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IAS commerce solved papers
COMMERCE AND ACCOUNTANCY Sample Paper Solved Paper
IAS Commerce Union Public Service Commission Exam Solved Paper
previous years solved question paper of IAS Commerce
1. Which of the following should be obtained as a basis of conclusions by the auditor?
(a) Sufficient evidence and detailed evidence
(b) Appropriate evidence and oral evidence
(c) Detailed evidence and appropriate evidence
(d) Sufficient evidence and appropriate evidence
Ans. (d)
2. Which one of the following is the best way for an auditor to satisfy himself that the amount of cash-in-hand shown in the balance sheet is correct?
(a) To obtain a certificate from the cashier to this effect
(b) To visit the location where cash is kept at the close of business hours on the last working day of the financial year and count the cash-in-hand
(c) To visit the location where cash is kept at the close of business hours on the first working day of the financial year and count the cash-in-hand
(d) To compare the amount of cash-in-hand at the balance sheet date with the corresponding amount in the previous years balance sheet
Ans. (b)
3. Which one of the following is the correct statement?
The most important factor influencing evolution and growth of auditing is:
(a) Industrial Revolution a
(b) divorce of ownership from management
(c) establishment of the Institute of Chartered Accountants of India adoption of mechanized accounting
Ans. (b)
4. Match List-I (Audit Test) with List-II (Situation) and select the correct answer using the code given below the Lists:
List-I

List II

(Audit Test)

(Situation)

A. Depth testing

1. Examination in depth by the auditor of one accounting

function or department at an interval planned by auditor

B. Vouching audit

2. Used in situations where evidence of a single error gives

hint to the auditor of a serious lapse which may require

investigation or extensive testing
C. Discovery sampling

3. Applied in situations where auditor has discovered that

internal control is virtually absent or unreliable and as a

result, it would be necessary to check all the documentary

evidences.
D. Rotational test

4. Involves tracing through the entire system all the aspects

of a transaction which the auditor wishes to check

Codes:
ABCD
(a) 1 3 4 2
(b) 4 2 3 1
(c) 1 4 3 2
(d) 4 3 2 1
Ans. (d)
5. Which one of the following statements is correct?
An auditor of a limited company may be removed from his office before the expiry of his term:
(a) by passing a special resolution in general meeting
(b) by passing an ordinary resolution in general meeting after obtaining prior approval of the Central Government
(c) by passing unanimous resolution in the board meeting
(d) without passing a resolution in the. general meeting
Ans. (b)
6. Which one of the following statements regarding appointment of auditor is correct?
(a) A company where sixty percent shares are owned by private investors and forty percent shares are owned by the Central Government; private
investors shall appoint the auditor
(b) A company where thirty percent shares are owned by the Centre and twenty-five percent by a State Government; auditor is appointed by the
Comptroller and Auditor-General of India
(c) A company where thirty percent shares are owned by the State Government and forty-five percent shares are owned by private investors; auditor is
appointed by the State Government
(d) A company where controlling shares are held neither by Central Government nor by State Government; auditor is appointed by the Comptroller and
Auditor-General of India.
Ans. (b)
7. Match List-I (Basis of classification) with List-II (Types of Audit) and select the correct answer using the code given below the Lists:
List-I
(Basis of classification)

List-II
(Types of Audit)

A. Time

1. Complete Audit

B. Subject matter

2. Public Audit

C Extent or coverage

3. Periodical Audit

D. Organization structure

4. Government Audit

5. Cost Audit
Code:

ABCD
(a) 3 4 1 5
(b) 1 5 2 4
(c) 3 5 1 4
(d) 1 4 2 5
Ans. (c)
8. Match List-I (Explanation) with List-II (Types of Audit) and select the correct answer using the codes given below the lists:
List-I
(Explanation)

List-II
(Types of Audit)

A. Audit work is carried on almost simultaneously

1. Balance Sheet Audit

with recording transaction

B. Auditor starts his work after the final accounts

2. Continuous Audit

have been prepared

C. Audit conducted in between two annual audits

3. Interim Audit

D. Some of the books and records of the who period

4. Partial audit

or specific period are audited

Code:
ABCD
(a) 2 4 3 1
(b) 3 1 2 4
(c) 2 1 3 4
(d) 3 4 2 1
Ans. (c)
9. What does the total audit risk in an auditing situation comprise?
(a) Inherent risk, process risk and control risk
(b) Planning risk, control risk and assessment risk
(c) Process risk, control risk and detection risk
(d) Inherent risk, control risk and detection risk
Ans. (a)
10. What is a constructive and comprehensive appraisal and examination of organizational structure, plans, and objectives of a concern termed as?
(a) Management audit
(b) System audit
(c) Cost audit
(d) Procedural audit

