multiple choice questions (mcq)

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Multiple Choice Questions (MCQ)

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JG COLLEGE OF COMMERCE

AHMEDABAD

Affiliated to Gujarat University

DEPARTMENT FACULTY

Accountancy / Taxation / Law/ Auditing

Dr. Jigar Aggarwal

Dr. Kandarp Chavda

Prof. C.A. Kartik Patel

Prof. Rajmohan Nair

Prof. Arpit Dave

(Visiting Faculty)

Prof. Dhaval Sayata

(Visiting Faculty)

Statistics

Dr. Arati Shah

Dr. Delnaz Jokhi

Economics

Prin. Dr. Satyajeet S.

Deshpande

Dr. Megha Bhatt

Prof. Dinesh Patel

Management

Dr. Shimoni Trivedi

Prof. Mrunal Mehta

English / Commercial Communication

Dr. Minnie Mattheew

Prof. Jigar Joshi

Dr. Dhaval Kataria

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T.Y.B.Com. Sem. 6

SR. No

SUBJECT PAGE NO.

1.

Management Accounting - II

04 - 26

2.

Auditing - II

27 - 49

3.

Statistics – VI

50 - 71

4.

Problems of Indian Economy – II

72 - 95

5. Fundamentals of Financial

Management - II

96 - 115

6. Commercial Communication 116 - 133

7. Business Law 134 - 151

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T.Y.B.Com. Sem. 6

Multiple Choice Questions (MCQ)

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T.Y.B.Com. Sem. 6

Subject: Management Accounting - II

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T.Y.B.Com. Sem. 6

Subject: Management Accounting - II

(Multiple Choice Questions)

(1) Use of inferior quality raw material in production may lead to ________ Material Usage Variance.

(a) Unfavourable

(b) Favourable

(c) Zero

(d) None of these

Correct Answer: A. Unfavourable

(2) Labour Idle Time Variance will always be ___________.

(a) Unfavourable

(b) Favourable

(c) Zero

(d) None of these

Correct Answer : A. Unfavourable

(3) A Company purchased 10,000 kgs. of material for Rs. 50,000. The material Price Variance was Rs. +2,000(F) The Standard Price of Material per kg. is _______.

(a) Rs. 5.20

(b) Rs. 5.30

(c) Rs. 5.40

(d) None of these

Correct Answer : A. Rs. 5.20

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(4) The purchase department manager is usually held accountable for the ________.

(a) Material Price Variance

(b) Material Usage Variance

(c) Labour Efficieny Variance

(d) Wage Rate Variance

Correct Answer : A. Material Price Variance

(5) The Efficieny Variance is also known as________.

(a) Quantity Variance

(b) Cost variance

(c) Rate Variance

(d) Budget Variance

Correct Answer : A. Quantity Variance

(6) Data about a company for March, 2018 are as follow: Standard Wage Rate per hour - Rs 10; Actual Wage Rate per hour - Rs 15; Abnormal Idle Time 100 hours. What will be the Idle Time Variance?

(a) 1,000 (U)

(b) 1,000 (F)

(c) 1,500 (U)

(d) 1,500 (F)

Correct Answer : A. 1,000 (U)

(7) Excess of actual cost over standard cost is a _________.

(a) Favouable

(b) Unfavourable

(c) Abnormal Gain

(d) None of these

Correct Answer : B. Unfavourable

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(8) The following information is available:

Standard Variable Overhead is Rs. 20,000; Labour Hours are 2000 and Production is 1000 Units, while Actuals are Rs. 19,000, 2050 Hours and 1050 Units respectively, then what will be the Variable Overhead Cost Variance?

(a) 2,000 (U)

(b) 2,000 (F)

(c) 4,000 (U)

(d) 4,000 (F)

Correct Answer : B. 2,000 (F)

(9) Actual fixed overheads was Rs. 9,90,000; which is 10% more than budgeted fixed overhead. What will be Fixed Overhead Expenditure Variance?

(a) 90,000 (F)

(b) 90,000 (U)

(c) 99,000 (F)

(d) 99,000 (U)

Correct Answer : B. 90,000 (U)

(10) If actual sales is 5,000 units; bugeted sales is 4,000 units; actual profit per unit is Rs.10 and budgeted profit per unit is Rs. 8, what will be Sales Margin Price Variance?

(a) 10,000 (U)

(b) 10,000 (F)

(c) 8,000 (U)

(d) 8,000 (F)


(11) Sales Value Variance=_____________

(a) Sales Price Variance+Sales Volume Variance + Sales Mix Variance

(b) Sales Price Variance+Sales Mix Variance+Sales Sub- Volume Variance

(c) Sales Price Variance+ Sales Volume Variance + Sales Sub- Volume Variance

(d) None of the above

Correct Answer : B. Sales Price Variance+Sales Mix Variance+Sales Sub- Volume Variance

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(12) Compound interest is calculated on __________.

(a) Principle Amount

(b) Interest amount

(c) Principle amount+ Interest Amount


Correct Answer : C. Principle amount+ Interest Amount

(13) As per the concept of Time Value Of Money the Value Of money is ___________.

(a) Equal in all years

(b) Higher In later years than in earlier years

(c) Higher in earlier years than in later years


Correct Answer : C. Higher in earlier years than in later years

(14) While evaluating capital investment proposals, the Time Value of Money is considered in case of _____.

(a) Payback Period Method

(b) Average Rate Of Return Method

(c) Net Present Method


Correct Answer : C. Net Present Method

(15) An Annuity is__________.

(a) A series of unequal but consecutive payment

(b) A series of equal but non consecutive payments

(c) A series of equal but consecutive payments


Correct Answer : C. A series of equal but consecutive payments

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(16) If interest is compounded every six months at 12% annually on Rs. 50,000: what will be the amount at the end of 3 years?

(a) Rs.68,000

(b) Rs 70,246

(c) RS. 70,926

(d) RS.71,288

Correct Answer : C. RS. 70,926

(17) Which of the following considers a project 's profitabilty ?

(a) Pay back Period

(b) Pay back Resiprocal (period)

(c) Discounted Cash flow

(d) Average Rate Of Rate

Correct Answer : D. Average Rate Of Rate

(18) A "zero" Net Present Value indicates that project ________.

(a) is unacceptable.

(b) has Profitabilty Index less than 1.

(c) has Profitability Index more than 1.

(d) has Profitability Index 1.

Correct Answer : D. has Profitability Index 1.

(19) Discount factor is highly necessary in _________.

(a) Pay back Period

(b) Average Rate Of return

(c) Earning per Share

(d) Internal Rate of Return

Correct Answer : D Internal Rate of Return

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(20) which of the follwing statement is not correct ?

(a) An unfavourable variance always indicates operational inefficiency .

(b) Material cost variance is divided into material price variance and material usage

variance

(c) Favourable variance would increase the budgeted profit

(d) The most important use of standard cost is the analysis of variances and cost control

Correct Answer : A. An unfavourable variance always indicates operational

inefficiency

(21) Which of the following statement is correct as regard s Fixed Overhead Variances?

(a) There can be no efficiency variance in fixed overheads.

(b) Fixed overhead budget variance is the differnce between total fixed overhead as per

budget and actual fixed overheads.

(c) As fixed overhead always remain fixed there can be no variance as regards fixed

overhead

(d) While computing fixed overhead vaiances. It is not necessary to workout recovery

rate.

Correct Answer : B. Fixed overhead budget variance is the differnce between total fixed overhead as per budget and actual fixed overheads.

(22) The details of overhead cost are as under : Standard Variable Overhead is Rs. 40,000, Production is 2,000 units and hours are 4,000 hours; while actuals are Rs. 38,000, 2,100 units and 4,100 hours respectively. Then find out the Variable OH Efficiency Variance?

(a) 1,000 (U)

(b) 2,000 (F)

(c) 1,000 (F)

(d) 2,000 (U)

Correct Answer : C. 1,000 (F)

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(23) As per the concept of 'Time Value Of Money' the value of money

(a) Is higher in earlier years than in later years

(b) Is eqaul in all the years

(c) is higher in later years than in earlier years


Correct Answer : A. Is higher in earlier years than in later years

(24) A firm intends to invest Rs 1,80,000 in a project; Life of the project is 5 years; It

has no scrap value; Rate of tax is 50%; Depriciation is charged on straight line

method. The profit before depreciation and tax are as follows : Rs.36,000, Rs.

39,600, Rs. 50,400, Rs. 54,000 and Rs. 90,000. From the above data Find out

Average Rate of Return?

(a) 12%

(b) 10%

(c) 15%

(d) 8%

Correct Answer : B. 10%

(25) Which of the following statement is correct?

(a) Mix variances can arise only in case of material.

(b) Material price Variance + Material usage variance = Material cost Variance

(c) Labour rate Variance + Labour efficency variance = Labour mix variance

(d) Labour efficiency variance is the difference between wages for actual hours at

standard rate and

Correct Answer: B. Material price Variance + Material usage variance = Material cost Variance

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(26) Shrinath Company is thinking to invest Rs. 2,00,000 in a project. Return for three years before tax is as follows: Rs.80,000, Rs.90,000, Rs.1,60,000. Rate of tax is 50%. Depriciation is charged at 10% on straight line method. Find out Pay Back Period.

(a) 4 Years

(b) 2 years 9 months

(c) 2 years 6 months

(d) 3 years 2 months

Correct Answer : B. 2 years 9 months

(27) M' Company Ltd. Has invested Rs. 5,00,000 in a project . The cash inflow of inflow of three years is as follow respectively. Rs.2,00,000, Rs.3,00,000, and Rs.2,00,000. The discount factor at 10%. What will the nearer Net Present Value?

(a) Rs. 80,030

(b) Rs. 50,000

(c) Rs. 75,600

(d) Rs. 60,900

Correct Answer : A. Rs. 80,030

(28) Material Usage Variance is -10 . Material Cost Variance is -22, Standard material quantity is 10 kgs and Actual material quantity is 12kgs .What will be the price of actual material quantity per kg?

(a) Rs. 6

(b) Rs. 5

(c) Rs. 4

(d) Rs. 3

Correct Answer : A. Rs. 6 (29) Standard cost per unit for a product is as under : 21 litres ,at the rate of Rs.2.50

per litre. 12,000 litres material is used for actual production ,of which price paid is 4% more than the standard price and the direct material usage variance is Rs.+3,600. Find Units of the product. (a) 640

(b) 560

(c) 480

(d) 540

Correct Answer : A. 640

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(30)The details of overhead cost are as under : Standard Variable Overhead is Rs. 1,00,000, Production is 20,000 units and hours are 20,000 hours; while actuals are Rs. 1,20,000, 20,000 units and 22,500 hours respectively. Then find out the Variable OH Efficiency Var

(a) 2,500 (U)

(b) 2,500 (F)

(c) 1,500 (U)

(d) 1,500 (F)


(31) The fixed overhead is Rs. 31,200 as per annual budget of a factory and the number of working days are 312, The production of 31,200 units has been fixed for a year . The number of actual working days in march is 24 . Calculate the calender variance.

(a) 200 (U)

(b) 200 (F)

(c) 300 (U)

(d) 300 (F)

Correct Answer : A. 200 (U)

(32) The details of June -2014 of a factory are as follows : Fixed overhead as per budget during June is Rs. 20,000, Production units as per budget during June is 10,000 units, Standard time per unit is 5 hours and Actual hours are 51,000 hours so Find out the Fixed O/h Capacity Variance.

(a) 400 (F)

(b) 400 (U)

(c) 800 (F)

(d) 800 (U)

Correct Answer : A. 400 (F)

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(33) A manufacturer wants to produce 73,205 units at the end of the four years . If the annual increase rate of production is 10% . How many units should be produced during the first year?

(a) 50,000

(b) 40,000

(c) 45,000

(d) 55,000

Correct Answer : A. 50,000

(34) If the interest is compounded every six month @12% annually on Rs. 2,000. What will be the amount at the end of 3 years period?

(a) Rs. 2,837

(b) Rs. 2,738

(c) Rs. 3,728

(d) Rs. 3,287


(35) A firm wants to purchase a machine worth Rs. 2,50,000. Its cash flow for the first

three years is Rs. 10,000, Rs. 20,000 and Rs. 10,000 respectively. Discount rate is 10% and discount factor for three years is 0.9091, 0.8265 and 0.7513 respectively. What will be the present value?

(a) Rs. 33,134

(b) Rs. 28,210

(c) Rs. 27,650

(d) Rs. 27,380


(36) XLtd. has a budgeted material cost of 1,25,000 for the production of 12,500 units per month. Each unit is budgeted to use 2 kg of materials. The standard price of material is ₹. 5 per kg. Actual materials in the month cost Rs. 1,36,000 for 13,500 units and 26,500 kgs. Were purchased and used. What will be the Material Price Variance? (a) 1,000 (F)

(b) 3,500 (U)

(c) 3,500 (F)

(d) 7,500 (U)

Correct Answer : B. 3,500 (U)

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(37) The purchase department manager is usually held accountable for the -

(a) Direct Material Price Variance

(b) Labour Efficiency Variance

(c) Variable Overhead Expenditure Variance

(d) Material Usage Variance

Correct Answer : A. Direct Material Price Variance

(38) The data regarding Labour-expense about produclion ot the D Co. for March 2016 is as follows : Actual paid direct labour 17,280 Direct Standard Hours 4,000 hrs. Standard wage rate per hour 4 Actual Paid hours 3,600 Hrs. Abnormal idle time 160 Hrs. The Labour Efficiency Variance and Idle time Variance will be -

(a) 2240 (F) and 640 (F)

(b) 2240 (F) and 640 (U)

(c) 4480 (F) and 1280 (U)

(d) 2240 (U) and 640 (F)

Correct Answer : B. 2240 (F) and 640 (U)

(39) The Information of Anadi Ltd. Budgeted Actual Variable overheads 10,000 9,500 Labour Hours 2,000 2,050 Production (Units) 1,000 1,050 Variable Overheads Cost Variance will be as under

(a) 1,000 (U)

(b) 2,000 (F)

(c) 1,000 (F)

(d) 2,000 (U)

Correct Answer : C. 1,000 (F)

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(40) If the annual interest rate is 15%, what will be the sum of present value of 2,000

received at the end of the 3rd and 5th years?

(a) 2,405

(b) 2,507

(c) 2,314

(d) 2,309

Correct Answer : D. 2,309

(41) Compound interest is calculated on

(a) Principal amount only

(b) Interest amount only

(c) On principal amount + Interest amount

(d) On time value of money

Correct Answer : C. On principal amount + Interest amount

(42) The data regarding sales of the Sanyam Ltd. as follows :

Product Standard Actual

Units Price Per Unit (Rs.)

Units Price Per Unit (Rs.)

P 2,250 37.50 3,000 36.00

R 1,500 35.00 1,050 35.00

What will be the Sales Price Variance and Sales Volume Variance respectively -

(a) 4,500 (U) and 12,375 (F)

(b) 4,500 (F) and 12,375 (U)

(c) Zero and 15,750 (U)

(d) 4,500 (F) and 28,125 (F)

Correct Answer : A. 4,500 (U) and 12,375 (F)

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(43) If present value of total investment and present value of cash flow are equal then project

(a) is unacceptable

(b) has a profitsbility index more than one

(c) has a profitsbility index less than one

(d) has a profitsbility index is one

Correct Answer : D. has a profitsbility index is one

(44) The Swar Ltd. wants to purchase a machine at the cost of 2,40,000. Its cash flows in the 5 years are as 90,000, 1,20,000, 90,000, 70,000 and 60,000 respectevely. Its expected rate of return is 10%. What will be Payback Period of machine on the basis of discounted cash flow?

(a) 2.87 yrs

(b) 3.87 yrs

(c) 3.5 yrs

(d) 4.5 yrs

Correct Answer : A. 2.87 yrs

(45) A company wants to invest 9,60,000 in one project. Useful life of the project is 6 years and scrap value is 60,000. Rate of taxation is 50%. Depreciation is to be provided as per straight line method. Annual cash flow before depreciation and taxation is as under: - ₹ . 1,80,000, ₹. 3,00,000, ₹. 2,84,000, ₹. 3,50,000, ₹. 4,25,000 and ₹. 3,50,000. Wh at is the Average Rate of Return on Investment? (a) 0.1816

(b) 0.1616

(c) 0.3264

(d) 0.1694

Correct Answer : B. 0.1616

(46) Use of inferior quality raw material in production may lead to _____ material usage variance. (a) Favorable

(b) Unfavorable

(c) Zero


Correct Answer : B. Unfavorable

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(47) If present value of cash outflows is more than the present value of cash inflows, the profitability Index will be

(a) Negative

(b) Less than one

(c) More than one

(d) Zero

Correct Answer : B. Less than one

(48) Labour idle time variance always _______ when labour efficiency variance is favourable.

