obtain his qualification shares within:
(a) one month of his appointment
(b) two months of his appointment
(c) three months of his appointment
(d) six months of his appointment
Ans. (b)

31. The altered Memorandum of Association must be filed with the Registrar within:
(a) 6 months of the Company Law Board’s Order
(b) 5 months of the Company Law Board’s Order
(c) 3 months of the Company Law Board’s Order
(d) 2 months of the Company Law Board’s Order
Ans. (c)

32. Whenever a company wants to alter it Memorandum for changing the place of registered office from one State to another, it has to pass:
(a) ordinary resolution
(b) special resolution
(c) resolution requiring special notice
(d) unanimous resolution
Ans. (b)

33. When an act is performed or a transaction is carried out, which, though legal in itself, is not authorized by the objects clause in the memorandum or by Statue, it is said to be:
(a) ultra vires the powers of the company
(b) intra vires the powers of the company
(c) ultra vires the powers of the Board
(d) ultra vires the implied authority
Ans. (a)

34. A special notice is required for a resolution when:
(a) a director is to be removed before the expiry of his period of office
(b) a statutory report has to be adopted
(c) there is alteration of share capital
(d) a company wants to convene a meeting of creditors
Ans. (a)

35. Which one of the following powers cannot be delegated to any person by the Board of Directors?
(a) investment of funds of the company
(b) Issue of debentures
(c) Borrowing money otherwise than on debentures
(d) Making loans
Ans. (b)

36. The Board of Directors cannot appoint:
(a) additional directors
(b) alternate directors
(c) directors in casual vacancy
(d) directors under Section 408 of the Companies Act, 1956
Ans. (d)

37. Under Section 68A of the Companies Act. 1956, any person who’ induces a company to allot shares or register transfer of shares in ‘a fictitious name shall be punishable with:
(a) a fine of Rs. 500
(b) a fine of Rs. 5,000
(c) imprisonment upto 5 years
(d) a fine of Rs. 500 and imprisonment upto 5 years
Ans. (c)

38. Which one of the following is an ‘Ordinary Business’ for the purpose of an Annual General meeting?
(a) Change in the Articles of Association of the company
(b) Issue of debentures
(c) Change in the ‘objects clause’ of the Memorandum of Association
(d) None of the above
Ans. (d)

39. Match List-I with List-II and select the correct answer using the Code given below the lists:
List-I List-II
A. L U T 1. D G FT
B. E PZ 2. Export promotion
C. E PCG Scheme 3. 100% Exports
D. Value Addition 4. 100% E O U
Codes:
A B C D
(a) 1 3 2 4
(b) 3 2 1 4
(c) 1 4 3 2
(d) 2 4 1 3
Ans. (c)

Directions: The following ten (10) items consist of two statement, one labelled the ‘Assertion A’ and the other labelled the ‘Reason R’. You are to examine these two statements carefully and decide if the Assertion A and the Reason R are individually true and if so, whether the Reason is a correct explanation of the Assertion.
Select your answers to these items using the Code given below and mark your answer sheet accordingly.
Codes:
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and R are true but R is NOT a correct explanation of A
(c) A is true but R is false
(d) A is false but R is true

40. Assertion (A): The auditor of a partnership firm is appointed under a contract with the firm but not under any statute.
Reason (R): The firm can also appoint him to act as an accountant for preparation of accounts.
Ans. (b)

41. Assertion (A): A common protectionist argument has been that nurse the baby, protect the child, guide the boy and free the adult.
Reason (R): Protection given in most cases creates rested interests which are averse to the removal of the protection.
Ans. (d)

42. Assertion (A): The matching concept requires that costs be recognized as expenses in the period in which revenue is realized.
Reason (R): There may not be a match between expenditure and revenue over a short period.
Ans. (c)

43. Assertion (A): According to International Accounting Standards Committee, fixed production expenses should be included in inventory valuation on the basis of normal capacity. According to the Institute of Chartered Accountants of India, it is for the management to decide the Question.
Reason (R): The Question to be decided is whether the fixed production expenses be excluded from inventory valuation and charged wholly to the revenue of that year or whether these expenses be included on the basis of normal level of production.
The former method is called ‘marginal costing’ and the latter ‘absorption’ costing’.
Ans. (c)

44. Assertion (A): The fixed assets in the balance sheet of a limited company are required to be shown at cost less depreciation.
Reason (R): The balance sheet and profit and loss account are to disclose a true and fair view.
Ans. (a)

45. Assertion (A): Share premium amount can be refunded in cash to equity shareholders.
Reason (R): Share premium is usually collected when the market price of the shares is higher than the face value of the share.

46. Assertion (A): Conventionally, a newly started company should adopt a low-geared capital structure where the share of equity capital and reserves is higher than the share of fixed interest bearing securities.
Reason (R): During initial years, the profit is low and the company tries to strengthen its financial position.
Ans. (a)

47. Assertion (A): A new firm can be profitable and yet not be able to pay its debts as they become due.
Reason (R): New firms often have the problem of having increased investments in inventory and fixed assets at an amount which exceeds cash generated from operations.
Ans. (a)

48. Assertion (A): A company is accountable to the society since it makes use of community owned assets and other infrastructural facilities and concessions provided by the State from the tax payers’ money.
Reason (R): The best way of social responsibility reporting is to prepare a Value Added Statement (VAS) which shows the income earned by shareholders.
Ans. (c)

49. Assertion (A): Audit procedure and audit techniques are two different aspects of auditing but are complementary to each other.
Reason (R): Audit procedure is concerned with determining the existence of documentary evidence and audit techniques are concerned with examination of those evidences.
Ans. (a)

Assertion Reason Questions in commerce

2011-04-29T17:49:00.000-07:00

Assertion Reason Questions in commerce
Objective Commerce Test containing Assertion Reason Type Questions
ASSERTION REASON QUESTIONS COMMERCE MCQ

Directions : The following Fourteen (14) items consist of two statements, one labelled as the ‘Assertion (A) ‘and the other as ‘Reason (R)’. You are to examine these two statements carefully and select the answers to these items using the Code given below:
(a) Both A and R are individually true and R is the correct explanation of A
(b) Both A and R are individually true but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true

1. Assertion (A): The role of the Doctrine of Indoor Management is opposed to the rules of constructive notice.
Reason (R): The constructive notice seeks to protect the company against the outsider whereas the Doctrine of Indoor Management operates to protect outsider against the company.
Ans. (a)

2. Assertion (A): Rules of Constructive Notice and Articles of Association are known to everyone who deals with the company.
Reason (R): After re4stration of the company, Memorandum and Articles of Association become public documents.
Ans. (a)

3. Assertion (A): Doctrine of Indoor Management does not apply to forgery.
Reason (R): Company Law recognizes ultra vires or illegal acts.
Ans (c)

4. Assertion (A): A Director of a company in his individual capacity can exercise powers conferred on him by the Companies Act, Memorandum and the Article of Association of the company.
Reason (R): The Directors have the power to enter into contract on behalf of the company with other parties.
Ans. (d)

5. Assertion (A): Capital expenditure is incurred for the purpose f acquiring fixed asset.
Reason (R): Capital expenditure item is shown in the asset side of the Balance Sheet.
Ans. (b)

6. Assertion (A): Staff officers and assigned an ‘authority of ideas’ and line officers and ‘authority to command’.
Reason (R): Functional authority is not restricted to managers of a particular type of department.
Ans. (b)

7. Assertion (A): Management Audit should be conducted by a team of experts.
Reason (R): Management Audit is a critical examination of policy and practices of management from the highest level to downward in order to ascertain that sound management prevails in the business concern.
Ans. (a)

8. Assertion (A): If it is found that some errors and/or frauds are remaining undetected due to the fact that a statutory auditor depended upon test checking, then the said auditor will be held responsible for negligence in the performance of his duties.
Reason (R): A statutory auditor cannot, in any way, avoid or reduce the responsibility laid on him by the statutes.
Ans. (d)

9. Assertion (A): An auditor of a large business concern has to adopt test checking based on scientific statistical sampling technique instead of checking the whole of transaction- of a particular class.
Reason (R): Test checking based on scientific statistical sampling technique, reduces the volume of unnecessarily cumbersome audit work involved in detailed checking of all transactions.
Ans. (a)

10. Assertion (A): Revenue expenditure is written off in the year in which it occurs.
Reason (R): The benefit of revenue expenditure is consumed in the year in which it arises.
Ans. (a)

11. Assertion (A): Cash flow Statement and Fund Flow Statement disclose same information.
Reason (R): Both are prepared out of the same data.
Ans. (d)

12. Assertion (A): Liquid ratio reveals strength of liquidity of a business unit.
Reason (R): Liquid ratio analyses liquid assets and liquid liabilities of a business uhit in order to assess the extent of liquidity.
Ans. (a)

13. Assertion (A): Profit and Loss Account and Balance Sheet are financial statements showing financial position of a business unit.
Reason (R): Profit and Loss Account and Balance Sheet are prepared at the end of the financial year.
Ans. (d)

14. Assertion (A): The interest on debentures can be capitalized up to the complete construction of the fixed assets.
Reason (R): The construction of fixed assets could only be completed by the use of these funds.
Ans. (c)

Objective commerce for B.Ed

2011-04-11T23:11:00.001-07:00

Objective commerce for B.Ed
MCQ Bed Commerce
Online Free Practice Test of Commerce for BEd Exam
1. Giffin goods may be characterized as—
(A) Inferior goods
(B) To have positive demand curve
(C) To have negative demand curve
(D) A case when income effect is positive and very strong

Ans. (A)

2. By which tax does the’ Government of India earn maximum revenue?
(A) Income-tax
(B) Custom duty
(C) Property-tax
(D) Excise duty

Ans. (D)

3. The main objective of controlling is—
(A) Maintaining discipline
(B) Motivating subordinates
(C) Reducing gap between planning and performance
(D) None of the above

Ans. (C)

4. A regressive tax will tend to redistribute income more—
(A) Equally
(B) Unequally
(C) Equitably
(D) Inequitably

Ans. (B)

5. Which of the following totals would not be included in a firm’s Profit and Loss Account?
(A) Overhead cost
(B) Direct cost
(C) Allowances for depreciation of assets
(D) All the above will be included

Ans. (B)

6. Which of the following is the basis for determining the national income?
(A) Total revenue of the State
(B) Production of goods and services
(C) Net profit earned and ‘expenditure incurred by the state
(D) All the above

Ans. (D)

7. All of the following totals would be included in a company’s Profit and Loss A/c except—
(A) Direct costs
(B) Allowances for depreciation of assets
(C) Overhead costs
(D) Value of premises owned by the company

Ans. (A)

8. When did WTO, which set out rules for world trade, come into force?
(A) 1984
(B) 1951
(C) 1954
(D) 1995

Ans. (D)

9. Who manage a joint stock company?
(A) Its Board of Directors
(B) Its General Body
(C) Its Management Council
(D) All the above

Ans. (A)

10. The costs which do not vary with the changes in a firm’s output are known as—
(A) Fixed costs
(B) Variable costs
(C) Implicit costs
(D) Social costs

Ans. (A)

11. Which of the following States leads in Commerce and Industry?
(A) Gujarat
(B) Tamil Nadu
(C) Maharashtra
(D) West Bengal

Ans. (C)
12. Which of the following States accounts for the largest share of industrial production and capital investment?
(A) Gujarat
(B) Maharashtra
(C) Tamil Nadu
(D) West Bengal

Ans. (B)

13. When the prices are rising, which of the following steps should the government adopt to bring about reduction in prices?
(A) Reduce the rate of tax on personal income
(B) Increase governmental spending
(C) Lower the interest rate
(D) Increase the availability of goods

Ans. (D)

14. Which of the following is not mathematical average?
(A) Geometric average
(B) Harmonic average
(C) Quadratic average
(D) Progressive average

Ans. (D)

15. Statutory Audit reports on—
(A) The efficiency of the Unit
(B) Accuracy of Stocjcs
(C) Accuracy of Accounts
(D) The proper follow-up of Government rules

Ans. (C)

16. Fourteen leading Commercial Banks were nationalized on—
(A) 15th August, 1947
(B) 26th January, 1949
(C) 19th July, 1969
(D) 29th July, 1969

Ans. (C)

17. According to Company Law a work done beyond the rights described in Memorandum of Association is—
(A) Legal
(B) Immoral
(C) Useless
(D) Opposed to public policy

Ans. (C)

18. Who issues the Certificate of Incorporation?
(A) Central Government
(B) Shareholders
(C) Director
(D) Company Registrar

Ans. (D)

19. Who stated ‘Bad money drives good money out of circulation’?
(A) Keynes
(B) Gresham
(C) Kent
(D) Mallows

Ans. (B)

20. A partner has a right—
(A) To take part in business
(B) To be consulted
(C) To interest on capital
(D) All of the above

Ans. (D)

21. What is the time duration of Managing director in a Public Company?
(A) 5 years
(B) 1 year
(C) 7 years
(D) Life-long

Ans. (A)

22. The concept of functional foreman as first developed by—
(A) Harrington Emerson
(B) F. W. Taylor
(C) F. B. Gilberth
(D) Elton Mayo

Ans. (B)

23. Motivation is basically a—
(A) Sociological process
(B) Physiological process
(C) Psychological process
(D) Intellectual process

Ans. (C)

24. Assets in the Balance Sheet of a company are arranged in the order of—
(A) Liquidity
(B) Market value
(C) Book value
(D) Permanence

Ans. (C)

25. Non-convertible debentures refer to—
(A) Owner capital
(B) Loan capital
(C) Short-term debts
(D) All of the above

Ans. (B)

26. Which of the following is not a current inability?
(A) Bills payable
(B) Bank overdraft
(C) Minority interest
(D) Unclaimed dividends

Ans. (C)

27. The term ‘depletion’ is used in relation to—
(A) Fixed Assets
(B) Wasting Assets
(C) Current Assets
(D) Intangible Assets

Ans. (B)

28. FIFO is advisable in case of—
(A) Rising prices
(B) Falling prices
(C) Constant prices
(D) None of the above

Ans. (B)

29. Main source of India’s national income is—
(A) Agriculture
(B) Industry
(C) Forestry
(D) Construction

Ans. (A)

30. Staffing includes—
1. Training 2.praisal
3. Placement 4.Directing
(A) 1 and3
(B) 1, 2 and 3
(C) 2 and 3
(D) 1, 2, 3 and 4

Ans. (B)

31. While delegating superior delegates—
(A) Only authority
(B) Authority and responsibility
(C) Authority, responsibility and accountability
(D) Authority and responsibility but not accountability

Ans. (A)

32. Which of the following is the most democratic form of organization?
(A) Line
(B) Line and Staff
(C) Functional
(D) Committee

Ans. (B)

33. The role of Staff in Line Staff organization is—
(A) Authoritative
(C) Responsible
(B) Advisory
(D) All of the above

Ans. (B)

34. A company secretary is appointed by—
(A) The Government
(B) Debenture holders
(C) The Board of Directors
(D) Shareholders

Ans. (C)

35. Which of the following would be fixed cost to manufacturing firm?
(A) Plant and Machinery
(B) Raw materials
(C) Wages
(D) Replacement of load

Ans. (D)

36. Public Sector consists of those enterprises in which
The State owns—
(A) 50% of the capital
(B) 66% of the capital
(C) 40% of the capital
(D) More than 50% of the capital

Ans. (D)

37. Which is a capital expenditure?
(A) Wages paid
(B) Salaries paid
(C) Heavy advertisement cost
(D) Patents acquired

Ans. (D)

38. A company can purchase its own—
(A) Equity shares
(B) Preference shares
(C) Debentures
(D) All of the above

Ans. (D)

39. A and B are of 7: 5 partners. C is admitted for 1/5 share. The new ratio is—
(A) 3:2:1
(B) 5:3
(C) 2: 2: 1
(D) None of the above

Ans. (B)

40. The sacrificing ratio in above case is—
(A) 7:5
(B) 2: l
(C) Equal
(D) 1:2

Ans. (A)

41. Immediate Liquidity Test is—
(A) Current ratio
(B) Quick ratio
(C) Fixed assets turnover ratio
(D) Stock turnover ratio

Ans. (B)

42. Cost accounting is a part of—
(A) Management accounting
(B) Financial accounting
(C) General accounting
(D) Special accounting

Ans. (A)

43. Theory ‘X’ and ‘Y’ was originated by—
(A) P. F. Drucker
(B) McGregor
(C) Maslow
(D) Herzberg

Ans. (B)

44. In a big office, efficient filing is—
(A) Vertical
(B) Horizontal
(C) Both
(D) None

Ans. (A)

45. Net worth of a business means—
(A) Total fixed assets
(B) Assets minus liabilities
(C) Fixed assets minus current assets
(D) Share capital plus current liabilities

Ans. (B)

46. Funds in relation to Funds Flow Statement earns—
(A)Net assets
(B)Current assets
(C) Net current assets
(D)Current liabilities

Ans. (C)

47. In the absence of an agreement, the partners are entitled to interest on their loans at the rate of—
(A) 5%
(B) 6%
(C) 7%
(D) 10%

Ans. (B)

48. Income and Expenditure A/c is prepared by—
(A) Manufacturing concerns
(B) Non-manufacturing concerns
(C) Trading concerns
(D) Non-trading concerns

Ans. (D)

49. Debit side of Income and Expenditure A/c shows—
(A) Income
(B) Expenditure
(C) Cash receipts
(D) Cash payments

Ans. (B)

50. Quick ratio is a test of—
(A) Liquidity
(B) Solvency
(C) Profitability
(D) None of the above

Ans. (B)

51. Franking Machine is a—
(A) Duplicating machine
(B) Dictating machine
(C) Calculating machine
(D) Mailing machine

Ans. (D)

52. Given: Current Ratio = 3: 1
Quick Ratio = 1:
Current Liabilities = Rs. 30, 000
What is the value of stock in trade?
(A) Rs. 45,000
(B) Rs. 60,000
(C) Rs. 90,000
(D) Rs. 50,000

Ans. (B)

53. When a supervisor is re designated as section officer under the need hierarchy theory of motivation, it satisfied—
(A) Social needs
(B) Esteem needs
(C) Seif-actualisation needs
(D) Economic needs

Ans. (B)

54. Principle of indemnity does not apply to—
(A) Life insurance
(B) Fire insurance
(C) Marine insurance
(D) Theft insurance

Ans. (A)

55. Cash sales are recorded in—
(A) Cash Book
(B) Sales Book
(C) Journal
(D) Ledger

Ans. (A)

56. Which one of the following is not a capital market instrument?
(A) Debentures
(B) Shares
(C) Public Sector Bonds
(D) Treasury Bills

Ans. (C)

57. Fixed Cost is known as—
(A) Special cost
(B) Direct cost
(C) Prime cost
(D) Overhead cost

Ans. (D)

58. Demand for electricity is—
(A) Inelastic
(B) Elastic
(C) Less elastic
(D) None of the above

Ans. (B)

59. The second largest agro-based industry in India is—
(A) Sugar industry
(B) Textile industry
(C) Food processing industry
(D) Poultry

Ans. (A)

60. Which of the following banks is known as lender of last resort?
(A) SBI
(B) RBI
(C) NABARD
(D) IDBI

Ans. (B)

61. The primary objective of India’s monetary policy has been—
(A)Maintenance of price stability
(B)Granting more autonomy to the RBI
(C)Purchasing and selling of Govt. securities
(D)Financing unlimited deficit of the Central Govt.

