GOODWILL TUTORIALS

BHU B.COM ENTRANCE

Q.1. Keeping permanent record of business transactions is known as:

a Accounting b Book Keeping

c Financial Accounting d Branches of Accounting

Q.2. In financial accounting______ is prepared for the calculation of business income

a. Trading Account b. Balance Sheet

c. Profit and Loss d. Both a and c

Q.3. Business is looked upon as a continuing entity. This assumption is

a Going concern assumption b. Periodicity assumption

c. Money measurement assumption d. Business entity assumption

Q.4. Outsider’s and owner’s claim against the assets of the firm is called___

a. Current assets b. Fixed assets

c. Current liabilities d Liabilities

Q.5. Bills receivable account is a______ account

a. Personal b. Real

c. Nominal d. Fictitious

Q.6. An amount of Rs.5,000 is debited twice in the Pass Book. When overdraft balance as per the
Cash Book is the starting point:

a. Rs. 5,000 will be added b. Rs. 5,000 will be deducted

c. Rs. 10,000 will be added d. Rs. 10,000 will be deducted

Q.7. Machinery purchased worth Rs.25,000 has been debited to purchase account. This entry can
be rectified:

a. Debit machinery, account and credit cash account

b. Debit purchase account to cash account

c. Debit machinery, account and credit purchases account

d. Debit machinery account and credit purchases account Rs.2,500

Q.8. When cash is deposited into and withdrawn from bank, the entry in the cash book is
called……….

a. Contrary entry b. Casting entry

c. Creative entry d Contra entry

Q.9. Purchase book records…….

a. Cash purchase of goods b. Credit purchase of fixed assets

c. Credit purchase of goods d. Credit sale of goods

Q.10. Economic activities, which are connected with the production or purchase and sale of goods
or supply of services with the main objective of earning profit refers to

a. Profession c. Employment

b. Business d. None of them

Q.11. Which of the following does not possess the feature of limited liability ?

a. Partnership c. Joint stock company

b. Corporative society d. None of them

Q12. Public enterprise may take different forms of organization. Which one of the following
comes under public enterprise ?

a. Statutory corporation c. Departmental undertaking

b. Government Company d. All of them

Q.13. According to this principle of insurance, the insurer undertakes to compensate the insured
for the loss caused to him due to damage or destruction of property insured.

a. Utmost good faith c. Insurable interest

b. Subrogation d Indemnity

Q.14 This type of commerce is best suited for dealing in goods for which there is no established
market mechanism.

a. B2B Commerce c. B2C Commerce

b. Intra B Commerce d. C2C Commerce

Q.15. Which element of business ethic is reflected in the examples ‘paying attention to values and
ethics in recruiting and hiring’ and ‘emphasizing corporate ethics in training ?

a. Publication of a code c. Involving employees at all levels

b. Establishment of compliance mechanisms d. Measuring results

Q.16. A business enterprise has be responsibility to provide a fair return on the capital investment
and to ensure the safety of such investment towards.

a. Government c Shareholders

b Consumers d Workers

Q.17. FCI and STC are the example of

a. Public warehouses b. Bonded warehouses

c Government warehouses d. Cooperative warehouses

Q.18. A partner who allows the use of his name by a firm, but does not contribute to its capital is
known as

A Sleeping partner c. Partner by estoppel

b. Secret partner d Nominal partner

Q.19. These industries include all those activities which are connected with the extraction and
production of natural resources and reproduction and development of living organisms, plants, etc.

a. Commerce c. Tertiary industries

b. Secondary industries d. None of the above

Q.20. A and B are partners in a firm. A is to get a commission of 10% on net profit before charging
any commission. B is to be get commission of 10% on net profit after charging all commission. Net
profit before charging any commission was Rs.2,20,000. Find out the commission of A and B.

a. Rs.22,000 and Rs.18,000 b. Rs.22,000 and Rs.16,000

c Rs.20,000 and Rs.18,000 d. Rs.16,000 and Rs.18,000

Q.21. A and B are partners sharing profit in 5:3. C joins for 1/5th share which he acquires from A
and B in the ratio of 60% and 40%. Find new ratio of A,B and C.

a. 101:59:40 b. 100:59:40

c 101:49:40 d. 101:59:39

Q.22. L, M and N are the partners sharing profits and losses in the ratio 6:5:4. M died on
31.03.2009 and profits for the accounting year ending December 2008 were Rs36,000. How much
share in profits for the period 01.01.2009 to 31.03.2009 will be credited to M’s Account.

a. Rs.3,300 b. Rs.3,000

c. Nil d. Rs.5,000
Q.23. A,B and C are partners with profit sharing ratio 4:3:2. B retires and Goodwill Rs10,800 was
shown in books of account. If A & C shares profits of B in 5:3, then find the value of goodwill shared
between A And C.

