Competitive Exams: Commerce MCQs (Practice-Test 34 of 99)

  1. Given that the value of furniture on 1.1. 93 is Rs. 8000, furniture purchased during the year is Rs. 4, 000, sale of furniture on no loss no profit basis is Rs. 2, 000, and the furniture is valued at Rs. 7, 000 on 31.12. 93, the depreciation for the year 1993 will be

    1. Rs. 1, 000

    2. Rs. 3, 000

    3. Rs. 5, 000

    4. Rs. 7, 000

  2. Which one of the following statements is NOT correct?

    1. Bonus shares can be issued out of General Reserves

    2. Bonus shares can be issued in lieu of dividends

    3. Bonus shares, can be issued even if the shares of the company are partly paid up

    4. Bonus shares can be issued even if there is a default in the payment of any term loans outstanding to any Public

    Financial Institution

  3. Which of the following are applicable to Sinking Fund method of depreciation?

    1. Periodic depreciation is smaller than the assets actual annual depreciable cost.

    2. Amount of interest constantly declines due to assets reducing balances.

    3. Annual net incidence on Profit and Loss Account remains constant due to incorporation of only fixed depreciation.

    4. Periodic depreciation is recorded through the Asset Account.

    Select the correct answer using the codes given below:

    Codes:

    1. 2 and 4

    2. 1 and 3

    3. 1, 2 and 3

    4. 2, 3 and 4

  4. Match List I with List II and select the correct answer using the codes given below the lists:

    List-I List-II
    1. Amortisation

    2. Depreciation

    3. Depletion

    4. Obsolescence

    1. Diminution in the life of the asset due to excessive use Exhaustion of natural resource

    2. Expiration, of tangible assets

    3. Expiration of intangible assets

    4. Economic deterioration due to improved inventions

    • A
    • B
    • C
    • D
      • 1
      • 2
      • 3
      • 4
      • 1
      • 2
      • 4
      • 5
      • 5
      • 2
      • 3
      • 4
      • 4
      • 3
      • 2
      • 5
  5. Which one of the-following methods of inventory valuation matches current cost with current revenues?

    1. Last in first out

    2. First in first out

    3. Simple average

    4. Weighted average

  6. Which of the following statements are correct?

    1. Inventory includes raw materials, finished goods and goods in process.

    2. Inventory is a part of the working capital.

    3. Inventory-includes goods likely to be purchased in coming months.

    Select the correct answer using the codes given below:

    Codes:

    1. 1, 2 and 3

    2. 2 and 3

    3. 1 and 3

    4. 1 and 2

  7. The success of perpetual inventory system depends upon

    1. placing order for materials at regular intervals

    2. exercising control over the issue of materials

    3. recording the receipt and issue of materials immediately after each transaction

    4. recording the receipt of materials by storekeeper in the Bin cards

  8. Consider the following factors

    1. Margin of safety

    2. Lead time

    3. Ordering cost

    4. Economic Order Quantity

    5. Average quantity consumed

    6. Storage cost

    The ordering level is fixed by taking into account

    1. 1, 4 and 6

    2. 1, 2 and 5

    3. 2, 3 and 4

    4. 3, 5 and 6

  9. Operating Ratio is given by

    1. Total Operating Profit Total Shareholders Equity

    2. Total Operating Cost Total Operating Revenue

    3. Total Operating Cost Total Capital Employed

    4. Total Operating Profit

    Total Operating Capital

  10. Interest Coverage Ratio is given by

    1. Net Profit/Interest on Debt

    2. Debt Capital/Interest on Debt

    3. Earnings Before Interest and Taxes/Interest on Debt

    4. Profit Before Tax/Interest on Debt

  11. In a common-size balance Sheet each item is expressed as a percentage of

    1. Equity Capital

    2. Debt Capital

    3. Fixed Assets

    4. Total Assets

  12. Given that Current Ratio = 2.5 Acid-test ratio = 1.5 Net Working Capital = Rs. 60, 000 The value of Current Liabilities will be

    1. Rs. 15, 000

    2. Rs. 40, 000

    3. Rs. 60, 000

    4. Rs. 1, 00, 000

  13. Match List I (Ratios) with List II (Method of calculation) and select the correct answer using the codes giver below the lists:

    List-I List-II
    1. Debt-Equity Ratio

    2. Proprietary Ratio

    3. Capital Gearing Ratio

    4. ROI

    1. Equity capital and total debt capital

    2. External equity and owners equity

    3. Total shareholders funds and total assets

    4. Profit before interest & tax and net assets

    • A
    • B
    • C
    • D
      • 2
      • 3
      • 1
      • 4
      • 2
      • 3
      • 4
      • 1
      • 3
      • 2
      • 1
      • 4
      • 3
      • 2
      • 4
      • 1
  14. Match List I with List II and select the correct answer using the codes given below the lists

    List-I List-II
    1. Financial Leverage

    2. Quick Ratio

    3. Stock Turnover Ratio

    4. Margin on Sales

    1. Efficiency

    2. Profitability

    3. Risk

    4. Liquidity

    • A
    • B
    • C
    • D
      • 3
      • 4
      • 1
      • 2
      • 4
      • 3
      • 1
      • 2
      • 4
      • 3
      • 2
      • 1
      • 3
      • 4
      • 2
      • 1
  15. Trading on equity takes place

    1. when Capital other than that of equity shareholders also employed

    2. only when equity Capital is employed

    3. only when debenture funds are employed

    4. when profits are ploughed back