Competitive Exams: Commerce MCQs (Practice-Test 9 of 99)

  1. A company takes a loan of Rs. 70 lakhs on which it has to pay interest at the rate of 15% p. a. Company's return on investment is 25% before tax and the tax payable on net earnings is 60%. What gain accrues to the shareholders because of this loan?

    1. Rs. 2, 40, 000

    2. Rs. 2, 43, 000

    3. Rs. 2, 77, 000

    4. Rs. 2, 80, 000

  2. Equity shares represent owner's capital. Therefore, an equity shareholder

    1. has preferential claim over income and wealth of the company

    2. has residual claim over income and width of the company

    3. has no. Right over income and wealth of the company

    4. is personally liable for all the liabilities of the company even beyond his paidup capital

  3. Which one of the following is not true of GDR?

    1. It is an instrument issued abroad and is listed and traded on a foreign stock exchange

    2. A GDR may represent one or more shares of the issuing company

    3. It can be converted into equity shares at any time

    4. A GDR may represent either equity shares or debentures or preference shares

  4. A company must refund the amount of subscription received from the public including the development of the amount received is less than the mandatory minimum subscription. The mandatory minimum subscription is

    1. 75%

    2. 80%

    3. 90%

    4. 95%

  5. For a firm, the particulars are

    Stock

    Rs. 60, 000

    Debtors

    Rs. 45, 000

    Bill Receivable

    Rs. 12, 000

    Advances (Recoverable cash or kind)

    Rs. 4, 000

    Cash in Hand

    Rs. 40, 000

    Creditors

    Rs. 70, 000

    Bills Payable

    Rs. 45, 000

    Bank Overdraft

    Rs. 4, 000

    Net Sales

    Rs. 7, 50, 000

    Gross Profit

    Rs. 60, 000

    Net Profit

    Rs. 40, 000

    The Current Ratio for the firm is, nearly

    1. 27: 20

    2. 17: 13

    3. 9: 7

    4. 11: 9

  6. Z is admitted in a firm for a ¼ share in the profits for which he brings Rs. 30, 000 for goodwill. It will be taken away by the old partners X and Y in

    1. old profit-sharing ratio

    2. new profit-sharing ratio

    3. sacrificing ratio

    4. capital ratio

  7. Forty thousand 10% redeemable preference shares of Rs. 10 each are redeemed at a premium of Rs. 10 each by the issue o120000 equity shares of Rs. 10 each at a premium of Rs. 10 each. The amount transferred to Capital Redemption Reserve Account would be

    1. Rs. 1, 80, 000

    2. Rs. 2, 00, 000

    3. Rs. 2, 20, 000

    4. Rs. 2, 40, 000

  8. Consider the following two statements and select the correct answer using the codes given, below:

    1. The office supervisor is concerned with the overall managerial functions of the office activities.

    2. The office manager is concerned with guiding and directing the routing work assigned to his subordinates.

      1. Only 1 is correct

      2. Only 2 is correct

      3. Both 1 and 2 are correct

      4. Neither 1 nor 2 is correct

  9. A planned sequence of operations for handling recurring business transactions uniformly and consistently is known as

    1. System

    2. Procedure

    3. Routine

    4. Control

  10. The undertaking by insurer to compensate the insured for the loss caused to him by the damage or destruction of the property insured is under the

    1. principle of utmost good faith

    2. principle of insurable interest

    3. principle of indemnity

    4. principle of contingency

  11. In a draft Balance Sheet, the stock at valuation Rs. 1, 00, 000 was shown on assets side. While finalizing the Balance Sheet, an item which was valued at Rs. 37, 400 had realizable of Rs. 26, 000 only. In the Profit and Loss Account, the stock would be shown at

    1. Rs. 62, 600

    2. Rs. 88, 600

    3. Rs. 1, 00, 000

    4. Rs. 1, 26, 000

  12. Consider the following statements: Capital expenditure is incurred for the purpose of

    1. Obtaining a long-term benefit for the business.

    2. Increasing earning capacity of the business.

    3. Purchasing of marketable securities.

    4. Acquiring of an asset in the business.

    Which of these statements are corrects?

    1. 1 and 4

    2. 1, 2 and 4

    3. 2 and 3

    4. 3 and 4

  13. Which one among the following shall result in capital losses to a firm?

    1. Pilferage of certain items

    2. Loss of goods in transit

    3. Loss due to delay in delivery by port authorities

    4. Confiscation of goods by custom authorities on account of false declaration

  14. Which one of the following is the correct sequence regarding preparation of final accounts?

    1. Ledger-Trial Balance-Journal-Profit and Loss Account-Balance Sheet

    2. Journal-Ledger-Trial Balance-Profit and Loss Account-Balance Sheet

    3. Trial Balance-Ledger-Journal-Balance Sheet-Profit and Loss Account

    4. Journal-Trial Balance-Ledger-

    Profit and Loss Account-Balance

    Sheet

  15. A, B and C are equal partner. After distributing the loss on realization of assets and paying all liabilities, their capital accounts show the following balances

A-Rs. 10, 000 (Cr.)

B-Rs. 4, 000 (Cr.)

C-Rs. 14, 000 (Dr.)

What is the amount of cash with the firm?

  1. Rs. 18, 000

  2. Rs. 4, 000

  3. Rs. 14, 000

  4. Rs. 10, 000