a. Rs.1,850 and Rs.1,950 b. Rs.1,650 and Rs.1,750

c. Rs.2,000 and Rs.1,600 d. Rs.2,250 and Rs.1,350

Q.24. The Securities Premium amount may be utilized by a company for_____.

a. Writing off any loss on sale of fixed asset

b. Writing off any loss of revenue nature

c. Payment of dividends

d. Writing off the expenses/discount on the issue of debentures

Q.25. Blue Jay Garments Ltd. Is engaged in the export of readymade garments. The company
purchased a machinery of Rs.10,00,000 for the use in packaging of such garments. State whether the
cash flow due to purchase of machinery will be cash flow from operating activities, investing
activities or financing activities.

a. Operating activity b. Financing activity

c. Investing activity d. Cash equivalents

Q.26. If X Ltd. Has a liquid ratio of 7:3 and its stock is Rs.25,000 and current liabilities are
Rs.75,000, what will be the amount of liquid assets ?

a. Rs.1,75,000 b. Rs.2,00,000

c. Rs.2,25,000 d. Rs.5,000

Q.27. Fixed deposits are posted under the head___ in the companies balance sheet

a. Secured loan b. Unsecured loan

c. Current liability d. Share capital

Q.28. It is the process whereby an executive develops an orderly pattern of group efforts among
his subordinates and secures unity of action in the pursuit of common purpose. Which concept is
referred in this statement?

a. Management c. Profession

b. Coordination d None of the above

Q29. The principle which suggests that the interests of an organization should take priority over
the interest of any one individual employee.

a. Espirit de Corps c. Subordination of Individual interest to General Interest

b Order d. Unity of Direction

Q.30. Which of the following is not an element of social environment ?

a. Concern with quality of life c. Birth and death rates

b. Life expectancy d. Rates of saving and investment

Q.31. Planning cannot forsee or assess future trends in the environment and thus there may be
obstacles to effective planning. The limitation of planning referred here is

a. May not work in a dynamic environment b. Leads to rigidity

c. Does not guarantee success d. Reduces Creativity

Q.32. They provide details in the exact manner in which any work is to be performed. The type of
plan is

a. Methods c. Rules

b. Procedures d. Programmes

Q.33. Krishna Ltd is manufacturing toys and have production, marketing, finance and personnel
departments in the organization. The type of organization structure that Krishna Ltd. Should be
following is

a. Divisional structure c. Functional structure

b. Formal organization d All of the above

Q.34. Process of searching for prospective employees and stimulation them to apply for jobs in the
organization is known as:

a. Selection c. Placement

b. Training d. Recruitment

Q.35. Which of the following is not a non-financial incentive for motivating people

a. Retirement Benefits c. Job Security

b. Career Advancement opportunity d. Employee participation

Q.36. Controlling helps to minimize dishonest behavior on the part of the employees by keeping a
close check on their activities. Which importance of controlling is referred here ?
a. Efficient use of resources b. Facilitates coordination in action

b. Ensures order and discipline d Accomplish organizational goals

Q.37. Borrowed funds as a source of finance cannot be in the form of

a. Public deposits c Loans

b. Retained earnings d Debentures

Q.38. Which of the following is a protective function of SEBI ?

a. Undertaking inspection, conduction enquiries of stock exchanges

b. Conducting research and publishing useful information

c. Regulation of takeover bids by companies

d. None of the above

Q.39. Advertisement showing women running after a man because he is using a particular
perfume is not good. Which objection of advertising is reflected here

a. Undermines social values b. Encourages sale of Inferior products

c Some advertisements are in bad taste d. All of the above

Q.40. If value of goods or services in question, along with the compensation claimed, exceeds
Rs.20 lakhs but does not exceed Rs. 1 crore then complaint can be made to

a. District forum c. Government

b. State Commission d. National Commission

Q.41 Believe in the best is the punch line that you would associate with

a. TVS Motors Ltd b. Bajaj Auto Ltd

c. BPL d Toshiba

Q.42. Who is the CEO to HCL Technologies

a. Shiv Nadar b. Ratan Tata

c. Rajendra Pawar d Vineet Nayar

Q.43. Opel Corsa is the brand of

a. Toyota b. Ford
c. General Motors d. Hindustan Motors

Q.44. The full form of ASSOCHAM is:

a. Assets Chamber of Commerce & Industry

b. Associated chamber of commerce & Industry

c. Associated charter of commerce & Industry

d. Associated charter of Club & Industry

45. Which one of the following statements about RBI is 'True'?

(A) RBI maintains the foreign exchange reserves of India

(B) RBI is the regulator of Banks and Securities market in India

(C) RBI started functioning from 1870

(D) None of these

46. Control function of management implies–

(A) To bring harmony in various activities (B) To keep the workforce satisfied

(C) To take corrective course of action (D) To dictate the subordinates

47. Coordination function of management aims at–

(A) Providing sufficient personnel (B) Bringing harmony in various activities

(C) Taking up corrective course of action (D)All the above

48. “Authority flows downwards from top to the bottom whereas accountability flows upwards from
bottom to top.” It is found in–

