Commerce Multiple Choice Questions For UPSC Civil Service Prelims

Commerce Multiple Choice Questions For UPSC Civil Service Prelims
Commerce Multiple Choice Questions for UPSC Civil Services (Preliminary)/ Public Service Commission Exams
UPSC Civil Services Preliminary Examination Solved MCQ Commerce

1. According to behavioral scientists, organization means the structure of:
(a) physical facilities
(b) tasks and relationships
(c) behaviour of the management with the working force
(d) attitude of workers with the management
Ans. (c)

2. Which one of the following styles of leadership is the most effective for a Job Order firm?
(a) Participative leadership
(b) Authoritarian leadership
(c) Transformational leadership
(d) Free-rein leadership
Ans. (d)

3. Which one of the following NOT a useful tool in decision making?
(a) Annual return
(b) Linear programming
(c) Sales forecasts
(d) Operation research
Ans. (b)

4. Among the following ‘change management’ methods, which one is the most appropriate when the employees are unwilling to accept change?
(a) Participative method .
(b) Directive method
(c) Leading by example
(d) Negative reinforcement
Ans. (a)

5. Impact of O & M is that:
(a) promotion possibility becomes restricted
(b) it leads to less scope for high salary and wages
(c) entire organization is streamlined
(d) work measurement is costly
Ans. (c)

6. In a group process, there are some forces favoring and some other forces opposing changes. As result, an equilibrium is maintained. This is described by Kurt Lewin’s:
(a) field of force
(b) field of disputes
(c) field of conflicts
(d) cognitive dissonance
Ans. (a)


7. A systematic and orderly process of determining the worth of ajob in relation to other jobs is known as:
(a) job analysis
(b) job evaluation
(c) job specification
(d) job description
Ans. (b)

8. Which one of the following is the most important function of manager?
(a) Communication
(b) Directing
(c) Supervising
(d) Decision making
Ans. (d)


9. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List-II
A. Statutory report 1 . Sec. 200
B. Prohibition of tax-free remuneration . 2. Sec.165
C. Underwriting commission 3. Sec.78
D. Issue of shares at premium 4. .Sec.76
Code:
A B C D
(a) 4 1 2 3
(b) 2 3 4 1
(c) 4 3 2 1
(d) 2 1 4 3
Ans. (d)

10. Registration of Articles of Association is optional in the case of:
(a) unlimited company
(b) private company limited by shares
(c) company limited by guarantee
(d) public company limited by shares
Ans. (d)

11. The Memorandum of Association shall be signed by each:
(a) director
(b) shareholder
(c) subscriber
(d) promoter and director
Ans. (c)

12. A person shall not be appointed as Director if he is found to be of unsound mind by:
(a) the company
(b) the company court
(c) a court of competent jurisdiction and the finding is in force
(d) the shareholder
Ans. (c)

13. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List -II
A. Reduction of share capital 1. Sec -100
B. Reissue of redeemed debentures 2. Sec - 228
C. Branch audit 3. Sec -121
D. Presentation of annual accounts 4. Sec -210
Code:
A B C D
(a) 4 2 3 1
(b) 1 3 2 4
(c) 4 3 2 1
(d) 1 2 3 4
Ans. (b)

14. Changing the name of a company requires:
(a) special resolution and approval of Company Law Board
(b) special resolution and approval of Securities and Exchange Board of India
(c) special resolution and approval of Central Government
(d) ordinary resolution and approval of Company Law Board
Ans. (c)

15. Power to use official seal of a company outside India is to be authorized by:
(a) Articles of Association
(b) Memorandum of Association
(c) Both Memorandum and Articles of Association
(d) Central Government
Ans. (a)

16. The approval of. which one of the following authorities is required to shift registered office of the company from the jurisdiction of one Registrar of Companies to another Registrar of Companies within a State?
(a) Company Law Board
(b) Central Government
(c) Regional Director
(d) Registrar of Companies
Ans. (a)

17. Secretarial Compliance Report is:
(a) optional for a company
(b) required when a company does not have a whole- time secretary
(c) required if a company is not required to employ a whole time secretary and has a paid-up share capital of Rs. 10 lakh or more
(d) required for companies as are notified by the Central Government
Ans. (c)

18. Which one of the following is the correct statement?
(a) One can be a shareholder without voting right
(b) A preference shareholder can exercise voting right from the date of allotment
(c) An equity shareholder has no voting right
(d) A debenture holder can vote at annual general meeting
Ans. (a)

