commerce mcq
MCQ Commerce Quiz For Degree Students BCom India
MCQ Commerce Objective test paper
COMMERCE MCQ AND SOLUTIONS
1. Match List-I (Concepts of Accounting) with List-II (Suitability of the Accounting Concepts) and select the Correct answer using the Code given below the lists:
List-I List-II
(Concepts of Accounting) (Suitability of the Accounting Concepts)
A. Money measurement concept 1. Applicable to all forms of business organizations
B. Business entity concept 2. Basic accounting
C. Cost concept 3. Original purchase price of assets
D. Dual aspect concept 4. Applicable to those transactions/ events which
are of financial nature in accounting
Codes:
A B C D
(a) 4 2 3 1
(b) 3 1 4 2
(c) 4 1 3 2
(d) 3 2 4 1
Ans. (c)
2. The cost of a machine is Rs.70, 000. It has 10-year life at the end of which it is expected to realize Rs.5, 000. The depreciation for first for years on a straight line basis is
(a) Rs. 28,000
(b) Rs. 26,000
(c) Rs. 22,000
(d) Rs. 20,000
Ans. (b)
3. What is the kind of expenditure incurred on heavy advertising whose benefit is to continue for years to come?
(a) Revenue Expenditure
(b) Capital Expenditure
(c) Deferred Revenue Expenditure
(d) Prepaid Expenditure
Ans. (c)
4. Cost of goods purchased for resale is an example of:
(a) capital expenditure
(b) revenue expenditure
(c) deferred revenue expenditure
(d) None of the above
Ans. (b)
5. Consider the following statements:
Capital expenditure is incurred for the purpose of
1. obtaining a long-term benefit for the business
2. increasing earning capacity of the business
3. purchasing of marketable securities
4. acquiring of an asset in the business
Which of these statements are correct?
(a) 1 and 4
(b) 1, 2 and 4
(c) 2 and 3
(d) 3 and 4
Ans. (b)
6. Which one among the following shall result in ‘capital loss’ to a firm ?
(a) Pilferage of certain items
(b) Loss of goods in transit
(c) Loss due to delay in delivery by port authorities
(d) Confiscation of goods by custom authorities on account of false declaration
Ans. (a)
7. Z is admitted in a firm for a 1/4 share in the profits for which he brings Rs 30,000 for goodwill. It will be taken away by the old partners X and Y in:
(a) old profit-sharing ratio
(b) new profit-sharing ratio
(c) sacrificing ratio
(d) capital ratio
Ans. (c)
8. A partner’s capital at the end of a, year was Rs 3,00,000. His share of profit for the. year was Rs. 60,000 and he had drawn Rs. 20,000 from the firm during the year. Then his capital at the beginning of the year was:
(a) Rs. 3,00,000
(b) Rs. 3,20,000
(c) Rs. 3,80,000
(d) Rs. 2,60,000
Ans.(d)
9. The balance left in the capital accounts on dissolution of a firm is transferred to:
(a) Realization Account
(b) Profit and Loss Account
(c) Bank Account
(d) None of the above
Ans. (c)
10. As per Garner v. Murray rule, the loss resulting from a partner’s insolvency is borne by other partners in:
(a) equal ratio
(b) their capital ratio
(c) their profit-sharing ratio
(d) 3 : 1 ratio
Ans.(b)
11. Consider the following statements:
Issue of bonus shares can be made out of the
1. General Reserve Account
2. Realized Capital Profits ‘Account
3. Revaluation Reserve Account
4. Profit and Loss Account (Cr.)
Which. of these statements are correct?
(a) 1 and 4
(b) 2, 3 and 5
(c) 1, and 4
(d) 2, 3 and 4
Ans. (c)
12. A, B and C are equal partners, After distributing the loss on realization of assets and paying all liabilities
their capital accounts show the following balances:
A— Rs. 10,000 (Cr.)
B—Rs. 4,000 (Cr.)
C—Rs. 14,000 (Dr.)
What is the amount of cash with the firm?
(a) Rs. 18,000
(b) Rs. 4,000
(c) Rs. 14,000
(d) Rs. 10,000
Ans. (c)
13. In case of retirement of a partner, the partner’s loan account would be shown:
(a) in his capital account
(b) in his wife’s loin account
(c) in his loan account
(d) in the total amount due to him
Ans. (c)
14. Which of the following is/are included in income and expenditure account?
1. Accrued expenses
2. Credit purchases
3. Prepaid expenses
4. Opening cash balance
Select the correct answer using the code given below:
Code:
(a) l only
(b) l and 2
(c) 2 and 3
(d) 3 and 4
Ans. (b)
15. Which one of the following is the correct sequence regarding preparation of final accounts?
(a) Ledger—Trial Balance—Journal—Profit and Loss Account—Balance Sheet
(b) Journal—Ledger—Trial Balance—Profit and Loss Account—Balance Sheet
(c) Trial Balance—Ledger—Journal—Balance Sheet—Profit and Loss Account
(d) Journal—Trial Balance—Ledger—Profit and Loss Account—Balance Sheet
Ans. (b)
16. Consider the following:
1. Preparation of Balance Sheet
2. Preparation of Funds Flow Statement
3. Preparation of Trial Balance
4. Preparation of Profit and Loss Account
The correct chronological sequence of the above in the preparation of periodical financial statement is:
(a) 4, 2, 3, 1
(b) 3, 4, 1, 2
(c) 2, 4, 3, 1
(d) 1, 3, 2, 4
Ans.(b)
17. In a draft Balance. Sheet, the stock at valuation Rs. 1,00,000 was shown on assets side. While finalizing the Balance Sheet, an item which was valued at Rs. 37,400 had realizable of Rs. 26,000 only. In the Profit and Loss Account, the stock would be shown at:
(a) Rs. 62,600
(b) Rs. 88,600
(c) Rs. 1,00,000
(d) Rs 1,26,000
Ans. (b)
18. Consider the following statements
The purposes of charging depreciation to the Profit and Loss Account are:
1. to provide for replacement of an asset
2. to ascertain true profit
3. to present real financial position
4. to arrive at the scrap value of the asset
Which of these statements are correct?
(a) 1 and 4
(b) 1 and 2
(c) 1, 2 and 3
(d) 2, 3 and 4
Ans. (b)
19. Forty thousand 10% Redeemable Preference Shares of Rs. 10 each are redeemed at a premium of Rs. 10 each by the issue of 20,000 equity shares of Rs. 10 each at a premium of Rs. each.
The amount transferred to Capital Redemption Reserve Account would be:
(a) Rs. 1,80,000
(b) Rs. 2,00,000
(c) Rs. 2,20,000
(d) Rs. 2,40,000
Ans. (b)
20. Profit from re-issue of forfeited shares should be transferred to:
(a) Profit and Loss Account
(b) General Reserve
(c) Share Premium Account
(d) Capital Account
Ans. (d)
21. A company must refund the amount of subscription received from the public including the development if the amount received is less than the mandatory minimum subscription. The mandatory minimum subscription is
(a) 75%
(b) 80%
(c) 90%
(d) 95%
Ans. (c)
22. Equity shares represent owner’s capital. Therefore, an equity shareholder:
(a) has preferential claim over income and wealth of the company
(b) has residual claim over income and wealth of the company
(c) has no right over income and wealth of the company
(d) is personally liable for all the liabilities of the company even beyond his paid-up capital
Ans. (b)
23. Which one of the following statements is true of bonus shares?
(a) Bonus shares are issued to the promoters only
(b) Bonus shares are issued only to the existing shareholders
(c) Bonus shares are the shares issued to the employees of the company as an incentive
(d) Bonus shares are issued at par value
Ans.(b)
24. Which one of the following transactions can change
the current ratio?
(a) Purchase of goods for cash
(b) Payment to outstanding trade creditors
(c) Acceptance on a Bill of Exchange written by a trade creditor
(d) Dishonor of a Bill of Exchange
Ans. (b)
25. An investor while trading in a stock in the share market lays greatest emphasis upon:
(a) earning before interest and tax
(b) rate of return on equity
(c) earning price ratio
(d) dividend price ratio
Ans. (c)
26. A company takes a loan of Rs. 70 lakhs on which it has to pay interest @ 15% p.a. Company’s return on investment is 25% before tax and the tax payable on net earnings is 60%. What gain accrues to the shareholders because of this loan?
(a) Rs. 2, 40,000
(b) Rs. 2, 43,000
(c) Rs. 2, 77,000
(d) Rs. 2, 80,000
Ans. (d)
27. Following particulars are given for a firm:
Quick Ratio—1 .5
Current Assets—Rs. 1, 50,000 Current Liabilities—Rs. 60,000
The value of stock is:
(a) Rs. 60,000
(b) Rs. 70.000
(c) Rs. 80,000
(d) Rs. 90,000
Ans. (a)
28. The Balance Sheet of M/s ABC as on 3 1 December is:
Liabilities Rs. Assets Rs.
Equity Share Capital 22,000 Machinery and
Equipment 46,000
Stock 14,000
Profit and Loss A/c 8,000
10% Sundry Debtors 10,000
Debentures 19,000 Cash at bank 2,000
Sundry 23,000
Creditors
Provision for Taxation 1000 Prepaid Expenses 1000
73,000 73, 000
The Liquidity Ratio is:
(a) 2 : 5
(b) 9: 20
(c) 1: 2
(d) 1: 1
Ans. (c)
29. The current assets to the current liabilities ratio is said to be satisfactory if it is
(a) 1: 2
(b) 2: 1
(c) 1: 1
(d) 1.5: 1
Ans. (b)
30. For a firm, the particulars are:
Rs. Rs.
Stock 60,000 Cash in Hand 40,000
Debtors 45,000 Creditors 70,000
Bills 12,000 Bills Payable 45,000
Receivable Bank 4,000
Overdraft
Advances 4,000
(Recoverable Net Sales 7,50,000
cash or kind) Gross Profit 60,000
Net Profit 40,0000
The Current Ratio for the firm is nearly:
(a) 27: 20
(b) 17:13
(c) 9:7
(d) 11 :9
Ans. (c)
31. Which one of the following is a leveraged buy-out?
(a) When a company is taken over by financing through borrowed funds
(b) When a company is taken over by the employees’ funds
(c) When a lender takes over a company to whom it is indebted
(d) When a company is bought out directly by buying its shares in the market
Ans. (a)
32. For a firm:
Opening Stock—Rs. 32,000
Closing Stock—Rs. 34,000
Sales—Rs. 4,40,000
Gross Profit Ratio—25% on sales
The stock turnover ratio of the firm is
(a) 8.0
(b) 8.5
(c) 9.0
(d) 10.0
Ans. (d)
33. Following particulars are given for a firm:
Closing Stock—Rs. 45,000
Other Current Assets——Rs. 1,05,000
Current Liabilities - Rs. 70,000
Sales—Rs. 3,20,000
The Working Capital Turnover Ratio is:
(a)5 :1
(b)4 :1
(c)3 :1
(d)2 :1
Ans. (b)
34. Match List-I with List-II and select the correct answer using the Code given below the lists:
List—I List-II
A. VED Analysis 1. Sources and uses of fund
B. Ratio Analysis 2. Inventory control
C. Fund-flow Analysis 3. Analysis and interpretation of financial statements
D. Income and Expenditure 4. Non-profit organization analysis
Codes:
A B C D
(a) 1 4 2 3
(b) 2 3 1 4
(c) 1 3 2 4
(d) 2 4 1 3
Ans. (b)
35. If net profit are Rs. 30,000 and expenses not resulting in the application of fund are Rs. 10,000, then the funds from operation will be:
(a) Rs. 30,000
(b) Rs. 40,000
(c) Rs. 10,000
(d) Rs. 20,000
Ans. (b)
36. Select the pairs which are correctly matched
1. Statutory Audit : Review of various operations of a company
2. Management Audit : Verification of top level policy and its implications
3. Operational Audit : Examining the production planning and control operations
4. Internal Audit : According to the company objectives
Select the correct answer using the Code given below:
Code:
(a) 1 and 2
(b) 1 and 3
(c) 2 and 3
(d) 1 and 4
Ans. (c)
37. Four important acts performed by an Auditor in connection with an audit work are:
1. verification of assets and checking valuation of the same
2. checking of Annual Accounts and balance Sheet
3. preparation of an audit programme
4. test checking of financial transactions
The correct sequence in which these acts are
performed by the Auditor is
(a) 2, 1, 3, 4
(b) 2, 3, 4, 1
(c)3, 1,4,2
(d) 3, 4, 1, 2
Ans. (d)
38. Consider the following statements
The auditor is generally expected to carry out the following in a particular seriatim:
1. Verification of assets and liabilities
2. Vouching of transactions
3. Checking of valuation of assets and liabilities
The correct chronological sequence of these acts is:
(a) 1, 3, 2
(b) 3, 2, 1
(c) 2, 1, 3
(d) 3, 1, 2
Ans. (c)
39. Auditing is compulsory in case of:
(a) Joint-stock Company
(b) Charitable Trust
(c) Cooperative Society
(d) All of the above
Ans. (d)
40. Consider the following statements:
An ‘Internal Audit’ is not a part of:
1. Continuous Statutory Audit
2. Internal Check System
3. Internal Control System
Which of these statements are correct?
(a) l, 2 and 3
(b) 1 and 2
(c) 2 and 3
(d) 1 and 3
Ans. (b)
41. Consider the following statements:
An ‘Internal Control System’ may include:
1. interim audit
2. internal audit
3. financial controls
Which of these statements are correct?
(a) 1, 2 and 3
(b) 1 and 2
(c) 2 and 3
(d) 1 and 2
Ans. (c)
42. According to the Companies Act, account books of a company are to be preserved for the preceding:
(a) six years
(b) eight years
(c) five years
(d) nine years
Ans. (b)
43. Consider the following functions:
1. Checking of valuation and physical verification of assets
2. Routine checking and vouching
3. Scrutiny of internal check system
The correct sequence of these functions to be performed by an Auditor during the course of auditing is
(a) 2, 1, 3
(b) 3, 1, 2
(c) 3, 2, 1
(d) 1, 2 , 3
Ans. (c)
44. Which of the following may be included in ‘Audit Working Paper’?
1. Audit notebook
2. Audit programmes
3. Schedules of sundry debtors and sundry creditors
4. Audit manuals
Select the correct answer using the Code given below:
Code:
(a) 1 and 4
(b) 1 and 2
(c) 2, 3 and 4
(d) 1, 2 and 3
Ans. (d)
45. Internal Auditor is appointed by the:
(a) Board of Directors of the Company
(b) shareholders of the Company
(c) Institute of Chartered Accountants of India
(d) Company Secretary
Ans. (a)
46. Financial audit in Joint-stock Company in India is:
(a) necessary
(b) voluntary
(c) statutory
(d) voluntary for companies which operate in certain activities only
Ans. (c)
47. Consider the following statements:
1. Transfer and transmission of shares is the same thing
2. ‘Stag’ is a speculative person who applies for shares in a new issue expected to be oversubscribed to make profit by selling such shares at a premium-
3. Stock is a bundle of fully paid shares put together for convenience
Which of the above statements is/are correct?
(a) 1 and 2
(b) 2 and 3
(c) 3 only
(d) 2 only
Ans. (b)
48. Underwriters are persons who:
(a) purchase the shares and debentures of a company
(b) work as agents of the company for the sale of shares and debentures
(c) undertake to buy those shares and debentures not subscribe for by the public
(d) publicize the share-issue on behalf of the company
Ans. (c)
49. The movement of securities from one stock exchange to another with the object of reaping a profit from the disparity in share prices is called:
(a) averaging
(b) arbitraging
(c) backwardation
(d) forward trading
Ans. (b)
50. Which one of the following statements pertaining to mutual funds is true?
(a) Mutual funds can be operated only by government organizations
(b) The maximum investment in mutual funds by an individual should not exceed a particular ceiling fixed by government from time to time
(c) Return on investment and safety of principal is not guaranteed in mutual funds
(d) Unit Trust of India is the regulatory authority for mutual funds in India.
Ans. (b)
Showing posts with label Commerce. Show all posts
Showing posts with label Commerce. Show all posts
Wednesday, June 1, 2011
Friday, May 20, 2011
Accountant Model test paper
Accountant Model test paper
Sample question papers of Jr Accountant Exam
Question Papers of Financial Accounting
1. Unpaid calls are shown in the balance sheet of a Company:
(a) by adding it to the share capital
(b) by deducting it from the called-up share capital
(c) under the head, ‘Current assets’
(d) under the head ‘Current liabilities’
Ans. (b)
2. Part-II Schedule VI to the Companies Act, 1956, prescribes:
(a) vertical form of balance sheet
(b) requirements as to profit and loss account
(c) horizontal form of balance sheet
(d) contents of prospectus
Ans. (b)
3. X Ltd. forfeited 30 shares of Rs. 10 each fully called-up, for non-payment of allotment money of Rs. 3 per share and call money of Rs. 4 per share. These shares are re-issued for Rs. 8 per share fully paid.
What is the amount to be transferred to Capital Reserve Account?
(a) Rs. 300
(b) Rs. 60
(c) Rs. 30
(d) Rs. 90
Ans. (c)
4. Right’s shares are the shares that are offered to the:
(a) directors of the company
(b) debenture holders
(c) existing shareholders
(d) creditors of the company
Ans. (c)
5. Pro-rata allotment of shares means allotment of shares:
(a) equally amongst the applicants
(b) at the discretion of the Directors
(c) to all the applicants in proportion to the shares applied for
(d) to only a few selected applicants
Ans. (c)
6. Interest on calls in arrears is charged according to Table A of Schedule I to the Companies Act 1956 at the rate of:
(a) 5% p.a.
(b) 6% p.a
(c) 12% p.a.
(d) 10% p.a.
Ans. (a)
7. The best definition of ‘Capital employed’ in calculating the rate of return on investment is:
(a) current assets + gross fixed assets
(b) current assets + net fixed assets
(c) working capital + gross fixed assets
(d) working capital + net fixed assets
Ans. (d)
8.Match list-I with list-II and select the correct answer using the Code given below the lists:
List—I List—II
A. Acid test ratio 1. Liquidity ratio
B. Gearing ratio 2. Profitability ratio
C. Working capital turnover ratio 3. Leverage ratio
D. Return on capital employed 4. Long-term solvency ratio
5. Activity ratio
Codes:
A B C D
(a) 1 3 5 2
(b) 2 5 1 3
(c) 1 5 4 2
(d) 5 3 4 1
Ans. (a)
9. Collection of sundry debtors would:
(a) increase current ratio
(b) decrease current ratio
(c) have no effect on current ratio
(d) increase debtors’ turnover
Ans. (c)
10. A company with a paid up capital of 5000 equity shares of Rs. 10 each has a turnover of four times with a margin of 8% on sales. The ROI of the company will be:
(a) 28%
(b) 32%
(c) 35%
(d) 42%
Ans. (b)
11. The ratios which measure the relative contribution of financing by owners and financing provided by outsiders are called:
(a) liquidity ratios
(b) leverage ratios
(c) activity ratios
(d) profitability ratios
Ans. (b)
12. The debt equity ratio of a company is 8: 1. It was decided to issue bonus shares in the ratio of 1: 2. The debt : equity ratio after the issue of bonus shares would be:
(a) 8: 1
(b) 4: 1
(c) 1:8
(d) 1:4
Ans. (a)
13. Which of the following transaction(s) will improve the Current Ratio?
1. Bills receivable dishonored
2. Cash collected from customers
3. Issue of new shares
4. Payment of preliminary expenses by way of equity shares
Select the correct answer using the Code given below:
Code:
(a) 1, 2 and 3
(b) 4 alone
(c) 3 alone
(d) 2 and 4
Ans. (c)
14. Which one of the following statements is NOT correct?
A high gross profit margin ratio is the result of:
(a) higher sales prices, cost of goods sold remaining constant
(b) lower cost of goods sold, sales price remaining constant.