(a) Favorable

(b) Adverse

(c) Controllable


Correct Answer : B. Adverse

(49) Excess of actual cost over standard cost is a

(a) Favorable

(b) Unfavorable

(c) Abnormal gain


Correct Answer : B. Unfavorable

(50)ABC Ltd. Purchased 6,850 kgs. Of material for 21,920. The materialprice variance was 1,370 (F). The standard price of material per Kg. is

(a) 3.25

(b) 3.4

(c) 3.15



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(52) Present value of project is 4,76,000 and investment is 4,00,000. The profitability index will be

(a) 1.2

(b) 1.19

(c) 1.21

(d) 1.4


(53) XY Ltd. wants to install a machine costing 10,00,000. It will earn an annual profit of 1,50,000 after charging depreciation at 10%p.a. Tax rate is 50% What should be the payback period from the following:

(a) 3 years

(b) 5.71 years

(c) 4 years

(d) 4.5 years

Correct Answer : B. 5.71 years

(54) Simple Interest at 7% for 2 years on Rs.. 1,000 will be

(a) Rs.74.9

(b) Rs.140

(c) Rs..70


Correct Answer : B. Rs. 140

(55) Material Price Variance + Material Usage Variance = __________

(a) Material Mix Variance

(b) Material Sub Usage Variance

(c) Material Cost Variance

(d) Material Expenditure Variance

Correct Answer : C. Material Cost Variance

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(56) Material Usage Variance Less Material Sub Usage Variance = _________





Correct Answer : A. Material Mix Variance

(57) Material Usage Variance Less Material Yield Variance =





Correct Answer : A. Material Mix Variance

(58) Material Yield Variance will only arise, when there is a _________ of material is

given in the question.

(a) Abnormal Wastage

(b) Loss

(c) Normal Wastage

(d) All of the Above

Correct Answer : D. All of the Above

(59) How Many Types of Variances are there in case of Expenses or Cost?

(a) 2

(b) 3

(c) 4

(d) 5

Correct Answer : C. 4

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(60) How Many Types of Variances are there in case of Revenue or Income?

(a) 2

(b) 3

(c) 4

(d) 5


(61) The Difference between the Actual Performance and Pre-determined Standard

set by the company is known as –

(a) Variance

(b) Variable

(c) Net Performance

(d) Gross Performance

Correct Answer : A. Variance

(62) The purchase department manager is usually held accountable for the ________.



(c) Material Price Variance

(d) Material Usage Variance

Correct Answer : C. Material Price Variance

(63) If Actual Expenses are greater than Standard Expenses it is ________ for the

company.

(a) Favourable

(b) Adverse

(c) Benefit

(d) Not every time.

Correct Answer : C. Benefit

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(64) When Single type of Material is used to manufacture one unit, how many

material variances will arise?

(a) 2

(b) 3

(c) 4

(d) 5

Correct Answer : A

(65) When more than one type of materials are used to manufacture one unit, how

many material variances will arise?

(a) 2

(b) 3

(c) 4

(d) 5


(66) Capital Budgeting is to be prepared to check whether the decision regarding _______________ is worthful for the business or not? (a) Capital

(b) Cost of Capital

(c) Capital Expenditure

(d) Capital Profit

Correct Answer : C. Capital Expenditure

(67) Capital budgeting is a ____________.

(a) Decision making process

(b) Method

(c) Concept of Cost

(d) Short term decision

Correct Answer : A. Decision making process

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(68) How many methods are there for preparing capital budgeting which are not

considering time value money?

(a) 2

(b) 3

(c) 4

(d) 5


(69) Which is not the method of capital budgeting from the non- discounting factor category?

(a) Pay-Back Period

(b) Accounting Rate of Return

(c) Average Rate of Return

(d) Internal Rate of Return

Correct Answer : D. Internal Rate of Return

(70) Which is not the method of capital budgeting from the discounting factor

category?

(a) Net Present Value Method

(b) Average Rate of Return

(c) Internal Rate of Return

(d) Profitability Index

Correct Answer : B. Average Rate of Return

(71) The method which is used to find the period in which the amount of invested will

receive back is known as –

(a) Pay-Back Period

(b) Post Pay-Back Period

(c) Accounting Period

(d) Internal Period

Correct Answer : A. Pay-Back Period

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(72) Which is from the following is the method of capital budgeting which used to find

the rate of return on investment?

(a) Internal Rate of Return

(b) Accounting Rate of Return

(c) Profitability Index

(d) Net Present Value

Correct Answer : B. Accounting Rate of Return

(73) In Accounting rate of return method, scrap value is considered as a __________ of investment.

(a) Value of Investment in the beginning

(b) Value of Investment at the end

(c) Ignored


Correct Answer : B. Value of Investment at the end

(74) Discounting Factor is also known as – (a) Present Value Factor

(b) Future Value Factor

(c) Annuity Factor

(d) Compounding Factor

Correct Answer : A. Present Value Factor

(75) What is the Discounting Factor of Rs. 1 for the 2nd Year, if discounting rate is 10%? (a) 0.909

(b) 0.826

(c) 0.893

(d) 0.925


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(76) IRR is the Discounting Factor rate where –

(a) Present Value of Cash inflows are equal to Present Value of Cash Outflows

(b) Net Present Value is zero

(c) Profitability Index is one


Correct Answer : D. All of the Above

(77) Present Value of Cash Inflows less Present Value of Cash outflows means –

(a) Net Present Value

(b) Profitability Index


(d) All of the Above.

Correct Answer : A. Net Present Value

(78) Which method from the following is known as trial and error method?

(a) Net Present Value

(b) Profitability Index


(d) Accounting Rate of Return

Correct Answer : C. Internal Rate of Return

(79) If profit after tax but before depreciation is Rs. 25,000p.a. and company's

investment is Rs. 1,12,500 of which assumed scrap value at the end of the 7 years life

is Rs. 12,500, then what is the Pay-Back period?

(a) 3.5 years

(b) 4 years

(c) 4.5 years

(d) 5 years

Correct Answer : C. 4.5 years

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(80) Fixed Overhead Expenditure Variance is also known as -

(a) Fixed Overhead Standard Variance

(b) Fixed Overhead Efficiency Variance

(c) Fixed Overhead Volume Variance

(d) Fixed Overhead Budget Variance

Correct Answer : D. Fixed Overhead Budget Variance

Page | 27



T.Y.B.Com. Sem. 6

Subject: - Auditing - II

Page | 28



T.Y.B.Com. Sem. 6

Subject: Auditing - II


1. After the end of financial year, within how much time, Final Accounts of a Company should be presented in Annual General Meeting?

(A) Three Months

(B) Six Months

(C) At any time before the end of next financial year.

(D) None of the above.

Answer: (B) Six Months

2. Dividend warrants should be issued to or dividend should be paid to the members within how much time, after the dividend is declared?

(A) 21 days

(B) 42 days

(C) Before the end of respective financial year.

(D) 30 days

Answer: (D) 30 days

3. Unpaid dividend should be transferred to a special unpaid dividend account after ____ days of declaration of dividend?

(A) Sixty days

(B) Forty-two days

(C) Thirty days

(D) Forty days

Answer: (C) Thirty days

Page | 29

4. The profit that is to be distributed among shareholders as per prescribed rate of dividend is called

(A) Gross profit

(B) Divisible profit

(C) Capital profit

(D) Reserve profit

Ans. : (B) Divisible profit

5. Dividend should be paid by company within how many days after it is declared at AGM.

(A) 21 Days

(B) 30 Days

(C) 45 Days

(D) 60 Days

Ans. : (B) 30 Days

6. To which of the following parties is the company auditor is expect to address his report?

(A) Shareholders

(B) Directors

(C) Government

(D) None of the Above

Ans. : (A) Shareholders

7. To which of the following parties is the company auditor is expect to address his Certificate?

(A) Shareholders

(B) Directors

(C) Government

(D) None of the mentioned

Ans. : (D) None of the mentioned

Page | 30

8. To which of the following Act is the company auditor expected to address his Report?

(A) 2013 Company Act

(B) 1952 Company Act

(C) 1954 Company Act

(D) 1961 Company Act

Ans. : (A) 2013 Company Act

9. Unpaid dividend should be transferred to a special unpaid dividend A/c after___ days of declaration of dividend.

(A) 30

(B) 40

(C) 05

(D) 10

Ans. : (C) 30

10. _______ is a statement of collected and considered facts.

(A) Report

(B) Audit Programme

(C) Audit Statement


Ans. : (A) Report

11. Whose approval/consent is required to pay the interim dividend?

(A) Shareholder

(B) Central Government

(C) Debenture holder

(D) Board of director

Ans. : (D) Shareholders

Page | 31

12. Auditors Report is important for _________.

(A) Shareholders

(B) Government

(C) Investors

(D) All of the mentioned.

Ans. : (D) All of the mentioned

13. When an Auditor gives report without any defect it is called as _______.

(A) Clean Report

(B) Adverse Report

(C) Qualified Report

(D) Disclaimer of Opinion

[Ans. : (A) Clean Report]

14. When an Auditor gives report with any defect it is called as _______.

(A) Clean Report

(B) Adverse Report

(C) Qualified Report

(D) Disclaimer of Opinion

[Ans. : (C) Qualified Report]

15. Clean report creates _________ impression on reader.

(A) Bad

(B) No

(C) Good


[Ans. : (C) Good]

Page | 32

16. _________ is the result of examination of books of account.

(A) Audit Report

(B) Audit Certificate

(C) Audit Program


[Ans. : (A) Audit Report]

17. _________ is a statement given by auditor after he vouchsafes the truth of such statement.

(A) Audit Report


(C) Audit Program


[Ans. : (B) Audit Certificate]

18. An auditor has to submit his report on the account of the company for every ________.

(A) 6 Month

(B) Year

(C) 3 Month


[Ans. : (B) Year ]

19. _________ is issued by auditor as and when it is required by auditor.

(A) Audit Report


(C) Both Report & Certificate


[Ans. : (B) Audit Certificate]

Page | 33

20. A dividend issued at the AGM of any company is called as _________.

(A) Final Dividend

(B) Interim Dividend

(C) Quarterly Dividend


[Ans. : (A) Final Dividend]

21. A dividend issued between two AGM of any company is called as _________.

(A) Final Dividend

(B) Interim Dividend

(C) Quarterly Dividend


[Ans. : (B) Interim Dividend]

22. Final dividend is paid only when it is approved by _______.

(A) Board of director

(B) Shareholder

(C) Auditor


[Ans. : (B) Shareholder]

23. After the expiry of ______ years the amount in the unpaid dividend account should be transferred to Investors Education & Protection Fund account.

(A) 7

(B) 5

(C) 6

(D) 3

[Ans. : (A) 7]

Page | 34

24. Dividend should be transferred to a separate bank account within _____days from the date of declaration of dividend.

(A) 7

(B) 5

(C) 30

(D) 10

[Ans. : (B) 5]

25. Rate of dividend is recommended by ________.

(A) Board of director

(B) Shareholder

(C) Auditor


[Ans. : (A) Board of director]

26. Rate of dividend is recommended by ________.

(A) Director

(B) Shareholder

(C) Auditor


[Ans. : (A) Director]

27. A Specimen of Audit certificate is given in the companies Act 2013.

(A) True

(B) False

(C) Partly Correct


[Ans. : (B) False]

Page | 35

28. If the dividend is not paid within the specified time company has to pay along with interest @ _______.

(A) 10%

(B) 12%

(C) 14%

(D) 8%

[Ans. : (B) 12 % ]

29. If the dividend is not paid within 30 days from the date of declaration, a company has to pay fine of ₹ ___ ___ per day till default continue.

(A) 1000

(B) 2000

(C) 500

(D) 100

[Ans. : (A) 1000]

30. As per companies act 2013, it is not compulsory for the company to transfer the amount to reserve account before the declaration of dividend.

(A) True

(B) False

(C) Partly Correct


[Ans. : (A) True]

31. Which of the following statements is correct?

(A) Profit means excess of assets over liabilities;

(B)The Companies Act has defined 'profits' as the excess of all types of incomes over

all types of expenses incurred during the accounting period;

(C) If profits are understated; the shareholders will be deprived of dividend to which

they are entitled;

(D) By showing more profits secret reserves will be created

[Ans]. : (C) Profits are understated; the shareholders will be deprived of dividend to which they are entitled

Page | 36

32.

Year Profit or loss

before

depreciation

Depreciation

provided

Depreciation as

per companies

Act

Profit or loss

after

2006 - Rs. 21,000 -Rs. 21,000 -Rs 7,000 -Rs 28.000

2007 -Rs. 3500 -Rs. 3,500 -Rs 10,500 -Rs.14,000

2008 +RS 42000 - Rs. 4,200 -Rs 14,000 +Rs. 28,000

Which of the following is the correct amount of profit available for dividend for the year

2007-08?

(A) Rs. 28,000

(B) Rs. 10,500

(C) Rs. 14,000

(D) Rs. 5,600.

[Ans] (B) Rs. 10,500; Profit of 2007-08 Rs. 42,000 - depr. 14.000 - Rs. 28,000 - arrears of depr. 11,900 (Rs. 4,900 for 2006 and Rs. 7.000 for 2007 = 16,100, lower of depreciation or loss Rs. 5,600 (Rs. 2,100 for 2006 and Rs. 3,500 for 2007) = Divisible profit Rs. 10,500.]

33. Year Profit or loss before

depreciation

Depreciation require by

law

Unabsorbed

Depreciation

2005-06 - Rs. 1,20,000 -Rs. 60,000 -Rs 45,000

2006-07 -Rs. 60000 -Rs. 3,500 -Rs 15,000

2007-08 +RS 300000 - Rs. 90,000 -

Which of the following is the correct amount of profit available for dividend for the year

2007-08?

(A) Rs. 3,00,000

(B) Rs. 2,10,000

(C) Rs. 1,50,000

(D) Rs. 1,05,000

[Ans] : (D) Rs. 1,05,000; profit for 2007-08 before sharing depreciation Rs. 3,00,000 - depr. 90,000 = Rs. 2,10,000 less arrears of depr. of last two years Rs. 45,000 + 15,000 = 60,000 - Rs. 1,50,000 less lower of depr. Charged or loss Rs. 15,000 + 30,000 = 45,000 = 1,05,000.]

Page | 37

34. Following balances appear in the books of a company as on 31st March 2008. (1) Net profit for the year 2007-08 Rs. 5,00,000

(2) Securities Premium Account Rs. 1,00,000

(3) Capital Redemption Reserve

(Pref. Shares are not yet redeemed) Rs. 2,50,000

(4) Net profit from the sale of fixed assets Rs. 3,20,000

(5) Accumulated capital loss of earlier years Rs.20,000

(6) Equity Share Capital (Rs. 10 each) Rs. 25,00,000

Company always transfers 10% of profits to General Reserve.

Which one of the following is the possible highest rate of dividend for the accounting year 2007-'08?

(A) 20%

(B) 30%

(C) 34%

(D) 40.20%.

Ans. : (B) 30%, Net Profit Rs. 5,00,000 less transferred to Reserve 10% Rs. 50,000 = Rs. 4,50,000 + Profit on sale of fixed assets 3,20,000 – Capital Loss Rs. 20,000 = Rs. 3,00,000 = Total divisible profit 7,50,000 x 100 = 2,50,000 Cap.= 30%. The amount share premium and capital redemption reserve are not available for dividend.

35. Following information‟s are regarding Profit & Loss Account of a company: Year Profit or Loss

Depreciation

Depreciation

required as per

Company Act.

Depreciation

actually

Provided

Unabsorbed

Depreciation

2006-07 -60,000 30,000 7,500 22,500

2007-08 -30,000 22,500 15,000 7,500

2008-09 + 1,50,000 45,000 45,000

Determine its divisible profit for the year 2008-09.

(a) Rs. 52,500

(b) Rs. 1,50,000

(c) Rs. 1,00,000

(d) Rs. 75,000

[Ans. : (a) Divisible profit Rs. 52,500 [In year 2008-'09 - profit before depreciation Rs. 1,50,000 less : Depreciation for current year Rs. 45,000 - 1,05,000. less Arrears of depreciation of previous years Rs. 30,000 (22,500 + 7,500) = 75,000 less loss or depreciation provided during previous years whichever is less Rs. 22,500 [For 2006-'07 Rs. 7,500,+ For 2007-'08 Rs. 15,000) = Rs. 52,500 divisible profit

Page | 38

36. Following information is regarding Profit and Loss Account of Memoon Company: Year Profit or Loss before

Depreciation

Rs.

Depreciation required

by law

Rs.

Unabsorbed

depreciation

Rs.