19. ‘Body corporate’ under the Companies Act, 1956 includes
(a) cooperative society
(b) company incorporated outside India
(c) corporation sole
(d) any other body corporate, not being a company, which the Central Government may specify
Ans. (b)


20. Which one of the following statutory committees needs to be constituted in a listed company?
(a) Tender Committee
(b) Audit Committee
(c) Management Committee
(d) Recruitment Committee
Ans. (a)

21. One of the major difficulties in improving the industrial efficiency in enterprises is:
(a) low investment
(b) low productivity
(c) ineffective marketing
(d) poor inventory control
Ans. (b)

22. Which among the following is a direct advantage of incentive compensation?
(a) Mutual cooperation among the workers
(b) Decrease in absenteeism
(c) Increase in productivity
(d) Better industrial relations
Ans. (d)

23. Which one of the following factors does NOT influence wage and salary structure?
(a) Demand Supply
(b) Cost of living
(c) Job rotation
(d) Job requirements
Ans. (c)

24. The takeover of a company in which most of the purchase price is paid with borrowed money is referred to as:
(a) hostile takeover
(c) leveraged buy-out
(b) illegal takeover
(d) management buy-out
Ans. (c)

Directions: The following 16 (sixteen) items consist of two statements one labelled the ‘Assertion (A)’ and. the other labelled the ‘Reason (R)’. You are required to examine these two statements carefully and decide
If the ‘Assertion (A)’ and the ‘Reason (R)’ are individually true and if so, whether the Reason is a correct explanation of the Assertion. Select your answers to these items using the code given below and mark your Answer Sheet accordingly.
Code:
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and R are true but R is NOT a correct explanation of A
(c) A is true but R is false
(d) A is false but R is true

25. Assertion (A): There is no error, when the totals of the debit side and the credit side of the Trial Balance are equal.
Reason (R): Trial Balance is a two-column statement showing names and balances of all the accounts in the order in which they appear in the ledger.
Ans. (a)

26. Assertion (A): Companies are required to use Written Down Value (WDV) method and the rates specified in Schedule XIV to the Companies Act.
Reason (R): A change from WDA method of providing depreciation to straight Line Method (SLM) should be made if it is considered that the change would result in a more appropriate preparation or presentation of the financial statements of the company.
Ans. (b)

27. Assertion (A): Section 205 of the Companies Act makes it obligatory for every company to make provision for depreciation.
Reason (R): Depreciation is a charge against revenue.
Ans. (c)


28. Assertion (A): Existence of secret reserve contradicts the disclosed network of a business.
Reason (R): Secret reserve helps promote managerial efficiency.
Ans. (c)

29. Assertion (A): Entrance fees in case of non-profit concerns can be revenue receipt or capital receipt.
Reason (R): Some accountants consider entrance fees to be recurring in nature, whereas others consider it to be non-recurring.

30. Assertion (A): Performance ratios show we are going.
Reason (R): Balance sheet ratios show how we stand.
Ans. (c)

31. Assertion (A): One single primary ratio that measures the final outcome of all recorded business activities is ROI
Reason (R): In practice, however variations are also found in the ratio because capital and return are subject to different interpretations by firms.
Ans. (b)

32. Assertion (A): According to Accounting Standard-3 (revised) of the Institute of Chartered Accountants of India, a Cash Flow Statement should be divided into three heads—cash flow from investing activities and cash flows from financing activities.
Reason (R): Operating activities involve income determining items and relate to changes in current assets and liabilities investing activities concern changes in. non-current assets and financial activities concern changes in non-current liabilities and shareholders equity.
Ans. (a)

33. Assertion (A): It is the duty of the auditor to see that costing records as required under Section Act, 209(1) (d) of the Companies Act, 1956, have been maintained by certain class of companies.
Reason (R): Mere maintenance of cost records does not make manufacturing companies cost-effective.
Ans. (c)

34. Assertion (A): Analytical Review-is not the part of Company Statutory Audit.
Reason (R): Analytical Review goes beyond true and fair presentation of the financial position.
Ans. (d)

35. Assertion (A): Management audit is a statutory audit.
Reason (R): Management audit is performed through innovative ideas.
Ans. (d)

36. Assertion (A): The Companies Act; 1956 requires that internal audit must be carried out by a Chartered Accountant.
Reason (R): It is to help the management to protect the interests of the shareholders and the society.
Ans. (d)