(c) an increase in the proportionate volume of higher margin items
(d) increase in the sales return, cost of goods sold remaining the same
Ans. (d)
15. Credit sales of a company during the year are Rs. 1,20,000; Debtors Rs. 20,000 and bills receivables, Rs. 10,000. The average collection period is:
(a) 3 months
(b) 4 months
(c) 5 months
(d) 6 months
Ans. (a)
16. While calculating the net present value under
discounted cash flow method of return on investment
analysis, the c4lculations involved are:
1. Cash outflow
2. Discounted net cash flow
3. Cash inflow
4. Net present value
The correct sequence of these calculations is:
(a) 4, 1, 3, 2
(b) 1, 3, 2, 4
(c) l, 2, 3, 4
(d) 3, 1, 4, 2
Ans. (b)
17. Ajoy Ltd. makes a net profit of Rs. 1,00,000, after providing for depreciation on assets amounting to Rs. 20,000 and writing off preliminary expenses amounting to Rs. 10,000 and gain of Rs. 5,000 on sale of a piece of machinery. Funds from operation of Ajoy Ltd. would be:
(a) Rs. 1,00,000
(b) 1,20,000
(c) Rs. 1,25,000
(d) 1,35,000
Ans. (b)
18. Match List-I with List-II and select the correct answer using the Code given below the lists:
List-I List-II
A. Net loss from operations 1. Source of funds
B. Changes in working capital 2. Drain of working capital
C. Depreciation 3. Flow of Funds
D. Issue of fully paid bonus shares 4. Neither source nor application of funds
Code:
A B C D
(a) 3 2 1 4
(b) 2 3 4 1
(c) 2 3 1 4
(d) 3 2 4 1
Ans. (c)
19. Which one of the following statements is correct?
(a) A decrease iii current liabilities causes an increase in the working capital
(b) An increase in current liabilities causes a decrease in the working capital
(c) A decrease in the current assets causes an increase in the working capital
(d) An increase in the current assets causes a decrease in the working capital
Ans. (a)
AUDITING
20. Match List-I (Type of audit) with List-II (Purposes) and select the correct answer using the Code given below the lists:
List-I List-II
A. Continuous audit 1. To ensure efficient conduct of the business and prevent
wastage
B. Periodical audit 2. Detailed examination of the books of accounts at regular
intervals capital
C. Interim audit 3. Audit taken up at the close of the financial period
D. Internal audit 4. Audit conducted between the ends of two financial period
Codes:
A B C D
(a) 1 3 4 2
(b) 2 3 4 1
(c) 3 2 1 4
(d) 3 1 2 4
Ans. (b)
21. Match List-I (Items) with List-II (Section of Companies Act, 1956) and select the correct answer using the Code given below the lists:
List-I List-II
A. Appointment of Auditors by Central Government 1. Sec. 22 (1)
B. Qualification of Auditors 2. Sec. 224 (5)
C. Appointment of Auditors by Board of Directors 3. Sec. 224 (8)
D. Remuneration of Auditors 4. Sec. 224 (3)
Code:
A B C D
(a) 4 1 3 2
(b) 1 4 2 3
(c) 4 1 2 3
(d) 1 4 3 2
Ans. (c)
22. Special audit of the accounts of a company is directed by:
(a) shareholders of the company
(b) Comptroller and Auditor General, of India
(c) Company Law Board
(d) Central Government
Ans. (d)
23. The author of the books ‘Suma de Arithmetica ‘is:
(a) H. A. Cassel
(b) Luca Paciolli
(c) Adam Smith
(d) Batliboi
Ans. (b)
24. Vouching may be termed as:
(a) identification of the documentary evidence supporting the transaction
(b) verification of the document supporting the transaction
(c) authentication of the document supporting the transaction
(d) verification of the accuracy and authenticity of the transaction
Ans. (d)
25. Interim audit refers to n audit conducted:
(a) in two different accounting years
(b) in between two statutory annual audits within the same accounting period
(c) in between one statutory audit and an internal audit in the same accounting period
(d) in between one statutory audit, one management audit and one internal audit
Ans. (b)
26. Audit technique are concerned with the:
(a) examination of those evidences which have been traced by audit procedures
(b) application of generally accepted accounting principles to particular phases of a financial statement
(c) accuracy and validity of management authorization to the account section employees
(d) method of conducting a business affair and reporting in annual report
Ans. (
27. What is the correct sequence of the following aspects in auditing?
1. Special audit
2. Internal audit
3. Internal check
4. Annual audit
Select the correct answer using the Code given below:
Code:
(a) 1, 3, 2, 4
(b) 3, 4, 1, 2
(c) 3, 2, 4, 1
(d) 1, 2, 3, 4
Ans. (c)
28. Test checking reduces the:
(a) powers of an auditor
(b) expenses of audit
(c) work of an auditor
(d) liability of an auditor
Ans. (c)
29. Management audit refers to:
(a) examination of books and audit of accounts done by the management
(b) the periodic assessment of company’s activities by the statutory auditor
(c) periodic assessment of company’s managerial planning, organizing, actuating and controlling compared to norm of successful operation
(d) auditor’s assessment of the financial statement of the entity
Ans. (c)
30. Consider the following documents:
1. Audit Notebook
2. Audit Programme
3. Audit Report
4. Audit Files
The correct sequence, in which an auditor prepares these documents is
(a) 2, 1, 4, 3
(b) 1, 2, 3, 4
(c) 2, 1, 3, 4
(d) 1, 2, 4, 3
Ans. (a)
31. The most important objective of internal audit, is:
(a) early detection of errors and frauds
(b) facilitating final audit
(c) early finalization of annual accounts
(d) ensuring systematic accounting
Ans. (a)
32. Section 224 of the Companies Act, 1956 deals with:
(a) special audit
(b) secretarial audit
(c) cost audit
(d) appointment and remuneration of auditors
Ans. (d)
33. An arrangement in which the accounting work of each individual is checked by other members is
known as:
(a) internal audit
(b) external audit
(c) internal check
(d) test checking
Ans. (c)
34. The main purpose of an independent audit is to:
(a) check and correct frauds and errors
(b) help in detecting frauds and errors
(c) determine if the financial statements fairly represent the actual financial position and the working results of the organization
(d) help in formulating future plans
Ans. (c)
35. Consider the following statements:
I. Foreign institutional investors have been allowed to invest in Mutual Funds
2. The main objective of SEBI is to protect the investors
3. Private placement is the route through which Promoters’ contribution is mobilized by a public company
4. RBI lays down the guidelines governing the capital market operation
Of these statements:
(a) 1 and 2 are correct
(b) 2, 3 and 4 are correct
(c) 1, 2 and 3 are correct
(d) 1, 3 and 4 are correct
Ans. (b)
36. Dow and Jones, now popularly known as ‘Dow-Jones’ in the stock market parlance, were the:
(a) first financial journalists
(b) first bull operators in the New York Stock Exchange
(c) first to predict the Great Depression
(d) architects of shop-floor trading
Ans.(b)
37. The primary function of Stock Exchange is to:
(a) mobilize savings from the public for long-term investment
(b) offer a secondary market for shares and other securities
(c) facilitate barter deals between buyer and seller holding different securities -
(d) enable Reserve Bank of India to trade in Government securities in their efforts to control money supply in the economy
Ans. (b)
38. Consider the following statements:
A mutual fund helps the ‘investor in securing:
1. professional management
2. diversification of risk
3. steady appreciation
4. lower cost of operation
Of these statements:
(a) 1, 2, 3 and 4 are correct
(b) 1, 2 and 4 are correct
(c) 2 and 3 are correct
(d) 3 and 4 are correct
Ans. (a)
39. Which of the following pairs are correctly matched?
1. Cooperative movement in India : Nanavahi Committee
is breast-fed, bottle-fed and spoon-fed
2. Tax on sole proprietor and partnership : Direct Taxes, Enquiry Committee
firm’s needs rationalization
3. Capital market in India is tightly controlled : Narasimham Committee
by the Government
Select the correct answer using the Code given below:
Code:
(a) 1, 2 and 3
(b) 1 and 3
(c) 2 and 3
(d) 1 and 2
Ans. (a)
40. “Arbitrage” means:
(a) a business arrangement by which al share broker tries to take advantages of different in ‘Spot’ and ‘Futures’ prices of a share
(b) a business arrangement in which a share broker tries to take advantage of difference in prices between two Stock Exchange centers on a particular share
(c) an arbitration proceedings that is invoked by either the buyer or the seller when he other party is unable to meet its commitment
(d) a compromise arrangement by which the transaction is postponed to the next settlement date
Ans. (b)
41. Which one of the following sets is correct with regard to liberalization in financial sector?
(a) Globalization, devaluation and privatization
(b) Deregulation, moral suasion branch expansion
(c) Privatization, computerization and standardization
(d) Globalization, deregulation and privatization
Ans. (b)
42. Which of the following are the means of marketing new issues of securities?
1. By listing of securities
2. Through jobbers and brokers
3. By private placing of securities
4. Through privileged subscription
Select the correct answer using the Code given below:
Code:
(a) 1 and 2
(c) 3 and 4
(b) 1,2 and 3
(d) 1, 2, 3 and 4
Ans. (d)
43. Narasimham Committee has, apart from other things, recommended:
(a) expanding priority sector financing
(b) restricting priority sector-financing
(c) asking new foreign and private sector banks to follow the existing norms for priority Sector financing
(d) total elimination of priority sector financing
Ans. (b)
44. Prospectus issued by a company is to be vetted and approved by the SEBI. This, however, does not mean that:
(a) disclosures are adequate as per its guidelines
(b) project proposal has been presented in conformity with its guidelines
(c) disclosures are adequate to take an informed decision by investors
(d) project proposal is sound or satisfactory
45. Commercial papers represent a new financial instrument issued for the purpose of:
(a) project financing
(b) working capital
(c) leasing of plant and equipment
(d) import of capital goods
Ans. (b)
46. Match List-I (Forms of business organization) with List-II (Distinctive characteristics) and select the correct answer using the Code given below the lists:
List-I List-II
A. Joint Hindu Family Firm 1. Association of persons for their common interests
B. Public Enterprise 2. Ownership and control by Government
C. Section 25 of Company 3. Ownership by coparceners
D. Co-operative organization 4. Limited company formed for promoting
art, commerce, science etc.
Codes:
A B C D
(a) 3 2 1 4
(b) 1 3 2 4
(c) 3 2 4 1
(d) 1 3 4 2
Ans. (c)
47. Does modernization of industrial enterprises call for mechanization?
(a) Yes, because manual labour alone cannot deliver the goods
(b) Yes, because mechanization holds the key to industrial success in most developing countries
(c) No, because it is rationalization and not mechanization that holds the key to modernization and higher productivity in the industrial sector
(d) No, because it is mechanization will aggravate the unemployment situation in the country and will ultimately result in the collapse of the economy
Ans. (a)
48. In the absence of an agreement to the contrary, the partners are:
(a) entitled to 6% interest on their capitals, only when there are profits
(b) entitled to 9% interest on their capitals, only when there are profits
(c) entitled to interest on capital at the bank rate, only when there are profits
Ans. (d)
49. Match List-I (landmark case) with List-II (the legal point established by that case) and select the correct answer using the Code given below the lists:
List—I List—II
A. Solomon vs. Solomon 1. The scope and limits of the Objects
Clause
B. Ewing vs. Butter Cup Margarine Co. Ltd. 2. A company should not be registered
with a name which resembles the
name of an existing Co.
C. Ashbury Rail Carriage & Iron Co. vs. Ritchie 3. Company is a distinct entity,
different from its members
D. Royal British Bank vs. Turquand 4. Limitation to the Doctrine of
constructive notice
5. Doctrine of Indoor Management
Codes:
A B C D
(a) 2 3 1 4
(b) 3 2 4 5
(c) 3 2 1 4
(d) 2 3 4 5
Ans. (b)
50. Which one of the following is NOT applicable to a .Co-operative form of business organization?
(a) Major portion of profit is distributed to members by way of dividend
(b) Policy decisions are taken by the members in a General Meeting
(c) Membership is open to all having a common interest
(d) It is formed generally by the artisans and consumers of limited means
Ans. (d)
Sample question papers of Jr Accountant Exam
Question Papers of Financial Accounting
1. Unpaid calls are shown in the balance sheet of a Company:
(a) by adding it to the share capital
(b) by deducting it from the called-up share capital
(c) under the head, ‘Current assets’
(d) under the head ‘Current liabilities’
Ans. (b)
2. Part-II Schedule VI to the Companies Act, 1956, prescribes:
(a) vertical form of balance sheet
(b) requirements as to profit and loss account
(c) horizontal form of balance sheet
(d) contents of prospectus
Ans. (b)
3. X Ltd. forfeited 30 shares of Rs. 10 each fully called-up, for non-payment of allotment money of Rs. 3 per share and call money of Rs. 4 per share. These shares are re-issued for Rs. 8 per share fully paid.
What is the amount to be transferred to Capital Reserve Account?
(a) Rs. 300
(b) Rs. 60
(c) Rs. 30
(d) Rs. 90
Ans. (c)
4. Right’s shares are the shares that are offered to the:
(a) directors of the company
(b) debenture holders
(c) existing shareholders
(d) creditors of the company
Ans. (c)
5. Pro-rata allotment of shares means allotment of shares:
(a) equally amongst the applicants
(b) at the discretion of the Directors
(c) to all the applicants in proportion to the shares applied for
(d) to only a few selected applicants
Ans. (c)
6. Interest on calls in arrears is charged according to Table A of Schedule I to the Companies Act 1956 at the rate of:
(a) 5% p.a.
(b) 6% p.a
(c) 12% p.a.
(d) 10% p.a.
Ans. (a)
7. The best definition of ‘Capital employed’ in calculating the rate of return on investment is:
(a) current assets + gross fixed assets
(b) current assets + net fixed assets
(c) working capital + gross fixed assets
(d) working capital + net fixed assets
Ans. (d)
8.Match list-I with list-II and select the correct answer using the Code given below the lists:
List—I List—II
A. Acid test ratio 1. Liquidity ratio
B. Gearing ratio 2. Profitability ratio
C. Working capital turnover ratio 3. Leverage ratio
D. Return on capital employed 4. Long-term solvency ratio
5. Activity ratio
Codes:
A B C D
(a) 1 3 5 2
(b) 2 5 1 3
(c) 1 5 4 2
(d) 5 3 4 1
Ans. (a)
9. Collection of sundry debtors would:
(a) increase current ratio
(b) decrease current ratio
(c) have no effect on current ratio
(d) increase debtors’ turnover
Ans. (c)
10. A company with a paid up capital of 5000 equity shares of Rs. 10 each has a turnover of four times with a margin of 8% on sales. The ROI of the company will be:
(a) 28%
(b) 32%
(c) 35%
(d) 42%
Ans. (b)
11. The ratios which measure the relative contribution of financing by owners and financing provided by outsiders are called:
(a) liquidity ratios
(b) leverage ratios
(c) activity ratios
(d) profitability ratios
Ans. (b)
12. The debt equity ratio of a company is 8: 1. It was decided to issue bonus shares in the ratio of 1: 2. The debt : equity ratio after the issue of bonus shares would be:
(a) 8: 1
(b) 4: 1
(c) 1:8
(d) 1:4
Ans. (a)
13. Which of the following transaction(s) will improve the Current Ratio?
1. Bills receivable dishonored
2. Cash collected from customers
3. Issue of new shares
4. Payment of preliminary expenses by way of equity shares
Select the correct answer using the Code given below:
Code:
(a) 1, 2 and 3
(b) 4 alone
(c) 3 alone
(d) 2 and 4
Ans. (c)
14. Which one of the following statements is NOT correct?
A high gross profit margin ratio is the result of:
(a) higher sales prices, cost of goods sold remaining constant
(b) lower cost of goods sold, sales price remaining constant.
(c) an increase in the proportionate volume of higher margin items
(d) increase in the sales return, cost of goods sold remaining the same
Ans. (d)
15. Credit sales of a company during the year are Rs. 1,20,000; Debtors Rs. 20,000 and bills receivables, Rs. 10,000. The average collection period is:
(a) 3 months
(b) 4 months
(c) 5 months
(d) 6 months
Ans. (a)
16. While calculating the net present value under
discounted cash flow method of return on investment
analysis, the c4lculations involved are:
1. Cash outflow
2. Discounted net cash flow
3. Cash inflow
4. Net present value
The correct sequence of these calculations is:
(a) 4, 1, 3, 2
(b) 1, 3, 2, 4
(c) l, 2, 3, 4
(d) 3, 1, 4, 2
Ans. (b)
17. Ajoy Ltd. makes a net profit of Rs. 1,00,000, after providing for depreciation on assets amounting to Rs. 20,000 and writing off preliminary expenses amounting to Rs. 10,000 and gain of Rs. 5,000 on sale of a piece of machinery. Funds from operation of Ajoy Ltd. would be:
(a) Rs. 1,00,000
(b) 1,20,000
(c) Rs. 1,25,000
(d) 1,35,000
Ans. (b)
18. Match List-I with List-II and select the correct answer using the Code given below the lists:
List-I List-II
A. Net loss from operations 1. Source of funds
B. Changes in working capital 2. Drain of working capital
C. Depreciation 3. Flow of Funds
D. Issue of fully paid bonus shares 4. Neither source nor application of funds
Code:
A B C D
(a) 3 2 1 4
(b) 2 3 4 1
(c) 2 3 1 4
(d) 3 2 4 1
Ans. (c)
19. Which one of the following statements is correct?
(a) A decrease iii current liabilities causes an increase in the working capital
(b) An increase in current liabilities causes a decrease in the working capital
(c) A decrease in the current assets causes an increase in the working capital
(d) An increase in the current assets causes a decrease in the working capital
Ans. (a)
AUDITING
20. Match List-I (Type of audit) with List-II (Purposes) and select the correct answer using the Code given below the lists:
List-I List-II
A. Continuous audit 1. To ensure efficient conduct of the business and prevent
wastage
B. Periodical audit 2. Detailed examination of the books of accounts at regular
intervals capital
C. Interim audit 3. Audit taken up at the close of the financial period
D. Internal audit 4. Audit conducted between the ends of two financial period
Codes:
A B C D
(a) 1 3 4 2
(b) 2 3 4 1
(c) 3 2 1 4
(d) 3 1 2 4
Ans. (b)
21. Match List-I (Items) with List-II (Section of Companies Act, 1956) and select the correct answer using the Code given below the lists:
List-I List-II
A. Appointment of Auditors by Central Government 1. Sec. 22 (1)
B. Qualification of Auditors 2. Sec. 224 (5)
C. Appointment of Auditors by Board of Directors 3. Sec. 224 (8)
D. Remuneration of Auditors 4. Sec. 224 (3)
Code:
A B C D
(a) 4 1 3 2
(b) 1 4 2 3
(c) 4 1 2 3
(d) 1 4 3 2
Ans. (c)
22. Special audit of the accounts of a company is directed by:
(a) shareholders of the company
(b) Comptroller and Auditor General, of India
(c) Company Law Board
(d) Central Government
Ans. (d)
23. The author of the books ‘Suma de Arithmetica ‘is:
(a) H. A. Cassel
(b) Luca Paciolli
(c) Adam Smith
(d) Batliboi
Ans. (b)
24. Vouching may be termed as:
(a) identification of the documentary evidence supporting the transaction
(b) verification of the document supporting the transaction
(c) authentication of the document supporting the transaction
(d) verification of the accuracy and authenticity of the transaction
Ans. (d)
25. Interim audit refers to n audit conducted:
(a) in two different accounting years
(b) in between two statutory annual audits within the same accounting period
(c) in between one statutory audit and an internal audit in the same accounting period
(d) in between one statutory audit, one management audit and one internal audit
Ans. (b)
26. Audit technique are concerned with the:
(a) examination of those evidences which have been traced by audit procedures
(b) application of generally accepted accounting principles to particular phases of a financial statement
(c) accuracy and validity of management authorization to the account section employees
