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Multiple Choice Questions (MCQ)
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JG COLLEGE OF COMMERCE
AHMEDABAD
Affiliated to Gujarat University
DEPARTMENT FACULTY
Accountancy / Taxation / Law/ Auditing
Dr. Jigar Aggarwal
Dr. Kandarp Chavda
Prof. C.A. Kartik Patel
Prof. Rajmohan Nair
Prof. Arpit Dave
(Visiting Faculty)
Prof. Dhaval Sayata
(Visiting Faculty)
Statistics
Dr. Arati Shah
Dr. Delnaz Jokhi
Economics
Prin. Dr. Satyajeet S.
Deshpande
Dr. Megha Bhatt
Prof. Dinesh Patel
Management
Dr. Shimoni Trivedi
Prof. Mrunal Mehta
English / Commercial Communication
Dr. Minnie Mattheew
Prof. Jigar Joshi
Dr. Dhaval Kataria
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JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
SR. No
SUBJECT PAGE NO.
1.
Management Accounting - II
04 - 26
2.
Auditing - II
27 - 49
3.
Statistics – VI
50 - 71
4.
Problems of Indian Economy – II
72 - 95
5. Fundamentals of Financial
Management - II
96 - 115
6. Commercial Communication 116 - 133
7. Business Law 134 - 151
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JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Multiple Choice Questions (MCQ)
Page | 4
JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Subject: Management Accounting - II
Page | 5
JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Subject: Management Accounting - II
(Multiple Choice Questions)
(1) Use of inferior quality raw material in production may lead to ________ Material Usage Variance.
(a) Unfavourable
(b) Favourable
(c) Zero
(d) None of these
Correct Answer: A. Unfavourable
(2) Labour Idle Time Variance will always be ___________.
(a) Unfavourable
(b) Favourable
(c) Zero
(d) None of these
Correct Answer : A. Unfavourable
(3) A Company purchased 10,000 kgs. of material for Rs. 50,000. The material Price Variance was Rs. +2,000(F) The Standard Price of Material per kg. is _______.
(a) Rs. 5.20
(b) Rs. 5.30
(c) Rs. 5.40
(d) None of these
Correct Answer : A. Rs. 5.20
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(4) The purchase department manager is usually held accountable for the ________.
(a) Material Price Variance
(b) Material Usage Variance
(c) Labour Efficieny Variance
(d) Wage Rate Variance
Correct Answer : A. Material Price Variance
(5) The Efficieny Variance is also known as________.
(a) Quantity Variance
(b) Cost variance
(c) Rate Variance
(d) Budget Variance
Correct Answer : A. Quantity Variance
(6) Data about a company for March, 2018 are as follow: Standard Wage Rate per hour - Rs 10; Actual Wage Rate per hour - Rs 15; Abnormal Idle Time 100 hours. What will be the Idle Time Variance?
(a) 1,000 (U)
(b) 1,000 (F)
(c) 1,500 (U)
(d) 1,500 (F)
Correct Answer : A. 1,000 (U)
(7) Excess of actual cost over standard cost is a _________.
(a) Favouable
(b) Unfavourable
(c) Abnormal Gain
(d) None of these
Correct Answer : B. Unfavourable
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(8) The following information is available:
Standard Variable Overhead is Rs. 20,000; Labour Hours are 2000 and Production is 1000 Units, while Actuals are Rs. 19,000, 2050 Hours and 1050 Units respectively, then what will be the Variable Overhead Cost Variance?
(a) 2,000 (U)
(b) 2,000 (F)
(c) 4,000 (U)
(d) 4,000 (F)
Correct Answer : B. 2,000 (F)
(9) Actual fixed overheads was Rs. 9,90,000; which is 10% more than budgeted fixed overhead. What will be Fixed Overhead Expenditure Variance?
(a) 90,000 (F)
(b) 90,000 (U)
(c) 99,000 (F)
(d) 99,000 (U)
Correct Answer : B. 90,000 (U)
(10) If actual sales is 5,000 units; bugeted sales is 4,000 units; actual profit per unit is Rs.10 and budgeted profit per unit is Rs. 8, what will be Sales Margin Price Variance?
(a) 10,000 (U)
(b) 10,000 (F)
(c) 8,000 (U)
(d) 8,000 (F)
Correct Answer : B. 10,000 (F)
(11) Sales Value Variance=_____________
(a) Sales Price Variance+Sales Volume Variance + Sales Mix Variance
(b) Sales Price Variance+Sales Mix Variance+Sales Sub- Volume Variance
(c) Sales Price Variance+ Sales Volume Variance + Sales Sub- Volume Variance
(d) None of the above
Correct Answer : B. Sales Price Variance+Sales Mix Variance+Sales Sub- Volume Variance
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(12) Compound interest is calculated on __________.
(a) Principle Amount
(b) Interest amount
(c) Principle amount+ Interest Amount
(d) None of the above
Correct Answer : C. Principle amount+ Interest Amount
(13) As per the concept of Time Value Of Money the Value Of money is ___________.
(a) Equal in all years
(b) Higher In later years than in earlier years
(c) Higher in earlier years than in later years
(d) None of the above
Correct Answer : C. Higher in earlier years than in later years
(14) While evaluating capital investment proposals, the Time Value of Money is considered in case of _____.
(a) Payback Period Method
(b) Average Rate Of Return Method
(c) Net Present Method
(d) None of the above
Correct Answer : C. Net Present Method
(15) An Annuity is__________.
(a) A series of unequal but consecutive payment
(b) A series of equal but non consecutive payments
(c) A series of equal but consecutive payments
(d) None of the above
Correct Answer : C. A series of equal but consecutive payments
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(16) If interest is compounded every six months at 12% annually on Rs. 50,000: what will be the amount at the end of 3 years?
(a) Rs.68,000
(b) Rs 70,246
(c) RS. 70,926
(d) RS.71,288
Correct Answer : C. RS. 70,926
(17) Which of the following considers a project 's profitabilty ?
(a) Pay back Period
(b) Pay back Resiprocal (period)
(c) Discounted Cash flow
(d) Average Rate Of Rate
Correct Answer : D. Average Rate Of Rate
(18) A "zero" Net Present Value indicates that project ________.
(a) is unacceptable.
(b) has Profitabilty Index less than 1.
(c) has Profitability Index more than 1.
(d) has Profitability Index 1.
Correct Answer : D. has Profitability Index 1.
(19) Discount factor is highly necessary in _________.
(a) Pay back Period
(b) Average Rate Of return
(c) Earning per Share
(d) Internal Rate of Return
Correct Answer : D Internal Rate of Return
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(20) which of the follwing statement is not correct ?
(a) An unfavourable variance always indicates operational inefficiency .
(b) Material cost variance is divided into material price variance and material usage
variance
(c) Favourable variance would increase the budgeted profit
(d) The most important use of standard cost is the analysis of variances and cost control
Correct Answer : A. An unfavourable variance always indicates operational
inefficiency
(21) Which of the following statement is correct as regard s Fixed Overhead Variances?
(a) There can be no efficiency variance in fixed overheads.
(b) Fixed overhead budget variance is the differnce between total fixed overhead as per
budget and actual fixed overheads.
(c) As fixed overhead always remain fixed there can be no variance as regards fixed
overhead
(d) While computing fixed overhead vaiances. It is not necessary to workout recovery
rate.
Correct Answer : B. Fixed overhead budget variance is the differnce between total fixed overhead as per budget and actual fixed overheads.
(22) The details of overhead cost are as under : Standard Variable Overhead is Rs. 40,000, Production is 2,000 units and hours are 4,000 hours; while actuals are Rs. 38,000, 2,100 units and 4,100 hours respectively. Then find out the Variable OH Efficiency Variance?
(a) 1,000 (U)
(b) 2,000 (F)
(c) 1,000 (F)
(d) 2,000 (U)
Correct Answer : C. 1,000 (F)
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(23) As per the concept of 'Time Value Of Money' the value of money
(a) Is higher in earlier years than in later years
(b) Is eqaul in all the years
(c) is higher in later years than in earlier years
(d) None of the above
Correct Answer : A. Is higher in earlier years than in later years
(24) A firm intends to invest Rs 1,80,000 in a project; Life of the project is 5 years; It
has no scrap value; Rate of tax is 50%; Depriciation is charged on straight line
method. The profit before depreciation and tax are as follows : Rs.36,000, Rs.
39,600, Rs. 50,400, Rs. 54,000 and Rs. 90,000. From the above data Find out
Average Rate of Return?
(a) 12%
(b) 10%
(c) 15%
(d) 8%
Correct Answer : B. 10%
(25) Which of the following statement is correct?
(a) Mix variances can arise only in case of material.
(b) Material price Variance + Material usage variance = Material cost Variance
(c) Labour rate Variance + Labour efficency variance = Labour mix variance
(d) Labour efficiency variance is the difference between wages for actual hours at
standard rate and
Correct Answer: B. Material price Variance + Material usage variance = Material cost Variance
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(26) Shrinath Company is thinking to invest Rs. 2,00,000 in a project. Return for three years before tax is as follows: Rs.80,000, Rs.90,000, Rs.1,60,000. Rate of tax is 50%. Depriciation is charged at 10% on straight line method. Find out Pay Back Period.
(a) 4 Years
(b) 2 years 9 months
(c) 2 years 6 months
(d) 3 years 2 months
Correct Answer : B. 2 years 9 months
(27) M' Company Ltd. Has invested Rs. 5,00,000 in a project . The cash inflow of inflow of three years is as follow respectively. Rs.2,00,000, Rs.3,00,000, and Rs.2,00,000. The discount factor at 10%. What will the nearer Net Present Value?
(a) Rs. 80,030
(b) Rs. 50,000
(c) Rs. 75,600
(d) Rs. 60,900
Correct Answer : A. Rs. 80,030
(28) Material Usage Variance is -10 . Material Cost Variance is -22, Standard material quantity is 10 kgs and Actual material quantity is 12kgs .What will be the price of actual material quantity per kg?
(a) Rs. 6
(b) Rs. 5
(c) Rs. 4
(d) Rs. 3
Correct Answer : A. Rs. 6 (29) Standard cost per unit for a product is as under : 21 litres ,at the rate of Rs.2.50
per litre. 12,000 litres material is used for actual production ,of which price paid is 4% more than the standard price and the direct material usage variance is Rs.+3,600. Find Units of the product. (a) 640
(b) 560
(c) 480
(d) 540
Correct Answer : A. 640
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(30)The details of overhead cost are as under : Standard Variable Overhead is Rs. 1,00,000, Production is 20,000 units and hours are 20,000 hours; while actuals are Rs. 1,20,000, 20,000 units and 22,500 hours respectively. Then find out the Variable OH Efficiency Var
(a) 2,500 (U)
(b) 2,500 (F)
(c) 1,500 (U)
(d) 1,500 (F)
Correct Answer : B. 2,500 (F)
(31) The fixed overhead is Rs. 31,200 as per annual budget of a factory and the number of working days are 312, The production of 31,200 units has been fixed for a year . The number of actual working days in march is 24 . Calculate the calender variance.
(a) 200 (U)
(b) 200 (F)
(c) 300 (U)
(d) 300 (F)
Correct Answer : A. 200 (U)
(32) The details of June -2014 of a factory are as follows : Fixed overhead as per budget during June is Rs. 20,000, Production units as per budget during June is 10,000 units, Standard time per unit is 5 hours and Actual hours are 51,000 hours so Find out the Fixed O/h Capacity Variance.
(a) 400 (F)
(b) 400 (U)
(c) 800 (F)
(d) 800 (U)
Correct Answer : A. 400 (F)
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(33) A manufacturer wants to produce 73,205 units at the end of the four years . If the annual increase rate of production is 10% . How many units should be produced during the first year?
(a) 50,000
(b) 40,000
(c) 45,000
(d) 55,000
Correct Answer : A. 50,000
(34) If the interest is compounded every six month @12% annually on Rs. 2,000. What will be the amount at the end of 3 years period?
(a) Rs. 2,837
(b) Rs. 2,738
(c) Rs. 3,728
(d) Rs. 3,287
Correct Answer : A. Rs. 2,837
(35) A firm wants to purchase a machine worth Rs. 2,50,000. Its cash flow for the first
three years is Rs. 10,000, Rs. 20,000 and Rs. 10,000 respectively. Discount rate is 10% and discount factor for three years is 0.9091, 0.8265 and 0.7513 respectively. What will be the present value?
(a) Rs. 33,134
(b) Rs. 28,210
(c) Rs. 27,650
(d) Rs. 27,380
Correct Answer : A. Rs. 33,134
(36) XLtd. has a budgeted material cost of 1,25,000 for the production of 12,500 units per month. Each unit is budgeted to use 2 kg of materials. The standard price of material is ₹. 5 per kg. Actual materials in the month cost Rs. 1,36,000 for 13,500 units and 26,500 kgs. Were purchased and used. What will be the Material Price Variance? (a) 1,000 (F)
(b) 3,500 (U)
(c) 3,500 (F)
(d) 7,500 (U)
Correct Answer : B. 3,500 (U)
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(37) The purchase department manager is usually held accountable for the -
(a) Direct Material Price Variance
(b) Labour Efficiency Variance
(c) Variable Overhead Expenditure Variance
(d) Material Usage Variance
Correct Answer : A. Direct Material Price Variance
(38) The data regarding Labour-expense about produclion ot the D Co. for March 2016 is as follows : Actual paid direct labour 17,280 Direct Standard Hours 4,000 hrs. Standard wage rate per hour 4 Actual Paid hours 3,600 Hrs. Abnormal idle time 160 Hrs. The Labour Efficiency Variance and Idle time Variance will be -
(a) 2240 (F) and 640 (F)
(b) 2240 (F) and 640 (U)
(c) 4480 (F) and 1280 (U)
(d) 2240 (U) and 640 (F)
Correct Answer : B. 2240 (F) and 640 (U)
(39) The Information of Anadi Ltd. Budgeted Actual Variable overheads 10,000 9,500 Labour Hours 2,000 2,050 Production (Units) 1,000 1,050 Variable Overheads Cost Variance will be as under
(a) 1,000 (U)
(b) 2,000 (F)
(c) 1,000 (F)
(d) 2,000 (U)
Correct Answer : C. 1,000 (F)
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(40) If the annual interest rate is 15%, what will be the sum of present value of 2,000
received at the end of the 3rd and 5th years?
(a) 2,405
(b) 2,507
(c) 2,314
(d) 2,309
Correct Answer : D. 2,309
(41) Compound interest is calculated on
(a) Principal amount only
(b) Interest amount only
(c) On principal amount + Interest amount
(d) On time value of money
Correct Answer : C. On principal amount + Interest amount
(42) The data regarding sales of the Sanyam Ltd. as follows :
Product Standard Actual
Units Price Per Unit (Rs.)
Units Price Per Unit (Rs.)
P 2,250 37.50 3,000 36.00
R 1,500 35.00 1,050 35.00
What will be the Sales Price Variance and Sales Volume Variance respectively -
(a) 4,500 (U) and 12,375 (F)
(b) 4,500 (F) and 12,375 (U)
(c) Zero and 15,750 (U)
(d) 4,500 (F) and 28,125 (F)
Correct Answer : A. 4,500 (U) and 12,375 (F)
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(43) If present value of total investment and present value of cash flow are equal then project
(a) is unacceptable
(b) has a profitsbility index more than one
(c) has a profitsbility index less than one
(d) has a profitsbility index is one
Correct Answer : D. has a profitsbility index is one
(44) The Swar Ltd. wants to purchase a machine at the cost of 2,40,000. Its cash flows in the 5 years are as 90,000, 1,20,000, 90,000, 70,000 and 60,000 respectevely. Its expected rate of return is 10%. What will be Payback Period of machine on the basis of discounted cash flow?
(a) 2.87 yrs
(b) 3.87 yrs
(c) 3.5 yrs
(d) 4.5 yrs
Correct Answer : A. 2.87 yrs
(45) A company wants to invest 9,60,000 in one project. Useful life of the project is 6 years and scrap value is 60,000. Rate of taxation is 50%. Depreciation is to be provided as per straight line method. Annual cash flow before depreciation and taxation is as under: - ₹ . 1,80,000, ₹. 3,00,000, ₹. 2,84,000, ₹. 3,50,000, ₹. 4,25,000 and ₹. 3,50,000. Wh at is the Average Rate of Return on Investment? (a) 0.1816
(b) 0.1616
(c) 0.3264
(d) 0.1694
Correct Answer : B. 0.1616
(46) Use of inferior quality raw material in production may lead to _____ material usage variance. (a) Favorable
(b) Unfavorable
(c) Zero
(d) None of the above
Correct Answer : B. Unfavorable
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(47) If present value of cash outflows is more than the present value of cash inflows, the profitability Index will be
(a) Negative
(b) Less than one
(c) More than one
(d) Zero
Correct Answer : B. Less than one
(48) Labour idle time variance always _______ when labour efficiency variance is favourable.