(A) Scalar chain (B) Functional organisation

(C) Committee structure (D) Multivariate Approach

49. Maslow’s needs hierarchy theory relates to–

(A) Motivation (B) Leadership

(C) Communication (D) Directing

50. M.B.O. is a technique of–

(A) Planning only (B) Controlling only

(C) Neither planning nor controlling (D) Both planning and controlling

51. Pre-incorporation Profit is transferred to–

(A) General Reserve (B) Capital Reserve

(C) Profit and Loss A/c (D) Trading A/c

52. Which of the following is shown in Profit Loss Appropriation A/c ?

(A) Provision for Income Tax (B) Provision for Depreciation

(C) Provision for Doubtful Debts (D) Contribution to General Reserve

53. Workmen’s Compensation Fund is a–

(A) Provision (B) Surplus

(C) Current liability (D) Loan

54. Private equity investors invest in a company based mainly on–

(A) the creditability and the valuation of the company

(B) the age of the company

(C) the location of the company

(D) the activity undertaken by the company

55. Disinvestment in Public Sector is called–

(A) Privatisation (B) Globlisation

(C) Liberalisation (D) Industrialisation

56. Debtors turnover ratio is 4. What is the average collection period ?

(A) 5 months (B) 4 months

(C) 3 months (D) 2 months

57. A particular firm provided the following data for a year–

Current Ratio 2•5 : 1

Liquid Ratio 1•5 : 1

Net Working Capital

Rs. 3,00,000

59. What are the current assets and current liabilities of this firm, respectively ?

(A) Rs. 3,00,000 and Rs. 1,50,000

(B) Rs. 5,00,000 and Rs. 2,00,000

(C) Rs. 2,00,000 and Rs. 5,00,000

(D) Rs. 3,00,000 and Rs. 1,00,000

60. Depreciation is a process of which one of the following ?

(A) Valuation of assets

(B) Allocation of acquisition cost over the estimated useful life of the asset

(C) Allocation of realizable value over the estimated useful life of the asset

(D) Estimating the market value of the asset on the balance sheet date

61. Audit adopted by banking company is–

(A) Continuous Audit (B) Periodical Audit

(C) Internal Audit (D) Balance Sheet Audit

62 . “A company has a separate legal existence from its members.” This principle was first laid down
in case of–

(A) Saloman Vs. Saloman & Co. Ltd. (1897)

(B) Daimler Co. Ltd. Vs. Continental Tyre & Rubber Co. (1916)

(C) State of U. P. Vs. Renu Sagar Power Co. (1991)

(D) Santunu Roy Vs. Union of India (1989)

63. According to ownership, Government Company means ……… share.

(A) Whose paid-up share capital’s 48%, shares are owned by Government

(B) Whose paid-up share capital’s 49% shares are owned by Government
(C) Whose paid-up share capital’s 50% shares are owned by Government

(D) Whose paid-up share capital’s 51% shares are owned by Government

64. Match the following List-I with List-II and select the correct answer from the answer codes given
below–

List-I

(a) AS-6 (b) AS-10 (c) AS-26 (d) AS-20

List-II

1. Accounting for Earning per share 2. Accounting for intangible and fictitious assets

3. Accounting for fixed assets 4. Depreciation Accounting

Codes :

(a) (b) (c) (d)

(A) 1 2 3 4

(B) 3 2 1 4

(C) 1 3 2 4

(D) 4 3 2 1

65. Establishment expenses of a new machine will be debited to–

(A) Expenses Account (B) Profit and Loss Account

(C) Machinery Account (D) None of the above

66. Goodwill is–

(A) Floating Asset (B) Wasting Asset

(C) Fictitious Asset (D) Intangible Asset

67. A Balance Sheet shows only–

(A) Personal Accounts and Nominal Accounts

(B) Real Accounts and Nominal Accounts

(C) Personal Accounts and Real Accounts

(D) Personal, Real and Nominal Accounts

68. Discount on Issue of Shares A/c is shown at the–

(A) Debit side of P & L A/c (B) Assets side of B/S

(C) Liabilities side of B/S (D) None of the above

69. If actual average profit is Rs. 30,000 and normal rate of return is 12%, then capitalization value of
the profits will be–