Ans. (A)

62. Which of the following has always remained in focus as the main objective of India’s Five Year Plans?
(A) Poverty
(B) Removal of unemployment
(C) Economic growth
(D) Reduction in income inequities

Ans. (C)

63. Finance Commission is constituted every—
(A) Three years
(B) Six years
(C) Four years
(D) Five years

Ans. (D)

64. Which of the following is not a calculating national income?
(A) Income method
(B) Export-Import method
(C) Production method
(D) Expenditure method

Ans. (B)

65. Trade Credit is source of—
(A) Short-term finance
(B) Medium-term finance
(C) Long-term finance
(D) None of the above

Ans. (A)

66. Fiscal Policy is related to—
(A) Issue of currency
(B) Credit creation
(C) Public revenue and expenditure
(D) All of the above

Ans. (C)

67. SIDO is related to the development of—
(A) Small industries
(B) Soap industries
(C) Software industry
(D) Sugar industry

Ans. (A)

68. The world’s largest private employer is—
(A) Ford Motors
(B) Suzuki
(C) General Motors
(D) General Electric

Ans. (A)

69. ‘Street’ is a motorcycle brand of —
(A) Escorts Ltd.
(B) Bajaj Auto
(C) Hero Honda Motors
(D) TVS Suzuki

Ans. (C)

70. The word ‘MODVAT’ is associated with—
(A) Medical Science
(B) Judiciary
(C) Banking
(D) Taxation

Ans. (D)

71. Fishing has been classified as—
(A) Extractive industry
(B) Genetic industry
(C) Manufacturing industry
(D) None of these

Ans. (A)

72. Which of the following is the top administrative organ of the company?
(A) Shareholders
(B) Managing Director
(C) General Manager
(D) Board of Directors

Ans. (D)

73. The founder of modern scientific management
(A) Henry Fayol
(B) McFarland
(C) F. W. Taylor
(D) Dickinson

Ans. (C)

74. The importer can not take delivery of goods unless he produces the—
(A) Bill of Sight
(B) Bill of Lading
(C) Shipping Bill
(D) Certificate of Origin

Ans. (B)

75. A statutory meeting requires a notice of at least—
(A) 7 days
(B) 4days
(C) 21 days
(D) 30 days amount of depreciation

Ans. (C)

76. In which method decreases every year—
(A) Straight line method
(B) Sum of years digit method
(C) Annuity method
(D) Sinking fund method is—

Ans. (B)

77. Under the Companies Act, a company must have—
(A)Board of Directors
(B)Managing Director
(C)Manager
(D)All of these

Ans. (A)

78. the most importer clause in the Memorandum of Association of a company is—
(A) Name Clause
(B) Objects Clause
(C) Registered Office Clause
(D) Liability Clause

Ans. (B)

79. Trading A/c is a—
(A) Personal A/c
(B) Real A/c
(C) Nominal A/c
(D) All of the above

Ans. (C)

80. Working of a Stock Exchange is governed by—
(A) Govt. of India
(B) Controller of Capital Issue
(C) Governing Board of that Stock Exchange
(D) Finance Minister

Ans. (C)

81. Internal audit helps in—
(A) Internal check
(B) Audit in depth
(C) Statutory audit
(D) Internal control

Ans. (D)

82. Day-today cash transactions of a club are recorded in—
(A) Receipts and Payments A/c
(B) Income and Expenditure A/c
(C) Cash Book
(D) Journal

Ans. (B)

83. An entry of Rs, 320 has been debited to Rajesh’s account, as Rs. 230. It is an error of—
(A) Commission
(B) Omission
(C) Principle
(D) None of these

Ans. (A)

84. An expense of Rs. 200 on cartage of a new machine purchased should be debited to—
(A) Cash A/c
(B) Machine Ale
(C) Cartage A/c
(D) None of these

Ans. (B)

85. A customer’s cheque returned dishonored is recorded in—
(A) Purchase Return Book
(B) Sales Return Book
(C) Cash Book
(D) Journal

Ans. (C)

86. Machinery purchased on account is recorded in—
(A) Purchase Book
(B) Cash Book
(C) Journal
(D) Ledger

Ans. (B)

87. Prepaid Insurance Account
(A) An expense
(B) A revenue
(C) An asset
(D) None of the above

Ans. (C)

88. The credit balance in the bank account is—
(A) An asset
(B) A liability
(C) A capital
(D) A revenue

Ans. (A)

89. Stock Exchange deals with—
(A) Second hand securities
(B) Issue of equity shares
(C) Issue of preference shares
(D) Issue of debentures

Ans. (A)

90. A Public Corporation is created by—
(A) Ministry of Finance
(B) Ministry of Industry
(C) Special Act of Parliament
(D) Ministry of Corporation

Ans. (C)

91. Chamber of Commerce is a form of—
(A) Trade Association
(B) Federation
(C) Merger
(D) Consolidation

Ans. (A)

92. Experts or specialists are attached to managers in—
(A) Line Organization
(B) Line and Staff Organization
(C) Functional Organization
(D) None of these

Ans. (B)

93. When dividend is declared, it must be paid within—
(A) 30 days
(B) 42 days
(C) 45 days
(D) 60 days

Ans. (A)

94. Management is—
(A) An Art
(B) A Science
(C) An Art as well as a Science
(D) None of these

Ans. (C)

95. ‘Esprit de corps’ principle of management states that—
(A) There is need for team-work
(B)Labor turnover should be minimized
(C)Discipline should be maintained
(D)There should be only one superior for each subordinate

Ans. (A)

96. Which theory of motivation assumes that average human being dislike work?
(A) Theory ‘X’
(B) Theory ‘Y’
(C) Maslow’s theory
(D) Equity theory

Ans. (A)

97. the most rigorous test of liquidity is—
(A) Current ratio
(B) Acid test ratio
(C) Stock turnover ratio
(D) Debtors turnover ratio

Ans. (B)

98. Which of the following is a Public corporation?
(A) TISCO
(B) TELCO
(C) ONGC
(D) DCM

Ans. (C)

99. Which of the following assets floes not depreciate?
(A) Machinery and equipments
(B) Patents
(C) Land
(D) Furniture

Ans. (C)

100. Of the following organizations, the easiest to wind up is the—
(A) Public Ltd. Company
(B) Multinational Corporation
(C) Private Ltd. Company
(D) Partnership Firm

Ans. (D)

Free Online Commerce practice test

2011-04-07T23:45:00.001-07:00

Free Online Commerce practice test

1. ln double entry system of Book-
keeping transaction means-

(A) Transfer of goods and ser—
vices from one person to another
(B) Transfer of goods and ser-
vices within the firm
(C) Producing and selling goods
(D) None of the above

Answer.A

2. Goods taken for personal use
will be posted in the credit of»
(A) Drawings Account
(B) Sales Account
(C) Purchases Account
(D) Cash Account

Answer.C

More at http://test4in.com/practice-paper-objective-commerce-based-on-mp-state-services-exam/

Commerce Big Question bank for exams

2011-04-07T23:44:00.000-07:00

Commerce Big Question bank for exams
Commerce practice Question bank for exams
Commerce Sample Question bank for exams
1. The assets which are purchased to improve profitability in the business not for the purpose of resale, are called?
(A) Intangible assets
(B) Current assets
(C) Fixed assets
(D) Wasting assets

2. As per the rule of Garner versus Murray, any loss that arises due to being insolvent of any partner should be divided among other partners in their?
(A) Profit and loss sharing ratio
(B) Capital ratio
(C) Average of both ratios
(D) None of these

3. Securities premium cannot be applied?
(A) For paying dividend to members
(B) For issuing bonus shares to members
(C) For writing off preliminary expenses of company
(D) For writing off discount on issue of debentures

4. Which method is legally accepted for redemption of preference shares?
(A) Issue of equity shares
(B) Issue of debentures
(C) Sale of fixed assets of the company
(D) Public deposits

5. A and B are partners in a firm. They admit C into partnership by giving him fourth share in future profits. The new profit sharing ratio of all the partners will be?
(A)3:2:1
(B)3:1:2
(C)3:3:2
(D) 3:3:3

6. Which of the following statements is not correct?
(A) The amount received from the sale of goods and services are called revenue
(B) Amount invested by the proprietor in the business is called capital
(C) Recording is the process of grouping transactions of one nature at one place
(D) Assets — Outside liabilities = Capital

7. The balance of which of the following items may have credit balance too?
(A) Cash
(B) Bank
(C) Investment
(D) Stock

8. Which of the following is not an intangible asset?
(A) Goodwill
(B) Debtors
(C) Copyright
(D) Patent

9. Which of the following statements indicates the essence of Robbins definition?
(A) “Economics is a subject concerned with an enquiry into the nature and causes of Wealth of Nations.”
(B) “Economics is the study of mankind in the ordinary busi ness of life.”
(C) “Economics is the science of scarcity.”
(D) “Economics is the study of allocation of scarce resources and of the determinants of employment, income and economic growth.”

10. A demand curve, parallel to X axis, shows the elasticity
(A) Infinite
(B) Less than l
(C) Zero
(D) Inelastic demand

11. According to the Malthusian theory of population which one of the following statements is not correct?
(A) Population tends to outrun the resources of subsistence
(B)There is a direct relationship between standard of living and population
(C) Increasing population can be checked through only positive checks
(D) Positive checks are those checks which are applied by the nature to stop population growth

12. When total utility is maximum, then marginal utility is
(A) Zero
(B) Less than average utility
(C) Equal to average utility
(D) More than average utility

13. Which of the following statements is correct?
(A) Perfectly elastic demand curve is parallel to X-axis
(B) Perfectly elastic demand curve is downward falling
(C) Perfectly inelastic demand curve is parallel to X-axis
(D) Generally highly elastic demand curve is a horizontal line

14. If 50% increase in the price of a commodity leads to only 10% reduction in demand, then such demand wilt be?
(A) Inelastic demand
(B) Perfectly elastic demand
(C) Perfectly inelastic demand
(D) Highly elastic demand
15. The equilibrium firm concept has been given by?
(A) Pigou
(B) Marshall
(C) Robinson
(D) J. K. Mehta
16. For ordinary business the maximum number of partners in a
Firm is?
(A)7
(B) 10
(C)20
(D) 50
17. By limited partnership is meant?
(A) Limited number of partners
(B) Unlimited liability of all partners
(C) Limited scope of partnership
(D) Limited liability of some partners
18. The voting right of the members of cooperative organization is?
(A) In the proportion of the shares purchased by them
(B) In the proportion of capital employed by them
(C) Equal voting right
(D) In the proportion of the total amount supplied by them

19. Line and staff organization is most suitable for?
(A) Small enterprises
(B) Medium sized enterprises
(C) Large sized enterprises
(D) Cottage enterprises

20. In sampling investigation, to arrive at valid conclusions, we may study?
(A) Only a very small unit of a population
(B) All the units of the population
(C) Representative units of the population
(D) None of these

21. ‘Law of Inertia of Large Numbers’ concludes?
(A) Smaller numbers are more stable than large ones
(B) Large numbers are more stable than small ones
(C) All of these
(D) None of these

22. Problem:
5 students secure less than 3 marks
12 students secure less than 6 marks
25 students secure less than 9 marks
33 students secure less than 12 marks
In the above problem, the number of students secure between 6 to 12 marks will be?
(A)12
(B)21
(C)25
(D)13

23.Statistical errors mean
(A)Errors committed while collecting data
(B) Errors committed while calculating
(C) Difference between the observed value and the true value
(D) Difference between old data and current data

24. A shopkeeper wants to stock shoes. The best suitable average for him will be?
(A) Arithmetic mean
(B) Median
(C) Mode
(D) Geometric mean

25. The mean marks of 100 students were found to be 40. Later on it was discovered that a score of 53 was misread as 83. The correct mean will be?
(A)39.5
(B)39.7
(C)39.8
(D)39.9

26. In which sequence are the following steps of communication taken?
(a) Getting participation in developing a solution to the problem
(b) Transmitting ideas or decisions
(c) Clarify the idea or problem
(d) Measuring the effectiveness of communication
Select your answer from the following codes—
(A) (a), (b), (c) and (d)
(B) (d), (c), (a) and (b)
(C) (d), (b), (a) and (c)
(D) (c), (a), (b) and (d)

27. Deficiency of capital, excessive dependency on agriculture and inequalities of income and wealth are some of the important features of a—
(A) Capitalistic economy
(B) Socialistic economy
(C) Developing economy
(D) Developed economy

28. Population census is made in India in every
(A) 7 years
(B) 10 years
(C) 15 years
(D) 20years

29. Which of the following banks stimulates the agricultural and rural development?
(A) EXIM Bank
(B) Exchange Bank
(C) HDFC Bank
(D) NABARD

30. Which bank’s old name was ‘Imperial Bank’?
(A) Reserve Bank of India
(B) Punjab National Bank
(C) State Bank of India
(D) Union Bank of India

31. Repo rate is the rate at which?
(A) The RBI takes money from banks
(B) Banks take money from the RBI
(C) One bank takes money from another bank
(D) The Government takes money from RBI

32. SIDBI is an apex financial insti tution for?
(A) Agricultural sector
(B) Collage industries
(C) Small and medium enterprises
(D) Large scale enterprises

33.The face value of a company’s share is Es. 100 Rs .The company
issued it at. 150 Rs The present market price of that share is Rs. 200. The company declares a dividend of 20% on these shares. The amount of dividend on per
share will be?
(A)Rs. 40
(B) Rs. 30
(C)Rs. 20
(D) Rs. 10

34.If own debenture of Rs. 1,000 is purchased for Rs. 975 from the
market by the company, the difference of Rs. 25 will be assumed?
(A) Profit on redemption of debenture
(B)Loss on redemption of debenture
(C)Goodwill
(D)None of these

35.Advance payment of tax is in the nature of?
(A) Asset
(B) Liability
(C) Prepaid Expenses
(D) Revenue expenses

36. Which of the following statements are true?
(a)Unclaimed dividend is an asset of a company.
(b)Dividend declared between two annual general meetings is called final dividend.
(c) A company can distribute interim dividend and final dividend in the same financial year.
Select your answer from the following codes?
(A) (b) and (c)
(B) (a), (b) and (c)
(C) (a) and (c)
(D) (a) and (b)

37. If debentures of Rs. 3,25,000 are issued for the consideration of
net assets of Rs. 3,50,000, balance of Rs. 25,000 will be credited to?
(A) Capital Reserve A / c
(B) General ReserveA/c
(C) Profit & Loss A/c
(D) Goodwill A / c

38. (Capital employed x Normal rate of return)/100=
(A)Average Profit
(B)Super Profit
(C)Normal Profit
(D) Adjusted Average Profit

39. Decrease in current liabilities is?
(A) Source of cash
(B)Use of cash
(C) None of (A) and (B)
(D) Both of (A) and (B)

40.Current liabilities are equal to?
(A) Working Capital ÷ Current Assets
(B) Working Capital — Current Assets
(C) Current Assets ÷ Working Capital
(D) Current Assets — Working Capital

41. In internal reconstruction?
(A) No company goes into liquidation
(B) Only one company goes into liquidation
(C) One or more companies go into liquidation
(D) Two or more companies go into liquidation

42. Intrinsic value of share can be determined by?
(A) Yield method
(B) Fair value method
(C) Net assets method
(D) Stock exchange quotation

43. In perfect competition the demand curve of a firm is?
(A)Horizontal
(B)Vertical
(C) Negative slope
(D) Positive slope

44.In a place the average rainfall was 4 centimeter during Monday
to Saturday. Due to heavy rainfall on Sunday the average of the
week was increased to 6 cm. The rainfall on Sunday will be?
(A) 17 cm
(B) 18 cm
(C)19cm
(D) 20cm
45. If Median 27 and Mean = 30,Mode will be?
(A) 20
(B) 21
(C) 22
(D) 23
46. If the coefficient of correlation is+ 0 it indicates?
(A) perfect correlation
(B) Absence of correlation
(C) Limited degree of correlation
(D) High degree of correlation
47. The original cost of an asset is Rs. 4,15,000. The useful life of the asset is 20 years and net scrap value is estimated to be Rs. 65,000. The amount of depreciation to be charged every year will be?
(A) Rs. 17,000
(B) Rs. 17,500
(C) Rs. 18,000
(D) Rs. 18,500
48. Which of the following is not undistributed profit?
(A) General Reserve A/c
(B) Workmen Compensation Fund A / c
(C) Securities Premium A/c
(D) Dividend Equalisation Reserve A/c
49. Who is the Chairman of the Planning Commission?
(A) Prime Minister
(B) President
(C) Governor of Reserve Bank of India
(D) Finance Secretary
50. The debit balance in nominal account shows?
(A) Expenses
(B) Gains
(C) Assets
(D) Liabilities
51. The cost of goods sold on hire purchase system is transferred to?
(A)Sales Account
(B)Purchase Account
(C)Hire-Purchase Trading Account
(D) Profit and Loss Account
52.Short working is equal to?
(A) Minimum rent-Royalty
(B) Royalty-Minimum Rent
(C) Royalty-Amount paid to landlord
(D) Shortworking-Surplus
53. Which of the following errors will not affect the Trial Balance?
(A) Goods for Rs. 5,000 purchased on cash, expenses account was debited instead of purchases account
(B) Purchase Returns Book for December was overcast by Rs. 500
(C) Sales Book carried forward Rs 2,200 instead of Rs. 2,000
(D) None of these
54.X and Y are partners sharing profits in the firm in the ratio of
2: 3. Goodwill appears in the books of the firm at Rs. 10,000. Z
joins the firm as new partner for share of profits. His share of
Goodwill is estimated to be Rs. 15,000. The old partners’ account will be credited with Goodwill by—
(A) Rs 50,000
(B) Rs. 40,000
(C) Rs. 75,000
(D) Rs, 65,000
55. In case of opening stock Rs. 5,000, purchases Rs. 15,000, direct expenses Its. 2,000 and closing stock Rs. 2,500, the cost of goods sold had been?
(A) Rs. 20,000
(B) Rs. 19,500
(C) Rs. 21,500
(D) Rs. 22,000
56. Which of the following statements is ‘True’ ?
(A) Building Account is a nominal account
(B) Outstanding rent account is a non-personal account
(C) Every debit has a corresponding credit
(D) Income is debited
57. Which one of the following is not a kind of statistical series ?
(A) Individual
(B) Discrete
(C) Classified
(D) Signed
58. The formula for coefficient of variation is?
(A) Standard Deviation/ Mean
(B)Mean/ Standard Deviation
(C) (Mean—Mode)/ Standard Deviation
(D)Standard Deviation/ (Mean—Mode)

59. The value of mean, median and mode coincides in case of?
(A) Positively skewed distribution
(B) Negative]y skewed distribution
(C) Symmetrical distribution
(D) All of these

60. Classification of the students of a college in two categories ‘rural’ and ‘urban’ is?
(A) Qualitative
(B) Quantitative
(C) Geographical
( D)None of these

61. Which of the following statements is ‘True’ ?
(A) Henry Fayol was the resident of America
(B) Elton Mayo is the father of scientific management
(C) Henry Fayol was the founder of human relation approach
(D) The credit of behavioural approach in management goes to Ford Foundation
62. X and Y Motivation Theory has been propounded by?
(A) Maslow
(B) Ouchi
(C) Herzberg
(D) McGregor
63. Study the following statements and mark your answer according to the answer code given below—
I. Planning is the first function of management.
II. Planning provides a basis for organisation.
Ill. Planning does not involve decision-making.
IV. Planning is a static function.
Codes:
(A) I and III are correct
(B) I and I are correct
(C) I and IV are correct
(D) II and IV are correct
64. Motivational process is basically?
(A) Emotional process
(B) Psychological process
(C) Physiological process
(D) Intellectual process

65. The main objective of controlling is to—
(A) Punish the guilty person
(B) Ensure that performance is as per planning
(C) Maintain discipline
(D) Fix responsibility of subordinates
66. Indian Banking Regulation Act was passed in the yea?
(A)1971
(B) 1969
(C)1949
(D) 1947
67. Which one of the following will not act as an incentive for exports?
(A) Raising the internal value of money
(B) Lowering the prices of goods within the country
(C) internal devaluation of money
(D) Granting low interest loans for exports.
68. Received Rs. 5,000 from Ram but credited his account by Rs. 50,000 is?
(A)Error of Omission
(B)Error of Principles
(C)Compensation Error
(D) None of these
69. The subsidiary voucher produced in the absence of primary voucher is called?
(A) General voucher
(B) Note-book voucher
(C) Counterfoil
(D) Collateral voucher
70. In how many days from the registration, the first Auditor of the company be appointed?
(A)10
(B) 20
(C)30
(D) 60
71. The main objective of Auditing is?
(A) To detect errors and fraud
(B) To prevent errors and fraud
(C) To find out accuracy, completeness and validity of accounts and documents
( D)All of these
72. Internal Auditor can be removed by the?
(A) Management
(B) Shareholders
(C) Statutory Auditor
(D) Government

73. In his report the Auditor gives his?
(A) Judgment
(B) Opinion
(C) Guarantee to correctness of accounts
(D) All of these
74. According to Section 227(1) of the Companies Act, 1956, the Auditor does not have the right
(A) To sign the Audit Report
(B) To see the books, accounts and vouchers of the company
(C) To obtain information and explanation
(D) To correct any wrong statement

75. Consider the following documents?
(a) Audit Report
(b) Audit Note-book
(c) Audit Programme
(d) Audit Files
The correct sequence in which the Auditor prepares these documents is?
(A) (c) (b) (d) (a)
(B) (d) (c) (a) (b)
(C) (c) (a) (d) (b)
(D) (a) (b) (c) (d)
76. Consider the following Statements
I Scope of audit
II Validity of appointment
III Knowledge about business
IV Instruction to client
V. Division of work among audit clerks.
The correct sequence of these elements for the commencement of a new audit will be?
(A) II, I ,III, IV and V
(B) I,II, III, IV and V
(C) V, I IV, III and II
(D)IV, I, III, II and V

77. Working papers which contain a record of the audit work done, are the property of?
(A) The company
(B) The auditor
(C) The company and the auditor both
(D) The Company Law Board

78. Under which Section of Companies Act, has the remuneration of the Auditor been discussed?
(A) Section 224(2)
(B) Section 224(8)
(C) Section 225
(D) Section 231
79. Marginal cost curve cuts the average cost curve
(A) At the left of its lowest point
(B) At the lowest point
(C) At the right of its lowest point
(D) At its highest point

80. In short term production function which of the following changes in factors?
(A) Ratio
(B) Scale
(C)Both of these
(D)None of these

81. Which one of the following is not a method of depreciation?
(A) Insurance Policy Method
(B) Diminishing Return Method
(C) The Sum of the Year Digits Method
(D)Replacement Cost Method

82. Which one of the following is not an accounting convention?
(A) Consistency
(B) Full disclosure
(C) Materiality
(D) Secrecy
83. Domestic use of office telephone is
(A) Embezzlement of Labour
(B) Embezzlement of Property
(C) Embezzlement of Facility
(D) None of these
84. The Geometric Mean of two numbers 8 and 18 shall be?
(A)12
(C)15
(B)13
(D)11.09

85. For open-end classes, the most appropriate measure of dispersion ?
(A) Range
(B) Quartile deviation
(C) Mean deviation
(D) Standard deviation
86. When the Cross Price Elasticity of demand between two goods is zero then those goods are called?
(A) Independent goods
(B) Luxury goods
(C) Substitute goods
(D) Complementary goods
87. The feature of monopolistic competition that drives a firm’s profit to zero in the long run is?
(A) Product differentiation
(B) Price leadership
(C) Market power
(D) Free entry

88. As a result of increase in the price of tea from Rs. 40 to Rs. 50 per pound, the demand for coffee increases from 500 pounds to 600 pounds. The cross elasticity of demand is?
(A)1/2
(B)2/3
(C)3/4
(D)4/5
89. Which of the following prevents National Income from falling to zero when Gross Investment falls to zero?
(A) Consumption
(B) Multiplier
(C) Accelerator
(D) None of these
90. In an Economy, where capital output ratio is 5.2 what should be the saving income ratio to bring about a growth rate of 6.2% in the National Income?
(A)1.00%
(B) 32.24%
(C)11.4%
(D)1.19%

91. Which of the following will happen when statutory liquidity ratio of banks is reduced by the central banks?
(A) Government can borrow more funds from the banks than before
(B) Government can sell more securities to the banks than before
(C) Private sector will be able to get less credit from banks than before
(D) Government will be able to sell less securities to banks than before
92. Which of the following growth models includes the population growth function?
(a) Classical Model
(b) Harrod-Domar Model
(c) New classical Model
(d) Schumpeter Model
Codes:
(A) (a) and (c)
(B) (a), (b) and (c)
(C) (a)and(d)
(D)(b) and (d)
93. Longer the period of time, elasticity of supply will be?
(A) Perfectly elastic
(B) Inelastic
(C) More elastic
(D) Constant
94. The production function expresses the relationship between?
(A) Cost and benefit
(B) Stock and flow variables
(C) Demand and supply
(D) Input and output
95.Which among the following is not the liability of a Commercial Bank?
(A) Share capital
(B) Reserve fund
(C) Bills, which are to be paid
(D) Balance with central bank and other banks
96. Which one of the following is not a method of credit control?
(A) Bank rate policy
(B) Open market operations
(C) Credit deposit ratio
(D) Cash reserve ratio

97. Economic development can be best measured by?
(A)D increase in Gross National Income
(B) Poverty ratios
(C) Growth in real per capita in GNP
(D) Faster capital formation
98. In calculating a country’s GNP at market prices, which one of the following is not included?
(A) Indirect taxes
(B) Subsidies
(C) Wages and salaries before tax
(D) Retirement pension
99. As against revenue deficit, gross fiscal deficit will always be?
(A). Lower
(B) Higher
(C) Similar
(D) Some times higher and sometimes lower