Ans. (a)
11. Match List-I (Method of Auditing) with List-II (Procedure) and select the correct answer using the code given below the lists:
List I

List -II

(Method of Auditing)
A. Vouching

(Procedure)
1. To select and examine a representative sample from a

large number of similar items

B. Audit Programme

2. Testing and checking done by quality control department

of an organization
C. Internal Audit

3. Audit conducted by regular employees of a business

concern
D. Test Checking

4. The inspection of documentary evidence supporting and

substantiating a transaction
5. A detailed plan of the auditing work to be performed
Code:
ABCD
(a) 3 1 2 5
(b) 4 5 3 1
(c) 3 5 2 1
(d) 4 1 3 5
Ans. (b)
12. Which one of the following statements is correct?
When an auditor fails to obtain sufficient information to warrant an expression of opinion, he makes a
(a) disclaimer of opinion
(b) piecemeal opinion
(c) adverse opinion
(d) qualified opinion
Ans. (a)
13. Which one of the following statements is correct?
The auditor in a cooperative society conducts the audit on behalf of the:
(a) Members of Cooperative Society
(b) Central Government
(c) Registrar of Cooperative Societies
(d) Managing Committee of Cooperative Society
Ans. (a)

14. Which one of the following is the correct statement?

An independent financial audit is conducted because:
(a) the top management may have indulged in fraud and the auditor would detect the same and report to the shareholders
(b) the audit may result in suggesting improvement in the internal control system
(c) the audit enhances credibility to financial statement
(d) the audit guarantees that no material
Ans. (c)
15. Which one of the following statements is correct?
A special resolution is required for appointment of an auditor of a limited company in which:
(a) ten percent of the subscribed share capital is held by an insurance company
(b) seventy-five percent of the subscribed share capital i held by individuals
(c) not less than twenty-five percent of the subscribed share capital is held by the Central Government or State Government or other specified public
financial institutions.
(d) not less than twenty percent of the subscribed share capital is held by a nationalized bank
Ans. (c)
16. Match List-I (Method of Collecting Audit Evidence) with List-II (Example) and select the correct answer using the code given below the lists:
List-I

List-II

(Method of Collecting Audit Evidence)

A. Observation

(Example)

1. Auditor finds that although there is no increase

in salaries and wages, contribution to Provident Fund has

increased
B. Correlation with
related information

2. On a thorough scrutiny of payroll auditor comes across 13

entries instead of 12 entries, one extra entry being for the

succeeding month of next year

C. Enquiry

3. Auditor, on a visit of companys godowns, finds that there is

a huge pile of damaged and obsolete stock.

On investigation he is told that the same are not shown as
.
D. Scanning

such in the inventory sheets

4. On a prolonged interaction with various persons connected

with cash transactions auditors find that there is system of

internal check in regard to cash transactions
Code:
ABCD
(a) 3 2 4 1
(b) 4 1 3 2

(c) 3 1 4 2
(d) 4 2 3 1
Ans. (c)
17. Consider the following statements:
The techniques of auditing include
1 physical examination of tangible assets
2. confirmation from third parties
3. interview with the article clerk
4. study of the type of the organization
Which of the statements given above are correct?
(a) 1 and 4 only
(b) 2, 3 and 4 only
(c) 1, 2 and 3 only
(d) 1 and 2 only
Ans. (d)
18. Match List-I (Specific Item) with List-II (Relevant Internal Control Query) and select the correct answer using the code given below the Lists:
List-I
(Specific Item)
A. Fixed assets

List-II
(Relevant Internal Control Query)
1. Are bank reconciliation statements prepared from .

time to time?
B. Purchase

2. Are invoices checked and verified in regard to

description of materials, terms of payments, etc.?