2007-08 -56000 28000 24000

2008-09 -28000 21000 7000

2009-10 +140000 42000

Less : Losses or Depreciation provided during previous years whichever is less :

Year Loss Depreciation

2008 45,000 5,000 = 5000

2009 56,000 6,000 = 6000 11000

(a) Rs. 50,000

(b) Rs. 30,000

(c) Rs. 20,000

(d) Rs. 13,000

Ans. (d) Divisible Profit for 2010 (Rs.. 13,000)

37. Profit of a company is Rs. 4,00,000. Calculate the amount required to be transferred to General Reserve, if the company decides to declare dividend on share capital at the rate of 13.5%

(a) Rs. 1,00,000

(b) Rs. 30,000

(c) Rs. 54,000

(d) Rs. 20,000.

[Ans.: (d) Rs. 20,000 (5% of Rs. 4,00,000).

38. Total paid up equity share capital of a company is Rs. 25 lakhs. Current year's profit after depreciation and tax is Rs. 7 lakhs. What will be the minimum amount to be transferred to reserve, if the recommended rate of dividend is 18%?

(a) Rs. 4,50,000

(b) Rs. 2,50,000

(c) Rs. 52,500

(d) Rs. 70,000

[Ans.: (c) Rs. 52,500 transfer to Reserve (7,00,000 x 7.5%).]

39. Dividend warrants should be issued to or dividend should be paid to the members within how much time, after the dividend is declared ?

(a) 21 days

(b) 42 days

(c) Before the end of respective financial year

(d) 30 days

Ans. : (d) 30 days.

Page | 39

40. Unpaid dividend should be transferred to a special unpaid dividend A/c after days of declaration of dividend.

(a) Thirty

(b) Forty two

(c) Thirty seven

(d) Sixty

[Ans. : (a) Thirty]

41. The profit that is to be distributed among shareholders as per prescribed rate of dividend is called

(a) Gross profit

(b) Divisible profit

(c) Capital profit

(d) Reserve profit

[Ans. : (a) Divisible profit]

42. Dividend warrants should be issued to or dividend should be paid to the members within how much time, after the dividend is declared?

(a) 21 days

(b) 30 days

(c) 42 days

(d) 45 days

[Ans. : (b) 30 days]

43. Which of the following statements is not correct? (a) The Board of Directors can declare interim dividend.

(b) No Dividend can be declared without providing for depreciation on

(c) Dividend cannot be declared from the profits prior to the incorporation fixed assets

(d) The member of the company have the power in general meeting to raise the rate of

dividend being declared by the board of directors

Ans. : (b) Dividend cannot be declared from the profits prior to the incorporation

44. Current year profit of a company is Rs. 4,00,000, Calculate the amount required to be transferred to General Reserve. If the company decides to declare dividend on share capital at the rate of 13.5%.

(a) Rs. 54,000

(b) Rs. 30,000

(c) Rs. 20,000

(d) Rs. 1,00,000

[Ans. : (c) Rs. 20,000.]

Page | 40

45. Which of the following statements is not correct? (a) The Board of Directors can declare interim dividend.

(b) Dividend cannot be declared from the profits priors to the incorporation

(c) No dividend can be declared without providing for depreciation on fixed assets.

(d) The members of the company have the power in General Meeting to raise the rate

of dividend being declared by the board of directors.

[Ans. : (b) Dividend cannot be declared from the profits prior to the Incorporation.]

46. Following information is relating to the profit and loss of a company for the past three year:

Year Profit or

Loss before

depreciation

Provision of

Depreciation

depreciation

per Act 205

depreciation

Profit or

Loss after

depreciation

2010-11 -40,000 5,000 32,000 -45,000

2011-12 -50,000 6,000 20,000 -56,000

2012-13 +1,00,000 15,000 25,000 +85,000

How much amount the company can use for declaring dividend in the year 2012-13? (a) Rs. 13,000

(b) Rs. 10,000

(c) Rs. 15,000

(d) Rs. 23,000

[Ans. : (d) Rs. 23,000] 47. Total paid up Equity share capital of a company is Rs. 25,00,000. Current year's profit after depreciation and Tax is Rs. 5,00,000. What will be the minimum amount to be transferred to General Reserve, if the recommended rate of dividend is 17.5%?

(a) Rs. 37,500

(b) Rs. 87,500

(c) Rs. 4,37,500

(d) Rs. 50,000

[Ans. : (a) Rs. 37,500] 48. Current year profit of a company is Rs. 6,00,000. Calculate the amount required to be transferred to general reserve if company decides to declare dividend on share capital at the rate of 13.5%.

(a) Rs. 60,000

(b) Rs. 1,00,000

(c) Rs. 30,000

(d) Rs. 45,000

[Ans. : (c) Rs. 30,000]

Page | 41

49. Which of the following statement is not correct for the divisible profit?

(a) No dividend can be declared without providing for depreciation on fixed assets.

(b) The Board of Directors can declare interim dividend.

(c) Dividend cannot be declared from the profit prior to incorporation.

(d) The members of the company have the power in General Meeting to raise the rate

of dividend being declared by the Board of Directors.

[Ans. : (4) The members of the company have the power in General Meeting to raise the rate of dividend being declared by the Board of Directors.]

50. Which of the following statements is not a consequence of understatement of profits?

(a)The understatement of profits will amount to tax evasion;

(b) The managerial personnel and employees will get less remuneration and bonus if

profit is understated;

(c) The Profit & Loss Account will not exhibit true and fair view of the results and the

Balance Sheet will not exhibit true and fair state of affairs of the business;

(d) By showing less profit, secret reserves will be utilised for paying dividend.

[Ans.: (d) By showing less profit, secret reserve is utilised, which is against the provisions]

51. Which Of the following statements is not a consequence of over-valuation of profits? (a) It may result into payment of dividend out of capital;

(b) This will protect the interest of the debenture-holders and creditors;

(c) More profits will attract more tax liabilities;

(d) It will result into more payment of managerial remuneration - if based on profits.

[Ans.: (b); By Overstating profit, the interest of debenture holders and Creditors is adversely affected.]

52. Which of the following is not a guiding principle in computing divisible profits? (a) The reputation of the company must be maintained by any means;

(b) The generally accepted principles of Accountancy should be followed;

(c) The regulations of the Memorandum and Articles of Association must be complied

with; Companies Act?

(d) The provisions of the Companies Act must be strictly complied with.

[Ans.: (a); The reputation of the company must be maintained is not a guiding principle in computing profit. In fact, that will lead to manipulation of accounts]

Page | 42

53. Which of the following provisions is not a part of Section 205 of the companies act? (a) Dividend cannot be declared or paid by a company without providing for

depreciation;

(b) Depreciation must be provided for any financial year falling after 28

(c) It is provided that the depreciation should be written off at the rates 12-1960

before declaring dividend for any financial year; specified in the Income Tax Act,

1961;

(d) Where any asset is sold, discarded, demolished or destroyed in any financial year,

the loss i.e. excess of written down value over its net sales value should be written off

as terminal allowance in the same financial year.

[Ans. : (c) Depreciation is to be provided according to rates prescribed by Schedule 14 of Companies Act and not according to Income Tax-Act 1961]

54. Following information is relating to the profit of a company for the past three years

Year Profit or Loss

before

Depreciation

Provision for

Depreciation

Depreciation

prescribed as per

act 205

Profit or Loss

after

Depreciation

2008 -40,000 5000 -32,000 -45,000

2009 -50,000 6000 -20,000 -56,000

2010 +90,000 15,000 -25,000 +75,000

How much amount the company can use for declaring dividend in 2010?

(a) Rs. 24,000

(b) Rs. 11,000

(c) Rs. 13,000

(d) Rs. 20,000

[Ans. : (C) Rs. 13,000.]

55. Which of the following is not included in the clauses of memorandum of association of company ?

(a) Name clause of the company

(b) Address of registered office of the company

(c) Clause of liability of members

(d) The rights, liabilities and dividend rights of various types of shareholders.

Answer: (d) The rights, liabilities and dividend rights of various types of shareholders.

Page | 43

56. As per the requirements of the companies act, the gap between date of profit and loss account and the date of AGM should not exceed-

(a) 6 Months

(b) 3 Months

(c) 9 Months

(d) 4 Months

Answer : (a) 6 Months

57. Bonus shares can not be issued from the following sources:

(a) General reserve

(b) Capital redemption reserve

(c) Revaluation reserve

(d) Securities Premium

Answer : (c) Revaluation reserve

58. Minimum time lag required between two bonus issues is-

(a) 12 Months

(b) 24 Months

(c) 36 Months


Answer : (d) None of the above

59. can the securities premium be utilised to convert partly paid up shares into fully paid up shares as bonus ?

(a) No

(b) Yes

(c) Can be utilised if articles of association of the company provides

(d) Companies act does not provide anything with respect to this.

Answer : (a) No

Page | 44

60. To which of the following parties is the auditor expected to address his report ?

(a) Shareholders of the company

(b) Board of directors of the company

(c) Central government

(d) Company Secretary

Answer : (a) Shareholders of the company

61. If the auditor has given a qualified report, which of the following consequences may result ?

(a) The board of directors have to give reply to such qualifications in board's report

(b) The board of directors have to resign

(c) Auditor has to resign

(d) The Central government may impose a fine on shareholders.

Answer : (a) The board of directors have to give reply to such qualifications in board's report

62. To which of the following parties is the auditor expected to address his certificate ?

(a) Board of directors of the company

(b) Central Government

(c) Shareholder of the company

(d) Not addressed to any party

Answer : (d) Not addressed to any party

63. is a statement of collected and considered facts.

(a) Audit programme

(b) Report

(c) audit statement


Answer : (b) Report

Page | 45

64. The date of Auditor's report should not be -

(a) Earlier than the date on which the accounts are approved by the management.

(b) Later than the date on which the accounts are approved in the board's meeting.

(c) The date of AGM.

(d) Both (B) and (C)

Answer : (a) Earlier than the date on which the accounts are approved by the management.

65. In which circumstances clean audit report can be given ?

(a) Proft or loss a/c dose not give a true and fair view of profit or loss.

(b) When balance sheets does not give true and fair view of the state of affairs.

(c) Proper books of accounts are kept as required by law

(d) Defect is found in examination of accounts

Answer : (c) Proper books of accounts are kept as required by law

66. The profit that is to be dstributed among shareholders as per prescribed rate of dividend is called-

(a) Divisible Profit

(b) Gross Profit

(c) Reserve Profit

(d) Capital Profit

Answer : (a) Divisible Profit

67. Which of the following is not a guiding principle in computing divisible profit ?

(a) The generally accepted principles of accountancy should be followed

(b) The provisions of the companies act must be strictly complied with.

(c) the regulation of the memorandum and articles of association must be complied

with.

(d) The reputation of the company must be maintained by any means.

Answer : (d) The reputation of the company must be maintained by any means

Page | 46

68. Which of the following statements is not correct for the divisible profit ?

(a) No dividend can be declared without providing for depreciation on fixed assets.

(b) The board of directors can declare interim devidend.

(c) Dividend can not be declared from the profit prior to incorporation.

(d) The members of the company have the power to raise th rate of dividend being

declared by the board of directors in the general meeting.

Answer : (d) The members of the company have the power to raise th rate of dividend being declared by the board of directors in the general meeting.

69. Which of the following statements is not a consequence of over valuation of profits?

(a) It may result into payment of dividend out of capital.

(b) This will protect the interest of the debenture holders and creditors.

(c) More profits will attract more tax liabilities

(d) It will result into more payment of managerial remneration if based on profits.

Answer : (b) This will protect the interest of the debenture holders and creditors.

70. Which of the following statements is correct ?

(a) The term 'I nvestigation' implies an examination of accounts and records for some

special purpose

(b) Investigation is compulsory under the companies act

(c) Audit report must incorporate the details of investigation.

(d) The Investigation is always carried out as per the instructions issued by 'SEBI'

Answer : (a) The term 'I nvestigation' implies an examination of accounts and records for some special purpose

71. Which of the following points is not relevant in relation to investigation when there is considerable increase in gross profit in spite of steady sales figure ?

(a) Examinations of reasons for increase in the percentage of gross profit

(b) Increase in the price of raw materials

(c) Closing stock might have been overvalued

(d) The purchase are omitted from being recorded in the books

Answer : (b) Increase in the price of raw materials

Page | 47

72. Which one of the following is not requried to be considered for "Investigation in case of suspected fraud" ?

(a) Embezzlement of cash to be examined

(b) The nature of fraud suspected

(c) Disqualifications of Directors of the company

(d) The period of investigation to be covered

Answer : (c) Disqualifications of Directors of the company

73. Whch of the following details is not required to be obtained before preparing an audit programme ?

(a) Accounting system adopted by the competitors

(b) System of internal check

(c) Technical detsils of business or institution

(d) Report of the previous auditor

Answer : (a) Accounting system adopted by the competitors

74. Which of the following statements is not correct with regards to verification and valuation of assets and liabilities, while preparing an audit programme of a college ?

(a) Cash on hand and balance with bank should be verified as usual

(b) The stock of stationery and furniture should be physically verified

(c) All the debts and liabilities should have been accounted for

(d) The investment made for specific purpose should have been recorded properly

Answer : (d) The investment made for specific purpose should have been recorded properly

75. Which of the following is not included in the clauses of Memorandum of Association of a company….

(a) Name Clause of the company

(b) Address of registered office

(c) Clause of liability of members

(d) Rights of share holders

Answer : (d) Rights of share holders

Page | 48

76. If the auditor has given a qualified report, the following consequences may result…

(a) The BoD have to resign

(b) The auditor has to resign

(c) The Central government may impose a fine on share holders

(d) The BoD have to give reply to such Qualifications in the report

Answer : (d) The BoD have to give reply to such qualifications

77. To which of the following parties is the auditor expected to address his certificate?

(a) BoD of the company

(b) Share holders of the company

(c) Central Government

(d) Not addressed to any party

Answer : (d) Not addressed to any party

78. Unpaid dividend should be transferred to a special unpaid dividend account after_____ days of declaration of dividend.

(a) Sixty

(b) Five

(c) Thirty + Five

(d) Thirty

Answer : (c) Thirty + Five

79. The profit that is to be distributed among shareholders as per prescribed rate of dividend is called…

(a) Divisible Profit

(b) Gross profit

(c) Reserve profit

(d) Capital profit

Answer : (a) Divisible profit

Page | 49

80. Which of the following statement is correct?

(a) Investigation is compulsory

(b) The terms investigation implies an examination of accounts for some special

reason

(c) The investigation is carried out according to instructions from SEBI

(d) Audit report must have details of investigation

Answer: (b) the term investigation implies an examination of accounts for a special reason

Page | 50



T.Y.B.Com. Sem. 6

Subject: Statistics- VI

Page | 51



T.Y.B.Com. Sem. 6

Subject: Statistics - VI


1) The method of estimating unknown characteristic of population on basis of sample information is called …………………..

(a) Statistics

(b) Parameter

(c) None

(d) Statistical Inference

Correct Answer :- (d) Statistical Inference

2) Statistical Inference consists of ……………………..

(a) Estimation

(b) Testing of Hypothesis

(c) Both

(d) None

Correct Answer :- (c) Both

3) A constant obtained from all the observations of population is ……………..

(a) Statistics

(b) Parameter

(c) Estimation


Correct Answer :- (b) Parameter

Page | 52

4) A constant obtained from all the observations of sample is ……………………

(a) Statistics

(b) Parameter

(c) None

(d) Inference

Correct Answer :- (a) Statistics

5) The notation for population size is ……………………….

(a) N

(b) M

(c) n

(d) Q

Correct Answer :- (a) N

6) The notation for sample standard deviation is ……………………

(a) S

(b) s

(c) None

(d) p

Correct Answer :- (b) s

7) The population proportion is denoted by ……………………..

(a) q

(b) P

(c) None

(d) S

Correct Answer :- (b) P

Page | 53

8) The sample size is denoted by ……………….

(a) S

(b) P

(c) N

(d) n

Correct Answer :- (d) n

9) A statistical hypothesis which is written for possible acceptance is called ………………. hypothesis

(a) Alternative

(b) Simple

(c) Composite

(d) Null

Correct Answer :- (d) Null

10) A hypothesis complimentary to the null hypothesis is …………………. Hypothesis

(a) Null

(b) Alternative

(c) None

(d) Simple

Correct Answer :- (b) Alternative

11) Null hypothesis is denoted by …………………

(a) Ho

(b) H1

(c) None

(d) Ho1

Correct Answer :- (a) Ho

Page | 54

12) Alternative hypothesis is denoted by …………………..