100. Consider the following statements
(a) Money is a stock whereas spending is a flow
(b) Wealth is a stock while income is a flow.
(c) The government debt is a stock but interest payment is a flow.
(d) The lending by bank is a flow and its outstanding loan is a stock.
Which of the statements given above are correct?
(A) Only (a) and (b)
(B) (a), (b) and (c)
(C) (a), (c) and (d)
(D) All of these

101. Unclaimed dividends should be shown in the Balance Sheet of a company under the heading
(A) Reserve and Surplus
(B) Provisions
(C) Current liabilities
(D) Miscellaneous items
102. The term, ‘imprest system’ is used in relation to?
(A) Purchases Book
(B) Sales Book
(C) Cash Book
(D) Petty Cash Book

103. On 31st December, 2007 the assets and liabilities of a firm were Rs. 40,000 and Rs. 30,000 respectively. The firm was dissolved and a sum of 60 paise per rupee was paid to the creditors. Loss on realization was?
(A) Rs. 10,000
(B ) Rs, 12,000
(C) Rs. 18,000
(D) Rs. 22,000
104. The rate of commission payable on the issue of shares should not be more than?
(A) 2%
(C) 4%
(B) 3%
(D) 5%

105. If sales are Rs. 18,000, Gross Profit Rs. 5,000, Net Loss Rs. 1,000, the operating expenses will be?
(A) Rs. 4,000
(B) Rs. 6,000
(C) Rs. 13,000
(D) Rs. 17,000

106. At what price is the stock valued under conventional method?
(A) At cost price
(B) At market price
(C) At cost price or market price whichever is lower
(D) At cost price or market price whichever is higher

107. Cumulative Preference share holders can claim unpaid dividend of earlier years as a matter of right only when?
(A) There are sufficient profits
(B) Company goes into winding up
(C) There are sufficient liquid funds
(D) Directors propose to distribute dividend to equity share holders before giving dividends to them

108. A firm had a capital balance of Rs. 1,00,000 at the beginning of a year. At the end of the year, the firm has total assets of Rs. 1,50,000 and total liabilities of Rs. 70,000. If the total withdrawals during the period were Rs. 30,000, what was the amount of Net Profit/Net Loss for the year?
(A) Rs. 10,000 profit
(B) Rs. 20,000 loss
(C) Rs. 50,000 loss
(D) Rs10,000 loss
109. You are given the following item
(a) Bills Receivables
(b) Short-term Investments
(c) Debtors
(d) Accrued but not received Interest.
Which of the following arrangements in the order of liquidity is
correct?
(A) (a), (b), (c) and (d)
(B) (b), (a), (d) and (c)
(C) (b), (c), (a) and (d)
(D) (c), (a), (d) and (b)
110. A private company does not?
(A) Restrict the right to transfer the shares
(B) Limit the number of its members
(C) Appoint auditor
(D) Publicity invite subscription to shares

111. Opening Stock : Rs. 15,000
Purchases : Rs. 95,000
Closing Stock :Rs. 29,000
Gross Profit 10% of sales
The amount of sales will be?
(A) Rs. 60,000
(B) Rs. 72,000
(C) Rs. 80,000
(D) Rs. 90,000
112. In case of retirement of a partner, the total amount of good will is credited to the account
of—
(A) The retiring partner only
(B) The remaining partners only
(C) All the partners
(D) None of these
113. If the rate of Gross Profit is 25% of sales and the -total cost of goods sold is RS. 1,00,000, the amount of gross profit will be?
(A) Rs. 25,000
(B) Rs. 20,000
(C) Rs. 30,000
(D) Rs. 33,333
114. The installation expenses for a new machine will be debited to?
(A) Installation Expense account
(B) Cash account
(C) Profit and Loss account
(D) Machinery account
115. A machine was purchased for Rs. 10,000 and its life was estimated to be 3 years, and at the end of its life, its book value was Rs. 5,120. If depreciation is calculated according to Diminishing Balance Method, the rate of depreciation would be?
(A) 25%
(B) 15%
(C) 20%
(D) 10%

116. Changing of capital expenditure to revenue expenditure results
in
(A) Secret reserve
(B) Revenue reserve
(C) Capital reserve
(D) None of these
117. X Ltd. has current ratio of 2 1 and quick ratio of 1: 1. If the current liabilities are Rs. 80,000 then the value of stock would be?
(A) Rs. 1,60,000
(B) Rs. 1,20,000
(C) Rs. 40,000
(D) Rs. 80,000
118. Profit prior to incorporation of a company?
(A) Can be paid as dividend
(B) Cannot be paid as dividend
(C) Can be used for revenue expenses
(D) None of these
Answers
1 C
2 B
3 A
4 A
5 C
6 C
7 A
8 B
9 D
10 A
11 B
12 B
13 A
14 C
15 C
16 C
17 D
18 C
19 B
20 C
21 A
22 B
23 C
24 D
25 B
26 D
27 C
28 B
29 D
30 C
31 B
32 B
33 C
34 A
35 C
36 A
37 A
38 C
39 B
40 D
41 A
42 C
43 A
44 A
45 B
46 D
47 B
48 C
49 A
50 A
51 C
52 A
53 A
54 C
55 B
56 C
57 D
58 A
59 D
60 C
61 D
62 D
63 B
64 B
65 B
66 C
67 A
68 A
69 D
70 C
71 C
72 A
73 B
74 D
75 A
76 A
77 B
78 B
79 C
80 C
81 D
82 D
83 B
84 A
85 A
86 D
87 A
88 D
89 C
90 A
91 A
92 B
93 C
94 D
95 D
96 C
97 D
98 B
99 B
100 D
101 C
102 D
103 B
104 D
105 B
106 C
107 A
108 A
109 C
110 D
111 D
112 C
113 D
114 D
115 C
116 A
117 C
118 B

Preparing Commerce Optional For UPSC Prelims : Practice Solved paper

2011-04-07T23:42:00.000-07:00

Preparing Commerce Optional For UPSC Prelims : Practice Solved paper
upsc prelims commerce question papers
Commerce Optional For UPSC Prelims :Check your preparation

1. Depreciation Accounting is a process of:
(a) allocation of cost
(b) valuation of assets
(c) provision for replacement of assets
(d) estimation of net profit
Ans. (a)

2. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I List-II
A. Amortisation 1.Diminution of the life of the asset due to excessive use.
B. Depreciation 2.Exhaustion of natural resources
C. Depletion 3.Expiration of tangible assets
D. Obsolescence 4.Expiration of intangible. assets
5. Economic deterioration due to improved inventions
Codes:
A B C D
(a) 1 2 3 4
(b) 1 2 4 5
(c) 5 2 3 4
(d) 4 3 2 5
Ans. (d)

3. Given that the value of furniture on 1.1.93 is Rs.8000, furniture purchased during the year is Rs. 4,000 sale of furniture on no loss no profit basis is Rs. 2,000 and the furniture is valued at Rs. 7000 on 31.12.93, the depreciation for the year 1993 will be:
(a) Rs. 1000
(b) Rs. 3000
(b) Rs. 5,000
(c) Rs. 7,000
Ans. (b)

4. Which one of the following methods of inventory valuation matches current cost with current revenues?
(a) Last In first Out
(b) First In First Out
(c) Simple average
(d) Weighted average
Ans. (a)

5. Which of the following statements are correct?
1. Inventory includes raw materials, finished goods and goods in process.
2. Inventory is a part, of the working capital.
3. Inventory includes goods likely to be purchased in the coming months.
Select the correct answer using the codes given below:
(a) 1, 2 and 3
(b) 2 and 3
(c) 1 and 3
(d) 1 and 2
Ans. (d)

6. The success of perpetual inventory system depends upon:
(a) placing order for materials at regular intervals
(b) exercising control over the issue of materials
(c) recording the receipt and issue of materials immediately after each transaction
(d) recording the receipt of materials by storekeeper in the ‘Bin Cards’.
Ans. (c)

7. A person starts a business with a capital of Rs. 45000.
He purchases goods on credit worth Rs. 5,000.
These transactions can be expressed in an Accounting Equation as:
(a) Rs. 5,000 = Rs. 50,000-Rs. 45,000
(b) Rs. 50,000 = Rs. 50,000 + 0
(c) Rs. 50,000 = Rs. 45,000 + Rs. 5,000
(d) Rs. 45,000 = Rs. 50,000 - Rs. 5,000
Ans. (c)

8. Which of the following are applicable to Sinking Fund Method of depreciation?
1. Periodic depreciation is smaller than the asset’s actual annual depreciable cost.
2. Amount of the interest constantly declines due to asset’s reducing balances.
3. Annual net incidence on P/LA/c remains constant due to incorporation of only fixed depreciation.
4. Periodic depreciation is recorded through the Asset Account.
Select the correct answer using the codes given
Codes:
(a) 2 and 4
(b) 1 and 3
(c) l, 2and3
(d) 2, 3 and 4
Ans. (b)

9. The value of which one of the following assets increases in the initial years of its life remains constant Thereafter and finally begins to decline?
(a) Livestock
(b) Patents
(c) Goodwill
(d) Machinery
Ans. (b)

10. Consider the following factors:
1. Margin of safety
2. Lead time
3. Ordering Cost
4. Economic Order Quantity
5. Average Quantity Consumed
6. Storage Cost
The ordering level is fixed by taking into account.
(a) 1, 4 and 6
(b) 1.2 and 5
(c) 2, 3 and 4
(d) 3, 5 and 6
Ans. (b)

11. Match List-I with List-II and select the correct answer using the codes given below the list:
List-I List—II
(Accounting (Principle involved)
Concept)

A. Consistency 1.Losses are anticipated and accounted for in advance but
profits are not accounted for until realized.
B. Comparability 2. All the relevant financial information should be summarized and
presented in the accounting statements.
C. Conservatism 3. Accounting procedures in an entity should be followed
uniformly from period to period.
D. Disclosure 4. Accounting statements of different periods of an entity and those
of different entities of a period should be based on the same
accounting principles and procedures.

5. Personal judgment of accountants should not influence
accounting measurements.

Codes:
A B C D
(a) 4 3 5 2
(b) 3 4 1 2
(c) 4 3 1 5
(d) 3 4 2 5
Ans. (b)

12. Which one of the following should be considered as revenue expenditure?
(a) Rs.1000 paid for the erection of a new plant
(b) Cost of Rs. 10,000 incurred in increasing the sitting accommodation of a hotel
(c) Damages paid on account of breach of a contract to supply certain goods
(d) Repairs to machinery purchased second hand.
Ans. (c)

13. The written down value of a plant is Rs. 6,000 (the original value being Rs. 10,000). It is sold for Rs. 12000 during the current financial year. Which one of the following is true in this regard?
(a) Capital Profit = Rs. 6,000
(b) Revenue Profit = Rs. 6,000
(c) Capital Profit = Rs. 2,000 and Revenue Profit = Rs.4000
(d) Capital Profit = Rs. 12,000
Ans. (c)

14. Match List-I (Item of expenditure / receipt) with List-II (Nature of expenditure / receipt) and select the correct answer using the codes given below the lists:

List- I List - II
A. Carriage charges on a new machine 1. Revenue Receipt
purchased for factory
B. Legal expenses incurred in defending 2. Revenue Expenditure
a case of violation of a provision of Factories
Act
C. Grant in aid re from the Government for the 3. Deferred Revenue Expenditure
construction of a building
D. Amount received for a part of the office 4. Capital Expenditure
building sub-let
5. Capital Receipt
Codes:
A B C D
(a) 2 3 1 5
(b) 4 2 5 1
(c) 3 4 1 5
(d) 4 3 1 5
Ans. (b)

15. Profit under single entry system of book keeping means:
(a) the difference between opening and closing cash balances as reduced by fresh capital introduced.
(b) the difference between opening net assets and closing net assets as increased by drawings and reduced by new capital introduced.
(c) Profit shown by Trading and Profit and Loss Account and Balance Sheet.
(d) The amount of closing cash balance as reduced by expenses.
Ans. (b)

16. Given that:
Opening Capital : Rs.5, 000
Closing Capital : Rs.6, 000
Drawings : Rs.1, 000
New capital Invested: Rs. 500
the profit for the year will be:
(a) Rs. 2,000
(b) Rs. 1,500
(c) Rs. 1,000
(d) Rs. 500
Ans. (b)

17. Which of the following are prepared by the organizations keeping only incomplete accounting records?
I. Cash Book
II. Customers’ Accounts
III. Expenses Accounts
IV. Day Books
Choose the correct answer using the codes given below:
(a) I, II and III
(b) 1, II and IV
(c) I, III and IV
(d) I III and IV
Ans. (b)

18. Match List-I (Financial Statements and Accounts) with List-II (Special matters associated with Statements and Accounts) and select the correct answer using the codes given below the list:
List-I List-II
A. Receipts and Payments Account 1. Revenue
B. Income and Expenditure Account 2. Cash
C. Dividend Equalization Reserve 3. Liability
D. Club Subscription Received in Advance Account 4. Balance Sheet
5. General Reserve
Codes:
A B C D
(a) 2 1 4 3
(b) 3 2 4 5
(c) 2 1 5 3
(d) 1 2 4 5
Ans. (c)

19. Interim payments to partners of a dissolved partnership firm are made according to the:
(a) assumption that remaining unrealized assets would be able to realize their book value
(b) balances of capital of the partners
(c) existing profit-sharing ratios of the partners
(d) assumption that the realizable value of the remaining assets is zero
Ans. (d)

20. A, B and C are partners in a business sharing profit in the ratio of 2:2: 1. C dies on 31.3.94. The profits for the Financial Year 1993-1994 (April-March) is Rs. 64,000. The share of the deceased partner in the profits for the year will be Rs:
(a) 12,800
(b) 9,600
(c) 6,400
(d) 3:200
Ans. (a)

21. A and B are partners sharing profits and losses in the ratio of 2: 5. They admit C on the condition that he will bring good will in cash which is distributed between A and B. C’s share in future profit and losses is to be 1, The new profit sharing ratio of A, Band C will be:

(a) 6: 15:7
(b) 15:6:7
(c) 7:6: 15
(c) 6: 7: 15
Ans. (a)

22. In a common size Balance Sheet each item expressed as a percentage of:
(a) Equity Capital
(b) Debt Capital
(c) Fixed Assets
(d) Total Assets
Ans. (a)

23. Which of the following pairs is/are correctly matched?
1. Sinking Fund: Replacement of wasting assets
2. Secret Reserve: Overvaluation of liabilities
3. General Reserve: Provision for drop in value of assets
Select the correct answer using the codes given below codes:
(a) 1, 2 and 3
(b) 1 and 3
(c) 2 alone
(d) 1 alone
Ans. (c)

24. Match List-I and with List-land select the correct answer using the codes given below the lists:

List-I List-II
A. Dividend 1. Accumulated Reserves
B. Interest 2. Always paid whenever the firm makes a profit
C. Bonus shares 3. Can be used for issue of Bonus shares
D. Premium on share Price 4. Can be paid out of capital
5. Divisible part of profit
Codes:
A B C D
(a) 2 1 5 4
(b) 5 4 1 3
(c) 5 1 2 4
(d) 2 5 1 3
Ans. (b)

25. An estimate of the assets and liabilities of a firm as on a given date is called:
(a) Balance sheet
(b) Statements of Affairs
(c) Statement of Capital
(d) Income Statement
Ans. (b)

26. A provision is a:
(a) General Reserve
(b) Specific Reserve
(c) Capital Reserve
(d) Contingency Reserve
Ans. (b)

27. ‘Final Accounts’ of a Manufacturing company generally include the following types of documents:
1. Balance Sheet
2. Manufacturing Account
3. Profit and Loss Account
4. Trading Account
5. Profit and Loss Appropriation Account
The correct sequence in which these documents are prepared is:
(a) 1, 4, 3, 2, 5
(b) 2, 4, 3, 5, 1
(c) 1, 2, 4, 3, 5
(d) 2, 4, 5, 3, 1
Ans. (b)

28. While preparing Annual Financial Statements, the balance of Bill Receivable A/c can be treated as:
1. an Accrued Income
2. an item of Assets
3. a” Personal Account” balance
Of these statements
(a) 2 and 3 are correct
(b) 1 and 3 are correct
(c) 1and 2 is correct
(d) none is correct
Ans. (a)

29. While preparing the Annual Financial Statements, the balance of Prepaid Rent A/c should be treated as the balance of a:
(a) personal account
(b) real account
(c) nominal account
(d) deferred expenditure Account
Ans. (a)

30. Advance received from customers is:
(a) an item of current liability
(b) an item of non-current asset
(c) an item of contingent liability
(d) an item of non-cash cost
Ans. (a)

31. Which one of the following statements is incorrect?
(a) Share premium received on issue of shares can be utilized for writing off the preliminary expenses of the company
(b) Capital Redemption Reserve is available only for issuing fully paid bonus shares
(c) Discount on issue of shares is shown as a reduction from Capital Account in the Balance Sheet
(d) At the time of Rights issue, the existing shareholders gain because the shares are generally issued at a price lower than the market price.
Ans. (c)

32. The directors of a limited company resolved to forfeit 1,000 equity shares of Rs.10 each, Rs. 7.50 paid up, for non-payment of the final call money of Rs. 2.50 per share. 700 of these shares were re-issued at Rs. 7 per share. The amount to be transferred to the Capital Reserve Account would be:
(a) Rs. 2,500
(b) Rs. 3,150
(c) Rs. 3,500
(d) Rs. 3750
Ans. (b)

33. The nominal and book value of Sinking Fund Investments Account are respectively Rs. 100,000 and Rs. 96,000; The company has sold investments of the nominal value of Rs. 20,000 at a price that was sufficient to redeem the debentures of Rs. 20,000 at Rs. 102. The profit on sale of investments is:
(a) Rs. 800
(b) Rs. 1,000
(c) Rs. 1,200
(d) Nil
Ans. (c)

34. A company’s Balance Sheet inter alia contains Rs. 1, 60,000 fully paid 10% redeemable preference shares, Rs. 1,000 as shares Premium and Rs. 1, 31,000 as Revenue Reserves. It resolves to immediately redeem the above mentioned shares at 5% prem. by maximum utilization of earnings from fresh issue. If the issue is made at 20% premium, the MINIMUM amount of Fresh equity issue proceeds will be:

(a) Rs. 28,800
(b) Rs. 32,000
(c) Rs. 36,000
(d) Rs. 37,000
Ans. (c)

35. The following accounting entries are required in connection with the allotment of shares of a company:
1. Adjustment entry in respect of the discount allowed, if any, on the issue of shares.
2. Transfer entry for the application money received on shares allotted.
3. Adjustment entry for the excess application money, if any, being adjusted against the allotment money due:
The correct sequence of these entries is:
(a) l, 2
(b) 2,
(c) 2, 3, 1
(d) 3, 2, 1
Ans. (c)

36. When shares are forfeited, called up amount on shares is debited to
(a) Forfeiture Account
(b) Capital Reserve Account
(c) General Reserve Account
(d) Capital Account
Ans. (d)

37. Which one of the following statements is NOT correct?
(a) Bonus shares can be issued out of General Reserves
(b) Bonus shares can be issued in lieu of dividends
(c) Bonus shares can be issued even if the shares of the company are partly paid up
(d) Bonus shares can be issued even if there is a default in the payment of any term loans outstanding to any Public Financial Institution
Ans. (c)

38. Operating Ratio is given by:

(a) Total Operating Profit
Total shareholders’ Equity
(b) Total Operating Cost
Total Operating Revenue
(c) Total Operating Cost
Total Capital Employed
(d) Total Operating Profit
Total Operating Capital
Ans. (a)

39. Interest Coverage Ratio is given by:

(a) Net Profit
Interest on Debt
(b) Debt Capital
Interest on Debt
(c) Earnings Before Interest and Taxes
Interest on Debt
d Profit Before Tax
Interest on Debt
Ans. (c)

40. Given that:
Current Ratio = 2.5
Acid test ratio = 1.5
Net working capital = Rs. 60,000
The value of current-liabilities will be:
(a) Rs. 15000
(b) Rs. 40,000
(c) Rs. 60,000
(d) Rs. 100,000
Ans. (b)

41. Match List-I (Ratios) with List-II (Method of Calculation) and select the correct answer using the codes given below the lists:
List-I List-II
A. Debt-Equity Ratio 1. Equity Capital
Total Debt Capital
B. Proprietary Ratio 2 External Equity
Owners’ Equity
C. Capital Gearing ratio 3. Total shareholder’s Fund
Total Assets
D. ROI 4. Profit Before Int. & Tax
Net Assets
Codes:
A B C D
(a) 2 3 1 4
(b) 2 3 4 1
(c) 3 2 1 4
(d) 3 2 4 1
Ans. (a)

42. Match List-I and List-Il and select the correct using the codes given below the lists:
List-I List-II
A. Financial Leverage 1. Efficiency
B. Quick Ratio 2. Profitability
C. Stock Turnover Ratio 3. Risk
D; Margin on sales 4. Liquidity

Codes:
AB C D
(a) 3 4 1 2
(b) 4 3 1 2
(c) 4 3 2 1
(d) 3 4 2 1
Ans. (a)

43. Trading on equity take place:
(a) when capital other than that of equity shareholders also employed
(b) only when equity capital is employed
(c) only when debenture funds are employed
(d) when profits are ploughed back
Ans. (d)

44. Payout ratio means the ratio of:
(a) debtors to creditors
(b) profit distributed to profit retained
(c) earnings that are distributed through dividends
(d) interest payment to dividends
Ans. (c)

45. Given that:
Sales = Rs. 50,000
Variable cost = 20,000
Fixed cost = 10,000
Capital employed = Rs. 200,000
The profit-volume ratio will be:
(a) l0%
(b) 15%
(c) 50%
(d) 60%
Ans. (d)

46. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I List-II
A. Operating income 1. Cost of sold to average stock
B. Capital Employed 2. Profits before depreciation, interest and taxes
C. Inventory Turnover 3. Net fixed Assets Investment and Net Working capital
D. Gross Cash Flow 4. Total Funds invested
5. Profit before interest and taxes only
Codes:
A B C D
(a) 2 1 4 5
(b) 2 3 4 2
(c) 2 1 3 2
(d) 5 3 1 2
Ans. (d)

AUDITING
47. Consider the following activities:
1. Valuation
2. Verification
3. Vouching
The correct sequence of these activities undertaken by auditor is:
(a) 3, l, 2
(b) 3, 2, l
(c) 2, 3, 1
(d) 1, 2, 3
Ans. (b)

48. Consider the following statements:
Continuous adult is useful because:
1. more detailed checking is possible
2: audit can be completed quite quickly
3. figures in the accounts cannot be altered as the auditor visits several times during the year
4. Internal check can be done away with
Of these statements:
(a) 1 and 2 are correct
(b) 2 and 4 are correct
(c) 2, 3 and 4 are correct
(d) 1, .3 and 4 are correct
Ans. (d)

49. Match List-I (Nature of audit) with List-II (Related types of audit) and select the correct answer using the codes given below the list:

List-I List-II
A. Audit work is carried on almost 1.Balance Sheet Audit
simultaneously with the recording of transactions
B. Auditor starts his work when the final accounts have 2.Continuous Audit
been prepared
C. Audit conducted in between two annual audits 3.Interim Audit
D. Some of the books and records of the whole period are audited 4. Cost Audit
5. Partial Audit
Codes:
A B C D
(a) 4 1 2 3
(b) 2 1 5 3
(c) 2 1 3 5
(d) 1 2 3 4
Ans. (c)

50. Which one of the following would be sufficient ground for an auditor to submit a qualified report even though the management had given a note to the accounts?
(a) Securities belonging to the client are lodged with a depository.
(b) Fixed assets have been mortgaged.
(c) Bank balance as shown by the pass-book is different from that indicated by the cash book.
(d) Closing stock is valued at cash plus 10%.
Ans. (d)
.