(A) Rs. 3,60,000 (B) Rs. 2,50,000

(C) Rs. 3,05,000 (D) None of the above

70. New profit sharing ratio is calculated at the time of–

(A) Admission of a new partner (B) Retirement of a partner

(C) Death of a partner (D) All of the above

71. What is reduction of paid-up share capital called ?

(A) External reconstruction (B) Internal reconstruction

(C) Reorganization (D) Redemption of capital

72. Under which of the following methods of depreciation the amount of an asset is never reduced
to zero ?

(A) Straight line method (B) Diminishing balance method

(C) Sums of Years Digit method (D) Annuity method

73. Company Auditor is responsible–

(A) For directors (B) For shareholders

(C) For public (D) For creditors

74. In Balance Sheet, Audit Accounts are audited–

(A) Monthly (B) Bi-monthly

(C) Annually or half yearly (D) Quarterly

75. At the time of dissolution the loss of the business, will be compensated first of all from–

(A) Capital (B) Profits

(C) Personal resources of the partners (D) Donations

76. The meaning of written down value is–

(A) Original cost – Scrap value (B) Book value + Depreciation

(C) Book value – Depreciation (D) None of these

77. Internal check is a part of–

(A) Internal Audit (B) Internal Control

(C) Annual Audit (D) Standard Audit

78. The following data are provided to you.

Fixed cost - Rs. 20,000; Selling price per unit - Rs. 25, Variable cost per unit - Rs. 20. Find out selling
price per unit if B.E.P. is brought down to 2,000 units.

(A) Rs. 30 (B) Rs. 40

(C) Rs. 50 (D) Rs. 60

79 . Among the following which is not an error of commission ?

(A) Wrong totalling (B) Recording with wrong amount

(C) Wrong posting (D) Escape from posting

80. Internal check means–

(A) Checking of accounts by cashier

(B) Checking of accounts by the Internal Auditor

(C) Checking the work of one person by another automatically

(D) Managerial control internally over the subordinates

81 . Verification includes–

(A) Valuation (B) Existence

(C) Ownership & Title (D) All of the above

82. Liability of partners in respect of the firm’s debt is–

(A) Limited to the amount of his capital in the business

(B) Unlimited

(C) Limited to the amount of guarantee given by the partner

(D) Limited to the amount of capital and the loan to the firm, if any

83 . A Government Company is one in which at least the following percentage of share capital is held
by the Central and/or State Government–

(A) 25% (B) 26%

(C) 50% (D) 51%

84. Special plans made for facing competition are known as–

(A) Objectives (B) Strategies

(C) Policies (D) Budgets

85. Audit is compulsory for–

(A) Sole Trader (B) Partnership Firms

(C) Joint Stock Companies (D) All of the above

86. Which of the following organisation makes "Doing Business Report" every year?

(A) WTO (B) World Bank

(C) UNCTAD (D) IMF

87. What does payout ratio mean ?

(A) Ratio of debtors to creditors

(B) Ratio of profit distributed to profit retained

(C) Ratio of dividends per share and earnings per share

(D) Retained earnings

88. How is ‘Calls in arrear’ shown in the balance sheet on the liability side ?

(A) By deducting the amount from the called up capital

(B) Under the heading ‘Reserves and Surplus’

(C) By deducting the amount from ‘Capital Reserve’

(D) By deducting the amount from the ‘Share Forfeited Account’

89. The following figures are presented to you–

Year Sales Profit/Loss

1999 Rs. 1,00,000 Rs. 10,000 (Loss)

2000 Rs. 2,50,000 Rs. 20,000 (Profit)

90. Calculate Profit Volume Ratio.

(A) 5% (B) 10%

(C) 15% (D) 20%

91. The following information is obtained from the records of K Co. Ltd.–

Sales (1,00,000 units) Rs. 1,00,000

Variable cost Rs. 40,000

Fixed cost Rs. 30,000

Find out margin of safety.

(A) Rs. 20,000 (B) Rs. 25,000

(C) Rs. 30,000 (D) Rs. 50,000

92 . A letter of credit (L/C) is produced by–

(A) An exporter (B) An importer

(C) Custom authorities (D) Shipping company

93 . First Auditor of a Company is appointed by the–

(A) Shareholders (B) Central Government

(C) Company Law Board (D) Board of Directors

94. Continuous audit is suitable for–

(A) Big institutions (B) Small institutions

(C) General institutions (D) None of the above

95. If the goods purchased are in transit, then the Journal Entry at the end of the period will be–

(A) Goods in Transit A/c Dr. To Supplier’s A/c

(B) Goods in transit A/c Dr. To Purchases A/c

(C) Stock A/c Dr. To Goods in Transit A/c

(D) Supplier’s A/c Dr. To Goods in Transit

96. Calculate Return on Investment/ Return on Proprietor’s fund. Gross profit of a firm is Rs.
3,20,000, Operating expenses Rs. 1,00,000, Taxes Rs. 20,000, Owner’s fund Rs. 5,00,000, Debenture
Interest Rs. 50,000–

