1. Physical verification of fixed assets is the primary responsibility of the:
(a) auditor
(b) management
(c) government
(d) shareholders
Ans. (b)
2. Auditing Standards differ from auditing procedures in that the procedures relate to:
(a) measures of performance
(b) audit principles
(c) acts to be performed
(d) audit judgments
Ans. (c)
3. What is the correct sequence of the following assignments?
1. Internal control
2. Test check
3. Internal check
4. Statutory audit
Select the correct answer using the codes given
below:
Codes
(a) 1, 2, 3, 4
(b) 3, 1, 4, 2
(c) 3. 1, 2, 4
(d) 4, 3, 2, 1
Ans. (c)
4. Statutory auditor of a company in the case of a casual vacancy may be appointed by the:
(a) Board of Directors
(b) Managing Director
(c) Extraordinary General meeting
(d) Government concerned
Ans. (a)
5. Which of the following are included in the ‘Statutory Books’ for the purpose of company audit ?
1. Register of charges
2. Minutes Books for the Board meetings
3. Articles of Association
4. Minutes Book for the shareholder’s meeting
5. Register of members
6. Memorandum of Association
Select the correct answer using the codes given
below:
Codes:
(a) 1, 2, 4 and 5
(b) 2, 3, 4 and 6
(c) 1, 3, 5 and 6
(d) 2, 3, 5 and 6
Ans. (b)
6. Consider the following statements:
A statutory auditor of a public limited company claims that he has the following legal rights in relation to his duties:
1. Right to refuse to make a report
2. Right of access to books of accounts and registers
3. Right to seek explanation from directors and officers -
4. Right to make statement in the general meeting
Of the above statements:
(a) 1, 2, and 3 are correct
(b) 1, 2 and 4 are correct
(c) 1, 3, and 4 are correct
(d) 2, 3 and 4 are correct
Ans. (d)
7 Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I List-II
A. Duties of auditors 1. Access to Books of company
B. Rights of auditors 2. Penalty for non-compliance with sections 227 to 229
C. Liabilities of auditors 3. Company in general meeting
D. Removal of auditors 4. To make a report.
Codes:
A B C D
(a) 4 1 2 3
(b) 2 3 1 4
(c) 1 4 3 2
(d) 3 2 4 1
Ans. (a)
8, Consider the following functions of a stock exchange:
1. Providing a ready market for securities
2. Helping capital formation
3. Regulating the capital structure of a company
4. Regulating the public deposits with companies
Of the above functions:
(a) 1, 2, 3 and 4 are correct
(b) 1, 2, and 3 are correct
(c) 1 and 2 are correct
(d) none is correct
Ans. (c)
9. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I List-II
A. Minimum issued capital for being 1. One crore
listed on a stock exchange
B. Exemption from the consent of controller 2. Three crores
of capital issues for issue of shares
C. Amount payable on shares to be called only 3. Issued capital of less than
in installments and not in one stroke Rs. 3 crores
D Listing in OTC exchange 4. Issued capital of Rs.50 crores
and above
Codes:
A B C D
(a) 2 1 4 3
(b) 1 3 4 2
(c) 2 1 3 4
(d) 4 3 1 2
Ans. (a)
10. In stock exchange operations, when the speculator buys the right to sell a certain number of shares on an agreed amount at a specified time it is known as:
(a) no option
(b) put option
(c) cal option
(d) double option
Ans. (b)
11. The jurisdiction of the M.R.T.P. commission with respect to monopolistic trade practices is not exercisable opon/under:
(a) a reference made to it by the Central Government
(b) an application made to it by the Director General
(c) its own knowledge or information
(d) any of the abovementioned circumstances.
Ans. (c)
12. Complete consolidation as a class of business
combination may include:
(a) mergers and amalgamations
(b) pools and cartels
(c) trusts and holding companies
(d) trade associations and chambers of commerce
Ans. (a)
13. Modernization of industries can be achieved by:
(a) ensuring proper enforcement of the provisions of BIFR Act
(b) permitting PSUs to disinvest
(c) strictly implementing the provisions of industrial (Development and Regulation) Act, 1957
(d) creating consciousness among the industrialists about the need for modernization
Ans. (d)
14. Which one of the following statements is not correct?
(a) The preamble to the Industrial Development and Regulation/Act, 1951 is to provide for the development and regulation of certain industries
(b) The Central Government has the power to add any new undertakings to the first schedule
(c) Regulation of industries specified in the first schedule to the Act is sought to be achieved by means of:
(i) regulation of existing industrial undertakings,
(ii) licensing of new industrial undertakings and
(iii) licensing for producing new articles
(d) The new industrial policy was announced by the government on July 24, 1991
Ans. (a)
15. Which of the following conditions must be satisfied in a claim for loss by fire?
1. There must be actual fire.
2. Fire must be accidental.
3. Cause of fire must be ascertainable.
4. The goods must have been destroyed, not damaged by fire.
Select the correct answer using the codes given below:
Codes:
(a) 1 and 2
(b) 1 and 3
(c) 2 and 3
(d) 3 and 4
Ans. (a)
16. A mixed marine policy means:
(a) combination of fire and marine losses coverage
(b)combination of voyage and time policies
(c) combination of all types of risk on the sea
(d) combination of export credit insurance and marine insurance
Ans. (b)
17. A building worth five lakhs of rupees is insured for one lakh rupees. There is an average clause in the policy. A portion of the building valued one lakh of rupees is destroyed by fire. The owner can claim and recover:
(a) one lakh rupees
(b) twenty thousand rupees minus the sale of proceeds of the debris
(c) five lakh rupees
(d) one lakh rupees minus the sale of proceeds of the debris
Ans. (b)
18. Every person has insurable interest in his own life up to:
(a) a maximum of Rs. 5,00,000
(b) twenty times his net salary drawn
(c) an unlimited extent provided the premium payable does not exceed 20% of his sales salary
(d) an unlimited extent
Ans. (d)
19. Plate-Glass is typical type of accident insurance and it is mainly applicable to
(a) personal accident
(b) motor cars
(c) retail trade
(d) house burglary
Ans. (d)
20. ‘Doctrine of Subrogation’ is used in:
(a) Life Insurance
(b) Fire Insurance
(c) Marine Insurance; Fire Insurance
(d) Joint Life Insurance
Ans. (c)
21. Consider the following statements:
The Exim Bank plays an active role in boosting exports in:
1. civil construction contract abroad
2. providing long term finance for export of capital goods
3. providing short term finance for import of capita! goods
4. providing short term finance for export of quality goods
Of the above statements:
(a) 1 and 2 are correct
(b) 1 and 4 are correct
(c) 2 and 3 are correct
(d) 3 and 4 are correct
Ans. (d)
22. Which one of the following is not in vogue now?
(a) REP Licenses
(b) Advance Licenses
(c) Special import Licenses
(d) Custom permit
Ans. (a)
23. Which of the following items are not considered to be export promotion measures?
1. Quota certificate
2. Cash compensatory assistance
3. System of exchange control
4. Marketing development fund
Select the correct answer from the codes given below:
(a) l and 3
(b) 3 and 4
(c) 1 and 4
(d) 2 and 4
Ans. (a)
24. ‘Bill of lading’ is issued by:
(a) Indian commercial banks
(b) Foreign banks
(c) shipping company
(d) exporters
Ans. (c)
25. Which one of the following defines Co-ordination?
(a) Actuating force which inspires a person to put his best for the fulfillment of a task
(b) Orderly arrangement of group effort to provide unity of action in the pursuit of a common purpose
(c) Process of transmitting information from one person to another or from one unit to another
(4) Process of determining what is to be accomplished and what has been accomplished and if necessary applying corrective measures
Ans. (b)
26. Consider the following basic steps involved in the process of control:
1. Identifying the strategic control points
2. Establishing the standards
3. Measuring performance against standards
4. Correcting deviations from the standards
The correct sequence of the above steps in the process of control is:
(a) 1,4,3,2
(b) 4,3,2,1
(c) 2,1,4,3
(d) 2,3,1,4
Ans. (d)
27 Effective direction does not depend on the:
(a) communication process
(b) forces at the subordinate level
(c) ability of the manager
(d) deployment of human resources
Ans. (d)
28. Match List-I with List-II and select the correct answer using the codes given below the lists:
List -I List -II
(Management Thinkers) (Contribution/work)
A. Elton Mayo 1. Importance of integrating the company’s and employees’ goal
B. Frederick W.Taylor 2. Social Problems of Industrial civilization
C. Henri Fayol 3 .General and industrial management
D. Mary Parker Follet 4. Principles of Scientific Management
Codes:
A B C D
(a) 1 4 3 2
(b) 4 3 2 1
(c) 2 4 3 1
(d) 3 4 1 2
Ans. (c)
29, An organization structure is effective if it enables individuals to contribute to the objectives of the enterprise. This is known as.:
(a) scalar principle
(b) principle of functional definition
(c) principle of unity of objectives
(d) None of the above
Ans. (c)
30. Which one of the following orders indicates the correct logical order of managerial functions?
(a) Organizing, planning, directing, staffing, coordination and control
(b) Planning, Organizing, Staffing, Directing, coordination and control
(c) Planning, directing, organizing, staffing, control and coordination
(d) Organizing, planning, staffing, directing, control and coordination
Ans. (b)
31. Which one of the following pairs is Not correctly matched?
(a) Value of any security : The real value of any security is determined by the prior rights to the return of income.
(b) Debenture : It possesses maximum safety and normally offers regular and fixed income.
(c) Preference share : It offers reasonable safety as well as regular and fixed income by way of dividend.
(d) Equity share: It invites speculative tendency among the investors. There is risk of loss in such a share.
Ans. (a)
32. Which one of the following formulae is used to calculate ‘Cross Relationship’ under span of control?
(a) n {n- 1}
(b) n {2n -1}/ n
(c) n {2n+n-1}/n
(d) None of the above
Ans. (a)
33. V.A. Graiounasi has identified three sets of superior subordinate relationship, which are Direct single relationship, Direct Group relationship and Cross relationship.
Now if there are two, three, four and five subordinates respectively under one superior then in this context which one of the following pairs is correctly matched?
