Competitive Exams: Commerce MCQs (Practice-Test 24 of 99)

  1. Who among the following is the ‘Officer who is in default’ within the definition given under Section 5 of the Companies Act, 1956?

    1. All employees

    2. Secretary

    3. Contractor who has been assigned to complete certain work within stipulated time

    4. Supplier of raw material

  2. Under the accrual concept, which one of the following will not be shown as an asset or as a liability in the balance sheet of an entity?

    1. Interest due but not paid

    2. Interest due but not received

    3. Interest due and paid

    4. Interest paid but not due

  3. Which of the following is/are the reason (s) for centralization of authority in an organization?

    1. Specialized skills, talent and technology are neither affordable nor practical in multiple locations.

    2. Decentralization usually results in an increase in overhead and staff

    3. Recent improvements in communication technology facilitate the movement of money, credit information and data processing from a single centre of authority

    Select the correct answer using the codes given below

    1. 3 only

    2. 1 and 2

    3. 1 and 3

    4. 1, 2 and 3

  4. Consider the following statements about Management by Objectives (MBO)

    1. Effective MBO programmes usually start with the top managers who determine the organization's strategy and set preliminary goals.

    2. Employees enjoy wide autonomy in implementation of plans.

    3. Managers and employees periodically meet to review progress towards the objectives.

    Which of the statements given above is/are correct?

    1. 2 and 3

    2. 1 and 3

    3. 1 only

    4. 1, 2 and 3

  5. A particular firm provided the following data for an accounting year: Current ratio: 25: 1 Liquid ratio: 1.5: 1 Net Working capital: Rs. 6, 00, 000 Current assets and current liabilities of the firm are, respectively

    1. Rs. 9, 00, 000 and Rs. 3, 00, 000

    2. Rs. 10, 00, 000 and Rs. 4, 00, 000

    3. Rs. 8, 50, 000 and Rs. 2, 50, 000

    4. Rs. 7, 50, 000 and Rs. 1, 50, 000

  6. Match List I (Motivation Theory) with List II (Management Expert) and select the correct answer using the codes given below

    List-I List-II
    1. Hygiene Theory

    2. Theory ‘X’ and Theory ‘Y’

    3. Expectancy theory

    1. Abraham H. Maslow

    2. Victor Vroom

    3. Fredrick Hertzberg

    4. Douglas McGregor

    • A
    • B
    • C
      • 3
      • 4
      • 2
      • 1
      • 4
      • 2
      • 3
      • 2
      • 4
      • 1
      • 2
      • 4
  7. In vouching, an auditor verifies

    1. The authority of transactions only

    2. The authenticity of transactions only

    3. Both the authority and authenticity of transactions

    4. The arithmetical accuracy of the transactions only

  8. When shares are forfeited, the share capital account is debited by

    1. Paid-up amount

    2. Called-up amount

    3. Nominal value of the shares

    4. Market value of the shares

  9. Which one of the following reflects the overall efficiency with which capital is used?

    1. Return on shareholders funds

    2. Investment turnover ratio

    3. Earning per share

    4. Operating ratio

  10. The following journal entry appears in the books of X Co. Ltd. Dr (Rs. ). Cr (Rs. ). Bank A/c 96, 000 Loss on issue of debentures A/c 10, 000 To 8% debentures N/c 1, 00, 000 To premium on redemption of debentures A/c 6, 000 The debentures have been issued at

    1. Discount of 4%

    2. Discount of 6%

    3. Premium of 6%

    4. Discount of 10%

  11. A company can pay dividend out of

    1. Profits of the company for the year for which dividends are to be paid

    2. Undistributed profits of the previous financial years

    3. Money provided by the Central and State Governments for the payment of dividends in pursuance of their guarantees

    4. All of the above three

  12. A limited company has to redeem redeemable preference shares of the value of Rs. 1, 00, 000 for which the company has issued 3000 equity shares of Rs. 10 each at a premium of 10%. The amount to be transferred to capital redemption reserve account will be

    1. Rs. 1, 00, 000

    2. Rs. 97, 000

    3. Rs. 70, 000

    4. Rs. 67, 000

  13. To test the liquidity of a concern, which of the following ratios are useful?

    1. Acid test ratio

    2. Capital turnover ratio

    3. Bad debts to sales ratio

    4. Inventory turnover ratio

    Select the correct answer using the codes given below

    1. 1 and 3

    2. 1 and 4

    3. 2 and 4

    4. 2 and 3

  14. The following figures are taken from a Balance: Sheet Rs. Equity share capital: 1, 10, 000 6% Preference share capital: 30, 000 General reserve: 50, 000 Reserve for contingencies: 20, 000 6% Mortgage debentures: 50, 000 Sundry creditors: 20, 000 Preliminary expenses: 5, 000 Prepaidexpenses: 4, 000 In this case, the debt equity ratio is

    1. 1: 2

    2. 2: 1

    3. 24: 1

    4. None of the above

  15. Match List I (Type of Audit) with List II (Feature) and select the correct answer using the codes given below

    List-I List-II
    1. Continuous audit

    2. Internal audit

    3. Occasional audit

    4. Periodical audit

    1. Continuous review of the operations and records of the business by special staff

    2. Audit which is not statutory

    3. Audit convenient and useful specially in the case of small concerns

    4. Audit work carried on almost simultaneously with the recording of transactions

    • A
    • B
    • C
    • D
      • 2
      • 1
      • 4
      • 3
      • 4
      • 3
      • 2
      • 1
      • 2
      • 3
      • 4
      • 1
      • 4
      • 1
      • 2
      • 3