ICAR NET (UG/PG): Commerce MCQs (Practice_Test 78 of 99)

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  1. Rights issue refers to the shares issued to
    1. employees
    2. public
    3. existing directors
    4. none of the above
  2. That portion of the share capital which can be called up only on the winding up of the company is the
    1. authorised capital
    2. issued capital
    3. subscribed capital
    4. reserve capital
  3. If vendors are issued fully paid shares of ₹ 80,000 in consideration of net assets of ₹ 60,000, then the balance of ₹ 20,000 will be
    1. debited to profit and loss account
    2. Debited to goodwill account
    3. credited to capital reserve account
    4. credited to share premium account
  4. Match List I with List II and select the correct answer:
    List-IList-II
    1. G P Ratio
    2. Cash budget
    3. EOQ
    4. Provision for bad debts
    1. Convention of conservatism
    2. Profitability
    3. Inventory management
    4. Management of liquid assets
    • A
    • B
    • C
    • D
      • 2
      • 4
      • 1
      • 3
      • 4
      • 2
      • 3
      • 1
      • 4
      • 2
      • 1
      • 3
      • 2
      • 4
      • 3
      • 1
  5. Given that the current ratio is 2: 1, if the net working capital is ₹ 60,600, then the amount of current liabilities would be
    1. ₹ 30,300
    2. ₹ 60,600
    3. ₹ 1,21, 200
    4. ₹ 90,900
  6. Project Engineering Ltd. Has An adverse current ratio. Which one of the following would improve this ratio?
    1. Sale of fixed assets for cash
    2. Collection of some of the current accounts receivables
    3. Use of cash to pay off some long-term debts
    4. Collection from sundry debtors
  7. XYZ Ltd. Incurs a net loss of ₹ 5,000 during an accounting year. Depreciation for the relevant year amount to ₹ 1,000, preliminary expenses written off during the accounting year is ₹ 3,000 and a loss of ₹ 4,000 is due to sale of plant and machinery. Based on this data, found from operations would amount to
    1. ₹ 3,000
    2. ₹ 2,000
    3. ₹ 5,000
    4. ₹ 4,000
  8. Social obligation of accounting refers to
    1. the completion of journal entries
    2. the preparation of final accounts
    3. cost recording
    4. servicing the needs of various stake-holders
  9. A countiuous audit is most suitable where the
    1. transactions are few but complicated
    2. there is no urgency to finalise the accounts on a particular date
    3. internal audit work is being carried on in a satisfactory manner
    4. system of internal check in operation is not satisfactory
  10. Management audit is
    1. an independent appraisal of the total management process
    2. a statutory requirement
    3. an investigation into the conduct of director
    4. an independent appraisal of competitiveness of business
  11. Management audit is conducted by
    1. the statutory auditors
    2. government auditors
    3. cost auditors
    4. none of the above
  12. System of internal check is said to exist in an organisation when
    1. an employee is specifically deputed to check the work of another employee
    2. the departmental head checks the works of his subordinate
    3. some outside experts check the work of employees
    4. another employee of the same department checks the work of an employee in routine office procedure
  13. Internal Auditor in appointed by the
    1. shareholders of the company
    2. statutory auditor
    3. Institute of Internal Auditors of India
    4. Board of Directors of the company
  14. Which one of the following is true of the position of an auditor regarding the system of internal check in the organisation?
    1. He should acquaint himself with the system of internal check
    2. He should monitor and supervise the system of internal check
    3. He himself should lay down the system of internal check
    4. He has nothing to do with the system of internal check
  15. The auditor has a right to ask for information and explanation from the
    1. past auditors of the company
    2. directors of the company
    3. officers of the company
    4. internal auditors of the company

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