(d) method of conducting a business affair and reporting in annual report
Ans. (
27. What is the correct sequence of the following aspects in auditing?
1. Special audit
2. Internal audit
3. Internal check
4. Annual audit
Select the correct answer using the Code given below:
Code:
(a) 1, 3, 2, 4
(b) 3, 4, 1, 2
(c) 3, 2, 4, 1
(d) 1, 2, 3, 4
Ans. (c)
28. Test checking reduces the:
(a) powers of an auditor
(b) expenses of audit
(c) work of an auditor
(d) liability of an auditor
Ans. (c)
29. Management audit refers to:
(a) examination of books and audit of accounts done by the management
(b) the periodic assessment of company’s activities by the statutory auditor
(c) periodic assessment of company’s managerial planning, organizing, actuating and controlling compared to norm of successful operation
(d) auditor’s assessment of the financial statement of the entity
Ans. (c)
30. Consider the following documents:
1. Audit Notebook
2. Audit Programme
3. Audit Report
4. Audit Files
The correct sequence, in which an auditor prepares these documents is
(a) 2, 1, 4, 3
(b) 1, 2, 3, 4
(c) 2, 1, 3, 4
(d) 1, 2, 4, 3
Ans. (a)
31. The most important objective of internal audit, is:
(a) early detection of errors and frauds
(b) facilitating final audit
(c) early finalization of annual accounts
(d) ensuring systematic accounting
Ans. (a)
32. Section 224 of the Companies Act, 1956 deals with:
(a) special audit
(b) secretarial audit
(c) cost audit
(d) appointment and remuneration of auditors
Ans. (d)
33. An arrangement in which the accounting work of each individual is checked by other members is
known as:
(a) internal audit
(b) external audit
(c) internal check
(d) test checking
Ans. (c)
34. The main purpose of an independent audit is to:
(a) check and correct frauds and errors
(b) help in detecting frauds and errors
(c) determine if the financial statements fairly represent the actual financial position and the working results of the organization
(d) help in formulating future plans
Ans. (c)
35. Consider the following statements:
I. Foreign institutional investors have been allowed to invest in Mutual Funds
2. The main objective of SEBI is to protect the investors
3. Private placement is the route through which Promoters’ contribution is mobilized by a public company
4. RBI lays down the guidelines governing the capital market operation
Of these statements:
(a) 1 and 2 are correct
(b) 2, 3 and 4 are correct
(c) 1, 2 and 3 are correct
(d) 1, 3 and 4 are correct
Ans. (b)
36. Dow and Jones, now popularly known as ‘Dow-Jones’ in the stock market parlance, were the:
(a) first financial journalists
(b) first bull operators in the New York Stock Exchange
(c) first to predict the Great Depression
(d) architects of shop-floor trading
Ans.(b)
37. The primary function of Stock Exchange is to:
(a) mobilize savings from the public for long-term investment
(b) offer a secondary market for shares and other securities
(c) facilitate barter deals between buyer and seller holding different securities -
(d) enable Reserve Bank of India to trade in Government securities in their efforts to control money supply in the economy
Ans. (b)
38. Consider the following statements:
A mutual fund helps the ‘investor in securing:
1. professional management
2. diversification of risk
3. steady appreciation
4. lower cost of operation
Of these statements:
(a) 1, 2, 3 and 4 are correct
(b) 1, 2 and 4 are correct
(c) 2 and 3 are correct
(d) 3 and 4 are correct
Ans. (a)
39. Which of the following pairs are correctly matched?
1. Cooperative movement in India : Nanavahi Committee
is breast-fed, bottle-fed and spoon-fed
2. Tax on sole proprietor and partnership : Direct Taxes, Enquiry Committee
firm’s needs rationalization
3. Capital market in India is tightly controlled : Narasimham Committee
by the Government
Select the correct answer using the Code given below:
Code:
(a) 1, 2 and 3
(b) 1 and 3
(c) 2 and 3
(d) 1 and 2
Ans. (a)
40. “Arbitrage” means:
(a) a business arrangement by which al share broker tries to take advantages of different in ‘Spot’ and ‘Futures’ prices of a share
(b) a business arrangement in which a share broker tries to take advantage of difference in prices between two Stock Exchange centers on a particular share
(c) an arbitration proceedings that is invoked by either the buyer or the seller when he other party is unable to meet its commitment
(d) a compromise arrangement by which the transaction is postponed to the next settlement date
Ans. (b)
41. Which one of the following sets is correct with regard to liberalization in financial sector?
(a) Globalization, devaluation and privatization
(b) Deregulation, moral suasion branch expansion
(c) Privatization, computerization and standardization
(d) Globalization, deregulation and privatization
Ans. (b)
42. Which of the following are the means of marketing new issues of securities?
1. By listing of securities
2. Through jobbers and brokers
3. By private placing of securities
4. Through privileged subscription
Select the correct answer using the Code given below:
Code:
(a) 1 and 2
(c) 3 and 4
(b) 1,2 and 3
(d) 1, 2, 3 and 4
Ans. (d)
43. Narasimham Committee has, apart from other things, recommended:
(a) expanding priority sector financing
(b) restricting priority sector-financing
(c) asking new foreign and private sector banks to follow the existing norms for priority Sector financing
(d) total elimination of priority sector financing
Ans. (b)
44. Prospectus issued by a company is to be vetted and approved by the SEBI. This, however, does not mean that:
(a) disclosures are adequate as per its guidelines
(b) project proposal has been presented in conformity with its guidelines
(c) disclosures are adequate to take an informed decision by investors
(d) project proposal is sound or satisfactory
45. Commercial papers represent a new financial instrument issued for the purpose of:
(a) project financing
(b) working capital
(c) leasing of plant and equipment
(d) import of capital goods
Ans. (b)
46. Match List-I (Forms of business organization) with List-II (Distinctive characteristics) and select the correct answer using the Code given below the lists:
List-I List-II
A. Joint Hindu Family Firm 1. Association of persons for their common interests
B. Public Enterprise 2. Ownership and control by Government
C. Section 25 of Company 3. Ownership by coparceners
D. Co-operative organization 4. Limited company formed for promoting
art, commerce, science etc.
Codes:
A B C D
(a) 3 2 1 4
(b) 1 3 2 4
(c) 3 2 4 1
(d) 1 3 4 2
Ans. (c)
47. Does modernization of industrial enterprises call for mechanization?
(a) Yes, because manual labour alone cannot deliver the goods
(b) Yes, because mechanization holds the key to industrial success in most developing countries
(c) No, because it is rationalization and not mechanization that holds the key to modernization and higher productivity in the industrial sector
(d) No, because it is mechanization will aggravate the unemployment situation in the country and will ultimately result in the collapse of the economy
Ans. (a)
48. In the absence of an agreement to the contrary, the partners are:
(a) entitled to 6% interest on their capitals, only when there are profits
(b) entitled to 9% interest on their capitals, only when there are profits
(c) entitled to interest on capital at the bank rate, only when there are profits
Ans. (d)
49. Match List-I (landmark case) with List-II (the legal point established by that case) and select the correct answer using the Code given below the lists:
List—I List—II
A. Solomon vs. Solomon 1. The scope and limits of the Objects
Clause
B. Ewing vs. Butter Cup Margarine Co. Ltd. 2. A company should not be registered
with a name which resembles the
name of an existing Co.
C. Ashbury Rail Carriage & Iron Co. vs. Ritchie 3. Company is a distinct entity,
different from its members
D. Royal British Bank vs. Turquand 4. Limitation to the Doctrine of
constructive notice
5. Doctrine of Indoor Management
Codes:
A B C D
(a) 2 3 1 4
(b) 3 2 4 5
(c) 3 2 1 4
(d) 2 3 4 5
Ans. (b)
50. Which one of the following is NOT applicable to a .Co-operative form of business organization?
(a) Major portion of profit is distributed to members by way of dividend
(b) Policy decisions are taken by the members in a General Meeting
(c) Membership is open to all having a common interest
(d) It is formed generally by the artisans and consumers of limited means
Ans. (d)
Sample Paper For Accountant Jobs
Sample Paper For Accountant Jobs
Sample question paper for Accountant jobs Practice tests
Sample question papers of Jr Accountant Exam
1. Alfa Company Limited acquired the business of M/s Bharat Traders. The valuation of the items acquired was—building Rs. 1,20,000; machinery Rs. 80,000 and stock-in-trade Rs. 30,000. The company issued in lieu of the above items 800, 10% debentures of Rs. 100 each at par and 1 5000 equity shares of Rs. 10 each.
How much was the flow of funds in the above transaction?
(a) Rs. 2,30,000
(b) Rs. 1,00,000
(c) Rs. 50,000
(d) Rs. 30,000
Ans. (d)
2. What are the aspects to be considered while qualifying the audit report on the accounts of a company?
1. An item requiring specific disclosure under the Companies Act is not so disclosed
2. Where the auditor has not been able to form an opinion due to his inability to obtain sufficient, appropriate evidence information and explanation
3. An auditor realizes that items in a financial statement are misstated to such an extent that the financial statement does not give a true and fair view
Select the correct answer using the Code given below:
Code:
(a) 1 only
(b) 1 and 2
(c) 2 and 3
(d) 1, 2 and 3
Ans. (d)
3. Analytical review by an auditor mainly includes:
(a) examining vouchers and other documents
(b) physical verification of assets
(c) examining day books with ledgers
(d) study of ratios and trends
Ans. (d)
4. Statements on Standard Auditing Practices (SAPs) are important while discharging the auditing function by a member of the ICAI in case of a company, because SAPs are:
(a) prescribed by the ICAI
(b) contained in the Companies Act, 1956
(c) approved by the Department of Company Affairs
(d) approved by the Central Government in consultation with Comptroller and Auditor-General
Ans. (a)
5. Which audit is carried out during the accounting period with some interval, it is called:
(a) periodic audit
(b) partial audit
(c) continuous audit
(d) interim audit
Ans. (c)
6. Which one of the following pairs is NOT correctly matched?
(a) Suppression of invoices : Window dressing
(b) Overcharging depreciation : Secret reserves
(c) Omission of cash receipts from debtors : Understatement of sales
(d) Omission of credit sale : Understatement of debtors
Ans. (a)
7. Internal audit report is submitted to:
(a) Government
(b) Shareholders
(c) Creditors
(d) Board of Directors
Ans. (d)
8. The main purpose of auditing is to:
(a) detect accounting offences and to punish the offender
(b) prepare and authenticate the accounts
(c) prepare the accounts and authenticate their true and fair view
(d) certify the financial position of the business
Ans. (d)
9. Every auditor appointed under Section 224 (1) of the Companies Act, 1956 shall inform in writing as to whether he has accepted or refused to accept the appointment. Such an intimation shall be given by him to the
(a) company within 30 days of receipt from the company of the intimation of his appointment
(b) Company Law Board within 30 days of receipt from the company of the intimation of his appointment
(c) company within 7 days of receipt from the company of the intimation of his appointment
(d) Registrar within 30 days of receipt from the company of the intimation of his appointment
Ans. (d)
10. If an auditor does something wrongfully in the performance of his duties resulting in financial loss to the company, he will be held guilty of:
(a) civil negligence
(b) misfeasance
(c) criminal negligence
(d) financial irregularity
Ans. (b)
11. Audit Committee shall act in accordance with the terms of reference to be specified by:
(a) Statutory Auditors
(b) SEBI
(c) Board of Directors
(d) Central Government
Ans. (c)
12. The selection of items, to be included in the audit on a subjective basis without consideration of sample size of method of selection, is:
(a) probability sampling
(b) systematic sampling
(c) random sampling
(d) judgment sampling
Ans. (a)
13. The scope of audit in a partnership firm is governed by:
(a) partnership act
(b) partnership deed
(c) agreement between partnership firm and auditor
(d) number of partners of the firm
Ans. (c)
14. While establishing the statistical sampling plan, the degree of precision required is determined by:
(a) keenness of the management
(b) suitability of accounting systems and. procedures
(c) allowable margin of error the auditors are willing to accept
(d) random number table used for the purpose
Ans. (d)
15. Match List- I with List -II and select the correct answer using the Code given below the Lists:
List—I List—II
A. Inspection of books of account under 1. Central government
Section 209A of the Companies Act, 1956
B. Constitution of National Advisory Committee 2. Registrar of Companies
on Accounting Standards
C. Books of account 3. Registered office
D. Reasons for failure to buy back shares 4. The ICAI
5. Directors’ Report
Code:
A B C D
(a) 2 1 3 5
(b) 3 1 2 4
(c) 2 4 3 5
(d) 3 4 2 1
Ans. (c)
16. The scope of ‘management audit’ is determined by the:
(a) shareholders
(b) Board of Directors
(c) Comptroller and Auditor-General (C & AG)
(d) Comptroller and Auditor-General in consultation with the Central Government
Ans. (b)
17. In the case of an auditor appointed under Section 619 of the Companies Act, 1956 by the Comptroller and Auditor-General of India, the remuneration shall be fixed by the
(a) company in general meeting
(b) comptroller and Auditor-General of India
(c) comptroller and— Auditor-General of India consultation with the Central Government
(d) Company Law Board
Ans. (d)
18. Test checking reduces:
(a) the work of an auditor
(b) tie liability of an auditor
(c) both work and liability of an auditor
(d) the remuneration of an auditor
Ans. (a)
19. X is proposed to be appointed as the auditor of ABC Co. Ltd. at the ensuing AGM in place of the retiring auditor Y. This requires:
(a) a special resolution and approval of the Company Law Board
(b) a special notice
(c) an ordinary resolution and approval of the Company Law Board
(d) a special resolution and approval of Central Government
Ans. (b)
20. Test checking of entries in the audit work refers to:
(a) the internal checks
(b) the internal controls
(c) checking some sample items from a large number of similar items
(d) checking the cash flow of business
Ans. (c)
21. The First Standard Auditing Practice (SAP-I) is related to:
(a) objectives and scope of the audit of financial statements
(b) basis principles governing an audit
(c) documentation
(d) detecting fraud and error
Ans. (a)
22. Which of the following relating to Audit’ Programme is NOT correct?
(a) The auditor cannot defend himself on the basis of audit programme if there is a charge of negligence against him
(b) it is useful basis for planning the programme for ‘the subsequent year
(c) It helps in the final review before the report is signed
(d) it simplifies the allocation of work amongst the audit staff
Ans. (a)
23. Who is ‘bull’?
(a) A stock broker who deals or specializes in a few shares
(b) An investor who sells securities in anticipation of being able to re-buy them later at a lower price
(c) An investor who buys securities in anticipation of being able to sell them at a higher price
(d) An investor who expects the price of a security or of the market as a whole to fall
Ans. (c)
24. Commercial paper is a:
(a) long-term corporate security meant for small investors
(b) medium-term corporate security meant for institutional investors
(c) treasury paper meant for corporate investors
(d) short-item corporate security meant for large-scale investors
Ans. (c)
25. A cartel is a combination of firms:
(a) which are functioning in a particular industry
(b) whose combined assets are worth more than 90% of total assets of the industry
(c) who control major chunk of the market
(d) whose combined profits are enormous
Ans. (d)
26. Social responsibility of business assumes considerable importance towards:
(a) owners and workers
(b) consumers and community
(c) government and nation
(d) All the above
Ans.(d)
27. The distinctive characteristic of ‘perpetual succession’ of a joint stock company refers to:
(a) uninterrupted business in spite of continuous losses
(b) immunity from government direction for the closure of the company
(c) immunity from resolution passed in the annual general body meeting for closure of the company
(d) uninterrupted existence not affected by the death or insolvency of members of the company
Ans. (d)
28. A statutory corporation is one which comes into being
by:
(a) registration under Companies Act, 1956
(b) virtue of enactment of a Special Act
(c) registration under any enforceable Act operating in India
(d) the entrepreneurial effort of the government
Ans. (d)
29. Consider the following statements:
An unregistered partnership firm suffers from the following disabilities4.
1. A partner of such firm cannot file a suit for the dissolution of the firm
2. The firm cannot file a suit against any third party for realization of its dues
3. A partner cannot file a suit against any other partner to enforce any right arising out of partnership deed
Which of the above statements are correct?
(a) 1, 2 and 3
(b) 1 and 3
(c) 1 and 2
(d) 2 and 3
Ans. (d)
30. Exim Bank of India provides financial assistance to exporters and importers in India:
(a) in foreign currency only
(b) both in Indian currency and foreign currencies
(c) as zero-interest loans
(d) as subsidies
Ans. (d)
31. In life insurance, the risk insured is:
(a) certain to occur and also the timing of its occurrence is known
(b) certain to occur, but its timing of its occurrence is not known
(c) not certain to occur and also the timing of its occurrence is not known
(d) not likely to occur
Ans. (c)
32. The national re-insurer in India is:
(a) General Insurance Corporation of India
(b) United India Insurance Company Ltd.
(c) Insurance Regulatory and Development Authority
(d) Oriental Fire and General Insurance Company Ltd.
Ans. (a)
33. Which one of the following risks is not insured by the Export Credit and Guarantee Corporation?
(a) The risk of non-payment by the foreign buyer
(b) The risk that the importer may return the goods on the ground of lower quality
(c) The political risk that the import license may be revoked
(d)The risk of war, revolution, etc.; in the buyer’s country
Ans. (b)
34. Which one of the following indicates the correct chronological order of the ‘system’ designed for purchasing ‘office supplies’?
(a) Select sources of supply, initiate requisition, order supplies, receive supplies and pay vendor
(b) Initiate requisition, order supplies, select sources of supply, receive supplies and pay vendor
(c) Select sources of supply, initiate requisition order supplies, pay vendor and receive supplies
(d) Initiate requisition, select sources of supply, order supplies, receive supplies and pay vendor
Ans. (b)
35. Which one among the following is an instance of Participative Management?
(a) Board of Directors
(b) Trade Unions
(c) Work Committees
(d) Task Force
Ans. (c)
36. The size of an office can be measured in which of the following ways?
1. Production capacity of the organization
2. Number of employees
3. Investment in equipment and machines
4. Total administrative expenses
Select the correct answer using the Code given below:
Code:
(a) 1 and 4 are correct
(b) 1 and 2 are correct
(c) 1, 2 and 3 are correct
(d) 2, 3 and 4 are correct
Ans. (d)
37. Contingency School of Management
(a) practice-oriented
(b) principle-oriented
(c) result-oriented
(d) profit and loss-oriented
Ans. (a)
38. The term ‘organizational climate’ best represents:
(a) human environment prevailing in an organization
(b)union management relations within an organization
(c) problems introduced by faulty organizational structure
(d) socio-cultural environment in an organization
Ans. (d)
39. Which one of the following is the correct sequence in terms of the four management functions, first identified by Henry Fayol?