(A) 20% (B) 30%

(C) 40% (D) 50%

97. The technique of “Carrot and Stick” is used in business organization for–

(A) Reducing absenteeism (B) Motivation

(C) Effective leadership (D) Rewarding workers

98. The clearing agent is appointed by the–

(A) Shipping company (B) Custom’s Authority

(C) Importer (D) Exporter

99. The importer cannot take delivery of goods unless he produces the–

(A) Bill of sight (B) Bill of lading

(C) Shipping Bill (D) Mate’s receipt

100 . The principle of indemnity is not related to–

(A) Life Insurance (B) Fire Insurance

(C) Marine Insurance (D) Crop Insurance

101. In Marine Insurance, the existence of insurable interest is necessary–

(A) When the loss is caused

(B) When the policy is taken

(C) Both when the policy is taken and when the loss is caused

(D) Throughout the period of contract

102. The policy of ‘anticipate no profit and provide for all possible losses’ is followed due to–

(A) Convention of consistency (B) Convention of conservation

(C) Convention of disclosure (D) None of the above

103. Receipts and Payments Account is prepared by–

(A) Companies (B) Banks

(C) Partnership firms (D) Non-trading organizations

104. Examination of documents and vouchers is called–

(A) Physical verification (B) Test checking

(C) Vouching (D) None of the above

105. Internal Audit is done by–

(A) External Auditors (B) Employees of the organisation

(C) Both (A) and (B) (D) Neither (A) nor (B)

106. Land Development Banks form part of–

(A) Commercial Banks (B) IDBI

(C) FCI (D) Cooperative Credit Structure

107. Among the following tax revenues of the Union Government, which is the biggest source?

(A) Income Tax (B) Corporation Tax

(C) Central Excise (D) Customs Duty

108 . Accounting for Intangible Assets are related to–

(A) AS - 10 (B) AS - 12

(C) AS – 24 (D) AS - 26

109 . Indian Accounting Standard – 28 is related to–

(A) Accounting for taxes on income

(B) Financial Reporting of Interests in Joint Venture

(C) Impairment of Assets

(D) Provisions, Contingent Liabilities and Contingent Assets

110. Recording of capital contributed by the owner as liability ensures the adherence of principle of–

(A) Consistency (B) Going concern

(C) Separate entity (D) Materiality

111. The product range is widest in case of–

(A) Chain store (B) Departmental store

(C) Speciality shop (D) One price shop

112 . A public corporation is set up–

(A) By a Special Act of Parliament

(B) By a special order of the Government

(C) Under Indian Companies Act, 1956

(D) By none of the above

113 . The minimum number of members required for registration of a cooperative society are–

(A) Two (B) Seven

(C) Ten (D) Twenty

114 . Insurable interest must be present at the time of insurance proposal and payment of claims in–

(A) Fire Insurance (B) Marine Insurance

(C) Life Insurance (D) Motor Insurance

115 . Which of the following errors are not disclosed by Trial Balance ?

(A) Compensatory Errors (B) Errors of Principle

(C) Errors of Omission (D) All the three

116. A large amount spent on special advertisement is–

(A) Capital Expenditure (B) Revenue Expenditure

(C) Revenue Loss (D) Deferred Revenue Expenditure

117. Double Entry System was introduced in–

(A) America (B) Japan

(C) India (D) Italy

118. According to going concern concept a business entity is assumed to have–

(A) A long life (B) A small life

(C) A very short life (D) A definite life

119 . The liability of the shareholders of a public limited company is limited to the extent of–

(A) Par value of the share (B) Paid up value of the shares

(C) Market price of the shares (D) Intrinsic value of the shares

120 . The first directors of a company are appointed by–

(A) Promoters (B) Government

(C) Shareholders (D) Company Law Board

121. In a public limited company, the minimum number of directors are–

(A) 2 (B) 3

(C) 5 (D) None of the above

122. General Insurance Corporation of India was set up in–

(A) 1956 (B) 1972

(C) 1980 (D) 2000

123. ‘Salvage Charges’ is related to–

(A) Life Insurance (B) Marine Insurance

(C) Fire Insurance (D) None of the above

124. In ‘Life Insurance Contract’ the insurable interest is examined at the time of–

(A) Entering the contract (B) Filing the claim

(C) Both (A) and (B) (D) Never

125. A company limited by shares has to call the statutory meeting within a period of not less than
one month and not more than six months. This period is counted with reference to which one of the
following ?

