commerce test papers

commerce test papers
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1. Which one of the following is the oldest form of organization?

(a) Functional Organization

(b) Line Organization

(c) Line and staff organization

(d) Departmentation

Ans. (b)

2. Which one of the following is the latest and most reliable form of communication?

(a) Speed post

(b) Telex

(c) Fax

(d) E-Mail

Ans. (d)

3. Douglas McGregor made five basic assumptions about people in his theory. First four assumptions are:

1. People are ambitious

2. They seek responsibility

3. They are dynamic

4, They recognize and accept organizational goals

The fifth assumption is:

(a) people are always cooperative and cheerful at their work

(b) People are not self-centered

(c) People are by nature resistant to change

(d) People are intelligent and possess creative potential

Ans. (a)

4. O & M in office management refers to:

(a) operating and management planning

(b) organization and management

(c) office orders and manuals

(d) none of the above

Ans. (d)

5. Which one of the following pairs is correctly matched?

(a) Manual of office procedures : in its absence the work load cannot be distributed

equitably and full day’s work cannot be assigned to

different employees.

(b) Methods study : determine the shape of things pertaining to office

activities and provides a broad guide to the course of

future operation.

(c) Organizing : undertaken by the office manager in respect of office

services only.

(d) Office policies : compiled for the information and guidance of all office

personnel.

Ans. (d)

6. To card indexing system in improvement over simple indexing system?

(a) Yes, because it facilitates location of any name a subject with the minimum of searching as the cards are arranged in an alphabetical order

(b) Yes, because the cards can be arranged in a particular order and the order cannot be changed at will

(c) No, because the cards wanted for reference cannot be taken out without holding up the works of recording of information as the other cards are left behind

(d) No, because the system has a limited capacity for expansion as the number of drawers cannot be increased as desired.

Ans. (b)

7. In the case of a deemed public limited company, the maximum number of members is restricted to:

(a) 10

(b) 50

(c) 100

(d) 200

Ans. (b)

8. Which one of the following types of registered companies will be the most appropriate for the promotion of science, culture, religion etc.?

(a) Company limited by share

(b) Company limited by Guarantee

(c) Unlimited company

(d) Government company

Ans. (b)

9. A joint stock company’s letterhead must by law, have the address of the:

(a) Managing Director

(b) Factory

(c) Registered office

(d) Head office

Ans. (c)

10. Which of the following are stated in the objects clause of Memorandum of Association of a Public Limited Company?

1. General and specific objects

2. Main objects

3. Secondary objects

4. Objects incidental to main objects

5. Other objects

(a) 2, 4 and 5

(b) 1, 3 and 5

(c) 2, 3 and 4

(d) l, 2, and 4

Ans. (a)

11. Who among the following has no right to speak at the AGM?

(a) Chairman of the company

(b) Whole time director of the company

(c) Proxy holder

(d) None of the above, as everybody has a right to speak at the AGM

Ans. (c)

12. Which one of the following is the correct sequence of steps in the formation and commencement of business of a public limited Company?

(a) Memorandum, issue of Prospectus, Filing of Prospectus, Minimum subscription.

(b) Memorandum, Minimum subscription, Filing of Prospectus, Issue of Prospectus

(c) Memorandum, Filing of prospectus, Issue of Prospectus, Minimum subscription.

(d) Memorandum, Issue of. Prospectus, Minimum subscription, filing of prospectus.

Ans. (c)

13. Those preference shares which do not enjoy the right to share additional profits come under the category of:

(a) Irredeemable Preference Shares

(b) Participating Preference Shares

(c) Non-cumulative Preference Shares

(d) Non-participating Preference Shares

Ans. (d)

14. Clauses in the Articles of Association can be altered by:

(a) a special resolution of the Board of Directors

(b) an ordinary resolution in the general meeting

(c) a special resolution in the general meeting

(d) obtaining permission from the Central Government

Ans. (c)

15. Under the Companies Act, 1956, the financial years of a company:

(a) must be exactly 12 months

(b) must not be less than 12 months

(c) may be more or less than a calendar year, but its shall not exceed 15 months

(d) may be more or less than a calendar year, but it shall not exceed 20 months.

Ans. (c)

16. Blue chip security is one which:

(a) given assured high returns

(b) almost every investor is willing to buy

(c) offers the highest liquidity and sells always much above par

(d) is issued by the reputed and profit making companies.