(a) Planning, Organizing, Leading and Controlling
(b) Planning, Organizing, Staffing and Coordinating
(c) Planning, Motivating, Directing and Reporting
(d) Planning, Staffing, Communicating and Leading
Ans. (b)
40. Match List-I (Office records) with List-II (Need of such record) and select the correct answer using the Code given below the Lists:
List-I List-II
A. File 1. Recording small and necessary expenses
B. Ledger 2. Recording transactions
C. Petty cash book 3. Keeping necessary documents
D. Office manual 4. Computerizing office system
Code:
A B C D
(a) 3 2 1 4
(b) 4 5 3 1
(c) 3 5 1 2
(d) 4 2 3 1
Ans. (a)
41. Organizations require narrow span of control if there are:
(a) mature subordinates within
(b) competent and trained managers
(c) unclear plans for non repetitive operations
(d) well defined plans for repetitive operations
Ans. (b)
42. Which one f the following traits describes properly organic or behavioral structure of organization?
(a) Wider spans of control
(b) More centralization
(c) Higher degree of specialization
(d) Taller hierarchy
Ans. (a)
43. People resist change in organization because of:
(a) fear of unemployment
(b) increase in responsibility
(c) need for new social adjustments
(d) All the above
Ans. (d)
44. When there are large number of smaller projects and the activities of those projects are to be accomplished by setting up some temporary departments, the appropriate organizational structure should be:
(a) project organization
(b) functional organization
(c) matrix organization
(d) divisional organization
Ans. (c)
45. The managerial function of organizing involves:
(a) reviewing and adjusting plan in the light of changing conditions
(b) establishing programme for the accomplishment of objectives
(c) creating a structure of functions and duties to be performed by a group
(d) getting things done through others
Ans. (c)
46. Which one of the following is the major consideration for decentralization?
(a) Organization’s environment
(b) Nature of management function
(c) Size of the organization
(d) Ability of higher-level managers
Ans. (c)
47. Which among the following is the most popular approach for accomplishing the results?
(a) Management by exception
(b) Reward system
(c) Management by objectives
(d) Mentor system
Ans. (c)
48. Which among the following is the oldest and simplest device for achieving coordination?
(a) Hierarchy
(b) Planning
(c) Incentives
(d) Rules
Ans. (b)
49. Centralizing the office work is desirable mostly because it:
(a) fixes responsibility
(b) avoids duplication
(c) permits better supervision
(d) permits better delegation
Ans. (a)
50. Match List-I with List-II and select the correct answer using the Code given below the List:
List- I List-II
A. F.W. Taylor 1. Principles of Management
B. Maslow 2. Team Work
C. Esprit de Corps 3. Scientific Management
D. V Henry Fayol 4. Theory of Human Motivation
Code:
A B C D
(a) 1 4 2 3
(b) 3 2 4 1
(c) 1 2 4 3
(d) 3 4 2 1
Ans. (d)
Sample question paper for Accountant jobs Practice tests
Sample question papers of Jr Accountant Exam
1. Alfa Company Limited acquired the business of M/s Bharat Traders. The valuation of the items acquired was—building Rs. 1,20,000; machinery Rs. 80,000 and stock-in-trade Rs. 30,000. The company issued in lieu of the above items 800, 10% debentures of Rs. 100 each at par and 1 5000 equity shares of Rs. 10 each.
How much was the flow of funds in the above transaction?
(a) Rs. 2,30,000
(b) Rs. 1,00,000
(c) Rs. 50,000
(d) Rs. 30,000
Ans. (d)
2. What are the aspects to be considered while qualifying the audit report on the accounts of a company?
1. An item requiring specific disclosure under the Companies Act is not so disclosed
2. Where the auditor has not been able to form an opinion due to his inability to obtain sufficient, appropriate evidence information and explanation
3. An auditor realizes that items in a financial statement are misstated to such an extent that the financial statement does not give a true and fair view
Select the correct answer using the Code given below:
Code:
(a) 1 only
(b) 1 and 2
(c) 2 and 3
(d) 1, 2 and 3
Ans. (d)
3. Analytical review by an auditor mainly includes:
(a) examining vouchers and other documents
(b) physical verification of assets
(c) examining day books with ledgers
(d) study of ratios and trends
Ans. (d)
4. Statements on Standard Auditing Practices (SAPs) are important while discharging the auditing function by a member of the ICAI in case of a company, because SAPs are:
(a) prescribed by the ICAI
(b) contained in the Companies Act, 1956
(c) approved by the Department of Company Affairs
(d) approved by the Central Government in consultation with Comptroller and Auditor-General
Ans. (a)
5. Which audit is carried out during the accounting period with some interval, it is called:
(a) periodic audit
(b) partial audit
(c) continuous audit
(d) interim audit
Ans. (c)
6. Which one of the following pairs is NOT correctly matched?
(a) Suppression of invoices : Window dressing
(b) Overcharging depreciation : Secret reserves
(c) Omission of cash receipts from debtors : Understatement of sales
(d) Omission of credit sale : Understatement of debtors
Ans. (a)
7. Internal audit report is submitted to:
(a) Government
(b) Shareholders
(c) Creditors
(d) Board of Directors
Ans. (d)
8. The main purpose of auditing is to:
(a) detect accounting offences and to punish the offender
(b) prepare and authenticate the accounts
(c) prepare the accounts and authenticate their true and fair view
(d) certify the financial position of the business
Ans. (d)
9. Every auditor appointed under Section 224 (1) of the Companies Act, 1956 shall inform in writing as to whether he has accepted or refused to accept the appointment. Such an intimation shall be given by him to the
(a) company within 30 days of receipt from the company of the intimation of his appointment
(b) Company Law Board within 30 days of receipt from the company of the intimation of his appointment
(c) company within 7 days of receipt from the company of the intimation of his appointment
(d) Registrar within 30 days of receipt from the company of the intimation of his appointment
Ans. (d)
10. If an auditor does something wrongfully in the performance of his duties resulting in financial loss to the company, he will be held guilty of:
(a) civil negligence
(b) misfeasance
(c) criminal negligence
(d) financial irregularity
Ans. (b)
11. Audit Committee shall act in accordance with the terms of reference to be specified by:
(a) Statutory Auditors
(b) SEBI
(c) Board of Directors
(d) Central Government
Ans. (c)
12. The selection of items, to be included in the audit on a subjective basis without consideration of sample size of method of selection, is:
(a) probability sampling
(b) systematic sampling
(c) random sampling
(d) judgment sampling
Ans. (a)
13. The scope of audit in a partnership firm is governed by:
(a) partnership act
(b) partnership deed
(c) agreement between partnership firm and auditor
(d) number of partners of the firm
Ans. (c)
14. While establishing the statistical sampling plan, the degree of precision required is determined by:
(a) keenness of the management
(b) suitability of accounting systems and. procedures
(c) allowable margin of error the auditors are willing to accept
(d) random number table used for the purpose
Ans. (d)
15. Match List- I with List -II and select the correct answer using the Code given below the Lists:
List—I List—II
A. Inspection of books of account under 1. Central government
Section 209A of the Companies Act, 1956
B. Constitution of National Advisory Committee 2. Registrar of Companies
on Accounting Standards
C. Books of account 3. Registered office
D. Reasons for failure to buy back shares 4. The ICAI
5. Directors’ Report
Code:
A B C D
(a) 2 1 3 5
(b) 3 1 2 4
(c) 2 4 3 5
(d) 3 4 2 1
Ans. (c)
16. The scope of ‘management audit’ is determined by the:
(a) shareholders
(b) Board of Directors
(c) Comptroller and Auditor-General (C & AG)
(d) Comptroller and Auditor-General in consultation with the Central Government
Ans. (b)
17. In the case of an auditor appointed under Section 619 of the Companies Act, 1956 by the Comptroller and Auditor-General of India, the remuneration shall be fixed by the
(a) company in general meeting
(b) comptroller and Auditor-General of India
(c) comptroller and— Auditor-General of India consultation with the Central Government
(d) Company Law Board
Ans. (d)
18. Test checking reduces:
(a) the work of an auditor
(b) tie liability of an auditor
(c) both work and liability of an auditor
(d) the remuneration of an auditor
Ans. (a)
19. X is proposed to be appointed as the auditor of ABC Co. Ltd. at the ensuing AGM in place of the retiring auditor Y. This requires:
(a) a special resolution and approval of the Company Law Board
(b) a special notice
(c) an ordinary resolution and approval of the Company Law Board
(d) a special resolution and approval of Central Government
Ans. (b)
20. Test checking of entries in the audit work refers to:
(a) the internal checks
(b) the internal controls
(c) checking some sample items from a large number of similar items
(d) checking the cash flow of business
Ans. (c)
21. The First Standard Auditing Practice (SAP-I) is related to:
(a) objectives and scope of the audit of financial statements
(b) basis principles governing an audit
(c) documentation
(d) detecting fraud and error
Ans. (a)
22. Which of the following relating to Audit’ Programme is NOT correct?
(a) The auditor cannot defend himself on the basis of audit programme if there is a charge of negligence against him
(b) it is useful basis for planning the programme for ‘the subsequent year
(c) It helps in the final review before the report is signed
(d) it simplifies the allocation of work amongst the audit staff
Ans. (a)
23. Who is ‘bull’?
(a) A stock broker who deals or specializes in a few shares
(b) An investor who sells securities in anticipation of being able to re-buy them later at a lower price
(c) An investor who buys securities in anticipation of being able to sell them at a higher price
(d) An investor who expects the price of a security or of the market as a whole to fall
Ans. (c)
24. Commercial paper is a:
(a) long-term corporate security meant for small investors
(b) medium-term corporate security meant for institutional investors
(c) treasury paper meant for corporate investors
(d) short-item corporate security meant for large-scale investors
Ans. (c)
25. A cartel is a combination of firms:
(a) which are functioning in a particular industry
(b) whose combined assets are worth more than 90% of total assets of the industry
(c) who control major chunk of the market
(d) whose combined profits are enormous
Ans. (d)
26. Social responsibility of business assumes considerable importance towards:
(a) owners and workers
(b) consumers and community
(c) government and nation
(d) All the above
Ans.(d)
27. The distinctive characteristic of ‘perpetual succession’ of a joint stock company refers to:
(a) uninterrupted business in spite of continuous losses
(b) immunity from government direction for the closure of the company
(c) immunity from resolution passed in the annual general body meeting for closure of the company
(d) uninterrupted existence not affected by the death or insolvency of members of the company
Ans. (d)
28. A statutory corporation is one which comes into being
by:
(a) registration under Companies Act, 1956
(b) virtue of enactment of a Special Act
(c) registration under any enforceable Act operating in India
(d) the entrepreneurial effort of the government
Ans. (d)
29. Consider the following statements:
An unregistered partnership firm suffers from the following disabilities4.
1. A partner of such firm cannot file a suit for the dissolution of the firm
2. The firm cannot file a suit against any third party for realization of its dues
3. A partner cannot file a suit against any other partner to enforce any right arising out of partnership deed
Which of the above statements are correct?
(a) 1, 2 and 3
(b) 1 and 3
(c) 1 and 2
(d) 2 and 3
Ans. (d)
30. Exim Bank of India provides financial assistance to exporters and importers in India:
(a) in foreign currency only
(b) both in Indian currency and foreign currencies
(c) as zero-interest loans
(d) as subsidies
Ans. (d)
31. In life insurance, the risk insured is:
(a) certain to occur and also the timing of its occurrence is known
(b) certain to occur, but its timing of its occurrence is not known
(c) not certain to occur and also the timing of its occurrence is not known
(d) not likely to occur
Ans. (c)
32. The national re-insurer in India is:
(a) General Insurance Corporation of India
(b) United India Insurance Company Ltd.
(c) Insurance Regulatory and Development Authority
(d) Oriental Fire and General Insurance Company Ltd.
Ans. (a)
33. Which one of the following risks is not insured by the Export Credit and Guarantee Corporation?
(a) The risk of non-payment by the foreign buyer
(b) The risk that the importer may return the goods on the ground of lower quality
(c) The political risk that the import license may be revoked
(d)The risk of war, revolution, etc.; in the buyer’s country
Ans. (b)
34. Which one of the following indicates the correct chronological order of the ‘system’ designed for purchasing ‘office supplies’?
(a) Select sources of supply, initiate requisition, order supplies, receive supplies and pay vendor
(b) Initiate requisition, order supplies, select sources of supply, receive supplies and pay vendor
(c) Select sources of supply, initiate requisition order supplies, pay vendor and receive supplies
(d) Initiate requisition, select sources of supply, order supplies, receive supplies and pay vendor
Ans. (b)
35. Which one among the following is an instance of Participative Management?
(a) Board of Directors
(b) Trade Unions
(c) Work Committees
(d) Task Force
Ans. (c)
36. The size of an office can be measured in which of the following ways?
1. Production capacity of the organization
2. Number of employees
3. Investment in equipment and machines
4. Total administrative expenses
Select the correct answer using the Code given below:
Code:
(a) 1 and 4 are correct
(b) 1 and 2 are correct
(c) 1, 2 and 3 are correct
(d) 2, 3 and 4 are correct
Ans. (d)
37. Contingency School of Management
(a) practice-oriented
(b) principle-oriented
(c) result-oriented
(d) profit and loss-oriented
Ans. (a)
38. The term ‘organizational climate’ best represents:
(a) human environment prevailing in an organization
(b)union management relations within an organization
(c) problems introduced by faulty organizational structure
(d) socio-cultural environment in an organization
Ans. (d)
39. Which one of the following is the correct sequence in terms of the four management functions, first identified by Henry Fayol?
(a) Planning, Organizing, Leading and Controlling
(b) Planning, Organizing, Staffing and Coordinating
(c) Planning, Motivating, Directing and Reporting
(d) Planning, Staffing, Communicating and Leading
Ans. (b)
40. Match List-I (Office records) with List-II (Need of such record) and select the correct answer using the Code given below the Lists:
List-I List-II
A. File 1. Recording small and necessary expenses
B. Ledger 2. Recording transactions
C. Petty cash book 3. Keeping necessary documents
D. Office manual 4. Computerizing office system
Code:
A B C D
(a) 3 2 1 4
(b) 4 5 3 1
(c) 3 5 1 2
(d) 4 2 3 1
Ans. (a)
41. Organizations require narrow span of control if there are:
(a) mature subordinates within
(b) competent and trained managers
(c) unclear plans for non repetitive operations
(d) well defined plans for repetitive operations
Ans. (b)
42. Which one f the following traits describes properly organic or behavioral structure of organization?
(a) Wider spans of control
(b) More centralization
(c) Higher degree of specialization
(d) Taller hierarchy
Ans. (a)
43. People resist change in organization because of:
(a) fear of unemployment
(b) increase in responsibility
(c) need for new social adjustments
(d) All the above
Ans. (d)
44. When there are large number of smaller projects and the activities of those projects are to be accomplished by setting up some temporary departments, the appropriate organizational structure should be:
(a) project organization
(b) functional organization
(c) matrix organization
(d) divisional organization
Ans. (c)
45. The managerial function of organizing involves:
(a) reviewing and adjusting plan in the light of changing conditions
(b) establishing programme for the accomplishment of objectives
(c) creating a structure of functions and duties to be performed by a group
(d) getting things done through others
Ans. (c)
46. Which one of the following is the major consideration for decentralization?
(a) Organization’s environment
(b) Nature of management function
(c) Size of the organization
(d) Ability of higher-level managers
Ans. (c)
47. Which among the following is the most popular approach for accomplishing the results?
(a) Management by exception
(b) Reward system
(c) Management by objectives
(d) Mentor system
Ans. (c)
48. Which among the following is the oldest and simplest device for achieving coordination?
(a) Hierarchy
(b) Planning
(c) Incentives
(d) Rules
Ans. (b)
49. Centralizing the office work is desirable mostly because it:
(a) fixes responsibility
(b) avoids duplication
(c) permits better supervision
(d) permits better delegation
Ans. (a)
50. Match List-I with List-II and select the correct answer using the Code given below the List:
List- I List-II
A. F.W. Taylor 1. Principles of Management
B. Maslow 2. Team Work
C. Esprit de Corps 3. Scientific Management
D. V Henry Fayol 4. Theory of Human Motivation
Code:
A B C D
(a) 1 4 2 3
(b) 3 2 4 1
(c) 1 2 4 3
(d) 3 4 2 1
Ans. (d)
commerce for IAS prelims
commerce for IAS prelims
Civil Services Commerce Prelims Paper practice
Commerce model question papers
1. Match List-I (Basis of Departmentation) with List-II (Example) and select the correct answer using the Code given below the lists:
List—I List—II
(Basis of Departmentation) (Example)
A. Customer 1. Day and night shifts in a hospital
B. Functional 2. Retail and wholesale sale of a trader
C. Geographical 3. Northern and Southern Divisions of a railway
D. Temporal 4. Production and sales of a factory
Codes:
A B C D
(a) 2 3 1 4
(b) 1 4 3 5
(c) 2 4 3 1
(d) 1 3 4 5
Ans. (c)
2. Which one of the following is not true of GDR?
(a) It is an instrument issued abroad and is listed and traded on a foreign stock exchange
(b) A GDR may represent one or more shares of the issuing company
(c) It can be converted into equity shares at any time
(d) A GDR may represent either equity shares or
Ans. (d)
3. The quality of information is measured by its:
(a) Accuracy
(b) Cost
(c) Degree of statistical validity
(d) Timeliness
Ans. (d)
4. A wage which should enable a worker to provide for himself and his family not merely the bare essentials like food, clothing and shelter but also a measure of comfort in the form of education for his children and protection against diseases and illness is known as:
(a) Fair wage
(b) Minimum wage
(c) Living wage
(d) Incentive wage
Ans. (c)
5. Emerson Efficiency System of wage payment means:
(a) The worker is allowed a certain time within which he is required to complete his job
(b) The completion of job within the prescribed time. The worker is paid bonus of a certain percentage
(c) where the worker takes 50% more than prescribed time he is paid no bonus
(d) All of the above
Ans. (b)
6. One of the consequences of highly protective tariff walls would be that:
(a) Foreign producers find their imports attractive
(b) Domestic producers sell exportable goods at a premium in the domestic market
(c) Foreign producers find their exports attractive
(d) Domestic producers find imports to be cheaper
Ans. (b)
Directions : The following Fourteen (14) items consist of two statements, one labelled as the ‘Assertion (A) ‘and the other as ‘Reason (R)’. You are to examine these two statements carefully and select the answers to these items using the Code given below:
(a) Both A and R are individually true and R is the correct explanation of A
(b) Both A and R are individually 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
7. Assertion (A): Management Audit should be conducted by a team of experts.
Reason (R): Management Audit is a critical examination of policy and practices of management from the highest level to downward in order to ascertain that sound management prevails in the business concern.
Ans. (a)
8. Assertion (A): If it is found that some errors and/or frauds are remaining undetected due to the fact that a statutory auditor depended upon test checking, then the said auditor will be held responsible for negligence in the performance of his duties.
Reason (R): A statutory auditor cannot, in any way, avoid or reduce the responsibility laid on him by the statutes.
Ans. (d)
9. Assertion (A): An auditor of a large business concern has to adopt test checking based on scientific statistical sampling technique instead of checking the whole of transaction- of a particular class.
Reason (R): Test checking based on scientific statistical sampling technique, reduces the volume of unnecessarily cumbersome audit work involved in detailed checking of all transactions.
Ans. (a)
10. Assertion (A): Revenue expenditure is written off in the year in which it occurs.
Reason (R): The benefit of revenue expenditure is consumed in the year in which it arises.
Ans. (a)
11. Assertion (A): Cash flow Statement and Fund Flow Statement disclose same information.
Reason (R): Both are prepared out of the same data.
Ans. (d)
12. Assertion (A): Liquid ratio reveals strength of liquidity ofa business unit.
Reason (R): Liquid ratio analyses liquid assets and liquid liabilities of a business uhit in order to assess the extent of liquidity.
Ans. (a)
13. Assertion (A): Profit and Loss Account and Balance Sheet are financial statements showing financial position of a business unit.
Reason (R): Profit and Loss Account and Balance Sheet are prepared at the end of the financial year.
Ans. (d)
14. Assertion (A): The interest on debentures can be capitalized up to the complete construction of the fixed assets.
Reason (R): The construction of fixed assets could only be completed by the use of these funds.