Number of the subordinates Total number of relationship
(a) 2 8
(b) 3 18
(c) 4 48
(d) 5 98
Ans. (b)
34. The main difference between delegation and decentralization is that:
(a) delegation refers primarily to transfer of authority from one individual to another while decentralization refers to systematic delegation of authority to all units in an organization
(b) delegation of authority can take place without decentralization whereas there cannot be decentralization without delegation of authority
(c) delegation represents sharing of excessive burden of key managerial personnel while decentralization refers to division of top managerial operations
(d) delegation may take place due to administrative, technical and routine reasons while decentralization involves deliberate action for the smooth functioning of the organization.
Ans. (a)
35. Management by exception introduces:
(a) selective, responsibility oriented reporting
(b) reporting of significant variances
(c) requirements of full reports on performance
(d) computation of actuals in different spheres of performance
Ans. (b)
36. Consider the following office equipments used in various offices:
1. Fax
2. Typewriter
3. Dictaphone
4. Letter opener
The correct order in which they are used is;
(a) 1,2,3,4
(b) 4,3,2,1
(c) 2,4,3,1
(d) 3,2,4,1
Ans; (b)
37. Consider the following four steps of purchasing office supplies:
1. Obtain quotation from vendors
2. Fill out quotation forms indicating requirements
3. Send forms to prospective vendors
4. Catalogue respective quotations
The correct sequence of the above steps is:
(a) 1,2,3,4
(b) 2,4,3,1
(c) 3,2,1,4
(d) 2,3,1,4
Ans. (d)
38. A public limited Company may in the general meeting, resolve to capitalize any part of the amount standing to the credit of any of its reserve accounts, upon the recommendation of the:
(a) Managing Director
(b) Board of Directors
(c) Financial Advisers
(d) shareholders
Ans. (b)
39. According to the Companies Act, 1956, a private company must have at least:
(a) seven directors
(b) three directors
(c) two directors
(d) one director
Ans. (c)
40. An enterprise incorporated by a Special Act of Parliament on the State Legislature intending to carry on some business of national importance is called:
(a) public company
(b) statutory corporation
(c) registered company
(d) registered statutory company
Ans. (b)
41. Which one of the following statements in respect of a public limited company is correct?
(a) Those are no legal restrictions on allotment of shares
(b) The convent of directors an their contract to purchase qualification shares, if any, required must be filed
(c) Directors need not retire by rotation every year
(d) There are legal restrictions on remuneration of Directors
Ans. (b)
42. Match List-I with List-II and select the correct answer using the codes given below the lists:
List-I List-II
(Company Issue) (Company Document)
A. Affirmation of compliance with 1. Certificate of incorporation
the registration formalities
B. Classes of shares into which 2. Statutory declaration
shake capital is divided
C. Rules for forfeiture of shares 3. Memorandum of Association
D. Name and address of the company 4. Articles of association
auditor
5. Prospectus
Codes:
A B C D
(a) 1 4 3 5
(b) 5 4 3 1
(c) 2 3 4 5
(d) 4 1 5 2
Ans. (c)
43. A special resolution for the alternation of the objects clause of the Memorandum of Association of a company having been passed, the alteration is to be confirmed by the:
(a) court concerned
(b) Central Government
(c) Company Law Board
(d) creditors of the Company
Ans. (c)
44. The last page of the record of proceedings of each meeting in minutes book shall be dated and signed by the Chairman of the same meeting within a period of 30 days of the conclusion of the meeting or in the event of death or inability of the Chairman within that period by:
(a) the managing Director
(b) a Director
(c) a Director duly authorized by the Board for that purpose
(d) The secretary
Ans. (c)
45. Which of the following statements are correct?
1. Minutes are not required to be read at a sub general meeting.
2. Confirmation of Minutes is not an item of agenda in general meeting.
3. The chairman may disallow any matter which in his opinion is detrimental to the interests of the company from being included in the minutes.
4. Members cannot obtain copies of minutes through they can inspect them during business hours.
Select the correct answer using the codes given below:
Codes:
(a) 2 and 3
(b) l, 2and 3
(c) l, 3 and 4
(d) 2, and 4
Ans. (b)
46. The agenda of the first Board Meeting of a limited company generally consists of the following items:
1. Election of chairman
2. Approval of draft prospectus
3. Appointment of officers, viz., The secretary, the manager and the accountant
4. Incorporation of the company and the legal advisor to report on the same
The correct order in which the above items of the agenda usually appear is:
(a) 1,2,3,4
(b) 4,3,2,1
(c) 3,4,1,2
(d) 4,1,3,2
Ans. (d)
47. According to Sec. 2 (45) of the Companies Act (as amended in 1974), a Company Secretary must possess the qualifications prescribed from time
time by the:
(a) Company Law Board
(b) Central Government
(c) Registrar of Companies
(d) Parliament
Ans. (b)
48. The Company Secretary files ‘copies of resolutions passed in an Extraordinary General Meeting with the Registrar of Companies under section:
(a) 173
(b) 192
(c) 193
(d) 2.8
Ans. (b)
49. The first annual general meeting of company must be held within:
(a) one month from the date of its incorporation
(b) six months from the date of its incorporation
(c) 12 months from the date of its incorporation
(d) 18 months from the date of its incorporation
Ans.(c)
50. Which one the following statements relating to a company secretary are not correct?
(a) He is not likely to perform duties towards shareholders
(b) He is the mouthpiece of the Board of directors
(c) He may be considered to be the head of the administrative section of a company
(d) He is to arrange for Board meetings
Ans. (a)
Showing posts with label COMMERCE. Show all posts
Showing posts with label COMMERCE. Show all posts
Wednesday, October 20, 2010
COMMERCE QUESTIONS FOR VARIOUS EXAMS
Accounting Concepts and Standards
1. Match List I with List II and select the correct answer using the code given below lists:
List -I List -II
A. Fixed assets are valued at cost less depreciation 1. Going-concem concept
B. Appending notes regarding contingent liabilities in 2. Materiality convention
accounting statements
C. Insignificant items or events having an insignificant 3. Business entity concept
economic effect need not be disclosed
D. Cash withdrawn by the owner to meet 4. Full-disclosure convention
personal expenses
Codes:
A B C D
(a) 3 4 2 1
(b) 3 2 4 1
(c) 1 4 2 3
(d) 1 2 4 3
Ans. (c)
2. Match List I with List II and select the correct answer using the code given below the Lists:
List –I List- II
(Content) (Accounting Standard)
A. Accounting for amalgamations 1. AS-3
B. Cash flow statements 2. AS-14
C. Net profit or loss for the period, prior period 3. AS-b
items and changes in accounting policies
B. Accounting for Fixed Assets 4. AS-5
Code:
A B C D
(a) 2 1 4 3
(b) 2 4 1 3
(c) 3 1 4 2
(d) 3 4 1 2
Ans. (a)
3. Which one of the following pairs is correctly matched?
(a) Share premium Revenue reserve
(b) Valuation of shares Super profit method
(c) Profit prior to incorporation Capital reserve
(d) Valuation of Goodwill Intrinsic value
Ans. (c)
4. By which of the following methods is secret reserve created?
1. Charging capital expenditure to revenue account
2. Showing contingent liability as actual liability
3. Providing less depreciation on fixed assets
4. Omitting some liabilities
Select the correct answer using the code given below:
Codes:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 3 and 4 only
(d) l, 2, 3 and 4
Ans. (a)
5. Which one of the following is the correct sequence of steps followed in accounting of transactions?
(a) Classification – Source – document – Summarization Recording
(b) Source of Summarization – document –Recording- Classification
(c) Recording—Summarization -Classification—Source of document
(d) Source of document -Classification—Recording— Summarization is Reg process of accounting
Ans. (b)
6. If Opening stock is-Rs 10000, Net purchases-Rs 70000, Wages-Rs 2500, Carriage inward-Rs. 500 and Closing stock-Rs. 15000.
Which one of the following is the Merchandizing cost?
(a) Rs.65000
(b) Rs 83000
(c) Rs 68000
(d) Rs 73000
Ans. (c)
7. If Assets of a business entity are—Rs 43000, Liabilities—Rs 3000, Capital—Rs 40000 op,0 1.03.2008 and on that date it sold goods costing Rs 4000 at Rs 4500 for cash. Which one of the following is the new accounting equation?
(a) Assets Rs 45500 = Liabilities Rs 3000 + Capital Rs 42500
(b) Assets Rs 43500= Liabilities Rs 3000 + Capital Rs 40500
(c) Assets Its 41000 = Liabilities Nil + Capital Rs 41000
(d) Assets Its 40500 = Liabilities Rs 3000 + Capital Rs 37500
Ans. (b)
8. Given below are the incomes and expenses an entity for the year 2007
Fee received in cash-Rs 24000, Accrued fees-Rs 6000, Rent for chamber paid 6000, Outstanding rent-Rs 2000, salary to staff paid-Rs 6000, Miscellaneous expenses paid-Rs 200 and Salary paid in advance to the staff-Rs 1000. Which one of the following is the amount of income under accrual basis?
(a) Rs 11800
(b) Rs 30000
(c) Rs 13200
(d) Rs 16800
Ans. (d)
9. Match List I with List I and select the correct answer using the code given below the Lists:
List I List II
A. Capital expenditure 1. Money raised by issue of shares
B. Revenue expenditure 2. Preliminary expenses
C. Deferred revenue expenditure 3. Depreciation
D. Capital receipt 4. Freight on machinery purchased
Code:
A B C D
(a) 1 2 3 4
(b) 1 3 2 4
(c) 4 3 2 1
(d) 4 2 3 1
Ans. (c)
10. How is renewal fee for patent treated as?
(a) Capital expenditure
(b) Deferred revenue expenditure
(c) Revenue expenditure
(d) Development expenditure
Ans. (b)
11. Given, Purchases Rs. 100000, Sales-Rs. 180000, Closing stock-Rs. 14000 and Manufacturing expenses-Rs 10000. Which one of the following is the value of Opening stock if the rate of gross profit is 33.3 % on cost?