(a) Ho

(b) H1

(c) None

(d) H1o

Correct Answer :- (a) H1

13) The error committed in rejecting null hypothesis when null hypothesis is true is …………. Error

(a) Type - I

(b) Type - II

(c) None

(d) Correct decision

Correct Answer :- (a) Type – I

14) The error committed in accepting the null hypothesis when it is false is called …………………. Error

(a) Type - I

(b) Type - II

(c) None

(d) Correct decision

Correct Answer :- (b) Type – II

15) The area of probability curve corresponding to Type – I error is called …………. Region

(a) Critical

(b) Level of significance

(c) Power of test


Correct Answer :- (a) Critical

Page | 55

16) When the critical region is on both the tails of probability curve it is called ………………………..test

(a) One tailed

(b) Two tailed

(c) Level of significance


Correct Answer :- (b) Two tailed

17) When the critical region is on one side of probability curve it is called …………test

(a) Two tailed

(b) One tailed

(c) None

(d) Level of significance

Correct Answer :- (b) One tailed

18) If the number of units in the sample is more than 30 it is called …………sample

(a) Large

(b) Small

(c) Medium

(d) Very large

Correct Answer :- (a) Large

19) If the number of units in the sample is less than or equal to 30 is called ……sample

(a) Small

(b) Medium

(c) None

(d) Very small

Correct Answer :- (a) Small

Page | 56

20) If Zcal < Ztab the null hypothesis is ………………………….

(a) Accepted

(b) Rejected

(c) Partially accepted

(d) Partially rejected

Correct Answer :- (a) Accepted

21) In a matrix if there are m rows and n columns the order of matrix is ………………

(a) mXn

(b) nXm

(c) mXm

(d) nXn

Correct Answer:- (a) mXn

22) For row matrix the order of matrix is …………………

(a) 1Xn

(b) nX1

(c) 1X1

(d) 0X0

Correct Answer :- (a) 1Xn

23) For a column matrix the order of matrix is …………………..

(a) mX1

(b) 1Xm

(c) nXn

(d) mXm

Correct Answer :- (a) mX1

Page | 57

24) In unit matrix the diagonal elements of the matrix are ……………….

(a) 1

(b) 0

(c) -1

(d) 2

Correct Answer :- (a) 1

25) For a square matrix the order of matrix is …………..

(a) mXm

(b) mXn

(c) None

(d) nXm

Correct Answer :- (a) mXm

26) The addition and subtraction of two or more matrices is possible when they are of …………order

(a) same

(b) different

(c) None

(d) Can’t say

Correct Answer :- (a) same

27) For a symmetric matrix …………..

(a) aij = aji

(b) aij>aji

(c) aij<aji

(d) Can’t say

Correct Answer :- (a) aij = aji

Page | 58

28) For skew symmetric matrix ………………

(a) aij = (-aji)

(b) aij = aji

(c) None

(d) Can’t say

Correct Answer :- (a) aij = (-aji)

29) For the multiplication of two matrices A and B the number of ………of matrix A and number of

………….of matrix B should be equal

(a) Columns , Rows

(b) Rows , Columns

(c) Rows , Rows

(d) Columns , Columns

Correct Answer :- (a) Columns , Rows

30) A determinant is a ……………… arrangement of numbers

(a) Rectangular

(b) Square

(c) Triangular

(d) Can’t say

Correct Answer :- (b) Square

31) Adjoint of a square matrix is the ……………. of matrix of co-factor of given matrix

(a) Multiplier

(b) Transpose

(c) None

(d) Can’t say

Correct Answer :- (b) Transpose

Page | 59

32) If A is a square matrix and there exists another square matrix of same order such that AB = BA = I

Then B is called …………… of matrix A

(a) Inverse

(b) Transpose

(c) Co-factor

(d) None

Correct Answer :- (a) Inverse

33) If A is a matrix of order 3X3 and B is a matrix of order 3X3 the order of BA is ……………….

(a) 3X3

(b) 2X2

(c) Can’t say

(d) None

Correct Answer :- (a) 3X3

34) If A and B are two square matrices then AB and BA are always equal

(a) False

(b) True

(c) Can’t say

(d) None

Correct Answer :- (a) False

35) If AB = I then A is ………….. of B

(a) Divider

(b) Multiplier

(c) Can’t say

(d) Inverse

Correct Answer :- (d) Inverse

Page | 60

36) For zero matrix all the elements of the matrix are …………….

(a) 0

(b) 1

(c) Can’t say

(d) None

Correct Answer :- (a) 0

37) When the determinant of a square matrix is zero then the type of matrix is ………………….

(a) Singular

(b) Non-singular

(c) Can’t say

(d) None

Correct Answer :- (a) Singular

38) If matrix A is of order 2X3 and matrix B is of order 3X2 then the order of AB is …………………

(a) 3X3

(b) 2X2

(c) 2X3

(d) 3X2

Correct Answer :- (b) 2X2

39) In determinant the number of rows and columns are ……………………..

(a) Not same

(b) Same

(c) Can’t say

(d) None

Correct Answer :- (b) Same

Page | 61

40) For a two tailed test at 5% level of significance the Ztab value is ……………

(a) 1.96

(b) 2.58

(c) 1.645

(d) 2.33

Correct Answer :- (a) 1.96

41. The different alternatives available for making/taking a decision are called .

a. States of Nature

b. Strategies

c. Events

d. Payoff

Correct Answer :- b . Strategies

42. The monetary gain/loss from the combinations of strategies and its corresponding states of nature is known as ___.

a. Acts

b. Pay off

c. Events

d. Payon

Correct Answer :- B. Payoff.

43. If the value of the coefficient of optimism ( Alpha) with respect to the Hurwitz‟s principle is not given then take value of Alpha =_______.

a. 0.9

b. 0.6

c. 0

d. 1

Correct Answer :- B. 0.6

Page | 62

44. When very little information is available and the decision maker cannot assess the probabilities of the various events or states of nature, the method/ situation of decision making used is called Decision Making Under_ .

a. Risk

b. Uncertainty

c. Certainty

d. None

Correct Answer :- B. Uncertainty

45. _______________method is used to find the best strategy /solve sums of Decision Making under Risk.

a. EVPI

b. E.M.V.

c. EPPI

d. None

Correct Answer :- B. EMV

46. ______is the formula for finding EVPI , in short?

a. EPPI – MIN EMV

b. EPPI – MAX EMV

c. EPPI – EMV

d. None

Correct Answer :- b. EPPI – MAX EMV

47. In Decision theory EPPI refers to .

a. Expected Percentage from Perfect Information.

b. Expected Profit from Perfect Information

c. Exact Percentage from Perfect Information

d. None

Correct Answer :- B. Expected Profit from Perfect Information

Page | 63

48. If EVPI is 1000 Rs. and the highest EMV is 500 Rs. What is the amount/value of EPPI?

a. 1500

b. 500

c. 2

d. None

Correct Answer:- A. 1500

49. In which principle of decision-making coefficient of optimism is used?

a. Laplace

b. maxi min

c. Hurwitz

d. Maxi Max

Correct Answer :- C. Hurwitz

50. The item costs Rs. 40 per unit and sells at Rs. 60 per unit. If units are not sold, they can be returned back at Rs. 10 per unit. The demand of an item is given below :

Demand 40 50 60 70

Probability 0.20 0.25 0.5 0.05

Calculate EMV, if 50 units are produced.

a. 900

b. 500

c. 870

d. None

Correct Answer :- A. 900

Page | 64

51. In which principle of decision-making equal probabilities are assigned to different states of nature?

a. Laplace

b. maxi min

c. Hurwitz

d. Maxi Max

Correct Answer :- A. Laplace (Note : Here average is taken so by default each observation assumes equal probability)

52. If the future demands are not known with certainty one would select the strategy with maximum ____, under the concept of Risk.

a. EPPI

b. EVPI

c. EMV

d. MAXI MAX

Correct Answer :- C. EMV

53. If the maximum pay-offs of different acts are as follows:

A B C D

28 24 26 20

Which act should be selected according to Maxi-max principle ?

a. B

b. A

c. D

d. C

Correct Answer :- B. Strategy A (i.e., 28)

54. E.V.P.I. is the abbreviation for _______.

a. Expected Value for Perfect Information

b. Exempted Value for Perfect Information

c. Established Value for Perfect Information

d. None

Correct Answer :- A. Expected Value for Perfect Information

Page | 65

55. E.M.V. stands for ______________

a. Expected Money Value

b. Expected Monitory Value

c. Expected Maximum Value

d. None

Correct Answer :- b. Expected Monitory Value

56. If the minimum pay-offs of different acts are as follows :

S1 S2 S3 S4

28 24 26 20

Which act should be selected according to Maxi- Min principle ?

a. S1

b. S2

c. S3

d. S4

Correct Answer :- A. S1.

57. If the calculations of Laplace Principle give the following averages then ______ Strategy is selected.

S1 S2 S3 S4

40 43 26 20

a. S1

b. S2

c. S3

d. S4

Correct Answer :- B. S2

Page | 66

58. If the calculations of Hurwitz Principle give the following averages then ______ Strategy is selected.

SA1 SA2 SA3 SA4

40 46 29 28

a. SA1

b. SA2

c. SA3

d. SA4

Correct Answer :- B. SA2

59. The probabilities for two states of nature is 0.4 and 0.6. If the pay-offs for an act are 125 and 300, find EMV.

a. EMV = 230

b. EMV = 235

c. EMV = 330

d. None

Correct Answer :- A. EMV = 230

60. If EMV for acts are 829, 860 and 790 and EVPI = 160, find Expected Profit for Perfect Information.

a. 1010

b. 1030

c. 1020

d. 1200

Correct Answer :- C. 1020

61. The competitive situation will be called a ______.

a. strategy

b. act

c. game

d. payoff

Correct Answer :- C. Game

Page | 67

62. The ___________ of a player is the decision rule he uses for making the choice from his list of courses of action.

a. strategy

b. act

c. game

d. payoff

Correct Answer :- a. strategy

63. In Game Theory, what is the classification of strategy?

a. Pure Strategy

b. Mixed Strategy

c. Both options a & b

d. None

Correct Answer :- C. Both options a & b

64. When do players apply mixed strategies?

a. when there is no, saddle point.

b. when there is a , saddle point.

c. every time it is applied

d. Never applied

Correct Answer :- a. when there is no, saddle point.

65. A ____________point is the position in the payoff matrix, where the maximum of row minima coincides with the minimum of column maxima.

a. Break-even point

b. saddle

c. pay off

d. None

Correct Answer :- B. saddle

Page | 68

66. A game with two players, where a gain of one player equals the loss of the other is known as _____________ .

a. a two-person zero sum game.

b. a Six -person zero sum game.

c. Saddle Point

d. Pay off

Correct Answer :- A. a two-person zero sum game.

67. A strategy is called ________, if one knows in advance of the play that it is certain to be adopted irrespective of the strategy the other may choose.

a. pure

b. Mixed

c. Partial

d. None

Correct Answer :- A. pure

68. The optimal strategy mixture for each player may be determined by assigning to each strategy its probability of being chosen. These strategies are called _______ strategy.

a. pure

b. Mixed

c. Partial

d. None

Correct Answer :- b. Mixed

69. Games without saddle point require players to play ___________ strategies.

a. pure

b. Mixed

c. Partial

d. None

Correct Answer :- b. Mixed

Page | 69

70. Games with saddle point require players to play ___________ strategies.

a. pure

b. Mixed

c. Partial

d. None

Correct Answer :- a. pure

71. ___________is the point of intersection of pure strategies.

a. a two-person zero sum game.

b. Pay off point.

c. Saddle Point

d. Strategic Point

Correct Answer :- c. Saddle Point

72. A pure strategy game is one in which each player has only one optimal strategy.

a. False

b. True

c. Can’t Say

d. None

Correct Answer :- B. True

73. The gains resulting from a game is called ________.

a. Break-even point

b. saddle point

c. payoff

d. None

Correct Answer :- c. payoff

Page | 70

74. In Game theory, Minimax is maximum of row minima.

a. False

b. True

c. Can’t Say

d. None


75. Maximin is minimum of column maxima.

a. False

b. True

c. Can’t Say

d. None


76. In Game theory, by default Player A is regarded as the one who _______.

a. Gaines ( Wins)

b. Looses

c. Draws the game ( Tie)

d. None

Correct Answer :- a. Gaines ( Wins)

77. In Game theory, by default Player B is regarded as the one who _______.

a. Gaines ( Wins)

b. Looses

c. Draws the game ( Tie)

d. None

Correct Answer :- b. Looses

Page | 71

78. In Game theory, Player B uses the ___________ principle to play the game.

a. Mini Max

b. maxi min

c. Hurwitz

d. Maxi Max

Correct Answer :- a. Mini Max

79. In Game theory, Player A uses the ___________ principle to play the game.

a. Mini Max

b. maxi min

c. Hurwitz

d. Maxi Max

Correct Answer :- b. maxi min

80. The game is said to be a fair game if the value of the game is ________.

a. Zero

b. Exactly +1

c. Exactly -1

d. None.

Correct Answer :- A. Zero

Page | 72



T.Y.B.Com. Sem. 6

Subject: Problems of Indian Economy - II

Page | 73



T.Y.B.Com. Sem. 6

Subject: Problems of Indian Economy - II


1. Which of the following reflect the magnitude of country‟s foreign trade?

(a) Size of its Import-Export

(b) Share of its foreign trade in total world trade

(c) Share of its foreign trade in national income

(d) All of the above

Correct Option: d) All of the above

2. Which factor is mostly affected to proportion of import of foreign trade of India?

(a) POL (Petrol, Oil and Lubricant)

(b) Agriculture Product

(c) Luxury Goods

(d) Machinery

Correct Option: a) POL

3. In which of the sectors does India have a trade surplus?

(a) Agriculture Sector

(b) Industrial Sector

(c) Service sector

(d) None of these

Correct Option: c) Service sector

Page | 74

4. What was the share of India‟s foreign trade in its GDP in 2019? (a) 39.5 %

(b) 49.5%

(c) 59.5%

(d) 29.5%

Correct Option: a) 39.5%

5. Percentage share of which type of products has increased in India‟s foreign trade over the years?

(a) Agriculture Product

(b) Raw Metal and Minerals

(c) Produced Goods

(d) Service

Correct Option: c) Produced Goods

6. Indian exports are mainly classified into how many sections? (a) 2

(b) 3

(c) 4

(d) 6

Correct Option: c) 4 7. In which of the following countries has the percentage share of our exports and imports has decreased?

(a) OPEC countries

(b) OECD countries

(c) ASIAN countries

(d) Latin American countries

Correct Option: b) OECD countries 8. How was the trade balance of India with USA in recent years?

(a) Deficit

(b) Surplus

(c) Equalibrium

(d) Uncertain

Correct Option: a) Deficit

Page | 75

9. Which is the other name for foreign trade policy?

(a) Internal trade policy

(b) Trade policy

(c) EXIM policy

(d) Service Policy

Correct Option: c) EXIM policy

10. Which of the following committees has recommended measures to increase India‟s exports?

(a) Mahalanobis Committee

(b) Mudaliar Committee

(c) Abid Committee

(d) Rangrajan Committee

Correct Option: d) Rangrajan Committee

11. Which government has brought real effective liberalization of foreign trade in India?

(a) Atal Bihari Bajpai

(b) Manmohan Sinh

(c) Narendra Modi

(d) Rajiv Gandhi Govt.

Correct Option: c) Narendra Modi

12. From which year a joint EXIM policy was introduced in India instead of separate import and export policies?

(a) 1980

(b) 1985

(c) 1991

(d) 2000

Correct Option: b) 1985 13. As per the foregin trade policy announced on 1st April, in how many categories export houses for status holders were classified?

(a) 2

(b) 3

(c) 4

(d) 5

Correct Option: d) 5

Page | 76

14. From which year in India, in place of import substitution, import liberlisation has taken important place in trade policy?

(a) 1961

(b) 1971

(c) 1981

(d) 1991

Correct Option: d) 1991 15. Which of the following are the important dimensions of foreign trade of any country?

(a) Quantum

(b) Compeosition

(c) Direction

(d) All of these

Correct Option: d) All of these 16. Which one of the following is India‟s highest trading partner?

(a) OPEC

(b) OECD

(c) Less Developed Countries

(d) all of the above

Correct Option: b) OECD (although its share has fallen, still it is the highest) 17. The foreign trade in India is canalisation through which of the following?

(a) IIFT (Indian Institute of Foreign Trade)

(b) Ministry of Commerce

(c) STC (State Trading Corporation) & MMTC (Metals and Minerals Trading

Corporation)

(d) Export promotion couinsils and Commodity Boards

Correct Option: d) Export Promotion Couincils and Commodity Boards 18. Which of the following is meant to facilitate the trade of agro-products?