Ans. (c)
15. Assertion (A): The role of the Doctrine of Indoor Management is opposed to the rules of constructive notice.
Reason (R): The constructive notice seeks to protect the company against the outsider whereas the Doctrine of Indoor Management operates to protect outsider against the company.
Ans. (a)
16. Assertion (A): Rules of Constructive Notice and Articles of Association are known to everyone who deals with the company.
Reason (R): After re4stration of the company, Memorandum and Articles of Association become public documents.
Ans. (a)
17. Assertion (A): Doctrine of Indoor Management does not apply to forgery.
Reason (R): Company Law recognizes ultra vires or illegal acts.
(c)
18. Assertion (A): A Director of a company in his individual capacity can exercise powers conferred on him by the Companies Act, Memorandum and the Article of Association of the company.
Reason (R): The Directors have the power to enter into contract on behalf of the company with other parties.
Ans. (d)
19. Assertion (A): Capital expenditure is incurred for the purpose f acquiring fixed asset.
Reason (R): Capital expenditure item is shown in the asset side of the Balance Sheet.
Ans. (b)
20. Assertion (A): Staff officers and assigned an ‘authority of ideas’ and line officers and ‘authority to command’.
Reason (R): Functional authority is not restricted to managers of a particular type of department.
Ans. (b)
21. Accounting is generally understood as:
1. summarization of business transaction
2. language of the business
3. source of business information
4. means of communication
Select the correct answer using the Code given below:
Code:
(a) 1 only
(b) 1 and 2
(c) 2 and 3
(d) 1, 2, 3 and 4
Ans. (d)
22. In case of disclosure of accounting policies, the following fundamental accountings assumptions may NOT be required to be stated f they are followed in the preparation of final accounts or a company:
1. Materiality and accounting period
2. Going concern and consistency
3. Accrual basis of accounting
4. Conservatism and accounting period
Select the correct answer using the Code given below:
Code:
(a) 2 and 3
(b) 1 and 4
(c) l, 2 and 3
(d) 1, 2, 3 and 4
Ans. (a)
23. Which one of the following pairs is NOT correctly matched?
(a) Accounting equation : Assets — Liabilities — Capital
(b) Accounting year : 1st April to 31st March
(c) Accrual concept : Recognizing revenue on receipt of cash
(d) Cost concept : Recognizing transactions at historical cost
Ans. (a)
24. Match List—I (Accounting Standards (AS) issued by the Institute of Chartered Accountants of India) with List-II (Standard on) 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. Disclosure of Accounting Policies
C. AS-3 3. Depreciation Accounting
D. AS-6 4. Cash Flow Statement
Code:
A B C D
(a) 2 3 4 1
(b) 4 1 2 3
(c) 4 3 2 1
(d) 2 1 4 3
Ans. (d)
25. Which among the following is the societal obligation of accounting?
(a) To ascertain profit correctly
(b) To maintain the records of the assets and liabilities of organization
(c) To establish effective organizational control
(d) To be helpful in correct tax assessment
Ans. (d)
26. Included in production overhead of hardware division of Rs. 3, 00,000 is Rs. 50,000, being the cost of prototype computers manufactured by the company itself. These are not to be sold but to be kept for demonstrating a live medical imaging software programme.
The cost of prototype computers of Rs. 50,000 should be treated as:
(a) fixed assets
(b) deferred revenue expenditure
(c) production overheat cost of hardware division
(d) advertising cost
Ans. (b)
27. A and B are partners sharing profits and losses in proportion of 2: 1. They admit new partner C whom they give 1/5th share in profits. The new profit-sharing ratio will be:
(a) 8:4:3
(b) 3:2:1
(c) 2:1:1
(d) 4:2:1
Ans. (a)
28. A and B are sharing profits in the ratio of 2:1. They admit C into the firm ¼ th share in profits for which he brings Rs. 12,000 as his share of capital. Therefore, the adjusted capital of B will be:
(a) Rs. 48,000
(b) Rs. 12,000
(c) Rs. l6, 000
(d) Rs. 24,000
Ans. (b)
29. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List—II
A. Revaluation Account 1. Retirement of a partner
B. Realization Account 2. Maximum loss method
C. Piecemeal Distribution 3. Admission of a partner
D. Gaining Ratio 4. Dissolution of partnership firm
Code:
A B C D
(a) 2 1 3 4
(b) 3 4 2 1
(c) 2 4 3 1
(d) 3 1 2 4
Ans. (b)
30. While making an adjusting entry in respect of interest on capital, we credit:
(a) Capital account
(b) Profit and loss account
(c) Interest on capital account
(d) Drawing account
Ans. (a)
31. What is the correct sequence of the following items of current assets in balance sheet of a company, as per the Companies Act, 1956?
1. Cash balance on hand
2. Interest accrued on investments
3. Stores and spare parts
4. Loose tools
5. Sundry debtors
6. Stock-in-trade
7. Work-in-progress
Select the correct answer using the Code given below:
Code:
(a) 2, 5, 4, 6, 7, 3, 1
(b) 1, 2, 4, 3, 5, 7, 6
(c) 7, 6, 4, 1, 2, 5, 3
(d) 2, 3, 4, 6, 7, 5, 1
Ans. (d)
32. The loss on the sale of old furniture debited to:
(a) profit and loss account
(b) furniture account
(c) trading account
(d) depreciation account
Ans. (a)
33. Given:
Opening stock : Rs. 5,000
Closing stock : Rs. 7,000
Purchases : Rs. 10,000
Manufacturing expenses : Rs. 20,000
Loss of materials due to fire : Rs. 1000
The cost of production would be
(a) Rs. 28,000
(b) Rs. 29,000
(c) Rs. 27,000
(d) Rs. 30,000
Ans. (c)
34. Consider the following statements:
1. Closing stock is valued on the Principle of cost price of market price whichever is lower
2. The manufactured goods in a year are transferred from the manufacturing account to trading account at selling price
3. The going concern concept assumes that a business will continue its operations indefinitely
4. Revenue is not increased by taking loans although assets and liabilities are increased
Which of the above statements are correct?
(a) l, 3 and 4
(b) l and 2
(c) 2 and 3
(d) 2, 3 and 4
Ans. (a)
35. Under the head ‘Provisions’ in the balance sheet of a limited company, the following provisions made for, are to be disclosed:
1. Proposed dividend
2. PF schemes
3. Pension and other staff-benefit schemes
4. Taxation The correct chronological order of their disclosure is
(a) 4, 2, 1, 3
(b) 3, 2, 1, 4
(c) 4, 1, 2, 3
(d) 3, 1, 2, 4
Ans. (c)
36. Under the head ‘current liabilities’, the following are disclosed:
1. Unclaimed dividend
2. Sundry creditors
3. Unexpired discounts
4. Bills payable
The correct chronological order of their disclosure is:
(a) 4, 3, 2, 1
(b) l, 3, 2, 4
(c) 4, 2, 3, 1
(d) l, 2, 3, 4
Ans. (c)
37. Dividend can be paid generally out of:
(a) share premium account
(b) capital redemption reserve account
(c) current year’s profits
(d) All of these
Ans. (c)
38. If the purchases made during the year were Rs. 60,000, the balance of stock in trade at the beginning and at the end of-the year were Rs. 12,000 and Rs. 9,000 respectively and the gross profit on sales was 1/5th, when which one of the following represents the figure of gross profit for the year?
(a) Rs. 15,750
(b) Rs. 14,000
(c) Rs. 12,500
(d) Rs. 17,250
Ans. (a) Rs. 15,750
39. Financial year of a company shall not exceed:
(a) calendar year
(b) 15 months.
(c) 18 months with special permission of Registrar of Companies
(d) 15 months with special permission of Registrar of Companies
Ans. (c)
40. The following four assets normally appear in the balance sheet:
1. Advance salary
2. Copyright
3. Preliminary expenses
4. Loose tools
The correct order in which these are to appear in the balance sheet if drawn in order of permanency will be:
(a) 4, 2, 1, 3
(b) 3, 2, 4, 1
(c) 1, 2, 3, 4
(d) 2, 4, 1, 3
Ans. (d)
41. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List—I List—II
A. Nominal share capital 1. Capitalization of reserve
B. Right shares 2. Fixed dividend
C. Bonus shares 3. Maximum amount of share capital of a company
D. Preference shares 4. First offered to the existing shareholders
Code:
A B C D
(a) 3 4 1 2
(b) 2 1 4 3
(c) 2 4 1 3
(d) 3 1 4 2
Ans. (a)
42. A company forfeited 30 equity shares of Rs. 10 each fully called-up, for non-payment of allotment money of Rs. 3 and call-money of Rs, 4 per share. If these shares are reissued at Rs. 8 per share fully paid, the amount transferable to capital reserve will be:
(a) Rs. 300
(b) Rs. 60
(c) Rs. 90
(d) Rs. 30
Ans. (d)
43. The balances appearing in the books of a company at the end of the financial year were:
Capital Redemption Reserve Account Rs. 50,000; Share Premium Account Rs. 10,000; General Reserve Account Rs. 5,000; Revaluation Reserve Rs. 2,000; Profit and Loss Account (Debit) Rs.10,000. Maximum amount available for distribution as ‘Bonus Shares’ will be:
(a) Rs. 50,000
(b) Rs. 55,000
(c) Rs. 45,000
(d) Rs. 57,000
Ans. (b)
44. A company can forfeit shares if the:
(a) shareholder fails to pay the amount of the call during the stipulated time
(b) shareholder pays calls in advance
(c) shareholder does not pay the application money
(d) shares have been issued at par
Ans. (a)
45. With regard to the rate of return on investment (ROI), which one of the following statements is NOT valid?
(a) It is an overall indicator of the profitability of an enterprise
(b) It is a triangular relationship in the sense that R O I= Profit margin x Asset turnover
(c) It is a superior measure compared to the cash flow generated per share
(d) It was firm developed by Du Pont, USA
Ans. (b)
46. Which one of the following types of information, a creditor would be interested to gather while reading Annual Reports of an enterprise?
(a) Profitability
(b) Liquidity
(c) Continuity
(d) Solvency
Ans. (d)
47. The return on capital employed shows the combined effect of:
(a) net profit ratio and inventory turnover ratio
(b) operating ratio and net profit ratio
(c) net profit ratio and capital turnover ratio
(d) gross profit ratio and capital turnover ratio
Ans. (c)
48. The current ratio is 3:2 and the amount of current liabilities is Rs. 40,000. What is the amount of current assets?
(a) Rs. 60,000
(b) Rs. 70,000
(c) Rs. 80,000
(d) Rs. 1, 00,000
Ans. (a)
49. Consider the following statements:
The current ratio would reduce by
1. collection of book debts
2. payment to trade creditors
3. purchase of machinery for cash
4. cash deposited into bank
Which of the above statements are correct?
(a) 1 and 3
(b) 2 and 3
(c) 2and 4
(d) 1, 3 and 4
Ans. (b)
50. Which one of the following ratios is likely to be affected the most on account of price level changes?
(a) Current Ratio
(b) Inventory Turnover Ratio
(c) Debtors’ Turnover Ratio
(d) Fixed Assets Turnover Ratio
Ans. (b)
Civil Services Commerce Prelims Paper practice
Commerce model question papers
1. Match List-I (Basis of Departmentation) with List-II (Example) and select the correct answer using the Code given below the lists:
List—I List—II
(Basis of Departmentation) (Example)
A. Customer 1. Day and night shifts in a hospital
B. Functional 2. Retail and wholesale sale of a trader
C. Geographical 3. Northern and Southern Divisions of a railway
D. Temporal 4. Production and sales of a factory
Codes:
A B C D
(a) 2 3 1 4
(b) 1 4 3 5
(c) 2 4 3 1
(d) 1 3 4 5
Ans. (c)
2. Which one of the following is not true of GDR?
(a) It is an instrument issued abroad and is listed and traded on a foreign stock exchange
(b) A GDR may represent one or more shares of the issuing company
(c) It can be converted into equity shares at any time
(d) A GDR may represent either equity shares or
Ans. (d)
3. The quality of information is measured by its:
(a) Accuracy
(b) Cost
(c) Degree of statistical validity
(d) Timeliness
Ans. (d)
4. A wage which should enable a worker to provide for himself and his family not merely the bare essentials like food, clothing and shelter but also a measure of comfort in the form of education for his children and protection against diseases and illness is known as:
(a) Fair wage
(b) Minimum wage
(c) Living wage
(d) Incentive wage
Ans. (c)
5. Emerson Efficiency System of wage payment means:
(a) The worker is allowed a certain time within which he is required to complete his job
(b) The completion of job within the prescribed time. The worker is paid bonus of a certain percentage
(c) where the worker takes 50% more than prescribed time he is paid no bonus
(d) All of the above
Ans. (b)
6. One of the consequences of highly protective tariff walls would be that:
(a) Foreign producers find their imports attractive
(b) Domestic producers sell exportable goods at a premium in the domestic market
(c) Foreign producers find their exports attractive
(d) Domestic producers find imports to be cheaper
Ans. (b)
Directions : The following Fourteen (14) items consist of two statements, one labelled as the ‘Assertion (A) ‘and the other as ‘Reason (R)’. You are to examine these two statements carefully and select the answers to these items using the Code given below:
(a) Both A and R are individually true and R is the correct explanation of A
(b) Both A and R are individually 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
7. Assertion (A): Management Audit should be conducted by a team of experts.
Reason (R): Management Audit is a critical examination of policy and practices of management from the highest level to downward in order to ascertain that sound management prevails in the business concern.
Ans. (a)
8. Assertion (A): If it is found that some errors and/or frauds are remaining undetected due to the fact that a statutory auditor depended upon test checking, then the said auditor will be held responsible for negligence in the performance of his duties.
Reason (R): A statutory auditor cannot, in any way, avoid or reduce the responsibility laid on him by the statutes.
Ans. (d)
9. Assertion (A): An auditor of a large business concern has to adopt test checking based on scientific statistical sampling technique instead of checking the whole of transaction- of a particular class.
Reason (R): Test checking based on scientific statistical sampling technique, reduces the volume of unnecessarily cumbersome audit work involved in detailed checking of all transactions.
Ans. (a)
10. Assertion (A): Revenue expenditure is written off in the year in which it occurs.
Reason (R): The benefit of revenue expenditure is consumed in the year in which it arises.
Ans. (a)
11. Assertion (A): Cash flow Statement and Fund Flow Statement disclose same information.
Reason (R): Both are prepared out of the same data.
Ans. (d)
12. Assertion (A): Liquid ratio reveals strength of liquidity ofa business unit.
Reason (R): Liquid ratio analyses liquid assets and liquid liabilities of a business uhit in order to assess the extent of liquidity.
Ans. (a)
13. Assertion (A): Profit and Loss Account and Balance Sheet are financial statements showing financial position of a business unit.
Reason (R): Profit and Loss Account and Balance Sheet are prepared at the end of the financial year.
Ans. (d)
14. Assertion (A): The interest on debentures can be capitalized up to the complete construction of the fixed assets.
Reason (R): The construction of fixed assets could only be completed by the use of these funds.
Ans. (c)
15. Assertion (A): The role of the Doctrine of Indoor Management is opposed to the rules of constructive notice.
Reason (R): The constructive notice seeks to protect the company against the outsider whereas the Doctrine of Indoor Management operates to protect outsider against the company.
Ans. (a)
16. Assertion (A): Rules of Constructive Notice and Articles of Association are known to everyone who deals with the company.
Reason (R): After re4stration of the company, Memorandum and Articles of Association become public documents.
Ans. (a)
17. Assertion (A): Doctrine of Indoor Management does not apply to forgery.
Reason (R): Company Law recognizes ultra vires or illegal acts.
(c)
18. Assertion (A): A Director of a company in his individual capacity can exercise powers conferred on him by the Companies Act, Memorandum and the Article of Association of the company.
Reason (R): The Directors have the power to enter into contract on behalf of the company with other parties.
Ans. (d)
19. Assertion (A): Capital expenditure is incurred for the purpose f acquiring fixed asset.
Reason (R): Capital expenditure item is shown in the asset side of the Balance Sheet.
Ans. (b)
20. Assertion (A): Staff officers and assigned an ‘authority of ideas’ and line officers and ‘authority to command’.
Reason (R): Functional authority is not restricted to managers of a particular type of department.
Ans. (b)
21. Accounting is generally understood as:
1. summarization of business transaction
2. language of the business
3. source of business information
4. means of communication
Select the correct answer using the Code given below:
Code:
(a) 1 only
(b) 1 and 2
(c) 2 and 3
(d) 1, 2, 3 and 4
Ans. (d)
22. In case of disclosure of accounting policies, the following fundamental accountings assumptions may NOT be required to be stated f they are followed in the preparation of final accounts or a company:
1. Materiality and accounting period
2. Going concern and consistency
3. Accrual basis of accounting
4. Conservatism and accounting period
Select the correct answer using the Code given below:
Code:
(a) 2 and 3
(b) 1 and 4
(c) l, 2 and 3
(d) 1, 2, 3 and 4
Ans. (a)
23. Which one of the following pairs is NOT correctly matched?
(a) Accounting equation : Assets — Liabilities — Capital
(b) Accounting year : 1st April to 31st March
(c) Accrual concept : Recognizing revenue on receipt of cash
(d) Cost concept : Recognizing transactions at historical cost
Ans. (a)
24. Match List—I (Accounting Standards (AS) issued by the Institute of Chartered Accountants of India) with List-II (Standard on) 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. Disclosure of Accounting Policies
C. AS-3 3. Depreciation Accounting
D. AS-6 4. Cash Flow Statement
Code:
A B C D
(a) 2 3 4 1
(b) 4 1 2 3
(c) 4 3 2 1
(d) 2 1 4 3
Ans. (d)
25. Which among the following is the societal obligation of accounting?
(a) To ascertain profit correctly
(b) To maintain the records of the assets and liabilities of organization
(c) To establish effective organizational control
(d) To be helpful in correct tax assessment
Ans. (d)
26. Included in production overhead of hardware division of Rs. 3, 00,000 is Rs. 50,000, being the cost of prototype computers manufactured by the company itself. These are not to be sold but to be kept for demonstrating a live medical imaging software programme.
The cost of prototype computers of Rs. 50,000 should be treated as:
(a) fixed assets
(b) deferred revenue expenditure
(c) production overheat cost of hardware division
(d) advertising cost
Ans. (b)
27. A and B are partners sharing profits and losses in proportion of 2: 1. They admit new partner C whom they give 1/5th share in profits. The new profit-sharing ratio will be:
(a) 8:4:3
(b) 3:2:1
(c) 2:1:1
(d) 4:2:1
Ans. (a)
28. A and B are sharing profits in the ratio of 2:1. They admit C into the firm ¼ th share in profits for which he brings Rs. 12,000 as his share of capital. Therefore, the adjusted capital of B will be:
(a) Rs. 48,000
(b) Rs. 12,000
(c) Rs. l6, 000
(d) Rs. 24,000
Ans. (b)
29. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List-I List—II
A. Revaluation Account 1. Retirement of a partner
B. Realization Account 2. Maximum loss method
C. Piecemeal Distribution 3. Admission of a partner
D. Gaining Ratio 4. Dissolution of partnership firm
Code:
A B C D
(a) 2 1 3 4
(b) 3 4 2 1
(c) 2 4 3 1
(d) 3 1 2 4
Ans. (b)
30. While making an adjusting entry in respect of interest on capital, we credit:
(a) Capital account
(b) Profit and loss account
(c) Interest on capital account
(d) Drawing account
Ans. (a)
31. What is the correct sequence of the following items of current assets in balance sheet of a company, as per the Companies Act, 1956?