C. Sales
D. Disbursement

3. Are all invoices duly approved for payment?

4. Who authorizes for the sale of scraps ?

5. Who prepares payroll?

Code:
ABCD
(a) 2 3 4 1
(b) 4 1 2 5
(c) 2 1 4 5
(d) 4 3 2 1
Ans. (b)
19. Which of the following are examined to verify the legal charges?
1. Examine the payment made to the lawyer by reference to the bill and money receipt from the the lawyer as well as any amount paid in advance

2. Examine the basis of allocation of expenditure under capital and revenue head
3. Inspect the register of law suits, if maintained by the company
4. Scan the result of the law suit
Select the correct answer using the code given below:
Code:
(a) 1 and 3 only
(b) l, 2 and 3 only
(c) 2 and 4 only
(d) l, 2, 3 and 4
Ans. (b)
20. Which one of the following statements is correct?
Sampling in auditing involves:
(a) application of auditing procedures to transactions of only a part of the period under audit selected by the auditor
(b) application of auditing procedures to a sample of transactions from an account or class of transactions and drawing inferences about the entire
account balance or class of transactions on this basis
(c) application of auditing procedures to only some of the items of financial statements selected by the auditor
(d) application of auditing procedures to transactions of only a division or department of the organization selected by the auditor
Ans. (b)
21. Test checking is applied in which of the following audit functions?
1. Vouching
2. Cash verification
3. Physical stock verification
4. Internal control evaluation
Select the correct answer using the code given below:
Code:
(a) 1 and 2 only
(b) 2, 3 and 4 only
(c) l, 2 and 4only
(d) 1 and 3 only
Ans. (d)
22. Which one of the following can fill a casual vacancy caused due to the death or incapability of the existing auditor?
(a) Board of Directors
(b) Shareholders of the Company
(c) Company Law Hoard
(d) SEBI

Ans. (a)
23. Which one of the following is the correct statement?
Negative confirmation procedure in relation to debtors is applied where
(a) the number of debtors is small and each owes a large sum
(c) the number of debtors is small and each owes a small sum
(d) the number of debtors is large and each owes a large sum
Ans. (b)
24. Which one of the following is the correct statement? Book Debts should be verified with the help of:
(a) book debts from the balance sheet
(b) amount received from debtors
(c) debtors schedule
(d) certificate of book debts from the management
Ans. (c)
25, What is/are the purpose(s) of using working papers prepared by an auditor?
1. Planning and conduct of the audit efficiently
2. Supervision and review of audit work performed by the juniors
3. Producing the working papers as evidence of the audit work performed by him
Select the correct answer using the code given below
Code:
(a) 1, 2 and 3
(b) 2 only
(c) 2 and 3 only
(d) 1 and 3 only
Ans. (a)
26. What is the maximum number of companies for which a company auditor on being an individual can be an auditor at one time?
(a) 2
(b) 5
(c)10
(d) 20
Ans. (d)
27. What is an independent appraisal function established within an organization to examine and evaluate its activities as a service to the organization
called?
(a) Internal Auditing
(b) Internal Check
(c) Internal Control

(d) Administrative Control

Ans. (a)
28. Which one of the following is the correct statement?
When an auditor finds significant unexplained fluctuation in various financial ratios while performing analytical review procedures, he should normally
(a) qualify the audit report
(b) issue a letter of weaknesses to the management
(c) extend his substantive procedures for detailed verification of transactions and balances
(d) make other quantitative checks
Ans. (c)
29. Consider the following in respect of the procedure adopted for buying and selling at stock exchange:
1. Making the contract
2. Contract note
3. Selection of broker
4, Placing order
5. Settlement
What is the correct sequence of the procedure for dealing at stock exchange?
(a) 1-3-2-5-4
(b) 3-1-5-2-4
(c) 1-4-2-3-5
(d) 3-4-1-2-5
Ans. (d)
30. What is the trading activity that seeks a profit from price variations of securities in the different markets
termed as?
(a) Margin trading
(b) Market rigging
(c)Option dealings
(d) Arbitrage
Ans. (d)
The following item consist of two statements, One labeled the Assertion A and the other labeled the Reason R. You are to examine these two statements
carefully and decide whether the Assertion A and the Reason R are individually true and if so, whether the reason is a correct explanation of the Assertion.
Select your answers to these items using the codes given below and mark your answer sheet accordingly:
Codes:
(a) Both A and Rare true and R is the correct explanation of A.
(b) Roth A and R are true but R is NOT a correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
31. Assertion (A) Only listed securities are dealt with in the stock exchanges.
Reason (R) Listing at stock exchanges indicates that a company is a blue chip.
Ans. (c)