(a) Favorable
(b) Adverse
(c) Controllable
(d) None of the above
Correct Answer : B. Adverse
(49) Excess of actual cost over standard cost is a
(a) Favorable
(b) Unfavorable
(c) Abnormal gain
(d) None of the above
Correct Answer : B. Unfavorable
(50)ABC Ltd. Purchased 6,850 kgs. Of material for 21,920. The materialprice variance was 1,370 (F). The standard price of material per Kg. is
(a) 3.25
(b) 3.4
(c) 3.15
(d) None of the above
Correct Answer : B. 3.4
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(52) Present value of project is 4,76,000 and investment is 4,00,000. The profitability index will be
(a) 1.2
(b) 1.19
(c) 1.21
(d) 1.4
Correct Answer : B. 1.19
(53) XY Ltd. wants to install a machine costing 10,00,000. It will earn an annual profit of 1,50,000 after charging depreciation at 10%p.a. Tax rate is 50% What should be the payback period from the following:
(a) 3 years
(b) 5.71 years
(c) 4 years
(d) 4.5 years
Correct Answer : B. 5.71 years
(54) Simple Interest at 7% for 2 years on Rs.. 1,000 will be
(a) Rs.74.9
(b) Rs.140
(c) Rs..70
(d) None of the above
Correct Answer : B. Rs. 140
(55) Material Price Variance + Material Usage Variance = __________
(a) Material Mix Variance
(b) Material Sub Usage Variance
(c) Material Cost Variance
(d) Material Expenditure Variance
Correct Answer : C. Material Cost Variance
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(56) Material Usage Variance Less Material Sub Usage Variance = _________
(a) Material Mix Variance
(b) Material Sub Usage Variance
(c) Material Cost Variance
(d) Material Expenditure Variance
Correct Answer : A. Material Mix Variance
(57) Material Usage Variance Less Material Yield Variance =
(a) Material Mix Variance
(b) Material Sub Usage Variance
(c) Material Cost Variance
(d) Material Expenditure Variance
Correct Answer : A. Material Mix Variance
(58) Material Yield Variance will only arise, when there is a _________ of material is
given in the question.
(a) Abnormal Wastage
(b) Loss
(c) Normal Wastage
(d) All of the Above
Correct Answer : D. All of the Above
(59) How Many Types of Variances are there in case of Expenses or Cost?
(a) 2
(b) 3
(c) 4
(d) 5
Correct Answer : C. 4
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(60) How Many Types of Variances are there in case of Revenue or Income?
(a) 2
(b) 3
(c) 4
(d) 5
Correct Answer : A. 2
(61) The Difference between the Actual Performance and Pre-determined Standard
set by the company is known as –
(a) Variance
(b) Variable
(c) Net Performance
(d) Gross Performance
Correct Answer : A. Variance
(62) The purchase department manager is usually held accountable for the ________.
(a) Material Mix Variance
(b) Material Sub Usage Variance
(c) Material Price Variance
(d) Material Usage Variance
Correct Answer : C. Material Price Variance
(63) If Actual Expenses are greater than Standard Expenses it is ________ for the
company.
(a) Favourable
(b) Adverse
(c) Benefit
(d) Not every time.
Correct Answer : C. Benefit
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(64) When Single type of Material is used to manufacture one unit, how many
material variances will arise?
(a) 2
(b) 3
(c) 4
(d) 5
Correct Answer : A
(65) When more than one type of materials are used to manufacture one unit, how
many material variances will arise?
(a) 2
(b) 3
(c) 4
(d) 5
Correct Answer : A. 2
(66) Capital Budgeting is to be prepared to check whether the decision regarding _______________ is worthful for the business or not? (a) Capital
(b) Cost of Capital
(c) Capital Expenditure
(d) Capital Profit
Correct Answer : C. Capital Expenditure
(67) Capital budgeting is a ____________.
(a) Decision making process
(b) Method
(c) Concept of Cost
(d) Short term decision
Correct Answer : A. Decision making process
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(68) How many methods are there for preparing capital budgeting which are not
considering time value money?
(a) 2
(b) 3
(c) 4
(d) 5
Correct Answer : A. 2
(69) Which is not the method of capital budgeting from the non- discounting factor category?
(a) Pay-Back Period
(b) Accounting Rate of Return
(c) Average Rate of Return
(d) Internal Rate of Return
Correct Answer : D. Internal Rate of Return
(70) Which is not the method of capital budgeting from the discounting factor
category?
(a) Net Present Value Method
(b) Average Rate of Return
(c) Internal Rate of Return
(d) Profitability Index
Correct Answer : B. Average Rate of Return
(71) The method which is used to find the period in which the amount of invested will
receive back is known as –
(a) Pay-Back Period
(b) Post Pay-Back Period
(c) Accounting Period
(d) Internal Period
Correct Answer : A. Pay-Back Period
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(72) Which is from the following is the method of capital budgeting which used to find
the rate of return on investment?
(a) Internal Rate of Return
(b) Accounting Rate of Return
(c) Profitability Index
(d) Net Present Value
Correct Answer : B. Accounting Rate of Return
(73) In Accounting rate of return method, scrap value is considered as a __________ of investment.
(a) Value of Investment in the beginning
(b) Value of Investment at the end
(c) Ignored
(d) None of the above
Correct Answer : B. Value of Investment at the end
(74) Discounting Factor is also known as – (a) Present Value Factor
(b) Future Value Factor
(c) Annuity Factor
(d) Compounding Factor
Correct Answer : A. Present Value Factor
(75) What is the Discounting Factor of Rs. 1 for the 2nd Year, if discounting rate is 10%? (a) 0.909
(b) 0.826
(c) 0.893
(d) 0.925
Correct Answer : B. 0.909
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(76) IRR is the Discounting Factor rate where –
(a) Present Value of Cash inflows are equal to Present Value of Cash Outflows
(b) Net Present Value is zero
(c) Profitability Index is one
(d) All of the Above
Correct Answer : D. All of the Above
(77) Present Value of Cash Inflows less Present Value of Cash outflows means –
(a) Net Present Value
(b) Profitability Index
(c) Internal Rate of Return
(d) All of the Above.
Correct Answer : A. Net Present Value
(78) Which method from the following is known as trial and error method?
(a) Net Present Value
(b) Profitability Index
(c) Internal Rate of Return
(d) Accounting Rate of Return
Correct Answer : C. Internal Rate of Return
(79) If profit after tax but before depreciation is Rs. 25,000p.a. and company's
investment is Rs. 1,12,500 of which assumed scrap value at the end of the 7 years life
is Rs. 12,500, then what is the Pay-Back period?
(a) 3.5 years
(b) 4 years
(c) 4.5 years
(d) 5 years
Correct Answer : C. 4.5 years
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(80) Fixed Overhead Expenditure Variance is also known as -
(a) Fixed Overhead Standard Variance
(b) Fixed Overhead Efficiency Variance
(c) Fixed Overhead Volume Variance
(d) Fixed Overhead Budget Variance
Correct Answer : D. Fixed Overhead Budget Variance
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JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Subject: - Auditing - II
Page | 28
JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Subject: Auditing - II
(Multiple Choice Questions)
1. After the end of financial year, within how much time, Final Accounts of a Company should be presented in Annual General Meeting?
(A) Three Months
(B) Six Months
(C) At any time before the end of next financial year.
(D) None of the above.
Answer: (B) Six Months
2. Dividend warrants should be issued to or dividend should be paid to the members within how much time, after the dividend is declared?
(A) 21 days
(B) 42 days
(C) Before the end of respective financial year.
(D) 30 days
Answer: (D) 30 days
3. Unpaid dividend should be transferred to a special unpaid dividend account after ____ days of declaration of dividend?
(A) Sixty days
(B) Forty-two days
(C) Thirty days
(D) Forty days
Answer: (C) Thirty days
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4. The profit that is to be distributed among shareholders as per prescribed rate of dividend is called
(A) Gross profit
(B) Divisible profit
(C) Capital profit
(D) Reserve profit
Ans. : (B) Divisible profit
5. Dividend should be paid by company within how many days after it is declared at AGM.
(A) 21 Days
(B) 30 Days
(C) 45 Days
(D) 60 Days
Ans. : (B) 30 Days
6. To which of the following parties is the company auditor is expect to address his report?
(A) Shareholders
(B) Directors
(C) Government
(D) None of the Above
Ans. : (A) Shareholders
7. To which of the following parties is the company auditor is expect to address his Certificate?
(A) Shareholders
(B) Directors
(C) Government
(D) None of the mentioned
Ans. : (D) None of the mentioned
Page | 30
8. To which of the following Act is the company auditor expected to address his Report?
(A) 2013 Company Act
(B) 1952 Company Act
(C) 1954 Company Act
(D) 1961 Company Act
Ans. : (A) 2013 Company Act
9. Unpaid dividend should be transferred to a special unpaid dividend A/c after___ days of declaration of dividend.
(A) 30
(B) 40
(C) 05
(D) 10
Ans. : (C) 30
10. _______ is a statement of collected and considered facts.
(A) Report
(B) Audit Programme
(C) Audit Statement
(D) None of the mentioned
Ans. : (A) Report
11. Whose approval/consent is required to pay the interim dividend?
(A) Shareholder
(B) Central Government
(C) Debenture holder
(D) Board of director
Ans. : (D) Shareholders
Page | 31
12. Auditors Report is important for _________.
(A) Shareholders
(B) Government
(C) Investors
(D) All of the mentioned.
Ans. : (D) All of the mentioned
13. When an Auditor gives report without any defect it is called as _______.
(A) Clean Report
(B) Adverse Report
(C) Qualified Report
(D) Disclaimer of Opinion
[Ans. : (A) Clean Report]
14. When an Auditor gives report with any defect it is called as _______.
(A) Clean Report
(B) Adverse Report
(C) Qualified Report
(D) Disclaimer of Opinion
[Ans. : (C) Qualified Report]
15. Clean report creates _________ impression on reader.
(A) Bad
(B) No
(C) Good
(D) None of the mentioned
[Ans. : (C) Good]
Page | 32
16. _________ is the result of examination of books of account.
(A) Audit Report
(B) Audit Certificate
(C) Audit Program
(D) None of the mentioned
[Ans. : (A) Audit Report]
17. _________ is a statement given by auditor after he vouchsafes the truth of such statement.
(A) Audit Report
(B) Audit Certificate
(C) Audit Program
(D) None of the mentioned
[Ans. : (B) Audit Certificate]
18. An auditor has to submit his report on the account of the company for every ________.
(A) 6 Month
(B) Year
(C) 3 Month
(D) None of the mentioned
[Ans. : (B) Year ]
19. _________ is issued by auditor as and when it is required by auditor.
(A) Audit Report
(B) Audit Certificate
(C) Both Report & Certificate
(D) None of the mentioned
[Ans. : (B) Audit Certificate]
Page | 33
20. A dividend issued at the AGM of any company is called as _________.
(A) Final Dividend
(B) Interim Dividend
(C) Quarterly Dividend
(D) None of the mentioned
[Ans. : (A) Final Dividend]
21. A dividend issued between two AGM of any company is called as _________.
(A) Final Dividend
(B) Interim Dividend
(C) Quarterly Dividend
(D) None of the mentioned
[Ans. : (B) Interim Dividend]
22. Final dividend is paid only when it is approved by _______.
(A) Board of director
(B) Shareholder
(C) Auditor
(D) None of the mentioned
[Ans. : (B) Shareholder]
23. After the expiry of ______ years the amount in the unpaid dividend account should be transferred to Investors Education & Protection Fund account.
(A) 7
(B) 5
(C) 6
(D) 3
[Ans. : (A) 7]
Page | 34
24. Dividend should be transferred to a separate bank account within _____days from the date of declaration of dividend.
(A) 7
(B) 5
(C) 30
(D) 10
[Ans. : (B) 5]
25. Rate of dividend is recommended by ________.
(A) Board of director
(B) Shareholder
(C) Auditor
(D) None of the mentioned
[Ans. : (A) Board of director]
26. Rate of dividend is recommended by ________.
(A) Director
(B) Shareholder
(C) Auditor
(D) None of the mentioned
[Ans. : (A) Director]
27. A Specimen of Audit certificate is given in the companies Act 2013.
(A) True
(B) False
(C) Partly Correct
(D) None of the mentioned
[Ans. : (B) False]
Page | 35
28. If the dividend is not paid within the specified time company has to pay along with interest @ _______.
(A) 10%
(B) 12%
(C) 14%
(D) 8%
[Ans. : (B) 12 % ]
29. If the dividend is not paid within 30 days from the date of declaration, a company has to pay fine of ₹ ___ ___ per day till default continue.
(A) 1000
(B) 2000
(C) 500
(D) 100
[Ans. : (A) 1000]
30. As per companies act 2013, it is not compulsory for the company to transfer the amount to reserve account before the declaration of dividend.
(A) True
(B) False
(C) Partly Correct
(D) None of the mentioned
[Ans. : (A) True]
31. Which of the following statements is correct?
(A) Profit means excess of assets over liabilities;
(B)The Companies Act has defined 'profits' as the excess of all types of incomes over
all types of expenses incurred during the accounting period;
(C) If profits are understated; the shareholders will be deprived of dividend to which
they are entitled;
(D) By showing more profits secret reserves will be created
[Ans]. : (C) Profits are understated; the shareholders will be deprived of dividend to which they are entitled
Page | 36
32.
Year Profit or loss
before
depreciation
Depreciation
provided
Depreciation as
per companies
Act
Profit or loss
after
2006 - Rs. 21,000 -Rs. 21,000 -Rs 7,000 -Rs 28.000
2007 -Rs. 3500 -Rs. 3,500 -Rs 10,500 -Rs.14,000
2008 +RS 42000 - Rs. 4,200 -Rs 14,000 +Rs. 28,000
Which of the following is the correct amount of profit available for dividend for the year
2007-08?
(A) Rs. 28,000
(B) Rs. 10,500
(C) Rs. 14,000
(D) Rs. 5,600.
[Ans] (B) Rs. 10,500; Profit of 2007-08 Rs. 42,000 - depr. 14.000 - Rs. 28,000 - arrears of depr. 11,900 (Rs. 4,900 for 2006 and Rs. 7.000 for 2007 = 16,100, lower of depreciation or loss Rs. 5,600 (Rs. 2,100 for 2006 and Rs. 3,500 for 2007) = Divisible profit Rs. 10,500.]
33. Year Profit or loss before
depreciation
Depreciation require by
law
Unabsorbed
Depreciation
2005-06 - Rs. 1,20,000 -Rs. 60,000 -Rs 45,000
2006-07 -Rs. 60000 -Rs. 3,500 -Rs 15,000
2007-08 +RS 300000 - Rs. 90,000 -
Which of the following is the correct amount of profit available for dividend for the year
2007-08?
(A) Rs. 3,00,000
(B) Rs. 2,10,000
(C) Rs. 1,50,000
(D) Rs. 1,05,000
[Ans] : (D) Rs. 1,05,000; profit for 2007-08 before sharing depreciation Rs. 3,00,000 - depr. 90,000 = Rs. 2,10,000 less arrears of depr. of last two years Rs. 45,000 + 15,000 = 60,000 - Rs. 1,50,000 less lower of depr. Charged or loss Rs. 15,000 + 30,000 = 45,000 = 1,05,000.]
Page | 37
34. Following balances appear in the books of a company as on 31st March 2008. (1) Net profit for the year 2007-08 Rs. 5,00,000
(2) Securities Premium Account Rs. 1,00,000
(3) Capital Redemption Reserve
(Pref. Shares are not yet redeemed) Rs. 2,50,000
(4) Net profit from the sale of fixed assets Rs. 3,20,000
(5) Accumulated capital loss of earlier years Rs.20,000
(6) Equity Share Capital (Rs. 10 each) Rs. 25,00,000
Company always transfers 10% of profits to General Reserve.
Which one of the following is the possible highest rate of dividend for the accounting year 2007-'08?
(A) 20%
(B) 30%
(C) 34%
(D) 40.20%.
Ans. : (B) 30%, Net Profit Rs. 5,00,000 less transferred to Reserve 10% Rs. 50,000 = Rs. 4,50,000 + Profit on sale of fixed assets 3,20,000 – Capital Loss Rs. 20,000 = Rs. 3,00,000 = Total divisible profit 7,50,000 x 100 = 2,50,000 Cap.= 30%. The amount share premium and capital redemption reserve are not available for dividend.
35. Following information‟s are regarding Profit & Loss Account of a company: Year Profit or Loss
Depreciation
Depreciation
required as per
Company Act.
Depreciation
actually
Provided
Unabsorbed
Depreciation
2006-07 -60,000 30,000 7,500 22,500
2007-08 -30,000 22,500 15,000 7,500
2008-09 + 1,50,000 45,000 45,000
Determine its divisible profit for the year 2008-09.