Preparing Commerce Optional For UPSC Prelims

2011-04-07T23:40:00.000-07:00

Preparing Commerce Optional For UPSC Prelims
prepare for Commerce exams
Sample paper Preparing Commerce Optional For UPSC Prelims
Prepare for commerce Exams in India for Free

1. Consider the following documents:
1. Audit Notebook
2. Audit Programme
3. Audit Report
4. Audit Files
The correct sequence in which an auditor prepares these documents is
(a) 1, 2, 3, 4
(b) 2, 1, 3, 4
(c) 2, 1, 4, 3
(d) 1, 2, 4, 3
Ans. (c)

2. Which of the following pairs are correctly matched?
1. Test check-Random Checking
2. Internal Cheek-A system of automatic checking
3. Internal Control-Includes internal check and internal audit
4. Investigation-General examination of all accounting records
Select the correct answer using the codes given below:
Codes:
(a) 1, 2, 3 and 4
(b) 1, 2 and 4
(c) 3 and 4
(d) 1, 2 and 3
Ans. (d)

3. The scope of external audit in the case of a partnership firm is decided by the:
(a) Companies Act
(b) Partnership Act
(c) Letter of Appointment of the auditor
(d) Income Tax Act
Ans. (c)

4. A C.A. who has purchased on credit goods worth Rs. 2000 from a company ‘Z’ Ltd. is:
(a) not qualified from being appointed an auditor of Z Ltd.
(b) disqualified from being appointed an auditor of any company of the group
(c) disqualified from being appointed an auditor of Z Ltd.
(d) disqualified from being appointed an auditor of any company having dealings with Z Ltd.
Ans. (c)

5. The auditors of a company are NOT supposed to issue an unqualified report when:
(a) goodwill worth Rs.1, 00,000 built up by the company is not shown in the Balance sheet
(b) good will is shown in the Balance sheet of the company although it has been totally lost
(c) Balance sheet and Profit and Loss Account show a true and correct view of the company’s affairs and are drawn in conformity with the law
(d) proper Books of accounts as required by law have been kept by the company but the auditor has been refused access to same of these books
Ans. (d)

6. Consider the following situation:
1. The business of the company is being conducted fraudulently.
2. The persons connected with the formation of the company have been guilty of fraud.
3. The company so desires it by way of a special resolution.
The central Government NEED NOT NECESSARILY appoint Inspectors to investigate the affairs of the company in respect of situations Listed at:
(a) 1, 2 and 3
(b) 1 and 2
(c) 1 and 3
(d) 2 and 3
Ans. (b)

7. Consider the following institutions:
1. SEBI (Securities Exchange Board of India) 1988
2. Board for Industrial and Financial Reconstruction (BIFR)
3. EXIM Bank
4. National Stock Exchange
The correct chronological sequence of the establishment of these institutions is:
(a) 4,1,2,3
(b) 3 1, 2, 4
(c) 3,2,1,4
(d) 4, 2, l, 3
Ans. (c)

8. Consider the following steps in the process of allotment of shares:
1. Issue of Prospectus
2. Appointment of Manager to the issue
3. Receipt of application money
4. Listing in a stock exchange
5. Minimum subscription
The correct chronological sequence of these steps is:
(a) 1, 2,5,4,3
(b) 2, 1,3,5,4
(c) 2, 1,5,3,4
(d) 1, 2,4,5,3
Ans. (b)

9. Which one of the following statements is correct?
(a) Cooperative organizations are based on the principle of “One share One Vote”
(b) A public limited company does not invite capital from the public.
(c) Most of the public enterprises in India are organized on the pattern of private limited companies
(d) Registration of partnership is compulsory
Ans. (c)

10. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I List-II
A. Sole Trader 1. Larger no. of risks takers
B. Partnership 2. Betterment of the weaker sections
C. Cooperatives 3. Contractual relationship
D. Public Limited Company 4. Unlimited liability

Codes:
AB C D
(a) 1 2 3 4
(b) 4 3 2 1
(c) 4 2 3 1
(d) 1 3 2 4
Ans. (b)

11. The liability of shareholders of a Public Limited Co. is limited to the:
(a) paid up value of shares
(b) extent of their private assets
(c) nominal value of shares
(d) amounts called up
Ans. (c)

12. The ‘Instrument of Transfer’ is used at the time of:
(a) issue of new shares to public by the Co.
(b) issue of debentures to the public by the Co.
(c) sale of shares by a member
(d) Conversion of shares into stock
Ans. (c)

13. Vertical combination helps to:
(a) achieve economy by combining allied activities
(b) survive daring the times of depression
(c) fight a common enemy
(d) add new product lines
Ans. (a)

14. A part dealing with restrictive trade practice of the MRTP Act was amended in 1991. This Amendment is applicable:
(a) only to private sector companies
(b) only to public sector companies
(c) to both public and private limited companies
(d) both public and private sector companies
Ans. (d)

15. Modernization leads to:
(a) higher productivity and higher production
(b) lower investment and cheaper quality
(c) cost reduction through reduced expenditure
(d) higher cost of production
Ans. (a)

16. Technological updating would invariably require:
(a) change in management
(b) privatization of public enterprises
(c) retrenchment of workers
(d) induction of fresh capital
Ans. (d)

17. Letter of credit is now becoming an increasingly popular method of financing:
(a) fixed capital needs
(b) working capital needs
(c) redemption of debentures
(d) distribution of dividend
Ans. (b)

18. Deferred Payments arrangement aim at financing:
(a) working capital needs
(b) redemption of debts
(c) purchase of GDRs
(d) import of plant and machinery
Ans (d)

19. In general, expert incentives are permitted within the regulatory framework of:
(a) OECD
(b) UNCTAD
(c) IMF
(d) WTO
Ans. (d)

20. Import procedure begins with:
(a) indent
(b) marine insurance
(c) mate’s certificate
(d) shipping order
Ans. (a)

21. Which one of the following statements is correct?
(a) EXIM Bank promotes Indian exports through a wide variety and range of lending programmes
(b) EXIM Bank does not extend non-funded facility to Indian exporter
(c) Overseas investment finance facility is not a part of the functions of EXIM Bank
(d) EXIM Hank was established to provide assistance in raising capital in international markets.
Ans. (a)

22. In which of the following types of insurance should insurable interest be present only at the time when policy is taken?
(a) Fire insurance
(b) Life Insurance
(c) Marine insurance
(d) Life & Marine insurance
Ans. (b)

23. Match List-I with List-Il and select the correct answer using the codes given below the lists:
List-I List-II
A. Causa Proxima 1. Financial Stake
B. Re-insurance 2. Main Reason behind the event
C. Indemnity 3. Compensation for the loss
4. Risking with other insurer
Codes:
A B C
(a) 2 4 3
(b) 1 2 3
(c) 2 3 1
(d) 2 4 1
Ans. (a)

24. ‘Insurer’ is a person who has:
(a) insured his life on goods
(b) helped a person to get an insurance policy
(c) undertaken to make good the loss of the subject matter of insurance
(d) filed a suit in a court of law to recover an insurance claim
Ans. (c)

25. In Insurance contract UBERIMA FIDEI’ aspect is
used as synonym of:
(a) insurable interest
(b) free consent of parties
(c) utmost good faith
(d) legality of consideration
Ans. (c)

26. Both ‘Security’ and ‘Investment’ elements are available:
(a) only in Life Insurance
(b) in both Life and Fire Insurance
(c) in both Marine and Fire Insurance
(d) in Life, Marine and Fire Insurance
Ans. (a)

27. Match List-I (Management experts) with List-II (sequence of functions advocated by them) and select the correct answer using the codes given below the lists:
List-I List-II
A. Newman and Summer 1. Organizing, Planning, Leading and controlling
B. Hendry Fayol 2. Planning, Organizing, Commanding and Controlling
C. Luther Gullick 3. Planning, Organizing, Staffing, Directing and Controlling
D. Koontz and O’ Donnel 4. “POSDCORB”

Codes:
A B C D
(a) 1 2 4 3
(b) 2 1 3 4
(c) 1 2 3 4
(d) 2 1 4 3
Ans. (c)

28. Which one of the following statements regarding “Skill-Mix” of management is correct?
(a) Top Management requires more human relations skill than others.
(b) Middle Level Management requires more technical skills than others
(c) Supervisory Level men require less technical skill than other
(d) Top management requires more conceptual skill than others
Ans. (d)

29. From the point of view of functional organization, which one of the following cannot be claimed to be an advantage?
(a) It ensures a greater division of labour
(b) It leads to a higher degree of efficiency
(c) It helps in the assignment of specific responsibilities
(d) It facilitates small scale production
Ans. (d)

30. Match List-I (A Managerial Activity) with List-II (Managerial Function) and select the correct answer using the codes given below the lists:

List-I List-II
A. Forecasting 1. Controlling
B. Communication 2. Planning
C. Selection of managers 3. Leading
D. Establishing performance standards 4. Staffing
Codes:
A B C D
(a) 2 3 4 1
(b) 1 2 4 3
(c) 2 4 3 1
(d) 2 3 4 2
Ans. (a)

31. Organization Theory deals with:
(a) forms of business organization
(b) structure of an organization
(c) industrial relations
(d) incentives and wage policy
Ans. (b)

32. The potential disadvantage of MBO is:
(a) its inability to control progress of work and achievement of results
(b) its over emphasis on production and productivity
(c) the additional commitment to the organization
(d) the absence of short term and long term planning
Ans. (b)

33. Consider the following statements:
1. Decentralization and Delegation are closely inter- related.
2. Delegation and decentralization are h desirable.
3. Decentralization is not suitable for large organization.
4. Delegation is not possible in the case of small organizations
Of these statements:
(a) 1 and 2 are correct
(b) 2 and 3 are correct
(c) 1 and 4 are correct
(d) 1, 3 and 4 are correct
Ans. (c)

34. Which one of the following statements is correct?
(a) Responsibility of the delegate cannot be greater than the authority delegated
(b) Delegation frees the delegator of the responsibility
(c) Delegation is merely the division of work
(d) Delegation does not bestow an obligation on the part of the delegatee
Ans. (a)

35. The basis of Theory ‘Z’ is the reliance on:
(a) external control of human behavior
(b) self control and self-direction
(c) the belief that productivity is linked to trust, openness, subtlety and intimacy in the work environment
(d) governmental regulatory framework
Ans. (c)

36. Delegation of authority is linked to:
(a) managerial planning
(b) management coordination
(c) management control
(d) scientific management
Ans. (c)

37. Match List-I with List-II and select the correct answer using the codes given below the list:
List-I List-II
A. F. W. Taylor 1. MBO
B. Henry Fayol 2. Scientific Management
C. Elton Mayo 3. Fourteen principles of Management
D. Peter Drucker 4. Theory ‘X’
Codes:
A B C D
(a) 2 3 - 1
(b) 1 2 4 -
(c) 2 - 4 1
(d) 3 2 - 1
Ans. (a)

38. When an office manager selects different colors of paper and ink for printing forms according to the purpose for which they are intended, he is following the principle of:
(a) systems integration
(b) standardization
(c) identification
(d) multiple use
Ans. (c)

39. Office Management is generally speaking, the
responsibility area of:
(a) Corporate controller
(b) Works manager
(c) Chairman, Board of Directors
(d) Chief Executive
Ans. (d)

40. File Movement Register keeps track of:
(a) indexing of records
(b) classification of records
(c) inventory of records
(d) None of the above
Ans. (c)

41. The use of office machine cannot:
(a) enhance production
(b) save labour
(c) promote accuracy
(d) relieve monotony
Ans. (d)

42. What is the correct sequence of the following functionaries I authorities in the life of a company?
1. Board of Directors
2. Promoters
3. Underwriters
4. Registrar of Companies
5. Liquidators
Select the correct answer using the codes given below:
Codes:
(a) l, 2, 3, 4, 5
(b) 2, 1, 3, 4, 5
(c) 5, 4, 1, 3, 2
(d) 2, 4, 1, 3, 5
Ans. (d)

43. Which one of the following statements is correct?
(a) A prospectus is a notice, circular, advertisement or other intimation inviting offers from the public for the purchase of goods of a company
(b) The amount of minimum subscription is mentioned in the Memorandum of Association
(c) All the directors must sign the prospectus
(d) Investors are not duly protected against any misstatement in a Prospectus
Ans. (c)

44. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I List-II
A. Director 1. In charge of statutory and administrative duties
B. Company Secretary 2. Reports to the management
C. Managing Director 3. Reports to the shareholders
D. Statutory auditor 4. Reports to the Board of Directors
5. Trustee of company’s assets
Codes:
A B C D
(a) 2 4 5 1
(b) 5 1 2 3
(c) 5 1 4 3
(d) 3 2 5 4
Ans. (c)

45. Which one of the following statements correctly explains the “Doctrine of Indoor Management”?
(a) Every person dealing with the company is presumed to have read and understood the contents of the Company’s Memorandum and Articles of Association
(b) It is aimed at protecting outsiders while dealing with the company
(c) If a person enters into a contract with the Company. which is contrary to the provisions of the Memorandum and AOA, he will not have any right under such a contract
(d) It is a rule that seeks to protect the company while dealing with the outsiders
Ans. (b)

46. Match List-I (Types of securities) with List-II (Special features) and select the correct answer using the codes given below the lists:
List-I List-II
A. Blue Chip 1. Issued by a. private limited company
B. Deep Discount Bonds 2. Highly Profitable investments in stock exchange
C. Commercial Paper 3.Issued by financially sound companies
D. Debentures 4. Small investments yielding a big sum after a long-term
5. Issued by cos. having large reserves
6. Issued in lieu of loans
Codes:
A B C D
(a) 2 1 3 6
(b) 1 4 6 5
(c) 2 3 1 5
(d) 2 4 3 6
Ans. (a)

47. A public limited company cannot issue:
(a) debentures
(b) deferred shares
(c) participating preference shares
(d) redeemable preference shares
Ans. (b)

48. “Which one of the following statements is correct?
(a) Merchant bankers shall furnish a Due Diligence certificate while forwarding a draft prospectus / letter of offer to registrar of companies
(b) Employee stock option scheme is a compulsory scheme on the part of the company to encourage employees to have a greater sense of participation in the activities of the company
(c) When a private limited or a closely held or an unlisted public company desires to get listed in a stock exchange by disinvestment, if may do so
(d) A company issuing shares to the public has no sight to select a Merchant Banker to manage the issue
Ans. (a)

49. Which of the following are the methods of marketing new issues of securities?
1. Listing of securities
2. Jobbers and brokers
3. Private placement of securities
4. Privileged subscriptions
Select the correct answer using the codes given below:
Codes:
(a) 1 and 2
(b) 2 and 3
(c) 3 and 4
(d) 1, 2, 3 and 4
Ans. (c)

50. Match List-I with List-II and select the correct answer using the codes given below the lists:

List-I List-II
A. Agenda 1.Minimum number of members required to be present
B. Quorum 2. Entitlement to vote
C. Adjournment 3. Matters to be taken up for decision
D. Proxy 4. A meeting in progress postponed to some other date
5. Minimum no. of directors
6. Entitlement to participate
Codes:
A B C D
(a) 1 6 4 2
(b) 3 5 1 2
(c) 3 1 4 2
(d) 2 1 4 6
Ans. (c)

UGC sample commerce exam paper

2011-04-07T23:38:00.000-07:00

UGC sample commerce exam paper
Free Sample UGC NET Exam Papers
UGC NET Solved Sample Question Paper Commerce
1. On January 1, 1992 there was a balance of Rs. 4,000 in the plant and machinery account. An addition of Rs. 2,000 was made on July 1, 1992. Accounts were closed for the year on December, 31, 1992. If depreciation was charged 10% per annum, the balance in the plant and machinery account on the closing date would be:

(a) Rs. 5,300

(b) Rs. 5,400

(c) Rs. 5,500

(d) Rs. 5,600

Ans. (c)

2. A machinery having a residual value of Rs. 5,000 was purchased on 1-1-1988 for Rs. 1, 00,000 and was depreciated @ 9.5% on a straight line method. On 1-1-91, it was estimated that its useful life has been reduced to eight years. Under the changed circumstances, the annual depreciation charges for the year 1991 and onwards will be:

(a) Rs. 11,875

(b) Rs. 13,300

(c) Rs. 9,500

(d) Rs. 12,500

Ans. (b)

3. In which one of the following methods of charging depreciation shall the balance never be reduced to zero?

(a) Fixed installment method

(b) Depreciation fund method

(c) Diminishing balance method

(d) Depletion unit method

Ans. (c)

4. Match List-I with List-II and select the correct answer using the following codes given below the lists:

List-I List-II

(Types of accounts) (Principles)

A. Real Accounts 1. Debit the receiver, credit the give.

B. Nominal Accounts 2. Debit what comes in credit what goes out.

C. Personal Accounts 3. Debit all expenses, credit all gains.

Codes:

A B C

(a) 3 2 1

(b) 1 3 2

(c) 2 3 1

(d) 1 2 3

Ans. (c)

5. Which one of the following branches of accounting primarily deals with processing and Goodwill presenting of accounting data for internal one?

(a) Financial Accounting

(b) Tax Accounting

(c) Management Accounting

(d) Inflation Accounting

Ans. (c)

6. “Holding gains in relation to stocks should not be used for payment of Dividend.” Which one of the following accounting principles is involved in this?

(a) Consistency

(b) Cost

(c) Materiality

(d) Realization

Ans. (d)

7. X started business with a capital of Rs. 20,000 and purchased goods worth Rs. 2,000 on credit. These transactions may be expressed in the form of ‘Accounting Equation’ such as:

(a) Rs. 22,000 = Rs. 20,000 - Rs. 2,000

(b) Rs. 20,000 = Rs. 22,000 - Rs. 2,000

(c) Rs. 22,000 = Rs. 22,000 + 0

(d) Rs. 22,000 = 0 + Rs. 22,000

Ans. (b)

8. Accounting records transaction in terms of:

(a) commodity units

(b) monetary units

(c) production units

(d) none of the above

Ans. (b)

9. Market price or actual cost, whichever is less, is the generally accepted accounting principle for valuation of:

(a) Stock in trade

(b) Fixed assets

(c) Current assets

(d) All assets

Ans. (a)

10. Capital employed in a business is Rs.1, 50,000. Profits are Rs. 50,000 and the normal rate of profits is 20%. The amount of goodwill as per capitalization method would be:

(a) Rs. 1, 00,000

(b) Rs. 1, 50,000

(c) Rs. 2, 00,000

(d) Rs. 3, 00,000

Ans. (a)

11. Consider the following data:

Jan. 1, 1989 Opening Stock 500 units Rs. 5 per unit

Jan. 15, 1989 Purchases 400 units @ Rs. 6 per unit

Jan. 30, 1989 issued 300 units

Feb. 15, 1989 Purchases 200 units Rs. 7 per unit

Feb. 28, 1989 Issued 300 units

March 25, 1989 Purchases 200 units @ Rs. 8 per unit

Based on the above data, the value of inventory in hand on 31st March, 1989 as per ‘First in First out’ (FIFO) method will be:

(a) Rs. 3,700

(b) Rs. 3,600

(c) Rs. 4,800

(d) None of the above

Ans. (c)

12. Renewal fee for Patents is a:

(a) capital expenditure

(b) revenue expenditure

(c) deferred revenue expenditure

(d) development expenditure

Ans. (a)

13. A manufacturing company spent the following amounts on the import and installation of a machine:

Rs. 50,000 Price of the machine

Rs. 5,000 Freight

Rs, 1,050 Insurance premium

Rs. 6,000 Replacement of a part damaged in transit, not covered under the insurance policy.

Based on the above data, Capital expenditure would be:

(a) Rs. 50, 000

(b) Rs. 56, 050

(c) Rs. 62, 050

(d) Rs.57, 050

Ans. (b)

14. Given, subscription received in 1990:

For the year 1989 Rs. 500

For the year 1990 Rs. 7,000

For the year 1991 Rs 400

1990-Subscription outstanding Rs. 250.

The amount of subscription to be posted to Income on 31st December 1990 and Expenditure account of 1990 is:

(a) Rs. 7,000

(b) Rs. 7,250

(c) Rs. 7,900

(d) Rs. 8,150

Ans. (b)

15. What is the correct sequence of the preparation of the following accounts and statements of a non-profit organization?

1. Income and Expenditure account

2. Receipts and Payment account

3. Balance Sheet

Select the correct answer from the codes given below:

(a) 1, 2, 3

(b) 1, 3, 2

(c) 2, 1, 3

(d) 2, 3, 1

Ans. (c)

16. Profit as per accounts from incomplete records may be construed as equivalent of:

(a) excess of assets over liabilities at the close of the period.

