Commerce Frauds :How Secret Reserves are created?
• By undervaluation of Assets! By undervaluation of liabilities
• By incorporating fictitious liabilities.
• By charging higher depreciation
• By charging capital items to revenue items
• By making excessive provisions for contingent liabilities etc.
Thursday, June 23, 2011
Tuesday, June 7, 2011
commerce Exam practice test using MCQ
commerce Exam practice test using MCQ
Commerce MCQ Practice Test for exams
Free online commerce MCQ test
1. Which one of the following functions is served most by information technology?
(a) Replacement of human labour
(b) Provision for a handle to the management to improve industrial relations
(c) Substitution of human information processing
(d) Rationalization of office work
Ans. (d)
2. Match List-I with List -II and select the correct answer using the Code given below the lists:
List- I List-II
A. Simple Association 1. Amalgamation
B. Federation 2. Cartels
C. Complete consolidation 3. Chamber of Commerce
D. Partial Consolidation 4. Holding company
Codes:
A B C D
(a) 3 2 4 1
(b) 2 3 1 4
(c) 2 3 4 1
(d) 3 2 1 4
Ans. (b)
3. Which one of the following NOT a feature of sole proprietorship business?
(a) Undivided risk
(b) No government regulation
(c) Separate entity of the firm
(d) Unlimited liability
Ans. (c)
FOREIGN TRADE (IMPORT & EXPORT)
4. Dumping is an example of:
(a) monopolistic practice in international trade
(b) monopoly in international trade
(c) oligopoly in international trade
(d) perfect competition in international trade
Ans. (b)
INSURANCE (LIFE, FIRE, MARINE GENERAL)
5. Who among the following does NOT have insurable rest in fire insurance?
(a) A shop owner in the property of his customers
(b) A creditor in the property mortgaged with him
(c) A trustee in the property of the trust
(d) An insurance company in the property
Ans. (d)
6. In marine insurance, warranty means a guarantee:
(a) against the loss of the ship in the voyage
(b) for the safety of the captain of the ship
(c) for payment of shipping freight
(d) to comply with conditions mentioned in the policy
Ans. (d)
7. In a consequential loss policy which one of the following losses is indemnified?
(a) Loss of corporate image
(b) Loss of net profits due to fire
(c) Loss due to theft during fire
(d) Loss due to damage around the venue of fire
Ans. (b)
MANAGEMENT
8. One of the major disadvantages of the Matrix form of organization structure is that:
(a) it does not pinpoint product - profit responsibility
(b) it is not oriented towards results
(c) there is possibility of disunity of command
(d) it generates rivalry between line and staff members
Ans. (c)
9. Which of the following gives the correct sequence with respect to communication process?
(a) Sender, Message, Encoding Receiver, Channel, Decoding and Feedback.
(b) Message, Sender, Encoding, Receiver, Channel, Decoding and Feedback.
(c) Encoding, Message, Sender, Decoding, Feedback, Receiver and Channel.
(d) Sender, Message, Encoding, Channel, Receiver, Decoding and Feedback
Ans. (d)
10. Maintenance of intended delegation requires that decisions lying within the individual manager’s authority should be made by them and not referred upwards in the organizational hierarchy. This is known as:
(a) principle of unity of command
(b) scalar principle
(c) authority level principle
(d) principle of absoluteness of responsibility
Ans. (c)
11. In which one of the following, Crisis Management is reflected?
(a) Future expansion plans of business
(b) Organization Development Programme
(c) Short-term Manpower Planning
(d) Prudent managerial leadership
Ans. (d)
12. David C. McClelland’s motivating needs are:
(a) Needs for power, affiliation and growth
(b) Needs for affiliation, achievement and security
(c) Needs for power, achievement and relatedness
(d) Needs for power, affiliation and achievement
Ans.(d)
13. Which one of the following, correctly signifies the purpose of an Organization Chart?
(a) Office Decor
(b) Indication of available Office Services
(c) Flow of Authority
(d) High Morale
Ans. (c)
14. Informal organization is as necessary as formal organization chiefly for the reason that it:
(a) resists change
(b) builds morale
(c) has close association with decision making
(d) fulfils separate goals and standards
Ans. (b)
15. Increase in the installation of Personal Computer is mainly due to:
(a) monotony of work
(b) reduction of fatigue
(c) improvement of efficiency
(d) lowering work load
Ans. (c)
16. The most important advantage of centralization of office services is:
(a) specialization
(b) higher departmental loyalty
(c) no delay in providing services
(d) less burden of work
Ans. (c)
17. Management by Exception is to improve:
(a) control over personnel
(b) strategic management
(c) steady flow of information
(d) high morale
Ans. (b)
18. Which one of the following indicates the correct chronological order of management approaches in the History of Management Thoughts?
(a) Classical, Human Relations, Behavioral, Systems, Contingency
(b) Contingency, Systems, Behavioral, Human Relations, Classical
(c) Classical, Behavioral, Human Relations, Systems, Contingency
(d) Classical, Human Relations, Behavioral, Contingency, Systems
Ans. (a)
19. The degree of decentralization in an organization
depends most on:
(a) technology
(b) size of workforce
(c) volume of transactions
(d) competence of subordinates
Ans. (d)
20. Job Evaluation is carried on mainly for:
(a) identifying geographical locational factors of business enterprise
(b) promoting job satisfaction
(c) simplifying wage administration
(d) meeting competition effectively
Ans. (c)
21. Consider the following stages of planned change:
1. Moving
2. Refreezing
3. Unfreezing
According to Kurt Lewin, the correct sequence of these is
(a) l, 2, 3
(b) 2, 3, l
(c) 3, 1, 2
(d) 1, 3, 2
Ans. (c)
22. Wider span of control is effective in organizations
(a) a1thority delegation is inadequate
(b) tasks are complex
(c) through subordinate training scheme exists
(d) the leadership style authoritarian
Ans. (c)
23. The most suitable method of filing for a transnational corporation is:
(a) numerical
(b) alphabetical-numerical
(c) numerical—territorial
(d) territorial
Ans. (b)
24. Which one of the following aims is achieved most through Office Record keeping ?
(a) Efficiency of operations on shop floor
(b) Business reputation
(c) Storage of documents
(d) Helping decision making
Ans. (c)
25. Greater mechanization of offices, results in:
(a) better house keeping
(b) greater accuracy in the work
(c) making employees cogs of the machines
(d) higher cost of running office
Ans. (b)
26. Which one of the following is the most appropriate
task of office management?
(a) Creation of profit centre
(b) Creation of control centre
(c) Making office supplies available
(d) Supervision of production Quality Control
Ans. (b)
27. O & M can be strengthened chiefly through:
(a) wage incentive plans
(b) good store-keeping
(c) improved office-layout
(d) better work measurement
Ans. (d)
COMPANY LAWS INCLUDING
SECRETARIAL PRACTICES
28. A director having direct or indirect, interest or concern in a transaction of the company, has to disclose his interest in a meeting to the:
(a) Board of Directors
(b) Shareholders
(c) Company Secretary
(d) Registrar of Companies
Ans. (a)
29. Match List-I with List-II and select the correct answer using the Code given below the lists:
List-I List-II
A. Company Secretary 1. In charge of statutory and administrative duties
B. Director 2. Reports to the shareholders
C. Managing Director 3. Reports to the Management
D. Internal Auditor 4. Trustee of Company’s assets
5. Reports to the Board of Directors
Codes:
A B C D
(a) 1 5 2 3
(b) 3 5 2 1
(c) 1 4 5 3
(d) 3 4 5 1
Ans. (c)
30. Which one of the following reports should have “responsibility statement” under the Companies Act, 1956?
(a) Auditor’s report
(b) Board of Director’s report
(c) Company Secretary’s report
(d) Audio Committee’s report
Ans. (b)
31. Consider the following statements:
1. Board of Directors appoints the first auditor of the company
2. A shareholder of a company can become member of the Board
3. Board of Directors can act as auditors
4. Directors of one company can be appointed as Director to any number of companies
Which of the above statements are correct?
(a) 1,2 and 3
(b) 1 and 3
(c) 1 and 2
(d) 2, 3 and 4
Ans. (c)
32. The capital of a public limited company can be reduced with the confirmation of the:
(a) Registrar of Companies
(b) Company Law Board
(c) Securities and Exchange Board of India
(d) High Court
Ans. (b)
33. Match List-I (Concept relating to company meetings) with List-II (Meaning) and select the correct answer using the Code given below the lists:
List-I List-II
A. Proxy 1. Minimum number of members required to be present
B. Quorum 2. Getting the right to vote only
C. Statutory Meeting 3. Conducted once in a year
D. Annual General Meeting 4. Once in the life time of a company
5. Meeting of a particular group of shareholders
Codes:
A B C D
(a) 5 3 2 1
(b) 2 1 4 3
(c) 5 1 2 3
(d) 2 3 4 1
Ans. (
34. Minimum paid-up capital required to incorporate a public-limited company is:
(a) Rs. 20,000
(b) Rs. 1 ,00.00
(c) Rs. 5,00,000
(d) Rs. 10,00,000
Ans. (d)
35. Consider the following statements:
1. The minimum number of directors in a public company is three.
2. The first directors are appointed by the first general meeting.
3. An official director appointed by the government in a public company is required to possess qualification shares within 2 months of his appointment.
4. The Company Secretary is appointed by Board of Directors.
Which of the above statements are correct?
(a) 1 and 2
(b) l and 4
(c) 2 and 3
(d) 2 and 4
Ans. (b)
36. After the commencement of the Companies Act, 1956 no person, save as otherwise provided in Section 276, shall hold office as director at the same time in more than:
(a) 5 Companies
(b) 10 Companies
(c) 15 Companies
(d) 20 Companies
Ans. (d)
37. Match List-I (Company having paid-up capital more than) with List-II (Must have/be a) and select the correct answer using the Code given below the lists.