(a) Rs. 28000
(b) Rs. 39000
(c) Rs. 37000
(d) Rs. 42000
Ans. (b)
12. X started a garment business on 01.01.2007 with a capital of Rs. 100000. Her capital on 31.12.2007 was Rs. 180000. During the period she introduced further capital of Rs. 30000 and withdrew from the business for domestic purpose Rs. 20000. Which one of the following is the value of her profit for the year ended 31.12.2007?
(a) Rs. 70000
(b) Rs. 170000
(c) Rs. 190000
(d) Rs. 77000
Ans. (a)
13. If a trader’s sales amount to Rs 18000 and his gross profit and net profit are 60% and 40% of sales respectively, which one of the following are his expenses if there is no indirect income?
(a) Rs 7200
(b) Rs 2500
(c) Rs 3600
(d) Rs 6480
Ans. (c)
14. Given, Balance of creditors of a firm as on January 01, 2007—Rs. 50000, Cash paid to creditors—Rs. 44000, Bills payable accepted during the year—Rs. 10000, Purchase returns Rs 1000 and Creditors as on December 31, 2007—Rs. 15000. Which one of the following is the credit purchase of the firm for the same period?
(a) Rs 15000
(b) Rs.25000
(c) Rs 20000
(d) Rs 30000
Ans. (c)
15. What does the balance of joint life policy account in the Balance Sheet of a partnership firm represent?
(a) Total premium paid to date
(b) Annual installment of premium payable each year
(c) The policy’s surrender value
(d) Amount receivable on maturity
Ans. (c)
16. Given the following information relating to bad debts and provision for doubtful debts of a concern during a period. Provisions for doubtful debts on 01.01 .2007—Rs. 6000, Bad debts written off during the current year 2007—Rs. 1200, Total debtors as on 31. l2.2007—Rs. 80000. A provision for doubtful debts to be made 5%
Which one of the following amounts is to be transferred to Profit and Loss Account?
(a) Rs. 5200 Dr.
(b) Rs. 800 Cr.
(c) Rs. 2000 Dr
(d) Rs. 800 Dr.
Ans. (a)
17. Given the following information of subscription for a period:
Subscription received during the year 2007—Rs. 12000
Subscription received in advance as on 01.01 .2007—Rs. 1500
Subscription outstanding as on 01.01 .2007—Rs. 500
Subscription outstanding as on 31.01 .2007—Rs. 700
Subscription received in advance as on 31. 12.2007—Rs. 2500
Which one of the following is the amount of subscription to be credited to Income and Expenditure Account?
(a) Rs. 14200
(b) Rs. 10700
(c) Rs. 11200
(d) Rs. 9100
Ans. (c)
18. X, Y and Z are partners in the ratio of 3:2:1. K, a new partner, is admitted for one-fourth share. Which of the following statements in this regard are correct?
1. K and Y will get equal amount of profit.
2. Z will have to bear the lowest amount of loss.
3. The ratio among X, Y and Z will not change.
Select the correct answer using the code given below:
Code:
(a) 1, 2 and 3
(b) 1 and 2 only
(c) 1 and 3 only
(d) 2 and 3 only
Ans. (d)
19. A and B are partners sharing profits in the ratio of 3: 2. C is admitted with one-third share in the profits. Which one of the following is the new profit-sharing ratio of the partners?
(a) 3:2:3
(b) 6:4:3
(c) 6:4:5
(d) 3:2:5
Ans. (d)
20. A and B are partners sharing profits in the ratio of 5 :3. C is admitted. The new profit sharing ratio among A, B and C is agreed at 3 2 1. There was a General reserve of Rs. 18000 before C’s admission. The General reserve will be distributed
(a) among A, B and C in the ratio of 3 :2: 1
(b) among A, B and C equally
(c) between A and B in the ratio of 5 : 3
(d) as per sacrificing ratio
Ans. (c)
21. Which one of the following transactions does not affect the Balance Sheet totals?
(a) Purchase of Rs. 5000 supplies on credit
(b) Payment of Rs. 30000 not payable
(c) Collection of Rs. 40000 from debtors
(d) Withdrawal of Rs. 8000 by owner
Ans. (c)
22. Consider -the following:
1. Fixed Assets
2. Investment
3. Current Assets
4. Loans and Advances
5. Profit and Loss Account
6. Miscellaneous Expenditure
Which one of the following is correct sequence of the above items appearing in the asset side of the Balance Sheet of a company as per Schedule VI, Part I of the Companies Act?
(a) 1-2-3-4
(b) 2-5-3-4-6
(c) 2-1-3-5-6-4
(d) 1-2-3-4-6-5
Ans.(d)
23. Consider the following items of liability side of Balance Sheet of a company under the Head Reserve and Surplus:
1. Securities Premium Account
2. Sinking Fund
3. Capital Reserve
4. Capital Redemption Reserve
Which one of the following is the correct sequence of appearance of the above items in the Balance Sheet?
(a) 1-3-2-4
(b) 3-4-2–1
(c) l-3-4-2
(d) 3-4-1-2
Ans. (b)
24. Which one of the following accounts is -neutralized in the event of issue of fully paid bonus shares by a company?
(a) Capital Reserve Account
(b) Bonus to Shareholders Account
(c) Share Capital Account
(d) General Reserve Account
Ans. (a)
25. Assertion (A) : Sinking fund is a charge against Profit and Loss Account.
Reason (R) : Sinking fund is created for repayment of a liability.
Code:
(a) Both A and R are individually true and R is the correct explanation of A
(b) Both A and Rare 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.
Ans. (d)
26. Assertion (A) : When a company earns any profit prior to incorporation, it is called capital profit.
Reason (R) : Capital profit cannot be used for distribution as dividend to the shareholders.
Code:
(a) Both A and R are individually true and R is the correct explanation of A.
(b) Both A and Rare 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.
Ans. (c)
27. The following Journal Entry -appears in the books of F Ltd:
Dr. Cr.
Rs. Rs.
Bank Account 96000
Loss on Issue of Debenture Account 10000
To 8% Debenture Account 10000
To Premium on Redemption of 6000
Debenture Account
At which one of the following discounted rates have the debentures been issued?
(a)10%
(b) 4%
(c) 6%
(d)10.42%
Ans. (b)
28. X Ltd. forfeited 20 shares of Rs. 10 each on which Rs.5 per share were paid up. The company issued these shares @ Rs. 8 as fully paid up. Which one of the following is the amount transferred to Capital Reserve Account?
(a) Rs.40
(b) Rs.60
(c) Rs. 20
(d) Rs. 100
Ans. (b)
29. An increase in Share Premium Account is
(a) an application of fund
(b) a source of fund
(c) no flow of fund
(d) None of the above
Ans. (b)
30. Which of the following is/are actually forfeited in case of share forfeiture?
1. Money already paid
2. Share certificate
3. Share capital
Select the correct answer using the codes given below
Code:
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1,2, and 3
Ans. (a)
31. Consider the following:
1. Payment to preference shareholders who paid calls in advance
2. Preference dividend
3. Payment to debenture holders
4. Preferential creditors
Which one of the following i the correct order of preferential payments of the above to be followed by the official liquidator in the event of liquidation of the company as per the provisions of the Companies Act, 1956?
(a) 1-2-3-4
(b) 3-4-2-1
(c) 2-1-4-3
(d) 3-2-1-4
Ans. (a)
32. Which of the following transactions will improve acid-test ratio?
1. Bills payable dishonored
2. Cash collected from customers
3. Issue of convertible debentures
Select the correct answer using the code given below
Code:
(a) 1,2 and 3
(b) 2 only
(c) 3 only
(d) 1 and 3 only
Ans. (c)
33. Given, Sundry debtors-Rs. 15000, Bills receivable-Rs. 12500,
Cash at bank-Rs. 17500, Stock-Rs. 15000, Profit-Rs 20000,
Creditors-Rs. 25000, Bills payable-Rs. 15000 and Sales-Rs.
100000. Which one of the following is the acid-test ratio?
(a) 1.5:1
(b) 1.l25: 1
(c) 1:1.5
(d) 1:1.125
Ans. (b)
34. Given below are some of the items of Profit and Loss Account of X Company Ltd:
Sales-Rs. 160000, Closing stock-Rs. 38000, Non-operating expenses-Rs. 800, Non-operating income-Rs. 4800 and Net profit-Rs. 28000
Which one of the following is the operating profit ratio?
(a)18%
(b) 20%
(c)15%
(d) 57%
Ans. (c)
35. A company offers to its shareholders the right to buy one share of Rs. 100 at Rs. 150 for every three shares of Rs. 100 each held. The market value of each share is Its 200. Which one of the following is the value of the right for one share?
(a) Rs. 12.50
(b) Rs. 10.00
(c) Rs. 12.00
(d) Rs 11.50
Ans. (a)
36. X Ltd. issued 10000, 12% debentures of Rs 100 each at Its 94 on 01.01.2003 under the term that j-th of the debentures are redeemable annually by drawings. Which one of the following is the amount of discount to be written off at the end of the year 2003?
(a) Rs. 20000
(b) Rs.40000
(c) Rs. 66000
(d) Cannot be computed
Ans. (a)
37. Assertion (A) : Audit means checking of the arithmetical accuracy of books of accounts and statements by mechanical ticking of figures.
Reason (R) Mere knowledge of Accountancy is not sufficient for auditing.
Code:
(a) Both A and R are individually true and It is the correct explanation of A.
(b) Both A and Rare 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.
Ans. (d)
38. How can a subsequent auditor be removed from office before the expiry of his term?
(a) With the prior approval of the Company Law Board
(b) With the prior approval of the Central Government
(c) Simply by passing resolution in the Board of Directors’ meeting
(d) With the prior approval of the Registrar of Companies
Ans. (b)
39. Which one of the following is maintained by the auditor to record all matters of material importance which may require discussion with the client and are generally used in the preparation of his audit report?
(a) Auditor’s handbook
(b) Audit file
(c) Auditor’s diary
(d) Audit notebook
Ans. (d)
40. Consider the following functions of purchase department:
1. Preparation of purchase order
2. Preparation of approved vendor list
3. Invitation of competitive quotation
4. Preparation of debit notes for materials returned
Which one of the following is the correct sequence in which
an auditor verifies the above functions?