1. Cash balance on hand
2. Interest accrued on investments
3. Stores and spare parts
4. Loose tools
5. Sundry debtors
6. Stock-in-trade
7. Work-in-progress
Select the correct answer using the Code given below:
Code:
(a) 2, 5, 4, 6, 7, 3, 1
(b) 1, 2, 4, 3, 5, 7, 6
(c) 7, 6, 4, 1, 2, 5, 3
(d) 2, 3, 4, 6, 7, 5, 1
Ans. (d)
32. The loss on the sale of old furniture debited to:
(a) profit and loss account
(b) furniture account
(c) trading account
(d) depreciation account
Ans. (a)
33. Given:
Opening stock : Rs. 5,000
Closing stock : Rs. 7,000
Purchases : Rs. 10,000
Manufacturing expenses : Rs. 20,000
Loss of materials due to fire : Rs. 1000
The cost of production would be
(a) Rs. 28,000
(b) Rs. 29,000
(c) Rs. 27,000
(d) Rs. 30,000
Ans. (c)
34. Consider the following statements:
1. Closing stock is valued on the Principle of cost price of market price whichever is lower
2. The manufactured goods in a year are transferred from the manufacturing account to trading account at selling price
3. The going concern concept assumes that a business will continue its operations indefinitely
4. Revenue is not increased by taking loans although assets and liabilities are increased
Which of the above statements are correct?
(a) l, 3 and 4
(b) l and 2
(c) 2 and 3
(d) 2, 3 and 4
Ans. (a)
35. Under the head ‘Provisions’ in the balance sheet of a limited company, the following provisions made for, are to be disclosed:
1. Proposed dividend
2. PF schemes
3. Pension and other staff-benefit schemes
4. Taxation The correct chronological order of their disclosure is
(a) 4, 2, 1, 3
(b) 3, 2, 1, 4
(c) 4, 1, 2, 3
(d) 3, 1, 2, 4
Ans. (c)
36. Under the head ‘current liabilities’, the following are disclosed:
1. Unclaimed dividend
2. Sundry creditors
3. Unexpired discounts
4. Bills payable
The correct chronological order of their disclosure is:
(a) 4, 3, 2, 1
(b) l, 3, 2, 4
(c) 4, 2, 3, 1
(d) l, 2, 3, 4
Ans. (c)
37. Dividend can be paid generally out of:
(a) share premium account
(b) capital redemption reserve account
(c) current year’s profits
(d) All of these
Ans. (c)
38. If the purchases made during the year were Rs. 60,000, the balance of stock in trade at the beginning and at the end of-the year were Rs. 12,000 and Rs. 9,000 respectively and the gross profit on sales was 1/5th, when which one of the following represents the figure of gross profit for the year?
(a) Rs. 15,750
(b) Rs. 14,000
(c) Rs. 12,500
(d) Rs. 17,250
Ans. (a) Rs. 15,750
39. Financial year of a company shall not exceed:
(a) calendar year
(b) 15 months.
(c) 18 months with special permission of Registrar of Companies
(d) 15 months with special permission of Registrar of Companies
Ans. (c)
40. The following four assets normally appear in the balance sheet:
1. Advance salary
2. Copyright
3. Preliminary expenses
4. Loose tools
The correct order in which these are to appear in the balance sheet if drawn in order of permanency will be:
(a) 4, 2, 1, 3
(b) 3, 2, 4, 1
(c) 1, 2, 3, 4
(d) 2, 4, 1, 3
Ans. (d)
41. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List—I List—II
A. Nominal share capital 1. Capitalization of reserve
B. Right shares 2. Fixed dividend
C. Bonus shares 3. Maximum amount of share capital of a company
D. Preference shares 4. First offered to the existing shareholders
Code:
A B C D
(a) 3 4 1 2
(b) 2 1 4 3
(c) 2 4 1 3
(d) 3 1 4 2
Ans. (a)
42. A company forfeited 30 equity shares of Rs. 10 each fully called-up, for non-payment of allotment money of Rs. 3 and call-money of Rs, 4 per share. If these shares are reissued at Rs. 8 per share fully paid, the amount transferable to capital reserve will be:
(a) Rs. 300
(b) Rs. 60
(c) Rs. 90
(d) Rs. 30
Ans. (d)
43. The balances appearing in the books of a company at the end of the financial year were:
Capital Redemption Reserve Account Rs. 50,000; Share Premium Account Rs. 10,000; General Reserve Account Rs. 5,000; Revaluation Reserve Rs. 2,000; Profit and Loss Account (Debit) Rs.10,000. Maximum amount available for distribution as ‘Bonus Shares’ will be:
(a) Rs. 50,000
(b) Rs. 55,000
(c) Rs. 45,000
(d) Rs. 57,000
Ans. (b)
44. A company can forfeit shares if the:
(a) shareholder fails to pay the amount of the call during the stipulated time
(b) shareholder pays calls in advance
(c) shareholder does not pay the application money
(d) shares have been issued at par
Ans. (a)
45. With regard to the rate of return on investment (ROI), which one of the following statements is NOT valid?
(a) It is an overall indicator of the profitability of an enterprise
(b) It is a triangular relationship in the sense that R O I= Profit margin x Asset turnover
(c) It is a superior measure compared to the cash flow generated per share
(d) It was firm developed by Du Pont, USA
Ans. (b)
46. Which one of the following types of information, a creditor would be interested to gather while reading Annual Reports of an enterprise?
(a) Profitability
(b) Liquidity
(c) Continuity
(d) Solvency
Ans. (d)
47. The return on capital employed shows the combined effect of:
(a) net profit ratio and inventory turnover ratio
(b) operating ratio and net profit ratio
(c) net profit ratio and capital turnover ratio
(d) gross profit ratio and capital turnover ratio
Ans. (c)
48. The current ratio is 3:2 and the amount of current liabilities is Rs. 40,000. What is the amount of current assets?
(a) Rs. 60,000
(b) Rs. 70,000
(c) Rs. 80,000
(d) Rs. 1, 00,000
Ans. (a)
49. Consider the following statements:
The current ratio would reduce by
1. collection of book debts
2. payment to trade creditors
3. purchase of machinery for cash
4. cash deposited into bank
Which of the above statements are correct?
(a) 1 and 3
(b) 2 and 3
(c) 2and 4
(d) 1, 3 and 4
Ans. (b)
50. Which one of the following ratios is likely to be affected the most on account of price level changes?
(a) Current Ratio
(b) Inventory Turnover Ratio
(c) Debtors’ Turnover Ratio
(d) Fixed Assets Turnover Ratio
Ans. (b)
Thursday, May 19, 2011
commerce objective type questions
commerce objective type questions
Commerce Multiple Choice Questions
MCQ Commerce Objective test paper
1. Consider the following elements:
1. Policies
2. Objectives
3. Programmes
4.. Procedures
The correct sequence of these elements in the planning process is:
(a) l, 2, 3, 4
(b) 1, 2, 4, 3
(c) 2, 1, 4, 3
(d) 2, 1, 3, 4
Ans. (c)
2. Consider the following steps:
1. Analysis of each decision unit in the context of total decision package
2. Identification of decision units
3. Allocation of resources to each unit based upon ranking
4. Evaluation and ranking of all decision units to develop the budget request
The correct sequence of these steps in Zero-base budgeting is:
(a) 1, 2, 3, 4
(b) 2, 1, 4, 3
(c) 2, 4, 1, 3
(d) 2, 3, 4, 1
Ans. (b)
3. Consider the following stages in Management by Exception:
1. Setting criteria that the management will use to follow progress towards organizational objectives
2. Measurement of current performance in the organization
3. Making comparison of actual and planned performance and identifying the exceptions
4. Decision-making prescribing the action to be taken The correct sequence of these stages is:
(a) 2, 3, 4, 1
(b) 2, 1, 3, 4
(c) 1, 3, 2, 4
(d) 1, 2, 3, 4
Ans. (d)
4. Scalar principle refers to the:
(a) responsibility of a subordinate to a superior
(b) conflict of instructions from two or more superiors
(c) existence of a clear line of authority in all parts of the organization
(d) delegation of authority at all levels of an organization
Ans. (c)
5. Consider the following statements:
The difference between office systems and routines are that the:
1. Systems are plans while routines are procedures
2. Systems are all-inclusive while routines are parts of systems
3. Systems are people oriented while routines are financial in nature
4. Systems are the goals while routines are the means.
Which of the above statements are correct?
(a) l, 2, and 3
(b) 1 and2
(c) 1, 3 and 4
(d) 2 and 4
Ans. (b)
6. The delegation of authority from higher to lower levels of an organization is called:
(a) Diminution of authority
(b) Division of labour
(c) Departmentalization
(d) Decentralization
Ans. (a)
7. Consider the following steps in Management of Change:
1. Identifying the elements to be changed
2. Identifying need for change
3. Assessing change forces
4. Implementing change
The correct sequence of these steps is:
(a) 1, 2, 3, 4
(b) 2, l, 3, 4
(c) 1, 3, 2, 4
(d) 2, 3, 1, 4
Ans. (d)
8. The membership of the Institute of Company Secretaries of India is a must for a person to become the Secretary of a company .having paid-up share capital of:
(a) Rs. 25 lakhs
(b) Rs. 50 lakhs
(c) Rs. 1 crore
(d) Rs. 2 crores
Ans. (b)
9. A special resolution passed for the purpose of reduction of capital of a company must be confirmed by the
(a) Registrar of Companies
(b) Company Law Board
(c) SEBI
(d) Appropriate Law Court
Ans. (d)
10. Equity shares issued by a company to its employees or directors at a discount or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions are known as:
(a) Employees/Directors stock option
(b) Promoters’ quota
(c) Sweat equity
(d) Rights shares
Ans. (c)
11. A Company Secretary has:
(a) neither statutory liabilities nor contractual liabilities
(b) only statutory liability’
(c) only contractual liability
(d) both statutory and contractual liabilities
Ans. (d)
12. The Board’s Report shall give the prescribed particulars employees, Mio are in receipt of yearly remuneration, which is not less than:
(a) Rs. 1.44 lak1
(b) Rs. 3 lakhs
(c) Rs. 6 lakhs
(d) Rs. 12 lakhs
Ans. (b)
13. An act of a director which is intra vires the Memorandum and ultra vires the Articles of Association:
(a) cannot be ratified by the company
(b) must necessarily be ratified by the company
(c) may be ratified by the company
(d) is void ab inhtio
Ans. (b)
14. The provisions relating to inter-corporate loans are inter-alia laid down in:
(a) Section 370 of the Companies Act, 1956
(b) Section 372 of the Companies Act, 1956
(c) Section 372A of the Companies Act, 1956
(d) Section 371 of the Companies Act, 1956
Ans. (a)
15. According to Companies Act, when the dividend proposal is exceeding 20 percent of the paid-up capital, the amount to be transferred to reserve shall not be less than:
(a) 7.5 percent of the current profit
(b) 10 percent of the current profit
(c) 12.5 percent of the current profit
(d) 15 percent of the current profit
Ans. (b)
16. Investor Education and Protection Fund is required to
be established by:
(a) the Central Government
(b) the SEBE
(c) over the Counter Exchange
(d) the National Stock Exchange
Ans. (a)
17. Which one of the following is an example of a trading block (regional integration in trade)?
(a) North American Free Trade Agreement
(b) Madras Export Trade Processing Zone
(c) Free Trade Zone at Kandla
(d) Indo-American Chamber of Commerce
Ans. (a)
Directions: The following thirteen (13) 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 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
18. Assertion (A): Management accounting provides management with information for decision making.
Reason (R): Management accounting is a branch of cost accounting
Ans. (c)
19. Assertion (A): tinder diminishing balance method of depreciation, the charge for depreciation keeps on diminishing year after year in all subsequent years.
Reason (R): Under diminishing balance method, the rate percent at which depreciation is written off goes on diminishing from year to year.
Ans. (c)
20. Assertion (A): No item of capital expenditure finds its place in the Trading and Profit & Loss Account or some other form of revenue accounts.
Reason (R): Capital expenditure consists of expenditure, the benefit of which is not fully consumed in one accounting period but is spread over several periods.
Ans. (a)
21. Assertion (A): Now-a-days many companies prepare their Balance Sheet in a vertical form rather than in the traditional horizontal form.
Reason (R): Part IV of Schedule VI -to the Companies Act, 1956 permits both the forms.
Ans. (b)
22. Assertion (A): When pro-rata at allotment of shares is made, the surplus application money is transferred to Share Allotment A/c.
Reason (R): The company is not required to pay any interest on such surplus application money.
Ans. (b)
23. Assertion (A): One single primary ratio, that measures the financial outcome of all recorded business activities, is R.O.I.
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)
24. Assertion (A): ROI is the index to study management efficiency.
Reason (R): Earning power in relation to total investment is measured by ROI
Ans. (b)
25. Assertion (A): Detection of errors is not of considerable importance to an auditor.
Reason (R): Some mistakes which appear to be in the first instance merely clerical errors are ultimately found to be fraudulent manipulation of accounts, but vast majority of mistakes are merely clerical errors committed due to either carelessness or ignorance on the part of clerical staff.
Ans. (d)
26. Assertion (A): Detection of frauds committed by the manipulation of accounts is a very difficult task for an auditor.
Reason (R): Frauds of the type ‘Manipulation of Accounts’ are committed without any misappropriation of cash or goods.
Ans. (a)
27. Assertion (A): E-commerce is an emerging field, which cannot be ignored.
Reason (R): The legal framework relating the E-commerce is yet to be crystallized.
Ans. (b)
28. Assertion (A): External alignment of wage rates is possible only when internal alignment is achieved.
Reason (R): Internal alignment of wage rates is dependent on increase in profits.
Ans. (b)
29. Assertion (A): Job evaluation facilitates framing a suitable incentive system for workers.
Reason (R): Incentive can be rationally based on time-saving by workers on a particular job, which can rightly be known from job evaluation.
Ans. (a)
30. Assertion (A): For a company, every debt is not a loan, but every loan is a debt.
Reason (R): In the case of deposit of money with the company, it is the depositor who is the prime mover, whereas in the case of loan it is the company who is the prime mover.
Ans. (a)
31. In the case of a particular depreciation method, the periodic depreciation is smaller than the asset’s actual annual depreciation cost. The annual net incidence on profit and loss account remains constant due to incorporation of only fixed depreciation. The periodic depreciation is not recorded through the assets account. The depreciation method used in this case is:
(a) Sinking fund method
(b) Diminishing balance method
(c) Annuity method
(d) Sum-of-years digits method
Ans. (a)
32. Under which one of the following methods of depreciation is the amount of the ‘asset never reduced to zero?
(a) Straight line method
(b) Diminishing balance method
(c) Sum of years digit method
(d) Annuity method
Ans. (b)
33. Writing off the expired cost of an intangible asset is called:
(a) amortisation
(b) capitalization
(c) depletion
(d) depreciation
Ans. (a)
34. A B C analysis is a:
(a) system of profit and loss appropriation
(b) technique of financial planning
(c) technique of inventory control
(d) technique of profit determination
Ans. (c)
35. When prices show a rising trend, which one of the following methods of inventory valuation will result in lower income and lower valuation of inventory?
(a) FIFO
(b) LIFO
(c) Simple average method
(d) Weighted average method
Ans. (b)
36. Match List—I (Items of Expenditure and Receipt) with List—II (Nature of Expenditure and Receipt) and select the correct answer using the Code given below the Lists:
List-I List-II
A. Replacement cost of an old asset 1. Revenue expenditure
B. Special repairing charges of an asset 2. Capital Receipt
C. Huge advertisement expenses 3. Deferred Revenue Expenditure
D. Sale value of an old motor car 4. Capital Expenditure
Code:
A B C D
(a) 4 1 3 2
(b) 4 1 2 3
(c) 1 4 3 2
(d) 1 4 2 3
Ans. (a)
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)
Commerce Multiple Choice Questions
MCQ Commerce Objective test paper
1. Consider the following elements:
1. Policies
2. Objectives
3. Programmes
4.. Procedures
The correct sequence of these elements in the planning process is:
(a) l, 2, 3, 4
(b) 1, 2, 4, 3
(c) 2, 1, 4, 3
(d) 2, 1, 3, 4
Ans. (c)
2. Consider the following steps:
1. Analysis of each decision unit in the context of total decision package
2. Identification of decision units
3. Allocation of resources to each unit based upon ranking
4. Evaluation and ranking of all decision units to develop the budget request
The correct sequence of these steps in Zero-base budgeting is:
(a) 1, 2, 3, 4
(b) 2, 1, 4, 3
(c) 2, 4, 1, 3
(d) 2, 3, 4, 1
Ans. (b)
3. Consider the following stages in Management by Exception:
1. Setting criteria that the management will use to follow progress towards organizational objectives
2. Measurement of current performance in the organization
3. Making comparison of actual and planned performance and identifying the exceptions
4. Decision-making prescribing the action to be taken The correct sequence of these stages is:
(a) 2, 3, 4, 1
(b) 2, 1, 3, 4
(c) 1, 3, 2, 4
(d) 1, 2, 3, 4
Ans. (d)
4. Scalar principle refers to the:
(a) responsibility of a subordinate to a superior
(b) conflict of instructions from two or more superiors
(c) existence of a clear line of authority in all parts of the organization
(d) delegation of authority at all levels of an organization
Ans. (c)
5. Consider the following statements:
The difference between office systems and routines are that the:
1. Systems are plans while routines are procedures
2. Systems are all-inclusive while routines are parts of systems
3. Systems are people oriented while routines are financial in nature
4. Systems are the goals while routines are the means.
Which of the above statements are correct?
(a) l, 2, and 3
(b) 1 and2
(c) 1, 3 and 4
(d) 2 and 4
Ans. (b)
6. The delegation of authority from higher to lower levels of an organization is called:
(a) Diminution of authority
(b) Division of labour
(c) Departmentalization
(d) Decentralization
Ans. (a)
7. Consider the following steps in Management of Change:
1. Identifying the elements to be changed
2. Identifying need for change
3. Assessing change forces
4. Implementing change
The correct sequence of these steps is:
(a) 1, 2, 3, 4
(b) 2, l, 3, 4
(c) 1, 3, 2, 4
(d) 2, 3, 1, 4
Ans. (d)
8. The membership of the Institute of Company Secretaries of India is a must for a person to become the Secretary of a company .having paid-up share capital of:
(a) Rs. 25 lakhs
(b) Rs. 50 lakhs
(c) Rs. 1 crore
(d) Rs. 2 crores
Ans. (b)
9. A special resolution passed for the purpose of reduction of capital of a company must be confirmed by the
(a) Registrar of Companies
(b) Company Law Board
(c) SEBI
(d) Appropriate Law Court
Ans. (d)
10. Equity shares issued by a company to its employees or directors at a discount or for consideration other than cash for providing know-how or making available rights in the nature of intellectual property rights or value additions are known as:
(a) Employees/Directors stock option
(b) Promoters’ quota
(c) Sweat equity
(d) Rights shares
Ans. (c)
11. A Company Secretary has:
(a) neither statutory liabilities nor contractual liabilities
(b) only statutory liability’
(c) only contractual liability
(d) both statutory and contractual liabilities
Ans. (d)
12. The Board’s Report shall give the prescribed particulars employees, Mio are in receipt of yearly remuneration, which is not less than:
(a) Rs. 1.44 lak1
(b) Rs. 3 lakhs
(c) Rs. 6 lakhs
(d) Rs. 12 lakhs
Ans. (b)
13. An act of a director which is intra vires the Memorandum and ultra vires the Articles of Association:
(a) cannot be ratified by the company
(b) must necessarily be ratified by the company
(c) may be ratified by the company
(d) is void ab inhtio
Ans. (b)
14. The provisions relating to inter-corporate loans are inter-alia laid down in:
(a) Section 370 of the Companies Act, 1956
(b) Section 372 of the Companies Act, 1956
(c) Section 372A of the Companies Act, 1956
(d) Section 371 of the Companies Act, 1956
Ans. (a)
15. According to Companies Act, when the dividend proposal is exceeding 20 percent of the paid-up capital, the amount to be transferred to reserve shall not be less than:
(a) 7.5 percent of the current profit
(b) 10 percent of the current profit
(c) 12.5 percent of the current profit
(d) 15 percent of the current profit
Ans. (b)
16. Investor Education and Protection Fund is required to
be established by:
(a) the Central Government
(b) the SEBE
(c) over the Counter Exchange
(d) the National Stock Exchange
Ans. (a)
17. Which one of the following is an example of a trading block (regional integration in trade)?
(a) North American Free Trade Agreement
(b) Madras Export Trade Processing Zone
(c) Free Trade Zone at Kandla
(d) Indo-American Chamber of Commerce
Ans. (a)
Directions: The following thirteen (13) 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 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
18. Assertion (A): Management accounting provides management with information for decision making.
Reason (R): Management accounting is a branch of cost accounting
Ans. (c)
19. Assertion (A): tinder diminishing balance method of depreciation, the charge for depreciation keeps on diminishing year after year in all subsequent years.