(a) Rs. 52,500
(b) Rs. 1,50,000
(c) Rs. 1,00,000
(d) Rs. 75,000
[Ans. : (a) Divisible profit Rs. 52,500 [In year 2008-'09 - profit before depreciation Rs. 1,50,000 less : Depreciation for current year Rs. 45,000 - 1,05,000. less Arrears of depreciation of previous years Rs. 30,000 (22,500 + 7,500) = 75,000 less loss or depreciation provided during previous years whichever is less Rs. 22,500 [For 2006-'07 Rs. 7,500,+ For 2007-'08 Rs. 15,000) = Rs. 52,500 divisible profit
Page | 38
36. Following information is regarding Profit and Loss Account of Memoon Company: Year Profit or Loss before
Depreciation
Rs.
Depreciation required
by law
Rs.
Unabsorbed
depreciation
Rs.
2007-08 -56000 28000 24000
2008-09 -28000 21000 7000
2009-10 +140000 42000
Less : Losses or Depreciation provided during previous years whichever is less :
Year Loss Depreciation
2008 45,000 5,000 = 5000
2009 56,000 6,000 = 6000 11000
(a) Rs. 50,000
(b) Rs. 30,000
(c) Rs. 20,000
(d) Rs. 13,000
Ans. (d) Divisible Profit for 2010 (Rs.. 13,000)
37. Profit of a company is Rs. 4,00,000. Calculate the amount required to be transferred to General Reserve, if the company decides to declare dividend on share capital at the rate of 13.5%
(a) Rs. 1,00,000
(b) Rs. 30,000
(c) Rs. 54,000
(d) Rs. 20,000.
[Ans.: (d) Rs. 20,000 (5% of Rs. 4,00,000).
38. Total paid up equity share capital of a company is Rs. 25 lakhs. Current year's profit after depreciation and tax is Rs. 7 lakhs. What will be the minimum amount to be transferred to reserve, if the recommended rate of dividend is 18%?
(a) Rs. 4,50,000
(b) Rs. 2,50,000
(c) Rs. 52,500
(d) Rs. 70,000
[Ans.: (c) Rs. 52,500 transfer to Reserve (7,00,000 x 7.5%).]
39. Dividend warrants should be issued to or dividend should be paid to the members within how much time, after the dividend is declared ?
(a) 21 days
(b) 42 days
(c) Before the end of respective financial year
(d) 30 days
Ans. : (d) 30 days.
Page | 39
40. Unpaid dividend should be transferred to a special unpaid dividend A/c after days of declaration of dividend.
(a) Thirty
(b) Forty two
(c) Thirty seven
(d) Sixty
[Ans. : (a) Thirty]
41. The profit that is to be distributed among shareholders as per prescribed rate of dividend is called
(a) Gross profit
(b) Divisible profit
(c) Capital profit
(d) Reserve profit
[Ans. : (a) Divisible profit]
42. Dividend warrants should be issued to or dividend should be paid to the members within how much time, after the dividend is declared?
(a) 21 days
(b) 30 days
(c) 42 days
(d) 45 days
[Ans. : (b) 30 days]
43. Which of the following statements is not correct? (a) The Board of Directors can declare interim dividend.
(b) No Dividend can be declared without providing for depreciation on
(c) Dividend cannot be declared from the profits prior to the incorporation fixed assets
(d) The member of the company have the power in general meeting to raise the rate of
dividend being declared by the board of directors
Ans. : (b) Dividend cannot be declared from the profits prior to the incorporation
44. Current year profit of a company is Rs. 4,00,000, Calculate the amount required to be transferred to General Reserve. If the company decides to declare dividend on share capital at the rate of 13.5%.
(a) Rs. 54,000
(b) Rs. 30,000
(c) Rs. 20,000
(d) Rs. 1,00,000
[Ans. : (c) Rs. 20,000.]
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45. Which of the following statements is not correct? (a) The Board of Directors can declare interim dividend.
(b) Dividend cannot be declared from the profits priors to the incorporation
(c) No dividend can be declared without providing for depreciation on fixed assets.
(d) The members of the company have the power in General Meeting to raise the rate
of dividend being declared by the board of directors.
[Ans. : (b) Dividend cannot be declared from the profits prior to the Incorporation.]
46. Following information is relating to the profit and loss of a company for the past three year:
Year Profit or
Loss before
depreciation
Provision of
Depreciation
depreciation
per Act 205
depreciation
Profit or
Loss after
depreciation
2010-11 -40,000 5,000 32,000 -45,000
2011-12 -50,000 6,000 20,000 -56,000
2012-13 +1,00,000 15,000 25,000 +85,000
How much amount the company can use for declaring dividend in the year 2012-13? (a) Rs. 13,000
(b) Rs. 10,000
(c) Rs. 15,000
(d) Rs. 23,000
[Ans. : (d) Rs. 23,000] 47. Total paid up Equity share capital of a company is Rs. 25,00,000. Current year's profit after depreciation and Tax is Rs. 5,00,000. What will be the minimum amount to be transferred to General Reserve, if the recommended rate of dividend is 17.5%?
(a) Rs. 37,500
(b) Rs. 87,500
(c) Rs. 4,37,500
(d) Rs. 50,000
[Ans. : (a) Rs. 37,500] 48. Current year profit of a company is Rs. 6,00,000. Calculate the amount required to be transferred to general reserve if company decides to declare dividend on share capital at the rate of 13.5%.
(a) Rs. 60,000
(b) Rs. 1,00,000
(c) Rs. 30,000
(d) Rs. 45,000
[Ans. : (c) Rs. 30,000]
Page | 41
49. Which of the following statement is not correct for the divisible profit?
(a) No dividend can be declared without providing for depreciation on fixed assets.
(b) The Board of Directors can declare interim dividend.
(c) Dividend cannot be declared from the profit prior to incorporation.
(d) The members of the company have the power in General Meeting to raise the rate
of dividend being declared by the Board of Directors.
[Ans. : (4) The members of the company have the power in General Meeting to raise the rate of dividend being declared by the Board of Directors.]
50. Which of the following statements is not a consequence of understatement of profits?
(a)The understatement of profits will amount to tax evasion;
(b) The managerial personnel and employees will get less remuneration and bonus if
profit is understated;
(c) The Profit & Loss Account will not exhibit true and fair view of the results and the
Balance Sheet will not exhibit true and fair state of affairs of the business;
(d) By showing less profit, secret reserves will be utilised for paying dividend.
[Ans.: (d) By showing less profit, secret reserve is utilised, which is against the provisions]
51. Which Of the following statements is not a consequence of over-valuation of profits? (a) It may result into payment of dividend out of capital;
(b) This will protect the interest of the debenture-holders and creditors;
(c) More profits will attract more tax liabilities;
(d) It will result into more payment of managerial remuneration - if based on profits.
[Ans.: (b); By Overstating profit, the interest of debenture holders and Creditors is adversely affected.]
52. Which of the following is not a guiding principle in computing divisible profits? (a) The reputation of the company must be maintained by any means;
(b) The generally accepted principles of Accountancy should be followed;
(c) The regulations of the Memorandum and Articles of Association must be complied
with; Companies Act?
(d) The provisions of the Companies Act must be strictly complied with.
[Ans.: (a); The reputation of the company must be maintained is not a guiding principle in computing profit. In fact, that will lead to manipulation of accounts]
Page | 42
53. Which of the following provisions is not a part of Section 205 of the companies act? (a) Dividend cannot be declared or paid by a company without providing for
depreciation;
(b) Depreciation must be provided for any financial year falling after 28
(c) It is provided that the depreciation should be written off at the rates 12-1960
before declaring dividend for any financial year; specified in the Income Tax Act,
1961;
(d) Where any asset is sold, discarded, demolished or destroyed in any financial year,
the loss i.e. excess of written down value over its net sales value should be written off
as terminal allowance in the same financial year.
[Ans. : (c) Depreciation is to be provided according to rates prescribed by Schedule 14 of Companies Act and not according to Income Tax-Act 1961]
54. Following information is relating to the profit of a company for the past three years
Year Profit or Loss
before
Depreciation
Provision for
Depreciation
Depreciation
prescribed as per
act 205
Profit or Loss
after
Depreciation
2008 -40,000 5000 -32,000 -45,000
2009 -50,000 6000 -20,000 -56,000
2010 +90,000 15,000 -25,000 +75,000
How much amount the company can use for declaring dividend in 2010?
(a) Rs. 24,000
(b) Rs. 11,000
(c) Rs. 13,000
(d) Rs. 20,000
[Ans. : (C) Rs. 13,000.]
55. Which of the following is not included in the clauses of memorandum of association of company ?
(a) Name clause of the company
(b) Address of registered office of the company
(c) Clause of liability of members
(d) The rights, liabilities and dividend rights of various types of shareholders.
Answer: (d) The rights, liabilities and dividend rights of various types of shareholders.
Page | 43
56. As per the requirements of the companies act, the gap between date of profit and loss account and the date of AGM should not exceed-
(a) 6 Months
(b) 3 Months
(c) 9 Months
(d) 4 Months
Answer : (a) 6 Months
57. Bonus shares can not be issued from the following sources:
(a) General reserve
(b) Capital redemption reserve
(c) Revaluation reserve
(d) Securities Premium
Answer : (c) Revaluation reserve
58. Minimum time lag required between two bonus issues is-
(a) 12 Months
(b) 24 Months
(c) 36 Months
(d) None of the above
Answer : (d) None of the above
59. can the securities premium be utilised to convert partly paid up shares into fully paid up shares as bonus ?
(a) No
(b) Yes
(c) Can be utilised if articles of association of the company provides
(d) Companies act does not provide anything with respect to this.
Answer : (a) No
Page | 44
60. To which of the following parties is the auditor expected to address his report ?
(a) Shareholders of the company
(b) Board of directors of the company
(c) Central government
(d) Company Secretary
Answer : (a) Shareholders of the company
61. If the auditor has given a qualified report, which of the following consequences may result ?
(a) The board of directors have to give reply to such qualifications in board's report
(b) The board of directors have to resign
(c) Auditor has to resign
(d) The Central government may impose a fine on shareholders.
Answer : (a) The board of directors have to give reply to such qualifications in board's report
62. To which of the following parties is the auditor expected to address his certificate ?
(a) Board of directors of the company
(b) Central Government
(c) Shareholder of the company
(d) Not addressed to any party
Answer : (d) Not addressed to any party
63. is a statement of collected and considered facts.
(a) Audit programme
(b) Report
(c) audit statement
(d) None of the above
Answer : (b) Report
Page | 45
64. The date of Auditor's report should not be -
(a) Earlier than the date on which the accounts are approved by the management.
(b) Later than the date on which the accounts are approved in the board's meeting.
(c) The date of AGM.
(d) Both (B) and (C)
Answer : (a) Earlier than the date on which the accounts are approved by the management.
65. In which circumstances clean audit report can be given ?
(a) Proft or loss a/c dose not give a true and fair view of profit or loss.
(b) When balance sheets does not give true and fair view of the state of affairs.
(c) Proper books of accounts are kept as required by law
(d) Defect is found in examination of accounts
Answer : (c) Proper books of accounts are kept as required by law
66. The profit that is to be dstributed among shareholders as per prescribed rate of dividend is called-
(a) Divisible Profit
(b) Gross Profit
(c) Reserve Profit
(d) Capital Profit
Answer : (a) Divisible Profit
67. Which of the following is not a guiding principle in computing divisible profit ?
(a) The generally accepted principles of accountancy should be followed
(b) The provisions of the companies act must be strictly complied with.
(c) the regulation of the memorandum and articles of association must be complied
with.
(d) The reputation of the company must be maintained by any means.
Answer : (d) The reputation of the company must be maintained by any means
Page | 46
68. Which of the following statements is not correct for the divisible profit ?
(a) No dividend can be declared without providing for depreciation on fixed assets.
(b) The board of directors can declare interim devidend.
(c) Dividend can not be declared from the profit prior to incorporation.
(d) The members of the company have the power to raise th rate of dividend being
declared by the board of directors in the general meeting.
Answer : (d) The members of the company have the power to raise th rate of dividend being declared by the board of directors in the general meeting.
69. Which of the following statements is not a consequence of over valuation of profits?
(a) It may result into payment of dividend out of capital.
(b) This will protect the interest of the debenture holders and creditors.
(c) More profits will attract more tax liabilities
(d) It will result into more payment of managerial remneration if based on profits.
Answer : (b) This will protect the interest of the debenture holders and creditors.
70. Which of the following statements is correct ?
(a) The term 'I nvestigation' implies an examination of accounts and records for some
special purpose
(b) Investigation is compulsory under the companies act
(c) Audit report must incorporate the details of investigation.
(d) The Investigation is always carried out as per the instructions issued by 'SEBI'
Answer : (a) The term 'I nvestigation' implies an examination of accounts and records for some special purpose
71. Which of the following points is not relevant in relation to investigation when there is considerable increase in gross profit in spite of steady sales figure ?
(a) Examinations of reasons for increase in the percentage of gross profit
(b) Increase in the price of raw materials
(c) Closing stock might have been overvalued
(d) The purchase are omitted from being recorded in the books
Answer : (b) Increase in the price of raw materials
Page | 47
72. Which one of the following is not requried to be considered for "Investigation in case of suspected fraud" ?
(a) Embezzlement of cash to be examined
(b) The nature of fraud suspected
(c) Disqualifications of Directors of the company
(d) The period of investigation to be covered
Answer : (c) Disqualifications of Directors of the company
73. Whch of the following details is not required to be obtained before preparing an audit programme ?
(a) Accounting system adopted by the competitors
(b) System of internal check
(c) Technical detsils of business or institution
(d) Report of the previous auditor
Answer : (a) Accounting system adopted by the competitors
74. Which of the following statements is not correct with regards to verification and valuation of assets and liabilities, while preparing an audit programme of a college ?
(a) Cash on hand and balance with bank should be verified as usual
(b) The stock of stationery and furniture should be physically verified
(c) All the debts and liabilities should have been accounted for
(d) The investment made for specific purpose should have been recorded properly
Answer : (d) The investment made for specific purpose should have been recorded properly
75. Which of the following is not included in the clauses of Memorandum of Association of a company….
(a) Name Clause of the company
(b) Address of registered office
(c) Clause of liability of members
(d) Rights of share holders
Answer : (d) Rights of share holders
Page | 48
76. If the auditor has given a qualified report, the following consequences may result…
(a) The BoD have to resign
(b) The auditor has to resign
(c) The Central government may impose a fine on share holders
(d) The BoD have to give reply to such Qualifications in the report
Answer : (d) The BoD have to give reply to such qualifications
77. To which of the following parties is the auditor expected to address his certificate?
(a) BoD of the company
(b) Share holders of the company
(c) Central Government
(d) Not addressed to any party
Answer : (d) Not addressed to any party
78. Unpaid dividend should be transferred to a special unpaid dividend account after_____ days of declaration of dividend.
(a) Sixty
(b) Five
(c) Thirty + Five
(d) Thirty
Answer : (c) Thirty + Five
79. The profit that is to be distributed among shareholders as per prescribed rate of dividend is called…
(a) Divisible Profit
(b) Gross profit
(c) Reserve profit
(d) Capital profit
Answer : (a) Divisible profit
Page | 49
80. Which of the following statement is correct?
(a) Investigation is compulsory
(b) The terms investigation implies an examination of accounts for some special
reason
(c) The investigation is carried out according to instructions from SEBI
(d) Audit report must have details of investigation
Answer: (b) the term investigation implies an examination of accounts for a special reason
Page | 50
JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Subject: Statistics- VI
Page | 51
JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Subject: Statistics - VI
(Multiple Choice Questions)
1) The method of estimating unknown characteristic of population on basis of sample information is called …………………..
(a) Statistics
(b) Parameter
(c) None
(d) Statistical Inference
Correct Answer :- (d) Statistical Inference
2) Statistical Inference consists of ……………………..
(a) Estimation
(b) Testing of Hypothesis
(c) Both
(d) None
Correct Answer :- (c) Both
3) A constant obtained from all the observations of population is ……………..
(a) Statistics
(b) Parameter
(c) Estimation
(d) Statistical Inference
Correct Answer :- (b) Parameter
Page | 52
4) A constant obtained from all the observations of sample is ……………………
(a) Statistics
(b) Parameter
(c) None
(d) Inference
Correct Answer :- (a) Statistics
5) The notation for population size is ……………………….
(a) N
(b) M
(c) n
(d) Q
Correct Answer :- (a) N
6) The notation for sample standard deviation is ……………………
(a) S
(b) s
(c) None
(d) p
Correct Answer :- (b) s
7) The population proportion is denoted by ……………………..
(a) q
(b) P
(c) None
(d) S
Correct Answer :- (b) P
Page | 53
8) The sample size is denoted by ……………….