(a) 1-2-3-4
(b) 2-1-3-4
(c) 2-3-4-1
(d) 2-3-1-4
Ans. (d)
41. As per AAS-l5, which of the following should be considered by an auditor while determining the sample size?
1. Sampling risk
2. Market risk
3. Expected error
4. Tolerable error
Select the correct answer using the code given below:
Code:
(a) 1,2,3 and 4
(b) 2 and 3 only
(c) 1,3 and 4 only
(d) 1 and 2 only
Ans. (c)
42. Who among the following can fill a casual vacancy caused in a company by way of resignation of the auditor?
(a) Board of Directors
(b) Shareholders through general meeting
(c) Central government
(d) Comptroller and Auditor General
Ans. (a)
43. Within which one of the following time periods, the first auditor of a newly incorporated company should be appointed?
(a) One week
(b) Three weeks
(c) One month
(d) Two months
Ans. (c)
44. Flow would the auditors approve the treatment of a lump sum amount by way of repairs to machinery damaged in the course of its shifting to a new site?
(a) As revenue expenditure
(b) As capital expenditure
(c) As deferred revenue expenditure
(d) None of the above
Ans. (c)
45. Which one of the following may be the opinion of an auditor where he fails to obtain sufficient information to warrant an expression of opinion?
(a) Qualified opinion
(b) Adverse or negative opinion
(c) Disclaimer of opinion
(d) Piecemeal opinion
Ans. (a)
46. Consider the following statements:
1. Management audit is statutorily compulsory.
2. Management auditor can be appointed either by Board of Directors or by the Shareholders.
Which of the statement(s) given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans. (d)
47. Which one of the following is known as a systematic examination of organizational structure of a concern, its plans, objectives, means of operation and the use of physical facilities and their constructive and comprehensive appraisal?
(a) System audit
(b) Management audit
(c) Statutory audit
(d) Procedural audit
Ans. (b)
48. As per the ICAI guidelines, for minimum how many years an auditor should maintain records relating to audit and other works done?
(a) One year
(b) Five years
(c) Seven years
(d) Ten years
Ans. (d)
49. Which one of the following courses of action is legally available to a company in the event of non-compliance of accounting standards?
(a) The company shall report the matter to the institute of Chartered Accountants of India
(b) The company shall report the matte. to the National Company Law Tribunal
(c) The company shall disclose the deviation from the accounting standards, reason for such deviation and the financial effect thereof
(d) The company shall ignore it
Ans. (c)
50. Match List -I with List -II and select the correct answer using the code given below the Lists:
List- I List-II
(Type of Fraud) (Example)
A. Suppression of receipts 1. Making payments against fictitious voucher
B. Inflating payments 2. Inflating the value of closing stock
C. Suppression of profits 3. Not accounting for receipts
B. Inflating profits 4. Charging items of capital nature to revenue
Code:
A B C D
(a) 2 4 1 3
(b) 3 4 1 2
(c) 3 1 4 2
(d) 2 1 4 3
Ans. (c)
1. Match List I with List II and select the correct answer using the code given below lists:
List -I List -II
A. Fixed assets are valued at cost less depreciation 1. Going-concem concept
B. Appending notes regarding contingent liabilities in 2. Materiality convention
accounting statements
C. Insignificant items or events having an insignificant 3. Business entity concept
economic effect need not be disclosed
D. Cash withdrawn by the owner to meet 4. Full-disclosure convention
personal expenses
Codes:
A B C D
(a) 3 4 2 1
(b) 3 2 4 1
(c) 1 4 2 3
(d) 1 2 4 3
Ans. (c)
2. Match List I with List II and select the correct answer using the code given below the Lists:
List –I List- II
(Content) (Accounting Standard)
A. Accounting for amalgamations 1. AS-3
B. Cash flow statements 2. AS-14
C. Net profit or loss for the period, prior period 3. AS-b
items and changes in accounting policies
B. Accounting for Fixed Assets 4. AS-5
Code:
A B C D
(a) 2 1 4 3
(b) 2 4 1 3
(c) 3 1 4 2
(d) 3 4 1 2
Ans. (a)
3. Which one of the following pairs is correctly matched?
(a) Share premium Revenue reserve
(b) Valuation of shares Super profit method
(c) Profit prior to incorporation Capital reserve
(d) Valuation of Goodwill Intrinsic value
Ans. (c)
4. By which of the following methods is secret reserve created?
1. Charging capital expenditure to revenue account
2. Showing contingent liability as actual liability
3. Providing less depreciation on fixed assets
4. Omitting some liabilities
Select the correct answer using the code given below:
Codes:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 3 and 4 only
(d) l, 2, 3 and 4
Ans. (a)
5. Which one of the following is the correct sequence of steps followed in accounting of transactions?
(a) Classification – Source – document – Summarization Recording
(b) Source of Summarization – document –Recording- Classification
(c) Recording—Summarization -Classification—Source of document
(d) Source of document -Classification—Recording— Summarization is Reg process of accounting
Ans. (b)
6. If Opening stock is-Rs 10000, Net purchases-Rs 70000, Wages-Rs 2500, Carriage inward-Rs. 500 and Closing stock-Rs. 15000.
Which one of the following is the Merchandizing cost?
(a) Rs.65000
(b) Rs 83000
(c) Rs 68000
(d) Rs 73000
Ans. (c)
7. If Assets of a business entity are—Rs 43000, Liabilities—Rs 3000, Capital—Rs 40000 op,0 1.03.2008 and on that date it sold goods costing Rs 4000 at Rs 4500 for cash. Which one of the following is the new accounting equation?
(a) Assets Rs 45500 = Liabilities Rs 3000 + Capital Rs 42500
(b) Assets Rs 43500= Liabilities Rs 3000 + Capital Rs 40500
(c) Assets Its 41000 = Liabilities Nil + Capital Rs 41000
(d) Assets Its 40500 = Liabilities Rs 3000 + Capital Rs 37500
Ans. (b)
8. Given below are the incomes and expenses an entity for the year 2007
Fee received in cash-Rs 24000, Accrued fees-Rs 6000, Rent for chamber paid 6000, Outstanding rent-Rs 2000, salary to staff paid-Rs 6000, Miscellaneous expenses paid-Rs 200 and Salary paid in advance to the staff-Rs 1000. Which one of the following is the amount of income under accrual basis?
(a) Rs 11800
(b) Rs 30000
(c) Rs 13200
(d) Rs 16800
Ans. (d)
9. Match List I with List I and select the correct answer using the code given below the Lists:
List I List II
A. Capital expenditure 1. Money raised by issue of shares
B. Revenue expenditure 2. Preliminary expenses
C. Deferred revenue expenditure 3. Depreciation
D. Capital receipt 4. Freight on machinery purchased
Code:
A B C D
(a) 1 2 3 4
(b) 1 3 2 4
(c) 4 3 2 1
(d) 4 2 3 1
Ans. (c)
10. How is renewal fee for patent treated as?
(a) Capital expenditure
(b) Deferred revenue expenditure
(c) Revenue expenditure
(d) Development expenditure
Ans. (b)
11. Given, Purchases Rs. 100000, Sales-Rs. 180000, Closing stock-Rs. 14000 and Manufacturing expenses-Rs 10000. Which one of the following is the value of Opening stock if the rate of gross profit is 33.3 % on cost?
(a) Rs. 28000
(b) Rs. 39000
(c) Rs. 37000
(d) Rs. 42000
Ans. (b)
12. X started a garment business on 01.01.2007 with a capital of Rs. 100000. Her capital on 31.12.2007 was Rs. 180000. During the period she introduced further capital of Rs. 30000 and withdrew from the business for domestic purpose Rs. 20000. Which one of the following is the value of her profit for the year ended 31.12.2007?
(a) Rs. 70000
(b) Rs. 170000
(c) Rs. 190000
(d) Rs. 77000
Ans. (a)
13. If a trader’s sales amount to Rs 18000 and his gross profit and net profit are 60% and 40% of sales respectively, which one of the following are his expenses if there is no indirect income?
(a) Rs 7200
(b) Rs 2500
(c) Rs 3600
(d) Rs 6480
Ans. (c)
14. Given, Balance of creditors of a firm as on January 01, 2007—Rs. 50000, Cash paid to creditors—Rs. 44000, Bills payable accepted during the year—Rs. 10000, Purchase returns Rs 1000 and Creditors as on December 31, 2007—Rs. 15000. Which one of the following is the credit purchase of the firm for the same period?
(a) Rs 15000
(b) Rs.25000
(c) Rs 20000
(d) Rs 30000
Ans. (c)
15. What does the balance of joint life policy account in the Balance Sheet of a partnership firm represent?
(a) Total premium paid to date
(b) Annual installment of premium payable each year
(c) The policy’s surrender value
(d) Amount receivable on maturity
Ans. (c)
16. Given the following information relating to bad debts and provision for doubtful debts of a concern during a period. Provisions for doubtful debts on 01.01 .2007—Rs. 6000, Bad debts written off during the current year 2007—Rs. 1200, Total debtors as on 31. l2.2007—Rs. 80000. A provision for doubtful debts to be made 5%
Which one of the following amounts is to be transferred to Profit and Loss Account?
(a) Rs. 5200 Dr.
(b) Rs. 800 Cr.
(c) Rs. 2000 Dr
(d) Rs. 800 Dr.
Ans. (a)
17. Given the following information of subscription for a period:
Subscription received during the year 2007—Rs. 12000
Subscription received in advance as on 01.01 .2007—Rs. 1500
Subscription outstanding as on 01.01 .2007—Rs. 500
Subscription outstanding as on 31.01 .2007—Rs. 700
Subscription received in advance as on 31. 12.2007—Rs. 2500
Which one of the following is the amount of subscription to be credited to Income and Expenditure Account?
(a) Rs. 14200
(b) Rs. 10700
(c) Rs. 11200
(d) Rs. 9100
Ans. (c)
18. X, Y and Z are partners in the ratio of 3:2:1. K, a new partner, is admitted for one-fourth share. Which of the following statements in this regard are correct?
