Competitive Exams: Commerce MCQs (Practice-Test 89 of 99)

  1. A company with a paid up capital of 5000 equity shares of Rs. 10 each has a turnover of four times with a margin of 8% on sales. The ROI of the company will be

    1. 28%

    2. 32%

    3. 35%

    4. 42%

  2. While calculating the net present value under discounted cash flow method of return on investment analysis, the calculations involved are:

    1. Cash outflow

    2. Discounted net cash flow

    3. Cash inflow

    4. Net present value

    The correct sequence of these calculations is

    1. 4, 1, 3, 2

    2. 1, 3, 2, 4

    3. 1, 2, 3, 4

    4. 3, 1, 4, 2

  3. The best definition of ‘Capital employed’ in calculating the rate of return on investment is

    1. current assets + gross fixed assets

    2. current assets + net fixed assets

    3. working capital + gross fixed assets

    4. working capital + net fixed assets

  4. Patents and copyrights fall under the category of

    1. current assets

    2. liquid assets

    3. Intangible assets

    4. nominal assets

  5. Match List I (Balance sheet items) with List II (Classification) and select the correct answer:

    List-I (Balance sheet items) List-II (Classification)
    1. Discount on debenture

    2. Forfeited shares account

    3. Income taxes payable

    4. Debtors acceptance

    1. Current liability

    2. Non-current asset

    3. Current asset

    4. Non-current liability

    • A
    • B
    • C
    • D
      • 2
      • 4
      • 1
      • 3
      • 4
      • 2
      • 3
      • 1
      • 2
      • 4
      • 3
      • 1
      • 4
      • 2
      • 1
      • 3
  6. Ajoy Ltd makes a profit of Rs. l, 00, 000, after providing for depreciation on assets amounting to Rs. 2.0, 000 and writing off preliminary expenses amounting to Rs. 10, 000 and gain of Rs. 5, 000 on sale of a piece of machinery. Funds from operation of Ajoy Ltd would be

    1. Rs. 1, 00, 000

    2. Rs. 1, 20, 000

    3. Rs. 1, 25, 000

    4. Rs. 1, 35, 000

  7. Which one of the following statements is correct?

    1. A decrease in current liabilities causes an increase in the working capital

    2. An increase in current liabilities causes a decrease in the working capital

    3. A decrease in the current assets causes an increase in the working capital

    4. An increase in the current assets causes a decrease in the working capital

  8. Match List I with List II and select the correct answer.

    List-I List-II
    1. Net loss from operations

    2. Changes in working

    3. Depreciation

    4. Issue of fully paid bonus shares

    1. Source of funds

    2. Drain on working capital

    3. Flow of Funds

    4. Neither source nor application of funds

    • A
    • B
    • C
    • D
      • 3
      • 2
      • 1
      • 4
      • 2
      • 3
      • 4
      • 1
      • 2
      • 3
      • 1
      • 4
      • 3
      • 2
      • 4
      • 1
  9. Vouching may be termed as

    1. Identification of the documentary evidence supporting the transaction

    2. Verification of the document supporting the transaction

    3. authentication of document supporting the transaction

    4. Verification of the accuracy and authenticity of the transaction

  10. Interim audit refers to an audit conducted

    1. in two different accounting years

    2. In-between two statutory annual audits within the same accounting period.

    3. In-between one statutory audit and an internal audit in the same accounting period

    4. In-between one statutory audit, one management audit and one internal audit

  11. Audit Techniques are concerned with the

    1. examination of those evidences which have. Been traced by audit procedures

    2. Application of generally accepted accounting principles to particular phases of a financial statement

    3. accuracy and validity of management authorization to the account section employees

    4. Method of conducting a business affair and reporting in annual report

  12. What is the correct sequence of the following aspects in auditing?

    1. Special audit

    2. Internal audit

    3. Internal check

    4. Annual audit

    Which is corrects sequence?

    1. 1, 3, 2, 4

    2. 3, 4, 1, 2

    3. 3, 2, 4, 1

    4. 1, 2, 3, 4

  13. The main purpose of an independent audit is to

    1. check and correct frauds and errors

    2. help in detecting frauds and errors

    3. Determine if the financial statements fairly represent the actual financial position and the working results of the organization

    4. help in formulating future plans

  14. Match List I (Types of audit) with List II (purposes) and select the correct answer using the codes given below:

    List-I (Types of audit) List-II (purposes)
    1. Continuous

    2. Periodical

    3. Interim

    4. Internal

    1. To ensure efficient conduct of the business and prevent wastage audit

    2. Detailed examination of the books of accounts at regular intervals audit

    3. Audit taken up at the close of the financial period audit

    4. Audit conducted between the end of two financial periods audit

    • A
    • B
    • C
    • D
      • 1
      • 3
      • 4
      • 2
      • 2
      • 3
      • 4
      • 1
      • 3
      • 2
      • 1
      • 4
      • 3
      • 1
      • 2
      • 4
  15. Management audit refers to

    1. examination of books and audit of accounts done by the management

    2. the periodic assessment of company's activities by the statutory auditor

    3. Periodic assessment of company's managerial is planning. Organizing. Actuating and controlling compared to norm of successful operation

    4. auditor's assessment of the financial statement of the entity