32. Which one of the following statements in the context of the famous case of Solomon Vs. Solomon& Co. Ltd. (1897), AC 22, is correct?
(a) A company is entirely distinct from and independent of its members even if a member owns virtually the whole of its shares
(b) A company is distinct from and independent of its members; but in case a member owns virtually the whole of its shares, they are actually the same
(c) A company and its members are not distinct and independent from each other
(d) A person having issued at least 51% of companys share would only be treated distinctly
Ans. (a)
33. Consider the following statements:
1. Shares payable in cash must have been allotted up to the amount of the minimum subscription
2. Directors must have paid in cash the application and allotment money in respect of the shares contracted to be taken by them for cash
3. No money is liable to be repaid to the applicants by reason of failure to apply for or to obtain permission for shares or debentures to be dealt on in any
recognized stock exchange
As per Section 149(1) of the Companies Act, 1956, the above conditions are imposed on companies for which one of the following?
(a) For listing of shares at the stock exchange
(b) To obtain Certificate of Commencement of Business
(c) To obtain Certificate of Incorporation
(d) To hold Statutory Meeting of the company
Ans. (b)
34. The public documents of a company should not only be read but to be understood as they are and therefore deemed to have been read by those who
deal with the company. What is this rule known as?
(a) The rule of equality
(b) The rule of constructive notice
(c) The rule of liability
(d) The rule of abrogation
Ans.(b)
35. Which doctrine emanated from the famous case of Royal British Bank Vs. Turquand (1856) 119 ER 886?
(a) Doctrine of ultra vires
(b) Doctrine of subjugation
(c) Doctrine of indoor management
(d) Doctrine of proportional representation
Ans. (c)
36. What is the penalty for making any statement, promise or forecast which.is false, deceptive or misleading, or by any other dishonest concealment of
material fact to enter into any agreement for acquiring shares or debentures through the prospectus?
(a) With imprisonment extending to five years or with a fine of rupees one lakh or with both
(b) With imprisonment extending to three years or with a fine of rupees one lakh or with both
(c) With imprisonment extending to five years only
(d) With a fine of rupees one lakh only

Ans. (a)
37. Consider the following statements
The Life Insurance Contracts are contracts of utmost
good faith because:
1 only insured knows about his health
2. only insured knows about his family history
3. insured cannot attempt to make profit out of his health condition
4. insurers risk is related to the disclosures made by insured
Which of the statement(s) given above is/are correct?
(a) l only
(b) 1, 2, 3 and 4
(c) 4 only
(d) 2, 3, and 4 only
Ans. (b)
.
38. In a contract of insurance, under which of the following principles the insurer, after having paid the loss to the insured, acquires all rights and remedies
as the insured would have enjoyed regarding the said loss?
(a) Principle of Subrogation
(b) Principle of Contribution
(c) Principle of Causa Proxima
(d) Principle of Insurable Interest
Ans. (a)
39. Consider the following statement.
The Bill of Lading issued by the Master of ship serves as a/an:
1. receipt for the goods shipped
2. open general license
3. evidence of the contract
4. dock challan
Which of the statements given above are correct?
(a) 1 and 3 only
(b) 1 and 2 only
(c) 2 and 4 only
(d) 3 and 4 only
Ans. (a)
40. Match List-I (Staff Authority) with List-II (Function) and select the correct answer using the code given below the lists:

List-I
(Staff Authority)

List-II
(Function)

A. Service Staff Authority

1. Provides specialized counseling to line managers

B. Control Staff Authority

2. Provides service authority relationship to the line

manager
C. Advisory Staff Authority

3. Specific authority for certain functions

D. Functional Staff Authority

4. Not only advises but restrains line authority

Code
ABCD
(a) 1 3 2 4
(b) 2 4 1 3
(c) 1 4 2 3
(d) 2 3 1 4
Ans. (b)
41. Which one of the following statements about MBO (Management by Objectives) is not correct?
(a) The greater the participation of the manager and his employees in setting goals, the more likely that the goals would be achieved
(b) Autonomy in implementation of the plans is a pre-requisite for the success of MBO
(c) Individual goal setting is not necessary for the success of MBO
(d) Top level goal setting is a pre-requisite for the success of MBO
Ans. (d)
42. What is the job evaluation method in which a number of compensable factors are identified and then the degree to which each of these factors is
present on the job is determined, called?
(a) Job classification
(b) Point rating
(c) Factor comparison
(d) Job ranking
Ans. (c)
43. Which one of the following help in determining long-term objectives of an organization, adoption of course of action and allocation of resources
necessary to achieve the set goals?
(a) Rules
(b) Policies
(c) Procedures
(d) Strategies
Ans. (d)
44. Match List-I (Style of Leader) with List-II (Approach) and select the correct answer using the codes given below the lists:
List-I