1. K and Y will get equal amount of profit.
2. Z will have to bear the lowest amount of loss.
3. The ratio among X, Y and Z will not change.
Select the correct answer using the code given below:
Code:
(a) 1, 2 and 3
(b) 1 and 2 only
(c) 1 and 3 only
(d) 2 and 3 only
Ans. (d)
19. A and B are partners sharing profits in the ratio of 3: 2. C is admitted with one-third share in the profits. Which one of the following is the new profit-sharing ratio of the partners?
(a) 3:2:3
(b) 6:4:3
(c) 6:4:5
(d) 3:2:5
Ans. (d)
20. A and B are partners sharing profits in the ratio of 5 :3. C is admitted. The new profit sharing ratio among A, B and C is agreed at 3 2 1. There was a General reserve of Rs. 18000 before C’s admission. The General reserve will be distributed
(a) among A, B and C in the ratio of 3 :2: 1
(b) among A, B and C equally
(c) between A and B in the ratio of 5 : 3
(d) as per sacrificing ratio
Ans. (c)
21. Which one of the following transactions does not affect the Balance Sheet totals?
(a) Purchase of Rs. 5000 supplies on credit
(b) Payment of Rs. 30000 not payable
(c) Collection of Rs. 40000 from debtors
(d) Withdrawal of Rs. 8000 by owner
Ans. (c)
22. Consider -the following:
1. Fixed Assets
2. Investment
3. Current Assets
4. Loans and Advances
5. Profit and Loss Account
6. Miscellaneous Expenditure
Which one of the following is correct sequence of the above items appearing in the asset side of the Balance Sheet of a company as per Schedule VI, Part I of the Companies Act?
(a) 1-2-3-4
(b) 2-5-3-4-6
(c) 2-1-3-5-6-4
(d) 1-2-3-4-6-5
Ans.(d)
23. Consider the following items of liability side of Balance Sheet of a company under the Head Reserve and Surplus:
1. Securities Premium Account
2. Sinking Fund
3. Capital Reserve
4. Capital Redemption Reserve
Which one of the following is the correct sequence of appearance of the above items in the Balance Sheet?
(a) 1-3-2-4
(b) 3-4-2–1
(c) l-3-4-2
(d) 3-4-1-2
Ans. (b)
24. Which one of the following accounts is -neutralized in the event of issue of fully paid bonus shares by a company?
(a) Capital Reserve Account
(b) Bonus to Shareholders Account
(c) Share Capital Account
(d) General Reserve Account
Ans. (a)
25. Assertion (A) : Sinking fund is a charge against Profit and Loss Account.
Reason (R) : Sinking fund is created for repayment of a liability.
Code:
(a) Both A and R are individually true and R is the correct explanation of A
(b) Both A and Rare 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.
Ans. (d)
26. Assertion (A) : When a company earns any profit prior to incorporation, it is called capital profit.
Reason (R) : Capital profit cannot be used for distribution as dividend to the shareholders.
Code:
(a) Both A and R are individually true and R is the correct explanation of A.
(b) Both A and Rare 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.
Ans. (c)
27. The following Journal Entry -appears in the books of F Ltd:
Dr. Cr.
Rs. Rs.
Bank Account 96000
Loss on Issue of Debenture Account 10000
To 8% Debenture Account 10000
To Premium on Redemption of 6000
Debenture Account
At which one of the following discounted rates have the debentures been issued?
(a)10%
(b) 4%
(c) 6%
(d)10.42%
Ans. (b)
28. X Ltd. forfeited 20 shares of Rs. 10 each on which Rs.5 per share were paid up. The company issued these shares @ Rs. 8 as fully paid up. Which one of the following is the amount transferred to Capital Reserve Account?
(a) Rs.40
(b) Rs.60
(c) Rs. 20
(d) Rs. 100
Ans. (b)
29. An increase in Share Premium Account is
(a) an application of fund
(b) a source of fund
(c) no flow of fund
(d) None of the above
Ans. (b)
30. Which of the following is/are actually forfeited in case of share forfeiture?
1. Money already paid
2. Share certificate
3. Share capital
Select the correct answer using the codes given below
Code:
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1,2, and 3
Ans. (a)
31. Consider the following:
1. Payment to preference shareholders who paid calls in advance
2. Preference dividend
3. Payment to debenture holders
4. Preferential creditors
Which one of the following i the correct order of preferential payments of the above to be followed by the official liquidator in the event of liquidation of the company as per the provisions of the Companies Act, 1956?
(a) 1-2-3-4
(b) 3-4-2-1
(c) 2-1-4-3
(d) 3-2-1-4
Ans. (a)
32. Which of the following transactions will improve acid-test ratio?
1. Bills payable dishonored
2. Cash collected from customers
3. Issue of convertible debentures
Select the correct answer using the code given below
Code:
(a) 1,2 and 3
(b) 2 only
(c) 3 only
(d) 1 and 3 only
Ans. (c)
33. Given, Sundry debtors-Rs. 15000, Bills receivable-Rs. 12500,
Cash at bank-Rs. 17500, Stock-Rs. 15000, Profit-Rs 20000,
Creditors-Rs. 25000, Bills payable-Rs. 15000 and Sales-Rs.
100000. Which one of the following is the acid-test ratio?
(a) 1.5:1
(b) 1.l25: 1
(c) 1:1.5
(d) 1:1.125
Ans. (b)
34. Given below are some of the items of Profit and Loss Account of X Company Ltd:
Sales-Rs. 160000, Closing stock-Rs. 38000, Non-operating expenses-Rs. 800, Non-operating income-Rs. 4800 and Net profit-Rs. 28000
Which one of the following is the operating profit ratio?
(a)18%
(b) 20%
(c)15%
(d) 57%
Ans. (c)
35. A company offers to its shareholders the right to buy one share of Rs. 100 at Rs. 150 for every three shares of Rs. 100 each held. The market value of each share is Its 200. Which one of the following is the value of the right for one share?
(a) Rs. 12.50
(b) Rs. 10.00
(c) Rs. 12.00
(d) Rs 11.50
Ans. (a)
36. X Ltd. issued 10000, 12% debentures of Rs 100 each at Its 94 on 01.01.2003 under the term that j-th of the debentures are redeemable annually by drawings. Which one of the following is the amount of discount to be written off at the end of the year 2003?
(a) Rs. 20000
(b) Rs.40000
(c) Rs. 66000
(d) Cannot be computed
Ans. (a)
37. Assertion (A) : Audit means checking of the arithmetical accuracy of books of accounts and statements by mechanical ticking of figures.
Reason (R) Mere knowledge of Accountancy is not sufficient for auditing.
Code:
(a) Both A and R are individually true and It is the correct explanation of A.
(b) Both A and Rare 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.
Ans. (d)
38. How can a subsequent auditor be removed from office before the expiry of his term?
(a) With the prior approval of the Company Law Board
(b) With the prior approval of the Central Government
(c) Simply by passing resolution in the Board of Directors’ meeting
(d) With the prior approval of the Registrar of Companies
Ans. (b)
39. Which one of the following is maintained by the auditor to record all matters of material importance which may require discussion with the client and are generally used in the preparation of his audit report?
(a) Auditor’s handbook
(b) Audit file
(c) Auditor’s diary
(d) Audit notebook
Ans. (d)
40. Consider the following functions of purchase department:
1. Preparation of purchase order
2. Preparation of approved vendor list
3. Invitation of competitive quotation
4. Preparation of debit notes for materials returned
Which one of the following is the correct sequence in which
an auditor verifies the above functions?
(a) 1-2-3-4
(b) 2-1-3-4
(c) 2-3-4-1
(d) 2-3-1-4
Ans. (d)
41. As per AAS-l5, which of the following should be considered by an auditor while determining the sample size?
1. Sampling risk
2. Market risk
3. Expected error
4. Tolerable error
Select the correct answer using the code given below:
Code:
(a) 1,2,3 and 4
(b) 2 and 3 only
(c) 1,3 and 4 only
(d) 1 and 2 only
Ans. (c)
42. Who among the following can fill a casual vacancy caused in a company by way of resignation of the auditor?
(a) Board of Directors
(b) Shareholders through general meeting
(c) Central government
(d) Comptroller and Auditor General
Ans. (a)
43. Within which one of the following time periods, the first auditor of a newly incorporated company should be appointed?
(a) One week
(b) Three weeks
(c) One month
(d) Two months
Ans. (c)
44. Flow would the auditors approve the treatment of a lump sum amount by way of repairs to machinery damaged in the course of its shifting to a new site?
(a) As revenue expenditure
(b) As capital expenditure
(c) As deferred revenue expenditure
(d) None of the above
Ans. (c)
45. Which one of the following may be the opinion of an auditor where he fails to obtain sufficient information to warrant an expression of opinion?
(a) Qualified opinion
(b) Adverse or negative opinion
(c) Disclaimer of opinion
(d) Piecemeal opinion
Ans. (a)
46. Consider the following statements:
1. Management audit is statutorily compulsory.
2. Management auditor can be appointed either by Board of Directors or by the Shareholders.
Which of the statement(s) given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans. (d)
47. Which one of the following is known as a systematic examination of organizational structure of a concern, its plans, objectives, means of operation and the use of physical facilities and their constructive and comprehensive appraisal?
(a) System audit
(b) Management audit
(c) Statutory audit
(d) Procedural audit
Ans. (b)
48. As per the ICAI guidelines, for minimum how many years an auditor should maintain records relating to audit and other works done?
(a) One year
(b) Five years
(c) Seven years
(d) Ten years
Ans. (d)
49. Which one of the following courses of action is legally available to a company in the event of non-compliance of accounting standards?