(a) S
(b) P
(c) N
(d) n
Correct Answer :- (d) n
9) A statistical hypothesis which is written for possible acceptance is called ………………. hypothesis
(a) Alternative
(b) Simple
(c) Composite
(d) Null
Correct Answer :- (d) Null
10) A hypothesis complimentary to the null hypothesis is …………………. Hypothesis
(a) Null
(b) Alternative
(c) None
(d) Simple
Correct Answer :- (b) Alternative
11) Null hypothesis is denoted by …………………
(a) Ho
(b) H1
(c) None
(d) Ho1
Correct Answer :- (a) Ho
Page | 54
12) Alternative hypothesis is denoted by …………………..
(a) Ho
(b) H1
(c) None
(d) H1o
Correct Answer :- (a) H1
13) The error committed in rejecting null hypothesis when null hypothesis is true is …………. Error
(a) Type - I
(b) Type - II
(c) None
(d) Correct decision
Correct Answer :- (a) Type – I
14) The error committed in accepting the null hypothesis when it is false is called …………………. Error
(a) Type - I
(b) Type - II
(c) None
(d) Correct decision
Correct Answer :- (b) Type – II
15) The area of probability curve corresponding to Type – I error is called …………. Region
(a) Critical
(b) Level of significance
(c) Power of test
(d) Statistical Inference
Correct Answer :- (a) Critical
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16) When the critical region is on both the tails of probability curve it is called ………………………..test
(a) One tailed
(b) Two tailed
(c) Level of significance
(d) Statistical Inference
Correct Answer :- (b) Two tailed
17) When the critical region is on one side of probability curve it is called …………test
(a) Two tailed
(b) One tailed
(c) None
(d) Level of significance
Correct Answer :- (b) One tailed
18) If the number of units in the sample is more than 30 it is called …………sample
(a) Large
(b) Small
(c) Medium
(d) Very large
Correct Answer :- (a) Large
19) If the number of units in the sample is less than or equal to 30 is called ……sample
(a) Small
(b) Medium
(c) None
(d) Very small
Correct Answer :- (a) Small
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20) If Zcal < Ztab the null hypothesis is ………………………….
(a) Accepted
(b) Rejected
(c) Partially accepted
(d) Partially rejected
Correct Answer :- (a) Accepted
21) In a matrix if there are m rows and n columns the order of matrix is ………………
(a) mXn
(b) nXm
(c) mXm
(d) nXn
Correct Answer:- (a) mXn
22) For row matrix the order of matrix is …………………
(a) 1Xn
(b) nX1
(c) 1X1
(d) 0X0
Correct Answer :- (a) 1Xn
23) For a column matrix the order of matrix is …………………..
(a) mX1
(b) 1Xm
(c) nXn
(d) mXm
Correct Answer :- (a) mX1
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24) In unit matrix the diagonal elements of the matrix are ……………….
(a) 1
(b) 0
(c) -1
(d) 2
Correct Answer :- (a) 1
25) For a square matrix the order of matrix is …………..
(a) mXm
(b) mXn
(c) None
(d) nXm
Correct Answer :- (a) mXm
26) The addition and subtraction of two or more matrices is possible when they are of …………order
(a) same
(b) different
(c) None
(d) Can’t say
Correct Answer :- (a) same
27) For a symmetric matrix …………..
(a) aij = aji
(b) aij>aji
(c) aij<aji
(d) Can’t say
Correct Answer :- (a) aij = aji
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28) For skew symmetric matrix ………………
(a) aij = (-aji)
(b) aij = aji
(c) None
(d) Can’t say
Correct Answer :- (a) aij = (-aji)
29) For the multiplication of two matrices A and B the number of ………of matrix A and number of
………….of matrix B should be equal
(a) Columns , Rows
(b) Rows , Columns
(c) Rows , Rows
(d) Columns , Columns
Correct Answer :- (a) Columns , Rows
30) A determinant is a ……………… arrangement of numbers
(a) Rectangular
(b) Square
(c) Triangular
(d) Can’t say
Correct Answer :- (b) Square
31) Adjoint of a square matrix is the ……………. of matrix of co-factor of given matrix
(a) Multiplier
(b) Transpose
(c) None
(d) Can’t say
Correct Answer :- (b) Transpose
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32) If A is a square matrix and there exists another square matrix of same order such that AB = BA = I
Then B is called …………… of matrix A
(a) Inverse
(b) Transpose
(c) Co-factor
(d) None
Correct Answer :- (a) Inverse
33) If A is a matrix of order 3X3 and B is a matrix of order 3X3 the order of BA is ……………….
(a) 3X3
(b) 2X2
(c) Can’t say
(d) None
Correct Answer :- (a) 3X3
34) If A and B are two square matrices then AB and BA are always equal
(a) False
(b) True
(c) Can’t say
(d) None
Correct Answer :- (a) False
35) If AB = I then A is ………….. of B
(a) Divider
(b) Multiplier
(c) Can’t say
(d) Inverse
Correct Answer :- (d) Inverse
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36) For zero matrix all the elements of the matrix are …………….
(a) 0
(b) 1
(c) Can’t say
(d) None
Correct Answer :- (a) 0
37) When the determinant of a square matrix is zero then the type of matrix is ………………….
(a) Singular
(b) Non-singular
(c) Can’t say
(d) None
Correct Answer :- (a) Singular
38) If matrix A is of order 2X3 and matrix B is of order 3X2 then the order of AB is …………………
(a) 3X3
(b) 2X2
(c) 2X3
(d) 3X2
Correct Answer :- (b) 2X2
39) In determinant the number of rows and columns are ……………………..
(a) Not same
(b) Same
(c) Can’t say
(d) None
Correct Answer :- (b) Same
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40) For a two tailed test at 5% level of significance the Ztab value is ……………
(a) 1.96
(b) 2.58
(c) 1.645
(d) 2.33
Correct Answer :- (a) 1.96
41. The different alternatives available for making/taking a decision are called .
a. States of Nature
b. Strategies
c. Events
d. Payoff
Correct Answer :- b . Strategies
42. The monetary gain/loss from the combinations of strategies and its corresponding states of nature is known as ___.
a. Acts
b. Pay off
c. Events
d. Payon
Correct Answer :- B. Payoff.
43. If the value of the coefficient of optimism ( Alpha) with respect to the Hurwitz‟s principle is not given then take value of Alpha =_______.
a. 0.9
b. 0.6
c. 0
d. 1
Correct Answer :- B. 0.6
Page | 62
44. When very little information is available and the decision maker cannot assess the probabilities of the various events or states of nature, the method/ situation of decision making used is called Decision Making Under_ .
a. Risk
b. Uncertainty
c. Certainty
d. None
Correct Answer :- B. Uncertainty
45. _______________method is used to find the best strategy /solve sums of Decision Making under Risk.
a. EVPI
b. E.M.V.
c. EPPI
d. None
Correct Answer :- B. EMV
46. ______is the formula for finding EVPI , in short?
a. EPPI – MIN EMV
b. EPPI – MAX EMV
c. EPPI – EMV
d. None
Correct Answer :- b. EPPI – MAX EMV
47. In Decision theory EPPI refers to .
a. Expected Percentage from Perfect Information.
b. Expected Profit from Perfect Information
c. Exact Percentage from Perfect Information
d. None
Correct Answer :- B. Expected Profit from Perfect Information
Page | 63
48. If EVPI is 1000 Rs. and the highest EMV is 500 Rs. What is the amount/value of EPPI?
a. 1500
b. 500
c. 2
d. None
Correct Answer:- A. 1500
49. In which principle of decision-making coefficient of optimism is used?
a. Laplace
b. maxi min
c. Hurwitz
d. Maxi Max
Correct Answer :- C. Hurwitz
50. The item costs Rs. 40 per unit and sells at Rs. 60 per unit. If units are not sold, they can be returned back at Rs. 10 per unit. The demand of an item is given below :
Demand 40 50 60 70
Probability 0.20 0.25 0.5 0.05
Calculate EMV, if 50 units are produced.
a. 900
b. 500
c. 870
d. None
Correct Answer :- A. 900
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51. In which principle of decision-making equal probabilities are assigned to different states of nature?
a. Laplace
b. maxi min
c. Hurwitz
d. Maxi Max
Correct Answer :- A. Laplace (Note : Here average is taken so by default each observation assumes equal probability)
52. If the future demands are not known with certainty one would select the strategy with maximum ____, under the concept of Risk.
a. EPPI
b. EVPI
c. EMV
d. MAXI MAX
Correct Answer :- C. EMV
53. If the maximum pay-offs of different acts are as follows:
A B C D
28 24 26 20
Which act should be selected according to Maxi-max principle ?
a. B
b. A
c. D
d. C
Correct Answer :- B. Strategy A (i.e., 28)
54. E.V.P.I. is the abbreviation for _______.
a. Expected Value for Perfect Information
b. Exempted Value for Perfect Information
c. Established Value for Perfect Information
d. None
Correct Answer :- A. Expected Value for Perfect Information
Page | 65
55. E.M.V. stands for ______________
a. Expected Money Value
b. Expected Monitory Value
c. Expected Maximum Value
d. None
Correct Answer :- b. Expected Monitory Value
56. If the minimum pay-offs of different acts are as follows :
S1 S2 S3 S4
28 24 26 20
Which act should be selected according to Maxi- Min principle ?
a. S1
b. S2
c. S3
d. S4
Correct Answer :- A. S1.
57. If the calculations of Laplace Principle give the following averages then ______ Strategy is selected.
S1 S2 S3 S4
40 43 26 20
a. S1
b. S2
c. S3
d. S4
Correct Answer :- B. S2
Page | 66
58. If the calculations of Hurwitz Principle give the following averages then ______ Strategy is selected.
SA1 SA2 SA3 SA4
40 46 29 28
a. SA1
b. SA2
c. SA3
d. SA4
Correct Answer :- B. SA2
59. The probabilities for two states of nature is 0.4 and 0.6. If the pay-offs for an act are 125 and 300, find EMV.
a. EMV = 230
b. EMV = 235
c. EMV = 330
d. None
Correct Answer :- A. EMV = 230
60. If EMV for acts are 829, 860 and 790 and EVPI = 160, find Expected Profit for Perfect Information.
a. 1010
b. 1030
c. 1020
d. 1200
Correct Answer :- C. 1020
61. The competitive situation will be called a ______.
a. strategy
b. act
c. game
d. payoff
Correct Answer :- C. Game
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62. The ___________ of a player is the decision rule he uses for making the choice from his list of courses of action.
a. strategy
b. act
c. game
d. payoff
Correct Answer :- a. strategy
63. In Game Theory, what is the classification of strategy?
a. Pure Strategy
b. Mixed Strategy
c. Both options a & b
d. None
Correct Answer :- C. Both options a & b
64. When do players apply mixed strategies?
a. when there is no, saddle point.
b. when there is a , saddle point.
c. every time it is applied
d. Never applied
Correct Answer :- a. when there is no, saddle point.
65. A ____________point is the position in the payoff matrix, where the maximum of row minima coincides with the minimum of column maxima.
a. Break-even point
b. saddle
c. pay off
d. None
Correct Answer :- B. saddle
Page | 68
66. A game with two players, where a gain of one player equals the loss of the other is known as _____________ .
a. a two-person zero sum game.
b. a Six -person zero sum game.
c. Saddle Point
d. Pay off
Correct Answer :- A. a two-person zero sum game.
67. A strategy is called ________, if one knows in advance of the play that it is certain to be adopted irrespective of the strategy the other may choose.
a. pure
b. Mixed
c. Partial
d. None
Correct Answer :- A. pure
68. The optimal strategy mixture for each player may be determined by assigning to each strategy its probability of being chosen. These strategies are called _______ strategy.
a. pure
b. Mixed
c. Partial
d. None
Correct Answer :- b. Mixed
69. Games without saddle point require players to play ___________ strategies.
a. pure
b. Mixed
c. Partial
d. None
Correct Answer :- b. Mixed
Page | 69
70. Games with saddle point require players to play ___________ strategies.
a. pure
b. Mixed
c. Partial
d. None
Correct Answer :- a. pure
71. ___________is the point of intersection of pure strategies.
a. a two-person zero sum game.
b. Pay off point.
c. Saddle Point
d. Strategic Point
Correct Answer :- c. Saddle Point
72. A pure strategy game is one in which each player has only one optimal strategy.
a. False
b. True
c. Can’t Say
d. None
Correct Answer :- B. True
73. The gains resulting from a game is called ________.
a. Break-even point
b. saddle point
c. payoff
d. None
Correct Answer :- c. payoff
Page | 70
74. In Game theory, Minimax is maximum of row minima.
a. False
b. True
c. Can’t Say
d. None
Correct Answer :- B. True
75. Maximin is minimum of column maxima.
a. False
b. True
c. Can’t Say
d. None
Correct Answer :- B. True
76. In Game theory, by default Player A is regarded as the one who _______.
a. Gaines ( Wins)
b. Looses
c. Draws the game ( Tie)
d. None
Correct Answer :- a. Gaines ( Wins)
77. In Game theory, by default Player B is regarded as the one who _______.
a. Gaines ( Wins)
b. Looses
c. Draws the game ( Tie)
d. None
Correct Answer :- b. Looses
Page | 71
78. In Game theory, Player B uses the ___________ principle to play the game.
a. Mini Max
b. maxi min
c. Hurwitz
d. Maxi Max
Correct Answer :- a. Mini Max
79. In Game theory, Player A uses the ___________ principle to play the game.
a. Mini Max
b. maxi min
c. Hurwitz
d. Maxi Max
Correct Answer :- b. maxi min
80. The game is said to be a fair game if the value of the game is ________.
a. Zero
b. Exactly +1
c. Exactly -1
d. None.
Correct Answer :- A. Zero
Page | 72
JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Subject: Problems of Indian Economy - II
Page | 73
JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Subject: Problems of Indian Economy - II
(Multiple Choice Questions)
1. Which of the following reflect the magnitude of country‟s foreign trade?
(a) Size of its Import-Export
(b) Share of its foreign trade in total world trade
(c) Share of its foreign trade in national income
(d) All of the above
Correct Option: d) All of the above
2. Which factor is mostly affected to proportion of import of foreign trade of India?
(a) POL (Petrol, Oil and Lubricant)
(b) Agriculture Product
(c) Luxury Goods
(d) Machinery
Correct Option: a) POL
3. In which of the sectors does India have a trade surplus?
(a) Agriculture Sector
(b) Industrial Sector
(c) Service sector
(d) None of these
Correct Option: c) Service sector
Page | 74
4. What was the share of India‟s foreign trade in its GDP in 2019? (a) 39.5 %
(b) 49.5%
(c) 59.5%
(d) 29.5%
Correct Option: a) 39.5%
5. Percentage share of which type of products has increased in India‟s foreign trade over the years?
(a) Agriculture Product
(b) Raw Metal and Minerals
(c) Produced Goods
(d) Service
Correct Option: c) Produced Goods
6. Indian exports are mainly classified into how many sections? (a) 2
(b) 3
(c) 4
(d) 6
Correct Option: c) 4 7. In which of the following countries has the percentage share of our exports and imports has decreased?
(a) OPEC countries
(b) OECD countries
(c) ASIAN countries
(d) Latin American countries
Correct Option: b) OECD countries 8. How was the trade balance of India with USA in recent years?
(a) Deficit
(b) Surplus
(c) Equalibrium
(d) Uncertain
Correct Option: a) Deficit
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9. Which is the other name for foreign trade policy?
(a) Internal trade policy
(b) Trade policy
(c) EXIM policy
(d) Service Policy
Correct Option: c) EXIM policy
10. Which of the following committees has recommended measures to increase India‟s exports?
(a) Mahalanobis Committee
(b) Mudaliar Committee
(c) Abid Committee
(d) Rangrajan Committee
Correct Option: d) Rangrajan Committee
11. Which government has brought real effective liberalization of foreign trade in India?
(a) Atal Bihari Bajpai
(b) Manmohan Sinh
(c) Narendra Modi
(d) Rajiv Gandhi Govt.
Correct Option: c) Narendra Modi
12. From which year a joint EXIM policy was introduced in India instead of separate import and export policies?
(a) 1980
(b) 1985
(c) 1991
(d) 2000
Correct Option: b) 1985 13. As per the foregin trade policy announced on 1st April, in how many categories export houses for status holders were classified?
(a) 2
(b) 3
(c) 4
(d) 5
Correct Option: d) 5
Page | 76
14. From which year in India, in place of import substitution, import liberlisation has taken important place in trade policy?
(a) 1961
(b) 1971
(c) 1981
(d) 1991
Correct Option: d) 1991 15. Which of the following are the important dimensions of foreign trade of any country?
(a) Quantum
(b) Compeosition
(c) Direction
(d) All of these
Correct Option: d) All of these 16. Which one of the following is India‟s highest trading partner?
(a) OPEC
(b) OECD
(c) Less Developed Countries
(d) all of the above
Correct Option: b) OECD (although its share has fallen, still it is the highest) 17. The foreign trade in India is canalisation through which of the following?