(a) SEZ (Special Economic Zone)

(b) AEZ (Agri-Export Zones) (c) STP (Software Technology Park)

(d) None of these

Correct Option: b) AEZ (Agri-Export Zones)

Page | 77

19. In which of the following years was the Indian rupee devalued? (a) 1949

(b) 1966

(c) 1991

(d) All of these

Correct Option: d) All of these 20. In which of the following years was India‟s SEZ (Special Economic Zone) scheme launched?

(a) 1951

(b) 1909

(c) 1991

(d) 2000

Correct Option: d) 2000 21. One of the following is not included in Technology Park Scheme:

(a) EHTP (Electronic Hardware Technology Park)

(b) STP (Software Technology Park)

(c) SIP (Systemetic Investment Plan)

(d) BTP (Bio Technology Park)

Correct Option: c) SIP (Systemetic Investment Plan) 22. India‟s balance of trade can be termed as:

(a) Unfavourable

(b) Favourable

(c) Balanced

(d) Surplus position

Correct Option: a) Unfavourable 23. By how much percentage was the indian rupee devalued in 1991?

(a) Around 33%

(b) Around 16%

(c) Around 18%

(d) Around 36%

Correct Option: c) Around 18%

Page | 78

24. In India, the Super Star Store scheme was launched in which year?: (a) 1991-92

(b) 1994-95

(c) 2000-01

(d) 2015-16

Correct Option: b) 1994-95 25. Which of the following institutes in India provides the guarantee for the recovery of export amounts:

(a) ECGC (Export Credit Guarantee Corporation of India Ltd)

(b) MEIS (Merchandise Export from India Scheme)

(c) EPCG (Export Promotion Capital Goods Scheme)

(d) IIFT (Indian Institute of Foreign Trade)

Correct Option: a) ECGC (Export Credit Guarantee Corporation of India Ltd) 26. The ECGC (Export Credit and Guarantee Corporation) of India was established in which year?

(a) 1951

(b) 1957

(c) 1969

(d) 1991

Correct Option: b) 1957 27. One of the following is the Export Promotion Scheme:

(a) TEE (Towns of export Excellence)

(b) MAI (Market Access Initiative)

(c) MDA (Marketing Development Assistance)

(d) All of these

Correct Option: d) All of these 28. One of the following is the limitation of import substitution policy:

(a) Internal monopoly

(b) Decrease in world trade

(c) Inefficiency of local manufacturers

(d) All of these

Correct Option: d) All of these

Page | 79

29. The full form of DEPB is one of the following: (a) Direct Export Promotion Board

(b) Duty Entitlement Pass Book

(c) Direct Export Promotion Bureau

(d) Duty Entitlement Promotion Book

Correct Option: a) Direct Export Promotion Board 30. As per an estimate, how much was the share of India‟s trade in world‟s total tarde in 2014-15?

(a) 1%

(b) 1.5%

(c) 2.7%

(d) 3%

Correct Option: c) 2.7% 31. Recently percentage share of which countries is highrest in the foreign tarde of India?

(a) Asia

(b) Europe

(c) Latin America

(d) North America

Correct Option: a) Asia 32. What was necessary for whole industrial development in starting stage of planning in India?

(a) Import substitution

(b) Import liberalization

(c) Export promotion

(d) None of these

Correct Option: a) Import substitution

33. In today‟s financial system, the importance of banking sector is: (a) Increasing

(b) Decreasing

(c) Stable

(d) Uncertain

Correct option: a) Increasing

Page | 80

34. Who is the regulator of the Indian banking system? a) SBI

b) RBI

c) NABARD

d) ICICI

Correct option: b) RBI 35. How many public sector banks were there on 31st March 2007?

a) 25

b) 27

c) 39

d) 20

Correct Option: b) 27 36. In which year SBI was established in India?

a) 1948

b) 1951

c) 1955

d) 1960

Correct Option: c) 1955 37. In which year 14 big private banks were nationalized?

a) 1955

b) 1969

c) 1991

d) 1980

Correct Option: b) 1969 38. The banks whose most shares are with private shareholders are known as

a) Public sector banks

b) Private sector banks

c) Regional rural banks

d) Co-operative banks

Correct Option: b) private sector banks 40. From the following which bank is not a private sector bank?

a) HDFC Bank

b) Bank of India

c) ICICI Bank

d) Yes Bank

Correct Option: b) Bank of India

Page | 81

41. What is the minimum reserve amount and paid-up capital of scheduled bank? a) 2 lacs

b) 3 lacs

c) 5 lacs

d) 10 lacs

Correct Option: c) 5 lacs 42. The percentage of rural branches in total bank branches in 2013 was

a) 22%

b) 30%

c) 37%

d) 50%

Correct option: c) 37% 43. In 2013, the average population per bank branch was

a) 63,800

b) 50,000

c) 25,000

d) 12,670

Correct Option: d) 12,670 44. By how much did the deposits of commercial banks increase during the period from 1991 to 2013?

a) 25 times

b) 30 times

c) 35 times

d) 37 times

Correct Option: c) 35 times 45. Due to recommendation of Narshimham committee, importance of which bank is increasing in Indian baking structure?

a) Public sector banks

b) Private sector banks

c) Private and foreign banks

d) Co-operative banks

Correct Option: c) Private and foreign banks 46. How much minimum net worth is necessary to start the new private sector bank?

a) 50 crores

b) 100 crores

c) 200 crores

d) 500 crores

Correct Option: b) 100 crores

Page | 82

47. Which type of banks had to force healthy competition by new private sector banks?

a) Regional rural banks

b) Co-operative banks

c) Public sector banks

d) Agriculture banks

Correct Option: c) Public sector banks 48. In which year was SARFAESI Act framed to remove the problem of recovery of loan of banks?

a) 1991

b) 1993

c) 2002

d) 2005

Correct Option: c) 2002 49. Which step was taken by the government for revival of the banks which were sick due to NPA?

a) Recapitalization

b) Nationalization

c) Consolidation

d) Privatization

Correct Option: a) Recapitalization 50. Which of the following committees has given recommendation for strengthening of the banking sector in India?

a) Mudliar committee

b) Narashimhan committee

c) Rangrajan committee

d) Kelkar Committee

Correct Option: b) Narashimhan committee 51. What is the minimum Percentage of promoter‟s holding in paid up capital of new private sector bank?

a) 15%

b) 20%

c) 25%

d) 50%

Correct Option: c) 25%

Page | 83

52. What was the recommendation of Narasimham committee regarding SLR? It was to be reduced to ______ in a phased manner in five year period.

a) 15%

b) 25%

c) 30%

d) 20%

Correct Option: b) 25%

53. Mergers of which kind of banks were opposed by Narasimham committee? a) Financially sound

b) Financially weak

c) Financially sound and weak

d) Public sector

Correct Option: c) Financially sound and weak

54. What is the minimum capital adequacy ratio required for banks in India? a) 5%

b) 8%

c) 10%

d) 12%

Correct Option: b) 8%

55. Whose name was connected with the past security scam? a) Harshad Mehta

b) Vijay Mallya

c) Nirav Modi

d) Ramesh Mehta

Correct Option: a) Harshad Mehta

56. Among different sectors of the economy, banking is treated as one of the following sectors:

a) Household

b) Financial intermediary

c) Corporate

d) Government

Correct Option: b) Financial intermediary

57. How many private sector banks were nationalized in the second phase of 15th April, 1980?

a) 4

b) 14

c) 21

d) 5

Correct Option: a) 4

Page | 84

58. From which year was the bill Discounting Scheme started in India?

a) 1952

b) 1969

c) 1991

d) 1980

Correct Option: a) 1952 59. From which year were the factoring services started in India?

a) 1952

b) 1969

c) 1991

d) 1980

Correct Option: c) 1991 60. On which committee‟s recommendations were the factoring services started in India from 1991?

a) N. Narsimham Committee

b) Kalyan Sundaram Committee

c) C. Rangarajan Committee

d) Abid Husain Committee

Correct Option: b) Kalyan Sundaram Committee 61. Who was the chairman of the banking reforms committee appointed in 1991?

a) N. Narsimham

b) Kalyan Sundaram

c) C. Rangarajan

d) Abid Husain

Correct Option: a) N. Narsimham 62. From which year were the Regional Rural Banks started to serve rural area?

a) 1951

b) 1969

c) 1976

d) 1991

Correct Option: c) 1976 63. Which specialized bank in India was established to assist the agriculture sector?

a) IDBI

b) MUDRA

c) SIDBI

d) NABARD

Correct Option: d) NABARD

Page | 85

64. Which specialized bank in India was established to assist the small sector? a) IDBI

b) MUDRA

c) SIDBI

d) NABARD

Correct Option: c) SIDBI 65. Which specialized bank in India established to assist the micro units?

a) IDBI

b) MUDRA

c) SIDBI

d) NABARD

Correct Option: b) MUDRA 66. One of the following is not the bank account opened by banks for mobilizing the savings.

a) Saving Account

b) Current Account

c) Cash Credit Account

d) Fixed Deposit Account

Correct Option: c) Cash Credit Account 67. A cheque issued by one bank on another bank is known as one of the following:

a) Demand draft

b) Pay order

c) Letter of credit

d) Crossed cheque

Correct Option: b) Pay order 68. The full form of RTGS is_____.

a) Regional Transfer Gross Settlement

b) Refinancing of Time deposits for Goods and Services

c) Real Time Gross Settlement

d) Regional Transfer for Goods and Services

Correct Option: c) Real Time Gross Settlement 69. The bank service to provide information about its client to third party is known as

a) Guarantor

b) Referee

c) Underwriting

d) Custodian

Correct Option: b) Referee

Page | 86

70. One of the following is not the short-term lending by the commercial banks.

a) Overdraft

b) Factoring

c) Term loan

d) Bill discounting

Correct Option: c) Term loan 71. After what time of non-payment of interest and principal having become due, is it treated as non-performing assets?

a) 14 days

b) 30 days

c) 90 days

d) 182 days

Correct Option: c) 90 days 72. One of the following services is not included in the merchant banking services

a) Underwritings

b) Share issue management

c) Demonetization

d) Drafting of prospectus

Correct Option: c) Demonetization 73. Which one of the following is a limitation of public sector banks?

a) Lower efficiency

b) Political interference

c) Increasing NPA

d) All of these

Correct Option: d) All of these 74. One of the following banks is not included in new private bank

a) Axis Bank

b) ICICI Bank

c) Karur Vaishya Bank

d) Bandhan Bank

Correct Option: c) Karur Vaishya Bank 75. In which year RBI was established?

a) 1935

b) 1947

c) 1951

d) 1949

Correct Option: a) 1935

Page | 87

76. Which is the policy of RBI regarding money control? a) Administrative Policy

b) Fiscal Policy

c) Monetary Policy

d) None of these

Correct Option: c) Monetary Policy 77. Which of the following tool is not of quantitative credit control?

a) Bank rate

b) Open market operation

c) Credit rationing

d) CRR

Correct Option: c) Credit rationing 78. What was the bank rate since 2004-2005 in India?

a) 6%

b) 7%

c) 9%

d) 10%

Correct Option: a) 6% 79. Which policy is important for controlling inflation?

a) Administrative Policy

b) Monetary Policy

c) Fiscal Policy

d) None of these

Correct Option: b) Monetary Policy 80. What should be done by the RBI to the bank rate to keep inflation in control?

a) Increase

b) Decrease

c) Stable

d) Uncertain

Correct Option: a) Increase

81. At present, which instrument is used most by monetary policy? a) Bank rate

b) SLR

c) Repo rare

d) CRR

Correct Option: c) Repo rate

Page | 88

82. In which range can the RBI change the CRR? a) 3% to 15%

b) 5% to 20%

c) 5% to 15%

d) 5% to 10%

Correct Option: a) 3% to 15% 83. The interest rate at which RBI provides short term loans to commercial banks is called---

a) Bank rate

b) Repo rate

c) Reverse repo rate

d) SLR (Statutory Liquidity Ratio)

Correct Option: b) Repo rate 84. In which year NABARD was established?

a) 1982

b) 1992

c) 1990

d) 1986

Correct Option: a) 1982 85. What is the ratio of SLR in India?

a) 25%

b) 30%

c) 27%

d) 34%

Correct Option: a) 25% 86. What is the main function of RBI?

a) Issue legal Money

b) As the banker of the government

c) Clearing house

d) All of these

Correct Option: d) All of these 87. What is the main objective of RBI?

a) Economic development

b) Price stability

c) Stability of exchange rate

d) All of these


Page | 89

88. MSF rate in monetary policy of RBI announced on 7th august 2019 is ____. a) 5.50%

b) 5.65%

c) 5.40%

d) 7.25%

Correct Option: b) 5.65% 89. Monetary Policy is called

a) Credit control Policy

b) Fiscal Policy

c) Cash reserve Policy

d) None of these

Correct Option: a) Credit control Policy 90. The Treasury Bills can mature in _________.

a) 14 days

b) 91 days

c) 182 days

d) All of these

Correct Option: d) All of these 91. One of the following is not the instrument of short term money market

a) Treasury bill

b) Commercial paper

c) Certificate of deposits

d) Certificate of origin

Correct Option: c) Certificate of deposits

92. The Bill Market Scheme was introduced by RBI in which year? a) 1934

b) 1947

c) 1952

d) 1969

Correct Option: c) 1952 93. On which of the following assets of the bank client, bill discounting services are provided?

a) Bill receivables

b) Debtors c) Bills Payables

d) Inventories

Correct Option: a) Bill Receivables

Page | 90

94. The full-form of CRR is

a) Credit rationing ratio

b) Cash reserve ratio

c) Client registration rate

d) Credit return ratio

Correct Option: b) Cash Reserve Ratio 95. Which of the following institutions issues Treasury Bills in India?

a) Government of India

b) State Government

c) Reserve Bank

d) State Bank

Correct Option: c) Reserve Bank 96. Which publication is published by the Reserve Bank of India every month?

a) Capital Market

b) Indian Banking

c) Reserve Bank Bulletin

d) Currency and Finance

Correct Option: c) Reserve Bank Bulletin 97. In India, the reserve repo rate as compared to repo rate tends to be _________.

a) High

b) Low

c) Equal

d) No relation between them

Correct Option: b) Low 99. One of the following is not included in the short term money market instruments:

a) Treasury bill

b) Commercial paper

c) Treasury bond

d) Certificate deposits

Correct Option: d) Treasury bond 100. The currency notes issued by the issue department are known as _________:

a) Commercial Paper

b) Treasury Bills

c) Legal tender

d) Certificate deposits

Correct Option: c) Legal tender

Page | 91

101. Which one of the following is not included in the functions of RBI? a) Government’s bank

b) Banker’s bank

c) To issue currency notes

d) Bill discounting

Correct Option: d) Bill discounting 102. The facility provided by the RBI to the scheduled banks for maintaining liquidity through repo and reverse-repo transactions is called __________.

a) CRR (Cash Reserve Ratio)

b) SLR (Statutory Liquidity Ratio)

c) LAF (Liquidity Adjustment Facility)

d) NPA (Non-Performing Assets)

Correct Option: c) LAF (Liquidity Adjustment Facility) 103. Who will benefit by the devaluation of Indian rupee?

a) Indian importer

b) Indian exporter

c) Domestic industry

d) Fixed income earners in India

Correct Option: b) Indian exporter 104. In the modern economic world, the economic development can be attained only through the monetary policy was advocated by one of the following economists.

a) Friedman

b) Samuelson

c) Keynes

d) Marshall

Correct Option: a) Friedman 105. The administrative head of the RBI is known as

a) Finance minister of India

b) President

c) Governor of RBI

d) Prime minister

Correct Option: c) Governor of RBI

106. The present governor of RBI IS

a) Urjit Patel

b) Shashikant Das

c) Raghuram rajan

d) Bimal jalan

Correct Option: b) Shashikant Das

Page | 92

107. The head office of reserve bank of India is in

a) New Delhi

b) Mumbai

c) Kolkata

d) Chennai

Correct Option: b) Mumbai 108. The nationalization of RBI was made in which year?

a) 1935

b) 1947

c) 1948

d) 1950

Correct Option: c) 1948 109. The main function of Finance Commission in India is ____________:

(a) To declare fiscal policy

(b) Allocation of tax revenues between centre and states

(c) To levy taxes

(d) To investigate tax evasions

Correct Option: b) Allocation of tax revenues between centre and states 110. Who appoints the Finance Commission in India?

(a) Prime Minister

(b) Finance Minister of India

(c) President of India

(d) Governor of Reserve Bank

Correct Option: c) President of India 111. The Chairman of the 15th Finance Commission (2020-25) is one of the following:

(a) C.D. Deshmukh

(b) K.C.Niyogi

(c) Nilam Sanjiv Reddy

(d) N.K.Singh

Correct Option: d) N. K. Singh

Page | 93

112. Who was the chairman of the Tax Reform Commettee appointed in 1991 ?

(a) Vijak Kelkar

(b) Raja J. Chelliah

(c) Parthsarthy Shome

(d) Akhilesh Ranjan

Correct Option: b) Raja J. Chelliah 113. The demonetisation in India was done in which year?

