Competitive Exams: Commerce MCQs (Practice-Test 36 of 99)

    • Assertion (A): Intrusion of an outsider as member is undesirable unless he is found to be a persona grata to the existin.
    • Reason (R): The Articles of a private limited company must for this reason contain restrictions 85 to transfer of Shares, limitation of members to 50 and prohibition of invitation to public to subscribe to any share in the company.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): The Prospectus of a company must state the management perception of the risk factors.
    • Reason (R): The investor can make the decision to invest or not to invest at his own risk.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Everything that goes to increase the importance of the subordinate's role is decent ratio.
    • Reason (R): When the degree of delegation of authority is more than the degree of reservation of authority, it is a case of decentralization
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): MBO is effective way of planning and organizing the work.
    • Reason (R): Employees participate in setting the objectives.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): O & M is a conscious attempt to improve the quality of management and to maintain efficient administrative machinery.
    • Reason (R): O & M involves a detailed study of the subject to be investigated, say procedures currently being followed.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): A Company Secretary with the requisite qualification and experience may still not be appointed by the Board if he is judged by the Board to be not trustworthy.
    • Reason (R): The Company Secretary deals with several confidential matters of the company.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Agenda is the genesis of the meeting to be held and of the minutes to be recorded subsequently.
    • Reason (R): The agenda, if prepared in brief, would enable the Secretary and the Chairman to prepare and finalize the minutes correctly and without difficulty.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Owners claims (equities) are often referred to as Residual.
    • Reason (R): Owners do not have any claim on the assets until all the claims of the creditors have been satisfied in full.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Interest on Working Capital should be treated as an item of Revenue Expenditure.
    • Reason (R): Interest is the cost of Capital employed in the business.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Wages paid for the installation of a new machine are treated as Capital Expenditure.
    • Reason (R): It is connected with the task of putting a new asset in working condition.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Legacy is treated as Capital Receipt and shown in the liability side of the Balance Sheet of a non-profit organization.
    • Reason (R): Property received under legacy creates liability for the organization.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Depreciation amount is added back to net profit for calculating ‘funds from operations’ in preparing a funds flow statement.
    • Reason (R): Depreciation is an item of cost but not funds.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Quick realization of receivables will improve the debtor's turnover of an enterprise.
    • Reason (R): Realization of receivables increases the quantum of Working Capital.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): In a large company, internal control is the responsibility of the management.
    • Reason (R): The external auditor has to certify that the company has internal control commensurate with the size of its operations.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): The return On Investment (ROI) is regarded as a primary ratio because it is one single measure where the final outcome of all business activities is recorded.
    • Reason (R): The ‘Capital’ and ‘Return’ are subject to varying interpretations by firms. Therefore ROI is in practice.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are true but R is NOT a correct explanation of A

    3. A is true but R is false

    4. A is false but R is true