NET, IAS, State-SET (KSET, WBSET, MPSET, etc.), GATE, CUET, Olympiads etc.: Commerce MCQs (Practice_Test 54 of 99)

Glide to success with Doorsteptutor material for competitive exams : get questions, notes, tests, video lectures and more- for all subjects of your exam.

    • Assertion (A) : Existence of secret reserve contradicts the disclosed network of a business.
    • Reason (R) : Secret reserve helps promote managerial efficiency.
      1. Both A and R are true and R is the correct explanation A
      2. Both A and H are true but R is NOT the correct explanation of A
      3. A is true but R is false
      4. A is false hut R is true
    • Assertion (A) : Entrance fees in case of non-profit concerns can be treated as revenue receipt or capital receipt.
    • Reason (R) : Some accountants consider entrance fees to be recurring in nature, whereas others consider it to be nonrecurring.
      1. Both A and R are true and R is the correct explanation A
      2. Both A and H are true but R is NOT the correct explanation of A
      3. A is true but R is false
      4. A is false hut R is true
    • Assertion (A) : Performance ratios show where we are goin.
    • Reason (R) : Balance Sheet ratios show how we stand.
      1. Both A and R are true and R is the correct explanation A
      2. Both A and H are true but R is NOT the correct explanation of A
      3. A is true but R is false
      4. A is false hut R is true
    • Assertion (A) : One single primary ratio that measures the final outcome of all recorded business activities is ROI.
    • Reason (R) : In practice, however variations are also found in the ratio because capital and return are subject to different interpretations by firms.
      1. Both A and R are true and R is the correct explanation A
      2. Both A and R are true but R is NOT the correct explanation of A
      3. A is true but R is false
      4. A is false hut R is true
    • Assertion (A) : According to Accounting Standard 3 (revised) of the Institute of Chartered Accountants of India, a Cash Flow Statement should be divided into three heads cash flows from operating activities, cash flows from investing activities and cash flows from financing activities.
    • Reason (R) : Operating activities involve income determining items and relate to changes in current assets and liabilities; investing activities concern changes in non-current assets and financial activities concern changes in non-current liabilities and shareholder & equity.
      1. Both A and R are true and R is the correct explanation A
      2. Both A and H are true but R is NOT the correct explanation of A
      3. A is true but R is false
      4. A is false hut R is true
    • Assertion (A) : It is the duty of the auditor to see that costing records as required under Section 209 (1) (d) of the Companies Act, 1956, have been maintained by certain class of companies.
    • Reason (R) : Mere-maintenance of cost records does not make manufacturing companies cost-effective.
      1. Both A and R are true and R is the correct explanation A
      2. Both A and H are true but R is NOT the correct explanation of A
      3. A is true but R is false
      4. A is false hut R is true
    • Assertion (A) : Analytical Review is not the part of Company Statutory Audit.
    • Reason (R) : Analytical Review goes beyond true and fair presentation of the financial position.
      1. Both A and R are true and R is the correct explanation A
      2. Both A and H are true but R is NOT the correct explanation of A
      3. A is true but R is false
      4. A is false hut R is true
    • Assertion (A) : Management audit is a statutory audit.
    • Reason (R) : Management audit is performed through innovative ideas.
      1. Both A and R are true and R is the correct explanation A
      2. Both A and H are true but R is NOT the correct explanation of A
      3. A is true but R is false
      4. A is false hut R is true
    • Assertion (A) : The Companies Act. 1956 requires that internal audit must be carried out by a Chartered Accountant.
    • Reason (R) : It is to help the management to protect the interests of the shareholders and the society.
      1. Both A and R are true and R is the correct explanation A
      2. Both A and H are true but R is NOT the correct explanation of A
      3. A is true but R is false
      4. A is false hut R is true
    • Assertion (A) : Certificate of Origin is an export-related document and it is issued by the Chamber of Commerce.
    • Reason (R) : Certificate of Origin is used by importer to take delivery of goods.
    • Assertion (A) : A company registered under the Companies Act, 1956 is a judicial person distinct from its members.
    • Reason (R) : Corporate veil cannot be lifted.
      1. Both A and R are true and R is the correct explanation A
      2. Both A and H are true but R is NOT the correct explanation of A
      3. A is true but R is false
      4. A is false hut R is true
    • Assertion (A) : The doctrine of indoor management does not give absolute protection to outsiders who deal with a company.
    • Reason (R) : Lithe majority of members have their way, the minority has its say.
      1. Both A and R are true and R is the correct explanation A
      2. Both A and H are true but R is NOT the correct explanation of A
      3. A is true but R is false
      4. A is false hut R is true
    • Assertion (A) : The powers of Board of Directors that are to be exercised by Board only at its meeting cannot go beyond those prescribed under Section 292 of the Companies Act, 1956.
    • Reason (R) : The members in general meeting cannot impose restriction on the exercise of powers by the Board of Directors.
      1. Both A and R are true and R is the correct explanation A
      2. Both A and H are true but R is NOT the correct explanation of A
      3. A is true but R is false
      4. A is false hut R is true
  1. Accounting is generally understood as
    1. summarization of business transactions
    2. language of the business
    3. source of business information
    4. means of communication
    • Select the correct answer using the codes given below:
      1. 1 only
      2. 1 and 2
      3. 2 and 3
      4. 1.2,3 and 4
  2. Which one of the following types of information, a creditor would be interested to gather while reading Annual Reports of an enterprise?
    1. Profitability
    2. Liquidity
    3. Continuity
    4. Solvency