Competitive Exams: Commerce MCQs (Practice_Test 52 of 99)

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  1. The first Standard Auditing practice (SAP 1) is related to
    1. objectives and scope of the audit of financial statements
    2. basic principles governing an audit
    3. documentation
    4. detecting fraud and error
  2. Which of the following relating to Audit Programme is NOT correct?
    1. The auditor cannot defend himself on the basis of audit programme if there is a charge of negligence against him
    2. It is useful basis for planning the programme for the subsequent year
    3. It helps in the final review before the report is signed
    4. simplifies the allocation of work amongst the audit staff
  3. The scope of ‘management audit’ is determined by the
    1. Shareholders
    2. Board of Directors
    3. Comptroller and Auditor-General (C & AG)
    4. Comptroller and Auditor General in consultation with the Central


  4. Test checking of entries in the audit work refers to
    1. the internal checks
    2. the internal controls
    3. checking some sample items from a large number of similar items
    4. checking the cash flow of business
  5. Test checking reduces
    1. the work of an auditor
    2. the liability of an auditor
    3. both work and liability of an auditor
    4. the remuneration of an auditor
  6. While establishing the sta1itical sampling plan, the degree of precision required is determined by
    1. keenness of the management
    2. suitability of accounting systems and procedures
    3. allowable margin of error the auditors are willing to accept
    4. random number table used for the purpose
  7. consider the following statements: An unregistered partnership firm suffers from the following disabilities
    1. A partner of such firm cannot file a suit for the dissolution of the firm
    2. The firm cannot file a suit against any third party for realization of its dues
    3. A partner cannot file a suit against any other partner to enforce any Fight arising out of partnership deed

    Which of the above statements arc correct?

    1. 1,2 and 3
    2. 1 and 3
    3. 1 and 2
    4. 2 and 3
  8. The distinctive characteristic of ‘perpetual succession’ of a joint stock company refers to
    1. uninterrupted business in spite of continuous losses
    2. immunity from government direction for the closure of the company
    3. immunity from resolution passed n the annual general body meeting for closure of the company
    4. uninterrupted existence not affected by the death or insolvency of members of the company
  9. Who is a bull?
    1. A stock broker who deals or specializes in a few shares
    2. An investor who sells securities in anticipation of being able to rebuy them later at a lower price
    3. An investor who buys securities in anticipation of being able to sell them later at a higher price
    4. An investor who expects the price of a security or of the market as a whole to fall
  10. Commercial paper is a
    1. long-term corporate security meant for small investors
    2. medium-term corporate security meant for institutional investors
    3. treasury paper meant for corporate investors
    4. short-term corporate security meant for large-scale investors
  11. A cartel is a combination of firms
    1. which are functioning in a particular industry
    2. whose combined assets are worth more than 90 % of total assets of the industry
    3. who control major chunk of the market
    4. whose combined profits are enormous
  12. The takeover of a company in which most of the purchase price is paid with borrowed money is referred to as
    1. hostile takeover
    2. illegal takeover
    3. leverage buy-out
    4. management buy-out
  13. One of the major difficulties in improving the industrial efficiency in enterprises is
    1. low investment
    2. low productivity
    3. ineffective marketing
    4. poor inventory control
  14. Exam Bank of India provides financial assistance to exporters and importers in India
    1. in foreign currency only
    2. both in Indian currency and foreign currencies
    3. as zero-interest loans
    4. as subsidies
  15. The national re-insurer in India is
    1. General Insurance corporation of India
    2. United India Insurance Company Ltd.
    3. Insurance Regulatory and Development Authority
    4. Oriental Fire and General Insurance

Company Ltd