List-I List-II
A. One lakh rupees 1. Whole-time Director
B. Ten lakh rupees 2. Secretarial compliance report
C. Fifty lakh rupees 3. Qualified Company Secretary
D. Five crore rupees 4. Public Limited Company
5. Private Limited Company
Codes:
A B C D
(a) 5 4 3 1
(b) 3 4 1 5
(c) 5 2 3 1
(d) 3 2 1 5
Ans. (a)
38. Match List—I with List—II and select the correct answer using the Code given below the lists:
List-I List-II
A. SEBI 1. Apex institution of development banks
B. OTCEI 2. Credit rating
C. IDBI 3. Trading in securities of small company and government
D. CRISIL 4. Regulation and development of capital market
Codes:
A B C D
(a) 4 3 1 2
(b) 3 4 1 2
(c) 4 3 2 1
(d) 3 4 2 1
Ans. (a)
MISCELLANEOUS
39. Merchant Banker does NOT offer services in regard to:
(a) project appraisal
(b) capital issue
(c) project preparation
(d) subscription of Equity shares
Ans. (a)
40. Match List—I with List—II and select the correct answer using the Code given below the lists:
List—I List—II
A. Reducing capital 1. Contribution margin
B. Sales> Variable cost 2. Reorganization
C. Sales> Break even sales 3. Absorption
D. Take-over of firm 4. Margin of safety
Codes:
A B C D
(a) 2 1 3 4
(b) 1 2 3 4
(c) 1 2 4 3
(d) 2 1 4 3
Ans. (d)
41. Mechanistic structures are designed to:
(a) promote flexibility and quick responses to fast changing situations
(b) induce people to behave in predictable and accountable manner
(c) make people happy by assigning specific tasks to. them
(d) perform assigned tasks within the scheduled time
Ans. (d)
42. The Net asset Value (NAV) of a unit of mutual fund scheme is computed as:
Market value of the fund’s investments ± Receivables + Accrued income —
(a) Liabilities — Accrued expenses
No. of units outstanding
(b) Market value of the fund’s investment
No. of units outstanding
(c) Assets of the fund — Liabilities of the fund
No. of units outstanding
(d) Face value of the unit + Dividend per unit
Ans. (a)
43. Which one of the following reports deals with “Corporate government”?
(a) Sabhanayagam Report
(b) Kurmaramangalam Birla Report
(c) Narasimham Report
(d) L. C. Gupta Report
Ans. (b)
REASONING
The following Seventeen (17) items consist of two statements one labelled the ‘Assertion A’ and the other labelled the Reason R’. You are to examine these two statements carefully and decide the Assertion (A) and the Reason (R)are individually true and if so, whether the Reason is a correct explanation of the Assertion. Select your answers to these items using the Code given below and mark your answer sheet accordingly:
Code:
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and R are true but R is NOT the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
44. Assertion (A): The best way of reporting of social responsibility is to prepare a Value Added Statement (VAS) to show the income earned by the providers of capital, the employees and the government.
Reason (R): A business is accountable to the society since it makes use of community-owned assets such as roads, railways, communication and other infrastructural facilities and concessions provided by the state from the taxpayer’s money.
Ans. (a)
45. Assertion (A): The interest on borrowed funds can be capitalized upto the completion of fixed assets.
Reason (R):The completion of fixed assets has been possible only because of these funds.
Ans. (b)
46. Assertion (A): A claim lodged with Railways in March 1998 for loss of goods of Rs. 2,00,000 had been passed for payment in March 2001 for Rs. 1,50,000. No entry was passed in 1998.
Reason (R): The collectability of the claim was not certain in 1998.
Ans. (a)
47. Assertion (A): Life-membership fees is to be capitalized.
Reason (R) : Often these are non-recurring receipts and the members take advantage of the services provided during the tenure of membership.
Ans.(b)
48. Assertion (A): The company is said to be trading on equity.
Reason (R): The capital structure of the company is highly geared.
Ans. (b)
49. Assertion (A): R.O.I. measures the final outcome of all recorded business activities. It is the ratio that measures the performance of the firm that generates returns.
Reason (R): However, interpretation regarding the amount of capital invested and size of returns generated by a firm differ from one interpreter to another and one organization to another. In other words, practices are not uniform and as such the acceptability of the concept is being questioned.
Ans. (b)
50. Assertion (A): An auditor of a company gives a critical review of accounts.
Reason (R): He gives collaborative evidence that accounts are properly drawn up.
Ans. (c)
Commerce MCQ Practice Test for exams
Free online commerce MCQ test
1. Which one of the following functions is served most by information technology?
(a) Replacement of human labour
(b) Provision for a handle to the management to improve industrial relations
(c) Substitution of human information processing
(d) Rationalization of office work
Ans. (d)
2. Match List-I with List -II and select the correct answer using the Code given below the lists:
List- I List-II
A. Simple Association 1. Amalgamation
B. Federation 2. Cartels
C. Complete consolidation 3. Chamber of Commerce
D. Partial Consolidation 4. Holding company
Codes:
A B C D
(a) 3 2 4 1
(b) 2 3 1 4
(c) 2 3 4 1
(d) 3 2 1 4
Ans. (b)
3. Which one of the following NOT a feature of sole proprietorship business?
(a) Undivided risk
(b) No government regulation
(c) Separate entity of the firm
(d) Unlimited liability
Ans. (c)
FOREIGN TRADE (IMPORT & EXPORT)
4. Dumping is an example of:
(a) monopolistic practice in international trade
(b) monopoly in international trade
(c) oligopoly in international trade
(d) perfect competition in international trade
Ans. (b)
INSURANCE (LIFE, FIRE, MARINE GENERAL)
5. Who among the following does NOT have insurable rest in fire insurance?
(a) A shop owner in the property of his customers
(b) A creditor in the property mortgaged with him
(c) A trustee in the property of the trust
(d) An insurance company in the property
Ans. (d)
6. In marine insurance, warranty means a guarantee:
(a) against the loss of the ship in the voyage
(b) for the safety of the captain of the ship
(c) for payment of shipping freight
(d) to comply with conditions mentioned in the policy
Ans. (d)
7. In a consequential loss policy which one of the following losses is indemnified?
(a) Loss of corporate image
(b) Loss of net profits due to fire
(c) Loss due to theft during fire
(d) Loss due to damage around the venue of fire
Ans. (b)
MANAGEMENT
8. One of the major disadvantages of the Matrix form of organization structure is that:
(a) it does not pinpoint product - profit responsibility
(b) it is not oriented towards results
(c) there is possibility of disunity of command
(d) it generates rivalry between line and staff members
Ans. (c)
9. Which of the following gives the correct sequence with respect to communication process?
(a) Sender, Message, Encoding Receiver, Channel, Decoding and Feedback.
(b) Message, Sender, Encoding, Receiver, Channel, Decoding and Feedback.
(c) Encoding, Message, Sender, Decoding, Feedback, Receiver and Channel.
(d) Sender, Message, Encoding, Channel, Receiver, Decoding and Feedback
Ans. (d)
10. Maintenance of intended delegation requires that decisions lying within the individual manager’s authority should be made by them and not referred upwards in the organizational hierarchy. This is known as:
(a) principle of unity of command
(b) scalar principle
(c) authority level principle
(d) principle of absoluteness of responsibility
Ans. (c)
11. In which one of the following, Crisis Management is reflected?
(a) Future expansion plans of business
(b) Organization Development Programme
(c) Short-term Manpower Planning
(d) Prudent managerial leadership
Ans. (d)
12. David C. McClelland’s motivating needs are:
(a) Needs for power, affiliation and growth
(b) Needs for affiliation, achievement and security
(c) Needs for power, achievement and relatedness
(d) Needs for power, affiliation and achievement
Ans.(d)
13. Which one of the following, correctly signifies the purpose of an Organization Chart?
(a) Office Decor
(b) Indication of available Office Services
(c) Flow of Authority
(d) High Morale
Ans. (c)
14. Informal organization is as necessary as formal organization chiefly for the reason that it:
(a) resists change
(b) builds morale
(c) has close association with decision making
(d) fulfils separate goals and standards
Ans. (b)
15. Increase in the installation of Personal Computer is mainly due to:
(a) monotony of work
(b) reduction of fatigue
(c) improvement of efficiency
(d) lowering work load
Ans. (c)
16. The most important advantage of centralization of office services is:
(a) specialization
(b) higher departmental loyalty
(c) no delay in providing services
(d) less burden of work
Ans. (c)
17. Management by Exception is to improve:
(a) control over personnel
(b) strategic management
(c) steady flow of information
(d) high morale
Ans. (b)
18. Which one of the following indicates the correct chronological order of management approaches in the History of Management Thoughts?
(a) Classical, Human Relations, Behavioral, Systems, Contingency
(b) Contingency, Systems, Behavioral, Human Relations, Classical
(c) Classical, Behavioral, Human Relations, Systems, Contingency
(d) Classical, Human Relations, Behavioral, Contingency, Systems
Ans. (a)
19. The degree of decentralization in an organization
depends most on:
(a) technology
(b) size of workforce
(c) volume of transactions
(d) competence of subordinates
Ans. (d)
20. Job Evaluation is carried on mainly for:
(a) identifying geographical locational factors of business enterprise
(b) promoting job satisfaction
(c) simplifying wage administration
(d) meeting competition effectively
Ans. (c)
21. Consider the following stages of planned change:
1. Moving
2. Refreezing
3. Unfreezing
According to Kurt Lewin, the correct sequence of these is
(a) l, 2, 3
(b) 2, 3, l
(c) 3, 1, 2
(d) 1, 3, 2
Ans. (c)
22. Wider span of control is effective in organizations
(a) a1thority delegation is inadequate
(b) tasks are complex
(c) through subordinate training scheme exists
(d) the leadership style authoritarian
Ans. (c)
23. The most suitable method of filing for a transnational corporation is:
(a) numerical
(b) alphabetical-numerical
(c) numerical—territorial
(d) territorial
Ans. (b)
24. Which one of the following aims is achieved most through Office Record keeping ?
(a) Efficiency of operations on shop floor
(b) Business reputation
(c) Storage of documents
(d) Helping decision making
Ans. (c)
25. Greater mechanization of offices, results in:
(a) better house keeping
(b) greater accuracy in the work
(c) making employees cogs of the machines
(d) higher cost of running office
Ans. (b)
26. Which one of the following is the most appropriate
task of office management?
(a) Creation of profit centre
(b) Creation of control centre
(c) Making office supplies available
(d) Supervision of production Quality Control
Ans. (b)
27. O & M can be strengthened chiefly through:
(a) wage incentive plans
(b) good store-keeping
(c) improved office-layout
(d) better work measurement
Ans. (d)
COMPANY LAWS INCLUDING
SECRETARIAL PRACTICES
28. A director having direct or indirect, interest or concern in a transaction of the company, has to disclose his interest in a meeting to the:
(a) Board of Directors
(b) Shareholders
(c) Company Secretary
(d) Registrar of Companies
Ans. (a)
29. Match List-I with List-II and select the correct answer using the Code given below the lists:
List-I List-II
A. Company Secretary 1. In charge of statutory and administrative duties
B. Director 2. Reports to the shareholders
C. Managing Director 3. Reports to the Management
D. Internal Auditor 4. Trustee of Company’s assets
5. Reports to the Board of Directors
Codes:
A B C D
(a) 1 5 2 3
(b) 3 5 2 1
(c) 1 4 5 3
(d) 3 4 5 1
Ans. (c)
30. Which one of the following reports should have “responsibility statement” under the Companies Act, 1956?
(a) Auditor’s report
(b) Board of Director’s report
(c) Company Secretary’s report
(d) Audio Committee’s report
Ans. (b)
31. Consider the following statements:
1. Board of Directors appoints the first auditor of the company
2. A shareholder of a company can become member of the Board
3. Board of Directors can act as auditors
4. Directors of one company can be appointed as Director to any number of companies
Which of the above statements are correct?