(a) The company shall report the matter to the institute of Chartered Accountants of India
(b) The company shall report the matte. to the National Company Law Tribunal
(c) The company shall disclose the deviation from the accounting standards, reason for such deviation and the financial effect thereof
(d) The company shall ignore it
Ans. (c)
50. Match List -I with List -II and select the correct answer using the code given below the Lists:
List- I List-II
(Type of Fraud) (Example)
A. Suppression of receipts 1. Making payments against fictitious voucher
B. Inflating payments 2. Inflating the value of closing stock
C. Suppression of profits 3. Not accounting for receipts
B. Inflating profits 4. Charging items of capital nature to revenue
Code:
A B C D
(a) 2 4 1 3
(b) 3 4 1 2
(c) 3 1 4 2
(d) 2 1 4 3
Ans. (c)
COMMERCE QUESTIONS FOR VARIOUS EXAMS
1. What is the correct sequence of the following actions taken by an auditor?
1. Physical verification of assets
2. Routine checking
3. Preparing the audit programme
4. Vouching
Select the correct answer using the code given below:
Code:
(a) l-4-2-3
(b) 2-l-4-3
(c) 3-2-4-1
(d) 4-3-1-2
Ans. (c)
2. Balance Sheet audit is an audit in which
(a) Balance Sheets of a number of years are audited
(b) Audit of financial statements is done
(c) Audit is done at the end of the financial year
(d) Verification of assets and liabilities is done
Ans. (d)
3. ‘Teeming and lading’ refers to which one of the following?
(a) Misappropriation of cash receipts from debtors
(b) Misappropriation of cash by showing fictitious purchases
(c) Issue of cheque when there is insufficient bank balance
(d) Cheques received from debtors but not deposited within reasonable time
Ans. (a)
4. The term ‘kiting’ refers to which one of the following?
(a) Non-recording of cash receipts
(b) Manipulation in bank accounts
(c) Showing higher depreciation in fixed assets
(d) Inflating expenditure
Ans. (b)
5. Consider the following statements:
1. The verification of assets and liabilities is primarily the responsibility of the management.
2. Auditor has to satisfy that valuation of assets has been correctly made as per accounting standards and generally accepted principles.
Which of the statement(s) given above is fare correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans. (c)
6. Which of the following is/are the advantage(s) of direct confirmation procedure in auditing?
1. Accurate physical verification of assets
2. Ascertaining accurate balances of debtors, loans and advances
3. Controlling of unnecessary expenditures
Select the correct answer using the code given below:
Code:
(a) 1 only
(b) 2 only
(c) 1 and 2 only
(d) 1, 2 and 3
Ans. (b)
7. Which one of the following is an example of direct confirmation?
(a) Management gives certificate of cash in hand
(b) Reconciliation of bank balance
(c) Debtors certifying outstanding balance
(d) Counting of inventories by the auditor
Ans. (c)
8. Which one of the following does not fall under audit planning (AAS-8) ?
(a) Developing the audit programme
(b) Development of overall plan
(c) Knowledge of the client’s business
(d) Performance of the peer firms
Ans. (d)
9. Consider the following steps in the preparation of an audit programme:
1. To ascertain the nature and scope of audit and its objectives
2. To obtain different records, viz., articles and memorandum of associations, agreement deeds, prospectus and other documents
3. To evaluate the systems of keeping accounts and internal check and internal control system in operation
4. To obtain detailed list of books of accounts and list of personnel responsible for different jobs
Which one of the following is the correct sequence of steps involved in the preparation of an audit programme?
(a) 1-2-3-4
(b) 3-4-2-1
(c) 4-3-2-1
(d) l-3-2-4
Ans. (a)
10. Match List -I with List -II and select the correct answer using the code given below the Lists:
List- I List -II
(Tool) (Nature of Function)
A. Test checking 1. Physical verification
B. Cash counting 2. Internal control
C. Division of labour 3. Overall assessment
D. Trend analysis 4. Selective verification
Code:
A B C D
(a) 3 2 1 4
(b) 3 1 2 4
(c) 4 2 1 3
(d) 4 1 2 3
Ans. (d)
11. You have the information that X Ltd. has declared 40% dividend. Which one of the following does it actually mean?
(a) X Ltd. has declared 40% of net profit as dividend
(b) X Ltd. has declared 40% of profits after tax as dividend
(c) X Ltd. will give dividend @40% on issued capital
(d) X Ltd. will give dividend @ 40% on paid-up capital
Ans. (d)
12. Match List I with List II and select the correct answer using the code given below the list:
List -I List -II
A. Doctrine of indoor management 1. Kotla Venkataswami vs. Ramamurthy
B. Untrue statement in prospectus 2. Ashbury Railway Carriage and Iron vs. Riche
C. Doctrine of ultra vires 3. Green Wood vs. Leather Shod Wheel Co.
D. Doctrine of constructive notice 4. Royal British Bank vs. Turquand
Code:
A B C D
(a) 4 2 3 1
(b) 4 3 2 1
(c) 1 3 2 4
(d) 1 2 3 4
Ans. (b)
13. Which one of the following exceptions for doctrine of indoor management was provided from Ruben vs. Great Fingall Consolidated case?
(a) Knowledge of irregularity
(b) Forgery
(c) Suspicion of irregularity
(d) An act outside apparent authority
Ans. (b)
14. The doctrine of indoor management seeks to
(a) protect outsider against the company.
(b) protect company against the outsider
(c) determine the relations between company and Directors.
(d) determine the relationship between Directors and auditor.
Ans. (a)
15. Under which of the following situations must dissolution of partnership take place?
1. At the expiry of the term
2. On the completion of a particular adventure
3. On death, insolvency or retirement of a partner
Select the correct answer using the code given below:
Code:
(a) 1, 2 and 3
(b) 3 only
(c) 2 and 3 only
(d) 1 and 2 only
Ans. (a)
16. Match List I with List II and select the correct answer using the code given below the Lists:
List -I List -II
(Document) (Use)
A. Bill of lading 1. To certify the origin of goods
B. Consular invoice 2. To transport cargo by ship
C. Packing slips 3. To inform about the contents of the package
Code:
A B C
(a) 3 1 2
(b) 2 1 3
(c) 2 3 1
(d) 3 2 1
Ans. (b)
17. In marine insurance, a partial loss is technically called as
(a) warranties.
(b) particular average.
(c) total loss.
(d) liabilities.
Ans. (b)
18. In which one of the following theories is it assumed that the psychological forces shaping peoples’ behavior are largely unconscious, and that a person cannot understand his or her own motivations?
(a) Maslow’s theory
(b) Herzberg’s theory
(c) Freud’s theory
(d) McGregor theory of X and Y
Ans. (c)
19. Consider the following statements:
Matrix organization is
1. most suitable when a project of a temporal nature is to be executed.
2. mostly seen in R & D and engineering organizations.
Which of the statement(s) given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans. (c)
20. Who among the following has advanced Transactional Analysis as an explanation of interpersonal communication strategy?
(a) Thomas A Harris
(b) Eric Frank
(c) Muriel James
(d) Eric Beme
Ans. (d)
21. Match List-I with List- II and select the correct answer using the code given below the Lists:
List -I List-II
(Theory of Motivation) (Contributor)
A. X, Y theory 1. Frederick Herzberg
B. Expectancy theory 2. J Stacey Adams
C. Two factor theory 3. Douglas McGregor
D. Equity theory 4. Victor Vroom
Code:
A B C D
(a) 3 1 4 2
(b) 2 4 1 3
(c) 2 1 4 3
(d) 3 4 1 2
Ans. (d)
22. Maslow’s need-hierarchy theory of motivation has classified the human needs into following five categories:
1. Safety needs
2. Esteem needs
3. Social needs
4. Physiological needs
5. Self-actualization needs
Which one of the following is correct hierarchy of the above needs from low order to high order?
(a) l-4-3-2–5
(b) 4-1-3-2-5
(c) 5-3-2-4-l
(d) 4- 1-2-5-3
Ans. (b)
23. Which one of the following is not included by Henry Mintzberg in the depiction of managerial roles?
(a) Interpersonal role
(b) Informational role
(c) Decisional role
(d) Organizing role
Ans. (d)
24. Which of the following is/are correct regarding coordination?
1. Coordination cannot be voluntarily produced by number of cooperating persons.
2. Coordination is, for the most part, the result of voluntary attitudes on the part of people in an organization.
3. Coordination is a far more inclusive term embracing the idea of cooperation.
Select the correct answer using the code given below:
Code:
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 only
(d) 1, 2 and 3
Ans. (b)
25. Who among the following has advanced the Power, Affiliation and Achievement motivation concepts?
(a) J. Stacey Adams
(b) BR Skinner
(c) Victor Vroom
(d) David C. McClelland
Ans. (d)
26. Which one of the following is not a method of performance appraisal?
(a) Grading method
(b) Behaviorally-anchored rating scale method
(c) Forced distribution method
(d) Paired comparison method
Ans. (a)
27. Consider the following statements about individual incentive system:
1. Individual incentive plans are used more frequently than organization based plans.
2. Individual plans can sometimes cause undesirable competition among peers.
Which of the statement(s) given above is/are not correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans. (d)
28. Which one of the following is an analytical method of job evaluation?
(a) Classification method
(b) Point -rating method
(c) Projection method
(d) Ranking method
Ans. (b)
29. Match List I with List II and select the correct answer using the code given above the Lists:
List -I List -II
(Contributor) (Management Thought/Theory)
A. Mary Parker Follett 1.Human relations
B. Henri Fayo 2.Integration theory
C. Elton Mayo 3.Scientific management
D. F.W. Taylor. 4 principles of management
Code:
A B C D
(a) 3 1 4 2
(b) 2 4 1 3
(c) 2 1 4 3
(d) 3 4 1 2
Ans. (b)
30. Identify the correct sequence of the following with regard to delegation of authority:
1. Creation of obligation
2. Authorization of actions
3. Determination of expected results
4. Assignment of duties
Select the correct answer using the code given below:
Code:
(a) 3-2-4-1
(b) 1-2-4-3
(c) 1-4-2-3
(d) 3-4-2-1
Ans. (d)
31. Consider the following statements with regard to ‘management by objectives’:
1. Overall objectives are set at the top of the organizational hierarchy.
2. Individual objectives coincide with the objectives of the organization.
3. Performances of employees are evaluated periodically.
Which of the statement(s) given above is/are correct?
(a) 1, 2 and 3
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1 only
Ans. (a)
32. If a situation calls for pooling the authority of two or more managers, it is referred to as
(a) splintered authority.
(b) centralized authority.
(c) decentralized authority.
(d) recentralized authority.
Ans. (a)
33. Which one of the following functions is concerned with synchronizing and unifying the actions of a group of people in an organization?