(b) excess of capital at the end over the capital at the beginning

(c) excess of assets over liabilities at the commencement of the period

(d) excess of capital at the beginning over the capital at the beginning

Ans. (b)

17. If the rate of gross profit is 20% on cost of goods sold and the sales are Rs. 1, 50,000 then the total gross profit would be:

(a) Rs. 25,000

(b) Rs. 30,000

(c) Rs. 37,500

(d) None of the above

Ans. (a)

18. According to records of a firm which does not keep its accounts on double entry system, all sales were made on credit so as to realize a profit of 33 % sale proceeds. The

3

stock of unsold goods at the beginning and at the end of the trading period were valued at Rs. 21,000 and Rs. 18,000 respectively. Goods worth Rs.1, 39,500 were purchased for resale during the period. The proprietor withdrew goods worth Rs. 1, 500 during the accounting period for personal use. What were the total sales during the period?

(a) Rs. 1, 80,000

(b) Rs. 2, 11,500

(c) Rs. 2, 25,000

(d) Rs. 2, 31,500

Ans. (b)

19. In the absence of partnership deed provision of Partnership Act, 1932 became applicable under which a partner is entitled to interest on money advances to the firm at:

(a) 4% p.a.

(b) 5% p.a.

(c) 6% p.a.

(d) 10% pa.

Ans. (c)

20. Which one of the following as not applicable to a co-operative form of business organization?

(a) Membership is open to all having a common interest

(b) Transferability of shares is permitted among general public

(c) Policy decisions are taken by the members in a general meeting

(d) Major portion of profit is distributed to members by way of dividend

Ans. (d)

21. Which one of the following statements is correct?

(a) A company consists of heterogeneous members

(b) A body corporate includes a co-operative society

(c) The expression ‘corporation’ or ‘Body corporate’ are the same

(d) A partner cannot contract with his firm, whereas a member of a company can

Ans. (d)

22. Dividend declared and paid by a company is:

(a) an expense of the company

(b) an income of the company

(c)the distribution of profit earned by the company

(d) the source of fund for the company

Ans. (c)

23. Long term liabilities are:

(a) fixed assets minus current assets

(b) fixed assets minus current liabilities

(c) current Assets plus current liabilities

(d) total liabilities minus current liabilities

Ans. (d)

24. A business entity has assets of Rs. 26,000 and liabilities of Rs. 6,000. Owner’s equity in this case is:

(a) Rs. 32,000

(b) Rs. 26,000

(c) Rs. 20,000

(d) Rs. 6,000

Ans. (c)

25. While preparing ‘Annual Financial Statements’, credit balance shown by the Bank pass book should be treated as:

(a) a liability

(b) an income

(c) an excess of payments over receipts

(d) an asset

Ans. (d)

26. If the trial balance does not tally in spite of through scruting and the difference is substantial, then which one of the following courses should an accountant adopt?

(a) Defer preparation of financial statements

(b) Open suspense account.

(c) Write off the difference to profit and losses A/c

(d) Ignore the difference and prepare financial statements

Ans. (b)

27. ‘A’ and ‘B’ are sharing profit and losses in the ratio of 4 I. ‘C’ is admitted as a new partner for 1/3rd share of profits for which he pays Rs. 30,000 as goodwill. Lf ’A’ and ‘B’ agree to share future profits equally, then the amount of goodwill to be credited to ‘A’ would be:

(a) Rs. 30.000

(b) Rs. 90,000

(c) Rs. 48,000

(d) Rs. 42,000

Ans. (d)

28. The joint life policy account received on the death of a partner is credited to the:

(a) Joint life policy reserve account

(b) Capital accounts of all the partners in their profit sharing ratio

(c) General Reserve account

(d) Profit and Loss Account

Ans. (b)

29. In setting the accounts of a firm after its dissolution, the assets of the firm shall be applied first in paying:

(a) each partner proportionately what is due to him on account of loans advanced by him

(b) each partner proportionately what is due to him account of capital

(c) each partner proportionately what is due to him on account of past profits

(d) the debts of the firm to the third parties

Ans. (d)

30. A limited company issued equity shares of Rs. 100 each. It has called up Rs. 75 on each share but received only Rs. 60 per share. The share capital account will be credited with:

(a) Rs. 60 per share

(b) Rs. 75 per share

(c) Rs. 100 per share

(d) None of the above

Ans. (b)

31. Redeemable preference shares can be redeemed:

(a) only if they are fully paid

(b) even if they are partly paid

(c) if they are paid not less than 50% of the nominal value of shares

(d) only if they are issued at a premium

Ans. (a)

32. Where all the debentures are redeemed, the balance left in the Debenture Sinking Fund Account is transferable to:

(a) Debentures Account

(b) Sinking Fund Investment Account

(c) Capital Redemption Reserve

(d) General Reserve

Ans. (d)

33. The balance in share forfeiture account, after the reissue of all forfeited shares, should be:

(a) added to paid up capital

(b) transferred to goodwill account

(c) transferred to capital reserve account

(d) shown as share forfeiture account

Ans. (c)

34. A company issued Rs. 20,000, 4% bonds repayable on equal installments over 10 years. What is the amount required in the initial year, to pay interest and to redeem the bonds (ignore tax and DCF)?

(a) Rs. 56,000

(b) Rs. 28,000

(c) Rs. 20,000

(d) Rs. 8,000

Ans. (b)

35. Match List-I with List-II and select the correct answer using the codes given below the lists:

List-I List-II

A. Deferred shares 1. Repayment obligation

B. Preference shares 2. Resembles Stock dividend

C. Bonus shares 3. No dividend obligation

D. Equity Shares 4. Not being used

Codes:

A B C D

(a) 4 3 1 2

(b) 4 1 3 2

(c) 3 2 1 4

(d) 4 1 2 3

Ans. (d)

36. Which one of the following statements is false?

(a) The process of issue of bonus shares is also known as capitalization of reserves

(b) Fully paid bonus shares are issued only out of capital reserves

(c) Only revenue reserves should be used when bonus is declared in order to make partly paid shares into fully paid shares.

(d) Bonus shares one shares issued without payment.

Ans. (b)

37. The Balance Sheet of a company showed the following balances at the end of the year under the head ‘Reserves and surplus’: General Reserve Rs. 5,00,000; Share Premium account Rs. 50,000; Premium on issue of Debentures account Rs. 20,000; Dividends equalization fund Rs. 40,000; Surplus on revaluation of assets Rs. 30,000 Profit and Loss account (credit) Rs. 60,000. Maximum amount available for distribution as dividend to the shareholders of the company will be:

(a) Rs. 60,000

(b) Rs.1, 00,000

(c) Rs. 6, 00,000

(d) Rs.6, 70,000

Ans. (c)

38. Capital Gearing ratio denotes the relationship between:

(a) assets and capital

(b) loan and capital

(c) equity shareholder’s fund and long term borrowed funds

(d) debentures and share capital

Ans. (c)

39. The following balances appear on the liability side of a company’s Balance Sheet:

Rs.

Equity Share Capital: 10,000 Shares of Rs. 10 each 1.00.000

10% Redeemable Preference shares 1, 00,000

5,000 shares of Rs 20 each

Capital redemption reserve account 40,000

14% Debentures 1, 00,000 Deb. of Rs. 2 each 2, 00,000

RFC loan 1, 50,000

Profit and Loss A/c 50,000

The Debt Equity ratio of the company is

(a) 35: 20

(b) 35: 26

(c) 35: 25

(d) 35: 21

Ans. (c)

40. Consider the following financial information in respect of two companies namely ‘M’ Co. and ‘Z’Co. :

Items of Assets and Liabilities ‘M’ Co. (Rs) ‘Z’ Co. (Rs)

Current Assets 7, 50,000 7, 50,000

Closing inventory 3, 00,000 2, 50,000

Goodwill 5, 00,000 3, 50,000

Current Liabilities 3, 00,000 5, 00,000

Based on the above data, acid test of M Co. in comparison to Z Co. is:

(a) lower

(b) equal

(c) higher

(d) indeterminate

Ans. (c)

41. Match List-I with List-II and select the correct answer using the codes given below the lists:

List-I List-II

(Names of Accounting Ratios) (Nature of Accounting Ratios)

A. Capital gearing ratio 1. Revenue Statement Ratio

B. Stock velocity ratio 2. Coverage Ratio

C. Debtors velocity ratio 3. Market Price ratio

D. Dividend Yield ratio 4. Balance Sheet ratio

5. Balance Sheet and Revenue statement combined ratio

Codes:

ABCD

(a) 4 1 5 3

(b) 5 4 2 1

(c) 1 5 4 2

(d) 3 2 5 1

Ans. (a)

42. For the purpose of calculating ROI capital employed means:

(a) Net Fixed Assets

(b) Current Assets-Current Liabilities

(c) Gross Block

(d) Fixed Assets + Current assets - Current liabilities

Ans. (d)

43. Given that the net profit for a certain year of company ‘X’ Ltd. is Rs. 1,23,000, equity-share capital for the same period is Rs. 10,00,000 and reserve and surplus is Rs. 2,30,000 the rate of ‘return on owners fund’ would be:

(a) 12:3%

(b) 10%

(c) 9.98%

(d) none of the above

Ans. (b)

44. Consider the following data:

Costs: Fixed = Rs. 40,000

Variable Rs. 30,000

Rate of income tax = 30%

Return on capital employed = 10%

Based on the above data the sales volume required to increase the return on capital employed to 18% would be:

(a) Rs. 5,000

(b) Rs. 7,500

(c) Rs. 8,000

(d) Rs. 8,500

Ans. (c)

45. Consider the following details of companies ‘A’ ‘B’ ‘C’ and ‘D’:

A/Rs. B/Rs. C/Rs. D/Rs.

Fixed Assets 100 125 150 200

Net Current 50 55 50 40

Assets

Sales 200 250 250 300

Contribution 150 196 200 180

Fixed Cost 20 27 30 60

If the cut off point of return on investment is l5% then which of the following companies fulfill this criterion?

(a) A and C

(b) B and C

(c) A, B and D

(d) B, C and D

Ans. (c)

46. Which one of the following is an example of sources of funds?

(a) Decrease in share capital

(b) Increase in long term liabilities

(c) Decrease in long term liabilities

(d) Increase in Fixed assets

Ans. (b)

41. Current Assets are Rs. 3, 00,000 and current liabilities are Rs. 1, 50,000. Now, if the debtors realized are Rs. 20,000, then its impact on working capital would be:

(a) an increase of Rs. 20,000

(b) a decrease of Rs. 40,000

(c) an increase of Rs. 40,000

(d) nil

Ans. (d)

48. Match List-I with List-II and select the correct answer using the codes given below the lists:

List-I List-II

A. Fund flow Analysis 1. Working Capital Management

B. Common Size Profit 2. Inventory Control

and Loss Account

C. ABC analysis 3. Management of receivables

D. Debt Collection Period 4. Financial Statement Analysis

Codes:

ABC D

(a) 4 1 2 3

(b) 1 4 2 3

(c) 2 3 1 4

(d) 3 1 2 4

Ans. (b)

49. The main object of audit is to:

(a) detect the errors and faults

(b) help the company in developing a sound accounting system

(c) verify the correctness of final accounts

(d) prevent commission of errors and faults

Ans. (c)

50. ‘Surprise Checks’ are part of:

(a) an auditor’s working papers

(b) an audit programme

(c) an auditor’s report

(d) an accounting standard

Ans. (b)

sample commerce exam paper

2011-04-07T23:36:00.000-07:00

sample commerce exam paper
Sample Commerce UGC NET Exam Papers
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1. Which one of the following is the first industrial organization to have conducted social audit of its performance?

(a) Associated Cement Companies

(b) Reliance Industries Limited

(c) Bharat Heavy Electricals Limited

(d) Tata Iron & Steel Company

Ans. (a)

2. Which of the following pairs are correctly matched?

1. Cash Compensatory scheme : It is allowed on a selective basis for compensation

the exporters for the elements of unrefunded taxes

and duties paid on the imports required for the

manufacture of goods exported.

2. Inland container depots : Confer all the facilities of dry ports and facilitate the

movement of exports.

3. Duty Drawback Scheme : The exporters are allowed reimbursement of customs

and central excise duties paid on raw materials,

components and packaging.

Select the correct answer using the Code given below:

Code:

(a) 1 and 3

(b) 1, 2 and 3

(c) 1 and 2

(d) 2 and 3

Ans. (b)

3. The following steps are normally taken in an import trade:

1. Indent and letter of credit

2. Ship’s report

3. Delivery and customs formalities

4. Exchange and bill of exchange

The correct sequence of these steps is:

(a) 1, 4, 2, 3

(b) 4, 1, 2, 3

(c) 4, 1, 3, 2

(d) l, 4, 3, 2

Ans. (a)

4. A Red clause letter of credit authorizes the:

(a) banker to transfer the L/C to some other person

(b) banker to take recourse to the drawer in case of default

(c) banker to fix the amount of credit

(d) negotiating banker to provide advance credit to the beneficiary for purchase of materials

Ans. (d)

5. Which one of the following is NOT the primary cause of India’s chronic balance of payments problem?

(a) Value of imports not matched by value of exports

(b) Deficits in merchandise trade

(c) Membership of W.T.O.

(d) POL imports

Ans. (a)

6. Which of the following pairs is/are corrects matched?

1. Presence of insurable interest in life policy : At the time of taking the policy and at

the time of making the claim

2. Presence of insurable interest in a fire policy : At the time of loss but may not be

required at the time of taking the policy

3. Presence of insurable interest in marine policy : At the time of taking the policy and

also at the time to loss

Select the correct answer using the Code given below:

Code:

(a) 1 and 2

(b) 2 alone

(c) 2 and 3

(d) 3 alone

Ans. (c)

7. Which one of the following generalizations can be drawn from the Principle of Subrogation?

(a) It is the principle by which the insurer, after having paid the loss to the insured, steps into the shoes of the ensured person and acquires all. rights and remedies as the insured would have enjoyed regarding the said loss

(b) A person who keeps a stock of inflammable material in his premises must mention the fact while taking out a fire policy

(c) The insured can get only the compensation against actual loss and he can’t make profit but of insurance

(d) In marine insurance the immediate cause and not the remote cause shall be considered for bearing the loss

Ans. (a)

8. A clause included in the marine policy which covers all losses due to willful misconduct of the master or crew of the ship to the prejudice of the insured is called:

(a) jettison

(b) waiver

(c) preventive penalty

(d) barratry

Ans. (b)

9. Which one of the following clearly defines ‘organization’ as a function?

(a) Management of business

(b) Accomplishment of goals through means

(c) Centralized authority in the hands of an individual to achieve business .goals

(d) Process of assigning duties to individuals to achieve specific ends effectively

Ans. (b)

10. What is the correct sequence of .the following functions of a Manager in an organization?

1. Motivating

2. Controlling

3. Organizing

4. Planning

Select the correct answer using the Code given below:

Code:

(a) 4, 3, 2, 1

(b) 4, 3, 1, 2

(c) 3, 4, 2, 1

(d) 3, 4, 1, 2

Ans. (b)

11. According to Need Hierarchy Theory of Maslow, human needs arise in which one of the following order?

(a) Physiological needs- Social needs- Safety needs- Ego needs- Selfactualisation needs

(b) Physiological needs- Social needs- Ego needs- Safety needs- Selfactualisation needs

(c) Physiological needs—Safety needs—Social needs—Ego needs—Selfactualisation needs

(d) Physiological needs—Safety needs—Ego needs—Social needs—Selfactualisation needs

Ans. (c)

12. Scalar principle of organization implies that:

(a) all subordinates have only one supervisor

(b) line of authority is denied clearly

(c) manager can directly supervise only a limited number of persons

(d) the subordinates need not necessarily have a supervisor

Ans. (b)

13. Consider the following statements:

(1) Planning is looking ahead

(2) Controlling is looking back

(3) Delegation multiplies leadership

(4) Life insurance is a contract of indemnity

Of these statements:

(a) 1, 2 and 4 are correct

(b) 1, 2 and 3 are correct

(c) 1, 3 and 4 are correct

(d) 2, 3 and 4 are correct

Ans. (b)

14. To indicate the functions of management, the catch word POSDCORB was coined by:

(a) Luther Gulik

(b) Henri Fayol

(c) Ernest Dale

(d) None of the above

Ans. (a)

15. Job analysis involves:

1. developing training skills, knowledge and personal traits of the worker necessary for a specific job

2. identifying machines, tools and equipment to be used for the job

3. identification of the task to be performed by an individual

4. determination of the materials, products or services needed

The correct sequence of these steps while conducting job analysis is

(a) 3, 2, 4, 1

(b) 3, 2, 1, 4

(c) 2, 3, 4, 1

(d) 2, 3, 1, 4

Ans. (a)

16. Consider the following statements:

1. Authority flows downward but responsibility flows upward

2.. Authority should be equal to responsibility

3. Both authority and responsibility are divisible

4. If delegation is the end, then decentralization should be the means:

Of these statements:

(a) 1 and 2 are correct

(b) 3 and 4 are correct

(c) 1, 2 and 3 are correct

(d) 2, 3 and 4 are correct

17. Following are the steps in the process of Delegation of Authority:

1. Assignment of task

2. Creation of responsibility

3. Granting authority

4. Fixing accountability

The correct sequence of these steps is:

(a) 1, 3, 2, 4

(b) 1, 4, 2, 3

(c) 1, 3, 4, 2

(d) 1, 2, 3, 4

Ans. (d)

18. Consider the following Organization Chart:

Which one of the following is indicated by this chart?

(a) Wide span

(b) Multiple levels of supervision

(c) Narrow span

(d) Decentralization

Ans. (b)

19. Match List-I (Wage incentive plans) with List-Il (Name of contributors) and select the correct answer using the Code given below the Lists :

List-I List-II

A. Premium Plan 1. Gantt

B. Efficiency Bonus Plan 2. Emerson

C. Points Premium Plan 3. Bedaux

D. Task and Bonus Plan 4. Taylor

5. Halsey

Codes:

A B C D

(a) 5 3 2 1

(b) 1 2 3 4

(c) 2 3 4 1

(d) 5 2 3 1

Ans. (d)

20. Match List-I (Management terms) with List-II (Factors related to these terms) and select the correct answer using the Code given below the Lists:

List-I List-II

A. Resisting forces of change 1. Organization

B. O. D. 2. New Policy

C. Driving forces change 3. Fear

D. Conflict 4. Interpersonal relationship

Codes:

A B C D

(a) 3 1 2 4

(b) 1 2 3 4

(c) 1 3 2 4

(d) 3 4 2 1

Ans. (a)

21. Which one of the following routines best describes the chronology of steps taken in the selling process?

(a) Receipt of order, invoicing, processing order, shipment of goods.

(b) Invoicing, processing order, shipment of goods, accounting for sale

(c) Receipt of order, processing order, accounting for sale, shipment of goods

(d) Processing order, invoicing, shipment of goods, accounting for sale.

Ans. (d)

22. Is Card Indexing an improvement over .the simple indexing system?

(a) Yes, because the cards can be managed in a particular order and the order can’t be changed at will

(b) No, because the cards wanted for reference can’t be taken out without holding up the work of recording information as other cards are left behind

(c) Yes, because it facilitates location of any name or subject with the minimum of searching, as the cards are arranged in alphabetical order.

(d) No, because it facilitates location of any name or subject with the minimum of searching, as the cards are arranged in alphabetical order.

Ans. (c)

23. A person can act as Secretary for NOT more than:

(a) 2 companies

(b) 3 companies

(c) 5 companies

(d) None of the above

Ans. (d)

24. A Secretary’s duties under the Companies Act are:

(a) purely ministerial

(b) either ministerial or administrative

(c) managerial

(d) supervisors

Ans. (b)

25. The document required to be filed with the Registrar of Companies at the time of incorporation of a company includes:

(a) an agreement, if any, which the company proposes to enter into with any individual for appointment as manager or managing director

(b) the Prospectus

(c) an application for name availability

(d) a statement of minimum subscription

Ans. (c)

26. Consider thei1Iowing statements:

1 A Private Limited Co., must have at least 3 (three) directors and a Public Ltd., at least 7 (seven) directors.

2. Liability of shareholder of a Public Ltd. Co., is limited to the extent of the total authorized Capital and liability of the company.

3. Transfer of shares is restricted in case of Private Ltd. Co.

4. Statement in lieu of Prospectus must be issued by a Private Ltd. Co., before commencement of business.

Of these statements:

(a) 2 alone is correct

(b) 2, 3 and 4 are correct

(c) 3 alone is correct

(d) 1, 2 and 4 are correct

Ans. (c)

27. An exception to the application of Doctrine of Indoor Management is made when:

(a) a person represents the company with or without actual authority to do so

(b) outsiders have knowledge of irregularity of the conduct

(c) the seal of the company is not affixed on the documents issued to outsiders

(d) the directors of the company delegated authority for the internal management to the Managing Director

Ans. (b)

28. The Secretary of a company is generally appointed by:

(a) Registrar of Companies

(b) Central Government

(c) Board of Directors

(d) Board of Directors with the consent of the Institute of Company Secretaries of India.

Ans. (c)

29. Public company can be called as a body corporate after it:

(a) receives certificate of commencement of business

(b) issues prospectus

(c) receives certificate of incorporation

(d) receives approval from the Registrar for the prospectus

Ans. (c)

30. A director should obtain his qualification shares within:

(a) one month of his appointment

(b) two months of his appointment

(c) three months of his appointment

(d) six months of his appointment

Ans. (b)

31. The altered Memorandum of Association must be filed with the Registrar within:

(a) 6 months of the Company Law Board’s Order

(b) 5 months of the Company Law Board’s Order

(c) 3 months of the Company Law Board’s Order

(d) 2 months of the Company Law Board’s Order

Ans. (c)

32. Whenever a company wants to alter it Memorandum for changing the place of registered office from one State to another, it has to pass:

(a) ordinary resolution

(b) special resolution

(c) resolution requiring special notice

(d) unanimous resolution

Ans. (b)

33. When an act is performed or a transaction is carried out, which, though legal in itself, is not authorized by the objects clause in the memorandum or by Statue, it is said to be:

(a) ultra vires the powers of the company

(b) intra vires the powers of the company

(c) ultra vires the powers of the Board

(d) ultra vires the implied authority

Ans. (a)

34. A special notice is required for a resolution when:

(a) a director is to be removed before the expiry of his period of office

(b) a statutory report has to be adopted

(c) there is alteration of share capital

(d) a company wants to convene a meeting of creditors

Ans. (a)

35. Which one of the following powers cannot be delegated to any person by the Board of Directors?

(a) investment of funds of the company

(b) Issue of debentures

(c) Borrowing money otherwise than on debentures

(d) Making loans

Ans. (b)

36. The Board of Directors cannot appoint:

(a) additional directors

(b) alternate directors

(c) directors in casual vacancy

(d) directors under Section 408 of the Companies Act, 1956

Ans. (d)

37. Under Section 68A of the Companies Act. 1956, any person who’ induces a company to allot shares or register transfer of shares in ‘a fictitious name shall be punishable with:

(a) a fine of Rs. 500

(b) a fine of Rs. 5,000

(c) imprisonment upto 5 years

(d) a fine of Rs. 500 and imprisonment upto 5 years

Ans. (c)

38. Which one of the following is an ‘Ordinary Business’ for the purpose of an Annual General meeting?

(a) Change in the Articles of Association of the company

(b) Issue of debentures

(c) Change in the ‘objects clause’ of the Memorandum of Association

(d) None of the above

Ans. (d)

39. Match List-I with List-II and select the correct answer using the Code given below the lists:

List-I List-II

A. L U T 1. D G FT

B. E PZ 2. Export promotion

C. E PCG Scheme 3. 100% Exports

D. Value Addition 4. 100% E O U

Codes:

A B C D

(a) 1 3 2 4

(b) 3 2 1 4

(c) 1 4 3 2

(d) 2 4 1 3

Ans. (c)

40. Globalization of financial services is being promoted by:

(a) World Trade Organization

(b) International Finance Corporation

(c) International Bank for Reconstruction and Development

(d) International Monetary Fund

Ans. (d)

Directions: The following ten (10) items consist of two statement, one labelled the ‘Assertion A’ and the other labelled the ‘Reason R’. You are to examine these two statements carefully and decide if the Assertion A and the Reason R are individually true and if so, whether the Reason is a correct explanation of the Assertion.