(a) IIFT (Indian Institute of Foreign Trade)
(b) Ministry of Commerce
(c) STC (State Trading Corporation) & MMTC (Metals and Minerals Trading
Corporation)
(d) Export promotion couinsils and Commodity Boards
Correct Option: d) Export Promotion Couincils and Commodity Boards 18. Which of the following is meant to facilitate the trade of agro-products?
(a) SEZ (Special Economic Zone)
(b) AEZ (Agri-Export Zones) (c) STP (Software Technology Park)
(d) None of these
Correct Option: b) AEZ (Agri-Export Zones)
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19. In which of the following years was the Indian rupee devalued? (a) 1949
(b) 1966
(c) 1991
(d) All of these
Correct Option: d) All of these 20. In which of the following years was India‟s SEZ (Special Economic Zone) scheme launched?
(a) 1951
(b) 1909
(c) 1991
(d) 2000
Correct Option: d) 2000 21. One of the following is not included in Technology Park Scheme:
(a) EHTP (Electronic Hardware Technology Park)
(b) STP (Software Technology Park)
(c) SIP (Systemetic Investment Plan)
(d) BTP (Bio Technology Park)
Correct Option: c) SIP (Systemetic Investment Plan) 22. India‟s balance of trade can be termed as:
(a) Unfavourable
(b) Favourable
(c) Balanced
(d) Surplus position
Correct Option: a) Unfavourable 23. By how much percentage was the indian rupee devalued in 1991?
(a) Around 33%
(b) Around 16%
(c) Around 18%
(d) Around 36%
Correct Option: c) Around 18%
Page | 78
24. In India, the Super Star Store scheme was launched in which year?: (a) 1991-92
(b) 1994-95
(c) 2000-01
(d) 2015-16
Correct Option: b) 1994-95 25. Which of the following institutes in India provides the guarantee for the recovery of export amounts:
(a) ECGC (Export Credit Guarantee Corporation of India Ltd)
(b) MEIS (Merchandise Export from India Scheme)
(c) EPCG (Export Promotion Capital Goods Scheme)
(d) IIFT (Indian Institute of Foreign Trade)
Correct Option: a) ECGC (Export Credit Guarantee Corporation of India Ltd) 26. The ECGC (Export Credit and Guarantee Corporation) of India was established in which year?
(a) 1951
(b) 1957
(c) 1969
(d) 1991
Correct Option: b) 1957 27. One of the following is the Export Promotion Scheme:
(a) TEE (Towns of export Excellence)
(b) MAI (Market Access Initiative)
(c) MDA (Marketing Development Assistance)
(d) All of these
Correct Option: d) All of these 28. One of the following is the limitation of import substitution policy:
(a) Internal monopoly
(b) Decrease in world trade
(c) Inefficiency of local manufacturers
(d) All of these
Correct Option: d) All of these
Page | 79
29. The full form of DEPB is one of the following: (a) Direct Export Promotion Board
(b) Duty Entitlement Pass Book
(c) Direct Export Promotion Bureau
(d) Duty Entitlement Promotion Book
Correct Option: a) Direct Export Promotion Board 30. As per an estimate, how much was the share of India‟s trade in world‟s total tarde in 2014-15?
(a) 1%
(b) 1.5%
(c) 2.7%
(d) 3%
Correct Option: c) 2.7% 31. Recently percentage share of which countries is highrest in the foreign tarde of India?
(a) Asia
(b) Europe
(c) Latin America
(d) North America
Correct Option: a) Asia 32. What was necessary for whole industrial development in starting stage of planning in India?
(a) Import substitution
(b) Import liberalization
(c) Export promotion
(d) None of these
Correct Option: a) Import substitution
33. In today‟s financial system, the importance of banking sector is: (a) Increasing
(b) Decreasing
(c) Stable
(d) Uncertain
Correct option: a) Increasing
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34. Who is the regulator of the Indian banking system? a) SBI
b) RBI
c) NABARD
d) ICICI
Correct option: b) RBI 35. How many public sector banks were there on 31st March 2007?
a) 25
b) 27
c) 39
d) 20
Correct Option: b) 27 36. In which year SBI was established in India?
a) 1948
b) 1951
c) 1955
d) 1960
Correct Option: c) 1955 37. In which year 14 big private banks were nationalized?
a) 1955
b) 1969
c) 1991
d) 1980
Correct Option: b) 1969 38. The banks whose most shares are with private shareholders are known as
a) Public sector banks
b) Private sector banks
c) Regional rural banks
d) Co-operative banks
Correct Option: b) private sector banks 40. From the following which bank is not a private sector bank?
a) HDFC Bank
b) Bank of India
c) ICICI Bank
d) Yes Bank
Correct Option: b) Bank of India
Page | 81
41. What is the minimum reserve amount and paid-up capital of scheduled bank? a) 2 lacs
b) 3 lacs
c) 5 lacs
d) 10 lacs
Correct Option: c) 5 lacs 42. The percentage of rural branches in total bank branches in 2013 was
a) 22%
b) 30%
c) 37%
d) 50%
Correct option: c) 37% 43. In 2013, the average population per bank branch was
a) 63,800
b) 50,000
c) 25,000
d) 12,670
Correct Option: d) 12,670 44. By how much did the deposits of commercial banks increase during the period from 1991 to 2013?
a) 25 times
b) 30 times
c) 35 times
d) 37 times
Correct Option: c) 35 times 45. Due to recommendation of Narshimham committee, importance of which bank is increasing in Indian baking structure?
a) Public sector banks
b) Private sector banks
c) Private and foreign banks
d) Co-operative banks
Correct Option: c) Private and foreign banks 46. How much minimum net worth is necessary to start the new private sector bank?
a) 50 crores
b) 100 crores
c) 200 crores
d) 500 crores
Correct Option: b) 100 crores
Page | 82
47. Which type of banks had to force healthy competition by new private sector banks?
a) Regional rural banks
b) Co-operative banks
c) Public sector banks
d) Agriculture banks
Correct Option: c) Public sector banks 48. In which year was SARFAESI Act framed to remove the problem of recovery of loan of banks?
a) 1991
b) 1993
c) 2002
d) 2005
Correct Option: c) 2002 49. Which step was taken by the government for revival of the banks which were sick due to NPA?
a) Recapitalization
b) Nationalization
c) Consolidation
d) Privatization
Correct Option: a) Recapitalization 50. Which of the following committees has given recommendation for strengthening of the banking sector in India?
a) Mudliar committee
b) Narashimhan committee
c) Rangrajan committee
d) Kelkar Committee
Correct Option: b) Narashimhan committee 51. What is the minimum Percentage of promoter‟s holding in paid up capital of new private sector bank?
a) 15%
b) 20%
c) 25%
d) 50%
Correct Option: c) 25%
Page | 83
52. What was the recommendation of Narasimham committee regarding SLR? It was to be reduced to ______ in a phased manner in five year period.
a) 15%
b) 25%
c) 30%
d) 20%
Correct Option: b) 25%
53. Mergers of which kind of banks were opposed by Narasimham committee? a) Financially sound
b) Financially weak
c) Financially sound and weak
d) Public sector
Correct Option: c) Financially sound and weak
54. What is the minimum capital adequacy ratio required for banks in India? a) 5%
b) 8%
c) 10%
d) 12%
Correct Option: b) 8%
55. Whose name was connected with the past security scam? a) Harshad Mehta
b) Vijay Mallya
c) Nirav Modi
d) Ramesh Mehta
Correct Option: a) Harshad Mehta
56. Among different sectors of the economy, banking is treated as one of the following sectors:
a) Household
b) Financial intermediary
c) Corporate
d) Government
Correct Option: b) Financial intermediary
57. How many private sector banks were nationalized in the second phase of 15th April, 1980?
a) 4
b) 14
c) 21
d) 5
Correct Option: a) 4
Page | 84
58. From which year was the bill Discounting Scheme started in India?
a) 1952
b) 1969
c) 1991
d) 1980
Correct Option: a) 1952 59. From which year were the factoring services started in India?
a) 1952
b) 1969
c) 1991
d) 1980
Correct Option: c) 1991 60. On which committee‟s recommendations were the factoring services started in India from 1991?
a) N. Narsimham Committee
b) Kalyan Sundaram Committee
c) C. Rangarajan Committee
d) Abid Husain Committee
Correct Option: b) Kalyan Sundaram Committee 61. Who was the chairman of the banking reforms committee appointed in 1991?
a) N. Narsimham
b) Kalyan Sundaram
c) C. Rangarajan
d) Abid Husain
Correct Option: a) N. Narsimham 62. From which year were the Regional Rural Banks started to serve rural area?
a) 1951
b) 1969
c) 1976
d) 1991
Correct Option: c) 1976 63. Which specialized bank in India was established to assist the agriculture sector?
a) IDBI
b) MUDRA
c) SIDBI
d) NABARD
Correct Option: d) NABARD
Page | 85
64. Which specialized bank in India was established to assist the small sector? a) IDBI
b) MUDRA
c) SIDBI
d) NABARD
Correct Option: c) SIDBI 65. Which specialized bank in India established to assist the micro units?
a) IDBI
b) MUDRA
c) SIDBI
d) NABARD
Correct Option: b) MUDRA 66. One of the following is not the bank account opened by banks for mobilizing the savings.
a) Saving Account
b) Current Account
c) Cash Credit Account
d) Fixed Deposit Account
Correct Option: c) Cash Credit Account 67. A cheque issued by one bank on another bank is known as one of the following:
a) Demand draft
b) Pay order
c) Letter of credit
d) Crossed cheque
Correct Option: b) Pay order 68. The full form of RTGS is_____.
a) Regional Transfer Gross Settlement
b) Refinancing of Time deposits for Goods and Services
c) Real Time Gross Settlement
d) Regional Transfer for Goods and Services
Correct Option: c) Real Time Gross Settlement 69. The bank service to provide information about its client to third party is known as
a) Guarantor
b) Referee
c) Underwriting
d) Custodian
Correct Option: b) Referee
Page | 86
70. One of the following is not the short-term lending by the commercial banks.
a) Overdraft
b) Factoring
c) Term loan
d) Bill discounting
Correct Option: c) Term loan 71. After what time of non-payment of interest and principal having become due, is it treated as non-performing assets?
a) 14 days
b) 30 days
c) 90 days
d) 182 days
Correct Option: c) 90 days 72. One of the following services is not included in the merchant banking services
a) Underwritings
b) Share issue management
c) Demonetization
d) Drafting of prospectus
Correct Option: c) Demonetization 73. Which one of the following is a limitation of public sector banks?
a) Lower efficiency
b) Political interference
c) Increasing NPA
d) All of these
Correct Option: d) All of these 74. One of the following banks is not included in new private bank
a) Axis Bank
b) ICICI Bank
c) Karur Vaishya Bank
d) Bandhan Bank
Correct Option: c) Karur Vaishya Bank 75. In which year RBI was established?
a) 1935
b) 1947
c) 1951
d) 1949
Correct Option: a) 1935
Page | 87
76. Which is the policy of RBI regarding money control? a) Administrative Policy
b) Fiscal Policy
c) Monetary Policy
d) None of these
Correct Option: c) Monetary Policy 77. Which of the following tool is not of quantitative credit control?
a) Bank rate
b) Open market operation
c) Credit rationing
d) CRR
Correct Option: c) Credit rationing 78. What was the bank rate since 2004-2005 in India?
a) 6%
b) 7%
c) 9%
d) 10%
Correct Option: a) 6% 79. Which policy is important for controlling inflation?
a) Administrative Policy
b) Monetary Policy
c) Fiscal Policy
d) None of these
Correct Option: b) Monetary Policy 80. What should be done by the RBI to the bank rate to keep inflation in control?
a) Increase
b) Decrease
c) Stable
d) Uncertain
Correct Option: a) Increase
81. At present, which instrument is used most by monetary policy? a) Bank rate
b) SLR
c) Repo rare
d) CRR
Correct Option: c) Repo rate
Page | 88
82. In which range can the RBI change the CRR? a) 3% to 15%
b) 5% to 20%
c) 5% to 15%
d) 5% to 10%
Correct Option: a) 3% to 15% 83. The interest rate at which RBI provides short term loans to commercial banks is called---
a) Bank rate
b) Repo rate
c) Reverse repo rate
d) SLR (Statutory Liquidity Ratio)
Correct Option: b) Repo rate 84. In which year NABARD was established?
a) 1982
b) 1992
c) 1990
d) 1986
Correct Option: a) 1982 85. What is the ratio of SLR in India?
a) 25%
b) 30%
c) 27%
d) 34%
Correct Option: a) 25% 86. What is the main function of RBI?
a) Issue legal Money
b) As the banker of the government
c) Clearing house
d) All of these
Correct Option: d) All of these 87. What is the main objective of RBI?
a) Economic development
b) Price stability
c) Stability of exchange rate
d) All of these
Correct Option: d) All of these
Page | 89
88. MSF rate in monetary policy of RBI announced on 7th august 2019 is ____. a) 5.50%
b) 5.65%
c) 5.40%
d) 7.25%
Correct Option: b) 5.65% 89. Monetary Policy is called
a) Credit control Policy
b) Fiscal Policy
c) Cash reserve Policy
d) None of these
Correct Option: a) Credit control Policy 90. The Treasury Bills can mature in _________.
a) 14 days
b) 91 days
c) 182 days
d) All of these
Correct Option: d) All of these 91. One of the following is not the instrument of short term money market
a) Treasury bill
b) Commercial paper
c) Certificate of deposits
d) Certificate of origin
Correct Option: c) Certificate of deposits
92. The Bill Market Scheme was introduced by RBI in which year? a) 1934
b) 1947
c) 1952
d) 1969
Correct Option: c) 1952 93. On which of the following assets of the bank client, bill discounting services are provided?
a) Bill receivables
b) Debtors c) Bills Payables
d) Inventories
Correct Option: a) Bill Receivables
Page | 90
94. The full-form of CRR is
a) Credit rationing ratio
b) Cash reserve ratio
c) Client registration rate
d) Credit return ratio
Correct Option: b) Cash Reserve Ratio 95. Which of the following institutions issues Treasury Bills in India?
a) Government of India
b) State Government
c) Reserve Bank
d) State Bank
Correct Option: c) Reserve Bank 96. Which publication is published by the Reserve Bank of India every month?
a) Capital Market
b) Indian Banking
c) Reserve Bank Bulletin
d) Currency and Finance
Correct Option: c) Reserve Bank Bulletin 97. In India, the reserve repo rate as compared to repo rate tends to be _________.
a) High
b) Low
c) Equal
d) No relation between them
Correct Option: b) Low 99. One of the following is not included in the short term money market instruments:
a) Treasury bill
b) Commercial paper
c) Treasury bond
d) Certificate deposits
Correct Option: d) Treasury bond 100. The currency notes issued by the issue department are known as _________:
a) Commercial Paper
b) Treasury Bills
c) Legal tender
d) Certificate deposits
Correct Option: c) Legal tender
Page | 91
101. Which one of the following is not included in the functions of RBI? a) Government’s bank
b) Banker’s bank
c) To issue currency notes
d) Bill discounting
Correct Option: d) Bill discounting 102. The facility provided by the RBI to the scheduled banks for maintaining liquidity through repo and reverse-repo transactions is called __________.
a) CRR (Cash Reserve Ratio)
b) SLR (Statutory Liquidity Ratio)
c) LAF (Liquidity Adjustment Facility)
d) NPA (Non-Performing Assets)
Correct Option: c) LAF (Liquidity Adjustment Facility) 103. Who will benefit by the devaluation of Indian rupee?
a) Indian importer
b) Indian exporter
c) Domestic industry
d) Fixed income earners in India
Correct Option: b) Indian exporter 104. In the modern economic world, the economic development can be attained only through the monetary policy was advocated by one of the following economists.
a) Friedman
b) Samuelson
c) Keynes
d) Marshall
Correct Option: a) Friedman 105. The administrative head of the RBI is known as
a) Finance minister of India
b) President
c) Governor of RBI
d) Prime minister
Correct Option: c) Governor of RBI
106. The present governor of RBI IS
a) Urjit Patel
b) Shashikant Das
c) Raghuram rajan
d) Bimal jalan
Correct Option: b) Shashikant Das
Page | 92
107. The head office of reserve bank of India is in
a) New Delhi
b) Mumbai
c) Kolkata
d) Chennai
Correct Option: b) Mumbai 108. The nationalization of RBI was made in which year?
a) 1935
b) 1947
c) 1948
d) 1950
Correct Option: c) 1948 109. The main function of Finance Commission in India is ____________:
(a) To declare fiscal policy
(b) Allocation of tax revenues between centre and states
(c) To levy taxes
(d) To investigate tax evasions
Correct Option: b) Allocation of tax revenues between centre and states 110. Who appoints the Finance Commission in India?