Reason (R): Under diminishing balance method, the rate percent at which depreciation is written off goes on diminishing from year to year.
Ans. (c)
20. Assertion (A): No item of capital expenditure finds its place in the Trading and Profit & Loss Account or some other form of revenue accounts.
Reason (R): Capital expenditure consists of expenditure, the benefit of which is not fully consumed in one accounting period but is spread over several periods.
Ans. (a)
21. Assertion (A): Now-a-days many companies prepare their Balance Sheet in a vertical form rather than in the traditional horizontal form.
Reason (R): Part IV of Schedule VI -to the Companies Act, 1956 permits both the forms.
Ans. (b)
22. Assertion (A): When pro-rata at allotment of shares is made, the surplus application money is transferred to Share Allotment A/c.
Reason (R): The company is not required to pay any interest on such surplus application money.
Ans. (b)
23. Assertion (A): One single primary ratio, that measures the financial outcome of all recorded business activities, is R.O.I.
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)
24. Assertion (A): ROI is the index to study management efficiency.
Reason (R): Earning power in relation to total investment is measured by ROI
Ans. (b)
25. Assertion (A): Detection of errors is not of considerable importance to an auditor.
Reason (R): Some mistakes which appear to be in the first instance merely clerical errors are ultimately found to be fraudulent manipulation of accounts, but vast majority of mistakes are merely clerical errors committed due to either carelessness or ignorance on the part of clerical staff.
Ans. (d)
26. Assertion (A): Detection of frauds committed by the manipulation of accounts is a very difficult task for an auditor.
Reason (R): Frauds of the type ‘Manipulation of Accounts’ are committed without any misappropriation of cash or goods.
Ans. (a)
27. Assertion (A): E-commerce is an emerging field, which cannot be ignored.
Reason (R): The legal framework relating the E-commerce is yet to be crystallized.
Ans. (b)
28. Assertion (A): External alignment of wage rates is possible only when internal alignment is achieved.
Reason (R): Internal alignment of wage rates is dependent on increase in profits.
Ans. (b)
29. Assertion (A): Job evaluation facilitates framing a suitable incentive system for workers.
Reason (R): Incentive can be rationally based on time-saving by workers on a particular job, which can rightly be known from job evaluation.
Ans. (a)
30. Assertion (A): For a company, every debt is not a loan, but every loan is a debt.
Reason (R): In the case of deposit of money with the company, it is the depositor who is the prime mover, whereas in the case of loan it is the company who is the prime mover.
Ans. (a)
31. In the case of a particular depreciation method, the periodic depreciation is smaller than the asset’s actual annual depreciation cost. The annual net incidence on profit and loss account remains constant due to incorporation of only fixed depreciation. The periodic depreciation is not recorded through the assets account. The depreciation method used in this case is:
(a) Sinking fund method
(b) Diminishing balance method
(c) Annuity method
(d) Sum-of-years digits method
Ans. (a)
32. Under which one of the following methods of depreciation is the amount of the ‘asset never reduced to zero?
(a) Straight line method
(b) Diminishing balance method
(c) Sum of years digit method
(d) Annuity method
Ans. (b)
33. Writing off the expired cost of an intangible asset is called:
(a) amortisation
(b) capitalization
(c) depletion
(d) depreciation
Ans. (a)
34. A B C analysis is a:
(a) system of profit and loss appropriation
(b) technique of financial planning
(c) technique of inventory control
(d) technique of profit determination
Ans. (c)
35. When prices show a rising trend, which one of the following methods of inventory valuation will result in lower income and lower valuation of inventory?
(a) FIFO
(b) LIFO
(c) Simple average method
(d) Weighted average method
Ans. (b)
36. Match List—I (Items of Expenditure and Receipt) with List—II (Nature of Expenditure and Receipt) and select the correct answer using the Code given below the Lists:
List-I List-II
A. Replacement cost of an old asset 1. Revenue expenditure
B. Special repairing charges of an asset 2. Capital Receipt
C. Huge advertisement expenses 3. Deferred Revenue Expenditure
D. Sale value of an old motor car 4. Capital Expenditure
Code:
A B C D
(a) 4 1 3 2
(b) 4 1 2 3
(c) 1 4 3 2
(d) 1 4 2 3
Ans. (a)
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)
practice paper Junior Accountant in sports authority of india SAI
practice paper Junior Accountant in sports authority of india SAI
SAMPLE JUNIOR ACCOUNTANT SELECTION EXAM
Objective commerce questions Sports Authority Of India Recruitment
1. Consider the following statements:
1. Operational loss is a source of funds
2. Decrease in working capital is a source of funds
3. Additions to fixed assets are an application of funds
4. Fresh introduction of capital is an application of funds
Which of the above statements are applicable while preparing the funds flow statement?
(a) 1 and 2
(b) 1 and 3
(c) 2 and 3
(d) 1, 3 and 4
Ans. (d)
2. Which one of the following pairs is not correctly matched?
(a) Increase in working capital : Application of fund
(b) Increase in current liability : Source of fund
(c) Issue of shares : Source of fund
(d) Issue of bonus shares : Source of fund
Ans. (d)
3. A company’s reported current profit is Rs. 70,000 after incorporating the following:
Loss on sale of investments Rs.10, 000; Premium on redemption of debentures Rs.1 ,500; Depreciation on machinery and plant Rs. 20,000; Goodwill and preliminary expenses written of Rs. 30,000; Gain from sale of non-current assets Rs. 40,000.
The net inflow of funds from the operation would be:
(a) Rs. 91,500
(b) Rs. 80,000
(c) Rs. 70,000
(d) Rs. 59,500
Ans. (a)
4. A building standing in the books at Rs. 30,000, was sold for Rs. 45,000. The gain on the sale of building was transferred to profit and loss account thus taking the net profit to Rs; 1,70,000. The fund from operation will be:
(a) Rs. 2,15,000
(b) Rs. 1,70,000
(c) Rs. 1,55,000
(d) Rs. 2,00,000
Ans. (c)
5. For the purpose of analyzing changes in financial position, enterprises prepare:
(a) Balance Sheet and Profit & Loss A/c
(b) Cash flow statement and Funds flow statement
(c) Statement of cash from operations and Balance Sheet
(d) Statement of changes in working capital and Statement of cash from operations.
Ans. (d)
6. Match List-I (Event) with List-II (Result) and select the correct answer using the Code given below the Lists:
List-I List-II
A. Collusion between two or 1. Payments of dividends otherwise not possible
more persons
B. Falsification of accounts to increase 2. Error of principle committed
apparent profits.
C. Operation of an effective system of 3. Trial balance may agree
internal check
D. Purchase of raw materials is debited to 4. Frauds perpetrated and concealed
loose tools account
5. Possibility of errors and frauds is
considerably reduced
Codes:
A B C D
(a) 3 4 5 2
(b) 4 1 5 2
(c) 4 1 2 5
(d) 2 4 1 3
Ans. (b)
7. It is necessary that an auditor should prepare an Audit Programme : maintain an Audit Note Book: use an Internal Control Questionnaire. and a ‘Flow Chart of Accounting System’; adopt ‘Special Ticks’ for. each class of transaction checked and divide work as well as responsibility among the members of his staff for an efficient conduct of audit work. All these refer to:
(a) general principle of internal auditing
(b) general principles of internal checking
(c) basic principles of auditing
(d) general techniques of auditing
Ans. (d)
8. When an auditor tests sales transactions, one step is tracing a sample of sales invoices to debits in the accounts receivable ledger. Based upon this step he will from an opinion as to whether:
(a) each sales invoice represents a valid sale
(b) all sales have been recorded
(c) all debits in accounts receivable ledger. are supported by sales invoices
(d) recorded sales invoices are properly posted to consumer accounts
Ans. (b)
9. Consider the following actions taken by an auditor:
1. Carrying on vouching
2. Preparing the audit report
3. Checking the valuation of assets
4. Decision to qualify the report
The correct sequence of these actions is:
(a) 1, 3, 4, 2
(b) 4, 1, 3, 2
(c) 3, 4, 2, 1
(d) l, 2, 4, 3
Ans. (a)
10. Which one of the following is the main object of auditing?
(a) Ascertaining whether all cash receipts and payments of an organization have been correctly recorded and accounted for
(b) Preventing errors and frauds connected with financial transactions of an organization
(c) Verifying books of accounts and annual financial statements of an organization so as to give a report on the view presented by the said accounts and statements
(d) Recording properly all financial transactions in various books of accounts and preparing annual financial statements indicating the results of such transactions
Ans. (c)
11. The books of account of a company should be preserved for a period of not less than:
(a) 2 years
(b) 5 years
(c) 8 years
(d) 10 years
Ans. (c)
12. In evaluating internal control, the first step is to prepare an internal control questionnaire or a flow chart of the system. The subsequent steps should be to:
1. determine the extent of audit work necessary to form an opinion
2. gather enough evidence to determine as to whether the internal control system is functioning as described
3. write a letter to the management describing the weaknesses in the internal control system
4. form a final judgement on the effectiveness of the internal control system
The correct sequence of these steps would be:
(a) 1, 2, 3, 4
(b) 2, 4,1, 3
(c) 2, 1, 3, 4
(d) 2, 4, 3, 1
Ans. (d)
13. Management audit refers to:
(a) audit on behalf of the management
(b) audit of management accounting system in operation
(c) systematic appraisal of management’s objectives and procedures
(d) audit of managerially initiated financial transactions
Ans. (c)
14. If an auditor, after his appointment, becomes disqualified as specified in Section 226 (3) and (4) of the Companies Act. 1956.
(a) the appointing authority will ask him to vacate his office
(b) the Company Law Board will ask him to tender his resignation
(c) he will be deemed to have vacated his office
(a) 1, 2, 3, 4
(b) 2, 4, 1, 3
(c) 2, 1, 3, 4
(d) 2, 4, 3, 1
Ans. (d)
15. The cost auditor in a company shall be appointed by:
(a) the Board of Directors
(b) the Board of Directors with the previous approval of the Central Government
(c) the members of the company with the previous approval of the Central Government
(d) the C & AG
Ans. (a)
16. For appointing an auditor other than a retiring auditor:
(a) special resolution is required
(b) ordinary resolution and approval of C & AG are required
(c) unanimous resolution and approval of the Central Government are required
(d) special notice is required
Ans. (d)
17. Secretarial Audit is:
(a) compulsory in companies having paid-up share capital of less than Rs. 50 lakhs
(b) compulsory where the statutory audit reveals inadequacy of internal check in secretarial department
(c) optional and would help the Board of Directors and the Registrar of Cor4anies in regard to compliance aspects, mainly tinder the Companies Act, 1956
(d) compulsory in such companies as may be notified. by the Central Government.
Ans. (c)
18. Match List—I with List—II and select the correct answer using the Code given below the Lists:
List—I List-II
A. A long-term debt instrument on which interest is 1. Mutual Fund
accumulated and paid on maturity
B. A debt instrument on which rebate is available 2. Deep Discount Bond
under the Income Tax Act
C. Pooling together the money of different investors 3. Infrastructure Bond
and investing it in diversified securities
D. Buying the right but not the 4. Put option
obligation to sell a security for a specific price
Codes:
A B C D
(a) 4 1 2 3
(b) 2 3 1 4
(c) 3 1 2 4
(d) 3 1 4 2
Ans. (b)
19. The comprehensive meaning of an efficient stock market is that it is a market which:
(a) allocates resources efficiently
(b) reflects the effective use of information in the price of the shares traded therein
(c) signals the changes in the listed company’s performance
(d) safeguards the investors money
Ans. (b)
20. Global Depository Receipts (GDRs) are issued by successful corporations with a view to attracting:
(a) overseas loan funds
(b) remittances from NRIs
(c) foreign equity capital
(d) foreign direct investment
Ans. (a)
21. Stock Holding Corporation of India Ltd. is expected to achieve, in the long run, the objective of:
(a) sale of all kinds of securities in all stock exchanges
(b) purchasing all shares issued in the country
(c) paperless trading in respect of all stock market transactions
(d) holding shares of all new companies and selling them later
Ans. (d)
22. Match List—I with List—II and select the correct answer using the Code given below the List:
A. Registrar of Companies 1 . Specified Securities
B. Memorandum of Association 2. Rules and Regulations of the Company
C. Buy back of shares 3. Certificate of Incorporation
D. Articles of Association 4. Objects of the Company
5. Minimum Subscription
Codes:
A B C D
(a) 3 4 5 1
(b) 4 3 1 2
(c) 3 4 1 2
(d) 1 2 5 4
Ans. (c)
23. The criterion for deeming a private company as a public company on the basis of average annual turnover is :
(a) Rs. 25 crores
(b) Rs. 20 crores
(c) Rs. 10 crores
(d) Rs. 5 crores
Ans. (c)
24. Match List- I with List -II and select the correct answer using the Code given below the Lists:
List –I List- II
A. Ashbury Rail Carriage & Iron Co. Ltd. vs. Riche 1 .Corporate entity
B. Peek vs. Gurney 2. Objects clause
C. Salomon vs. Salomon & Co. 3. Misstatement in prospectus
D. Royal British Bank vs. Turquand 4. Indoor management
Codes:
A B C D
(a) 2 1 3 4
(b) 3 4 1 2
(c) 2 3 1 4
(d) 2 3 4 1
Ans. (c)
25. When it is not registered, a partnership firm is:
(a) deemed to be illegal association and is disallowed to carry on business
(b) allowed to carry on business subject to payment of penalty
(c) allowed to carry on business subject to certain disabilities
(d) allowed to carry on business only with the special permission of the Registrar of Firms
Ans. (c)
26. All those who are dealing with the company are expected to know that contents of the Memorandum and Articles of Association. This is called:
(a) Doctrine of indoor management
(b) Doctrine of ultra vires
(c) Constructive notice
(d) Doctrine of merger
Ans. (c)
27. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List -I List-II
A. Doctrine of ultra vires 1. Articles of Association
B. Doctrine of indoor management 2. Prospectus
C. Doctrine of golden rule 3. Memorandum of Association
Code:
A B C
(a) 1 3 2
(b) 3 1 2
(c) 2 1 3
(d) 3 2 1
Ans. (b)
28. Which one of the following statements correctly explains the term Doctrine of Indoor Management?
(a) The doctrine seeks to protect the outsiders against the company
(b) Every person dealing with the company is presumed to have read and understood the contents of company’s Memorandum and Articles of Association
(c) If a person enters into a contract with the company which is contrary to the provisions of Memorandum and Articles of Association, he will not get any right under such contract
(d) It protects the company against the outsiders
Ans. (a)
29. A preliminary contract refers to a contract made on behalf of a company:
(a) before the incorporation of the company
(b) after the incorporation of the company
(c) after the company obtains the certificate to commence business
(d) after incorporation but before obtaining the certificate of commencement of business
Ans. (a)
30. Match List—I (Organization) with List—II (Basis of Membership) and select the correct answer using the Code give below the Lists:
List-I List-II
A. Cooperative society 1. Collective business
B. Joint Hindu family 2. Purchase/Transfer of share
C. Joint Stock company 3. By virtue of birth
D. Partnership firm 4. Common mutual interest
5. Mutual contract
Codes:
A B C D
(a) 1 3 2 5
(b) 5 4 1 3
(c) 4 3 2 5
(d) 4 1 2 3
Ans. (c)
31. Match List—I (Name of the Authority) with List—II (Function/Activity) and select the correct answer using the Code given below the Lists:
List-I List—II
A. Port Authority 1.Claim for damage
B. Insurance Company 2.Demurrage for goods unloaded
C. ECGC 3. Export finance guarantee
D. Advising Bank 4. Bank in the exporters country
5. Bank issuing L/C on the request of controller
Codes:
A B C D
(a) 2 1 4
(b) 4 3 5
(c) 3 4
(d) 1 3 5
Ans. (
32. Which one of the following documents attests the fact that goods of specified quantity, value and description are entering the bounds of the country?
(a) Bill of lading
(b) Consular invoice
(c) Documentary bill
(d) Bill of entry
Ans. (d)
33. A person insured his property worth Rs. 10,000 against fire for Rs. 8,000. His actual loss by fire is Rs. 5,000 and there is an average clause in the policy. His claim will be:
(a) Rs. 10,000
(b) Rs. 8,000
(c) Rs. 5,000
(d) Rs. 4,000
Ans. (d)
34. To guard against the dangers of excess payment arising out of double insurance or over insurance made by the insured, insurance companies provide in their agreement:
(a) Average clause
(b) Subrogation clause
(c) Risk clause
(d) Indemnity clause
Ans. (b)
35. Match List—I with List—II and select the correct answer using the Code given below the Lists:
List-I List-II
A. Ohio State University study 1. Production centered and Employee centered
B. University of Michigan study 2. Consideration and initiating structure
C. Likerts System Four 3. Country-club, Team manager, Impoverished, Task
Manger.
D. Fiedler’s Leadership Model 4. Exploitative authoritative, Benevolent
authoritative, Consultative, Participative
5. Leader-member relations, Task structure, Position
Power
Code:
A B C D
(a) 1 2 4 5
(b) 2 1 3 4
(c) 2 1 4 5
(d) 5 2 3 4
Ans. (c)
36. Gantt chart is essentially a pictorial presentation of:
(a) a modified procedure for productivity improvement
(b) an organization chart in the form of bar diagram
(c) a time-event network analysis
(d) position chart of the functions to be carried out by the members of a work team
Ans. (a)
37. Computerized communication system existing within an organization is called:
(a) internet
(b) extranet
(c) local Area Network
(d) intranet
Ans. (c)
38. Match List—I (Management Functions) with List—II (Terms related to each of them) and select the correct answer using the code given below the Lists:
List—I List—II
A. Planning 1. Morale
B. Controlling 2. Goal
C. Directing 3. Coding
D. Communicating 4. Deviation
5. Recruitment
Code:
A B C D
(a) 1 2 3 5
(b) 2 4 1 3
(c) 1 2 5 3
(d) 2 4 3 1
Ans. (b)
39. TQM’s major emphasis is on:
(a) product quality
(b) company profitability
(c) customer delight
(d) employee training
Ans. (a)
40. Match List—I with List—II and select the correct answer using the Code given below the Lists
Code:
List-I List-II
A. Principles of management 1. Douglas McGregor
B. Management by objectives 2. Chester Barnard
C. Human Resources Approach School 3. Henry Fayol
D. Human Relations School 4. George Elton Mayo
5. Peter Drucker
Codes:
A B C D
(a) 1 2 3 4
(b) 4 5 1 2
(c) 2 1 3 4
(d) 4 5 2 1
Ans. (b)
41. A collection of duties, tasks and responsibilities assigned to a single individual is:
(a) occupation
(b) position
(c) job
(d) grade
Ans. (c)
42. An optimizing model is designed to:
(a) get the maximum results with minimum inputs
(b) solve problems by eliminating the blocks in the process of goal achievement
(c) lead the selection of the best course of action from among available alternatives
(d) reduce the burden of organizational hierarchy
Ans. (a)
43. Match List—I with List—II and select the correct answer using the Code given below the Lists:
List—I List—II
A. Managerial Grid 1. H. Koontz
B. 3-D Approach 2. F.E. Fiedler
C. Contingency Model 3. R.R. Blake
D. Systems Approach 4. R. Likert
5. W.I. Reddin
Code:
A B C D
(a) 1 4 2 3
(b) 3 5 4 2
(c) 4 1 2 3
(d) 3 5 2 4
Ans. (d)
44. In an organization, performance appraisal is not expected to:
(a) integrate and coordinate the Endeavour of individuals
(b) monitor the efforts of individuals
(c) provide a means of correcting or commending the efforts of individuals ,
(d) calculate the living wage of the worker
Ans. (d)
45. Consider the following stages in delegation of authority
1. Creation of obligation
2. Determination of results expected
3. Assignment of duties
4. Authorization for action
The correct sequence of these stages is:
(a) 1,2, 3, 4
(b) 2, 1, 4, 3
(c) 2, 3, 4 1
(d) 1, 3, 4, 2
Ans. (c)
46. Under which one of the following types of organizational structure does a person become accountable to two or more bosses at the same time?