Select your answers to these items using the Code given below and mark your answer sheet accordingly.

Codes:

(a) Both A and R are true and R is the correct explanation of A

(b) Both A and R are true but R is NOT a correct explanation of A

(c) A is true but R is false

(d) A is false but R is true

41. Assertion (A): A common protectionist argument has been that nurse the baby, protect the child, guide the boy and free the adult.

Reason (R): Protection given in most cases creates rested interests which are averse to the removal of the protection.

Ans. (d)

42. Assertion (A): The matching concept requires that costs be recognized as expenses in the period in which revenue is realized.

Reason (R): There may not be a match between expenditure and revenue over a short period.

Ans. (c)

43. Assertion (A): According to International Accounting Standards Committee, fixed production expenses should be included in inventory valuation on the basis of normal capacity. According to the Institute of Chartered Accountants of India, it is for the management to decide the Question.

Reason (R): The Question to be decided is whether the fixed production expenses be excluded from inventory valuation and charged wholly to the revenue of that year or whether these expenses be included on the basis of normal level of production.

The former method is called ‘marginal costing’ and the latter ‘absorption’ costing’.

Ans. (c)

44. Assertion (A): The fixed assets in the balance sheet of a limited company are required to be shown at cost less depreciation.

Reason (R): The balance sheet and profit and loss account are to disclose a true and fair view.

Ans. (a)

45. Assertion (A): Share premium amount can be refunded in cash to equity shareholders.

Reason (R): Share premium is usually collected when the market price of the shares is higher than the face value of the share.

46. Assertion (A): Conventionally, a newly started company should adopt a low-geared capital structure where the share of equity capital and reserves is higher than the share of fixed interest bearing securities.

Reason (R): During initial years, the profit is low and the company tries to strengthen its financial position.

Ans. (a)

47. Assertion (A): A new firm can be profitable and yet not be able to pay its debts as they become due.

Reason (R): New firms often have the problem of having increased investments in inventory and fixed assets at an amount which exceeds cash generated from operations.

Ans. (a)

48. Assertion (A): A company is accountable to the society since it makes use of community owned assets and other infrastructural facilities and concessions provided by the State from the tax payers’ money.

Reason (R): The best way of social responsibility reporting is to prepare a Value Added Statement (VAS) which shows the income earned by shareholders.

Ans. (c)

49. Assertion (A): Audit procedure and audit techniques are two different aspects of auditing but are complementary to each other.

Reason (R): Audit procedure is concerned with determining the existence of documentary evidence and audit techniques are concerned with examination of those evidences.

Ans. (a)

50. Assertion (A): The auditor of a partnership firm is appointed under a contract with the firm but not under any statute.

Reason (R): The firm can also appoint him to act as an accountant for preparation of accounts.

Ans. (b)

Online Study Material Commerce

2011-04-07T23:33:00.000-07:00

Online Study Material Commerce
UPSC prelims Study Material and practice test Commerce
Commerce Study Material for UGC NET
1. The liability of auditor can be:

(a) only civil

(b) only crimi9al

(c) either civil or criminal

(d) civil and/or criminal

Ans. (d)

2. Who among the following is not a speculator in stock exchange?

(a) Broker

(b) Bull

(c) Bear

(d) Stag

Ans. (a)

3. Match List-I with List-II and select the correct answer using the codes given below the lists:

List—I List—II

A. Option dealing 1. Stock Exchange

B. Private Placement 2. Bonds of big companies

C. Deep Discount 3. New Public Limited companies

D. Law of large numbers 4. Statistical probability

Codes:

A B C D

(a) 1 2 3 4

(b) 4 2 3 1

(c) 1 3 2 4

(d) 4 3 2 1

Ans. (c)

4. It is compulsory for a share broker to register with the:

(a) concerned stock exchange

(b) securities and Exchange Board of India

(c) department of Company Affairs

(d) concerned Stock Exchange in concurrence with the securities and Exchange Board of India

Ans. (d)

5. One of the uses of ‘Commercial Paper’ is that it can:

(a) help to understand business news

(b) transactions

(c) be circulated to raise money just like a Bill of Exchange

(d) be issued to finance an important transaction

Ans. (c)

6. The Gilt-edged market refers to the market for:

(a) industrial securities

(b) government and semi-government securities

(c) shares and debentures

(d) public limited securities

Ans. (b)

7. A ‘Co-partner’ is one who is:

(a) an active member of a partnership

(b) a member of a Joint Hindu Family Firm

(c) a member of a Joint Stock Con1pany

(d) a member of a co-operative society

Ans. (b)

8. A planned sequence of operations for handling recurring business transactions uniformly and consistently is known as:

(a) System

(b) Procedure

(c) Routine

(d) Control

Ans. (a)

9. In a broader sense, the activities of a co-operative organization are expected to ensure primarily:

(a) profitability to the members

(b) socialism in the economy

(c) equity to the members

(d) productivity to the society

Ans. (c)

10. Which of the following statements are correct?

1. A trust form of organization cannot do business

2. A society registered under the Societies Registration Act can be formed only for non-profit purpose

3. A partnership does not require registration

4. A company limited by guarantee is almost always registered for non-profit activities

Select the correct answer using the codes given below:

Codes:

(a) 2, 3 and 4

(b) 1 and 4

(c) 2 and 3

(d) 1, 2, 3 and 4

Ans. (d)

11. The basic characteristics of a partnership firm include:

(a) existence bf relationship, plurality of persons, contract and profit maximization

(b) Unlimited liability, contractual binding principal-agent relationship and profit motive

(c) existence of business contractual relationship, group of persons, task orientation and employment conditions

(d) existence of business, plurality of persons, contractual relationship, profit motive and principal-agent relationship.

Ans. (d)

12. Match List-I with List-II and select the correct answer using the codes given below the lists:

List—I List—II

A. Simple Association 1. Pool

B. Federation 2. Chamber of commerce

C. Partial consolidation 3. Merger

D. Complete consolidation 4. Holding company

Codes:

A B C D

(a) 3 1 2 4

(b) 2 4 1 3

(c) 2 1 4 3

(d) 3 2 4 1

Ans. (c)

13. The combination of firms n successive stages of the same industry may be referred to as:

(a) horizontal integration

(b) vertical integration

(c) forward integration

(d) backward integration

Ans. (b)

14. Modernization of an industrial unit involves mainly:

(a) technological up gradation of its production process

(b) technological reorientation towards low cost production

(c) reengineering the basics of production and procedures

(d) reduction in labour and cost to the absolute minimum

Ans. (b)

15. Which one of the following statements is true?

(a) Supplier’s credit and buyer’s credit are one and the same thing

(b) EXIM bank generally deals with export transactions above Rs. 5 crore

(c) The. main focus of EXIM bank is on Export and Import credits for short-term

(d) ECGC provides no protection against hazards of nature

Ans. (c)

16. Which one of the following statements is true in the context of Import-Export Trade?

(a) Under a C & F contract, the cost of insurance is to be borne by the buyer or the importer.

(b) Marine insurance covers the risks during the sea voyages only

(c) The standard call risks cover automatically covers war risk as well

(d) Under a C & F contract, the exporter need not bother about insuring goods

Ans. (a)

17. The special facilities and benefits provided to approve Export Houses (EH), Trading Houses (TH) and Star Trading Houses (STH) may be arranged in descending order as:

(a) EH, TH and STH

(b) STH, EH and TH

(c) TH, STH and EH

(d) STH, TH and EH

Ans. (a)

18. A letter of credit is opened on behalf of:

(a) an exporter

(b) an importer

(c) a buying agent

(d) a bank

Ans. (b)

19. Which of the following guarantees are offered by the ECGC which help the banks to extend credit to exporters?

1. Packing credit Guarantee

2. Post shipment Export Credit Guarantee

3. Export production Finance Guarantee

4. Transfer of funds guarantee

Select the correct answer using the codes given below:

Codes:

(a) l, 2 and 3

(b) 2 and 3

(c) 1, 3 and 4

(d) 1, 2, 3 and 4

Ans. (a)

20. Which of the following statements are correct?

1. Bill of lading is a document of title

2. Green shipping bill is used for export of goods entitled to duty draw back

3. An airway bill is not a document of title.

4. A consular invoice and a proforma invoice are one and the same.

Codes:

(a) 2 and 4

(b) 1, 3 and 4

(c) 1, 2 and 4

(d) 1, 2 and 3

Ans. ?

21. Actuary is a person who:

(a) acts as an insurance agent

(b) certifies the loss incurred by the insured

(c) audits claims relating to insurance claims

(d) computer the net liability of an insurance claims

Ans. (d)

22. Life insurance is a contract n the life of a man in which the insurer promises to pay a sum of money. For the consideration of a definite premium, to the insured person on his death or an attaining a particular age. Which one of the following assumptions is implicit in the above definition?

(a) It is a contract of Indemnity

(b) It is a contract of guarantee

(c) It is a contract of compensation

(d) It is a contract of return on investment

Ans. (a)

23. “Causa Proxima” implies that the loss must arise from:

(a) the nearest place

(b) an ascertainable source

(c) the cause insured against

(d) unforeseen sources

Ans. (c)

24. Which of the following risks are not covered by a marine insurance policy?

1. Damage caused by delay in ships transit

2. Damage caused by unsuitable package

3. Loss due to sinking of the vessel

4. Loss due to jettison

Select the correct answer using the codes given below:

(a) 1, 3 and 4

(b) l and 2

(c) 2 and 4

(d) 1, 2, 3 and 4

Ans. (a)

25. Which of the following pairs are correctly matched?

1. Planning : sets out the objectives and a complete set of policies.

2. Organization : Enables the owner or top executive of a business to interview

men, money, materials and method.

3. Coordination : Orderly arrangement of group effort to provide unity of action.

4. Control : Verifying whether everything occurs in conformity with the plan

adopted, the instructions issued and principles established.

Select the correct answer using the codes given below:

Codes:

(a) 2, 3 and 4

(b) 2 and 4

(c) 1, 3 and 4

(d) 1, 2 and 3

Ans. (c)

26. A written statement of the main duties and responsibilities which a particular job entails is called:

(a) job Analysis

(b) job specification

(c) job description

(d) job evaluation

Ans. (c)

27. Selection process in any organization is usually preceded by the preparation of:

(a) human resources audit

(b) operations audit

(c) human resources inventory

(d) human resources accounting

Ans. (c)

28. Which one of the following monitors critical inputs and suggests. prevention measures in the form of corrective action to correct inputs and processes?

(a) Feed back control

(b) Feed forward control

(c) Budgetary control

(d) Operational control

Ans. (a)

29. Consider the following elements in a feed back loop:

1. Identification of deviations ‘

2. Measurement of actual performance

3. Actual performance

4. Comparison of actual against standards

The correct sequence of these elements in the feedback loop is:

(a) 3, 2, 1, 4

(b) 3, 2, 1, 4

(c) 2, 3, 1, 4

(d) 2, 3, 4, 1

Ans. (b)

30. Span of management may be. larger in the case of:

(a) hardworking subordinates

(b) loyal subordinates

(c) centralized works and less responsibility

(d) repetitive work and clear responsibility

Ans. (d)

31. If the span of control is narrow, a number of manager would be required in each unit of the organization and there would be many managerial levels or layers.

Such an organizational structure is referred to as:

(a) flat structure

(b) tall structure

(c) matrix structure

(d) project structure

Ans. (b)

32. Span of management means that:

(a) an organization must have well defined goals or objectives.

(b) each person in the organization must manage within a clearly defined-functional area

(c) each subordinate should report to only one supervision

(d) manager can supervise only a limited no of subordinates

Ans. (d)

33. The following steps are involved in the process of organizing:

1. Forming supportive objective

2. Delegating to the head of each group the authority necessary to perform the activities

3. Establishing enterprise objectives

4. Identifying and classifying activities

The correct sequence of these steps is:

(a) 3, 1, 2, 4

(b) 3, 1, 4, 2

(c) 1, 3, 4, 2

(d) 1, 3, 2, 4

Ans. (b)

34. When management pays attention to more important areas and when the day-to-day routine problems are looked after by lower level management, it is known as:

(a) management by objectives

(b) management by exception

(c) participative management

(d) critical path method

Ans. (b)

35. The following steps are involved in managing by objectives:

1. Preliminary setting of objectives at the top

2. Setting subordinate’s objectives

3. Trying resources with the goals

4. Clarifying the organizational roles

The correct sequence of these steps is:

(a) 1, 2, 3, 4

(b) 1, 2, 4, 3

(c) 1, 3, 2, 4

(d) 1, 4, 2, 3

Ans. (b)

36. A company secretary must always be:

(a) a part of a secretarial agency

(b) a firm or corporation

(c) registered with the securities and Exchange Board of India

(d) an individual with specified professional qualifications

Ans. (d)

37. The Company Secretary is the agent of the

(a) managing Director

(b) shareholders

(c) board of Directors

(d) promoters

Ans. (c)

38. In the case of transmission of shares, the company secretary is required to check:

(a) the letter of request’ submitted by the executor

(b) whether the transfer form submitted by the administrator is duly stamped

(c) the deed of settlement between the parties

(d) if everything is in conformity with the orders of the Central Government

Ans. (a)

39. Declaration of Dividend is an important part of the agenda of:

(a) Statutory Meeting

(b) Annual General Meeting

(c) Extraordinary General Meeting

(d) Joint meeting of the shareholders and debenture

Ans. (b)

40. In principle, in the case of transfer of shares, the company secretary, after he is satisfied that everything is in order, is required to issue

(a) transfer receipt to the transferee and the transferor

(b) letter of probate receipt to the transferee and the transferor

(c) ‘Notices of Lodgment of transfer’ to the transferee and the transferor

(d) an advertisement by way of public notice regarding the transfer

Ans. (c)

41. The minutes of the proceedings of very general meeting should be recorded in the books of kept for that purpose within:

(a) 30 days of every such meeting

(b) 3 months of any such meeting

(c) the intervening period between that meeting and next meeting’

(d) such time as approved by the Chairman of the company

Ans. (a)

42. Which one of the following statements is correct?

(a) Minutes has the legal recognition by virtue of the provisions contained in the Company’s Act, while reports have no such legal sanctity

(b) Minutes have no legal sanctity but reports have legal sanctity by virtue of the provisions contained in the Company’s Act.

(c) Minutes contain a much more detailed account of all matters of the meeting whereas reports have fewer details

(d) There is very little difference between the minutes and reports except that one is brief and contains only action points while the other (reports) contains details including pros and cons of a particular decision

Ans. (d)

43. Principle of constructive notice means:

(a) notice of the objects clause of the Memorandum of Association

(b) Any notice issued/published in newspapers

(c) notice to outsiders dealing with the company as to the contents of the Memorandum and Articles of Association

(d) Notice to the public regarding the issue of the prospectus

Ans. (c)

44. Which one of the following statements illustrates the Doctrine of Indoor Management?

Persons dealing with the company are:

(a) bound to enquire whether the internal proceedings of the company are regular or not

(b) bound to enquire whether the decisions of the management are taken with proper authority

(c) entitled to assume that what has been done, has been regularly done by the company

(d) always to presume that the internal affairs of a company cannot be questioned

Ans. (c)

45. Converting a public company into a private company requires a special resolution:

(a) passed by members

(b) passed by members and approval of the Registrar of Companies

(c) of the member and approval of the Company Law Board

(d) of the members and approval by the creditors

Ans. (c)

46. The contents of the prospectus of a public limited company should be approved by the:

(a) Registrar of companies

(b) Merchant Banker

(c) Stock exchange in which the company is to be listed

(d) Securities and Exchange Board of India

Ans. (d)

47. It is compulsory for a share broker to register with the:

(a) concerned stock exchange

(b) Securities and Exchange Board of India

(c) Department of Company Affairs

(d) concerned Stock Exchange in concurrence with the securities and Exchange Board of India

Ans. (d)

Directions : The following items consist of two statements, one labelled the ‘Assertion A’. and the other labelled ‘Reason R’. You are to examine these two statements carefully and decide if the Assertion A and the Reason R are individually true and if so, whether the Reason is a correct explanation of the Assertion. Select your answers to these items using the codes given below and mark your answer sheet accordingly.

Codes:

(a) Both A and R are true and R is the correct explanation of A.

(b) Both A and R are true but R is not a correct explanation of A.

(c) A is true but R is false

(d) A is false but R is true

48. Assertion (A): The Balance Sheet fails to reveal the worth of a business.

Reason (R): Assets are merely unamortized costs.

Ans. (d)

49. Assertion (A): For ascertaining the correct profit, current costs are to be matched with current revenues.

Reason (R): LIFO method ensures matching of current costs with current revenues.

Ans. (a)

50. Assertion (A): An equal increase in both current asset and current liabilities decreases current ratio.

Reason (R): Equal decrease in current assets and current liabilities also decreases current ratio.

Ans. (c)

Commerce test questions

2011-04-07T23:31:00.000-07:00

Commerce test questions
Free Commerce Online Practice Test
Objective Commerce Test BCom Level
1. According to behavioral scientists, organization means the structure of:
(a) physical facilities
(b) tasks and relationships
(c) behaviour of the management with the working force
(d) attitude of workers with the management
Ans. (c)

2. Which one of the following styles of leadership is the most effective for a Job Order firm?
(a) Participative leadership
(b) Authoritarian leadership
(c) Transformational leadership
(d) Free-rein leadership
Ans. (d)

3. Which one of the following NOT a useful tool in decision making?
(a) Annual return
(b) Linear programming
(c) Sales forecasts
(d) Operation research
Ans. (b)

4. Among the following ‘change management’ methods, which one is the most appropriate when the employees are unwilling to accept change?
(a) Participative method .
(b) Directive method
(c) Leading by example
(d) Negative reinforcement
Ans. (a)

5. Impact of O & M is that:
(a) promotion possibility becomes restricted
(b) it leads to less scope for high salary and wages
(c) entire organization is streamlined
(d) work measurement is costly
Ans. (c)

6. In a group process, there are some forces favoring and some other forces opposing changes. As result, an equilibrium is maintained. This is described by Kurt Lewin’s:
(a) field of force
(b) field of disputes
(c) field of conflicts
(d) cognitive dissonance
Ans. (a)

7. A systematic and orderly process of determining the worth of ajob in relation to other jobs is known as:
(a) job analysis
(b) job evaluation
(c) job specification
(d) job description
Ans. (b)

8. Which one of the following is the most important function of manager?
(a) Communication
(b) Directing
(c) Supervising
(d) Decision making
Ans. (d)

9. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List-II
A. Statutory report 1 . Sec. 200
B. Prohibition of tax-free remuneration . 2. Sec.165
C. Underwriting commission 3. Sec.78
D. Issue of shares at premium 4. .Sec.76
Code:
A B C D
(a) 4 1 2 3
(b) 2 3 4 1
(c) 4 3 2 1
(d) 2 1 4 3
Ans. (d)

10. Registration of Articles of Association is optional in the case of:
(a) unlimited company
(b) private company limited by shares
(c) company limited by guarantee
(d) public company limited by shares
Ans. (d)

11. The Memorandum of Association shall be signed by each:
(a) director
(b) shareholder
(c) subscriber
(d) promoter and director
Ans. (c)

12. A person shall not be appointed as Director if he is found to be of unsound mind by:
(a) the company
(b) the company court
(c) a court of competent jurisdiction and the finding is in force
(d) the shareholder
Ans. (c)

13. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List -II
A. Reduction of share capital 1. Sec -100
B. Reissue of redeemed debentures 2. Sec - 228
C. Branch audit 3. Sec -121
D. Presentation of annual accounts 4. Sec -210
Code:
A B C D
(a) 4 2 3 1
(b) 1 3 2 4
(c) 4 3 2 1
(d) 1 2 3 4
Ans. (b)

14. Changing the name of a company requires:
(a) special resolution and approval of Company Law Board
(b) special resolution and approval of Securities and Exchange Board of India
(c) special resolution and approval of Central Government
(d) ordinary resolution and approval of Company Law Board
Ans. (c)

15. Power to use official seal of a company outside India is to be authorized by:
(a) Articles of Association
(b) Memorandum of Association
(c) Both Memorandum and Articles of Association
(d) Central Government
Ans. (a)

16. The approval of. which one of the following authorities is required to shift registered office of the company from the jurisdiction of one Registrar of Companies to another Registrar of Companies within a State?
(a) Company Law Board
(b) Central Government
(c) Regional Director
(d) Registrar of Companies
Ans. (a)

17. Secretarial Compliance Report is:
(a) optional for a company
(b) required when a company does not have a whole- time secretary
(c) required if a company is not required to employ a whole time secretary and has a paid-up share capital of Rs. 10 lakh or more
(d) required for companies as are notified by the Central Government
Ans. (c)

18. Which one of the following is the correct statement?
(a) One can be a shareholder without voting right
(b) A preference shareholder can exercise voting right from the date of allotment
(c) An equity shareholder has no voting right
(d) A debenture holder can vote at annual general meeting
Ans. (a)

19. ‘Body corporate’ under the Companies Act, 1956 includes
(a) cooperative society
(b) company incorporated outside India
(c) corporation sole
(d) any other body corporate, not being a company, which the Central Government may specify
Ans. (b)

20. Which one of the following statutory committees needs to be constituted in a listed company?
(a) Tender Committee
(b) Audit Committee
(c) Management Committee
(d) Recruitment Committee
Ans. (a)

21. One of the major difficulties in improving the industrial efficiency in enterprises is:
(a) low investment
(b) low productivity
(c) ineffective marketing
(d) poor inventory control
Ans. (b)

22. Which among the following is a direct advantage of incentive compensation?
(a) Mutual cooperation among the workers
(b) Decrease in absenteeism
(c) Increase in productivity
(d) Better industrial relations
Ans. (d)

23. Which one of the following factors does NOT influence wage and salary structure?
(a) Demand Supply
(b) Cost of living
(c) Job rotation
(d) Job requirements
Ans. (c)

24. The takeover of a company in which most of the purchase price is paid with borrowed money is referred to as:
(a) hostile takeover
(c) leveraged buy-out
(b) illegal takeover
(d) management buy-out
Ans. (c)
Directions: The following 16 (sixteen) items consist of two statements one labelled the ‘Assertion (A)’ and. the other labelled the ‘Reason (R)’. You are required to examine these two statements carefully and decide
If the ‘Assertion (A)’ and the ‘Reason (R)’ are individually true and if so, whether the Reason is a correct explanation of the Assertion. Select your answers to these items using the code given below and mark your Answer Sheet accordingly.
Code:
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and R are true but R is NOT a correct explanation of A
(c) A is true but R is false
(d) A is false but R is true

25. Assertion (A): There is no error, when the totals of the debit side and the credit side of the Trial Balance are equal.
Reason (R): Trial Balance is a two-column statement showing names and balances of all the accounts in the order in which they appear in the ledger.
Ans. (a)

26. Assertion (A): Companies are required to use Written Down Value (WDV) method and the rates specified in Schedule XIV to the Companies Act.
Reason (R): A change from WDA method of providing depreciation to straight Line Method (SLM) should be made if it is considered that the change would result in a more appropriate preparation or presentation of the financial statements of the company.
Ans. (b)

27. Assertion (A): Section 205 of the Companies Act makes it obligatory for every company to make provision for depreciation.
Reason (R): Depreciation is a charge against revenue.
Ans. (c)

28. Assertion (A): Existence of secret reserve contradicts the disclosed network of a business.
Reason (R): Secret reserve helps promote managerial efficiency.
Ans. (c)

29. Assertion (A): Entrance fees in case of non-profit concerns can be revenue receipt or capital receipt.
Reason (R): Some accountants consider entrance fees to be recurring in nature, whereas others consider it to be non-recurring.