(A) The date of incorporation

(B) The date at which the company is entitled to commence business

(C) The date of actual receipt of certificate of incorporation

(D) The date of actual commencement of business

126. Which among the following is eligible to issue Shelf Prospectus ?

(A) Any company contemplating for public issue of securities

(B) Any public financial institution

(C) Only manufacturing companies

(D) Only foreign companies engaged in t

127. Current Ratio is 3•75, Acid Test Ratio is 1•25 Stock Rs. 3,75,000, calculate working capital.

(A) Rs. 3,00,000 (B) Rs. 4,00,000

(C) Rs. 4,12,500 (D) Rs. 4,25,000

128 . Share premium account can be used for–

(A) Paying tax liability

(B) Meeting the cost of issue of shares or debentures

(C) Paying Dividend on shares

(D) Meeting the loss on sale of old asset

129 . Ploughing-back of profits means–

(A) Dividend declared but not claimed by shareholders

(B) Non-declaration of dividend in any year

(C) Profits earned from illegal sources and employed in business

(D) Retaining the earnings of business for future expansion programme

130 . Partnership may come into existence by–

(A) The operation of law

(B) An express agreement only

(C) An express or implied agreement only

(D) Inheritance of property

131 . A public company can start business–

(A) After incorporation

(B) After promotion

(C) After registration

(D) After getting certificate of commencement of business

132 . Consumers cooperative store is set up by the–

(A) Central Government (B) State Government

(C) Registrar of Cooperative Societies (D) Members

133 . ‘Object Clause’ of a Memorandum of Association can be altered by–

(A) Ordinary resolution

(B) Special resolution

(C) Special resolution and confirmation by Registrar of Companies

(D) Special resolution and confirmation by Company Law Board

134 . Export procedure begins with–

(A) Indent (B) Shipping order

(C) Marine insurance (D) None of these

135. ‘Self-help by mutual help’ is a feature of–

(A) Public enterprise (B) Public corporation

(C) Co-operative society (D) All of the above

136. In India private sector entered into the Life Insurance business in the year–

(A) 1995 (B) 1998

(C) 2000 (D) 2001

137. Consider the following statements–

Current ratio is increased by

1. issue of redeemable preference shares.

2. selling of old furniture for cash.

3. cash realized from debtors.

138. Which one of the following statements is correct ?

When creditors' velocity or creditors' turnover is higher as compared to debtors' velocity, it would

(A) improve liquidity (B) reduce liquidity

(C) have no effect on liquidity (D) improve financial position

139. Which one of the following transactions changes the current ratio ?

(A) Purchase of goods for cash

(B) Plant acquired on account

(C) Sold goods on credit

(D) Debentures converted into equity capital

140. Price earning ratio is 83•33% and E.P.S. is Rs. 30. The market price of equity share will be–

(A) Rs. 33•33 (B) Rs. 66•67

(C) Rs. 20 (D) Rs. 25

141. If the current ratio is 2, current assests are worth Rs. 1,600, if current ratio is not allowed to fall
below 1•5, how much additional can be borrowed by the company on the short term basis ?

(A) Rs. 400 (B) Rs. 600

(C) Rs. 2,733 (D) Rs. 800

142. Average stock of firm is Rs. 80,000, the opening stock is Rs. 10,000 less than closing stock. Find
opening stock.

(A) Rs. 95,000 (B) Rs. 85,000

(C) Rs. 90,000 (D) Rs. 75,000

143. The goods taken by the proprietor from the shop is debited to–

(A) Shop account (B) Goods account

(C) Capital account (D) Drawings accounts

144. Which of the following types of business organisation has a separate legal entity ?

(A) Joint Hindu family business (B) Partnership

(C) Joint Stock Company (D) None of the above

145. The organisation in which power of authority runs in straight line is called–

(A) Line organization (B) Functional organisation

(C) Committee organization (D) None of the above

146. In which State the Mitakshara form of H.U.F. business does not apply ?

(A) Rajasthan (B) Gujarat

(C) West Bengal (D) Kerala

147. What is outsourcing of production and concentrating on marketing operations in international

business, known as ?

(A) Licensing (B) Franchising

(C) Contract manufacturing (D) Joint venture

148. Given: Current Ratio = 3: 1

Quick Ratio = 1:1

Current Liabilities = Rs. 30, 000

What is the value of stock in trade?

(A) Rs. 45,000

(B) Rs. 60,000

(C) Rs. 90,000

(D) Rs. 50,000

149. When a supervisor is re-designated as section officer under the need hierarchy theory of
motivation, it satisfied—

(A) Social needs

(B) Esteem needs

(C) Self- actualisation needs

(D) Economic needs)

150 . Principle of indemnity does not apply to—

(A) Life insurance

(B) Fire insurance

(C) Marine insurance

(D) Theft insurance

151. Cash sales are recorded in—

(A) Cash Book

(B) Sales Book

(C) Journal

(D) Ledger

152 . Which one of the following is not a capital market instrument?