(a) Prime Minister
(b) Finance Minister of India
(c) President of India
(d) Governor of Reserve Bank
Correct Option: c) President of India 111. The Chairman of the 15th Finance Commission (2020-25) is one of the following:
(a) C.D. Deshmukh
(b) K.C.Niyogi
(c) Nilam Sanjiv Reddy
(d) N.K.Singh
Correct Option: d) N. K. Singh
Page | 93
112. Who was the chairman of the Tax Reform Commettee appointed in 1991 ?
(a) Vijak Kelkar
(b) Raja J. Chelliah
(c) Parthsarthy Shome
(d) Akhilesh Ranjan
Correct Option: b) Raja J. Chelliah 113. The demonetisation in India was done in which year?
(a) 1946
(b) 1978
(c) 2016
(d) All of these
Correct Option: d) All of these 114. From which year GST Act was implemented in India?
(a) 2015
(b) 2017
(c) 2019
(d) 2020
Correct Option: b) 2017 115. Which tax is applicable for providing intra-state sales of services?
(a) CGST
(b) SGST
(c) IGST
(d) None of these
Correct Option: c) IGST 116. How many times was demonetization done in India since planning (1951)?
(a) One
(b) Two
(c) Three
(d) Four
Correct Option: b) Two
Page | 94
117. On which date were the currency notes of Rs. 500 and Rs. 1000 demonetized in India?
(a) 8th
November - 2016
(b) 8th
November - 2017
(c) 8th
November - 2018
(d) 30th
December - 2016
Correct Option: a) 8th November – 2016 118. Which one of the following is the tax of Central Government?
(a) Entertainment Tax
(b) Vehicle Tax
(c) Wealth Tax
(d) Stamp Duty
Correct Option: c) Wealth Tax 119. One of the following is the tax of state Government:
(a) Entertainment Tax
(b) Income Tax
(c) Wealth Tax
(d) Excise and Custom Duty
Correct Option: a) Entertainment Tax 120. The first Finance Commission in India was appointed for period ________.
(a) 1947-52
(b) 1952-57
(c) 1961-65
(d) 1969 - 74
Correct Option: b) 1952-57 121. The 15th Finance Commission in India is appointed for period __________:
(a) 2001-05
(b) 2011-15
(c) 2015-20
(d) 2020-25
Correct Option: d) 2020-25
Page | 95
122. Which one of the following is the scheme for controlling black money in India?
(a) Voluntary Disclosure Scheme
(b) Bearer Bond
(c) Demonetization
(d) All of these
Correct Option: d) All of these
Page | 96
JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Subject: Fundamentals of Financial
Management
Page | 97
JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Subject: Fundamentals of Financial Management
(Multiple Choice Questions)
1. Managers try to attain objectives keeping finance in centre as _____. A. Maximisation of Income and Effective use of assets.
B. Satisfactory return on investment.
C. Social services oriented objectives.
D. All of these Ans: (D) All of these
2. In which century the term finance was considered as money lenders? A. 17th century B. 18
th century
C. 19th
century
D. 21st century
Ans : (A) 17th century
3. In Modern finance what is taken into consideration _______. A. Only Acquisition of finance B. Only Utilisation of finance C. Both Acquisition and Utilisation of finance D. None of these
Ans : (C) Both Acquisition and Utilisation of finance
4. Finance manager has to perform _____ activities. A. To estimate the need of required finance. B. To procure required finance from various sources. C. To distribute finance amongst various departments. D. All of these
Ans : (D) All of these
5. Identify the characteristics of a sound financial planning. A. Simplicity B. Flexibility C. Economical D. All of these
Ans : (D) All of these
Page | 98
6. Functions regarding Financial planning includes ______. A. Cash planning B. Collection from customers C. Planning for borrowing of money D. Both cash planning and planning for borrowing of money
Ans : (D) Both cash planning and planning for borrowing of money
7. ______ is not the limitation of traditional approach. A. Use of finance is not considered
B. Only form of company is considered
C. No analytical approach
D. None of these Ans (D) None of these
8. What are the objectives of Financial Management? A. Profit Maximization approach B. Wealth Maximization approach C. Both Profit and Wealth Maximization approach D. None of these
Ans : (C) Both Profit and Wealth Maximization approach
9. _____ is not the limitation of Profit Both Profit Maximization approach. A. To Consider time value of money B. To consider risk element for evaluation C. Ignores risk D. Both To Consider time value of money and To consider risk element for
evaluation Ans (D) Both To Consider time value of money and To consider risk element for evaluation
10. ________ is the process of estimating the fund requirements of a firm and determining the sources of funds.
A. Financial Planning B. Financial Management C. Money Market D. Capital Market
Ans : (A) Financial Planning
Page | 99
11. Capital structure with more types of securities makes it ______. A. Complicated B. Easy C. Flexible D. None of these
Ans : (A) Complicated
12. Investors prefer to buy debentures, cumulative preference share when prices are ______.
A. Decline B. Increasing C. Average D. None of these
Ans : (A) Decline
13. Investors prefer to buy _______ when prices increase. A. Equity shares B. Preference share
C. Debentures
D. Bonds
Ans : (A) Equity shares
14. Identify which is not the external factors determining capital structure. A. Taxation structure of country.
B. Condition of capital market
C. Attitude of investors
D. Risk in Business Ans : (D) Risk in Business
15. Identify which is not the internal factor of capital structure. A. Increase in trading o0n equity B. Future needs C. Control on management D. Taxation structure of country.
Ans : (D)Taxation structure of country.
16. The ratios of ownership capital and borrowed money are known as _____. A. Capital gearing B. Low gearing C. Thin equity D. Trading on equity
Ans : (A) Capital gearing
Page | 100
17. Among the following Trading on equity becomes profitable in which circumstances? A. Risk and compensation B. Higher rate of earning C. Rate of taxes D. All of these
Ans : (D) All of these
18. To increase the profit of equity shareholders when company uses the securities with fixed burden such as debentures, preference share is called ______. A. Financial leverage B. Operational leverage C. None of these D. Combined leverage
Ans : (A) Financial leverage
19. Identify the types of preference share from the given option. A. All of these B. Cumulative preference share C. Redeemable preference share D. Convertible preference share
Ans : (A) All of these
20. Which is not the limitation of debentures? A. Fixed income B. High price C. Stamp duty D. Less dividend
Ans : (A) Fixed income
21. ______ are not the causes of watered capital. A. High payment to promoters B. Excess advertisement and no result C. Assets purchased at a high price D. Establishment of company in the time of inflation.
Ans : (D) Establishment of company in the time of inflation.
22. When ratio of equity share capital is very low in comparison of borrowed capital , it is said that the company is possessing _____. A. Thin equity B. Thick equity C. Trading on equity D. Capital gearing
Ans : (A) Thin equity
Page | 101
23. State the methods of Capitalisation. A. Historical cost theory B. Earning theory C. Both Historical cost theory and Earning theory D. None of these
Ans : (C) Both Historical cost theory and Earning theory
24. The historical cost method is suitable for ______. A. New company B. Old company C. Government organisation D. Multinational company.
Ans : (A) New company
25. When ratio of equity share capital is more than the borrowed capital , it is said that the company is possessing _____.
A. Thin equity B. Thick equity C. Trading on equity D. Capital gearing
Ans : (A) Thin equity
26. When in comparison of equity share capital ratio of borrowed money is more then it is called ______. A. High gearing B. Low gearing
C. Capital gearing
D. None of these
Ans : (A) High gearing
27. When the ratio of borrowed capital is less in comparison of owners capital then it is called ______. A. High gearing
B. Low gearing C. Capital gearing
D. None of these
Ans : (B) Low gearing
28. ______ is the importance of capital structure. A. Dividend per share , Financial liability
B. Trading on equity , uncertainty of Income
C. Cost of capital , under or over capitalisation
D. All of these Ans : (D) All of these
Page | 102
29. When company makes profitable business by borrowed capital along with its
ownership capital and pays more dividend to the equity shareholders then it is known as _______. A. Trading on equity B. Thick equity
C. Thin equity D. None of these
Ans : (A) Trading on equity
30. The concept of operating leverage is associated with _______. A. Production , Purchase
B. Sale , Advertising
C. Distribution , Administration
D. All of these Ans : (D) All of these
31. Formula of operating leverage is ____. A. Operating leverage = changes in operating profit (%)
__________________________ Changes in sales (%)
B. Operating leverage = changes in financial profit (%) __________________________
Changes in depreciation (%)
C. Operating leverage = changes in overall loss (%) __________________________
Changes in sales (%)
D. All of these
Ans : (A) Operating leverage = changes in operating profit (%) __________________________ Changes in sales (%)
32. Give full form of : EBIT A. Earnings Before Interest & Taxes B. Evaluating Before Interest & Taxes
C. Earning By Interest & Taxes
D. Evaluating By Internal Taxes
Ans : (A) Earnings Before Interest & Taxes
Page | 103
33. DOL stands for ______. A. Degree of Operating Leverage B. Degree of Over Leverage
C. Degree of Outstanding Leverage
D. Degree of Overall Leverage
Ans : (A) Degree of Operating Leverage
34. ______ is not the advantage of financial leverage. A. Risky in starting years
B. Lower capital cost
C. Advantage of Taxes
D. Capital formation on a large extent
Ans : (A) Risky in starting years
35. Which of the following is not a function of operating leverage in a firm? A. The amount of fixed costs B. The rates of income-tax C. The contribution margin D. The volume of sales
Ans : (B) The rates of income-tax
36. _____ are the remedies for over capitalisation. A. Reduction of share value B. Ploughing back of profits C. Reorganisation of capital structure D. All of these
Ans : (D) All of these
37. Which of the following statement is not correct? A. Increase in fixed financial costs requires necessary decrease in EBIT level. B. Financial leverage helps considerably the finance manager while devising the
capital structure of a company. C. One of the objectives of planning an appropriate capital structure is to
maximize the EPS. (Earning per share) D. Financial leverage indicates the percentage change in EPS in relation to a
percentage change in EBIT. Ans.: (A) Increase in fixed financial costs requires necessary decrease in EBIT level.
Page | 104
38. An engineering company‟s actual output is 40,000 units against its installed
capacity of 60,000 units . The contribution margin per unit is Rs 40. What would be the operating leverage when fixed costs is Rs 12,00,000? A. 5.00
B. 4.00 C. 2.00
D. 1.33
Ans : (B) 4.00
Solution:
Operating leverage = contribution
____________
EBIT
Total contribution = Actual output * margin per unit
= 40,000 * 40
Total contribution = 16,00,000
Fixed costs = 12,00,000 (given)
EBIT= Total contribution – Fixed cost
= 16,00,000 – 12,00,000
EBIT = 4,00,000
Operating leverage = contribution
____________
EBIT
= 16,00,000
_________
4,00,000
Operating leverage = 4
39. Zenith Ltd‟s income statement are as follows: Sales : Rs 10,50,000 , variable costs : Rs 7,67,000 , Fixed costs : Rs 75,000 Interest : Rs 1,10,000 Tax rate : 30% . What would be the degree of operating leverage (DOL) of the company ? A. 1.36 B. 1.37
C. 1.00
D. 0.74
Ans : (A) 1.36
Page | 105
Solution :
Operating leverage = c
_______
EBIT
C = sales – variable costs
= 10,50,000-75000
C = 283000
EBIT = C- fixed costs
= 283000- 75000
EBIT = 208000
Operating leverage= C
_______
EBIT
= 283000 / 208000
= 1.36
40. Give idea of trading on equity on basis of balance sheet given below Balance sheet of Raj company Ltd. As on 31.3.2021
Liabilities Amt. Assets Amt.
Equity share capital 50,000 Sundry Assets 3,00,000
6% preference share
capital
75000
5% debentures 1,00,000
Reserve & surplus 25,000
Other liabilities 50,000
Total 3,00,000 Total 3,00,000
A. 50% B. 60%
C. 40%
D. None of these
Ans : (A) 50%
Page | 106
Solution : Trading on Equity = debts/ assets * 100
= debts + other liabilities / assets * 100
= 1,00,000 + 50,000 / 3,00,000 * 100
= 1,50,000 / 3,00,000 * 100
Trading on equity = 50%
41. Working capital means ____________.
a. Current liability minus Current assets
b. Current assets minus Current liability c. Total fixed assets
d. Total liability
Ans: b. Current assets minus Current liability
42. Requirement of working capital will remain continuously for production and __________ activities of business.
a. For Fixed assets
b. For Fixed capital
c. Sales d. All of given
Ans: c. Sales
43. In comparison to fixed capital _________ fluctuation is seen in working capital.
a. Less
b. Temporary
c. More d. Balance
Ans: c. More
44. Working capital is also known as ______.
a. Fluctuating capital
b. Temporary capital
c. Short term capital
d. All of given
Ans: d. All of given.
Page | 107
45. Working capital remains in current assets but these current assets are converted into cash after completion of production and sale process, this element is known as ________.
a. Cash liquidity b. Cash management
c. Cash balance
d. Petty cash
Ans: a. Cash liquidity
46. ____________means the difference between book value of current assets and current liability.
a. Total capital
b. Total working capital
c. Net working capital d. Assets
Ans : c. Net working capital
47. _______________ and __________ are types of working capital.
a. Permanent and flexible b. Current and fixed assets
c. Current and fixed liability
d. None
Ans : a. Permanent and flexible
48. ___________ and ___________ are types of permanent working capital.
a. Seasonal and Initial
b. Seasonal and Special
c. Regular and Initial d. Special and regular
Ans : c Regular and Initial
49. _____________ and __________ are types of flexible working capital.
a. Seasonal and Initial
b. Seasonal and Special c. Regular and Initial
d. Special and regular
Ans : b. Seasonal and Special
Page | 108
50. Working capital locked in raw material is known as __________.
a. Regular b. Initial
c. Seasonal
d. Special
Ans : a. Regular
51. which of the given is not a type of working capital?
a. Initial working capital
b. Regular working capital
c. Seasonal working capital
d. All are types of working capital
Ans: d. All are types of working capital
52. It is that part of working capital which is permanently locked in current assets is known as ____________
a. Permanent working capital b. Seasonal working capital
c. Special working capital
d. Regular working capital
Ans: a. Permanent working capital
53. Which of the following is not a feature of working capital?
a. Short term needs
b. Liquidity
c. Less risky
d. All are the features of working capital
Ans: d. All are the features of working capital
54. Which are the factors that affect the determine working capital requirement in the business
a. Size of business
b. Production policy
c. Nature of business
d. All given are the factors that affect determine working capital requirement.
Ans: d. All given are the factors that affect determine working capital requirement.
Page | 109
55. ____________ are the principles of working capital.
a. Principles of optimisation
b. Principles of Variation
c. Principles of cost of capital
d. All give are principles
Ans: d. All give are principles
56. __________ is not a components of working capital.
a. Cash
b. Debtors and receivable
c. Inventory
d. Profit
Ans : d. Profit
57. The additional working capital required for meeting with the emergency is known as ____________.
a. Permanent working capital
b. Seasonal working capital
c. Special working capital d. Regular working capital
Ans: c. Special working capital
58. Which of the following is not the objective to hold the cash?
a. Business transaction
b. Speculative motive
c. Modernization
d. Sales Promotion
Ans : d. Sales Promotion
59. Which of the following is not a type of inventory?
a. Raw material
b. Semi – Finished
c. Work in progress
d. None of given.