(a) 1,2 and 3
(b) 1 and 3
(c) 1 and 2
(d) 2, 3 and 4
Ans. (c)
32. The capital of a public limited company can be reduced with the confirmation of the:
(a) Registrar of Companies
(b) Company Law Board
(c) Securities and Exchange Board of India
(d) High Court
Ans. (b)
33. Match List-I (Concept relating to company meetings) with List-II (Meaning) and select the correct answer using the Code given below the lists:
List-I List-II
A. Proxy 1. Minimum number of members required to be present
B. Quorum 2. Getting the right to vote only
C. Statutory Meeting 3. Conducted once in a year
D. Annual General Meeting 4. Once in the life time of a company
5. Meeting of a particular group of shareholders
Codes:
A B C D
(a) 5 3 2 1
(b) 2 1 4 3
(c) 5 1 2 3
(d) 2 3 4 1
Ans. (
34. Minimum paid-up capital required to incorporate a public-limited company is:
(a) Rs. 20,000
(b) Rs. 1 ,00.00
(c) Rs. 5,00,000
(d) Rs. 10,00,000
Ans. (d)
35. Consider the following statements:
1. The minimum number of directors in a public company is three.
2. The first directors are appointed by the first general meeting.
3. An official director appointed by the government in a public company is required to possess qualification shares within 2 months of his appointment.
4. The Company Secretary is appointed by Board of Directors.
Which of the above statements are correct?
(a) 1 and 2
(b) l and 4
(c) 2 and 3
(d) 2 and 4
Ans. (b)
36. After the commencement of the Companies Act, 1956 no person, save as otherwise provided in Section 276, shall hold office as director at the same time in more than:
(a) 5 Companies
(b) 10 Companies
(c) 15 Companies
(d) 20 Companies
Ans. (d)
37. Match List-I (Company having paid-up capital more than) with List-II (Must have/be a) and select the correct answer using the Code given below the lists.
List-I List-II
A. One lakh rupees 1. Whole-time Director
B. Ten lakh rupees 2. Secretarial compliance report
C. Fifty lakh rupees 3. Qualified Company Secretary
D. Five crore rupees 4. Public Limited Company
5. Private Limited Company
Codes:
A B C D
(a) 5 4 3 1
(b) 3 4 1 5
(c) 5 2 3 1
(d) 3 2 1 5
Ans. (a)
38. Match List—I with List—II and select the correct answer using the Code given below the lists:
List-I List-II
A. SEBI 1. Apex institution of development banks
B. OTCEI 2. Credit rating
C. IDBI 3. Trading in securities of small company and government
D. CRISIL 4. Regulation and development of capital market
Codes:
A B C D
(a) 4 3 1 2
(b) 3 4 1 2
(c) 4 3 2 1
(d) 3 4 2 1
Ans. (a)
MISCELLANEOUS
39. Merchant Banker does NOT offer services in regard to:
(a) project appraisal
(b) capital issue
(c) project preparation
(d) subscription of Equity shares
Ans. (a)
40. Match List—I with List—II and select the correct answer using the Code given below the lists:
List—I List—II
A. Reducing capital 1. Contribution margin
B. Sales> Variable cost 2. Reorganization
C. Sales> Break even sales 3. Absorption
D. Take-over of firm 4. Margin of safety
Codes:
A B C D
(a) 2 1 3 4
(b) 1 2 3 4
(c) 1 2 4 3
(d) 2 1 4 3
Ans. (d)
41. Mechanistic structures are designed to:
(a) promote flexibility and quick responses to fast changing situations
(b) induce people to behave in predictable and accountable manner
(c) make people happy by assigning specific tasks to. them
(d) perform assigned tasks within the scheduled time
Ans. (d)
42. The Net asset Value (NAV) of a unit of mutual fund scheme is computed as:
Market value of the fund’s investments ± Receivables + Accrued income —
(a) Liabilities — Accrued expenses
No. of units outstanding
(b) Market value of the fund’s investment
No. of units outstanding
(c) Assets of the fund — Liabilities of the fund
No. of units outstanding
(d) Face value of the unit + Dividend per unit
Ans. (a)
43. Which one of the following reports deals with “Corporate government”?
(a) Sabhanayagam Report
(b) Kurmaramangalam Birla Report
(c) Narasimham Report
(d) L. C. Gupta Report
Ans. (b)
REASONING
The following Seventeen (17) items consist of two statements one labelled the ‘Assertion A’ and the other labelled the Reason R’. You are to examine these two statements carefully and decide the Assertion (A) and the Reason (R)are individually true and if so, whether the Reason is a correct explanation of the Assertion. Select your answers to these items using the Code given below and mark your answer sheet accordingly:
Code:
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and R are true but R is NOT the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
44. Assertion (A): The best way of reporting of social responsibility is to prepare a Value Added Statement (VAS) to show the income earned by the providers of capital, the employees and the government.
Reason (R): A business is accountable to the society since it makes use of community-owned assets such as roads, railways, communication and other infrastructural facilities and concessions provided by the state from the taxpayer’s money.
Ans. (a)
45. Assertion (A): The interest on borrowed funds can be capitalized upto the completion of fixed assets.
Reason (R):The completion of fixed assets has been possible only because of these funds.
Ans. (b)
46. Assertion (A): A claim lodged with Railways in March 1998 for loss of goods of Rs. 2,00,000 had been passed for payment in March 2001 for Rs. 1,50,000. No entry was passed in 1998.
Reason (R): The collectability of the claim was not certain in 1998.
Ans. (a)
47. Assertion (A): Life-membership fees is to be capitalized.
Reason (R) : Often these are non-recurring receipts and the members take advantage of the services provided during the tenure of membership.
Ans.(b)
48. Assertion (A): The company is said to be trading on equity.
Reason (R): The capital structure of the company is highly geared.
Ans. (b)
49. Assertion (A): R.O.I. measures the final outcome of all recorded business activities. It is the ratio that measures the performance of the firm that generates returns.
Reason (R): However, interpretation regarding the amount of capital invested and size of returns generated by a firm differ from one interpreter to another and one organization to another. In other words, practices are not uniform and as such the acceptability of the concept is being questioned.
Ans. (b)
50. Assertion (A): An auditor of a company gives a critical review of accounts.
Reason (R): He gives collaborative evidence that accounts are properly drawn up.
Ans. (c)
commerce objective questions with answers
commerce objective questions with answers
Solved Objective Questions Commerce For UPSC PGT TGT
Multiple choice questions: basic Commerce
1. A file which contains rules governing the organization under audit is known as:
(a) Current file
(b) Permanent file
(c) Routine file
(d) Precedence file
Ans. (b)
2. In so far as a company is concerned, which one of the following pairs is not correctly matched?
(a) Internal audit — Obligatory
(b) Statutory audit — Mandatory
(c) Continuous audit — Optional
(d) Management audit — Voluntary
Ans. (a)
3. Where the auditor places a high degree of reliance on an internal control procedure, the acceptable risk of over-reliance would be:
(a) Low
(c) Moderate
(b) High
(d) Nil
Ans. (c)
4. Management audit is ordered by the:
(a) Workers of a company
(b) Government
(c) Board of Directors
(d) Securities Exchange Board of India.
Ans. (c)
5. When an auditor detects material weaknesses in the internal checks and control system of the company under audit, he should report his findings as per:
(a) ICAI orders
(b) SEBI orders
(c) MAOCAR orders
(d) ICWAI orders
Ans. (c)
CAPITAL MARKET (STOCK EXCHANGE)
6. A company can invest money in another company only if it is so authorized by its
(a) Memorandum of Association
(b) Articles of Association
(c) Auditors
(d) Company Secretary
Ans. (a)
7. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List-II
(Type of Mutual Fund) (Features)
A. Open-ended fund 1. Maximizes short term return to investors
B. Income fund 2. Can sell unlimited number of units
C. Close-ended fund 3. The units are not redeemable at their NAV
D. Growth fund 4. Maximizes long-term return to investors
Codes:
A B C D
(a) 3 4 2 1
(b) 3 4 1 2
(c) 2 1 4 3
(d) 2 1 3 4
Ans. (d)
8. Which one of the following best supports the theory that the Stock Exchange is a secondary market?
In a Stock Exchange:
(a) securities are bought and sold by way of transfer
(b) an existing holder of securities can dispose of the holdings to another investor who intends to buy them
(c) no new investment is created
(d) securities are dealt in for dual purposes— investment and speculation
Ans. (d)
9. LIBOR refers to:
(a) liberalized system of foreign exchange transfer between Banks
(b) inter-bank lending rate for Euro-dollars at London
(c) lowest rate of interest at which banks in London lend Pound Sterling
(d) lowest rate of interest prescribed by the Reserve Bank of India
Ans. (b)
10. Financial disintermediation results in larger:
(a) access to financial institutions
(b) participation of foreign financial institutions
(c) free-based income
(d) securities-related income
Ans. (a)
BUSINESS ORGANISATION
AND COMBINATION
11. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List-II
(Organization) (Associated with)
A. Joint stock company 1. Memorandum of Association (M/A)
B. Co-operative society 2. Special Act
C. Statutory corporation 3.Mutual contract
D. Partnership 4. Bye-laws
5. Shareholding
Codes:
A B C D
(a) 1 4 3 2
(b) 5 2 4 3
(c) 1 4 2 3
(d) 5 2 3 4
Ans. (c)
12. The basic flow of activities of a business firm follows a certain cyclical sequence. A business would like to have as many such cycles as possible during a given time period, say a year. What will be the sequential flow of some of these activities in the cycle?