(A) Debentures

(B) Shares

(C) Public Sector Bonds

(D) Treasury Bills

153. Fixed Cost is known as—

(A) Special cost

(B) Direct cost

(C) Prime cost

(D) Overhead cost

154. Demand for electricity is—

(A) Inelastic

(B) Elastic

(C) Less elastic

(D) None of the above

155. The second largest agro-based industry in India is—

(A) Sugar industry

(B) Textile industry

(C) Food processing industry

(D) Poultry

156. Which of the following banks is known as a ‘lender of last resort’?

(A) SBI

(B) RBI

(C) NABARD

(D) IDBI

157. The primary objective of India’s monetary policy has been—

(A) Maintenance of price stability

(B) Granting more autonomy to the RBI

(C) Purchasing and selling of Govt. securities

(D) Financing unlimited deficit of the Central Govt.

158. Which of the following has always remained in focus as the main objective of India’s Five Year
Plans?

(A) Poverty

(B) Removal of unemployment

(C) Economic growth

(D) Reduction in income inequities

159. Finance Commission is constituted every—

(A) Three years

(B) Six years

(C) Four years

(D) Five years

160. Which of the following is not a method of calculating national income?

(A) Income method

(B) Export-Import method

(C) Production method

(D) Expenditure method

161. Trade Credit is source of—

(A) Short-term finance

(B) Medium-term finance

(C) Long-term finance

(D) None of the above

162. Fiscal Policy is related to—

(A) Issue of currency

(B) Credit creation

(C) Public revenue and expenditure

(D) All of the above

163. SIDO is related to the development of—

(A) Small industries

(B) Soap industries

(C) Software industry

(D) Sugar industry

164. The world’s largest private employer is—

(A) Ford Motors

(B) Suzuki

(C) General Motors

(D) General Electric

165. ‘Street’ is a motorcycle brand of ?

(A) Escorts Ltd.

