SSC Section Officer Commercial Audit Model Practice test

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)