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)
Monday, May 30, 2011
Friday, May 27, 2011
Commerce For Accountant Jobs Model paper
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)
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)
Sunday, May 22, 2011
Commerce practice questions
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)
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)
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