Ans. (c)

17. ‘Doctrine of constructive Notice’ is the notice:

(a) of alteration of ‘objects clause’ to the Registrar of companies

(b) of change of name to the members of the company

(c) to the public as to the issue of prospectus

(d) to outsiders dealing with the company as to the contents of the Memorandum and Articles of Association

Ans. (d)

18. Under the guidelines of SEBI, pricing of first capital issues should be on par value only in the case of:

(a) an existing company with no past reserves

(b) a private company converting into a public company

(c) a new company promoted by an existing company

(d) a new company with no connections with other companies

Ans. (d)

19. Which of the following statements are correct?

I. A mirror is not competent to become a member of a company.

2. A firm cannot be treated as a member of a company

3. A foreigner may become*member of a company

4. A partnership firm cannot hold shares in a company in the individual il5ames of partners as joint holders

(a) l and 2

(b) 2, 3 and 4

(c) 1, 3 and 4

(d) 1, 2 and 3

Ans. (d)

20. In the case of a company making a public issue, ‘Minimum Subscription’ must provide for which of the following?

1. Investments to be made

2. Preliminary expenses

3. Repayment of money borrowed for preliminary expenses

4. Working capital

5. Any other expenditure if it is specifically stated

(a) 1, 2, 3, 4 and 5

(b) l, 3 and 5

(c) 1, 2 and 4

(d) 2, 3, 4 and 5

Ans. (d)

21. A meeting of the Board of Director must be held at least once every

(a) two months

(b) four months and at least three such mt tings must be held every year

(c) three months and at least four such meeting must be held every year

(d) six months

Ans. (c)

22. The power to make calls on share can be exercised by the:

(a) shareholders of the company in general meeting

(b) Company Secretary on his own

(c) Board of Directors of the company

(d) Managing Directors of the company

Ans. (c)

23. One of the important powers that must be exercised by the Board of Directors and cannot be delegated to a committee or any of the managerial personnel is the power to:

(a) issue debentures

(b) take decisions on investment of company funds

(c) make loans

(d) declare dividends

Ans. (a)

24. The annual general meeting can be called by the:

(a) Company secretary

(b) Board of Directors

(c) Managing Directors

(d) Non-executive directors of the company

Ans. (a)

25. Under the Companies Act, 1956, the Balance Sheet and Profit and Loss Account of a company are required to be signed by the manager or the secretary of the company and by how many directors including the Managing Director?

(a) One

(b) Two

(c) Three

(d) All

Ans. (b)

26. A law graduate with specialization is company can be appointed as company secretary of a company having a paid up capital of:

(a) above one crore rupees

(b) above two crores rupees

(c) above five crores rupees

(d) None of the above

Ans. (d)

27. The fundamental accounting equation:

Assets = Equities, is the formal expression of:

(a) Dual aspect concept

(b) Matching concept

(c) Going concern concept

(d) Money Measurement concept

Ans. (a)

28. Which of the following pairs are correctly matched?

1. Business entity : Accounting standard

2. Stock Valuation : Consistency

3. Capital : Drawings

4. Going concern : Assumption

Select the correct answer using the codes given below Codes:

(a) 2, 3 and 4

(b) 1, 2, and 3

(c) l, 2 and 4

(d) 1, 3 and 4

Ans. (c)

29. Money Measurement concept of Accounting Theory is based on the assumption that the value of money will:

(a) remain constant

(b) fluctuate

(c) decrease

(d) go up

Ans. (a)

30. Given that:

M = Opening Stock

N Purchase

O = Closing Stock

P = Cost of goods sold

The correct equation will be:

(a) M-N0+P

(b) M-OP-O

(c) M—O = P—N

(d) P—M = N + O

Ans. (c)

31. An asset is purchased for Rs. 50,000 on which depreciation is to be provided annually according to the Straight Line Method. The useful life of the asset is 10 years and the residual value is Rs. 10,000. The rate of depreciation is:

(a) 20%

(b) 18%

(c) 10%

(d) 8%

Ans. (c)

32. An asset in never reduced to zero in the:

(a) Fixed installment method

(b) Reducing balance method

(c) Annuity Method

(d) Sum of year’s method

Ans. (b)

33. The main objective of providing depreciation is to:

(a) Create secret Reserves

(b) Reduce the book value of assets

(c) Value the assets properly

(d) Allocate cost of the assets

Ans. (c)

34. Revaluation method of depreciation is generally used in the case of:

(a) Plant

(b) Land and building

(c) Stock

(d) Loose tools

Ans. (d)

35. Rate of consumption of materials is one of the most important factors while fixing:

(a) maximum level

(b) maximum level and recorder level

(c) minimum level and reorder level

(d) maximum level, minimum level and re-order level

Ans. (d)

36. During a period of declining prices, which one of the following inventory pricing methods will result in lower cost of goods scold?