1. Financing decision
2. Investment decision
3. Disposal or output
4. Acquisition of resources
Select the correct answer using the Code given below:
Code:
(a) 2, 1, 4, 3
(b) 4, 1, 2, 3
(c) 1, 3, 4, 2
(d) 2, 3, 1, 4
Ans. (a)
13. Which one of the following types of Companies deals with only its shareholders for their benefit?
(a) Private Limited Company
(b) Chit Fund Company
(c) Nidhi Company
(d) Banking Company
Ans. (b)
14. In addition of Consumer Forums which one of the following looks after the interests of consumers?
(a) High courts
(b) Company Law Board
(C) MRTP
(d) Bureau of Industrial Costs and Prices
Ans. (c)
15. Which one of the following is NOT an advantage of the incorporation of a company?
(a) Perpetual succession
(b) Limited liability of Members
(c) Capital contributions forming part. of the joint stock of the company
(d) Freedom to do any business
Ans. (d)
16. Economic oligarchy, fraudulent practices, bureaucratic management and difficulty in formation are the limitations of a:
(a) sole proprietary concern
(b) partnership firm
(c) joint stock company
(d) co-operative society
Ans. (c)
17. Which one of the following is not the distinctive feature of the co-operative form of business organization?
(a) Service before self
(b) Democratic management
(c) Corporate status
(d) One-share one-vote system
Ans. (d)
18. The liability of the Karta in a joint Hindu family is:
(a) limited to his interest in the joint Hindu family
(b) unlimited
(c) limited to the entire property of the family
(d) limited to the private properties of all the members
Ans. (b)
19. Those companies which can register themselves without the word “limited” under license granted by the Central Government are:
(a) Private Companies
(b) Charitable Companies
(c) Public Companies
(d) None of the above
Ans. (b)
20. A, B, C. D are partners sharing profits and losses in the ratio 3 : 3 : 2: 1. The partnership is dissolved and D becomes insolvent. C brings only his share of loss and shows his inability to contribute anything towards D’s deficiency. According to Garner vs. Murray rule, D’s deficiency in the total will be shared by:
(a) A and B in their capital ratio
(b) A, B and C in their profit sharing ratio
(c) A, B and C in their capital ratio
(d) A, B and C equally
Ans. (a)
21. Non-registration of a partnership does not affect:
(a) the right of a partner to sue the firm
(b) the right of the firm to sue third parties
(c) the right of the third party to proceed against the firm or its partners
(d) any of the above
Ans. (c)
22. If a minor chooses to continue as a partner on attaining the age of majority, he will be liable to the debts of the firm from the date of his:
(a) attaining majority
(b) admission to profits of the firm
(c) choosing to become a partner at a subsequent date
(d) guardian giving the option
Ans. (b)
23. Which one of the following is not a feature of Private
company as per Indian Companies Act?
(a) Limitation on the number of its members
(b) Restriction on the right to transfer its shares
(c) Ban on floating of debentures
(d) Prohibition of any invitation to the public
Ans. (c)
24. Combination of Printing and Dyeing Companies is a type of:
(a) vertical combination
(b) horizontal combination
(c) circular combination
(d) allied combination
Ans. (d)
25. According to the Companies Act, which one of-the following companies can commence allotment of shares even before the minimum subscription is subscribed or paid?
(a) Chartered Company
(b) Private Company
(c) Government company’
(d) Public Limited Company
Ans. (b)
26. Which one of the following documents is known as
Doctrine of constructive notice?
(a) The prospectus of the company
(b) The certificate of commencement of business
(c) The Memorandum and the Article of Association
(d) List of working directors
Ans. (c)
27. Consider the following statements regarding Indian industries
1. Industrial modernization has not come up even in a modest way.
2. A support system and a regulatory framework have been developed so as to encourage and direct the industrial houses to modernize their plants.
3. Considerable advances have been made in the fields of managerial and technological skills in the country.
4. No effort has so far been made towards attaining the goal of self-reliance in the manufacture of consumer items.
Of these statements:
(a) 1 and 2 are correct
(b) 2 and 3 are correct
(c) 3 and 4 are correct
(d) 1 and 4 are correct
Ans. (b)
28. Which one of the following is a joint stock company as per Companies Act, 1956?
(a) A charitable trust
(b) A partnership firm with fixed capital
(c) A society with fixed reserve fund
(d) None of the above
Ans. (d)
FOREIGN TRADE (IMPORT& EXPORT)
29. Steps to be taken in a selling system include:
1. Receipt of order
2. Processing order
3. Shipment of merchandise
4. Accounting for sale
The correct chronological sequence of these steps is:
(a) 1, 4, 3. 2
(b) 1, 4, 2, 3
(c) 1, 2, 4, 3
(d) 1, 2, 3, 4
Ans. (c)
30. Which one of the following is not a commercial risk?
(a) Insolvency of the buyer
(b) New restrictions placed on import-export trade
(c) Damage to goods in transit
(d) Change in the exchange rate
Ans. (d)
INSURANCE (LIFE, FIRE, MARINE & GENERAL)
31. Match List-I with List-II and select the correct answer using the Code given below the list:
List-I List-II
(Some usages in trade & marine insurance) (Practical implication or name)
A. Ex- works contract 1. C.I.F.
B. Freight paid by Importer 2. Method of settlement of disputes
C. Force majeure 3. Minimum obligation for the exporter
D. Arbitration 4. Condition to be included in the contract if
natural calamities are to be covered
5. F O B contract
Code:
A B C D
(a) 3 5 2 1
(b) 1 2 3 4
(c) 1 2 4 3
(d) 3 5 4 2
Ans. (d)
32. The average clause in a fire policy states that the insured can get back:
(a) only that portion of the actual loss suffered as the sum insured bears to total value
(b) the entire amount of the total loss suffered
(c) the entire amount of partial loss suffered
(d) a fixed percentage of loss suffered
Ans. (a)
MANAGEMENT
33. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List-II
A. Span of control 1. The superior helps, through continuous guidance, the
subordinate to reach his goals
B. M.B.O. 2. Numerical limit of subordinates to be supervised by
an executive
C. M.B.E. 3. Subordinate remains accountable to his superior and
the superior has the authority to demand
accountability from his subordinate
D. Delegation of authority 4. The management will concern itself of and confine
its activities to those areas and operations where the
actual performance is short of the target
Code:
A B C D
(a) 1 2 3 4
(b) 1 2 4 3
(c) 2 1 3 4
(d) 2 1 4 3
Ans. (d)
34. According to Peter Principle, managers tend to:
(a) work late as they go higher up the hierarchy
(b) work even beyond their retirement age
(c) get promoted to the level of their incompetence
(d) loss their competence with successive promotions
Ans. (c)
35. Which of the following advantages could be derived from the use of Franking machine?
t. It saves time because of its speed
2. Valuable facts and figures can be obtained
3. It is very convenient to use
4. It ensures much greater accuracy
Select the correct answer using the Cod. given
below:
Code:
(a) 1 and 4
(b) 1 and 3
(c) l and 2
(d) 2 and 3
Ans. (b)
36. Consider the given structure of an organization:
Which one of the following is represented by the same?
(a) Druckers’ effective structure
(b) Span of effective control
(c) Functional form of organization
(d) General Manager’s view of the organization
Ans. (c)
37. According to Graicuna’s theory, total, number of relations among superiors and subordinates can be found by the formula:
(a) n (2 n + n + 1)
n
(b) n (2 n -1 + n -1)
2
(c) n (2 n -1 + n +1)
2
(d) n (2 n + n +1)
2
Ans. (d)
38. Which of the following pairs are correctly matched?
1. Henri Fayol — Administration Industrial et General
2. F.W. Taylor — The Functions of the Executive
3. Douglas McGregor — The Human side of Enterprise
4. Peter Drucker — Management: Tasks, Responsibilities and Practices
Select the correct answer using the Code given below:
Code:
(a) 1, 2, 3 and 4
(b) 3 and 4
(c) 2 and 4
(d) 1 and 3
Ans. (a)
39. Match List-I and List-II and select the correct answer using the Code given below the Lists:
List-I List-II
A. Line authority 1. Some people in an organization are vested with primary
source of authority
B. Staff authority 2. Some people in an organization have legitimate right to exert
influence on others
C. Functional authority 3. Some people in an organization lack independent, formal
authority
D. Formal authority 4. Some people have right to control activities of other
departments as they relate to specific staff
Code:
A B C D
(a) 1 2 3 4
(b) 2 4 3 1
(c) 1 3 4 2
(d) 2 3 4 1
Ans. (c)
40. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I (Names) List-II (Model)
A. Kurt Lewin 1. Action Research process model
B. H.J. Leavitt 2. Sequential profess model
C. Larry Greiner 3. System model
D. Floyd C. Mann 4. Three-step model
Codes:
A B C D
(a) 1 2 3 4
(b) 1 4 3 2
(c) 3 2 1 4
(d) 4 3 2 1
Ans. (c)
41. Understanding control does Not signify understanding:
(a) how one controls
(b) what is meant by control
(c) who controls
(d) what is controlled
Ans. (c)
42. Consider the following statements:
The social responsibility of business is to:
1. do a business as per the public policy
2. obey all the rules and regulations of the Government
3. make payment of the taxes imposed by the Government
4. provide not necessarily adequate but good quality of goods
Of these statements:
(a) 2 and 3 are correct
(b) 1 and 4 are correct
(c) 1, 2 and 3 are correct
(d) 1, 2, 3 and 4 are correct
Ans. (d)
43. In the process of controlling office management, certain steps are normally taken. These include:
1. analyzing the actual performance
2. finding out the reasons for discrepancies.
3. evaluating the performance
4. establishing the standards of work performance
The correct sequence in which these steps are usually taken is:
(a) 4, 1, 2, 3
(b) 1, 4, 2, 3
(c) 1, 4, 3, 2
(d) 4, 1, 3, 2
Ans. (d)
44. Which of the following constitute manpower planning?
1. Determining human resource requirements both quantitatively and qualitatively
2. Finding the source of talented individuals
3. Planning for the human resource, needs of an organization
4. Reaching out to the right source for procuring the right people
Select the correct answer using the Code given below:
Code:
(a) 1, 2 and (c) l and 3
(b) 2 and 3
(d) 1, 2, 3 and 4
Ans. (a)
45. Organization and methods aim at simplification of office procedures through:
(a) elimination of all unnecessary work, minimizing the number of forms and direct communication
(b) elaboration of specific work processes for better implementation
(c) discarding all the records and treating each work merit
(d) allowing existing procedures to continue without adding any new procedures or amendments.
Ans. (a)
46. Consider the following statements:
1. MBO is a control technique in which managers devote time only on the areas of deviation.
2. MBO integrates the individual with the organization, and the organization with the environment.
3. In MBO the control over people is shifted to control over operations.
4. The MBO principle must be accompanied in practice by the principle of critical-point control.
Of these statements:
(a) 1 and 2 are correct
(b) 2 and 3 are correct
(c) 3 and 4 are correct
(d) 1 and 4 are correct
Ans. (c)
47. Which of the following advantages accrue from vertical filing?
1. The system has universal application, as all types of papers and documents can be field
2. It provides ample scope for the expansion of the filling facility
3. It is comparatively a heap method
4. The papers are kept in a chronological order
Select the correct answer using the Code given below.
Code:
(a) 1 and 3
(b) 1 and 2
(c) 2, 3 and 4
(d) 1, 2, 3 and 4
Ans. (b)
48. Consider the following statements:
A strategic management piece comprises:
1. goal settling, strategy formulation, administration and strategic control
2. setting courses of action attaining objective, process of seeking key areas and strategy formulation
3. integrating the organization with culture
4. strategic planning and acting on these plans
Of these statements:
(a) 1, 2 and 3 are correct
(b) 2, 3 and 4 are correct
(c) 1, 2 and 4 are correct
(d) 1, 3 and 4 are correct.