(a) Directing
(b) Controlling
(c) Coordinating
(d) Staffing
Ans. (c)
34. With which one of the following is force-field analysis associated?
(a) Understanding the pressure for and against change
(b) Incessant coordination between production schedule and product distribution schedule
(c) Understanding the process of coordination to ensure promptness and avoid red tapism
(d) None of the above
Ans. (a)
35. Which one of the following management thinkers argued in favour of separating planning from operation?
(a) Henri Fayol
(b) Luther Gulick
(c) L.F. Urwick
(d) F.W.Taylor
Ans. (d)
36. The balance brought out between economic and social models of decision-making as advanced by Herbert A Simon is called
(a) rational model
(b) satisfying model.
(c) irrational model.
(d) satisfying model.
Ans. (d)
37. For calculating, which one of the following is Dr. Aykroyd’s formula applied?
(a) Living wage
(b) Fair wage
(c) Real and nominal wage
(d) Need based minimum wage
Ans. (d)
38. Who among the following has observed that bureaucratic staff increases in inverse proportion to the amount of work done?
(a) Laurence J. Peter
(b) Peter F. Drucker
(c) Warren G. Bennis
(d) Northcote Parkinson
Ans. (d)
39. Under which one of the following conditions does false positive staffing error occur?
(a) Selection as well as performance scores are high
(b) Selection scores are low and performance scores are high
(c) Selection scores are high and performance scores are low
(d) Both selection and performance scores are low
Ans. (c)
40. Match List -I with List- II and select the correct answer using the code given below the Lists:
List-I List-II
(Selection Step) (Objective)
A. Reference checks 1. Swift evaluation of candidate
B. Preliminary interview 2. Evaluation of candidate including measuring mannerisms,
vocabulary, temperament, etc.
C. Selection test 3. Check authenticity provided in application blanks
D. Comprehensive interview 4. Measuring IQ of the candidate
Code:
A B C D
(a) 3 1 4 2
(b) 3 4 1 2
(c) 2 1 4 3
(d) 2 4 1 3
Ans. (a)
41. Consider the following stages of planned change:
1. Moving
2. Refreezing
3. Unfreezing
Which one of the following is the correct sequence of the
above according to Kurt Lewin?
(a) 1-2-3
(c) 3-1-2
(b) 2-3-1
(d) 1-3-2
Ans. (c)
42. Match List I with List II and select the correct answer using the code given below the Lists:
List- I List- II
(Contributor) (Leadership Style)
A. Robert Blake and Jane Mouton 1. Four-system model
B. W.J. Reddin 2. Normative model
C. Rensis Likert 3. Managerial grid
D. Vroom and Yetton 4. The 3-D theory
Code:
A B C D
(a) 3 4 1 2
(b) 3 1 4 2
(c) 2 1 4 3
(d) 2 4 1 3
Ans. (a)
43. Which one of the following is not a dimension of the managerial grid theory of leadership?
(a) Country club management
(b) Impoverished management
(c) Team management
(d) Entrepreneurship management
Ans. (b)
44. Which one of the following is the correct sequence with regard to communication process?
(a) Sender-Message-Encoding-Receiver – Channel Decoding- Feedback
(b) Message-Sender –Encoding-Receiver- Channel-Decoding -Feedback
(c) Encoding -Message –Sender-Decoding –Feedback-Receiver-Channel
(d) Sender-Message- Encoding-Channel-Receiver-Decoding-Feedback
Ans. (c)
45. Gangplank theory of communication, advanced by Henri Fayol, is an example of which one of the following
(a) Vertical upward communication
(b) Vertical downward communication
(c) Lateral or horizontal communication
(d) Cyclic or circular communication
Ans. (c)
46. Which one of the following is signified by the Moosa Goolam Ariff vs. Ebrahim Goolam Ariff case?
(a) The certificate of incorporation is a conclusive proof of validity
(b) The certificate of incorporation is for the commencement of the business
(c) The certificate of incorporation places limit on the working of the Directors
(d) Company can be revived after dissolution
Ans. (a)
47. Company Law Information Memorandum, as per section 60 (B) of the Companies Act, 1956 is related to
(a) the Directors responsibility statement.
(b) corporate governance,
(c) initial public offering,
(d) accounting standard relating to finance and investment companies.
Ans. (c)
48. Statutory Report
(a) shall be prepared by Board of Directors and forwarded 21 days before the statutory meeting.
(b) shall be prepared by the Secretary and forwarded 21 days before the statutory meeting.
(c) can be prepared by anyone and there is no time period prescribed.
(d) shall be prepared by the auditor and forwarded 30 days before the statutory meeting.
Ans. (a)
49. Which one of the following is the penalty imposed under the Companies Act for contravening the provisions relating to acquisition and transfer of shares?
(a) Imprisonment for a term extending to three years or with fine which may extent to rupees fifty thousand or both
(b) imprisonment for term extending to six years or with fine which may extend to rupees ten thousand or both
(c) Imprisonment for a term extending to one year or with fine which may extend to rupees five thousand or both
(d) imprisonment for a term extending to five years or with fine which may extend to rupees twenty-five thousand or both
Ans. (a)
50. Which among the following can issue shelf prospectus?
(a) Any company
(b) Only public limited company
(c) Any public financial institution
(d) Only private companies
Ans. (c)
1. Physical verification of assets
2. Routine checking
3. Preparing the audit programme
4. Vouching
Select the correct answer using the code given below:
Code:
(a) l-4-2-3
(b) 2-l-4-3
(c) 3-2-4-1
(d) 4-3-1-2
Ans. (c)
2. Balance Sheet audit is an audit in which
(a) Balance Sheets of a number of years are audited
(b) Audit of financial statements is done
(c) Audit is done at the end of the financial year
(d) Verification of assets and liabilities is done
Ans. (d)
3. ‘Teeming and lading’ refers to which one of the following?
(a) Misappropriation of cash receipts from debtors
(b) Misappropriation of cash by showing fictitious purchases
(c) Issue of cheque when there is insufficient bank balance
(d) Cheques received from debtors but not deposited within reasonable time
Ans. (a)
4. The term ‘kiting’ refers to which one of the following?
(a) Non-recording of cash receipts
(b) Manipulation in bank accounts
(c) Showing higher depreciation in fixed assets
(d) Inflating expenditure
Ans. (b)
5. Consider the following statements:
1. The verification of assets and liabilities is primarily the responsibility of the management.
2. Auditor has to satisfy that valuation of assets has been correctly made as per accounting standards and generally accepted principles.
Which of the statement(s) given above is fare correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans. (c)
6. Which of the following is/are the advantage(s) of direct confirmation procedure in auditing?
1. Accurate physical verification of assets
2. Ascertaining accurate balances of debtors, loans and advances
3. Controlling of unnecessary expenditures
Select the correct answer using the code given below:
Code:
(a) 1 only
(b) 2 only
(c) 1 and 2 only
(d) 1, 2 and 3
Ans. (b)
7. Which one of the following is an example of direct confirmation?
(a) Management gives certificate of cash in hand
(b) Reconciliation of bank balance
(c) Debtors certifying outstanding balance
(d) Counting of inventories by the auditor
Ans. (c)
8. Which one of the following does not fall under audit planning (AAS-8) ?
(a) Developing the audit programme
(b) Development of overall plan
(c) Knowledge of the client’s business
(d) Performance of the peer firms
Ans. (d)
9. Consider the following steps in the preparation of an audit programme:
1. To ascertain the nature and scope of audit and its objectives
2. To obtain different records, viz., articles and memorandum of associations, agreement deeds, prospectus and other documents
3. To evaluate the systems of keeping accounts and internal check and internal control system in operation
4. To obtain detailed list of books of accounts and list of personnel responsible for different jobs
Which one of the following is the correct sequence of steps involved in the preparation of an audit programme?
(a) 1-2-3-4
(b) 3-4-2-1
(c) 4-3-2-1
(d) l-3-2-4
Ans. (a)
10. Match List -I with List -II and select the correct answer using the code given below the Lists:
List- I List -II
(Tool) (Nature of Function)
A. Test checking 1. Physical verification
B. Cash counting 2. Internal control
C. Division of labour 3. Overall assessment
D. Trend analysis 4. Selective verification
Code:
A B C D
(a) 3 2 1 4
(b) 3 1 2 4
(c) 4 2 1 3
(d) 4 1 2 3
Ans. (d)
11. You have the information that X Ltd. has declared 40% dividend. Which one of the following does it actually mean?
(a) X Ltd. has declared 40% of net profit as dividend
(b) X Ltd. has declared 40% of profits after tax as dividend
(c) X Ltd. will give dividend @40% on issued capital
(d) X Ltd. will give dividend @ 40% on paid-up capital
Ans. (d)
12. Match List I with List II and select the correct answer using the code given below the list:
List -I List -II
A. Doctrine of indoor management 1. Kotla Venkataswami vs. Ramamurthy
B. Untrue statement in prospectus 2. Ashbury Railway Carriage and Iron vs. Riche
C. Doctrine of ultra vires 3. Green Wood vs. Leather Shod Wheel Co.
D. Doctrine of constructive notice 4. Royal British Bank vs. Turquand
Code:
A B C D
(a) 4 2 3 1
(b) 4 3 2 1
(c) 1 3 2 4
(d) 1 2 3 4
Ans. (b)
13. Which one of the following exceptions for doctrine of indoor management was provided from Ruben vs. Great Fingall Consolidated case?
(a) Knowledge of irregularity
(b) Forgery
(c) Suspicion of irregularity
(d) An act outside apparent authority
Ans. (b)
14. The doctrine of indoor management seeks to
(a) protect outsider against the company.
(b) protect company against the outsider
(c) determine the relations between company and Directors.
(d) determine the relationship between Directors and auditor.