37. Assertion (A): Certificate of Origin is an export related document and it is issued by the Chamber of Commerce.
Reason (R): Certificate of Origin is used by importer to take delivery of goods.
Ans. (c)

38. Assertion (A): A company registered under the Companies Act, 1956 is a juridical person distinct from its members.
Reason (R): Corporate veil cannot be lifted.
Ans. (c)

39. Assertion (A): The doctrine if indoor management does not give absolute protection to outsiders who deal with a company.
Reason (R): If majority of members have their way, the minority has its say.
Ans. (b)

40. Assertion (A): The powers of Board of Directors that are to be exercised by Board only at its meeting cannot go beyond those prescribed under Section 292 of the companies Act, 1956.
Reason (R): The members in general meeting cannot impose restriction on the exercise of powers by the Board of Directors.
Ans. (d)


41. Consider the following statements with respect to the sinking fund method of depreciation:
1. Depreciation is smaller than the assets annual depreciable cost.
2. Amount of interest constantly declines due to assets reducing balance.
3. Annual net incidence on profit and loss account remains constant due to changing fixed depreciation.
4. Periodic depreciation is recorded through the asset account.
Which of the above statements are correct?
(a) 2 and 3
(b) 1 and 3
(c) 1, 2 and 4
(d) 2, 3 and 4
Ans. (b)

42. Which one of the following accounting equations is correct?
(a) Assets Owner’s Equity
(b) Assets Liabilities + Owner’s Equity
(c) Assets Liabilities —Owner’s Equity
(d) Assets + Liabilities = Owner’s Equity
Ans. (b)

43. Match List-I (Standards issued by ICAI) with List-II (Objects/areas covered) and select the correct answer using the Code given below the lists:
List-I List-II
A. AS-1 1. Valuation of Inventories
B. AS-2 2. Cash Flow Statement
C. AS-3 3. Revenue Recognition
D. AS-9 4. Disclosure of Accounting Policies
Code:
A B C D
(a) 4 1 2 3
(b) 4 1 3 2
(c) 1 4 3 2
(d) 1 4 2 3
Ans. (a)

44. Which one of the following is correct with respect to going concern convention?
(a) The enterprise is not going to terminate its operations in the period ahead
(b) The enterprise may go out of business in the next accounting period
(c) The enterprise may not divest or diversify its operational spheres
(d) The enterprise may not revalue its assets during the current accounting period
Ans. (a)

45. Consider the following statements:
Continuous evaluation of the relevance of generally accepted accounting principles is required, because:
1. they are the everlasting operating realities.
2. the environment, in which business operates, undergoes constant change.
3. the business enterprises can develop financial statements of value to the end-users.
4. realities of social, economic and legal framework have to be considered by professional accountants.
Which of the above statements are correct?
(a) 1, 2 and 3
(b) 2, 3 and 4
(c) 3 and 4
(d) I and 4
Ans. (d)

46. Which one of the following accounting conventions stipulates that contingent assets appear as a footnote in the balance sheet?
(a) Materiality
(b) Consistency
(c) Disclosure
(d) Conservatism
Ans. (c)

47. Which one of the following is NOT related to the convention of conservatism?
(a) Making provision for doubtful debts and discount on debtors in anticipation of actual bad debts and discount
(b) Valuation of stock at Market Price or Cost Price whichever is higher.
(c) Charging of small capital items as Revenue
(d) Adopting Written-down Value Method of depreciation as against Straight-line Method
Ans. (b)

48. Which one of the following is an ingredient of the entity convention of accounting?
(a) The owner of a unit and the unit itself is one and the same
(b) The owner and the unit are treated separately
(c) No separate accounts for the unit is required
(d) The unit is a private affair of the owner, hence no accounting is required
Ans. (b)


49. Which one of the following items is considered revenue expenditure?
(a) Expenditure by way of maintenance that has increased productivity
(b) Repair of a gearbox in a car that has enhanced its operational life
(c) Complete overhaul of a machine, spending around 20% of its value
(d)Changing a small component of a machine to maintain its operating efficiency
Ans. (d)


50. After the construction of their new factory building, M/s XYZ Co. shifted to it. During this process Rs. 20,000 were spent on pulling down the old structure and Rs. 2,000 were spent on shifting the stocks to new building. These expenditures are to be classified as:
(a) Capital expenditure
(b) Revenue expenditure
(c) Capital and Revenue expenditure respectively
(d) Deferred Revenue expenditure
Ans. (c)