Ans. (c)
49. Which one of the following may not necessarily be an advantage of co-ordination?
(a) Effective supervision
(b) Unity of direction
(c) Creative force
(d) Summarization of all management functions
Ans. (c)
COMPANY LAWS INCLUDING
SECRETARIAL PRACTICES
50.A qualified company Secretary is needed to be appointed as Secretary to a company only on the basis of the:
(a) business of the company
(b) paid up capital of the company
(c) location of the company
(d) listing of the company on any stock exchange
Ans. (b)
Solved Objective Questions Commerce For UPSC PGT TGT
Multiple choice questions: basic Commerce
1. A file which contains rules governing the organization under audit is known as:
(a) Current file
(b) Permanent file
(c) Routine file
(d) Precedence file
Ans. (b)
2. In so far as a company is concerned, which one of the following pairs is not correctly matched?
(a) Internal audit — Obligatory
(b) Statutory audit — Mandatory
(c) Continuous audit — Optional
(d) Management audit — Voluntary
Ans. (a)
3. Where the auditor places a high degree of reliance on an internal control procedure, the acceptable risk of over-reliance would be:
(a) Low
(c) Moderate
(b) High
(d) Nil
Ans. (c)
4. Management audit is ordered by the:
(a) Workers of a company
(b) Government
(c) Board of Directors
(d) Securities Exchange Board of India.
Ans. (c)
5. When an auditor detects material weaknesses in the internal checks and control system of the company under audit, he should report his findings as per:
(a) ICAI orders
(b) SEBI orders
(c) MAOCAR orders
(d) ICWAI orders
Ans. (c)
CAPITAL MARKET (STOCK EXCHANGE)
6. A company can invest money in another company only if it is so authorized by its
(a) Memorandum of Association
(b) Articles of Association
(c) Auditors
(d) Company Secretary
Ans. (a)
7. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List-II
(Type of Mutual Fund) (Features)
A. Open-ended fund 1. Maximizes short term return to investors
B. Income fund 2. Can sell unlimited number of units
C. Close-ended fund 3. The units are not redeemable at their NAV
D. Growth fund 4. Maximizes long-term return to investors
Codes:
A B C D
(a) 3 4 2 1
(b) 3 4 1 2
(c) 2 1 4 3
(d) 2 1 3 4
Ans. (d)
8. Which one of the following best supports the theory that the Stock Exchange is a secondary market?
In a Stock Exchange:
(a) securities are bought and sold by way of transfer
(b) an existing holder of securities can dispose of the holdings to another investor who intends to buy them
(c) no new investment is created
(d) securities are dealt in for dual purposes— investment and speculation
Ans. (d)
9. LIBOR refers to:
(a) liberalized system of foreign exchange transfer between Banks
(b) inter-bank lending rate for Euro-dollars at London
(c) lowest rate of interest at which banks in London lend Pound Sterling
(d) lowest rate of interest prescribed by the Reserve Bank of India
Ans. (b)
10. Financial disintermediation results in larger:
(a) access to financial institutions
(b) participation of foreign financial institutions
(c) free-based income
(d) securities-related income
Ans. (a)
BUSINESS ORGANISATION
AND COMBINATION
11. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List-II
(Organization) (Associated with)
A. Joint stock company 1. Memorandum of Association (M/A)
B. Co-operative society 2. Special Act
C. Statutory corporation 3.Mutual contract
D. Partnership 4. Bye-laws
5. Shareholding
Codes:
A B C D
(a) 1 4 3 2
(b) 5 2 4 3
(c) 1 4 2 3
(d) 5 2 3 4
Ans. (c)
12. The basic flow of activities of a business firm follows a certain cyclical sequence. A business would like to have as many such cycles as possible during a given time period, say a year. What will be the sequential flow of some of these activities in the cycle?
1. Financing decision
2. Investment decision
3. Disposal or output
4. Acquisition of resources
Select the correct answer using the Code given below:
Code:
(a) 2, 1, 4, 3
(b) 4, 1, 2, 3
(c) 1, 3, 4, 2
(d) 2, 3, 1, 4
Ans. (a)
13. Which one of the following types of Companies deals with only its shareholders for their benefit?
(a) Private Limited Company
(b) Chit Fund Company
(c) Nidhi Company
(d) Banking Company
Ans. (b)
14. In addition of Consumer Forums which one of the following looks after the interests of consumers?
(a) High courts
(b) Company Law Board
(C) MRTP
(d) Bureau of Industrial Costs and Prices
Ans. (c)
15. Which one of the following is NOT an advantage of the incorporation of a company?
(a) Perpetual succession
(b) Limited liability of Members
(c) Capital contributions forming part. of the joint stock of the company
(d) Freedom to do any business
Ans. (d)
16. Economic oligarchy, fraudulent practices, bureaucratic management and difficulty in formation are the limitations of a:
(a) sole proprietary concern
(b) partnership firm
(c) joint stock company
(d) co-operative society
Ans. (c)
17. Which one of the following is not the distinctive feature of the co-operative form of business organization?
(a) Service before self
(b) Democratic management
(c) Corporate status
(d) One-share one-vote system
Ans. (d)
18. The liability of the Karta in a joint Hindu family is:
(a) limited to his interest in the joint Hindu family
(b) unlimited
(c) limited to the entire property of the family
(d) limited to the private properties of all the members
Ans. (b)
19. Those companies which can register themselves without the word “limited” under license granted by the Central Government are:
(a) Private Companies
(b) Charitable Companies
(c) Public Companies
(d) None of the above
Ans. (b)
20. A, B, C. D are partners sharing profits and losses in the ratio 3 : 3 : 2: 1. The partnership is dissolved and D becomes insolvent. C brings only his share of loss and shows his inability to contribute anything towards D’s deficiency. According to Garner vs. Murray rule, D’s deficiency in the total will be shared by:
(a) A and B in their capital ratio
(b) A, B and C in their profit sharing ratio
(c) A, B and C in their capital ratio
(d) A, B and C equally
Ans. (a)
21. Non-registration of a partnership does not affect:
(a) the right of a partner to sue the firm
(b) the right of the firm to sue third parties
(c) the right of the third party to proceed against the firm or its partners
(d) any of the above
Ans. (c)
22. If a minor chooses to continue as a partner on attaining the age of majority, he will be liable to the debts of the firm from the date of his:
(a) attaining majority
(b) admission to profits of the firm
(c) choosing to become a partner at a subsequent date
(d) guardian giving the option
Ans. (b)
23. Which one of the following is not a feature of Private
company as per Indian Companies Act?
(a) Limitation on the number of its members
(b) Restriction on the right to transfer its shares
(c) Ban on floating of debentures
(d) Prohibition of any invitation to the public
Ans. (c)
24. Combination of Printing and Dyeing Companies is a type of:
(a) vertical combination
(b) horizontal combination
(c) circular combination
(d) allied combination
Ans. (d)
25. According to the Companies Act, which one of-the following companies can commence allotment of shares even before the minimum subscription is subscribed or paid?
(a) Chartered Company
(b) Private Company
(c) Government company’
(d) Public Limited Company
Ans. (b)
26. Which one of the following documents is known as
Doctrine of constructive notice?
(a) The prospectus of the company
(b) The certificate of commencement of business
(c) The Memorandum and the Article of Association
(d) List of working directors
Ans. (c)
27. Consider the following statements regarding Indian industries
1. Industrial modernization has not come up even in a modest way.
2. A support system and a regulatory framework have been developed so as to encourage and direct the industrial houses to modernize their plants.
3. Considerable advances have been made in the fields of managerial and technological skills in the country.
4. No effort has so far been made towards attaining the goal of self-reliance in the manufacture of consumer items.
Of these statements:
(a) 1 and 2 are correct
(b) 2 and 3 are correct
(c) 3 and 4 are correct
(d) 1 and 4 are correct
Ans. (b)
28. Which one of the following is a joint stock company as per Companies Act, 1956?
(a) A charitable trust
(b) A partnership firm with fixed capital
(c) A society with fixed reserve fund
(d) None of the above
Ans. (d)
FOREIGN TRADE (IMPORT& EXPORT)
29. Steps to be taken in a selling system include:
1. Receipt of order
2. Processing order
3. Shipment of merchandise
4. Accounting for sale
The correct chronological sequence of these steps is:
(a) 1, 4, 3. 2
(b) 1, 4, 2, 3
(c) 1, 2, 4, 3
(d) 1, 2, 3, 4
Ans. (c)
30. Which one of the following is not a commercial risk?
(a) Insolvency of the buyer
(b) New restrictions placed on import-export trade
(c) Damage to goods in transit
(d) Change in the exchange rate
Ans. (d)
INSURANCE (LIFE, FIRE, MARINE & GENERAL)
31. Match List-I with List-II and select the correct answer using the Code given below the list:
List-I List-II
(Some usages in trade & marine insurance) (Practical implication or name)
A. Ex- works contract 1. C.I.F.
B. Freight paid by Importer 2. Method of settlement of disputes
C. Force majeure 3. Minimum obligation for the exporter
D. Arbitration 4. Condition to be included in the contract if
natural calamities are to be covered
5. F O B contract
Code:
A B C D
(a) 3 5 2 1
(b) 1 2 3 4
(c) 1 2 4 3
(d) 3 5 4 2
Ans. (d)
32. The average clause in a fire policy states that the insured can get back:
(a) only that portion of the actual loss suffered as the sum insured bears to total value
(b) the entire amount of the total loss suffered
(c) the entire amount of partial loss suffered
(d) a fixed percentage of loss suffered
Ans. (a)
MANAGEMENT
33. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List-II
A. Span of control 1. The superior helps, through continuous guidance, the
subordinate to reach his goals
B. M.B.O. 2. Numerical limit of subordinates to be supervised by
an executive
C. M.B.E. 3. Subordinate remains accountable to his superior and
the superior has the authority to demand
accountability from his subordinate
D. Delegation of authority 4. The management will concern itself of and confine
its activities to those areas and operations where the
actual performance is short of the target
Code:
A B C D
(a) 1 2 3 4
(b) 1 2 4 3
(c) 2 1 3 4
(d) 2 1 4 3
Ans. (d)
34. According to Peter Principle, managers tend to:
(a) work late as they go higher up the hierarchy
(b) work even beyond their retirement age
(c) get promoted to the level of their incompetence
(d) loss their competence with successive promotions
Ans. (c)
35. Which of the following advantages could be derived from the use of Franking machine?
t. It saves time because of its speed
2. Valuable facts and figures can be obtained
3. It is very convenient to use
4. It ensures much greater accuracy
Select the correct answer using the Cod. given
below:
Code:
(a) 1 and 4
(b) 1 and 3
(c) l and 2
(d) 2 and 3
Ans. (b)
36. Consider the given structure of an organization:
Which one of the following is represented by the same?