Ans. (a)
15. Under which of the following situations must dissolution of partnership take place?
1. At the expiry of the term
2. On the completion of a particular adventure
3. On death, insolvency or retirement of a partner
Select the correct answer using the code given below:
Code:
(a) 1, 2 and 3
(b) 3 only
(c) 2 and 3 only
(d) 1 and 2 only
Ans. (a)
16. Match List I with List II and select the correct answer using the code given below the Lists:
List -I List -II
(Document) (Use)
A. Bill of lading 1. To certify the origin of goods
B. Consular invoice 2. To transport cargo by ship
C. Packing slips 3. To inform about the contents of the package
Code:
A B C
(a) 3 1 2
(b) 2 1 3
(c) 2 3 1
(d) 3 2 1
Ans. (b)
17. In marine insurance, a partial loss is technically called as
(a) warranties.
(b) particular average.
(c) total loss.
(d) liabilities.
Ans. (b)
18. In which one of the following theories is it assumed that the psychological forces shaping peoples’ behavior are largely unconscious, and that a person cannot understand his or her own motivations?
(a) Maslow’s theory
(b) Herzberg’s theory
(c) Freud’s theory
(d) McGregor theory of X and Y
Ans. (c)
19. Consider the following statements:
Matrix organization is
1. most suitable when a project of a temporal nature is to be executed.
2. mostly seen in R & D and engineering organizations.
Which of the statement(s) given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans. (c)
20. Who among the following has advanced Transactional Analysis as an explanation of interpersonal communication strategy?
(a) Thomas A Harris
(b) Eric Frank
(c) Muriel James
(d) Eric Beme
Ans. (d)
21. Match List-I with List- II and select the correct answer using the code given below the Lists:
List -I List-II
(Theory of Motivation) (Contributor)
A. X, Y theory 1. Frederick Herzberg
B. Expectancy theory 2. J Stacey Adams
C. Two factor theory 3. Douglas McGregor
D. Equity theory 4. Victor Vroom
Code:
A B C D
(a) 3 1 4 2
(b) 2 4 1 3
(c) 2 1 4 3
(d) 3 4 1 2
Ans. (d)
22. Maslow’s need-hierarchy theory of motivation has classified the human needs into following five categories:
1. Safety needs
2. Esteem needs
3. Social needs
4. Physiological needs
5. Self-actualization needs
Which one of the following is correct hierarchy of the above needs from low order to high order?
(a) l-4-3-2–5
(b) 4-1-3-2-5
(c) 5-3-2-4-l
(d) 4- 1-2-5-3
Ans. (b)
23. Which one of the following is not included by Henry Mintzberg in the depiction of managerial roles?
(a) Interpersonal role
(b) Informational role
(c) Decisional role
(d) Organizing role
Ans. (d)
24. Which of the following is/are correct regarding coordination?
1. Coordination cannot be voluntarily produced by number of cooperating persons.
2. Coordination is, for the most part, the result of voluntary attitudes on the part of people in an organization.
3. Coordination is a far more inclusive term embracing the idea of cooperation.
Select the correct answer using the code given below:
Code:
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 only
(d) 1, 2 and 3
Ans. (b)
25. Who among the following has advanced the Power, Affiliation and Achievement motivation concepts?
(a) J. Stacey Adams
(b) BR Skinner
(c) Victor Vroom
(d) David C. McClelland
Ans. (d)
26. Which one of the following is not a method of performance appraisal?
(a) Grading method
(b) Behaviorally-anchored rating scale method
(c) Forced distribution method
(d) Paired comparison method
Ans. (a)
27. Consider the following statements about individual incentive system:
1. Individual incentive plans are used more frequently than organization based plans.
2. Individual plans can sometimes cause undesirable competition among peers.
Which of the statement(s) given above is/are not correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans. (d)
28. Which one of the following is an analytical method of job evaluation?
(a) Classification method
(b) Point -rating method
(c) Projection method
(d) Ranking method
Ans. (b)
29. Match List I with List II and select the correct answer using the code given above the Lists:
List -I List -II
(Contributor) (Management Thought/Theory)
A. Mary Parker Follett 1.Human relations
B. Henri Fayo 2.Integration theory
C. Elton Mayo 3.Scientific management
D. F.W. Taylor. 4 principles of management
Code:
A B C D
(a) 3 1 4 2
(b) 2 4 1 3
(c) 2 1 4 3
(d) 3 4 1 2
Ans. (b)
30. Identify the correct sequence of the following with regard to delegation of authority:
1. Creation of obligation
2. Authorization of actions
3. Determination of expected results
4. Assignment of duties
Select the correct answer using the code given below:
Code:
(a) 3-2-4-1
(b) 1-2-4-3
(c) 1-4-2-3
(d) 3-4-2-1
Ans. (d)
31. Consider the following statements with regard to ‘management by objectives’:
1. Overall objectives are set at the top of the organizational hierarchy.
2. Individual objectives coincide with the objectives of the organization.
3. Performances of employees are evaluated periodically.
Which of the statement(s) given above is/are correct?
(a) 1, 2 and 3
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1 only
Ans. (a)
32. If a situation calls for pooling the authority of two or more managers, it is referred to as
(a) splintered authority.
(b) centralized authority.
(c) decentralized authority.
(d) recentralized authority.
Ans. (a)
33. Which one of the following functions is concerned with synchronizing and unifying the actions of a group of people in an organization?
(a) Directing
(b) Controlling
(c) Coordinating
(d) Staffing
Ans. (c)
34. With which one of the following is force-field analysis associated?
(a) Understanding the pressure for and against change
(b) Incessant coordination between production schedule and product distribution schedule
(c) Understanding the process of coordination to ensure promptness and avoid red tapism
(d) None of the above
Ans. (a)
35. Which one of the following management thinkers argued in favour of separating planning from operation?
(a) Henri Fayol
(b) Luther Gulick
(c) L.F. Urwick
(d) F.W.Taylor
Ans. (d)
36. The balance brought out between economic and social models of decision-making as advanced by Herbert A Simon is called
(a) rational model
(b) satisfying model.
(c) irrational model.
(d) satisfying model.
Ans. (d)
37. For calculating, which one of the following is Dr. Aykroyd’s formula applied?
(a) Living wage
(b) Fair wage
(c) Real and nominal wage
(d) Need based minimum wage
Ans. (d)
38. Who among the following has observed that bureaucratic staff increases in inverse proportion to the amount of work done?
(a) Laurence J. Peter
(b) Peter F. Drucker
(c) Warren G. Bennis
(d) Northcote Parkinson
Ans. (d)
39. Under which one of the following conditions does false positive staffing error occur?
(a) Selection as well as performance scores are high
(b) Selection scores are low and performance scores are high
(c) Selection scores are high and performance scores are low
(d) Both selection and performance scores are low
Ans. (c)
40. Match List -I with List- II and select the correct answer using the code given below the Lists:
List-I List-II
(Selection Step) (Objective)
A. Reference checks 1. Swift evaluation of candidate
B. Preliminary interview 2. Evaluation of candidate including measuring mannerisms,
vocabulary, temperament, etc.
C. Selection test 3. Check authenticity provided in application blanks
D. Comprehensive interview 4. Measuring IQ of the candidate
Code:
A B C D
(a) 3 1 4 2
(b) 3 4 1 2
(c) 2 1 4 3
(d) 2 4 1 3
Ans. (a)
41. Consider the following stages of planned change:
1. Moving
2. Refreezing
3. Unfreezing
Which one of the following is the correct sequence of the
above according to Kurt Lewin?
(a) 1-2-3
(c) 3-1-2
(b) 2-3-1
(d) 1-3-2
Ans. (c)
42. Match List I with List II and select the correct answer using the code given below the Lists:
List- I List- II
(Contributor) (Leadership Style)
A. Robert Blake and Jane Mouton 1. Four-system model
B. W.J. Reddin 2. Normative model
C. Rensis Likert 3. Managerial grid
D. Vroom and Yetton 4. The 3-D theory
Code:
A B C D
(a) 3 4 1 2
(b) 3 1 4 2
(c) 2 1 4 3
(d) 2 4 1 3
Ans. (a)
43. Which one of the following is not a dimension of the managerial grid theory of leadership?
(a) Country club management
(b) Impoverished management
(c) Team management
(d) Entrepreneurship management
Ans. (b)
44. Which one of the following is the correct sequence with regard to communication process?
(a) Sender-Message-Encoding-Receiver – Channel Decoding- Feedback
(b) Message-Sender –Encoding-Receiver- Channel-Decoding -Feedback
(c) Encoding -Message –Sender-Decoding –Feedback-Receiver-Channel
(d) Sender-Message- Encoding-Channel-Receiver-Decoding-Feedback
Ans. (c)
45. Gangplank theory of communication, advanced by Henri Fayol, is an example of which one of the following
(a) Vertical upward communication
(b) Vertical downward communication
(c) Lateral or horizontal communication
(d) Cyclic or circular communication
Ans. (c)
46. Which one of the following is signified by the Moosa Goolam Ariff vs. Ebrahim Goolam Ariff case?
(a) The certificate of incorporation is a conclusive proof of validity
(b) The certificate of incorporation is for the commencement of the business
(c) The certificate of incorporation places limit on the working of the Directors
(d) Company can be revived after dissolution
Ans. (a)
47. Company Law Information Memorandum, as per section 60 (B) of the Companies Act, 1956 is related to
(a) the Directors responsibility statement.
(b) corporate governance,
(c) initial public offering,
(d) accounting standard relating to finance and investment companies.
Ans. (c)
48. Statutory Report
(a) shall be prepared by Board of Directors and forwarded 21 days before the statutory meeting.
(b) shall be prepared by the Secretary and forwarded 21 days before the statutory meeting.
(c) can be prepared by anyone and there is no time period prescribed.
(d) shall be prepared by the auditor and forwarded 30 days before the statutory meeting.
Ans. (a)
49. Which one of the following is the penalty imposed under the Companies Act for contravening the provisions relating to acquisition and transfer of shares?
(a) Imprisonment for a term extending to three years or with fine which may extent to rupees fifty thousand or both
(b) imprisonment for term extending to six years or with fine which may extend to rupees ten thousand or both
(c) Imprisonment for a term extending to one year or with fine which may extend to rupees five thousand or both
(d) imprisonment for a term extending to five years or with fine which may extend to rupees twenty-five thousand or both
Ans. (a)
50. Which among the following can issue shelf prospectus?
(a) Any company
(b) Only public limited company
(c) Any public financial institution
(d) Only private companies
Ans. (c)
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