List -II

(Style of Leader)

(Approach)

A. Impoverished Management

1. Highest concern for production and people

B. Country Club Management

2. Highest concern for production but low concern

for people
C. Autocratic Task Managers

3. Very low concern for production but concern for

people
D. Team Managers

4. Very low concern for production and people

Code:
ABCD
(a) 4 3 2 1
(b) 2 1 4 3
(c) 4 1 2 3
(d) 2 3 4 1
Ans. (a)
45. Consider the following statements:
1. According to Trait theory of leadership, leaders are born, not made.
2. There is high concern for production but low concern for people. It is called as Middle of the road management.
3. There is a high concern for both production as well as people. It is called as Impoverished management.
Which of the statement(s) given above is/are correct?
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) l and 3 only
Ans. (a)
46. Match List-I (Basic Components of Expectancy Theory) with List-II (Definition) and select the correct answer using the code given below the lists:
List-I
(Basic Components

List -II
(Definition)

of Expectancy Theory)
A. Expectancy

1. Force directing specific behavioral alternatives

B. Instrumentality

2. Preference of an individual for a particular outcome

C. Motivation

3. Probability that effort will lead to good performance

D. Valence

4. Probability that successful performance will lead to

certain outcomes
Codes:

ABCD
(a) 1 4 2 3
(b) 2 3 1 4
(c) 1 3 2 4
(d) 2 4 1 3
Ans. (b)
47. Match List-I (Description) with List-II (Functional Feature) and select the correct answer using the code given below the lists:
List I
(Description)

List II
(Functional Feature)

A. Decentralization in organization

1. Machine-oriented and not in man-oriented

B. Chain of communication

2. Line of authority

C. Task of top management

3. Setting goals of organization

D. Movement of task management

4. Empowerment of subordinates

Codes:
ABCD
(a) 3 1 4 2
(b) 4 2 3 1
(c) 3 2 4 1
(d) 4 1 3 2
Ans. (b)
48. Which one of the following approaches to the organization gives managers a way of looking at the organization as a whole and as a part of the larger
external environment?
(a) Behavioral science
(b) Contingency
(c) Human relations
(d) Systems
Ans. (d)
49. Which one of the following types of leadership is based on organizational status?
(a) Informal leadership
(b) Diplomatic leadership
(c) Charismatic leadership
(d) Bureaucratic leadership
Ans. (d)
50. Consider the following steps with regard to job ranking method:
1. Obtain job information

2. Rank jobs
3. Select jobs
4. Select compensable factors
5. combine ratings
What is the correct sequence of the steps given above?
(a) 1 -3-2-5-4
(b) 2-1-3-5-4
(c) 2-3-1-4-5
(d) 1-3-4-2-5
Ans. (d)
1. In the context of audit, where are what work was done and by whom and what explanations and information were given and by whom, shown?

(a) Working papers

(b) Audit manual

(c) Audit programme

(d) Audit report

Ans. (a)

2. Teeming and lading is a technique exercised with the motive of

(a) Defalcation of cash

(b) Misappropriation of goods

(c) Falsification of accounts

(d) Early completion of accounts

Ans. (a)

3. Consider the following steps in estimation of sampling:

1. Determine the sample size

2. Take sample and determine the results

3. Determine sampling plan

4. Evaluate sample results

The correct sequence of the steps given above

(a) 2-3-4-1

(b) 3-1-2-4

(c) 4-3-2-1

(d) 1-2-3-4

Ans. (b)

4. Consider the following statements:

1. Liability of professional accountants is unlimited.

2. Professional accountants can form only partnership firms.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Ans. (a)

5. Which one of the following is an example of errors of principle?

(a) Credit purchases of Rs 50,000 from Mr. X entered in Sales Day Book

(b) Credit sales to Mr. Y Rs 50,000 is not recorded in Sales Day Book

(c) Stationery Rs 5,000 debited to Salary Accounts

(d) Rs 50,000 paid for the purchase of furniture debited to Purchases Account

Ans. (d)

6. In capital market, Beta is used to measure:

(a) the riskiness of securities

(b) profitability, of securities

(c) marketability of securities

(d) volatility in prices of securities

Ans. (a)

7. Match List-I with List-II and select the correct answer by using the codes given below the lists

List-I

(Regulator of Capital Market)