(a) 1946

(b) 1978

(c) 2016

(d) All of these

Correct Option: d) All of these 114. From which year GST Act was implemented in India?

(a) 2015

(b) 2017

(c) 2019

(d) 2020

Correct Option: b) 2017 115. Which tax is applicable for providing intra-state sales of services?

(a) CGST

(b) SGST

(c) IGST

(d) None of these

Correct Option: c) IGST 116. How many times was demonetization done in India since planning (1951)?

(a) One

(b) Two

(c) Three

(d) Four

Correct Option: b) Two

Page | 94

117. On which date were the currency notes of Rs. 500 and Rs. 1000 demonetized in India?

(a) 8th

November - 2016

(b) 8th

November - 2017

(c) 8th

November - 2018

(d) 30th

December - 2016

Correct Option: a) 8th November – 2016 118. Which one of the following is the tax of Central Government?

(a) Entertainment Tax

(b) Vehicle Tax

(c) Wealth Tax

(d) Stamp Duty

Correct Option: c) Wealth Tax 119. One of the following is the tax of state Government:

(a) Entertainment Tax

(b) Income Tax

(c) Wealth Tax

(d) Excise and Custom Duty

Correct Option: a) Entertainment Tax 120. The first Finance Commission in India was appointed for period ________.

(a) 1947-52

(b) 1952-57

(c) 1961-65

(d) 1969 - 74

Correct Option: b) 1952-57 121. The 15th Finance Commission in India is appointed for period __________:

(a) 2001-05

(b) 2011-15

(c) 2015-20

(d) 2020-25

Correct Option: d) 2020-25

Page | 95

122. Which one of the following is the scheme for controlling black money in India?

(a) Voluntary Disclosure Scheme

(b) Bearer Bond

(c) Demonetization

(d) All of these


Page | 96



T.Y.B.Com. Sem. 6

Subject: Fundamentals of Financial

Management

Page | 97



T.Y.B.Com. Sem. 6

Subject: Fundamentals of Financial Management


1. Managers try to attain objectives keeping finance in centre as _____. A. Maximisation of Income and Effective use of assets.

B. Satisfactory return on investment.

C. Social services oriented objectives.

D. All of these Ans: (D) All of these

2. In which century the term finance was considered as money lenders? A. 17th century B. 18

th century

C. 19th

century

D. 21st century

Ans : (A) 17th century

3. In Modern finance what is taken into consideration _______. A. Only Acquisition of finance B. Only Utilisation of finance C. Both Acquisition and Utilisation of finance D. None of these

Ans : (C) Both Acquisition and Utilisation of finance

4. Finance manager has to perform _____ activities. A. To estimate the need of required finance. B. To procure required finance from various sources. C. To distribute finance amongst various departments. D. All of these

Ans : (D) All of these

5. Identify the characteristics of a sound financial planning. A. Simplicity B. Flexibility C. Economical D. All of these


Page | 98

6. Functions regarding Financial planning includes ______. A. Cash planning B. Collection from customers C. Planning for borrowing of money D. Both cash planning and planning for borrowing of money

Ans : (D) Both cash planning and planning for borrowing of money

7. ______ is not the limitation of traditional approach. A. Use of finance is not considered

B. Only form of company is considered

C. No analytical approach

D. None of these Ans (D) None of these

8. What are the objectives of Financial Management? A. Profit Maximization approach B. Wealth Maximization approach C. Both Profit and Wealth Maximization approach D. None of these

Ans : (C) Both Profit and Wealth Maximization approach

9. _____ is not the limitation of Profit Both Profit Maximization approach. A. To Consider time value of money B. To consider risk element for evaluation C. Ignores risk D. Both To Consider time value of money and To consider risk element for

evaluation Ans (D) Both To Consider time value of money and To consider risk element for evaluation

10. ________ is the process of estimating the fund requirements of a firm and determining the sources of funds.

A. Financial Planning B. Financial Management C. Money Market D. Capital Market

Ans : (A) Financial Planning

Page | 99

11. Capital structure with more types of securities makes it ______. A. Complicated B. Easy C. Flexible D. None of these

Ans : (A) Complicated

12. Investors prefer to buy debentures, cumulative preference share when prices are ______.

A. Decline B. Increasing C. Average D. None of these

Ans : (A) Decline

13. Investors prefer to buy _______ when prices increase. A. Equity shares B. Preference share

C. Debentures

D. Bonds

Ans : (A) Equity shares

14. Identify which is not the external factors determining capital structure. A. Taxation structure of country.

B. Condition of capital market

C. Attitude of investors

D. Risk in Business Ans : (D) Risk in Business

15. Identify which is not the internal factor of capital structure. A. Increase in trading o0n equity B. Future needs C. Control on management D. Taxation structure of country.

Ans : (D)Taxation structure of country.

16. The ratios of ownership capital and borrowed money are known as _____. A. Capital gearing B. Low gearing C. Thin equity D. Trading on equity

Ans : (A) Capital gearing

Page | 100

17. Among the following Trading on equity becomes profitable in which circumstances? A. Risk and compensation B. Higher rate of earning C. Rate of taxes D. All of these


18. To increase the profit of equity shareholders when company uses the securities with fixed burden such as debentures, preference share is called ______. A. Financial leverage B. Operational leverage C. None of these D. Combined leverage

Ans : (A) Financial leverage

19. Identify the types of preference share from the given option. A. All of these B. Cumulative preference share C. Redeemable preference share D. Convertible preference share

Ans : (A) All of these

20. Which is not the limitation of debentures? A. Fixed income B. High price C. Stamp duty D. Less dividend

Ans : (A) Fixed income

21. ______ are not the causes of watered capital. A. High payment to promoters B. Excess advertisement and no result C. Assets purchased at a high price D. Establishment of company in the time of inflation.

Ans : (D) Establishment of company in the time of inflation.

22. When ratio of equity share capital is very low in comparison of borrowed capital , it is said that the company is possessing _____. A. Thin equity B. Thick equity C. Trading on equity D. Capital gearing

Ans : (A) Thin equity

Page | 101

23. State the methods of Capitalisation. A. Historical cost theory B. Earning theory C. Both Historical cost theory and Earning theory D. None of these

Ans : (C) Both Historical cost theory and Earning theory

24. The historical cost method is suitable for ______. A. New company B. Old company C. Government organisation D. Multinational company.

Ans : (A) New company

25. When ratio of equity share capital is more than the borrowed capital , it is said that the company is possessing _____.

A. Thin equity B. Thick equity C. Trading on equity D. Capital gearing

Ans : (A) Thin equity

26. When in comparison of equity share capital ratio of borrowed money is more then it is called ______. A. High gearing B. Low gearing

C. Capital gearing

D. None of these

Ans : (A) High gearing

27. When the ratio of borrowed capital is less in comparison of owners capital then it is called ______. A. High gearing

B. Low gearing C. Capital gearing

D. None of these

Ans : (B) Low gearing

28. ______ is the importance of capital structure. A. Dividend per share , Financial liability

B. Trading on equity , uncertainty of Income

C. Cost of capital , under or over capitalisation

D. All of these Ans : (D) All of these

Page | 102

29. When company makes profitable business by borrowed capital along with its

ownership capital and pays more dividend to the equity shareholders then it is known as _______. A. Trading on equity B. Thick equity

C. Thin equity D. None of these

Ans : (A) Trading on equity

30. The concept of operating leverage is associated with _______. A. Production , Purchase

B. Sale , Advertising

C. Distribution , Administration

D. All of these Ans : (D) All of these

31. Formula of operating leverage is ____. A. Operating leverage = changes in operating profit (%)

__________________________ Changes in sales (%)

B. Operating leverage = changes in financial profit (%) __________________________

Changes in depreciation (%)

C. Operating leverage = changes in overall loss (%) __________________________

Changes in sales (%)

D. All of these

Ans : (A) Operating leverage = changes in operating profit (%) __________________________ Changes in sales (%)

32. Give full form of : EBIT A. Earnings Before Interest & Taxes B. Evaluating Before Interest & Taxes

C. Earning By Interest & Taxes

D. Evaluating By Internal Taxes

Ans : (A) Earnings Before Interest & Taxes

Page | 103

33. DOL stands for ______. A. Degree of Operating Leverage B. Degree of Over Leverage

C. Degree of Outstanding Leverage

D. Degree of Overall Leverage

Ans : (A) Degree of Operating Leverage

34. ______ is not the advantage of financial leverage. A. Risky in starting years

B. Lower capital cost

C. Advantage of Taxes

D. Capital formation on a large extent

Ans : (A) Risky in starting years

35. Which of the following is not a function of operating leverage in a firm? A. The amount of fixed costs B. The rates of income-tax C. The contribution margin D. The volume of sales

Ans : (B) The rates of income-tax

36. _____ are the remedies for over capitalisation. A. Reduction of share value B. Ploughing back of profits C. Reorganisation of capital structure D. All of these


37. Which of the following statement is not correct? A. Increase in fixed financial costs requires necessary decrease in EBIT level. B. Financial leverage helps considerably the finance manager while devising the

capital structure of a company. C. One of the objectives of planning an appropriate capital structure is to

maximize the EPS. (Earning per share) D. Financial leverage indicates the percentage change in EPS in relation to a

percentage change in EBIT. Ans.: (A) Increase in fixed financial costs requires necessary decrease in EBIT level.

Page | 104

38. An engineering company‟s actual output is 40,000 units against its installed

capacity of 60,000 units . The contribution margin per unit is Rs 40. What would be the operating leverage when fixed costs is Rs 12,00,000? A. 5.00

B. 4.00 C. 2.00

D. 1.33

Ans : (B) 4.00

Solution:

Operating leverage = contribution

____________

EBIT

Total contribution = Actual output * margin per unit

= 40,000 * 40

Total contribution = 16,00,000

Fixed costs = 12,00,000 (given)

EBIT= Total contribution – Fixed cost

= 16,00,000 – 12,00,000

EBIT = 4,00,000

Operating leverage = contribution

____________

EBIT

= 16,00,000

_________

4,00,000

Operating leverage = 4

39. Zenith Ltd‟s income statement are as follows: Sales : Rs 10,50,000 , variable costs : Rs 7,67,000 , Fixed costs : Rs 75,000 Interest : Rs 1,10,000 Tax rate : 30% . What would be the degree of operating leverage (DOL) of the company ? A. 1.36 B. 1.37

C. 1.00

D. 0.74

Ans : (A) 1.36

Page | 105

Solution :

Operating leverage = c

_______

EBIT

C = sales – variable costs

= 10,50,000-75000

C = 283000

EBIT = C- fixed costs

= 283000- 75000

EBIT = 208000

Operating leverage= C

_______

EBIT

= 283000 / 208000

= 1.36

40. Give idea of trading on equity on basis of balance sheet given below Balance sheet of Raj company Ltd. As on 31.3.2021

Liabilities Amt. Assets Amt.

Equity share capital 50,000 Sundry Assets 3,00,000

6% preference share

capital

75000

5% debentures 1,00,000

Reserve & surplus 25,000

Other liabilities 50,000

Total 3,00,000 Total 3,00,000

A. 50% B. 60%

C. 40%

D. None of these

Ans : (A) 50%

Page | 106

Solution : Trading on Equity = debts/ assets * 100

= debts + other liabilities / assets * 100

= 1,00,000 + 50,000 / 3,00,000 * 100

= 1,50,000 / 3,00,000 * 100

Trading on equity = 50%

41. Working capital means ____________.

a. Current liability minus Current assets

b. Current assets minus Current liability c. Total fixed assets

d. Total liability

Ans: b. Current assets minus Current liability

42. Requirement of working capital will remain continuously for production and __________ activities of business.

a. For Fixed assets

b. For Fixed capital

c. Sales d. All of given

Ans: c. Sales

43. In comparison to fixed capital _________ fluctuation is seen in working capital.

a. Less

b. Temporary

c. More d. Balance

Ans: c. More

44. Working capital is also known as ______.

a. Fluctuating capital

b. Temporary capital

c. Short term capital

d. All of given

Ans: d. All of given.

Page | 107

45. Working capital remains in current assets but these current assets are converted into cash after completion of production and sale process, this element is known as ________.

a. Cash liquidity b. Cash management

c. Cash balance

d. Petty cash

Ans: a. Cash liquidity

46. ____________means the difference between book value of current assets and current liability.

a. Total capital

b. Total working capital

c. Net working capital d. Assets

Ans : c. Net working capital

47. _______________ and __________ are types of working capital.

a. Permanent and flexible b. Current and fixed assets

c. Current and fixed liability

d. None

Ans : a. Permanent and flexible

48. ___________ and ___________ are types of permanent working capital.

a. Seasonal and Initial

b. Seasonal and Special

c. Regular and Initial d. Special and regular

Ans : c Regular and Initial

49. _____________ and __________ are types of flexible working capital.

a. Seasonal and Initial

b. Seasonal and Special c. Regular and Initial

d. Special and regular

Ans : b. Seasonal and Special

Page | 108

50. Working capital locked in raw material is known as __________.

a. Regular b. Initial

c. Seasonal

d. Special

Ans : a. Regular

51. which of the given is not a type of working capital?

a. Initial working capital

b. Regular working capital

c. Seasonal working capital

d. All are types of working capital

Ans: d. All are types of working capital

52. It is that part of working capital which is permanently locked in current assets is known as ____________

a. Permanent working capital b. Seasonal working capital

c. Special working capital

d. Regular working capital

Ans: a. Permanent working capital

53. Which of the following is not a feature of working capital?

a. Short term needs

b. Liquidity

c. Less risky

d. All are the features of working capital

Ans: d. All are the features of working capital

54. Which are the factors that affect the determine working capital requirement in the business

a. Size of business

b. Production policy

c. Nature of business

d. All given are the factors that affect determine working capital requirement.

Ans: d. All given are the factors that affect determine working capital requirement.

Page | 109

55. ____________ are the principles of working capital.

a. Principles of optimisation

b. Principles of Variation

c. Principles of cost of capital

d. All give are principles

Ans: d. All give are principles

56. __________ is not a components of working capital.

a. Cash

b. Debtors and receivable

c. Inventory

d. Profit

Ans : d. Profit

57. The additional working capital required for meeting with the emergency is known as ____________.

a. Permanent working capital

b. Seasonal working capital

c. Special working capital d. Regular working capital

Ans: c. Special working capital

58. Which of the following is not the objective to hold the cash?

a. Business transaction

b. Speculative motive

c. Modernization

d. Sales Promotion

Ans : d. Sales Promotion

59. Which of the following is not a type of inventory?

a. Raw material

b. Semi – Finished

c. Work in progress

d. None of given.

Ans: d. None of given

Page | 110

60. __________ are different expenses involved in holding inventories.

a. Ordering cost

b. Carrying cost

c. Set-up cost

d. Banking expenses

Ans : d. Banking expences

61. Bank provides OD facility to satisfy __________ need of a customer.

a. Permanent

b. Temporary c. Long term

d. None

Ans : b. Temporary

62. Cash management involves the ________ factors.

a. Cash inflow

b. Cash outflow

c. Optimum investment of surplus

d. All factors

Ans: d. All factors

63.___________ are Objectives of maintaining receivables.

a. To achieve growth in sales

b. To increase profit

c. Meet competition

d. All

Ans: d. All

64. Inventory is the ______ property.

a. Tangible b. Intangibles

c. Various forms

d. Continuous

Ans: a. Tangible

Page | 111

65. The waste materials arising during manufacturing is known as ________.

a. Scarp b. Raw material

c. WIP

d. Supplies

Ans: a. Scrap

66. The cost of capital is the ________ acceptable rate of return on funds committed to the project.

a. Maximum

b. Minimum c. More

d. Less

Ans : b. Minimum

67. Write Full form if ROI.

a. Rate of interest b. Rate for interest

c. Rate of investment

d. Rate of return

Ans : a. Rate of interest

68. The minimum estimated rate of return of an investment is called the _______ rate.

a. Optimum rate

b. Minimum rate

c. Maximum rate

d. Cut – off rate

Ans : d. Cut-off rate

69. _________ cost is the cost of capital raised in the past.

a. Historical b. Future

c. Combined

d. Implicit

Ans : a. Historical

Page | 112

70. The total cost of capital obtained from the different sources of finance is called as ______ cost.

a. Historical

b. Future

c. Combined d. Implicit

Ans : c. Combined

71. .Combined cost is also known as __________.

a. Explicit cost

b. Weighted cost c. Future cost

d. Average cost

Ans : b. Weighted cost

72. ______________formula of Cost of Debts.

a. COC = I/P x 100 b. COC = P/I x 100

c. COC = P/I( 1-t) x 100

d. COC =I(1-t)/(f-p)(1-t)

Ans: a. COC = I/P x 100

73. ______ is the significance of Cost of capital.

a. Issue of new securities

b. Financial decisions

c. Capital Budgeting

d. ALL

Ans: d. All

74. Certain costs incurred to issue the shares and debenture is known as _____.

a. Flotation cost b. Capital cost

c. Fixed cost

d. Variable cost

Ans: a. Flotation cost

Page | 113

75. Flotation cost is calculated on _________ value.

a. Face value b. Market cost

c. Fix value

d. After cost

Ans: a. Face value

76. Business capital is broadly divided into ____ & _______ types.

a. Fixed and variable

b. Fixed and working c. Variable and fixed

d. Fixed and permanent

Ans : b. Fixed and working

77. _______ is the formula for calculating cost of debenture.

a. Kd= R/P b. Kd= P/R

c. Kd= (1-t)

d. Kd= (F-P)

Ans: a. Kd= R/P

78. When management issues irredeemable debentures, Company can not return its capital it is known as _______.

a. Perpetual debt b. Debts

c. Capital assets pricing model

d. None

Ans : a. Perpetual debt

79. Write full form of CAPM.

a. Capital assets pricing model b. Capital assets price model

c. Current liability price model

d. Current assets price model

Ans : a. Capital assets pricing model

Page | 114

80. ____________ and ____________ are approaches for computation of cost of equity share capital.

a. Cost and earning

b. Dividend and earning c. Dividend and cost

d. Dividend and income

Ans: b. Dividend and earning

81. _______________ is the firms formal process for the acquisition and investment of capital.

a. Cost of capital

b. Capital budgeting c. Cash budgeting

d. Production budgeting

Ans: b. Capital budgeting

82. Which of the following is not the characteristic of capital budgeting?

a. Long term capital investment

b. Not a daily event

c. Policy oriented problem

d. Maintaining market value of share.