(a) Druckers’ effective structure
(b) Span of effective control
(c) Functional form of organization
(d) General Manager’s view of the organization
Ans. (c)
37. According to Graicuna’s theory, total, number of relations among superiors and subordinates can be found by the formula:
(a) n (2 n + n + 1)
n
(b) n (2 n -1 + n -1)
2
(c) n (2 n -1 + n +1)
2
(d) n (2 n + n +1)
2
Ans. (d)
38. Which of the following pairs are correctly matched?
1. Henri Fayol — Administration Industrial et General
2. F.W. Taylor — The Functions of the Executive
3. Douglas McGregor — The Human side of Enterprise
4. Peter Drucker — Management: Tasks, Responsibilities and Practices
Select the correct answer using the Code given below:
Code:
(a) 1, 2, 3 and 4
(b) 3 and 4
(c) 2 and 4
(d) 1 and 3
Ans. (a)
39. Match List-I and List-II and select the correct answer using the Code given below the Lists:
List-I List-II
A. Line authority 1. Some people in an organization are vested with primary
source of authority
B. Staff authority 2. Some people in an organization have legitimate right to exert
influence on others
C. Functional authority 3. Some people in an organization lack independent, formal
authority
D. Formal authority 4. Some people have right to control activities of other
departments as they relate to specific staff
Code:
A B C D
(a) 1 2 3 4
(b) 2 4 3 1
(c) 1 3 4 2
(d) 2 3 4 1
Ans. (c)
40. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I (Names) List-II (Model)
A. Kurt Lewin 1. Action Research process model
B. H.J. Leavitt 2. Sequential profess model
C. Larry Greiner 3. System model
D. Floyd C. Mann 4. Three-step model
Codes:
A B C D
(a) 1 2 3 4
(b) 1 4 3 2
(c) 3 2 1 4
(d) 4 3 2 1
Ans. (c)
41. Understanding control does Not signify understanding:
(a) how one controls
(b) what is meant by control
(c) who controls
(d) what is controlled
Ans. (c)
42. Consider the following statements:
The social responsibility of business is to:
1. do a business as per the public policy
2. obey all the rules and regulations of the Government
3. make payment of the taxes imposed by the Government
4. provide not necessarily adequate but good quality of goods
Of these statements:
(a) 2 and 3 are correct
(b) 1 and 4 are correct
(c) 1, 2 and 3 are correct
(d) 1, 2, 3 and 4 are correct
Ans. (d)
43. In the process of controlling office management, certain steps are normally taken. These include:
1. analyzing the actual performance
2. finding out the reasons for discrepancies.
3. evaluating the performance
4. establishing the standards of work performance
The correct sequence in which these steps are usually taken is:
(a) 4, 1, 2, 3
(b) 1, 4, 2, 3
(c) 1, 4, 3, 2
(d) 4, 1, 3, 2
Ans. (d)
44. Which of the following constitute manpower planning?
1. Determining human resource requirements both quantitatively and qualitatively
2. Finding the source of talented individuals
3. Planning for the human resource, needs of an organization
4. Reaching out to the right source for procuring the right people
Select the correct answer using the Code given below:
Code:
(a) 1, 2 and (c) l and 3
(b) 2 and 3
(d) 1, 2, 3 and 4
Ans. (a)
45. Organization and methods aim at simplification of office procedures through:
(a) elimination of all unnecessary work, minimizing the number of forms and direct communication
(b) elaboration of specific work processes for better implementation
(c) discarding all the records and treating each work merit
(d) allowing existing procedures to continue without adding any new procedures or amendments.
Ans. (a)
46. Consider the following statements:
1. MBO is a control technique in which managers devote time only on the areas of deviation.
2. MBO integrates the individual with the organization, and the organization with the environment.
3. In MBO the control over people is shifted to control over operations.
4. The MBO principle must be accompanied in practice by the principle of critical-point control.
Of these statements:
(a) 1 and 2 are correct
(b) 2 and 3 are correct
(c) 3 and 4 are correct
(d) 1 and 4 are correct
Ans. (c)
47. Which of the following advantages accrue from vertical filing?
1. The system has universal application, as all types of papers and documents can be field
2. It provides ample scope for the expansion of the filling facility
3. It is comparatively a heap method
4. The papers are kept in a chronological order
Select the correct answer using the Code given below.
Code:
(a) 1 and 3
(b) 1 and 2
(c) 2, 3 and 4
(d) 1, 2, 3 and 4
Ans. (b)
48. Consider the following statements:
A strategic management piece comprises:
1. goal settling, strategy formulation, administration and strategic control
2. setting courses of action attaining objective, process of seeking key areas and strategy formulation
3. integrating the organization with culture
4. strategic planning and acting on these plans
Of these statements:
(a) 1, 2 and 3 are correct
(b) 2, 3 and 4 are correct
(c) 1, 2 and 4 are correct
(d) 1, 3 and 4 are correct.
Ans. (c)
49. Which one of the following may not necessarily be an advantage of co-ordination?
(a) Effective supervision
(b) Unity of direction
(c) Creative force
(d) Summarization of all management functions
Ans. (c)
COMPANY LAWS INCLUDING
SECRETARIAL PRACTICES
50.A qualified company Secretary is needed to be appointed as Secretary to a company only on the basis of the:
(a) business of the company
(b) paid up capital of the company
(c) location of the company
(d) listing of the company on any stock exchange
Ans. (b)
commerce multiple choice questions with answers
commerce multiple choice questions with answers
Commerce Multiple Choice Questions solved as a practice for exams
Multiple Choice Questions With Answers On Commerce
1. Rights issue refers to the shares issued to:
(a) Employees
(b) Public
(c) Existing directors
(d) None of the above
Ans. (d)
2. That portion of the state capital which can be called up only on the winding up of the company is the:
(a) Authorized capital
(b) Issued capital
(c) Subscribed capital
(d) Reserve capital
Ans. (d)
3. If vendor are issued fully paid shares of Rs. 80,000 in consi1eration of net assets of Rs. 60,000, then the balance of Rs. 20,000 will be:
(a) Debited to profit and loss account
(b) Debited to goodwill account
(c) Credited to capital reserve account
(d) Credited to share premium account.
Ans. (b)
RATIO ANALYSIS
4. Owner’s equity stands for:
(a) Fixed Assets minus Fixed Liabilities
(b) Fixed Assets minus Current Liabilities
(c) Current Assets minus Fixed Liabilities
(d) Total Assets minus Total liabilities
Ans. (d)
5. Match List-I with List-II and select the correct answer:
List-I List-II
A. G.P. Ratio 1. Convention of conservatism
B. Cash Budget 2. Profitability
C. EOQ 3. Inventory Management
D. Provision for Bad debts 4. Management of Liquid Assets
Codes:
A B C D
(a) 2 4 1 3
(b) 4 2 3 1
(c) 4 2 I 3
(d) 2 4 3 1
Ans. (d)
6. Given that the current ratio is 2:1, if the net working capital is Rs. 60,600, then the amount of current liabilities would be:
(a) Rs. 30,300
(b) Rs. 60,600
(c) Rs. 1, 21,000
(d) Rs. 90,900
Ans. (b)
7. Project Engineering Ltd. has an adverse current ratio which one of the following would improve this ratio?
(a) Sale of fixed assets for cash
(b) Collection of some of the current accounts receivable
(c) Use of cash to pay off some long term debts
(d) Collection from sundry debtors
Ans. (a)
FUNDS FLOW STATEMENT
8. XYZ Ltd. incurs a net loss of Rs. 5,000 during are accounting years. Depreciation for the relevant year amount to Rs. 1000, preliminary expenses written off during the accounting years is Rs. 3,000 and a loss of Rs. 4,000 is due to sale of plant and machinery. Based on this data, found from operation would amount to:
(a) Rs. 3,000
(b) Rs. 2,000
(c) Rs. 5,000
(d) Rs. 4,000
Ans. (a)
AUDITING
9. Auditors of a company have to report to the:
(a) Board of Director
(b) Managing Director
(c) Institutional Investors
(d) Shareholders at the annual general meeting
Ans. (d)
10. Special Audit can be ordered by:
(a) preference shareholders
(b) the central Government
(c) SEBI
(d) debenture holders
Ans. (b)
11. System of internal check is said to exist in an organization when:
(a) an employee is specifically deputed to check the work of another employee
(b) the departmental head checks the works of his subordinate
(c) some outside experts check the work of employees
(d) another employee of the same department checks the work of an employee in routine office procedure.
Ans. (d)
12. Internal Auditor is appointed by the:
(a) shareholders of the company
(b) Statutory auditor
(c) Institute of internal Auditors of India
(d) Board of Directors of the Company
Ans. (d)
13. Which one of the following is true of the position of an auditor regarding the system of internal check in the organization?
(a) He should acquaint himself with the system of internal check
(b) He should monitor and supervise the system of internal check
(c) He himself should lay down the system of internal check
(d) He has nothing to do with the system of internal check
Ans. (b)
14. A continuous audit is most suitable where the:
(a) transactions are few but complicated
(b) there is no urgency to finalize the accounts on a particular date
(c) internal audit work is being carried On in a satisfactory manner
(d) system of internal check in operation is not satisfactory
Ans. (d)
15. Management audit is:
(a) an independent appraisal of the total management process
(b) a statutory requirement
(c) an investigation into the conduct of direction
(d) an independent appraisal of competitiveness of business
Ans. (a)
16. Management audit is conducted by:
(a) the statutory auditors
(b) government auditors
(c) cost auditors
(d) none of the above
Ans. (d)
17. The auditor has a right to ask for information and
explanation from the:
(a) past auditor of the company
(b) directors of the company
(c) officers of the company
(d) internal auditors of the company
Ans. (b), (c)
18. Working papers which contain a record of the audit works are the property of the:
(a) company
(b) auditor
(c) Registrar of companies
(d) Government of India
Ans. (b)
19. The first Auditors of a company are appointed by the:
(a) Registrar of Companies
(b) shareholders of the Company
(c) Promoters of the Company
(d) Board of Director of the Company
Ans. (d)
20. Sampling is used in the case of:
(a) collection of debts by the accountant
(b) test checks by the auditor
(c) supervision by the works manager
(d) checking pass book entries by the accountant
Ans. (b)
21. In the case of audit of Statutory Report, an auditor is expected to give his report on the:
(a) numbers of shares allotted, amount received in cash and summarized Receipts and Payments account
(b) authorized capital, subscribed capital and paid up capital
(c) Profit and loss account, Balance sheet and director’s report
(d) Directors’ qualification shares, Calls in arrears and Calls in Advance
Ans. (a)
CAPITAL MARKET (STOCK. EXCHANGE)
22. Match List-I (Activity) with list-II (Associated organization) and select the correct answer:
List-I List-II
A. Mutual fund 1. Stock Exchange
B. Public issue of capital 2. Assets Management Company
C. Forward Trading 3. Merchant Banking
D. Option Pricing 4. Forex Market
Codes:
A B C D
(a) 3 2 4 1
(b) 3 2 1 4
(c) 2 3 1 4
(d) 2 3 4 1
Ans. (d)
23. The scope of MRTP Act, since 1992, has been confined only to the regulation of:
(a) consumer monopolies
(b) monopolistic trade practices
(c) restrictive and unfair trade practices
(d) restrictive trade practices
Ans. (d)
24. EXIM bank can be described as a:
(a) non-banking financial company
(b) commercial bank
(c) non-banking non financial company
(d) scheduled bank
Ans. (a)
BUSINESS ORGANISATION AND COMBINATION
25. One of the consequences of non-registration of a partnership firm is that:
(a) a partner cannot such the other partner to enforce a right arising from a contract
(b) the partner of such a firm cannot sue third parties
(c) third parties cannot sue the firm for claims exceeding Rs. 100
(d) The official Assignee or Receiver will have no power on the property of the dissolved firm
Ans. (a)
26. Consider the following rights:
1. Right to take part in the business
2. Right to share profits
3. Right to interest on advances in excess of capital
4. Right to expel a non-cooperative partner
The legal rights of a partner would include:
(a) 1 and 2
(b) 2 and 4
(c) 1, 2 and 3
(d) 1, 3 and 4
Ans. (c)