List -II

(Country/Global Financial Market)

A. Capital Market, Board

1. Russia

B. Securities Commission

2. Hong Kong,

C. Securities and Futures Commission

3. Turkey

D. Federal Commission for the Securities Market

4. Thailand

5. Malaysia

Codes:

ABCD

(a) 3 5 2 1

(b) 2 1 4 5

(c) 3 1 2 5

(d) 2 5 4 1

Ans. (a)

8. Consider the following statements regarding Mutual Funds:

1. Mutual funds can participate in options trading and carrying forward transactions in securities.

2. Mutual funds can invest in transferable securities in the money and capital markets.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Ans. (b)

9. Match List-I with List-II and select the correct answer by using the codes given below the lists:

A. Open-Ended Mutual Fund Scheme

1. It offers capital appreciation of the

underlying investment

B. Close-Ended Mutual Fund Scheme

2. It is a fund accepted and liquidated on a

continuous basis by a Mutual Fund Manager

C. Growth Fund Scheme

D. Off-shore Mutual Fund

Codes:

ABCD

(a) 2 1 4 3

(b) 3 4 1 2

(c) 2 4 1 3

(d) 3 1 4 2

3. It is also known as regional or country fund

4. No exits possible till the closure of the scheme

Ans. (c)

10. Consider the following statements

1. UTI is established by an Act of Parliament in 1964. So UTI does not come under the SEBI regulations for mutual funds

2. Mutual fund organizations can invest their mobilized funds abroad.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Ans. (d)

11. Consider the following statements

1. SEBI acts as a judicial body and has the same powers of the Civil Courts under the Code of Civil Procedure, 1908, while trying a suit in certain matters.

2. SEBI shall have powers of both the Civil Courts and Criminal Courts under CPC and CRPC.

Which of the statements given above is/are correct?

(a) 1 only

(b 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Ans. (a)

12. SEBI issued guidelines for disclosure and investors protection based on the guidelines given by the committee under whose chairmanship?

(a) Rangarajan

(b) Raja Chelliah

(c) Malegam

(d) Kelkar

Ans. (c)

13. The Committee constituted by SEBI under the chairmanship of Justice Dr. Dhanuka had which of the following terms of reference?

1. Review of inter-alia, the SEBI Act, SCR Act, Depositories Act and the provisions of the Companies Act pertaining to the capital market

2. To review the penal provisions contained in the Sections 15(A) to 15(J) of the Securities Laws (Amendment)

Select the correct answer by using the code given below:

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Ans. (c)

14. Consequential Loss Policy is an example of insurance of:

(a) Existing assets

(b) Non-existing assets

(c) Re-insurance

(d) Double insurance

Ans. (b)

15. Gross profit percentages on turnover for the last three years were: 20%, 25% and 24%. In the current year, there was a fire in May which destroyed all
stock. Opening stock was Rs. 30,000 at cost. Purchases and sales upto the date of fire amounted to Rs 80,000 and Rs. 1, 00,000 respectively.

What is the value of closing stock for claim with insurance company?

(a) Rs 33,000

(b) Rs 43,000

(c) Rs 23,000

(d) Rs 13,000

Ans. (a)

16. Match List-I with List-II and select the correct answer by using the codes given below the lists:

List-I

List-II

A. Marine insurance

1. Throwing off certain cargo

B. Voyage policy

2. Value is decided at the time of forming policy

C. Block policy

3. Lloyds Association

D. Jettison

5. Cargo

Codes:

ABCD

(a) 3 4 2 1

(b) 1 5 4 3

(c) 3 5 4 1

4. Land and sea risks

(d) 1 4 2 3

Ans. (c)

17. Consider the following statements:

1. Private remittance reduces pressure in the balance of payments.

2. Invisible receipts and payments are recorded in current account of balance of payments.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Ans. (c)

18. Which one of the following statements is correct? Exchange control measures are taken by the Reserve Bank of India to:

(a) avoid excessive volatility in fluctuation in the exchange rate

(b) control the flow of foreign currency into India

(c) reduce the availability of foreign currency with exporters

(d) check foreign currency speculation

Ans. (a)

19. All Industry Rate is associated with which one of the following?

(a) Duty drawback

(b) Duty entitlement passbook

(c) Market development assistance

(d) Export credit

Ans. (d)

20. Who issues the Small Exporters Policy?

(a) Export Credit Guarantee Corporation

(b) Chambers of Commerce

(c) Reserve Bank of India

(d) Ministry of Commerce and Industry

Ans. (d)

21. Who issues the Lev Export Order?

(a) Shipping agent

(b) Customs authorities

(c) Captain of the ship

(d) Clearing and forwarding agent

Ans. (b)

22. Consider the following statements

1. Merchant bankers need not maintain balance sheet, a copy of the auditors report and a statement of financial position of the issuing company.