(a) FIFO

(b) LIFO

(c) Simple average method

(d) Inflated price method

Ans. (b)

37. A sum of Rs. 50,000 was spent by a factory in overhauling its existing plant and machinery and it enhanced its working life by five years. The aforesaid expenditure is

(a) capital expenditure

(b) partly capital and partly revenue expenditure

(c) revenue loss

(d) deferred revenue expenditure

Ans. (a)

38. Which one of the following is NOT a capital expenditure?

(a) Legal expenses incurred in raising a debenture loan

(b) Compensation paid to a dismissed employee

(c) Brokerage paid to the broker at the time or purchase of land

(d) Expenses for pulling down an old structure

Ans. (b)

39. A, B, C ‘were partners sharing profits in the proportion of 1/2, 1/3 and 1/6 respectively. On 31st March, 1997 their capital stood as follows:

A = Rs. 4, 00,000/-

B = Rs. 3, 00,000/-

C Rs. 2, 50,000/-

A sum of Rs. 1, 20,000, also appeared as reserve fund in their balance sheet on this date. B retires on this date when the goodwill of the firm was valued at Rs. 1, 80,000/-

Profit and loss adjustment account prepared on that date without taking goodwill and reserve fund into consideration showed a net profit of Rs. 28,500/-. The net amount payable to B will be:

(a) Rs. 3, 82,500/-

(b) Rs. 4, 09,500/-

(c) Rs. 3, 63,800/-

(d) Rs. 4, 04,000/-

Ans. (b)

40. A and B are partners sharing profits and losses in the ratio of 3:1. They have agreed to admit C into the partnership firm. C is given 1/4th share of future profits which he acquires in the ratio of 2: 1 from A and B. The new profit-sharing ratio would be:

(a) 4:3:1

(b) 7:2:3

(c) 3:1:7

(d) 7:3:2

Ans. (b)

41. On the death of a partner, the amount of joint life policy should be credited to the capital accounts of:

(a) all partners including the deceased partner in their profit-sharing ratio

(b) remaining partners in the new profit sharing ratio

(c) remaining partners equally

(d) all partners including the deceased partner in their capital ratio

Ans. (a)

42. X and Y are partners sharing profits in the ratio of 1:1. They admit Z for 1/5th share who contributed Rs. 25,000/- for his share of goodwill. The total, value of the goodwill of the firm will be:

(a) Rs. 25,000/-

(b) Rs. 50,000/-

(c) Rs. 1, 00,000/-

(d) Rs. 1, 25,000/-

Ans. (d)

43. For piecemeal distribution .of cash for return of capital among the partners on dissolution, the method adopted should ensure that the amount finally left unpaid i.e., the loss to be borne by the partners is in:

(a) profit-sharing ratio

(b) proportion to closing capital the time of dissolution

(c) equal proportion

(d) proportion to assets realized

Ans. (a)

44. According to the decision in Garner vs. Murray, in the absence of any agreement to the contrary, the deficiency of the insolvent partner must be borne by other solvent partners in:

(a) profit-sharing ratio

(b) capital ratio which stood after the dissolution of the firm

(c) capital ratio which stood before the dissolution of the firm

(d) equal proportion

Ans. (c)

45. In the absence of any contract to the contrary, capital profit arising on dissolution of a partnership firm is credited to the partners, capital account in:

(a) equal proportion

(b) capital ratio

(c) profit-sharing ratio

(d) proportion to assets realized

Ans. (a)

46. Match List—I (Balance sheet items) with List—Il (Classification) and select the correct answer using the Code given below the lists:

List-I List-II

A. Discount on debenture 1. Current liability

B. Forfeited shares account 2. Non-current asset

C. Income tax payable 3. Current asset

D. Debtors acceptance 4. Non-current liability

Code:

A B C D

(a) 2 4 1 3

(b) 4 2 3 1

(c) 2 4 3 1

(d) 4 2 1 3

Ans. (a)

47. Consider the following statements:

Secret reserves serve the purpose of:

1. enabling the directors to tide over unfavorable items

2. meeting exceptional losses

3. increasing the working capital

Of these statements:

(a) 1 and 2 are correct

(b) 2 and 3 are correct

(c) 1 and 3 are correct

(d) 1, 2 and 3 are correct

Ans. (d)

48. Profit prior to incorporation is an example of:

(a) revenue reserve

(b) secret reserve

(c) capital reserve

(d) general reserve

Ans. (c)

49. Outstanding wages is an item of:

(a) current asset

(b) current liability

(c) non-current asset

(d) non-current liability

Ans. (b)

50. Patents and copyrights fall under the category of:

(a) current assets

(b) liquid assets

(c) intangible assets

(d) nominal assets

Ans. (c)