Objective Commerce Questions
1. Provisions are amounts set aside out of profits and other surpluses for–
(A) meeting a liability, the amount of which can be determined with exact figure
(B) any known liability of which the amount cannot be determined with substantial accuracy
(C) meeting an eventuality arising out of revaluation of assets in ordinary course of business
(D) meeting a liability arising out of arbitration
See Answer:
2. A trader does not keep a complete set of books and gives the following information–
He started business with Rs. 10,000 on 1st June, 2012. He drew at the rate of Rs. 500 per month for the last six months. He also introduced further capital of Rs. 2,000 in the business during the year.
His total assets on 31st December, 2012 were Rs. 23,700 and his creditors were Rs. 3,000 on the same date. Outstanding expenses on 31st December 2012 were Rs. 500. His net profit during the year would be–
(A) Rs. 11,200 (B) Rs. 11,500
(C) Rs. 13,000 (D) Rs. 14,200
See Answer:
3. X, who holds 100 shares of Rs. 10 each, fails to pay a final call of Rs. 2. The directors forfeited all the shares and subsequently reissued 50 shares of Rs. 6 each as fully paid. The amount to be transferred to ‘Capital Reserve A/c’ would be–
(A) Rs. 200 (B) Rs. 300
(C) Rs. 400 (D) Rs. 800
See Answer:
4. A Ltd. Company issues 3,000, 15% debentures of Rs. 100 each at a discount of 7•5% repayable at a premium of 5% at the end of 5 years. The loss on issue of debentures will be–
(A) Rs. 22,500 (B) Rs. 30,000
(C) Rs. 37,500 (D) Rs. 45,000
See Answer:
5. X Ltd. has current ratio of 2– 1 and quick ratio of 1•5– 1. If its current liabilities are Rs. 80,000, then the value of stock would be–
(A) Rs. 1,60,000 (B) Rs. 1,20,000
(C) Rs. 40,000 (D) Rs. 80,000
See Answer:
6. Test checking of entries in the audit work refers to–
(A) the internal checks
(B) the inernal controls
(C) checking some sample items from a large number of similar items
(D) checking the cash flow of business
See Answer:
7. Test checking reduces–
(A) the work of an auditor (B) the liability of an auditor
(C) both work and liability of an auditor (D) the remuneration of an auditor
See Answer:
8. While establishing the statistical sampling plan, the degree of precision required is determined by–
(A) keenness of the management
(B) suitability of accounting systems and procedures
(C) allowable margin of error the auditors are willing to accept
(D) random number table used for the purpose
See Answer:
9. The distinctive characteristic of ‘perpetual succession’ of a joint stock company refers to–
(A) uniterrupted business in spite of continuous losses
(B) immunity from government direction for the closure of the company
(C) immunity from resolution passed in the annual general body meeting for closure of the company
(D) uninterrupted existence not affected by the death or insolvency of members of the company
See Answer:
10. Who is a ‘bull’ ?
(A) A stock broker who deals or specializes in a few shares
(B) An investor who sells securities in anticipation of being able to rebuy them later at a lower price
(C) An investor who buys securities in anticipation of being able to sell them later at a higher price
(D) An investor who expects the price of a security or of the market as a whole to fall
See Answer:
11. Among the following ‘change management’ methods, which one is the most appropriate when the employees are unwilling to accept change ?
(A) Participative method (B) Directive method
(C) Leading by example (D) Negative reinforcement
See Answer:
12. In a group process, there are some forces favouring and some other forces opposing changes. As a result, an equilibrium is maintained. This is described by Kurt Lwein as–
(A) field of force (B) field of disputes
(C) field of conflicts (D) cognitive dissonance
See Answer:
13. People resist change in organization because of–
(A) fear of unemployment (B) increase in responsibility
(C) need for new social adjustments (D) All the above
See Answer:
14. Centralising the office work is desirable mostly because it–
(A) fixes responsibility (B) avoids duplication
(C) permits better supervision (D) permits better delegation
See Answer:
15. Which one of the following indicates the correct chronological order of the ‘system’ designed for purchasing ‘office supplies’ ?
(A) Select sources of supply, initiate requisition, order supplies, receive supplies and pay vendor
(B) Initiate requisition, order supplies, select sources of supply, receive supplies and pay vendor
(C) Select sources of supply, initiate requisition order supplies, pay vendor and receive supplies
(D) Initiate requisition, select sources of supply, order supplies, receive supplies and pay vendor
See Answer:
16. The first step of the control process actually gets initiated in the managerial function of–
(A) Staffing (B) Planning
(C) Communication (D) Co-ordination
See Answer:
17. Which one of the following statements is correct ?
(A) Business policy is another name for long-range planning
(B) Strategic planning is the function of middle management
(C) Operational planning is the function of top management
(D) Strategic planning is largely influenced by external environment.
See Answer:
18. What is indent in foreign trade ?
(A) Shipping documents in duplicate
(B) A certificate indicating that the foods have been loaded on board the ship
(C) A firm and binding order from the importer
(D) A letter of intent from the overseas supplier.
See Answer:
19. Making the provision for bad and doubtful debts in anticipation of actual bad debts is on the basis of–
(A) Convention of disclosure (B) Convention of consistency
(C) Convention of conservation (D) Convention of disclosure and consistency
See Answer:
20. Who among the following is the ‘Officer who is in default’ within the definition given under Section 5 of the Companies Act, 1956.