30. Assertion (A): Performance ratios show we are going.
Reason (R): Balance sheet ratios show how we stand.
Ans. (c)

31. Assertion (A): One single primary ratio that measures the final outcome of all recorded business activities is ROI
Reason (R): In practice, however variations are also found in the ratio because capital and return are subject to different interpretations by firms.
Ans. (b)

32. Assertion (A): According to Accounting Standard-3 (revised) of the Institute of Chartered Accountants of India, a Cash Flow Statement should be divided into three heads—cash flow from investing activities and cash flows from financing activities.
Reason (R): Operating activities involve income determining items and relate to changes in current assets and liabilities investing activities concern changes in. non-current assets and financial activities concern changes in non-current liabilities and shareholders equity.
Ans. (a)

33. Assertion (A): It is the duty of the auditor to see that costing records as required under Section Act, 209(1) (d) of the Companies Act, 1956, have been maintained by certain class of companies.
Reason (R): Mere maintenance of cost records does not make manufacturing companies cost-effective.
Ans. (c)

34. Assertion (A): Analytical Review-is not the part of Company Statutory Audit.
Reason (R): Analytical Review goes beyond true and fair presentation of the financial position.
Ans. (d)

35. Assertion (A): Management audit is a statutory audit.
Reason (R): Management audit is performed through innovative ideas.
Ans. (d)

36. Assertion (A): The Companies Act; 1956 requires that internal audit must be carried out by a Chartered Accountant.
Reason (R): It is to help the management to protect the interests of the shareholders and the society.
Ans. (d)

37. Assertion (A): Certificate of Origin is an export related document and it is issued by the Chamber of Commerce.
Reason (R): Certificate of Origin is used by importer to take delivery of goods.
Ans. (c)

38. Assertion (A): A company registered under the Companies Act, 1956 is a juridical person distinct from its members.
Reason (R): Corporate veil cannot be lifted.
Ans. (c)

39. Assertion (A): The doctrine if indoor management does not give absolute protection to outsiders who deal with a company.
Reason (R): If majority of members have their way, the minority has its say.
Ans. (b)

40. Assertion (A): The powers of Board of Directors that are to be exercised by Board only at its meeting cannot go beyond those prescribed under Section 292 of the companies Act, 1956.
Reason (R): The members in general meeting cannot impose restriction on the exercise of powers by the Board of Directors.
Ans. (d)

41. Consider the following statements with respect to the sinking fund method of depreciation:
1. Depreciation is smaller than the assets annual depreciable cost.
2. Amount of interest constantly declines due to assets reducing balance.
3. Annual net incidence on profit and loss account remains constant due to changing fixed depreciation.
4. Periodic depreciation is recorded through the asset account.
Which of the above statements are correct?
(a) 2 and 3
(b) 1 and 3
(c) 1, 2 and 4
(d) 2, 3 and 4
Ans. (b)

42. Which one of the following accounting equations is correct?
(a) Assets Owner’s Equity
(b) Assets Liabilities + Owner’s Equity
(c) Assets Liabilities —Owner’s Equity
(d) Assets + Liabilities = Owner’s Equity
Ans. (b)

43. Match List-I (Standards issued by ICAI) with List-II (Objects/areas covered) and select the correct answer using the Code given below the lists:
List-I List-II
A. AS-1 1. Valuation of Inventories
B. AS-2 2. Cash Flow Statement
C. AS-3 3. Revenue Recognition
D. AS-9 4. Disclosure of Accounting Policies
Code:
A B C D
(a) 4 1 2 3
(b) 4 1 3 2
(c) 1 4 3 2
(d) 1 4 2 3
Ans. (a)

44. Which one of the following is correct with respect to going concern convention?
(a) The enterprise is not going to terminate its operations in the period ahead
(b) The enterprise may go out of business in the next accounting period
(c) The enterprise may not divest or diversify its operational spheres
(d) The enterprise may not revalue its assets during the current accounting period
Ans. (a)

45. Consider the following statements:
Continuous evaluation of the relevance of generally accepted accounting principles is required, because:
1. they are the everlasting operating realities.
2. the environment, in which business operates, undergoes constant change.
3. the business enterprises can develop financial statements of value to the end-users.
4. realities of social, economic and legal framework have to be considered by professional accountants.
Which of the above statements are correct?
(a) 1, 2 and 3
(b) 2, 3 and 4
(c) 3 and 4
(d) I and 4
Ans. (d)

46. Which one of the following accounting conventions stipulates that contingent assets appear as a footnote in the balance sheet?
(a) Materiality
(b) Consistency
(c) Disclosure
(d) Conservatism
Ans. (c)

47. Which one of the following is NOT related to the convention of conservatism?
(a) Making provision for doubtful debts and discount on debtors in anticipation of actual bad debts and discount
(b) Valuation of stock at Market Price or Cost Price whichever is higher.
(c) Charging of small capital items as Revenue
(d) Adopting Written-down Value Method of depreciation as against Straight-line Method
Ans. (b)

48. Which one of the following is an ingredient of the entity convention of accounting?
(a) The owner of a unit and the unit itself is one and the same
(b) The owner and the unit are treated separately
(c) No separate accounts for the unit is required
(d) The unit is a private affair of the owner, hence no accounting is required
Ans. (b)

49. Which one of the following items is considered revenue expenditure?
(a) Expenditure by way of maintenance that has increased productivity
(b) Repair of a gearbox in a car that has enhanced its operational life
(c) Complete overhaul of a machine, spending around 20% of its value
(d)Changing a small component of a machine to maintain its operating efficiency
Ans. (d)

50. After the construction of their new factory building, M/s XYZ Co. shifted to it. During this process Rs. 20,000 were spent on pulling down the old structure and Rs. 2,000 were spent on shifting the stocks to new building. These expenditures are to be classified as:
(a) Capital expenditure
(b) Revenue expenditure
(c) Capital and Revenue expenditure respectively
(d) Deferred Revenue expenditure
Ans. (c)

Commerce Interview Questions and Answers

2011-04-07T23:29:00.000-07:00

Commerce Interview Questions and Answers
Commerce Interview FAQs
1. A trader does not keep a complete set of books and gives the following information:
He started business with Rs. 10,000 on 1st June, 2000. He drew at the rate of Rs. 500 per month for the last six months. He also introduced further capital of Rs. 2,000 in the business during the year. His total assets on 31st December, 2000 were Rs. 23,700 and his creditors were Rs. 3,000 on the same date. Outstanding expenses on 31st December, 2000 were Rs. 500. His net profit during the year would be:
(a) Rs 11,200
(b) Rs. 11,500
(c) Rs. 13,000
(d) Rs. 14,200
Ans. (a)

2. The capital of a firm is Rs. 80,000. The reasonable return in the industry is 7.5 percent. If the profit earned by the firm during past five years was Rs. 8,000; Rs. 9,000; Rs. 7,000; Rs. 8,500 ad Rs. 10,000; then the super profit of the firm will be:
(a) Rs. 2,000
(b) Rs. 2,500
(c) Rs. 3,000
(d) Rs.. 3,500
Ans. (b)

3. Consider the following:
A football club has received the following subscriptions during the. year ending 3 1st March 2001:
31-3-00 31-3-01
Outstanding
subscription 19,500 22,500
Advance subscription 12,800 9,500
Subscription received during the year 2000 -01 Rs. 2, 45,000. The subscription income of the club for the year 2000-01 was:
(a) Rs. 2, 63,800
(b) Rs. 2, 80,000
(c) Rs. 2, 47,700
(d) Rs. 2, 84,000
Ans. (a)

4. The basis adopted for piecemeal distribution of cash among the partners should be such that amounts finally left unpaid are in the ratio in which:
(a) capital stands on the date of dissolution
(b) profits and losses are shared
(c) capital balances stood at the beginning of partnership
(d) private assets appear on the date of dissolution
Ans. (b)

5. ‘A’ and ‘B’ are partners in a firm sharing profits and losses in the ratio of 2 : 3, ‘C’, a new partner is admitted for 1/4th share. ‘A’ and ‘B’, old partners share C’s profit into their profit sharing ratio. The new profit sharing ratio of ‘A’ ‘B’ and C’ would be:
(a) 1: 1: 1
(b) 2: 3: 4
(c) 1: 2: 2
(d) 6: 9: 5
Ans. (d)

6. Match List-I (Fund) with List-II (Purpose of fund) and select the correct answer using the Code given below the lists:
List-I List-II
A. Sinking fund 1. Maintaining stable rate of dividend
B. Capital redemption 2. Periodica1 redemption of debenture
C. Dividend equalization fund 3. Strengthening financial position
D. General reserve fund 4. Redeeming preference shares
Code:
A B C D
(a) 4 2 1 3
(b) 2 4 3 1
(c) 4 2 3 1
(d) 2 4 1 3
Ans. (d)

7. If opening stock = Rs. 2, 45,000; purchases = Rs. 15, 00,000; sales = Rs. 17, 40,000 and rate of gross profit = 20% on cost of goods sold, then the closing stock would be at
(a) Rs. 3, 53,000
(b) Rs. 2, 95,000
(c) Rs. 2, 45,000
(d) Rs. 1, 95,000
Ans. (b)

8. Match List-I with List-II and select the correct answer using the Code given below the lists:
List-I List-II
A. Goodwill 1.Current liability
B. Overdraft 2. Fixed Assets
C. Preliminary expenses 3. Reserves and surpluses
D. Premium on issue of shares 4. Fictitious assets
Code:
A B C D
(a) 2 1 4 3
(b) 1 2 4 3
(c) 1 2 3 4
(d) 2 1 3 4
Ans. (a)

9. Which one of the following will lead to understatement of net profit?
(a) Amortization of Fictitious Assets
(b) Treating capital expenditure as revenue expenditure
(c) Treating revenue expenditure as capital expenditure
(d) Creation of general reserve
Ans. (b)

10. Preparation of Trial Balance helps, mainly in:
(a) summarizing business transactions
(b) verifying that ‘generally accepted accounting principles have been observed
(c) finalizing the ‘sources and uses of funds’ statement
(d) locating errors, if any, in books of accounts
Ans. (d)

11. Provisions are amounts set aside out of profits and other surpluses for:
(a) meeting a liability, the amount of which can be determined with exact figure
(b) any known liability of which the amount cannot be determined with substantial accuracy
(c) meeting an eventuality arising out of revaluation of assets in ordinary course of business
(d) meeting a liability arising out of arbitration
Ans. (b)

12. The fund available with a company after paying all claims including tax and dividend is called:
(a) net profit
(b) net operating profit
(c) capital profit
(d) retained earnings
Ans. (d)

13. Match List-I (Items) with List-II (Recorded in) and select the correct answer using the Code given below the lists:
List-I List-II
A. Wrapping material 1. Trading account
B. Wages and salaries 2. Profit and loss account
C. Prepaid expenses 3. Balance sheet
D. Opening stock
Code:
A B C D
(a) 2 1 1 3
(b) 2 1 3 1
(c) 3 2 2 1
(d) 3 2 1 3
Ans. (b)

14. The following information .about share-capital is required to be disclosed in the balance sheet of a Ltd. Company:
1. Issued, subscribed and paid-up capital
2. Add forfeited shares
3. Less calls in arrear from directors
4. Less calls in arrear from others
The chronological order of their disclosure under the head ‘Share Capital’ in the balance sheet would be:
(a) 1, 2, 3, 4
(b) 1, 3, 4, 2
(c) 1, 4, 3, 2
(d) 1, 2, 4, 3
Ans. (b)

15. On 31st March, 2001, the closing stock of X Ltd. was Rs. 3, 45,000. On April 1, 2001, stock of Rs. 2, 25,000 was destroyed by fire. The company closes its account on 31st March. If the balance sheet of the company on 31st March 2001 was finalized on 25th April 2001, then the balance sheet will show the closing stock at:
(a) Rs. 3, 45,000 with no mention of fire
(b) Rs. 1, 20,000 with no mention of fire
(c) Rs. 3, 45,000 showing loss by fire in footnote
(d) Rs. 1, 20,000 showing loss by fire in footnote
Ans. (c)

16. ‘X’ who holds 100 shares of Rs. 10/-each, fail to pay a call of Rs. 2/-. The directors forfeited all the shares and subsequently reissued 50 shares of Rs. 6/- each as fully paid. The amount to be transferred to ‘Capital Reserve A/c’ would be :
(a) Rs. 200
(b) Rs. 00
(c) Rs. 400
(d) Rs. 800
Ans. (a)

17. Consider the following:
The investment portfolio of a 31-12-2000 stood as follows:
1. 8% Debentures of X Co. Ltd. (Rs. 6,000). Interest payable on 31st March and 30th September.
2. 7% Debentures of Y Co. Ltd. (Rs. 4,000). Interest payable on 30th June and 31St December.
3. 10% Debentures of Z Co. Ltd. (Rs. 9,000). Interest payable on 1st June and 1st December.
Amount of interest accrued on the closing date will be:
(a) Rs. 335
(b) Rs. 1,025
(c) Rs. 195
(d) Rs. 830
Ans. (a)

18. ABCD Company issues 3,000, 15% debentures of Rs. 100 each at a discount of 7.5% repayable at a premium of 5% at the end of 5 years. The loss on issue of debentures will be:
(a) Rs. 22,500
(b) Rs. 30,000
(c) Rs. 37,500
(d) Rs. 45,000
Ans. (c)

19. The following information had been made available from the profit and loss account for the year ending on 31st March, 2001.
Gross profit : Rs. 2, 00,000
Gross profit margin : 20 %
Stock velocity : 4
If, in current year, the sales are expected to increase by 50%, then the average inventory required would be:
(a) Rs. 2, 00,000
(b) Rs. 2, 50,000
(c) Rs. 3, 00,000
(d) Rs. 3, 50,000
Ans. (c)

20. If earning per share of a company is Rs. 5 and the priced earning ratio of other similar companies is 4. Then the market value of the share of the company would be:
(a) Rs. 0.80
(b) Rs. 1.25
(c) Rs. 9
(d) Rs. 20
Ans. (d)

21. Match List-I (Transactions) with List-II (Impact on current ratio) and select the correct answer using the Code given below the lists:
List-I List-II
A. Goods sold at profit 1. Improvement
B. Creditors paid 2. Deterioration
C. Debts realized 3. No change
D. Materials purchased on credit
Codes:
A B C D
(a) 1 3 2 2
(b) 2 3 1 3
(c) 1 1 3 2
(d) 2 1 3 3
Ans. (c)

22. If the cost of goods sold is Rs. 1, 00,000/-the value of opening stock is Rs. 20,000/- and the value of closing stock is Rs. 80,000/- then the stock turnover ratio would be:
(a) 5 times
(b) 4 times
(c) 2 times
(d) 1 time
Ans. (c)

23. Match List-I with List-II and select the correct answer using the Code given below the lists:
List-I List-II
A. Technique of Cash Management 1. Fund Flow Analysis
B. Technique of Working Capital Management 2. Economic Order Quantity
C. Technique of Inventory Management 3. Common size Balance Sheet
D. Technique of Analysis of Financial Statements 4. Cash Flow Analysis
Codes:
A B C D
(a) 1 4 2 3
(b) 1 4 3 2
(c) 4 1 3 2
(d) 4 1 2 3
Ans. (d)

24. Match List-I with List-Il and select the correct answer the Code given below the lists:
List-I List-II
A. Current Ratio 1. Sufficiency of EBIT to cover interest charges
B. Debt-Equity Ratio 2. Short-term solvency
C. Net Profit Margin Ration 3. Exposure to financial risk
D. Interest Coverage Ratio 4. Earnings left for Share holders
Codes:
A B C D
(a) 2 3 1 4
(b) 3 2 1 4
(c) 3 2 4 1
(d) 2 3 4 1
Ans. (d)

25. X Ltd. has current ratio of 2: 1 and quick ratio of 1.5:
1. If its current liabilities are Rs. 80,000 then the value of stock would be:
(a) Rs. 1, 60,000
(b) Rs. 1, 20,000
(c) Rs. 40,000
(d) Rs. 80,000
Ans. (c)

26. Match List-I with List-II and select the correct answer using the Code given below the lists:
List-I List-II
A. Leverage Ratio 1. Short-term solvency
B. Liquid Ratio 2. Earning capacity
C. Turnover Ratio 3. Relationship of Debt and Equity
D. Profitability Ratio 4. Efficiency of Assets Management
Codes:
A B C D
(a) 2 1 4 3
(b) 3 2 1 4
(c) 4 3 1 2
(d) 3 1 4 2
Ans. (d)

27. EPS is calculated as:
(a) EBIT
Equity Shares
(b) EBIT — Preference Dividend Equity shares
Equity shares
(c) EIT
Equity Shares
(d) EAT — Preference Dividend
Equity shares
Ans. (d)

28. Consider the following information provided by XY Ltd:
Net profit before depreciation and taxes Rs. 44,000
Depreciation for the year Rs. 8,000
Goodwill written-off during the year Rs. 10,000
Rate of tax 50 %
The cash flow of XY Ltd. from operations will be:
(a) Rs. 36,000
(b) Rs. 28,000
(c) Rs. 26,000
(d) Rs. 13,000
Ans. (a)

29. If profit made during the year is Rs. 10,000; increase and decrease in the current assets is Rs. 5,000 and Rs. 4,000 respectively, then the cash from operation equals:
(a) Rs. 9,000
(b) Rs. 10,000
(c) Rs. 11,000
(d) Rs. 19,000
Ans. (a)

30. Match List-I with List-II and select the-correct answer the Code given below the lists:
List-I List-II
A. Auditor is a watch dog but not a blood hound 1. Union Bank of Allahabad case
B. An auditor should sign the balance 2. Hedley Byrne and Co. Ltd. Vs. Hiller sheet with open eyes. He should not depend on 4 partner’s case
the officials of the company.
C. Capital profit cannot be divided as dividend 3. Kingston Cotton Mills case
unless all the assets have been revaluated and
the profit has been actually realized.
D. An action for negligence can be brought 4. Foster Vs. The Trinidad Lake Ashalte
against the auditor in tort by a person with Co. Case
whom he is not in a contractual relationship
but to whom he owes duty
Codes:
A B C D
(a) 1 3 2 4
(b) 3 1 2 4
(c) 1 3 4 2
(d) 3 1 4 2
Ans. (d)

31. Consider the following statements:
1. Audit working papers enable the auditor to know the weaknesses of the internal check system
2. Audit programme assures adherence to the principles of auditing and accounting
3. Manipulation of accounts are done by under valuation of assets
4. Internal check maximizes the possibilities of errors and frauds
Which of the above statements are correct?
(a) 1, 2 and 3
(b) 2, 3 and 4
(c) 1, 2 and 4
(d) l, 2, 3 and 4
Ans. (a)

32. Consider the following with regard to furniture and fixtures:
1. Valuation with reference to bills and invoices
2. Authorization of expenditure and its capitalization
3. Adequate provision of depreciation
4. Whether furniture is mortgaged or free from any mortgage
The correct sequence to adopted by the auditor during the course of analytical review, vouching and examination of documents, would be:
(a) 1, 2, 3, 4
(b) 2, 3, 1, 4
(c) 3, 4, 2, l
(d) 4, l, 2, 3
Ans. (a)

33. The accounts of a company shall be audited by the company auditor, or by a person qualified to be appointed as auditor, if the company has to:
(a) windup
(b) amalgamate
(c) finalize branch office accounts
(d) declare interim dividend
Ans. (c)

34. Consider the following documents’;
1. Audit Report
2. Audited Final Accounts
3. Audit Note Book
4. List of Lost Vouchers
5. Audit Programme
Which of the above documents are Auditor’s working papers?
(a) 1, 2 and 4
(b) 1, 3 and 4
(c) l, 3, 4 and 5
(d) 2, 3, 4 and 5
Ans. (c)

