ICAR NET (UG/PG): Commerce MCQs (Practice_Test 43 of 99)

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    • Assertion (A) : Organization and methods is a conscious attempt to improve the quality of management and maintain efficient administrative machinery.
    • Reason (R) : It involves detailed investigation with regard to the subject to be investigated, say procedures already being followed.
    1. Both A and R are true and R is the correct explanation of A
    2. Both A and R or 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
  1. The fundamental accounting equation, Assets = Equities, is the formal expression of
    1. Dual aspect concept
    2. Matching concept
    3. going-concern concept
    4. money measurement concept
  2. A business is considered to be having and indefinite life according to
    1. Accounting period concept
    2. Cost concept
    3. Going concern concept
    4. Dual aspect concept
  3. Which of the following pairs are correctly matched?
      • Business entity
      • Accounting standard
      • Stock valuation
      • Consistency
      • Capital
      • Drawings
      • Going concern
      • Assumption

    Select the correct answer using the codes given below:

    Codes:

    1. 2,3 and 4
    2. 1,2 and 3
    3. 1,2 and 4
    4. 1,3 and 4
  4. Money-measurement concept of Accounting Theory is based on the assumption that the value of money will
    1. Remain constant
    2. Fluctuate
    3. Decreases
    4. go up
  5. match List I (Items of Expenditure and Receipt) with List II (Nature of Expenditure and Receipt) and select the correct answer using the codes given below the list:
    List-IList-II
    1. Premium paid for a leasehold property
    2. Insurance premium paid for risks against accidental losses of properties (fixed assets)
    3. Amount realized from the sale of securities (investments) purchased earlier
    4. Huge sales promotion expense
    1. Revenue expenditure
    2. Capital receipt
    3. Deferred revenue expenditure
    4. Capital expenditure.
    • A
    • B
    • C
    • D
      • 4
      • 2
      • 1
      • 3
      • 3
      • 2
      • 1
      • 4
      • 4
      • 1
      • 2
      • 3
      • 3
      • 1
      • 2
      • 4
  6. Match List I (Items of Expenditure and Receipt) with List II (Nature of expenditure and receipt) and select the correct answer using the codes given below the lists:
    List-IList-II
    1. Compensation paid to retrenched workers of the factory for the loss of service
    2. Legal expenses incurred in connection with the purchase of a plot of land
    3. Compensation received from the government for the compulsory removal of a business premises to another place
    4. Sale proceeds of merchandise (goods)
    1. Capital expenditure
    2. Capital receipt
    3. Revenue Expenditure
    4. Revenue receipt
    • A
    • B
    • C
    • D
      • 1
      • 3
      • 4
      • 2
      • 1
      • 3
      • 2
      • 4
      • 3
      • 1
      • 4
      • 2
      • 3
      • 1
      • 2
      • 4
  7. The cash price of a machine is ₹ 1,20, 000 and its hire purchase price is ₹ 1,50, 000 to be paid in five equal yearly installments. If a company purchases the machine on hire purchase basis, the amount of capital expenditure will be
    1. ₹ 1,20, 000
    2. ₹ 1,35, 000
    3. ₹ 1,50, 000
    4. ₹ 1,60, 000
  8. Which one of the following is a capital expenditure?
    1. Compensation paid to Directors on termination of their services
    2. Expenditure incurred in connection with the renewal of a Trade Mark
    3. Gratuities paid to employees on their retirement
    4. Royalty paid in installments for the purchase of rights to manufacture and sell patient medicines
  9. A private limited company earns a net profit of ₹ 2,00, 000 after tax during a certain financial period. Provision for taxation is ₹ 2,00, 000 and income from investment is ₹ 20,000 Capital employed during the same period is ₹ 10,00, 000 return on capital employed is
    1. 10 %
    2. 20 %
    3. 38 %
    4. 42 %
  10. After taking into consideration the noncash charges of ₹ 30,000 the operating loss of a company is ₹ 20,000. The fund generated from operations is
    1. ₹ 50,000
    2. ₹ 30,000
    3. ₹ 20,000
    4. ₹ 10,000
  11. If profit is one-fourth of selling price. The share of profit to cost will be
  12. If balance sheets on two different dates show machinery account at ₹ 1,85, 600 and ₹ 1,73, 800 respectively and the machinery and depreciated by ₹ 30,000 and one piece of machinery of book value of ₹ 5,000 had been sold in the beginning of the year for ₹ 3,100 then the application of fund is
    1. ₹ 6,800
    2. ₹ 11,800
    3. ₹ 14,900
    4. ₹ 23,200
  13. Given that M = opening stock, N = purchases, O = closing stock, P = cost of goods sold, The correct equation will be
    1. M-N = O + P
    2. M-O = P-P
    3. M-O = P-N
    4. P-M = N + O
  14. Messers. XXXX Ltd. provides the following information:

Net profit before income tax: ₹ 40,000

Depreciation charged during the year: ₹ 10,000

Goodwill written off during the year: ₹ 10,000

Income tax for the year: ₹ 20,000

Funds from operations will be

  1. ₹ 60,000
  2. ₹ 50,000
  3. ₹ 40,000
  4. ₹ 20,000

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