(A) All employees (B) Secretary
(C) Contractor (D) Supplier of raw material
See Answer:
(A) meeting a liability, the amount of which can be determined with exact figure
(B) any known liability of which the amount cannot be determined with substantial accuracy
(C) meeting an eventuality arising out of revaluation of assets in ordinary course of business
(D) meeting a liability arising out of arbitration
See Answer:
2. A trader does not keep a complete set of books and gives the following information–
He started business with Rs. 10,000 on 1st June, 2012. He drew at the rate of Rs. 500 per month for the last six months. He also introduced further capital of Rs. 2,000 in the business during the year.
His total assets on 31st December, 2012 were Rs. 23,700 and his creditors were Rs. 3,000 on the same date. Outstanding expenses on 31st December 2012 were Rs. 500. His net profit during the year would be–
(A) Rs. 11,200 (B) Rs. 11,500
(C) Rs. 13,000 (D) Rs. 14,200
See Answer:
3. X, who holds 100 shares of Rs. 10 each, fails to pay a final call of Rs. 2. The directors forfeited all the shares and subsequently reissued 50 shares of Rs. 6 each as fully paid. The amount to be transferred to ‘Capital Reserve A/c’ would be–
(A) Rs. 200 (B) Rs. 300
(C) Rs. 400 (D) Rs. 800
See Answer:
4. A Ltd. Company issues 3,000, 15% debentures of Rs. 100 each at a discount of 7•5% repayable at a premium of 5% at the end of 5 years. The loss on issue of debentures will be–
(A) Rs. 22,500 (B) Rs. 30,000
(C) Rs. 37,500 (D) Rs. 45,000
See Answer:
5. X Ltd. has current ratio of 2– 1 and quick ratio of 1•5– 1. If its current liabilities are Rs. 80,000, then the value of stock would be–
(A) Rs. 1,60,000 (B) Rs. 1,20,000
(C) Rs. 40,000 (D) Rs. 80,000
See Answer:
6. Test checking of entries in the audit work refers to–
(A) the internal checks
(B) the inernal controls
(C) checking some sample items from a large number of similar items
(D) checking the cash flow of business
See Answer:
7. Test checking reduces–
(A) the work of an auditor (B) the liability of an auditor
(C) both work and liability of an auditor (D) the remuneration of an auditor
See Answer:
8. While establishing the statistical sampling plan, the degree of precision required is determined by–
(A) keenness of the management
(B) suitability of accounting systems and procedures
(C) allowable margin of error the auditors are willing to accept
(D) random number table used for the purpose
See Answer:
9. The distinctive characteristic of ‘perpetual succession’ of a joint stock company refers to–
(A) uniterrupted business in spite of continuous losses
(B) immunity from government direction for the closure of the company
(C) immunity from resolution passed in the annual general body meeting for closure of the company
(D) uninterrupted existence not affected by the death or insolvency of members of the company
See Answer:
10. Who is a ‘bull’ ?
(A) A stock broker who deals or specializes in a few shares
(B) An investor who sells securities in anticipation of being able to rebuy them later at a lower price
(C) An investor who buys securities in anticipation of being able to sell them later at a higher price
(D) An investor who expects the price of a security or of the market as a whole to fall
See Answer:
11. Among the following ‘change management’ methods, which one is the most appropriate when the employees are unwilling to accept change ?
(A) Participative method (B) Directive method
(C) Leading by example (D) Negative reinforcement
See Answer:
12. In a group process, there are some forces favouring and some other forces opposing changes. As a result, an equilibrium is maintained. This is described by Kurt Lwein as–
(A) field of force (B) field of disputes
(C) field of conflicts (D) cognitive dissonance
See Answer:
13. People resist change in organization because of–
(A) fear of unemployment (B) increase in responsibility
(C) need for new social adjustments (D) All the above
See Answer:
14. Centralising the office work is desirable mostly because it–
(A) fixes responsibility (B) avoids duplication
(C) permits better supervision (D) permits better delegation
See Answer:
15. Which one of the following indicates the correct chronological order of the ‘system’ designed for purchasing ‘office supplies’ ?
(A) Select sources of supply, initiate requisition, order supplies, receive supplies and pay vendor
(B) Initiate requisition, order supplies, select sources of supply, receive supplies and pay vendor
(C) Select sources of supply, initiate requisition order supplies, pay vendor and receive supplies
(D) Initiate requisition, select sources of supply, order supplies, receive supplies and pay vendor
See Answer:
16. The first step of the control process actually gets initiated in the managerial function of–
(A) Staffing (B) Planning
(C) Communication (D) Co-ordination
See Answer:
17. Which one of the following statements is correct ?
(A) Business policy is another name for long-range planning
(B) Strategic planning is the function of middle management
(C) Operational planning is the function of top management
(D) Strategic planning is largely influenced by external environment.
See Answer:
18. What is indent in foreign trade ?
(A) Shipping documents in duplicate
(B) A certificate indicating that the foods have been loaded on board the ship
(C) A firm and binding order from the importer
(D) A letter of intent from the overseas supplier.
See Answer:
19. Making the provision for bad and doubtful debts in anticipation of actual bad debts is on the basis of–
(A) Convention of disclosure (B) Convention of consistency
(C) Convention of conservation (D) Convention of disclosure and consistency
See Answer:
20. Who among the following is the ‘Officer who is in default’ within the definition given under Section 5 of the Companies Act, 1956.
(A) All employees (B) Secretary
(C) Contractor (D) Supplier of raw material
See Answer:
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