35. Match List-I with List-II and select the correct answer using the Code-given below the lists:
Lists-I List- II
A. Interest on capital in construction works 1. Performance and Propriety
B. Management Audit 2.Capital Expenditure
C. Financial Audit 3.Authorization of Expenditure
D. Valuation in Balance Sheet 4. Critical review by Management
5. Entity concept
Codes:
A B C D
(a) 2 4 5 3
(b) 4 1 2 5
(c) 2 1 3 4
(d) 4 2 3 1
Ans. (a)

36. Which one of the following is NOT included under the rights and powers of an Auditor in the Companies Act 1956?
(a) Right of access to books of Accounts
(b) Right to call for a General Meeting
(c) Right to receive notice of and attend the General Meeting
(d) Right to make statement at the General Meeting
Ans. (b)

37. The Companies Act, 1956 requires the annual accounts to show a ‘true and fair view’ of the financial position of the company instead of ‘true and correct view’ because:
(a) too much of dependence on arithmetical accuracy may lead to window dressing
(b) annual accounts should not only be made correctly but should also convey an overall fair view without any misleading impression
(c) all financial transactions cannot be correctly expressed in terms of money
(d) most of the stake holders do not have reasonable idea about accounting rules and regulations
Ans. (b)

38. Which of the following is NOT correct about the management auditor?
(a) He appraises and reviews the past performance and the plans of the company
(b) He evaluates the performance of management and finds out whether they are efficient or not
(c) He works simultaneously with the statutory auditor verifying the financial state of affairs of the company
(d) He examines both financial and non-financial records of the organization.
Ans. (c)

39. Which one of the following pairs is NOT correctly matched?
(a) internal check : Staff of the concern
(b) Internal Audit : Chartered Accountant
(c) Cost Audit : Cost accountant or Chartered Accountant
(d) Propriety Audit Auditor : Comptroller and General of India.
Ans. (b)

40. Consider the following statements:
The important techniques of auditing are:
1. test check and sampling
2. flow charting of interrelated operations in the accounting system of an organization
3. using Internal Control Questionnaire
4. collecting information on price fluctuations from market-research organizations
Which of the above statements are correct?
(a) 1, 2 and 3
(b) 1, 2 and 4
(c) 2, 3 and 4
(d) 1, 3 and 4
Ans. (b)

41. As per the Companies Act 1956, who among the following must be included in the Audit Committee constituted in a company?
(a) Managing Director and whole-time Director
(b) Auditor and Internal Auditor
(c) Company Secretary
(d) Directors who are not whole-time and Managing Director
Ans. (a)

42. Consider th following duties of the auditor:
1. He should see that the provisions of Sec.78 have been complied with
2. He should see that the sum available has been utilized in the manner as laid down by the Articles.
3. He should examine the Prospectus, the Articles and the Minutes of the Directors meeting to see whether the issue of shares at a premium is duly authorized or not.
The correct sequence of these duties in case of audit of issue of shares at a premium is:
(a) 1, 2, 3
(b) 2, 1.3
(c) 3, 1, 2
(d) 3, 2, 1
Ans. (a)

43. Match List-I with List-II and select the correct answer using the Code given below the lists:
Code:
List-I List-II
A. The Indian Partnership Act 1. Listing of company shares
B. SEBI 2. Member’s mutual benefit
C. The Cooperative Societies Act 3. Brokers deal with their customers
D. Stock exchange 4. Listed companies are supervised
5. No compulsory registration
Codes:
A B C D
(a) 3 2 4 5
(b) 5 4 2 1
(c) 5 2 4 1
(d) 3 4 2 5
Ans. (b)

44. Match List-I with List-II and select the correct answer using the Code given below the lists:
List-I List-II
A. Public limited company 1. One man one vote
B. Partnership firm 2. Can make public issue
C. Cooperative society 3. Restricted membership
D. Private limited company 4. Unlimited liability
5. Direct supervision
Codes:
A B C D
(a) 5 4 2 3
(b) 2 4 1 3
(c) 5 3 2 1
(d) 2 3 1 4
Ans. (b)

45. A partner under his ‘Implied Authority’ can:
(a) enter into partnership with others on behalf of the firm
(b) submit a dispute relating to the business of the firm for arbitration
(c) defend any suit field against the firm
(d) withdraw any suit or proceedings filed on behalf of the firm
Ans. (c)

46 Combination of Printing and Dyeing in a textile company is called:
(a) circular combination
(b) vertical combination
(c) allied combination
(d) horizontal combination
Ans. (b)

47. Consider the following rights:
1. The right of a partner to sue for dissolution of the firm accounts thereof
2. The power of the receiver to realize the properties of an insolvent partner
3. The right of the firm to sue any partner
4. The right of a partner to file a suit against the firm for enforcing his rights
Which of the above rights are NOT affected due to non-registration of a partnership firm?
(a) l and 2
(b) 2 and 3
(c) 1, 2 and 3
(d) 2, 3 and 4
Ans. (a)

48. Which one of the following firms is considered to be illegal to do trading business?
(a) A firm with 11 partners
(b) A firm with 18 partners
(c) A firm with 20 partners
(d) A firm with 22 partners
Ans. (d)

49. A voluntary association, of traders, industrialists, bankers and professionals formed for the purpose of promotion of common business interests in a particular locality is called:
(a) Association of Industrialists
(b) Chamber of Commerce
(c) Entrepreneurs Association
(d) Bankers Union
Ans. (b)

50. The most suitable form of business organization for the people of weaker section is:
(a) partnership firm
(b) cooperative society
(c) sole-trading business
(d) joint stock company
Ans. (b)

Commerce Multiple Choice Questions

2011-04-07T23:27:00.000-07:00

Commerce Multiple Choice Questions
Multiple Choice Questions for Business and Commerce
Multiple choice questions: basic Commerce
1. Consider the following statements:
1. Operational loss is a source of funds
2. Decrease in working capital is a source of funds
3. Additions to fixed assets are an application of funds
4. Fresh introduction of capital is an application of funds
Which of the above statements are applicable while preparing the funds flow statement?
(a) 1 and 2
(b) 1 and 3
(c) 2 and 3
(d) 1, 3 and 4
Ans. (d)

2. Which one of the following pairs is not correctly matched?
(a) Increase in working capital : Application of fund
(b) Increase in current liability : Source of fund
(c) Issue of shares : Source of fund
(d) Issue of bonus shares : Source of fund
Ans. (d)

3. A company’s reported current profit is Rs. 70,000 after incorporating the following:
Loss on sale of investments Rs.10, 000; Premium on redemption of debentures Rs.1 ,500; Depreciation on machinery and plant Rs. 20,000; Goodwill and preliminary expenses written of Rs. 30,000; Gain from sale of non-current assets Rs. 40,000.
The net inflow of funds from the operation would be:
(a) Rs. 91,500
(b) Rs. 80,000
(c) Rs. 70,000
(d) Rs. 59,500
Ans. (a)

4. A building standing in the books at Rs. 30,000, was sold for Rs. 45,000. The gain on the sale of building was transferred to profit and loss account thus taking the net profit to Rs; 1,70,000. The fund from operation will be:
(a) Rs. 2,15,000
(b) Rs. 1,70,000
(c) Rs. 1,55,000
(d) Rs. 2,00,000
Ans. (c)

5. For the purpose of analyzing changes in financial position, enterprises prepare:
(a) Balance Sheet and Profit & Loss A/c
(b) Cash flow statement and Funds flow statement
(c) Statement of cash from operations and Balance Sheet
(d) Statement of changes in working capital and Statement of cash from operations.
Ans. (d)

6. Match List-I (Event) with List-II (Result) and select the correct answer using the Code given below the Lists:
List-I List-II
A. Collusion between two or 1. Payments of dividends otherwise not possible
more persons
B. Falsification of accounts to increase 2. Error of principle committed
apparent profits.
C. Operation of an effective system of 3. Trial balance may agree
internal check
D. Purchase of raw materials is debited to 4. Frauds perpetrated and concealed
loose tools account
5. Possibility of errors and frauds is
considerably reduced
Codes:
A B C D
(a) 3 4 5 2
(b) 4 1 5 2
(c) 4 1 2 5
(d) 2 4 1 3
Ans. (b)

7. It is necessary that an auditor should prepare an Audit Programme : maintain an Audit Note Book: use an Internal Control Questionnaire. and a ‘Flow Chart of Accounting System’; adopt ‘Special Ticks’ for. each class of transaction checked and divide work as well as responsibility among the members of his staff for an efficient conduct of audit work. All these refer to:
(a) general principle of internal auditing
(b) general principles of internal checking
(c) basic principles of auditing
(d) general techniques of auditing
Ans. (d)

8. When an auditor tests sales transactions, one step is tracing a sample of sales invoices to debits in the accounts receivable ledger. Based upon this step he will from an opinion as to whether:
(a) each sales invoice represents a valid sale
(b) all sales have been recorded
(c) all debits in accounts receivable ledger. are supported by sales invoices
(d) recorded sales invoices are properly posted to consumer accounts
Ans. (b)

9. Consider the following actions taken by an auditor:
1. Carrying on vouching
2. Preparing the audit report
3. Checking the valuation of assets
4. Decision to qualify the report
The correct sequence of these actions is:
(a) 1, 3, 4, 2
(b) 4, 1, 3, 2
(c) 3, 4, 2, 1
(d) l, 2, 4, 3
Ans. (a)

10. Which one of the following is the main object of auditing?
(a) Ascertaining whether all cash receipts and payments of an organization have been correctly recorded and accounted for
(b) Preventing errors and frauds connected with financial transactions of an organization
(c) Verifying books of accounts and annual financial statements of an organization so as to give a report on the view presented by the said accounts and statements
(d) Recording properly all financial transactions in various books of accounts and preparing annual financial statements indicating the results of such transactions
Ans. (c)

11. The books of account of a company should be preserved for a period of not less than:
(a) 2 years
(b) 5 years
(c) 8 years
(d) 10 years
Ans. (c)

12. In evaluating internal control, the first step is to prepare an internal control questionnaire or a flow chart of the system. The subsequent steps should be to:
1. determine the extent of audit work necessary to form an opinion
2. gather enough evidence to determine as to whether the internal control system is functioning as described
3. write a letter to the management describing the weaknesses in the internal control system
4. form a final judgement on the effectiveness of the internal control system
The correct sequence of these steps would be:
(a) 1, 2, 3, 4
(b) 2, 4,1, 3
(c) 2, 1, 3, 4
(d) 2, 4, 3, 1
Ans. (d)

13. Management audit refers to:
(a) audit on behalf of the management
(b) audit of management accounting system in operation
(c) systematic appraisal of management’s objectives and procedures
(d) audit of managerially initiated financial transactions
Ans. (c)

14. If an auditor, after his appointment, becomes disqualified as specified in Section 226 (3) and (4) of the Companies Act. 1956.
(a) the appointing authority will ask him to vacate his office
(b) the Company Law Board will ask him to tender his resignation
(c) he will be deemed to have vacated his office
(a) 1, 2, 3, 4
(b) 2, 4, 1, 3
(c) 2, 1, 3, 4
(d) 2, 4, 3, 1
Ans. (d)

15. The cost auditor in a company shall be appointed by:
(a) the Board of Directors
(b) the Board of Directors with the previous approval of the Central Government
(c) the members of the company with the previous approval of the Central Government
(d) the C & AG
Ans. (a)

16. For appointing an auditor other than a retiring auditor:
(a) special resolution is required
(b) ordinary resolution and approval of C & AG are required
(c) unanimous resolution and approval of the Central Government are required
(d) special notice is required
Ans. (d)

17. Secretarial Audit is:
(a) compulsory in companies having paid-up share capital of less than Rs. 50 lakhs
(b) compulsory where the statutory audit reveals inadequacy of internal check in secretarial department
(c) optional and would help the Board of Directors and the Registrar of Cor4anies in regard to compliance aspects, mainly tinder the Companies Act, 1956
(d) compulsory in such companies as may be notified. by the Central Government.
Ans. (c)

18. Match List—I with List—II and select the correct answer using the Code given below the Lists:
List—I List-II
A. A long-term debt instrument on which interest is 1. Mutual Fund
accumulated and paid on maturity
B. A debt instrument on which rebate is available 2. Deep Discount Bond
under the Income Tax Act
C. Pooling together the money of different investors 3. Infrastructure Bond
and investing it in diversified securities
D. Buying the right but not the 4. Put option
obligation to sell a security for a specific price
Codes:
A B C D
(a) 4 1 2 3
(b) 2 3 1 4
(c) 3 1 2 4
(d) 3 1 4 2
Ans. (b)

19. The comprehensive meaning of an efficient stock market is that it is a market which:
(a) allocates resources efficiently
(b) reflects the effective use of information in the price of the shares traded therein
(c) signals the changes in the listed company’s performance
(d) safeguards the investors money
Ans. (b)

20. Global Depository Receipts (GDRs) are issued by successful corporations with a view to attracting:
(a) overseas loan funds
(b) remittances from NRIs
(c) foreign equity capital
(d) foreign direct investment
Ans. (a)

21. Stock Holding Corporation of India Ltd. is expected to achieve, in the long run, the objective of:
(a) sale of all kinds of securities in all stock exchanges
(b) purchasing all shares issued in the country
(c) paperless trading in respect of all stock market transactions
(d) holding shares of all new companies and selling them later
Ans. (d)

22. Match List—I with List—II and select the correct answer using the Code given below the List:
A. Registrar of Companies 1 . Specified Securities
B. Memorandum of Association 2. Rules and Regulations of the Company
C. Buy back of shares 3. Certificate of Incorporation
D. Articles of Association 4. Objects of the Company
5. Minimum Subscription
Codes:
A B C D
(a) 3 4 5 1
(b) 4 3 1 2
(c) 3 4 1 2
(d) 1 2 5 4
Ans. (c)

23. The criterion for deeming a private company as a public company on the basis of average annual turnover is :
(a) Rs. 25 crores
(b) Rs. 20 crores
(c) Rs. 10 crores
(d) Rs. 5 crores
Ans. (c)

24. Match List- I with List -II and select the correct answer using the Code given below the Lists:
List –I List- II
A. Ashbury Rail Carriage & Iron Co. Ltd. vs. Riche 1 .Corporate entity
B. Peek vs. Gurney 2. Objects clause
C. Salomon vs. Salomon & Co. 3. Misstatement in prospectus
D. Royal British Bank vs. Turquand 4. Indoor management
Codes:
A B C D
(a) 2 1 3 4
(b) 3 4 1 2
(c) 2 3 1 4
(d) 2 3 4 1
Ans. (c)

25. When it is not registered, a partnership firm is:
(a) deemed to be illegal association and is disallowed to carry on business
(b) allowed to carry on business subject to payment of penalty
(c) allowed to carry on business subject to certain disabilities
(d) allowed to carry on business only with the special permission of the Registrar of Firms
Ans. (c)

26. All those who are dealing with the company are expected to know that contents of the Memorandum and Articles of Association. This is called:
(a) Doctrine of indoor management
(b) Doctrine of ultra vires
(c) Constructive notice
(d) Doctrine of merger
Ans. (c)

27. Match List-I with List-II and select the correct answer using the Code given below the Lists:

List -I List-II
A. Doctrine of ultra vires 1. Articles of Association
B. Doctrine of indoor management 2. Prospectus
C. Doctrine of golden rule 3. Memorandum of Association
Code:
A B C
(a) 1 3 2
(b) 3 1 2
(c) 2 1 3
(d) 3 2 1
Ans. (b)

28. Which one of the following statements correctly explains the term Doctrine of Indoor Management?
(a) The doctrine seeks to protect the outsiders against the company
(b) Every person dealing with the company is presumed to have read and understood the contents of company’s Memorandum and Articles of Association
(c) If a person enters into a contract with the company which is contrary to the provisions of Memorandum and Articles of Association, he will not get any right under such contract
(d) It protects the company against the outsiders
Ans. (a)

29. A preliminary contract refers to a contract made on behalf of a company:
(a) before the incorporation of the company
(b) after the incorporation of the company
(c) after the company obtains the certificate to commence business
(d) after incorporation but before obtaining the certificate of commencement of business
Ans. (a)

30. Match List—I (Organization) with List—II (Basis of Membership) and select the correct answer using the Code give below the Lists:
List-I List-II
A. Cooperative society 1. Collective business
B. Joint Hindu family 2. Purchase/Transfer of share
C. Joint Stock company 3. By virtue of birth
D. Partnership firm 4. Common mutual interest
5. Mutual contract
Codes:
A B C D
(a) 1 3 2 5
(b) 5 4 1 3
(c) 4 3 2 5
(d) 4 1 2 3
Ans. (c)

31. Match List—I (Name of the Authority) with List—II (Function/Activity) and select the correct answer using the Code given below the Lists:
List-I List—II
A. Port Authority 1.Claim for damage
B. Insurance Company 2.Demurrage for goods unloaded
C. ECGC 3. Export finance guarantee
D. Advising Bank 4. Bank in the exporters country
5. Bank issuing L/C on the request of controller
Codes:
A B C D
(a) 2 1 4
(b) 4 3 5
(c) 3 4
(d) 1 3 5
Ans. (

32. Which one of the following documents attests the fact that goods of specified quantity, value and description are entering the bounds of the country?
(a) Bill of lading
(b) Consular invoice
(c) Documentary bill
(d) Bill of entry
Ans. (d)

33. A person insured his property worth Rs. 10,000 against fire for Rs. 8,000. His actual loss by fire is Rs. 5,000 and there is an average clause in the policy. His claim will be:
(a) Rs. 10,000
(b) Rs. 8,000
(c) Rs. 5,000
(d) Rs. 4,000
Ans. (d)

34. To guard against the dangers of excess payment arising out of double insurance or over insurance made by the insured, insurance companies provide in their agreement:
(a) Average clause
(b) Subrogation clause
(c) Risk clause
(d) Indemnity clause
Ans. (b)

35. Match List—I with List—II and select the correct answer using the Code given below the Lists:
List-I List-II
A. Ohio State University study 1. Production centered and Employee centered
B. University of Michigan study 2. Consideration and initiating structure
C. Likerts System Four 3. Country-club, Team manager, Impoverished, Task
Manger.
D. Fiedler’s Leadership Model 4. Exploitative authoritative, Benevolent
authoritative, Consultative, Participative
5. Leader-member relations, Task structure, Position
Power
Code:
A B C D
(a) 1 2 4 5
(b) 2 1 3 4
(c) 2 1 4 5
(d) 5 2 3 4
Ans. (c)

36. Gantt chart is essentially a pictorial presentation of:
(a) a modified procedure for productivity improvement
(b) an organization chart in the form of bar diagram
(c) a time-event network analysis
(d) position chart of the functions to be carried out by the members of a work team
Ans. (a)

37. Computerized communication system existing within an organization is called:
(a) internet
(b) extranet
(c) local Area Network
(d) intranet
Ans. (c)

38. Match List—I (Management Functions) with List—II (Terms related to each of them) and select the correct answer using the code given below the Lists:
List—I List—II
A. Planning 1. Morale
B. Controlling 2. Goal
C. Directing 3. Coding
D. Communicating 4. Deviation
5. Recruitment
Code:
A B C D
(a) 1 2 3 5
(b) 2 4 1 3
(c) 1 2 5 3
(d) 2 4 3 1
Ans. (b)

39. TQM’s major emphasis is on:
(a) product quality
(b) company profitability
(c) customer delight
(d) employee training
Ans. (a)

40. Match List—I with List—II and select the correct answer using the Code given below the Lists
Code:
List-I List-II
A. Principles of management 1. Douglas McGregor
B. Management by objectives 2. Chester Barnard
C. Human Resources Approach School 3. Henry Fayol
D. Human Relations School 4. George Elton Mayo
5. Peter Drucker
Codes:
A B C D
(a) 1 2 3 4
(b) 4 5 1 2
(c) 2 1 3 4
(d) 4 5 2 1
Ans. (b)

41. A collection of duties, tasks and responsibilities assigned to a single individual is:
(a) occupation
(b) position
(c) job
(d) grade
Ans. (c)

42. An optimizing model is designed to:
(a) get the maximum results with minimum inputs
(b) solve problems by eliminating the blocks in the process of goal achievement
(c) lead the selection of the best course of action from among available alternatives
(d) reduce the burden of organizational hierarchy
Ans. (a)

43. Match List—I with List—II and select the correct answer using the Code given below the Lists:

List—I List—II
A. Managerial Grid 1. H. Koontz
B. 3-D Approach 2. F.E. Fiedler
C. Contingency Model 3. R.R. Blake
D. Systems Approach 4. R. Likert
5. W.I. Reddin
Code:
A B C D
(a) 1 4 2 3
(b) 3 5 4 2
(c) 4 1 2 3
(d) 3 5 2 4
Ans. (d)

44. In an organization, performance appraisal is not expected to:
(a) integrate and coordinate the Endeavour of individuals
(b) monitor the efforts of individuals
(c) provide a means of correcting or commending the efforts of individuals ,
(d) calculate the living wage of the worker
Ans. (d)

45. Consider the following stages in delegation of authority
1. Creation of obligation
2. Determination of results expected
3. Assignment of duties
4. Authorization for action
The correct sequence of these stages is:
(a) 1,2, 3, 4
(b) 2, 1, 4, 3
(c) 2, 3, 4 1
(d) 1, 3, 4, 2
Ans. (c)

46. Under which one of the following types of organizational structure does a person become accountable to two or more bosses at the same time?
(a) Matrix structure
(b) Centralized structure
(c) Decentralized structure
(d) Vertical structure
Ans. (a)

47. Consider the following principles:
1. Harmony of objectives
2. Unity of command
3. Division of work
4. Responsibility
Which of these principles are not parts of direction?
(a) 1 and 2
(b) 2 and 3
(c) 3 and 4
(d) 1 and 4
Ans. (c)

48. The approach that considers an organization to be in a dynamic relationship with its environment is called:
(a) Contingency approach
(b) Scientific approach
(c) Societal approach
(d) Systems approach
Ans. (c)

49. Matrix Organization refers to a form of:
(a) organization where authority and responsibility coexist
(b) organization in which two or more basic types of Departmentation are combined
(c) mathematical arrangement of events in columns and rows
(d) organization where mathematical simulation is used
Ans. (b)

50. Consider the following steps:
1. Measurement of performance
2. Establishment of standards
3. Comparison between performance and standards
4. Correction of deviations
The correct sequence in which these steps are undertaken in the process of controlling is:
(a) 1, 2, 3, 4
(b) 2, 1, 3, 4
(c) 3, 1, 2, 4
(d) 1, 3, 2, 4
Ans. (b)