2. There is no stipulation for a lead manager to accept underwriting obligations.

Which of the statements given above is/are correct?

(b) 2 only

(a) 1 only

(c) Both I and 2

Ans. (b)

23. Red Ink Interest is noted in which one of the following?

(a) Current account

(b) Account current

(c) Capital account

(d) Cash account

Ans. (a)

24. From a managerial perspective, which is the most desirable form of control?

(a) Contingency control

(b) Feedback control

(c) Feed forward control

(d) Concurrent control

Ans. (d)

25. Which one of the following is the correct statement?

In the context of coordination, a manager is said to be playing a boundary spanning role when

(a) he controls or takes responsibility across departmental boundaries

(b) he assumes an additional charge of a unit over and above his core charge

(c) he acts as a liaison between departments or organizations that are in frequent contact

(d) he engages in cross functional, interdepartmental communication, disregarding departmental boundaries

Ans. (d)

26. Which of the following statements characterize coordination as a function?

1. It is the orderly arrangement of group efforts to ensure unity of action for accomplishing a common objective.

2. It necessarily has dine, quantity, quality or direction dimension.

3. It is regarded by some as an all inclusive function of management and not just one of its functions.

Select the correct answer by using the codes given below:

(a) 1 and 2 only

(b) 2 and 3 only

(c) l and 3 only

(d) 1, 2 and 3

Ans. (d)

27. Consider the following statements:

1. Theory X observes that people can exercise self-direction and accept responsibility.

2. According to Douglas McGregor, assumptions of the theory Y best captured the true nature of workers and should guide management practice.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Ans. (b)

28. McClellands Needs Theory of Motivation talks about different needs that are relevant to management. Which of the following are those?

(a) Power, actualization, people

(b) Power, affiliation, achievement

(c) Affiliation, prestige, actualization

(d) People, prestige, achievement

Ans. (b)

29. Which of the following qualities are the four essential requirements of active listening ?

(a) Expression, empathy, acceptance, curiosity

(b) Curiosity, desire to conform, empathy, acceptance

(c) Intensity, empathy, acceptance, willingness to take responsibility for completion

(d) Acceptance, empathy, expression, intensity

Ans. (b)

30. Which one of the following is the power that arises from identification with a person who has desirable resources or personal traits in the contexts of
leadership?

(a) Reward power

(b) Legitimate power

(c) Expert power

(d) Referent power

Ans. (d)

31. Which one of the following is not a type of leader identified by the path goal theory of leadership?

(a) Directive leader

(b) Participative leader

(c) Charismatic leader

(d) Supportive leader

Ans. (c)

32. Match List-I with List-Il and select the correct answer by using the codes given below the lists:

List-I

(Propounder)

List-II

(Theory)

A. Rensis Likert

1. Leadership as a continuum

B. Blake and Mouton

2. Four systems of management

C. Tannebaum and Schmidt

3. Contingency theory

D. Fred Fiedler

4. Managerial Grid

Codes:

ABCD

(a) 3 1 4 2

(b) 2 4 1 3

(c) 3 4 1 2

(d) 2 1 4 3

Ans. (b)

33. Match List-I with List-II and select the correct answer by using the codes given below the list:

List-I

A. Typing test

B. Verbal comprehension test

List-II

1. Personality test

2. Aptitude test

C. Self confidence test

3. Achievement test

D. Clerical test

4. Intelligence test

Codes:

ABCD

(a) 3 4 1 2

(b) 1 2 3 4

(c) 3 2 1 4

(d) 1 4 3 2

Ans. (a)

34. Which one of the following statements about selection is not valid?

(a) Recruitment is a positive exercise while selection is a negative exercise

(b) The utility of interview as a tool of selection is affected by the possibility of interviewer bias

(c) Aptitude tests form complete tools for managerial positions

(d) References have a limited role in the selection process for employment

Ans. (c)

35. Which one of the following statements best explains the scalar principle?

(a) Superiors cannot escape responsibilities for organizing activities of their subordinates

(b) Clearer the line of authority, clearer will be the responsibility of decision-making by the subordinates

(c) Managers must make decisions that are within their authority

(d) Responsibility of actions cannot be more or less than the delegated authority to perform the same

Ans. (b)

36. Michael Porter had identified five forces in analysis of an industry.

Which one of the following is not a part of the five forces?

