Free Objective test Questions on Economics

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

(C) Innovation, Bank credit, Breaking circular flow, 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

(C) IV, II, I, 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).

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

(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).

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

(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).

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

(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.

(C) II 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.

(C) II and III 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.

(C) III and IV 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.

(C) I and II 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.

(C) II and III 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

(C) Are the same

(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

be

(A) Upward sloping

(B) Downward sloping

(C) Horizontal line

(D) Vertical line

Ans :D

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

(A) Only discretionary changes

(B) Only automatic changes

(C) Both (A) and (B)

(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

(C) Factor abundance defined in terms of factor prices

(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.

(C) III and IV 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.

(C) III and IV 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.

(C) II and IV 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.

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

(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).

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

(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

(C) IV, III, I, II

(D) III, IV, II, I

Ans :D

 

BEd Entrance Exam previous questions Commerce group

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

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

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

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

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)