(a) Matrix structure
(b) Centralized structure
(c) Decentralized structure
(d) Vertical structure
Ans. (a)
47. Consider the following principles:
1. Harmony of objectives
2. Unity of command
3. Division of work
4. Responsibility
Which of these principles are not parts of direction?
(a) 1 and 2
(b) 2 and 3
(c) 3 and 4
(d) 1 and 4
Ans. (c)
48. The approach that considers an organization to be in a dynamic relationship with its environment is called:
(a) Contingency approach
(b) Scientific approach
(c) Societal approach
(d) Systems approach
Ans. (c)
49. Matrix Organization refers to a form of:
(a) organization where authority and responsibility coexist
(b) organization in which two or more basic types of Departmentation are combined
(c) mathematical arrangement of events in columns and rows
(d) organization where mathematical simulation is used
Ans. (b)
50. Consider the following steps:
1. Measurement of performance
2. Establishment of standards
3. Comparison between performance and standards
4. Correction of deviations
The correct sequence in which these steps are undertaken in the process of controlling is:
(a) 1, 2, 3, 4
(b) 2, 1, 3, 4
(c) 3, 1, 2, 4
(d) 1, 3, 2, 4
Ans. (b)
SAMPLE JUNIOR ACCOUNTANT SELECTION EXAM
Objective commerce questions Sports Authority Of India Recruitment
1. Consider the following statements:
1. Operational loss is a source of funds
2. Decrease in working capital is a source of funds
3. Additions to fixed assets are an application of funds
4. Fresh introduction of capital is an application of funds
Which of the above statements are applicable while preparing the funds flow statement?
(a) 1 and 2
(b) 1 and 3
(c) 2 and 3
(d) 1, 3 and 4
Ans. (d)
2. Which one of the following pairs is not correctly matched?
(a) Increase in working capital : Application of fund
(b) Increase in current liability : Source of fund
(c) Issue of shares : Source of fund
(d) Issue of bonus shares : Source of fund
Ans. (d)
3. A company’s reported current profit is Rs. 70,000 after incorporating the following:
Loss on sale of investments Rs.10, 000; Premium on redemption of debentures Rs.1 ,500; Depreciation on machinery and plant Rs. 20,000; Goodwill and preliminary expenses written of Rs. 30,000; Gain from sale of non-current assets Rs. 40,000.
The net inflow of funds from the operation would be:
(a) Rs. 91,500
(b) Rs. 80,000
(c) Rs. 70,000
(d) Rs. 59,500
Ans. (a)
4. A building standing in the books at Rs. 30,000, was sold for Rs. 45,000. The gain on the sale of building was transferred to profit and loss account thus taking the net profit to Rs; 1,70,000. The fund from operation will be:
(a) Rs. 2,15,000
(b) Rs. 1,70,000
(c) Rs. 1,55,000
(d) Rs. 2,00,000
Ans. (c)
5. For the purpose of analyzing changes in financial position, enterprises prepare:
(a) Balance Sheet and Profit & Loss A/c
(b) Cash flow statement and Funds flow statement
(c) Statement of cash from operations and Balance Sheet
(d) Statement of changes in working capital and Statement of cash from operations.
Ans. (d)
6. Match List-I (Event) with List-II (Result) and select the correct answer using the Code given below the Lists:
List-I List-II
A. Collusion between two or 1. Payments of dividends otherwise not possible
more persons
B. Falsification of accounts to increase 2. Error of principle committed
apparent profits.
C. Operation of an effective system of 3. Trial balance may agree
internal check
D. Purchase of raw materials is debited to 4. Frauds perpetrated and concealed
loose tools account
5. Possibility of errors and frauds is
considerably reduced
Codes:
A B C D
(a) 3 4 5 2
(b) 4 1 5 2
(c) 4 1 2 5
(d) 2 4 1 3
Ans. (b)
7. It is necessary that an auditor should prepare an Audit Programme : maintain an Audit Note Book: use an Internal Control Questionnaire. and a ‘Flow Chart of Accounting System’; adopt ‘Special Ticks’ for. each class of transaction checked and divide work as well as responsibility among the members of his staff for an efficient conduct of audit work. All these refer to:
(a) general principle of internal auditing
(b) general principles of internal checking
(c) basic principles of auditing
(d) general techniques of auditing
Ans. (d)
8. When an auditor tests sales transactions, one step is tracing a sample of sales invoices to debits in the accounts receivable ledger. Based upon this step he will from an opinion as to whether:
(a) each sales invoice represents a valid sale
(b) all sales have been recorded
(c) all debits in accounts receivable ledger. are supported by sales invoices
(d) recorded sales invoices are properly posted to consumer accounts
Ans. (b)
9. Consider the following actions taken by an auditor:
1. Carrying on vouching
2. Preparing the audit report
3. Checking the valuation of assets
4. Decision to qualify the report
The correct sequence of these actions is:
(a) 1, 3, 4, 2
(b) 4, 1, 3, 2
(c) 3, 4, 2, 1
(d) l, 2, 4, 3
Ans. (a)
10. Which one of the following is the main object of auditing?
(a) Ascertaining whether all cash receipts and payments of an organization have been correctly recorded and accounted for
(b) Preventing errors and frauds connected with financial transactions of an organization
(c) Verifying books of accounts and annual financial statements of an organization so as to give a report on the view presented by the said accounts and statements
(d) Recording properly all financial transactions in various books of accounts and preparing annual financial statements indicating the results of such transactions
Ans. (c)
11. The books of account of a company should be preserved for a period of not less than:
(a) 2 years
(b) 5 years
(c) 8 years
(d) 10 years
Ans. (c)
12. In evaluating internal control, the first step is to prepare an internal control questionnaire or a flow chart of the system. The subsequent steps should be to:
1. determine the extent of audit work necessary to form an opinion
2. gather enough evidence to determine as to whether the internal control system is functioning as described
3. write a letter to the management describing the weaknesses in the internal control system
4. form a final judgement on the effectiveness of the internal control system
The correct sequence of these steps would be:
(a) 1, 2, 3, 4
(b) 2, 4,1, 3
(c) 2, 1, 3, 4
(d) 2, 4, 3, 1
Ans. (d)
13. Management audit refers to:
(a) audit on behalf of the management
(b) audit of management accounting system in operation
(c) systematic appraisal of management’s objectives and procedures
(d) audit of managerially initiated financial transactions
Ans. (c)
14. If an auditor, after his appointment, becomes disqualified as specified in Section 226 (3) and (4) of the Companies Act. 1956.
(a) the appointing authority will ask him to vacate his office
(b) the Company Law Board will ask him to tender his resignation
(c) he will be deemed to have vacated his office
(a) 1, 2, 3, 4
(b) 2, 4, 1, 3
(c) 2, 1, 3, 4
(d) 2, 4, 3, 1
Ans. (d)
15. The cost auditor in a company shall be appointed by:
(a) the Board of Directors
(b) the Board of Directors with the previous approval of the Central Government
(c) the members of the company with the previous approval of the Central Government
(d) the C & AG
Ans. (a)
16. For appointing an auditor other than a retiring auditor:
(a) special resolution is required
(b) ordinary resolution and approval of C & AG are required
(c) unanimous resolution and approval of the Central Government are required
(d) special notice is required
Ans. (d)
17. Secretarial Audit is:
(a) compulsory in companies having paid-up share capital of less than Rs. 50 lakhs
(b) compulsory where the statutory audit reveals inadequacy of internal check in secretarial department
(c) optional and would help the Board of Directors and the Registrar of Cor4anies in regard to compliance aspects, mainly tinder the Companies Act, 1956
(d) compulsory in such companies as may be notified. by the Central Government.
Ans. (c)
18. Match List—I with List—II and select the correct answer using the Code given below the Lists:
List—I List-II
A. A long-term debt instrument on which interest is 1. Mutual Fund
accumulated and paid on maturity
B. A debt instrument on which rebate is available 2. Deep Discount Bond
under the Income Tax Act
C. Pooling together the money of different investors 3. Infrastructure Bond
and investing it in diversified securities
D. Buying the right but not the 4. Put option
obligation to sell a security for a specific price
Codes:
A B C D
(a) 4 1 2 3
(b) 2 3 1 4
(c) 3 1 2 4
(d) 3 1 4 2
Ans. (b)
19. The comprehensive meaning of an efficient stock market is that it is a market which:
(a) allocates resources efficiently
(b) reflects the effective use of information in the price of the shares traded therein
(c) signals the changes in the listed company’s performance
(d) safeguards the investors money
Ans. (b)
20. Global Depository Receipts (GDRs) are issued by successful corporations with a view to attracting:
(a) overseas loan funds
(b) remittances from NRIs
(c) foreign equity capital
(d) foreign direct investment
Ans. (a)
21. Stock Holding Corporation of India Ltd. is expected to achieve, in the long run, the objective of:
(a) sale of all kinds of securities in all stock exchanges
(b) purchasing all shares issued in the country
(c) paperless trading in respect of all stock market transactions
(d) holding shares of all new companies and selling them later
Ans. (d)
22. Match List—I with List—II and select the correct answer using the Code given below the List:
A. Registrar of Companies 1 . Specified Securities
B. Memorandum of Association 2. Rules and Regulations of the Company
C. Buy back of shares 3. Certificate of Incorporation
D. Articles of Association 4. Objects of the Company
5. Minimum Subscription
Codes:
A B C D
(a) 3 4 5 1
(b) 4 3 1 2
(c) 3 4 1 2
(d) 1 2 5 4
Ans. (c)
23. The criterion for deeming a private company as a public company on the basis of average annual turnover is :
(a) Rs. 25 crores
(b) Rs. 20 crores
(c) Rs. 10 crores
(d) Rs. 5 crores
Ans. (c)
24. Match List- I with List -II and select the correct answer using the Code given below the Lists:
List –I List- II
A. Ashbury Rail Carriage & Iron Co. Ltd. vs. Riche 1 .Corporate entity
B. Peek vs. Gurney 2. Objects clause
C. Salomon vs. Salomon & Co. 3. Misstatement in prospectus
D. Royal British Bank vs. Turquand 4. Indoor management
Codes:
A B C D
(a) 2 1 3 4
(b) 3 4 1 2
(c) 2 3 1 4
(d) 2 3 4 1
Ans. (c)
25. When it is not registered, a partnership firm is:
(a) deemed to be illegal association and is disallowed to carry on business
(b) allowed to carry on business subject to payment of penalty
(c) allowed to carry on business subject to certain disabilities
(d) allowed to carry on business only with the special permission of the Registrar of Firms
Ans. (c)
26. All those who are dealing with the company are expected to know that contents of the Memorandum and Articles of Association. This is called:
(a) Doctrine of indoor management
(b) Doctrine of ultra vires
(c) Constructive notice
(d) Doctrine of merger
Ans. (c)
27. Match List-I with List-II and select the correct answer using the Code given below the Lists:
List -I List-II
A. Doctrine of ultra vires 1. Articles of Association
B. Doctrine of indoor management 2. Prospectus
C. Doctrine of golden rule 3. Memorandum of Association
Code:
A B C
(a) 1 3 2
(b) 3 1 2
(c) 2 1 3
(d) 3 2 1
Ans. (b)
28. Which one of the following statements correctly explains the term Doctrine of Indoor Management?
(a) The doctrine seeks to protect the outsiders against the company
(b) Every person dealing with the company is presumed to have read and understood the contents of company’s Memorandum and Articles of Association
(c) If a person enters into a contract with the company which is contrary to the provisions of Memorandum and Articles of Association, he will not get any right under such contract
(d) It protects the company against the outsiders
Ans. (a)
29. A preliminary contract refers to a contract made on behalf of a company:
(a) before the incorporation of the company
(b) after the incorporation of the company
(c) after the company obtains the certificate to commence business
(d) after incorporation but before obtaining the certificate of commencement of business
Ans. (a)
30. Match List—I (Organization) with List—II (Basis of Membership) and select the correct answer using the Code give below the Lists:
List-I List-II
A. Cooperative society 1. Collective business
B. Joint Hindu family 2. Purchase/Transfer of share
C. Joint Stock company 3. By virtue of birth
D. Partnership firm 4. Common mutual interest
5. Mutual contract
Codes:
A B C D
(a) 1 3 2 5
(b) 5 4 1 3
(c) 4 3 2 5
(d) 4 1 2 3
Ans. (c)
31. Match List—I (Name of the Authority) with List—II (Function/Activity) and select the correct answer using the Code given below the Lists:
List-I List—II
A. Port Authority 1.Claim for damage
B. Insurance Company 2.Demurrage for goods unloaded
C. ECGC 3. Export finance guarantee
D. Advising Bank 4. Bank in the exporters country
5. Bank issuing L/C on the request of controller
Codes:
A B C D
(a) 2 1 4
(b) 4 3 5
(c) 3 4
(d) 1 3 5
Ans. (
32. Which one of the following documents attests the fact that goods of specified quantity, value and description are entering the bounds of the country?
(a) Bill of lading
(b) Consular invoice
(c) Documentary bill
(d) Bill of entry
Ans. (d)
33. A person insured his property worth Rs. 10,000 against fire for Rs. 8,000. His actual loss by fire is Rs. 5,000 and there is an average clause in the policy. His claim will be:
(a) Rs. 10,000
(b) Rs. 8,000
(c) Rs. 5,000
(d) Rs. 4,000
Ans. (d)
34. To guard against the dangers of excess payment arising out of double insurance or over insurance made by the insured, insurance companies provide in their agreement:
(a) Average clause
(b) Subrogation clause
(c) Risk clause
(d) Indemnity clause
Ans. (b)
35. Match List—I with List—II and select the correct answer using the Code given below the Lists:
List-I List-II
A. Ohio State University study 1. Production centered and Employee centered
B. University of Michigan study 2. Consideration and initiating structure
C. Likerts System Four 3. Country-club, Team manager, Impoverished, Task
Manger.
D. Fiedler’s Leadership Model 4. Exploitative authoritative, Benevolent
authoritative, Consultative, Participative
5. Leader-member relations, Task structure, Position
Power
Code:
A B C D
(a) 1 2 4 5
(b) 2 1 3 4
(c) 2 1 4 5
(d) 5 2 3 4
Ans. (c)
36. Gantt chart is essentially a pictorial presentation of:
(a) a modified procedure for productivity improvement
(b) an organization chart in the form of bar diagram
(c) a time-event network analysis
(d) position chart of the functions to be carried out by the members of a work team
Ans. (a)
37. Computerized communication system existing within an organization is called:
(a) internet
(b) extranet
(c) local Area Network
(d) intranet
Ans. (c)
38. Match List—I (Management Functions) with List—II (Terms related to each of them) and select the correct answer using the code given below the Lists:
List—I List—II
A. Planning 1. Morale
B. Controlling 2. Goal
C. Directing 3. Coding
D. Communicating 4. Deviation
5. Recruitment
Code:
A B C D
(a) 1 2 3 5
(b) 2 4 1 3
(c) 1 2 5 3
(d) 2 4 3 1
Ans. (b)
39. TQM’s major emphasis is on:
(a) product quality
(b) company profitability
(c) customer delight
(d) employee training
Ans. (a)
40. Match List—I with List—II and select the correct answer using the Code given below the Lists
Code:
List-I List-II
A. Principles of management 1. Douglas McGregor
B. Management by objectives 2. Chester Barnard
C. Human Resources Approach School 3. Henry Fayol
D. Human Relations School 4. George Elton Mayo
5. Peter Drucker
Codes:
A B C D
(a) 1 2 3 4
(b) 4 5 1 2
(c) 2 1 3 4
(d) 4 5 2 1
Ans. (b)
41. A collection of duties, tasks and responsibilities assigned to a single individual is:
(a) occupation
(b) position
(c) job
(d) grade
Ans. (c)
42. An optimizing model is designed to:
(a) get the maximum results with minimum inputs
(b) solve problems by eliminating the blocks in the process of goal achievement
(c) lead the selection of the best course of action from among available alternatives
(d) reduce the burden of organizational hierarchy
Ans. (a)
43. Match List—I with List—II and select the correct answer using the Code given below the Lists:
List—I List—II
A. Managerial Grid 1. H. Koontz
B. 3-D Approach 2. F.E. Fiedler
C. Contingency Model 3. R.R. Blake
D. Systems Approach 4. R. Likert
5. W.I. Reddin
Code:
A B C D
(a) 1 4 2 3
(b) 3 5 4 2
(c) 4 1 2 3
(d) 3 5 2 4
Ans. (d)
44. In an organization, performance appraisal is not expected to:
(a) integrate and coordinate the Endeavour of individuals
(b) monitor the efforts of individuals
(c) provide a means of correcting or commending the efforts of individuals ,
(d) calculate the living wage of the worker
Ans. (d)
45. Consider the following stages in delegation of authority
1. Creation of obligation
2. Determination of results expected
3. Assignment of duties
4. Authorization for action
The correct sequence of these stages is:
(a) 1,2, 3, 4
(b) 2, 1, 4, 3
(c) 2, 3, 4 1
(d) 1, 3, 4, 2
Ans. (c)
46. Under which one of the following types of organizational structure does a person become accountable to two or more bosses at the same time?
(a) Matrix structure
(b) Centralized structure
(c) Decentralized structure
(d) Vertical structure
Ans. (a)
47. Consider the following principles:
1. Harmony of objectives
2. Unity of command
3. Division of work
4. Responsibility
Which of these principles are not parts of direction?
(a) 1 and 2
(b) 2 and 3
(c) 3 and 4
(d) 1 and 4
Ans. (c)
48. The approach that considers an organization to be in a dynamic relationship with its environment is called:
(a) Contingency approach
(b) Scientific approach
(c) Societal approach
(d) Systems approach
Ans. (c)
49. Matrix Organization refers to a form of:
(a) organization where authority and responsibility coexist
(b) organization in which two or more basic types of Departmentation are combined
(c) mathematical arrangement of events in columns and rows
(d) organization where mathematical simulation is used
Ans. (b)
50. Consider the following steps:
1. Measurement of performance
2. Establishment of standards
3. Comparison between performance and standards
4. Correction of deviations
The correct sequence in which these steps are undertaken in the process of controlling is:
(a) 1, 2, 3, 4
(b) 2, 1, 3, 4
(c) 3, 1, 2, 4
(d) 1, 3, 2, 4
Ans. (b)
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