Ans: d. Maintaining market value of share

83. Write full form of PI.

a. Profitability index b. Profit index

c. Profit investment

d. Profitability investment

Ans : a. Profitability index

84. _________ is not a disadvantage of profitability index.

a. Incorrect comparison

b. Estimates cost of capital

c. Easy to understand d. None

Ans : c. Easy to understand

Page | 115

85. _________ is not the a method of capital budgeting.

a. Pay-back period

b. Net present value

c. Average rate of return

d. None

Ans: d. None

86. Write full form of ARR.

a. Average rate of return method b. Average rate of return on money

c. Aggregate rate of return

d. Aggregate rate of return on money

Ans : a. Average rate of return method

87. _____________ is the formula of Rate on return.

a. Total expected return / Total capital investment X 100 b. Total expected return / No. of years of income

c. Average annual return / Average capital investment X 100

d. Present value of cash inflow / Present value of investment

Ans : a. Total expected return / Total capital investment X 100

88. ____________ is the formula of Profitability Index.

a. Total expected return / Total capital investment X 100

b. Total expected return / No. of years of income

c. Average annual return / Average capital investment X 100

d. Present value of cash inflow / Present value of investment

Ans : d. Present value of cash inflow / Present value of investment

Page | 116



T.Y.B.Com. Sem. 6

Subject: Commercial Communication

Page | 117



T.Y.B.Com. Sem. 6

Subject: Commercial Communication


1) The old man had to be taken to the hospital because:

(a) Pete beat him up and robbed him

(b) he hadn't eaten a thing for three days

(c) he had eaten way too much food that day

Correct Option: (b) he hadn't eaten a thing for three days

2) The old ladies gave Pete dinner because:

(a) he is their closest living relative

(b) he was kind to them the previous day

(c) he was the first poor person to walk by

Correct Option: (c) he was the first poor person to walk by

3) Pete came and took a bench in Union Square:

(a) because he was tired after his morning exercise

(b) out of habit

(c) the Old Gentleman had asked him to do so

Correct Option: (b) out of habit

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4) The Old Gentleman and Pete walked south:

(a) to the Old Gentleman's house where each year Pete had his Thanksgiving

Day dinner

(b) to the house of two old ladies where each year Pete had his Thanksgiving

Day dinner

(c) to the same restaurant where each year Pete had his Thanksgiving Day

dinner

Correct Option: (c) to the same restaurant where each year Pete had his

Thanksgiving Day dinner

5) The old man was:

(a) tall and fat and sixty years old

(b) tall and thin and sixty years old

(c) tall and unsteady and seventy years old

Correct Option: (b) tall and thin and sixty years old

6) At the restaurant, Pete ate:

(a) soup, oysters, roast turkey, and pie

(b) soup, fish, roast chicken, and peas

(c) soup, oysters, fried turkey, and cake

Correct Option: (a) soup, oysters, roast turkey, and pie

7) Pete was brought to the two old ladies by:

(a) the old man

(b) their servant

(c) the restaurant owner

Correct Option: (b) their servant

Page | 119

8) Pete used to come to Union Square every Thanksgiving Day

(a) for nine years

(b) for six years

(c) since his childhood

Correct Option: (a) for nine years

9) It was the month of_________ when this story took place: (a) October

(b) November

(c) December

Correct Option: (b) November

10) Pete had to be taken to the hospital because: (a) he had an attack of indigestion

(b) he had a heart attack

(c) he had an attack of asthma

Correct Option: (a) he had an attack of indigestion

11) When we are inwardly afraid: (a) we dread to stand alone

(b) we don't dread to stand alone

(c) we dread to admire

Correct Option: (a) we dread to stand alone

12) The older the civilization:

(a) The greater the weight of tradition

(b) The greater the scope of political freedom

(c) The greater the presence of good values

Correct Option: (a) The greater the weight of tradition

Page | 120

13) We try to enrich ourselves outwardly by clinging to „people, to

position, to property‟ because:

(a) we must show off our wealth

(b) we can achieve more strength by doing this

(c) we suffer from inward poverty

Correct Option: (c) we suffer from inward poverty

14) The tendency to imitate others destroys our: (a) self-confidence

(b) initiative

(c) development

Correct Option: (b) initiative

15) For people who are inwardly insufficient and empty, ____________ matters a great deal.

(a) purity

(b) devotion

(c) tradition

Correct Option: (c) tradition

16) Ned was going to (a) pictures

(b) horse riding

(c) para gliding

Correct Option: (a) pictures

17) J. Krishnamurti advises us to be free from: (a) good customs and good habits

(b) blind beliefs and traditions

(c) polite way of life

Correct Option: (b) blind beliefs and traditions

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18) Real Freedom is written by:

(a) Sudha Murty

(b) R.K Narayan

(c) J. Krishnamurti

Correct Option: (c) J. Krishnamurti

19) A_____________ questions everything and finds the inner truth of the world around us. (a) closed mind

(b) narrow mind

(c) free mind

Correct Option: (c) free mind

20) Two Thanksgiving Day Gentlemen is written by: (a) B. R Ambedkar

(b) Mark Twain

(c) O. Henry

Correct Option: (c) O. Henry

21) Thanksgiving Day is a very special holiday in

(a) United Kingdom

(b) United States

(c) United Arab Emirates

Correct Option: (b) United States

22) In the school bus, someone started to talk about:

(a) pizzas

(b) marbles

(c) chess

Correct Option: (b) marbles

Page | 122

23) When the last boy was out, the school bus: (a) stood in the campus

(b) waited for another trip

(c) rolled out of the gates

Correct Option: (c) rolled out of the gates 24) He always liked Saturdays because:

(a) the school was closed that day

(b) the next day was Sunday

(c) he used to stay alone at home that day

Correct Option: (b) the next day was Sunday

25) The class used to begin at: (a) half past eight

(b) half past seven

(c) half past nine

Correct Option: (a) half past eight

26) On Saturdays, the last hour of school, they used to spend in the: (a) library

(b) playground

(c) laboratory

Correct Option: (b) library

27) He was waiting to eat________ after going back home:

(a) lemon soup

(b) lemon tart

(c) lemon pie

Correct Option: (c) lemon pie

Page | 123

28) He had lunch:

a) With the teachers and a few other day scholars

b) With the boarders and a few other teachers

c) With the boarders and a few other day scholars

Correct Option: (c) With the boarders and a few other day scholars

29) He started to stay in ______after his mother died.

(a) his aunt's house

(b) his grandfather's house

(c) his maternal uncle's house

Correct Option: (a) his aunt's house

30) What did the boy always do in the Arithmetic class?

(a) fall asleep

(b) look outside the window

(c) make fun of the teacher

Correct Option: (a) fall asleep

31) After returning from America, Rakesh:

(a) joined a private hospital

(b) joined a city hospital

(c) opened his personal chamber

Correct Option: (b) joined a city hospital

32) Rakesh‟s father: (a) was a vegetable seller

(b) owned a grocery store

(c) worked under a kerosene dealer

Correct Option: (c) worked under a kerosene dealer

Page | 124

33) From his American colleagues, Rakesh won:

(a) economics

(b) encomiums

(c) encouragements

Correct Option: (b) encomiums

34) As a dessert, Rakesh allowed his father to eat:

(a) halwa

(b) kheer

(c) laddu

Correct Option: (b) kheer

35) The car Rakesh bought for his parents was a

(a) sky-blue Ambassador

(b) white Maruti

(c) black Ambassador

Correct Option: (a) sky-blue Ambassador

36) Rakesh‟s father bribed his grandchildren for:

(a) betel leaf

(b) bhujia

(c) sweets

Correct Option: (c) sweets

37) Rakesh‟s father told his neighbour, Mr. Bhatia that:

(a) his son beats him regularly

(b) his son deprives him of food

(c) his son does not talk to him

Correct Option: (b) his son deprives him of food

Page | 125

38) Varmaji‟s diet was:

(a) dry bread, boiled lentils, boiled vegetables and, boiled chicken or fish

(b) dry bread, boiled lentils, sautéed vegetables and boiled chicken or fish

(c) dry bread, fried lentils, boiled vegetables and, boiled chicken or fish

Correct Option: (a) dry bread, boiled lentils, boiled vegetables and, boiled chicken or fish

39) Rakesh‟s mother gloated chiefly over the fact that her son _______in America.

(a) did not marry

(b) studied medicine

(c) did not decide to stay

Correct Option: (a) did not marry

40) Rakesh‟s wife was a ________ girl (a) plump and educated

(b) beautiful and uneducated

(c) plump and uneducated

Correct Option: (c) plump and uneducated

41) Rakesh had begun keeping a check on his father's food because he: (a) was worried about his health

(b) did not have enough money to feed his father

(c) was a careless and selfish son.

Correct Option: (a) was worried about his health

42) Rakesh‟s father secretly gave ______ paise to his grandchild to bring jalebis for him.

(a) forty

(b) fifty

(c) sixty

Correct Option: (b) fifty

Page | 126

43) Varma‟s ultimate request to his son was to allow him to _____.

(a) die

(b) live peacefully alone

(c) commit suicide

Correct Option: (a) die

44) Monsieur Lantin had fallen in love with a girl who was the:

(a) daughter of a clergyman

(b) daughter of a provincial tax collector

(c) daughter of a vicar

Correct Option: (b) daughter of a provincial tax collector

45) Monsieur Lantin once worked as a chief clerk in the:

(a) Department of Interior

(b) Department of Investigation

(c) Department of Finance

Correct Option: (a) Department of Interior

46) Monsieur Lantin‟s wife was fond of:

(a) imitation jewellery and dresses

(b) ornaments and theatre

(c) jewellery and food

Correct Option: (b) ornaments and theatre

47) Monsieur Lantin thought women‟s real ornaments are:

(a) beauty and honesty

(b) modesty and honesty

(c) beauty and modesty

Correct Option: (c) beauty and modesty

Page | 127

48) Monsieur Lantin sold his wife‟s necklace for:

(a) fifteen thousand francs

(b) eighteen thousand francs

(c) sixteen thousand francs

Correct Option: (b) eighteen thousand francs

49) The day Monsieur Lantin sold his late wife‟s Jewellery: (a) he had lunch at Voisin’s, and drank wine worth thirty francs a bottle

(b) he had lunch at Voisin’s, and drank wine worth twenty francs a bottle

(c) he had lunch at Victor’s, and drank wine worth twenty francs a bottle

Correct Option: (b) he had lunch at Voisin‟s, and drank wine worth twenty francs a bottle

50) Apart from the necklace, the other ornaments were worth: (a) one hundred and forty-five thousand francs

(b) one hundred and thirty-three thousand francs

(c) one hundred and forty-three thousand francs

Correct Option: (c) one hundred and forty-three thousand francs

51) Monsieur Lantin‟s second wife was: (a) a very virtuous woman; but had a violent temper

(b) a very virtuous woman; but had a soft temper

(c) a promiscuous woman; and had a violent temper

Correct Option: (a) a very virtuous woman; but had a violent temper

52) After____ years of marriage, Monsieur Lantin loved his wife even more than he did on the first day.

(a) 5

(b) 6

(c) 7

Correct Option: (b) 6

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53) Monsieur Lantin suddenly became rich by:

(a) winning a lottery ticket

(b) inheriting property from his father

(c) selling his wife’s jewels

Correct Option: (c) selling his wife‟s jewels

54) Bullish trend means_____

(a) Decreasing prices

(b) Rising prices

(c) Stagnant price

Correct Option: (b) Rising prices

55) Factor causing Bearish Trend

(a) Disturbed world situation

(b) Good terms with neighbours

(c) Bull support

Correct Option: (a) Disturbed world situation

56) Slump means

(a) Artificial rise to make a profit

(b) A list of shares

(c) A marked fall in prices

Correct Option: (c) A marked fall in prices

57) Wall Street is

(a) Mall in Sydney

(b) New York stock exchange

(c) In Mumbai

Correct Option: (b) New York stock exchange

Page | 129

58) Rig means

(a) Artificial rise to make profit

(b) Working hours

(c) Demand

Correct Option: (a) Artificial rise to make profit

59) Nose diving is _____

(a) A swimming style

(b) Nose exercise

(c) When prices of shares go down suddenly

Correct Option: (c) When prices of shares go down suddenly

60) Jittery indicates_____

(a) Falling prices

(b) Shivering

(c) Constant buying

Correct Option: (a) Falling prices

61) Blue chips is

(a) List of shares sold on Monday

(b) Dull market

(c) Shares of leading companies that are in good demand

Correct Option: (c) Shares of leading companies that are in good demand

62) Flutter indicates_____

(a) Nervousness

(b) Keen interest

(c) Ready to fly

Correct Option: (a) Nervousness

Page | 130

63) Punter is_____

(a) A person who goes hunting

(b) A person who bets

(c) A person who gets beaten

Correct Option: (b) A person who bets

64) Undertone shows_____

(a) New fashion trends

(b) How to speak

(c) Future tendency of the market

Correct Option: (c) Future tendency of the market

65) Boom is_____

(a) Pop song

(b) Period of high volume and rising prices

(c) Loud sound in a factory

Correct Option: (b) Period of high volume and rising prices

66) Divergent trend is_____

(a) Bullish trend in some shares and bearish in others

(b) Cheerful condition

(c) Unfavourable market

Correct Option: (a) Bullish trend in some shares and bearish in others

67) Face value means_____

(a) Look in the mirror

(b) Prices are steady

(c) Value of shares in the primary market

Correct Option: (c) Value of shares in the primary market

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68) Jobber is_____

(a) Member of the stock market

(b) Member of parliament

(c) Member of a gang

Correct Option: (c) Member of a gang

69) Liquidation is_____

(a) Constant selling

(b) Constant buying

(c) Constant nagging

Correct Option: (a) Constant selling

70) Listless indicates

(a) No mood to sing

(b) Dull market

(c) Bull market

Correct Option: (b) Dull market

71) Kerb Deals means_____

(a) Prices were higher than before

(b) Prices were lower than before

(c) Trading not registered at the stock market

Correct Option: (c) Trading not registered at the stock market

72) Pari Passu

(a) Simultaneous progress

(b) Gradual progress

(c) Swift progress

Correct Option: (a) Simultaneous progress

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73) Speculation is

(a) Buying or selling not for investment

(b) To buy or not to buy

(c) To sell or not to sell

Correct Option: (a) Buying or selling not for investment

74) Business Reports are of two types

(a) Individual Report and Committee Report

(b) Individual Report and Press Report

(c) Individual Report and Technical Report

Correct Option: (a) Individual Report and Committee Report

75) The process of purchasing goods or services from foreign country is known as_____

(a) Process

(b) Export

(c) Import

Correct Option: (c) Import

76) Bohemian means______ (a) One who is a brahmin

(b) One who is a vegetarian

(c) One who lives an unconventional life.

Correct Option: (c) One who lives an unconventional life.