(a) Competition among companies

(b) Bargaining power of the company concerned

(c) Bargaining power of suppliers

(d) Threat of new companies entering Se market

Ans. (b)

37. Which one of the following statements is correct?

No particular management action based on planning strategy will be suitable for all situations, is a basic premise of the

(a) systems approach

(b) human behaviour approach

(c) contingency approach

(d) role approach

Ans. (c)

38. Which one of the following statements is correct?

Bounded rationality approach to decision-making results in

(a) maximizing decision

(b) optimum decision

(c) contingent decision

(d) satisfactory decision

Ans. (b)

39. In the context of hierarchical nature of planning, which one of the following is the correct hierarchy?

(a) Objectivesstrategiesbudget programme

(b) Strategiesobjectivespoliciesprocedures

(c) Objectivesstrategiespoliciesbudgets

(d) Objectivespoliciesstrategiesprogrammes

Ans. (d)

40. Which one of the following statements is correct?

In a PERT chart, the critical path is

(a) the sequence of the most important events and activities In the project

(b) the most time consuming sequence of events and activities in the project

(c) the least time consuming sequence of events and activities

(d the end points representing the completion of major activities

Ans. (b)

41. Which of the following is/are finding(s) of the Hawthorne Experiment?

1. Productivity increases as workers feel important as a result of being noticed

2. Productivity increases as rest time of the workers being modified

3. Productivity is independent of environmental variables

Select the correct answer by using the codes given below

(a) 1 only

(b) 2 only

(c) l and 3

(d) l and 2

Ans. (c)

42. Which one of the following statements is correct?

Discretionary cost budgets are typically used for

(a) measuring marketing and sales effectiveness

(b) expense centres like administrative, legal or research department

(c) manufacturing plants but also for any unit where output can be accurately measured

(d) managers who have responsibility for both expenses and revenues of their units

Ans. (c)

43. Consider the following statements

Management can diagnose the state of growth of an enterprise by analyzing the

1. profits earned throughout the years.

2. decisions needed to attain objective.

Which of the statements given above is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Ans. (c)

44. Which one of the following statements is correct?

A job specification best describes

(a) job contents, environment and conditions of employment

(b) minimum acceptable qualifications for a job, the knowledge, skills and abilities needed to do the job effectively

(c) the responsibilities and obligations, as well as the privileges of a job

(d) the job within the organizational structure

Ans. (b)

45. Which one of the following is not related to splintered authority?

(a) Decision made by pooling of two or more managers

(b) Decision is cross-functional in nature

(c) Managers have to report to more than one senior officer

(d) Delegated authority can be recovered

Ans. (c)

46. Which one of the following forms of organization would best describe the blend of departmentation by function and departmentation by product?

(a) Virtual organization

(b) Strategic business unit

(c) Brick and mortar

(d) Matrix organization

Ans. (d)

47. consider the following statements

The principle of span of management states that

1. organizational variables affect the number of subordinates that can be effectively supervised by a manager.

2. the use of technology in the organization affects the number of subordinates that can be effectively supervised by a manager.

Which of the statements given above is/are correct?

(a) l only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Ans. (c)

48. Match List-I with List-II and select the correct answer by using the codes given below the lists:

List-I

(Hierarchy of Objective)

List -II

(Level of Management)

A. Mission

1. Board level

B. Market share objectives

2. Top management level

C, Personal development objectives

D. Departmental objectives

3. Middle level

4. Bottom level

Codes:

ABCD

(a) 1 3 4 2

(b) 1 2 4 3

(c) 2 1 3 4

(d) 2 3 1 4

Ans. (b)

49. Which one of the following statements is correct?

Among the methods of bringing about change in the organization and its human resources, sensitivity training refers to the practice of

(a) an outside consultant for helping the managers to perceive, understand and act on process events

(b) assessing the attitudes of organizational members, identifying discrepancies among them and resolving the same through feedback communication

(c) changing behaviour through unstructured group interaction

(d) involving team members in interaction to learn how each member thinks and works

Ans. (b)

50. Among the standard symbols used for workflow in office management, what does an inverted triangle denote?

(a) Operation

(b) Storage

(c) Inspection

(d) Delay

Ans. (b)