Ans: d. None of given
Page | 110
60. __________ are different expenses involved in holding inventories.
a. Ordering cost
b. Carrying cost
c. Set-up cost
d. Banking expenses
Ans : d. Banking expences
61. Bank provides OD facility to satisfy __________ need of a customer.
a. Permanent
b. Temporary c. Long term
d. None
Ans : b. Temporary
62. Cash management involves the ________ factors.
a. Cash inflow
b. Cash outflow
c. Optimum investment of surplus
d. All factors
Ans: d. All factors
63.___________ are Objectives of maintaining receivables.
a. To achieve growth in sales
b. To increase profit
c. Meet competition
d. All
Ans: d. All
64. Inventory is the ______ property.
a. Tangible b. Intangibles
c. Various forms
d. Continuous
Ans: a. Tangible
Page | 111
65. The waste materials arising during manufacturing is known as ________.
a. Scarp b. Raw material
c. WIP
d. Supplies
Ans: a. Scrap
66. The cost of capital is the ________ acceptable rate of return on funds committed to the project.
a. Maximum
b. Minimum c. More
d. Less
Ans : b. Minimum
67. Write Full form if ROI.
a. Rate of interest b. Rate for interest
c. Rate of investment
d. Rate of return
Ans : a. Rate of interest
68. The minimum estimated rate of return of an investment is called the _______ rate.
a. Optimum rate
b. Minimum rate
c. Maximum rate
d. Cut – off rate
Ans : d. Cut-off rate
69. _________ cost is the cost of capital raised in the past.
a. Historical b. Future
c. Combined
d. Implicit
Ans : a. Historical
Page | 112
70. The total cost of capital obtained from the different sources of finance is called as ______ cost.
a. Historical
b. Future
c. Combined d. Implicit
Ans : c. Combined
71. .Combined cost is also known as __________.
a. Explicit cost
b. Weighted cost c. Future cost
d. Average cost
Ans : b. Weighted cost
72. ______________formula of Cost of Debts.
a. COC = I/P x 100 b. COC = P/I x 100
c. COC = P/I( 1-t) x 100
d. COC =I(1-t)/(f-p)(1-t)
Ans: a. COC = I/P x 100
73. ______ is the significance of Cost of capital.
a. Issue of new securities
b. Financial decisions
c. Capital Budgeting
d. ALL
Ans: d. All
74. Certain costs incurred to issue the shares and debenture is known as _____.
a. Flotation cost b. Capital cost
c. Fixed cost
d. Variable cost
Ans: a. Flotation cost
Page | 113
75. Flotation cost is calculated on _________ value.
a. Face value b. Market cost
c. Fix value
d. After cost
Ans: a. Face value
76. Business capital is broadly divided into ____ & _______ types.
a. Fixed and variable
b. Fixed and working c. Variable and fixed
d. Fixed and permanent
Ans : b. Fixed and working
77. _______ is the formula for calculating cost of debenture.
a. Kd= R/P b. Kd= P/R
c. Kd= (1-t)
d. Kd= (F-P)
Ans: a. Kd= R/P
78. When management issues irredeemable debentures, Company can not return its capital it is known as _______.
a. Perpetual debt b. Debts
c. Capital assets pricing model
d. None
Ans : a. Perpetual debt
79. Write full form of CAPM.
a. Capital assets pricing model b. Capital assets price model
c. Current liability price model
d. Current assets price model
Ans : a. Capital assets pricing model
Page | 114
80. ____________ and ____________ are approaches for computation of cost of equity share capital.
a. Cost and earning
b. Dividend and earning c. Dividend and cost
d. Dividend and income
Ans: b. Dividend and earning
81. _______________ is the firms formal process for the acquisition and investment of capital.
a. Cost of capital
b. Capital budgeting c. Cash budgeting
d. Production budgeting
Ans: b. Capital budgeting
82. Which of the following is not the characteristic of capital budgeting?
a. Long term capital investment
b. Not a daily event
c. Policy oriented problem
d. Maintaining market value of share.
Ans: d. Maintaining market value of share
83. Write full form of PI.
a. Profitability index b. Profit index
c. Profit investment
d. Profitability investment
Ans : a. Profitability index
84. _________ is not a disadvantage of profitability index.
a. Incorrect comparison
b. Estimates cost of capital
c. Easy to understand d. None
Ans : c. Easy to understand
Page | 115
85. _________ is not the a method of capital budgeting.
a. Pay-back period
b. Net present value
c. Average rate of return
d. None
Ans: d. None
86. Write full form of ARR.
a. Average rate of return method b. Average rate of return on money
c. Aggregate rate of return
d. Aggregate rate of return on money
Ans : a. Average rate of return method
87. _____________ is the formula of Rate on return.
a. Total expected return / Total capital investment X 100 b. Total expected return / No. of years of income
c. Average annual return / Average capital investment X 100
d. Present value of cash inflow / Present value of investment
Ans : a. Total expected return / Total capital investment X 100
88. ____________ is the formula of Profitability Index.
a. Total expected return / Total capital investment X 100
b. Total expected return / No. of years of income
c. Average annual return / Average capital investment X 100
d. Present value of cash inflow / Present value of investment
Ans : d. Present value of cash inflow / Present value of investment
Page | 116
JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Subject: Commercial Communication
Page | 117
JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Subject: Commercial Communication
(Multiple Choice Questions)
1) The old man had to be taken to the hospital because:
(a) Pete beat him up and robbed him
(b) he hadn't eaten a thing for three days
(c) he had eaten way too much food that day
Correct Option: (b) he hadn't eaten a thing for three days
2) The old ladies gave Pete dinner because:
(a) he is their closest living relative
(b) he was kind to them the previous day
(c) he was the first poor person to walk by
Correct Option: (c) he was the first poor person to walk by
3) Pete came and took a bench in Union Square:
(a) because he was tired after his morning exercise
(b) out of habit
(c) the Old Gentleman had asked him to do so
Correct Option: (b) out of habit
Page | 118
4) The Old Gentleman and Pete walked south:
(a) to the Old Gentleman's house where each year Pete had his Thanksgiving
Day dinner
(b) to the house of two old ladies where each year Pete had his Thanksgiving
Day dinner
(c) to the same restaurant where each year Pete had his Thanksgiving Day
dinner
Correct Option: (c) to the same restaurant where each year Pete had his
Thanksgiving Day dinner
5) The old man was:
(a) tall and fat and sixty years old
(b) tall and thin and sixty years old
(c) tall and unsteady and seventy years old
Correct Option: (b) tall and thin and sixty years old
6) At the restaurant, Pete ate:
(a) soup, oysters, roast turkey, and pie
(b) soup, fish, roast chicken, and peas
(c) soup, oysters, fried turkey, and cake
Correct Option: (a) soup, oysters, roast turkey, and pie
7) Pete was brought to the two old ladies by:
(a) the old man
(b) their servant
(c) the restaurant owner
Correct Option: (b) their servant
Page | 119
8) Pete used to come to Union Square every Thanksgiving Day
(a) for nine years
(b) for six years
(c) since his childhood
Correct Option: (a) for nine years
9) It was the month of_________ when this story took place: (a) October
(b) November
(c) December
Correct Option: (b) November
10) Pete had to be taken to the hospital because: (a) he had an attack of indigestion
(b) he had a heart attack
(c) he had an attack of asthma
Correct Option: (a) he had an attack of indigestion
11) When we are inwardly afraid: (a) we dread to stand alone
(b) we don't dread to stand alone
(c) we dread to admire
Correct Option: (a) we dread to stand alone
12) The older the civilization:
(a) The greater the weight of tradition
(b) The greater the scope of political freedom
(c) The greater the presence of good values
Correct Option: (a) The greater the weight of tradition
Page | 120
13) We try to enrich ourselves outwardly by clinging to „people, to
position, to property‟ because:
(a) we must show off our wealth
(b) we can achieve more strength by doing this
(c) we suffer from inward poverty
Correct Option: (c) we suffer from inward poverty
14) The tendency to imitate others destroys our: (a) self-confidence
(b) initiative
(c) development
Correct Option: (b) initiative
15) For people who are inwardly insufficient and empty, ____________ matters a great deal.
(a) purity
(b) devotion
(c) tradition
Correct Option: (c) tradition
16) Ned was going to (a) pictures
(b) horse riding
(c) para gliding
Correct Option: (a) pictures
17) J. Krishnamurti advises us to be free from: (a) good customs and good habits
(b) blind beliefs and traditions
(c) polite way of life
Correct Option: (b) blind beliefs and traditions
Page | 121
18) Real Freedom is written by:
(a) Sudha Murty
(b) R.K Narayan
(c) J. Krishnamurti
Correct Option: (c) J. Krishnamurti
19) A_____________ questions everything and finds the inner truth of the world around us. (a) closed mind
(b) narrow mind
(c) free mind
Correct Option: (c) free mind
20) Two Thanksgiving Day Gentlemen is written by: (a) B. R Ambedkar
(b) Mark Twain
(c) O. Henry
Correct Option: (c) O. Henry
21) Thanksgiving Day is a very special holiday in
(a) United Kingdom
(b) United States
(c) United Arab Emirates
Correct Option: (b) United States
22) In the school bus, someone started to talk about:
(a) pizzas
(b) marbles
(c) chess
Correct Option: (b) marbles
Page | 122
23) When the last boy was out, the school bus: (a) stood in the campus
(b) waited for another trip
(c) rolled out of the gates
Correct Option: (c) rolled out of the gates 24) He always liked Saturdays because:
(a) the school was closed that day
(b) the next day was Sunday
(c) he used to stay alone at home that day
Correct Option: (b) the next day was Sunday
25) The class used to begin at: (a) half past eight
(b) half past seven
(c) half past nine
Correct Option: (a) half past eight
26) On Saturdays, the last hour of school, they used to spend in the: (a) library
(b) playground
(c) laboratory
Correct Option: (b) library
27) He was waiting to eat________ after going back home:
(a) lemon soup
(b) lemon tart
(c) lemon pie
Correct Option: (c) lemon pie
Page | 123
28) He had lunch:
a) With the teachers and a few other day scholars
b) With the boarders and a few other teachers
c) With the boarders and a few other day scholars
Correct Option: (c) With the boarders and a few other day scholars
29) He started to stay in ______after his mother died.
(a) his aunt's house
(b) his grandfather's house
(c) his maternal uncle's house
Correct Option: (a) his aunt's house
30) What did the boy always do in the Arithmetic class?
(a) fall asleep
(b) look outside the window
(c) make fun of the teacher
Correct Option: (a) fall asleep
31) After returning from America, Rakesh:
(a) joined a private hospital
(b) joined a city hospital
(c) opened his personal chamber
Correct Option: (b) joined a city hospital
32) Rakesh‟s father: (a) was a vegetable seller
(b) owned a grocery store
(c) worked under a kerosene dealer
Correct Option: (c) worked under a kerosene dealer
Page | 124
33) From his American colleagues, Rakesh won:
(a) economics
(b) encomiums
(c) encouragements
Correct Option: (b) encomiums
34) As a dessert, Rakesh allowed his father to eat:
(a) halwa
(b) kheer
(c) laddu
Correct Option: (b) kheer
35) The car Rakesh bought for his parents was a
(a) sky-blue Ambassador
(b) white Maruti
(c) black Ambassador
Correct Option: (a) sky-blue Ambassador
36) Rakesh‟s father bribed his grandchildren for:
(a) betel leaf
(b) bhujia
(c) sweets
Correct Option: (c) sweets
37) Rakesh‟s father told his neighbour, Mr. Bhatia that:
(a) his son beats him regularly
(b) his son deprives him of food
(c) his son does not talk to him
Correct Option: (b) his son deprives him of food
Page | 125
38) Varmaji‟s diet was:
(a) dry bread, boiled lentils, boiled vegetables and, boiled chicken or fish
(b) dry bread, boiled lentils, sautéed vegetables and boiled chicken or fish
(c) dry bread, fried lentils, boiled vegetables and, boiled chicken or fish
Correct Option: (a) dry bread, boiled lentils, boiled vegetables and, boiled chicken or fish
39) Rakesh‟s mother gloated chiefly over the fact that her son _______in America.
(a) did not marry
(b) studied medicine
(c) did not decide to stay
Correct Option: (a) did not marry
40) Rakesh‟s wife was a ________ girl (a) plump and educated
(b) beautiful and uneducated
(c) plump and uneducated
Correct Option: (c) plump and uneducated
41) Rakesh had begun keeping a check on his father's food because he: (a) was worried about his health
(b) did not have enough money to feed his father
(c) was a careless and selfish son.
Correct Option: (a) was worried about his health
42) Rakesh‟s father secretly gave ______ paise to his grandchild to bring jalebis for him.
(a) forty
(b) fifty
(c) sixty
Correct Option: (b) fifty
Page | 126
43) Varma‟s ultimate request to his son was to allow him to _____.
(a) die
(b) live peacefully alone
(c) commit suicide
Correct Option: (a) die
44) Monsieur Lantin had fallen in love with a girl who was the:
(a) daughter of a clergyman
(b) daughter of a provincial tax collector
(c) daughter of a vicar
Correct Option: (b) daughter of a provincial tax collector
45) Monsieur Lantin once worked as a chief clerk in the:
(a) Department of Interior
(b) Department of Investigation
(c) Department of Finance
Correct Option: (a) Department of Interior
46) Monsieur Lantin‟s wife was fond of:
(a) imitation jewellery and dresses
(b) ornaments and theatre
(c) jewellery and food
Correct Option: (b) ornaments and theatre
47) Monsieur Lantin thought women‟s real ornaments are:
(a) beauty and honesty
(b) modesty and honesty
(c) beauty and modesty
Correct Option: (c) beauty and modesty
Page | 127
48) Monsieur Lantin sold his wife‟s necklace for:
(a) fifteen thousand francs
(b) eighteen thousand francs
(c) sixteen thousand francs
Correct Option: (b) eighteen thousand francs
49) The day Monsieur Lantin sold his late wife‟s Jewellery: (a) he had lunch at Voisin’s, and drank wine worth thirty francs a bottle
(b) he had lunch at Voisin’s, and drank wine worth twenty francs a bottle
(c) he had lunch at Victor’s, and drank wine worth twenty francs a bottle
Correct Option: (b) he had lunch at Voisin‟s, and drank wine worth twenty francs a bottle
50) Apart from the necklace, the other ornaments were worth: (a) one hundred and forty-five thousand francs
(b) one hundred and thirty-three thousand francs
(c) one hundred and forty-three thousand francs
Correct Option: (c) one hundred and forty-three thousand francs
51) Monsieur Lantin‟s second wife was: (a) a very virtuous woman; but had a violent temper
(b) a very virtuous woman; but had a soft temper
(c) a promiscuous woman; and had a violent temper
Correct Option: (a) a very virtuous woman; but had a violent temper
52) After____ years of marriage, Monsieur Lantin loved his wife even more than he did on the first day.
(a) 5
(b) 6
(c) 7
Correct Option: (b) 6
Page | 128
53) Monsieur Lantin suddenly became rich by:
(a) winning a lottery ticket
(b) inheriting property from his father
(c) selling his wife’s jewels
Correct Option: (c) selling his wife‟s jewels
54) Bullish trend means_____
(a) Decreasing prices
(b) Rising prices
(c) Stagnant price
Correct Option: (b) Rising prices
55) Factor causing Bearish Trend
(a) Disturbed world situation
(b) Good terms with neighbours
(c) Bull support
Correct Option: (a) Disturbed world situation
56) Slump means
(a) Artificial rise to make a profit
(b) A list of shares
(c) A marked fall in prices
Correct Option: (c) A marked fall in prices
57) Wall Street is
(a) Mall in Sydney
(b) New York stock exchange
(c) In Mumbai
Correct Option: (b) New York stock exchange
Page | 129
58) Rig means
(a) Artificial rise to make profit
(b) Working hours
(c) Demand
Correct Option: (a) Artificial rise to make profit
59) Nose diving is _____
(a) A swimming style
(b) Nose exercise
(c) When prices of shares go down suddenly
Correct Option: (c) When prices of shares go down suddenly
60) Jittery indicates_____
(a) Falling prices
(b) Shivering
(c) Constant buying
Correct Option: (a) Falling prices
61) Blue chips is
(a) List of shares sold on Monday
(b) Dull market
(c) Shares of leading companies that are in good demand
Correct Option: (c) Shares of leading companies that are in good demand
62) Flutter indicates_____
(a) Nervousness
(b) Keen interest
(c) Ready to fly
Correct Option: (a) Nervousness
Page | 130
63) Punter is_____
(a) A person who goes hunting
(b) A person who bets
(c) A person who gets beaten
Correct Option: (b) A person who bets
64) Undertone shows_____
(a) New fashion trends
(b) How to speak
(c) Future tendency of the market
Correct Option: (c) Future tendency of the market
65) Boom is_____
(a) Pop song
(b) Period of high volume and rising prices
(c) Loud sound in a factory
Correct Option: (b) Period of high volume and rising prices
66) Divergent trend is_____
(a) Bullish trend in some shares and bearish in others
(b) Cheerful condition
(c) Unfavourable market
Correct Option: (a) Bullish trend in some shares and bearish in others
67) Face value means_____
(a) Look in the mirror
(b) Prices are steady
(c) Value of shares in the primary market
Correct Option: (c) Value of shares in the primary market
Page | 131
68) Jobber is_____
(a) Member of the stock market
(b) Member of parliament
(c) Member of a gang
Correct Option: (c) Member of a gang
69) Liquidation is_____
(a) Constant selling
(b) Constant buying
(c) Constant nagging
Correct Option: (a) Constant selling
70) Listless indicates
(a) No mood to sing
(b) Dull market
(c) Bull market
Correct Option: (b) Dull market
71) Kerb Deals means_____
(a) Prices were higher than before
(b) Prices were lower than before
(c) Trading not registered at the stock market
Correct Option: (c) Trading not registered at the stock market
72) Pari Passu
(a) Simultaneous progress
(b) Gradual progress
(c) Swift progress
Correct Option: (a) Simultaneous progress
Page | 132
73) Speculation is
(a) Buying or selling not for investment
(b) To buy or not to buy
(c) To sell or not to sell
Correct Option: (a) Buying or selling not for investment
74) Business Reports are of two types
(a) Individual Report and Committee Report
(b) Individual Report and Press Report
(c) Individual Report and Technical Report
Correct Option: (a) Individual Report and Committee Report
75) The process of purchasing goods or services from foreign country is known as_____
(a) Process
(b) Export
(c) Import
Correct Option: (c) Import
76) Bohemian means______ (a) One who is a brahmin
(b) One who is a vegetarian
(c) One who lives an unconventional life.
