Competitive Exams: Commerce MCQs (Practice-Test 29 of 99)

  1. First Auditors of a company are appointed by Board of Directors

    1. Within gestation period

    2. After commencement of the production

    3. Within one month of the date of registration of the company

    4. Within six months of the date of registration of the. Company

  2. Consider the following statements: The books of accounts and other books and papers of every company shall be open to inspection during business hours by the following:

    1. The Registrar of Companies

    2. Such officers of the government as may be authorized by the Central Government in this behalf.

    3. Such officers of the Securities

    Exchange Board of

    India as may be authorized by it.

    Which of the above is/are correct when such inspection is made without giving any previous notice to the company?

    1. 1 only

    2. 1 and 2

    3. 2 and 3

    4. 1, 2 and 3

  3. Consider the. Following statements: The National Advisory Committee on Accounting Standards shall consist of

    1. One member each to be nominated by ICAI, ICWAI and ICSI

    2. One representative each of the Central Government, RBI and Comptroller and Auditor General of India.

    3. A professor of Accountancy, Finance or Business Management from any university or a deemed university.

    Which of the statements given above is/are correct?

    1. 1 only

    2. 1 and 2

    3. 1, 2 and 3

    4. 2 and 3

  4. Section 161 (1) of the Companies Act requires the Annual Report of the companies to be signed by which of the following?

    1. Auditor and Company Secretary

    2. Chairman and Company Secretary

    3. Managing Director and Company Secretary

    4. General Manager and Company

    Secretary

    • Assertion (A): Improvement in the social environment benefits both society and business.
    • Reason (R): Society must pay for the social environment of business through higher prices.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually true but R is not the correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): The companies prefer to issue debt securities in their private placements.
    • Reason (R): It helps them to go for trading on equity.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually true but R is not the correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Internal check is a system of organizing accounting function whereby duties of different clerks are arranged in such a way that work of one person is automatically checked by another.
    • Reason (R): Fraud is not possible without collusion between two or more persons, and at the same time possibilities of errors are reduced to a minimum by internal check.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually true but R is not the correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Vouching is an inspection by auditor of documentary evidence supporting and substantiating transactions in the books of accounts.
    • Reason (R): A thorough vouching system reduces the need for verification of assets & liabilities.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually true but R is not the correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Accounting information refers to only those events which are concerned with entity.
    • Reason (R): Accounting information is presented in the form of financial statements.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually true but R is not the correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): An agreement of a trial balance is not a conclusive evidence of accuracy of ledger posting.
    • Reason (R): A ledger may contain mistakes relating to errors of commission.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually true but R is not the correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): In a fund flow statement, an issue of shares for an asset is to be disclosed on its both sides.
    • Reason (R): The fund flow statement discloses what is not disclosed by the balance sheet.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually true but R is not the correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

    • Assertion (A): Matters which cannot be decided because of limitation of authority may be referred to superiors.
    • Reason (R): Maintenance of intended delegation requires that decisions without authority of individual be made by them.
    1. Both A and R are individually true and R is the correct explanation of A

    2. Both A and R are individually true but R is not the correct explanation of A

    3. A is true but R is false

    4. A is false but R is true

  5. Consider the following statements: Redeemable Preference Shares can be redeemed

    1. out of the proceeds of new issue of shares for the purpose.

    2. out of profits available for dividend.

    3. out of sale proceeds of the assets.

    4. out of the grants received from the government.

    Which of the statements given above are correct?

    1. 1 and 2

    2. 3 and 4

    3. 1 and 3

    4. 1, 2, 3 and 4

  6. On 1.4. 2002, the position o X Company Ltd. Was as follows On 31.3. 2003, the company's ship sank and all records and the cash were sunk. However, it was revealed that creditors and debtors were 20% more than at

    1. 4.2002 position. Stock and Bank was at the same level. The current ratio-had always been

    2. What was the amount of cash sunk on 31.3. 2003?

      1. Rs. 5, 000

      2. Rs. 15, 000

      3. Rs. 10, 000

      4. Rs. 20, 000

  7. The following is the Balance Sheet of Z company: What is the absolute liquidity ratio of the company?

    1. 2: 1

    2. 1.06: 1

    3. 0.92: 1

    4. 1.90: 1