27. Match List-I with List-II and select the correct answer.
List-I List-II
(Type of combination) (Illustrations)
A. Association 1.Cartel
B. Federation 2. Chamber of commerce and Industry
C. Partial consolidation 3.Holding company
D. Complete consolidation 4.Amalgamation
Codes:
A B C D
(a) 2 1 3 4
(b) 1 2 3 4
(c) 2 1 4 3
(d) 1 2 4 3
Ans. (a)
28. Which one of the following is an example of a company incorporated by a Special Act of Parliament?
(a) Life insurance Corporation of India
(b) Indian Oil Corporation
(c) State Trading Corporation of India
(d) Bharat Heavy Electricals Limited
Ans. (a)
29. Match List-I with List-II and select the correct answer:
List-I List-II
A. Contract of Uberrimae Fidei 1. Public Utility concern
B. Right of Eminent Domain 2. Co-operative society
C. Statement in lieu of prospectus 3. Partnership
D. System of ‘one man one vote’ 4. Sole trading concern
5. Public limited company
Codes
A B C D
(a) 1 3 5 4
(b) 3 1 5 2
(c) 3 2 1 4
(d) 1 2 5 3
Ans. (b)
30. Integration of various units of similar character producing similar products or engaged in the same sphere of business activity under a single form of management and control is called:
(a) vertical combination
(b) horizontal combination
(c) circular or mixed combination
(d) lateral or allied combination
Ans. (b)
FOREIGN TRADE (IMPORT & EXPORT)
31. Match List-I (Document) with List-II (Where used) and select the correct answer:
List-I List-II
A. Shipping Bill 1. To certify the country of origin of goods
B. Bill of Lading 2. For having loaded the cargo in the ship
C. Consular invoice 3. To Transport cargo by ship
D. Packing slip 4. To identify the cargo in transit
Codes:
A B C D
(a) 2 3 4 1
(b) 2 3 1 4
(c) 3 2 1 4
(d) 3 2 4 I
Ans. (c)
32. In the context of foreign trade, the CIF cost may be obtained by:
(a) adding freight and marine insurance premium to the FOB price
(b) deducting freight and marine insurance premium from the FOB price
(c) adding customs duties, freight and marine insurance premium to the cost
(d) deducting customs duties, freight and marine insurance premium from the price
Ans. (a)
INSURANCE (LIFE, FIRE,
MARINE & GENERAL)
33. Paid up value is payable on a life insurance policy:
(a) on. the maturity of the policy
(b) when the policy lapses
(c) when the policy is surrendered
(d) on maturity or expiry whichever is earlier
Ans. (a)
MANAGEMENT
34. Setting the mission which encompasses objectives, policies and goals is known as:
(a) operational planning
(b) strategic planning
(c) tactical planning
(d) contingency planning
Ans. (b)
35. Which one of the following statements is correct?
(a) Planning and controlling are essentially one and the same
(b) Controlling is a part of the planning process
(c) Controlling is a substitute for planning
(d) A control process is meaningless without pre-set goals
Ans. (d)
36. When jobs are broadened in scope and complexity so that the person’s overall area of job responsibility increases, it is a case of:
(a) job rotation
(b) job enrichment
(c) job specification
(d) job enlargement
Ans. (b)
37. Consider the following statements:
Planning involves:
1. Forecasting
2. Choice among alternative courses of action
3. Wishful thinking
4. Decision only by production manager
Of these statements:
(a) 1, 2, 3 and 4 are correct
(b) 1, 3 and 4 are correct
(c) 1 and 2 are correct
(d) 1, 2 and 3 are correct
Ans. (d)
38. Techniques of managerial control are useful in:
(a) selection of Plant location
(b) identifying appropriate technology
(c) profit Planning
(d) conducting shareholder’s meetings
Ans. (b)
39. Motivational process and not the motivators as such is associated with:
(a) need of Hierarchy theory
(b) two-factor theory
(c) ERG theory
(d) expectancy theory
Ans. (a)
40. “Perceived equity in reward results in satisfaction”. Which one of the following motivation theories takes this into account?
(a) Porter and Lawler Model
(b) Victor Varoom’s Expectancy Model
(c) F.W. Taylor’s incentive scheme
(d) Herzberg’s two-Factor Theory
Ans. (a)
41. One of the steps that may be required for achieving effective coordination is:
(a) reporting on performance and taking remedial measures
(b) training in leadership and supervisory abilities of controllers of activity
(c) transmission of messages in a full line communication channel
(d) making an honest appraisal and initiating rewards/punishments
Ans. (c)
42. Minimum wages are fixed by the:
(a) trade unions
(b) employers
(c) state governments
(d) courts of law
Ans. (c)
43. An important aspect of control is that the:
(a) manager motivates his subordinates to give better performance
(b) manager sets an effective management information system
(c) plans are checked before implementation against predetermined measures of performance
(d) performance is checked against predetermined standards
Ans. (d)
44. Consider the following steps:
1. Analysis of variances
2. Initiating corrective action
3. Measurement of actual performance
4. Establishment of standards
The correct sequence of these steps in process of control is
(a) 4, 3, 2, l
(b) 3, 4, 2, 1
(c) 4, 3, 1, 2
(d) 3, 4, 1, 2
Ans. (c)
45. According to the principle of “Span of control” there is:
(a) a tendency to overload supervisors with too much of works
(b) a limit to the number of subordinates a supervisor can effectively supervise
(c) no limit to the number of subordinate a supervisor can supervise
(d) a limit to delegation of authority to the subordinate
Ans. (b)
46. Establishment of management by objectives presupposes:
(a) that limits of authority are not defined
(b) that the employees are provided with result expected
(c) Unlimited freedom to operate in the assigned task
(d) Unlimited freedom to set goals
Ans. (b)
47. Each subordinate should have only one superior whose command he has to obey.
This is known as:
(a) acalar principle
(b) exception principle
(c) unity of command principle
(d) authority responsibility principle
Ans. (c)
48. Consider the following elements:
1. Indicators
2. Objectives
3. Controls
4. Key result Areas
5. Roles and Mission
6. Action Plans
Their correct sequence in Management by Objectives and Result is:
(a) 5, 4, 2, 1, 3, 6
(b) 4, 5, 2, 1, 3, 6
(c) 5, 4, 1, 2, 6, 3
(d) 4, 5, 1, 2, 6, 3
Ans. (d)
49. Delegation of authority takes place when a manager thinks that:
(a) the job is too difficult and hazardous
(b) the job requires the high skill that he does not possess
(c) he cannot look after all the demanding tasks by himself
(d) he needs to punish his subordinate
Ans. (c)
50. Brain storming is used by the management for:
(a) work allocation on the shop floor
(b) generating alternative for problem solving
(c) the promotion of research and development
(d) training employees
Ans. (b)
Commerce Multiple Choice Questions solved as a practice for exams
Multiple Choice Questions With Answers On Commerce
1. Rights issue refers to the shares issued to:
(a) Employees
(b) Public
(c) Existing directors
(d) None of the above
Ans. (d)
2. That portion of the state capital which can be called up only on the winding up of the company is the:
(a) Authorized capital
(b) Issued capital
(c) Subscribed capital
(d) Reserve capital
Ans. (d)
3. If vendor are issued fully paid shares of Rs. 80,000 in consi1eration of net assets of Rs. 60,000, then the balance of Rs. 20,000 will be:
(a) Debited to profit and loss account
(b) Debited to goodwill account
(c) Credited to capital reserve account
(d) Credited to share premium account.
Ans. (b)
RATIO ANALYSIS
4. Owner’s equity stands for:
(a) Fixed Assets minus Fixed Liabilities
(b) Fixed Assets minus Current Liabilities
(c) Current Assets minus Fixed Liabilities
(d) Total Assets minus Total liabilities
Ans. (d)
5. Match List-I with List-II and select the correct answer:
List-I List-II
A. G.P. Ratio 1. Convention of conservatism
B. Cash Budget 2. Profitability
C. EOQ 3. Inventory Management
D. Provision for Bad debts 4. Management of Liquid Assets
Codes:
A B C D
(a) 2 4 1 3
(b) 4 2 3 1
(c) 4 2 I 3
(d) 2 4 3 1
Ans. (d)
6. Given that the current ratio is 2:1, if the net working capital is Rs. 60,600, then the amount of current liabilities would be:
(a) Rs. 30,300
(b) Rs. 60,600
(c) Rs. 1, 21,000
(d) Rs. 90,900
Ans. (b)
7. Project Engineering Ltd. has an adverse current ratio which one of the following would improve this ratio?
(a) Sale of fixed assets for cash
(b) Collection of some of the current accounts receivable
(c) Use of cash to pay off some long term debts
(d) Collection from sundry debtors
Ans. (a)
FUNDS FLOW STATEMENT
8. XYZ Ltd. incurs a net loss of Rs. 5,000 during are accounting years. Depreciation for the relevant year amount to Rs. 1000, preliminary expenses written off during the accounting years is Rs. 3,000 and a loss of Rs. 4,000 is due to sale of plant and machinery. Based on this data, found from operation would amount to:
(a) Rs. 3,000
(b) Rs. 2,000
(c) Rs. 5,000
(d) Rs. 4,000
Ans. (a)
AUDITING
9. Auditors of a company have to report to the:
(a) Board of Director
(b) Managing Director
(c) Institutional Investors
(d) Shareholders at the annual general meeting
Ans. (d)
10. Special Audit can be ordered by:
(a) preference shareholders
(b) the central Government
(c) SEBI
(d) debenture holders
Ans. (b)
11. System of internal check is said to exist in an organization when:
(a) an employee is specifically deputed to check the work of another employee
(b) the departmental head checks the works of his subordinate
(c) some outside experts check the work of employees
(d) another employee of the same department checks the work of an employee in routine office procedure.