Correct Option: (c) One who lives an unconventional life.
77) Fatigue means (a) A country
(b) A habit
(c) Tiredness
Correct Option: (c) Tiredness
Page | 133
78) Monsieur Lantin was a _____
(a) Chief clerk
(b) Banker
(c) Interior designer
Correct Option: (a) Chief clerk
79) Bedlam means _____
(a) Uproar and confusion
(b) A place with a bed
(c) A resort with spa
Correct Option: (a) Uproar and confusion
80) A devoted son is written by
(a) Kiran Desai
(b) Anita Desai
(c) Shashi Despande
Correct Option: (b) Anita Desai
Page | 134
JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Subject: Business Law
Page | 135
JG COLLEGE OF COMMERCE
Affiliated to Gujarat University
T.Y.B.Com. Sem. 6
Subject: Business Law
(Multiple Choice Questions)
1. Which of the following is not a special contract under Indian Contract Act, 1872? (a) Contract of Indemnity
(b) Contract of Guarantee
(c) Contract of Bailment
(d) Contract of Sale
Correct Option: (d) Contract of Sale
2. A contract of Indemnity is a contract for __________. (a) Rectification of Mistake
(b) Increase of Damages
(c) Protection Against Loss
(d) New offer against Old Offer
Correct Option: (c) Protection Against Loss 3. Under the Contract of Indemnity, the given Promise is for Protection
for loss caused by _________. (a) Promisor Himself
(b) Any other Person
(c) Both
(d) None
Correct Option: (c) Both.
4. If the Loss occurs because of an accident and not in the manner stated in the contract, Compensation must be paid by Indemnifier. The Given Statement is ________.
(a) True
(b) False
(c) Both
(d) None
Correct Option: (b) False
Page | 136
5. The person whose loss is bear by promiser is known as _______. (a) Indemnifier
(b) Indemnity holder
(c) Guarantor
(d) Creditor
Correct Option: (a) Indemnifier 6. In a contract of guarantee there are ______ parties.
(a) Two
(b) Three
(c) Four
(d) Five
Correct Option: (b) Three
7. If principal debtor is adjudged insolvent as per law, the surety ____be discharged from its liability.
(a) Will
(b) Will not
(c) Partly
(d) Can
Correct Option: (b) Will not 8. A _______ is a contract to perform the promise or discharge the
liability of third person in a case of principal debtor‟s default. (a) Contract of Indemnity
(b) Contract of guarantee
(c) Contract of agency
(d) Contract of pledge
Correct Option: (b) Contract of guarantee
9. In case of contract of indemnity, the liability of promiser is of __________Nature.
(a) Fiction
(b) Primary
(c) Secondary
(d) None
Correct Option: (b) Primary
Page | 137
10. Under Contract of Guarantee, because of which reason Surety is discharged from his liability?
(a) Illness of Surety
(b) Surety going to foreign Country
(c) Surety transfer in other state
(d) Change in terms of contract
Correct Option: (d) Change in terms of contract
11. If Surety remains silent after informing him about the changes in the terms of contract of guarantee is said ___________.
(a) Free Consent
(b) Not to be Consent
(c) To be Implied Consent
(d) Consent
Correct Option: (b) Not to be Consent
12. Guarantee Contract Extends to Series of transactions is called_________.
(a) Specific Guarantee
(b) Special Guarantee
(c) Continuing Guarantee
(d) Alternative Guarantee
Correct Option: (c) Continuing Guarantee
13. Surety for his possible loss can make _________ for total debt or its part.
(a) Contract of Sale
(b) Contract of Agency
(c) Contract of Guarantee
(d) Contract of Indemnity
Correct Option: (d) Contract of Indemnity
14. Guarantee which is limited to a single transaction is called _________. (a) Continuous Guarantee
(b) Continuing Guarantee
(c) Specific Guarantee
(d) Separate Guarantee
Correct Option: (c) Specific Guarantee
Page | 138
15. Under the contract of guarantee, can the surety file a suit against the principal debtor?
(a) Yes
(b) No
(c) Both
(d) None
Correct Option: (a) Yes
16. How many contracts can be formed under the contract of indemnity? (a) One
(b) Two
(c) Three
(d) Four
Correct Option: (a) One
17. In contract of guarantee, the liability of surety will arise ________. (a) When principal debtor makes payment
(b) When principal debtor promises to make payment
(c) When principal debtor defaults the payment
(d) When creditor denies to accept payment
Correct Option: (c) When principal debtor defaults the payment
18. Can minor be a Principal debtor in case of contract of guarantee? (a) Yes
(b) No
(c) Both
(d) None
Correct Option: (a) Yes
19. Revocation of guarantee can be done by____ . (a) By Notice
(b) By death of surety
(c) By novation of contract
(d) All of the above
Correct Option: (d) All of the above
Page | 139
20. Which of the following is not an exception to continuing guarantee? (a) Guarantee for honesty of a person for his appointment
(b) Guarantee for a payment of a certain sum of money by instalment
within a definite time
(c) When the consideration of guarantee is of a single nature
(d) None of the above.
Correct Option: (d) None of the above 21. Who has to prove the quantum of liability of surety?
(a) Debtor
(b) Creditor
(c) Surety
(d) Third party
Correct Option: (b) Creditor
22. Which of the following right of surety against the principal debtor? (a) Right to recover damages
(b) Right to recover the amount paid
(c) Right to have amount of interest
(d) Right to issue a notice.
Correct Option: (c) Right to have amount of interest
23. Which of the following right is not included in the rights of surety against the creditor?
(a) Right to set off
(b) Right to appoint surety
(c) Right of security
(d) Right to retrench from service
Correct Option: (b) Right to appoint surety
24. In which of the following circumstances surety will be discharged from his responsibility?
(a) By giving a notice
(b) By death of surety
(c) By loss of security
(d) All of the Above.
Correct Option: (d) All of the above
Page | 140
25. Which of the following is not considered invalid? (a) Guarantee by mutual consent
(b) Guarantee obtained by keeping silence
(c) Failure of co surety join as Surety
(d) Unlawful Consideration
Correct Option: (a) Guarantee by mutual consent
26. In case of Bailment, Delivery of Goods will be done _________ Purpose.
(a) Permanent
(b) Temporary
(c) Long term
(d) None
Correct Option: (b) Temporary
27. Contract of bailment is done for __________. (a) Money
(b) Building
(c) Motor Car
(d) All of the Above
Correct Option: (C) Motor Car
28. When goods are physically handed over to the bailee by the bailor is known as _____________.
(a) Actual Delivery
(b) Temporary Delivery
(c) Constructive Delivery
(d) None of the Above
Correct Option: (a) Actual Delivery
29. Which of the following is not a characteristic of bailment? (a) Specific Purpose
(b) Specific Time limit
(c) Return of Goods
(d) Fixed Assets
Correct Option: (d) Fixed Assets
Page | 141
30. _________ bailment would be either for the exclusive benefits of either bailor or Bailee.
(a) Gratuitous Bailment
(b) Non- Gratuitous Bailment
(c) General Bailment
(d) None
Correct Option: (a) Gratuitous Bailment 31. Which of the following is not a duty of bailor?
(a) Disclose Known Facts
(b) Bear Necessary Expenses
(c) Indemnify Bailee
(d) None
Correct Option: (d) None
32. Which of the Following is not included in types of Bailment? (a) Deposit type Bailment
(b) Hire type Bailment
(c) Sale of Goods on Credit
(d) Goods given for Carriage
Correct Option: (c) Sale of Goods on Credit
33. Which of the following is a duty of bailee? (a) Duty to take Reasonable Care
(b) Duty of Disclose of Facts
(c) Duty to pay necessary expenses
(d) All of the Above
Correct Option: (a) Duty to take Reasonable Care
34. Under contract of bailment, mixing of goods made without the Consent of bailor which are not Separable then the Bailee Shall __________.
(a) Bear the separation expenses
(b) Compensate all the damages
(c) Bear loss Proportionately
(d) None.
Correct Option: (b) Compensate all the damages
Page | 142
35. The right to retain the goods, till the demands are unsatisfied is called______.
(a) Pledge
(b) Bailment
(c) Lien
(d) None
Correct Option: ( c) Lien
36. Partnership firm is separate legal entity from its partners. True or False.
(a) True
(b) False
(c) Partly True
(d) Partly False
Correct Option: (b) False
37. Minimum number of members in case of Public Company? (a) 1
(b) 2
(c) 5
(d) 7
Correct Option: (d) 7
38. Maximum number of members in case of Private Company? (a) Unlimited
(b) 50
(c) 200
(d) 7
Correct Option: (c) 200
39. Minimum number of directors in case of a Public Company is ______. (a) 1
(b) 2
(c) 3
(d) 4
Correct Option: (c) 3
Page | 143
40. What is known as a charter of a company? (a) Memorandum of Association
(b) Bye Laws
(c) Articles of Association
(d) Prospectus
Correct Option: (a) Memorandum of Association
41. How company‟s name can be Changed? (a) An ordinary Resolution
(b) By a Special Resolution
(c) The approval of the central government
(d) A Special Resolution and with the Approval of the Central
Government
Correct Option: (d) A Special Resolution and with the Approval of the Central Government
42. As per schedule I, form of Memorandum of Unlimited Company not having share capital is mentioned in which Table?
(a) Table A
(b) Table B
(c) Table C
(d) Table D
Correct Option: (d) Table D
43. Registered office of the company should be verified and such verification should be sent to registrar within ____________ Days of incorporation.
(a) 30 days
(b) 60 days
(c) 15 days
(d) 10 Days
Correct Option: (a) 30 days
44. The outsider or the 3rd party dealing with the company shall have knowledge of the MOA and AOA of the Company but they need not have knowledge process of Company, is called as…………….
(a) Doctrine of Ultra Virus
(b) Doctrine of Constructive Notice
(c) Doctrine of Indoor Management
(a) None of the Above
Correct Option: (a) Doctrine of Ultra Virus
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45. The total managerial remuneration to the directors and the manager in respect of any financial year must not exceed ______ percent of the net profit.
(a) 3%
(b) 5%
(c) 11%
(d) 10%
Correct Option: (c) 11%
46. A person cannot work as a managing director of more than how many companies at a time?
(a) Two
(b) Three
(c) Four
(d) Five
Correct Option: (c) Four
47. Which of the following is not an ownership Security? (a) Equity Share
(b) Debenture
(c) Preference Share
(d) None
Correct Option: (b) Debentures
48. Whose Signature is required on share Certificate? (a) Company Secretary
(b) Two Directors
(c) Two Directors and Company Secretary
(d) All Directors
Correct Option: (c) Two Directors and Company Secretary
49. Private Companies raises its funds (Capital) through issue of prospectus by inviting public for Subscription. True or False
(a) True
(b) Partly True
(c) False
(d) Partly False
Correct Option: (c) False
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50. Memorandum of Association regulates the relationship with which parties?
(a) Outsiders
(b) Shareholders
(c) Employees
(d) Management
Correct Option: (a) Outsiders
51. Consumer Protection Act is applicable to whom? (a) Immovable Goods
(b) Movable Goods
(c) Specific Goods
(d) All Goods and Services
Correct Option: (d) All Goods and Services
52. Under the consumer protection act which is not included in the Term of “Goods”?
(a) Share-Stock
(b) Currency Note
(c) Grass on the Land
(d) Packing Material
Correct Option: (b) Currency Notes
53. The rights of consumer as per consumer protection act does not included the right to be_________.
(a) Informed
(b) Heard
(c) Safety
(d) Presented
Correct Option: (d) Presented
54. Which of the following options is not included in redressal forum according to the consumer Protection?
(a) Lok Adalat
(b) District Level Forums
(c) State Level Commission
(d) National Level Commission
Correct Option: (a) Lok Adalat
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55. Which organisation are created to advice and assist the consumers in seeking and enforcing their rights in India?
(a) C.P.C
(b) CERC
(c) CUTS
(d) CCC
Correct Option: (a) C.P.C
56. How many members exist in the district level forum? (a) Three
(b) Two
(c) Four
(d) Five
Correct Option: (a) Three
57. Which of the following is not considered as the exploitation of consumer?
(a) Misleading advertisement
(b) Hoarding of Goods
(c) Quality Product-High Price
(d) Low Quality- High Price
Correct Option: (c) Quality Product-High Price
58. Up to how much maximum amount of redressal is done by state level commission?
(a) Rs. 50 lakhs
(b) Rs. 25 lakhs
(c) Rs. 1 crore
(d) Rs. 70 lakhs
Correct Option: (c) Rs. 1 crore
59. The Central Council shall convene at least ______ meeting every year. (a) Two
(b) One
(c) Three
(d) Four
Correct Option: (b) one
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60. What is a maximum age limit of a person who can be a member in national commission is _________?
(a) 65 Year
(b) 60 Year
(c) 50 Year
(d) 70 Year
Correct Option: (d) 70 Year
61. The Complaint be in consumer within _________ of cause occurred. (a) 6 months
(b) 1 year
(c) 2 year
(d) 3 Months
Correct Option: (c) 2 Year
62. Appeal against the national forum can be done in _______. (a) District Court
(b) High Court
(c) Supreme Court
(d) Taluka Court
Correct Option: (C) Supreme Court
63. An appeal against the order of state consumer dispute redressal commission can be done in ___________.
(a) 30 Days
(b) 15 Days
(c) 7 Days
(d) 21 Days
Correct Option: (a) 30 Days
64. How Many Rights are avail to consumers under consumer Protection Act?
(a) Seven
(b) Eight
(c) Five
(d) Six
Correct Option: (d) Six
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65. When the day on which a promissory note or bill of exchange Is at maturity is a public holiday, the instrument shall be deemed to be due on the………………
(a) Next Preceding Business Day
(b) Previous Business Day
(c) On the Same Date
(d) Any of the Above
Correct Option: (a) Next Preceding Business Day
66. When the Negotiable Instrument Act enacted in India? (a) 1950
(b) 1882
(c) 1872
(d) 1881
Correct Option: (d) 1881
67. Negotiable Instrument is always given in lieu of valuable _______. (a) Ornaments
(b) House
(c) Consideration
(d) Materials
Correct Option: (c) Consideration
68. The property in a negotiable instrument passes to a _______ transferee for value.
(a) Mala fide
(b) Bona fide
(c) Both a and b
(d) Can be Mala fide as well as bona fide
Correct Option: (b) Bona fide
69. Which of the following is the characteristics of Negotiable Instruments?
(a) In Writing
(b) Endorsement
(c) Must Contains Signature
(d) All of the Above
Correct Option: (d) All of the Above
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70. Which of the following is not included in the Presumptions of negotiable Instrument?
(a) Presumption of filling
(b) Presumption of Consideration
(c) Presumption of Date
(d) Presumption as to stamp
Correct Option: (a) Presumption of filling
71. Which of the following is not included in the types of Negotiable Instrument?
(a) Barer Instrument
(b) Inland Instrument
(c) Accommodation Bill
(d) Inter State Instrument
Correct Option: (d) Inter State Instrument 72. A promissory note must contain ______.
(a) Undertaking
(b) Conditional Undertaking
(c) Unconditional Undertaking
(d) can be Conditional undertaking or Unconditional undertaking
Correct Option: (C) Unconditional Undertaking
73. Person Named in the instrument to whom money is directed to be paid is known as ________.
(a) Drawer
(b) Acceptor
(c) Maker
(d) Payee
Correct Option: (d) Payee
74. Where no rate of interest is specified in the bills of exchange or promissory notes then what is the interest rate used for calculating the interest amount?
(a) 15% P.A
(b) 18% P.A
(c) 12% P.A
(d) 16% P.A
Correct Option: (b) 18% P.A
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75. How many parties Should be in the case of bill of exchange? (a) One
(b) Two
(c) Three
(d) Four
Correct Option: (c) Three
76. Which of the following is included in the essential elements of promissory notes?
(a) It must bear Stamp
(b) Amount must be Specific
(c) It must be Signed
(d) All of the Above
Correct Option: (d) All of the Above
77. Which of the following is not included in the essential elements of bills of exchange?
(a) Written Form
(b) Request Form
(c) Unconditional order
(d) Fixed Amount
Correct Option: (b) Request Form
78. Validity period for the presentation of cheque in bank is………. (a) 3 Months
(b) 6 Months
(c) 1 Year
(d) 2 Years
Correct Option: (a) 3 Months
79. How many days of grace are allowed where a note or bill, which Is not expressed to be payable on demand, at sight or on presentment?
(a) 7 days
(b) 3 days
(c) 30 Days
(d) 2 days
Correct Option: (b) 3 days
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80. Any person who for consideration became the possessor of a promissory note, bill of exchange or cheque is called as…………….
(a) Acceptor in due Course
(b) Acceptor
(c) Holder in due Course
(d) Holder
Correct Option: (c) Holder in due Course
All the best