(B) Bajaj Auto

(C) Hero Honda Motors

(D) TVS Suzuki

166. The word ‘MODVAT’ is associated with—

(A) Medical Science

(B) Judiciary

(C) Banking

(D) Taxation

167. Fishing has been classified as—

(A) Extractive industry

(B) Genetic industry

(C) Manufacturing industry

(D) None of these

168. Which of the following is the top administrative organ of the company?

(A) Shareholders

(B) Managing Director

(C) General Manager

(D) Board of Directors

169. The founder of modern scientific management is—

(A) Henry Fayol

(B) McFarland

(C) F. W. Taylor

(D) Dickinson

170. The importer can not take delivery of goods unless he produces the—

(A) Bill of Sight

(B) Bill of Lading

(C) Shipping Bill

(D) Certificate of Origin

171. A statutory meeting requires a notice of at least—

(A) 7 days

(B) 4days

(C) 21 days

(D) 30 days

172 . Trading A/c is a—

(A) Personal A/c

(B) Real A/c

(C) All of the above

(D) Nominal A/c

173. Working of a Stock Exchange is governed by—

(A) Govt. of India

(B) Controller of Capital Issue

(C) Governing Board of that Stock Exchange

(D) Finance Minister

174. Internal audit helps in—

(A) Internal check

(B) Audit in depth

(C) Statutory audit

(D) Internal control

175. Day-today cash transactions of a club are recorded in—

(A) Receipts and Payments A/c

(B) Income and Expenditure A/c

(C) Cash Book

(D) Journal

176. An entry of Rs, 320 has been debited to Rajesh’s account, as Rs. 230. It is an error of—

(A) Commission

(B) Omission

(C) Principle

(D) None of these

177. An expense of Rs. 200 on cartage of a new machine purchased should be debited to—

(A) Cash A/c

(B) Machine Ale

(C) Cartage A/c

(D) None of these

178. A customer’s cheque returned dishonoured is recorded in—

(A) Purchase Return Book

(B) Sales Return Book

(C) Cash Book

(D) Journal

179. Machinery purchased on account is recorded in—

(A) Purchase Book

(B) Cash Book

(C) Journal

(D) Ledger

180. Prepaid Insurance Account is—

(A) An expense

(B) A revenue

(C) An asset

(D)) None of the above

181. The credit balance in the bank account is—

(A) An asset

(B) A liability

(C) A capital

(D) A revenue

182. Stock Exchange deals with—

(A) Second hand securities

(B) Issue of equity shares

(C) Issue of preference shares

(D) Issue of debentures

183. A Public Corporation is created by—

(A) Ministry of Finance

(B) Ministry of Industry

(C) Special Act of Parliament

(D)) Ministry of Corporation

184. Chamber of Commerce is a form of—

(A) Trade Association

(B) Federation

(C) Merger

(D) Consolidation

185. Experts or specialists are attached to managers in—

(A) Line Organisation

(B) Line and Staff Organisation

(C) Functional Organisation

(D) None of these

186. When dividend is declared, it must be paid within—

(A) 30 days

(C) 45 days

(B) 42 days

(D) 60 days

187. Management is—

(A) An Art

(B) A Science

(C) An Art as well as a Science

(D) None of these

188. ‘Esprit de corps’ principle of management states that—

(A) There is need for team-work

(B) Labour turnover should be minimised

(C) Discipline should be maintained

(D) There should be only one superior for each subordinate

189. Which theory of motivation assumes that average human being dislike work?

(A) Theory ‘X’

(B) Theory ‘Y’

(C) Maslow’s theory

(D) Equity theory

190. The most rigorous test of liquidity is—

(A) Current ratio

(B) Acid test ratio

(C) Stock turnover ratio

(D) Debtors turnover ratio

191. Which of the following is a Public corporation?

(A) TISCO

(B) TELCO

(C) ONGC

(D) DCM

192. Which of the following assets does not depreciate?

(A) Machinery and equipments

(B) Patents

(C) Land

(D) Furniture
193. Of the following organisation, the easiest to wind up is the—

(A) Public Ltd. Company

(B) Multinational Corporation

(C) Private Ltd. Company

(D) Partnership Firm

194. The statutory meeting of a company is convened—

(A) Once in a year

(B) Once in the life time of the company

(C) Once in six months

(D) Once in three months

195. Secret reserves may be created by—

(A) Under-valuation of liabilities only

(B) Under-valuation of assets only

(C) Over-valuation of assets only

(D) Over-valuation of liabilities and under-valuation of assets

196. The current ratio of a firm is 2: 1. If it pays Rs. 5000 to it creditors, it will—

(A) Increase the current ratio

(B) Decrease the current ratio

(C) Increase working capital

(D) Neither increase nor decrease

197. E-commerce means—

(A) Economics Commerce

(B) Electronic Commerce

(C) Engineering Commerce

(D) Electrified Commerce

198. Which of the following is not a media of oral communication?

(A) T.V. Transmission (B) Interview (C) Questionnaire (D) None of above
199. Which of the following is not the form of body language?

(A) Facial expression

(B) Eye contact

(C) Gestures

(D) Oral)

200. Density of population means—

(A) No. of person living in per sq. km.

(B) No. of person living in per km.

(C) No. of person living in each city

(D) No. of person living below poverty line

201. Ex-officio Chairman of Planning Commission is—

(A) President

(B) Prime Minister

(C) Agriculture Minister

(D) Finance Minister

202 . Trade-tax is levied upon—

(A) Import of goods

(B) Export of goods

(C) Sale of goods

(D) Income of trade

203. Henry Fayol is known for–

(A) Scientific Management (B) Rationalisation

(C) Industrial Psychology (D) Principles of Management

204. Unity of command implies having not more than one–

(A) Subordinate (B) Friend

(C) Boss (D) Unit

205. ‘x’ and ‘y’ theory of Motivation has been propounded by–

(A) McGregor (B) Maslow

(C) Ouchi (D) Herzberg

206. Coordination has the following features–

(A) Continuous (B) Vertical organisation

(C) Horizontal relationship (D) All of the above

207. Which one of the following is not a barrier in communication ?

(A) Noise (B) Affection

(C) Fear and distrust (D) Perception

208 . A Company can reissue its forfeited shares–

(A) At a premium (B) At a face value

(C) At a discount (D) All of the above

209 . Which of the following is an example of capital expenditure ?

(A) Insurance Premium (B) Taxes and Legal expenses

(C) Depreciation (D) Custom duty on import of machinery

210. Given :

Average profit of a firm Rs. 21,000

Normal Profit Rs. 18,000

Value of goodwill on the basis of 3 years purchases of super profit shall be–

(A) Rs. 39,000 (B) Rs. 9,000

(C) Rs. 3,000 (D) Rs. 12,000.

211. Accounting for research and development relates to–

(A) AS-7 (B) AS-8

(C) AS-9 (D) AS-10

212. Which one among the following is not true for Special Economic Zones?

(A) No routine examination of cargo for export/import by customs authorities

(B) No licence is required for import

(C) Manufacturing and service activities are allowed

(D) No permission for subcontracting

213. Brent index is associated with–

(A) shipping rate index (B) crude oil prices

(C) copper future prices (D) gold future prices