Ans. (d)
12. Internal Auditor is appointed by the:
(a) shareholders of the company
(b) Statutory auditor
(c) Institute of internal Auditors of India
(d) Board of Directors of the Company
Ans. (d)
13. Which one of the following is true of the position of an auditor regarding the system of internal check in the organization?
(a) He should acquaint himself with the system of internal check
(b) He should monitor and supervise the system of internal check
(c) He himself should lay down the system of internal check
(d) He has nothing to do with the system of internal check
Ans. (b)
14. A continuous audit is most suitable where the:
(a) transactions are few but complicated
(b) there is no urgency to finalize the accounts on a particular date
(c) internal audit work is being carried On in a satisfactory manner
(d) system of internal check in operation is not satisfactory
Ans. (d)
15. Management audit is:
(a) an independent appraisal of the total management process
(b) a statutory requirement
(c) an investigation into the conduct of direction
(d) an independent appraisal of competitiveness of business
Ans. (a)
16. Management audit is conducted by:
(a) the statutory auditors
(b) government auditors
(c) cost auditors
(d) none of the above
Ans. (d)
17. The auditor has a right to ask for information and
explanation from the:
(a) past auditor of the company
(b) directors of the company
(c) officers of the company
(d) internal auditors of the company
Ans. (b), (c)
18. Working papers which contain a record of the audit works are the property of the:
(a) company
(b) auditor
(c) Registrar of companies
(d) Government of India
Ans. (b)
19. The first Auditors of a company are appointed by the:
(a) Registrar of Companies
(b) shareholders of the Company
(c) Promoters of the Company
(d) Board of Director of the Company
Ans. (d)
20. Sampling is used in the case of:
(a) collection of debts by the accountant
(b) test checks by the auditor
(c) supervision by the works manager
(d) checking pass book entries by the accountant
Ans. (b)
21. In the case of audit of Statutory Report, an auditor is expected to give his report on the:
(a) numbers of shares allotted, amount received in cash and summarized Receipts and Payments account
(b) authorized capital, subscribed capital and paid up capital
(c) Profit and loss account, Balance sheet and director’s report
(d) Directors’ qualification shares, Calls in arrears and Calls in Advance
Ans. (a)
CAPITAL MARKET (STOCK. EXCHANGE)
22. Match List-I (Activity) with list-II (Associated organization) and select the correct answer:
List-I List-II
A. Mutual fund 1. Stock Exchange
B. Public issue of capital 2. Assets Management Company
C. Forward Trading 3. Merchant Banking
D. Option Pricing 4. Forex Market
Codes:
A B C D
(a) 3 2 4 1
(b) 3 2 1 4
(c) 2 3 1 4
(d) 2 3 4 1
Ans. (d)
23. The scope of MRTP Act, since 1992, has been confined only to the regulation of:
(a) consumer monopolies
(b) monopolistic trade practices
(c) restrictive and unfair trade practices
(d) restrictive trade practices
Ans. (d)
24. EXIM bank can be described as a:
(a) non-banking financial company
(b) commercial bank
(c) non-banking non financial company
(d) scheduled bank
Ans. (a)
BUSINESS ORGANISATION AND COMBINATION
25. One of the consequences of non-registration of a partnership firm is that:
(a) a partner cannot such the other partner to enforce a right arising from a contract
(b) the partner of such a firm cannot sue third parties
(c) third parties cannot sue the firm for claims exceeding Rs. 100
(d) The official Assignee or Receiver will have no power on the property of the dissolved firm
Ans. (a)
26. Consider the following rights:
1. Right to take part in the business
2. Right to share profits
3. Right to interest on advances in excess of capital
4. Right to expel a non-cooperative partner
The legal rights of a partner would include:
(a) 1 and 2
(b) 2 and 4
(c) 1, 2 and 3
(d) 1, 3 and 4
Ans. (c)
27. Match List-I with List-II and select the correct answer.
List-I List-II
(Type of combination) (Illustrations)
A. Association 1.Cartel
B. Federation 2. Chamber of commerce and Industry
C. Partial consolidation 3.Holding company
D. Complete consolidation 4.Amalgamation
Codes:
A B C D
(a) 2 1 3 4
(b) 1 2 3 4
(c) 2 1 4 3
(d) 1 2 4 3
Ans. (a)
28. Which one of the following is an example of a company incorporated by a Special Act of Parliament?
(a) Life insurance Corporation of India
(b) Indian Oil Corporation
(c) State Trading Corporation of India
(d) Bharat Heavy Electricals Limited
Ans. (a)
29. Match List-I with List-II and select the correct answer:
List-I List-II
A. Contract of Uberrimae Fidei 1. Public Utility concern
B. Right of Eminent Domain 2. Co-operative society
C. Statement in lieu of prospectus 3. Partnership
D. System of ‘one man one vote’ 4. Sole trading concern
5. Public limited company
Codes
A B C D
(a) 1 3 5 4
(b) 3 1 5 2
(c) 3 2 1 4
(d) 1 2 5 3
Ans. (b)
30. Integration of various units of similar character producing similar products or engaged in the same sphere of business activity under a single form of management and control is called:
(a) vertical combination
(b) horizontal combination
(c) circular or mixed combination
(d) lateral or allied combination
Ans. (b)
FOREIGN TRADE (IMPORT & EXPORT)
31. Match List-I (Document) with List-II (Where used) and select the correct answer:
List-I List-II
A. Shipping Bill 1. To certify the country of origin of goods
B. Bill of Lading 2. For having loaded the cargo in the ship
C. Consular invoice 3. To Transport cargo by ship
D. Packing slip 4. To identify the cargo in transit
Codes:
A B C D
(a) 2 3 4 1
(b) 2 3 1 4
(c) 3 2 1 4
(d) 3 2 4 I
Ans. (c)
32. In the context of foreign trade, the CIF cost may be obtained by:
(a) adding freight and marine insurance premium to the FOB price
(b) deducting freight and marine insurance premium from the FOB price
(c) adding customs duties, freight and marine insurance premium to the cost
(d) deducting customs duties, freight and marine insurance premium from the price
Ans. (a)
INSURANCE (LIFE, FIRE,
MARINE & GENERAL)
33. Paid up value is payable on a life insurance policy:
(a) on. the maturity of the policy
(b) when the policy lapses
(c) when the policy is surrendered
(d) on maturity or expiry whichever is earlier
Ans. (a)
MANAGEMENT
34. Setting the mission which encompasses objectives, policies and goals is known as:
(a) operational planning
(b) strategic planning
(c) tactical planning
(d) contingency planning
Ans. (b)
35. Which one of the following statements is correct?
(a) Planning and controlling are essentially one and the same
(b) Controlling is a part of the planning process
(c) Controlling is a substitute for planning
(d) A control process is meaningless without pre-set goals
Ans. (d)
36. When jobs are broadened in scope and complexity so that the person’s overall area of job responsibility increases, it is a case of:
(a) job rotation
(b) job enrichment
(c) job specification
(d) job enlargement
Ans. (b)
37. Consider the following statements:
Planning involves:
1. Forecasting
2. Choice among alternative courses of action
3. Wishful thinking
4. Decision only by production manager
Of these statements:
(a) 1, 2, 3 and 4 are correct
(b) 1, 3 and 4 are correct
(c) 1 and 2 are correct
(d) 1, 2 and 3 are correct
Ans. (d)
38. Techniques of managerial control are useful in:
(a) selection of Plant location
(b) identifying appropriate technology
(c) profit Planning
(d) conducting shareholder’s meetings
Ans. (b)
39. Motivational process and not the motivators as such is associated with:
(a) need of Hierarchy theory
(b) two-factor theory
(c) ERG theory
(d) expectancy theory
Ans. (a)
40. “Perceived equity in reward results in satisfaction”. Which one of the following motivation theories takes this into account?
(a) Porter and Lawler Model
(b) Victor Varoom’s Expectancy Model
(c) F.W. Taylor’s incentive scheme
(d) Herzberg’s two-Factor Theory
Ans. (a)
41. One of the steps that may be required for achieving effective coordination is:
(a) reporting on performance and taking remedial measures
(b) training in leadership and supervisory abilities of controllers of activity
(c) transmission of messages in a full line communication channel
(d) making an honest appraisal and initiating rewards/punishments
Ans. (c)
42. Minimum wages are fixed by the:
(a) trade unions
(b) employers
(c) state governments
(d) courts of law
Ans. (c)
43. An important aspect of control is that the:
(a) manager motivates his subordinates to give better performance
(b) manager sets an effective management information system
(c) plans are checked before implementation against predetermined measures of performance
(d) performance is checked against predetermined standards
Ans. (d)
44. Consider the following steps:
1. Analysis of variances
2. Initiating corrective action
3. Measurement of actual performance
4. Establishment of standards
The correct sequence of these steps in process of control is
(a) 4, 3, 2, l
(b) 3, 4, 2, 1
(c) 4, 3, 1, 2
(d) 3, 4, 1, 2
Ans. (c)
45. According to the principle of “Span of control” there is:
(a) a tendency to overload supervisors with too much of works
(b) a limit to the number of subordinates a supervisor can effectively supervise
(c) no limit to the number of subordinate a supervisor can supervise
(d) a limit to delegation of authority to the subordinate
Ans. (b)
46. Establishment of management by objectives presupposes:
(a) that limits of authority are not defined
(b) that the employees are provided with result expected
(c) Unlimited freedom to operate in the assigned task
(d) Unlimited freedom to set goals
Ans. (b)
47. Each subordinate should have only one superior whose command he has to obey.
This is known as:
(a) acalar principle
(b) exception principle
(c) unity of command principle
(d) authority responsibility principle
Ans. (c)
48. Consider the following elements:
1. Indicators
2. Objectives
3. Controls
4. Key result Areas
5. Roles and Mission
6. Action Plans
Their correct sequence in Management by Objectives and Result is:
(a) 5, 4, 2, 1, 3, 6
(b) 4, 5, 2, 1, 3, 6
(c) 5, 4, 1, 2, 6, 3
(d) 4, 5, 1, 2, 6, 3
Ans. (d)
49. Delegation of authority takes place when a manager thinks that:
(a) the job is too difficult and hazardous
(b) the job requires the high skill that he does not possess
(c) he cannot look after all the demanding tasks by himself
(d) he needs to punish his subordinate
Ans. (c)
50. Brain storming is used by the management for:
(a) work allocation on the shop floor
(b) generating alternative for problem solving
(c) the promotion of research and development
(d) training employees
Ans. (b)
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