77) Fatigue means (a) A country

(b) A habit

(c) Tiredness

Correct Option: (c) Tiredness

Page | 133

78) Monsieur Lantin was a _____

(a) Chief clerk

(b) Banker

(c) Interior designer

Correct Option: (a) Chief clerk

79) Bedlam means _____

(a) Uproar and confusion

(b) A place with a bed

(c) A resort with spa

Correct Option: (a) Uproar and confusion

80) A devoted son is written by

(a) Kiran Desai

(b) Anita Desai

(c) Shashi Despande

Correct Option: (b) Anita Desai

Page | 134



T.Y.B.Com. Sem. 6

Subject: Business Law

Page | 135



T.Y.B.Com. Sem. 6

Subject: Business Law


1. Which of the following is not a special contract under Indian Contract Act, 1872? (a) Contract of Indemnity

(b) Contract of Guarantee

(c) Contract of Bailment

(d) Contract of Sale

Correct Option: (d) Contract of Sale

2. A contract of Indemnity is a contract for __________. (a) Rectification of Mistake

(b) Increase of Damages

(c) Protection Against Loss

(d) New offer against Old Offer

Correct Option: (c) Protection Against Loss 3. Under the Contract of Indemnity, the given Promise is for Protection

for loss caused by _________. (a) Promisor Himself

(b) Any other Person

(c) Both

(d) None

Correct Option: (c) Both.

4. If the Loss occurs because of an accident and not in the manner stated in the contract, Compensation must be paid by Indemnifier. The Given Statement is ________.

(a) True

(b) False

(c) Both

(d) None

Correct Option: (b) False

Page | 136

5. The person whose loss is bear by promiser is known as _______. (a) Indemnifier

(b) Indemnity holder

(c) Guarantor

(d) Creditor

Correct Option: (a) Indemnifier 6. In a contract of guarantee there are ______ parties.

(a) Two

(b) Three

(c) Four

(d) Five

Correct Option: (b) Three

7. If principal debtor is adjudged insolvent as per law, the surety ____be discharged from its liability.

(a) Will

(b) Will not

(c) Partly

(d) Can

Correct Option: (b) Will not 8. A _______ is a contract to perform the promise or discharge the

liability of third person in a case of principal debtor‟s default. (a) Contract of Indemnity

(b) Contract of guarantee

(c) Contract of agency

(d) Contract of pledge

Correct Option: (b) Contract of guarantee

9. In case of contract of indemnity, the liability of promiser is of __________Nature.

(a) Fiction

(b) Primary

(c) Secondary

(d) None

Correct Option: (b) Primary

Page | 137

10. Under Contract of Guarantee, because of which reason Surety is discharged from his liability?

(a) Illness of Surety

(b) Surety going to foreign Country

(c) Surety transfer in other state

(d) Change in terms of contract

Correct Option: (d) Change in terms of contract

11. If Surety remains silent after informing him about the changes in the terms of contract of guarantee is said ___________.

(a) Free Consent

(b) Not to be Consent

(c) To be Implied Consent

(d) Consent

Correct Option: (b) Not to be Consent

12. Guarantee Contract Extends to Series of transactions is called_________.

(a) Specific Guarantee

(b) Special Guarantee

(c) Continuing Guarantee

(d) Alternative Guarantee

Correct Option: (c) Continuing Guarantee

13. Surety for his possible loss can make _________ for total debt or its part.

(a) Contract of Sale

(b) Contract of Agency

(c) Contract of Guarantee

(d) Contract of Indemnity

Correct Option: (d) Contract of Indemnity

14. Guarantee which is limited to a single transaction is called _________. (a) Continuous Guarantee

(b) Continuing Guarantee

(c) Specific Guarantee

(d) Separate Guarantee

Correct Option: (c) Specific Guarantee

Page | 138

15. Under the contract of guarantee, can the surety file a suit against the principal debtor?

(a) Yes

(b) No

(c) Both

(d) None

Correct Option: (a) Yes

16. How many contracts can be formed under the contract of indemnity? (a) One

(b) Two

(c) Three

(d) Four

Correct Option: (a) One

17. In contract of guarantee, the liability of surety will arise ________. (a) When principal debtor makes payment

(b) When principal debtor promises to make payment

(c) When principal debtor defaults the payment

(d) When creditor denies to accept payment

Correct Option: (c) When principal debtor defaults the payment

18. Can minor be a Principal debtor in case of contract of guarantee? (a) Yes

(b) No

(c) Both

(d) None

Correct Option: (a) Yes

19. Revocation of guarantee can be done by____ . (a) By Notice

(b) By death of surety

(c) By novation of contract

(d) All of the above

Correct Option: (d) All of the above

Page | 139

20. Which of the following is not an exception to continuing guarantee? (a) Guarantee for honesty of a person for his appointment

(b) Guarantee for a payment of a certain sum of money by instalment

within a definite time

(c) When the consideration of guarantee is of a single nature

(d) None of the above.

Correct Option: (d) None of the above 21. Who has to prove the quantum of liability of surety?

(a) Debtor

(b) Creditor

(c) Surety

(d) Third party

Correct Option: (b) Creditor

22. Which of the following right of surety against the principal debtor? (a) Right to recover damages

(b) Right to recover the amount paid

(c) Right to have amount of interest

(d) Right to issue a notice.

Correct Option: (c) Right to have amount of interest

23. Which of the following right is not included in the rights of surety against the creditor?

(a) Right to set off

(b) Right to appoint surety

(c) Right of security

(d) Right to retrench from service

Correct Option: (b) Right to appoint surety

24. In which of the following circumstances surety will be discharged from his responsibility?

(a) By giving a notice

(b) By death of surety

(c) By loss of security

(d) All of the Above.

Correct Option: (d) All of the above

Page | 140

25. Which of the following is not considered invalid? (a) Guarantee by mutual consent

(b) Guarantee obtained by keeping silence

(c) Failure of co surety join as Surety

(d) Unlawful Consideration

Correct Option: (a) Guarantee by mutual consent

26. In case of Bailment, Delivery of Goods will be done _________ Purpose.

(a) Permanent

(b) Temporary

(c) Long term

(d) None

Correct Option: (b) Temporary

27. Contract of bailment is done for __________. (a) Money

(b) Building

(c) Motor Car


Correct Option: (C) Motor Car

28. When goods are physically handed over to the bailee by the bailor is known as _____________.

(a) Actual Delivery

(b) Temporary Delivery

(c) Constructive Delivery

(d) None of the Above

Correct Option: (a) Actual Delivery

29. Which of the following is not a characteristic of bailment? (a) Specific Purpose

(b) Specific Time limit

(c) Return of Goods

(d) Fixed Assets

Correct Option: (d) Fixed Assets

Page | 141

30. _________ bailment would be either for the exclusive benefits of either bailor or Bailee.

(a) Gratuitous Bailment

(b) Non- Gratuitous Bailment

(c) General Bailment

(d) None

Correct Option: (a) Gratuitous Bailment 31. Which of the following is not a duty of bailor?

(a) Disclose Known Facts

(b) Bear Necessary Expenses

(c) Indemnify Bailee

(d) None

Correct Option: (d) None

32. Which of the Following is not included in types of Bailment? (a) Deposit type Bailment

(b) Hire type Bailment

(c) Sale of Goods on Credit

(d) Goods given for Carriage

Correct Option: (c) Sale of Goods on Credit

33. Which of the following is a duty of bailee? (a) Duty to take Reasonable Care

(b) Duty of Disclose of Facts

(c) Duty to pay necessary expenses


Correct Option: (a) Duty to take Reasonable Care

34. Under contract of bailment, mixing of goods made without the Consent of bailor which are not Separable then the Bailee Shall __________.

(a) Bear the separation expenses

(b) Compensate all the damages

(c) Bear loss Proportionately

(d) None.

Correct Option: (b) Compensate all the damages

Page | 142

35. The right to retain the goods, till the demands are unsatisfied is called______.

(a) Pledge

(b) Bailment

(c) Lien

(d) None

Correct Option: ( c) Lien

36. Partnership firm is separate legal entity from its partners. True or False.

(a) True

(b) False

(c) Partly True

(d) Partly False

Correct Option: (b) False

37. Minimum number of members in case of Public Company? (a) 1

(b) 2

(c) 5

(d) 7

Correct Option: (d) 7

38. Maximum number of members in case of Private Company? (a) Unlimited

(b) 50

(c) 200

(d) 7

Correct Option: (c) 200

39. Minimum number of directors in case of a Public Company is ______. (a) 1

(b) 2

(c) 3

(d) 4

Correct Option: (c) 3

Page | 143

40. What is known as a charter of a company? (a) Memorandum of Association

(b) Bye Laws

(c) Articles of Association

(d) Prospectus

Correct Option: (a) Memorandum of Association

41. How company‟s name can be Changed? (a) An ordinary Resolution

(b) By a Special Resolution

(c) The approval of the central government

(d) A Special Resolution and with the Approval of the Central

Government

Correct Option: (d) A Special Resolution and with the Approval of the Central Government

42. As per schedule I, form of Memorandum of Unlimited Company not having share capital is mentioned in which Table?

(a) Table A

(b) Table B

(c) Table C

(d) Table D

Correct Option: (d) Table D

43. Registered office of the company should be verified and such verification should be sent to registrar within ____________ Days of incorporation.

(a) 30 days

(b) 60 days

(c) 15 days

(d) 10 Days

Correct Option: (a) 30 days

44. The outsider or the 3rd party dealing with the company shall have knowledge of the MOA and AOA of the Company but they need not have knowledge process of Company, is called as…………….

(a) Doctrine of Ultra Virus

(b) Doctrine of Constructive Notice

(c) Doctrine of Indoor Management

(a) None of the Above

Correct Option: (a) Doctrine of Ultra Virus

Page | 144

45. The total managerial remuneration to the directors and the manager in respect of any financial year must not exceed ______ percent of the net profit.

(a) 3%

(b) 5%

(c) 11%

(d) 10%

Correct Option: (c) 11%

46. A person cannot work as a managing director of more than how many companies at a time?

(a) Two

(b) Three

(c) Four

(d) Five

Correct Option: (c) Four

47. Which of the following is not an ownership Security? (a) Equity Share

(b) Debenture

(c) Preference Share

(d) None

Correct Option: (b) Debentures

48. Whose Signature is required on share Certificate? (a) Company Secretary

(b) Two Directors

(c) Two Directors and Company Secretary

(d) All Directors

Correct Option: (c) Two Directors and Company Secretary

49. Private Companies raises its funds (Capital) through issue of prospectus by inviting public for Subscription. True or False

(a) True

(b) Partly True

(c) False

(d) Partly False

Correct Option: (c) False

Page | 145

50. Memorandum of Association regulates the relationship with which parties?

(a) Outsiders

(b) Shareholders

(c) Employees

(d) Management

Correct Option: (a) Outsiders

51. Consumer Protection Act is applicable to whom? (a) Immovable Goods

(b) Movable Goods

(c) Specific Goods

(d) All Goods and Services

Correct Option: (d) All Goods and Services

52. Under the consumer protection act which is not included in the Term of “Goods”?

(a) Share-Stock

(b) Currency Note

(c) Grass on the Land

(d) Packing Material

Correct Option: (b) Currency Notes

53. The rights of consumer as per consumer protection act does not included the right to be_________.

(a) Informed

(b) Heard

(c) Safety

(d) Presented

Correct Option: (d) Presented

54. Which of the following options is not included in redressal forum according to the consumer Protection?

(a) Lok Adalat

(b) District Level Forums

(c) State Level Commission

(d) National Level Commission

Correct Option: (a) Lok Adalat

Page | 146

55. Which organisation are created to advice and assist the consumers in seeking and enforcing their rights in India?

(a) C.P.C

(b) CERC

(c) CUTS

(d) CCC

Correct Option: (a) C.P.C

56. How many members exist in the district level forum? (a) Three

(b) Two

(c) Four

(d) Five

Correct Option: (a) Three

57. Which of the following is not considered as the exploitation of consumer?

(a) Misleading advertisement

(b) Hoarding of Goods

(c) Quality Product-High Price

(d) Low Quality- High Price

Correct Option: (c) Quality Product-High Price

58. Up to how much maximum amount of redressal is done by state level commission?

(a) Rs. 50 lakhs

(b) Rs. 25 lakhs

(c) Rs. 1 crore

(d) Rs. 70 lakhs

Correct Option: (c) Rs. 1 crore

59. The Central Council shall convene at least ______ meeting every year. (a) Two

(b) One

(c) Three

(d) Four

Correct Option: (b) one

Page | 147

60. What is a maximum age limit of a person who can be a member in national commission is _________?

(a) 65 Year

(b) 60 Year

(c) 50 Year

(d) 70 Year

Correct Option: (d) 70 Year

61. The Complaint be in consumer within _________ of cause occurred. (a) 6 months

(b) 1 year

(c) 2 year

(d) 3 Months

Correct Option: (c) 2 Year

62. Appeal against the national forum can be done in _______. (a) District Court

(b) High Court

(c) Supreme Court

(d) Taluka Court

Correct Option: (C) Supreme Court

63. An appeal against the order of state consumer dispute redressal commission can be done in ___________.

(a) 30 Days

(b) 15 Days

(c) 7 Days

(d) 21 Days

Correct Option: (a) 30 Days

64. How Many Rights are avail to consumers under consumer Protection Act?

(a) Seven

(b) Eight

(c) Five

(d) Six

Correct Option: (d) Six

Page | 148

65. When the day on which a promissory note or bill of exchange Is at maturity is a public holiday, the instrument shall be deemed to be due on the………………

(a) Next Preceding Business Day

(b) Previous Business Day

(c) On the Same Date

(d) Any of the Above

Correct Option: (a) Next Preceding Business Day

66. When the Negotiable Instrument Act enacted in India? (a) 1950

(b) 1882

(c) 1872

(d) 1881

Correct Option: (d) 1881

67. Negotiable Instrument is always given in lieu of valuable _______. (a) Ornaments

(b) House

(c) Consideration

(d) Materials

Correct Option: (c) Consideration

68. The property in a negotiable instrument passes to a _______ transferee for value.

(a) Mala fide

(b) Bona fide

(c) Both a and b

(d) Can be Mala fide as well as bona fide

Correct Option: (b) Bona fide

69. Which of the following is the characteristics of Negotiable Instruments?

(a) In Writing

(b) Endorsement

(c) Must Contains Signature


Correct Option: (d) All of the Above

Page | 149

70. Which of the following is not included in the Presumptions of negotiable Instrument?

(a) Presumption of filling

(b) Presumption of Consideration

(c) Presumption of Date

(d) Presumption as to stamp

Correct Option: (a) Presumption of filling

71. Which of the following is not included in the types of Negotiable Instrument?

(a) Barer Instrument

(b) Inland Instrument

(c) Accommodation Bill

(d) Inter State Instrument

Correct Option: (d) Inter State Instrument 72. A promissory note must contain ______.

(a) Undertaking

(b) Conditional Undertaking

(c) Unconditional Undertaking

(d) can be Conditional undertaking or Unconditional undertaking

Correct Option: (C) Unconditional Undertaking

73. Person Named in the instrument to whom money is directed to be paid is known as ________.

(a) Drawer

(b) Acceptor

(c) Maker

(d) Payee

Correct Option: (d) Payee

74. Where no rate of interest is specified in the bills of exchange or promissory notes then what is the interest rate used for calculating the interest amount?

(a) 15% P.A

(b) 18% P.A

(c) 12% P.A

(d) 16% P.A

Correct Option: (b) 18% P.A

Page | 150

75. How many parties Should be in the case of bill of exchange? (a) One

(b) Two

(c) Three

(d) Four

Correct Option: (c) Three

76. Which of the following is included in the essential elements of promissory notes?

(a) It must bear Stamp

(b) Amount must be Specific

(c) It must be Signed


Correct Option: (d) All of the Above

77. Which of the following is not included in the essential elements of bills of exchange?

(a) Written Form

(b) Request Form

(c) Unconditional order

(d) Fixed Amount

Correct Option: (b) Request Form

78. Validity period for the presentation of cheque in bank is………. (a) 3 Months

(b) 6 Months

(c) 1 Year

(d) 2 Years

Correct Option: (a) 3 Months

79. How many days of grace are allowed where a note or bill, which Is not expressed to be payable on demand, at sight or on presentment?

(a) 7 days

(b) 3 days

(c) 30 Days

(d) 2 days

Correct Option: (b) 3 days

Page | 151

80. Any person who for consideration became the possessor of a promissory note, bill of exchange or cheque is called as…………….

(a) Acceptor in due Course

(b) Acceptor

(c) Holder in due Course

(d) Holder

Correct Option: (c) Holder in due Course

All the best

multiple choice questions (mcq)

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