Competitive Exams: Commerce MCQs (Practice-Test 83 of 99)

  1. A law graduate with specialization in company Law can be appointed as company secretary of a company having a id-up capital of

    1. Above one core rupees

    2. Above two crores rupees

    3. Above five crores rupees

    4. None of the above

    • Assertion (A): A construction company which by. Memorandum and Articles had powers to borrow and lend carries on a banking business. This is considered to be ultra vires the memorandum.
    • Reason (R): The borrowing and lending should be received to the main (construction) activity only.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are 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

    • Assertion (A): A minor can be admitted to the benefits of partnership with the consent of all the partners.
    • Reason (R): His liability is confined only the extent of his share in the profits and property of the firm.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are 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

    • Assertion (A): The auditor should examine the ‘Objects clause’ of the Memorandum of Association.
    • Reason (R): This would ensure that the company is carrying on business as specified in the Memorandum of Association.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are 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

    • Assertion (A): The auditor of a proprietary firm need not be bound by professional propriety.
    • Reason (R): Proprietary auditor is responsible only to the person (s) who appoints (s) him.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are 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

    • Assertion (A): The main purpose of auditing is to verify that the accounts have been prepared according to the principles of accounting and to see whether the financial statements so prepared reflect a true and fair view of the state of affairs of a business.
    • Reason (R): Auditing starts after the completion of recording of transactions in the books of account.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are 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

    • Assertion (A): The auditor should visit the particular concern at intervals and check the book of accounts.
    • Reason (R): Some precaution is required to be taken by the auditor to avoid weaknesses of continuous audit.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are 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

    • Assertion (A): Return on Investment is the ultimate relationship between earnings and investment.
    • Reason (R): Sales play the pivotal role in such a relationship as sales govern the earnings and investments in turn government sales.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are 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

    • Assertion (A): In accounting, a distinction is made between the business and the owner.
    • Reason (R): Accounting concepts are based on objectivity and not on subjectivity.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are 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

    • Assertion (A): Materiality concept refers to the state of ignoring relatively small items and values from accounts.
    • Reason (R): The effort involved in allocating the cost of a small item over a long period should be justified m terms of the benefit derived from this operation. Therefore. Cost of such items may be treated as expenses for the period In which they are acquired.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are 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

    • Assertion (A): In a joint stock company, the shareholders have very restricted powers.
    • Reason (R): The personality of the company is separate and distinct from the humans who compose it.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are 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

    • Assertion (A): Prediction of share price movement in a stock exchange is almost impossible.
    • Reason (R): Speculative activity has made the fundamentals of shares quite insignificant.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are 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

    • Assertion (A): The investors in the capital market have been showing a decisive shift in favour of fixed income instruments.
    • Reason (R): The debt instruments have active secondary market.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are 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

    • Assertion (A): The floating policy protects the policy holder against errors and omissions.
    • Reason (R): Goods are insured even if the policy holder fails. To report that goods have already been forwarded from the place of shipment.
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are 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

    • Assertion (A): Social responsibility of business is an idea that cannot be put into practice by most of the businesses.
    • Reason (R): There are no norms to measure the extent of responsibility towards each segment of the society
    1. Both A and R are true and R is the correct explanation of A

    2. Both A and R are 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