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Q.1       Accounting is a language of

            (a) Business                  (b) Government              (c) Company                  (d) All the above

Q.2       In devising an Accounting Structure, the steps required are

Arrangement of accounts in a desired sequence

Preparation of the source data

Analysis of the transactions

All the above

Q.3       Objective of accounting is to

(a)   Keep a systematic and permanent record of monetary transactions

(b)   Prepare Final accounts

(c)   Communicate the results of the monetary transaction

(d)   All the above

Q.4       A business transaction is first recorded in

(a)   Journal

(b)   Ledger

(c)   A document called voucher

(d)   None of the above

Q.5       Double-entry System of Book-keeping was introduced by

35.  William Pickels

36.  Lucas Pacioli

37.  R.N. Carter

38.  None of the above

Q.6       Owner’s equities are the amounts payable to

(a)   Creditors

(b)   Owners

(c)   Bankers

(d)   All the above

Q.7       External users of Accounting information are

(a)   Government

(b)   Researchers

(c)   Banking institutions

(d)   All the above

Q.8       A separate business legal entity concept is applicable to writing the accounts of

(a)   A Company

(b)   A Partnership firm

(c)   A Proprietary firm

(d)   All the above

Q.9       Cash Book is a

(a)   Journal

(b)   Ledger

(c)   Both (a) and (b)

(d)   None of the above

Q.10     Trial Balance discloses errors of

(a)   Principle

(b)   Compensating nature

(c)   Commission

(d)   All the above

Q.11     A Balance Sheet is usually prepared at the end of a

            (a) month                      (b) year             (c) Period                      (d) Half year

Q.12     Accounting Standard Board was set up by the Institute of Chartered Accounts of India in

d.     April 1977

di.    October 1978

dii.   October 1979

diii.  None of the above

Q.13     Contingent liability appears as a footnote in the Balance Sheet. This involves an accounting principle named as

            (a) Consistency             (b) Disclosure                (c) Conservatism                        (d) Materiality

Q.14     Amount received from a debtor after being declared as bad debt is credited to

(a)   Debtors  A/c

(b)   Bad Debts Recovered A/c

(c)   Bad Debts A/c

(d)   Suspense A/c

Q.15     Prepaid Insurance is

            (a) An asset                              (b) A Liability                

(c) Sometimes an Asset             (d) Sometimes an Expenditure

Q.16     A Limited Co. bought machine for Rs. 2 Crore. The market price of the machine on that day was Rs. 2 ½ Crore. It shows the Machine Account on that day was Rs.2 1/2 crore. Which of the accounting concept has been violated by the Co.?

39.  Money Measurement Concept

40.  Realisation Concept

41.  Cost Concept

42.  None of the above

Q.17     In the case of sale of partnership firm to a company, the profit or loss on the sale is ascertained through

(a)   Revaluation A/c

(b)   Realization A/c

(c)   Memorandum Realisation A/c

(d)   Any of the above

Q.18     Under Stock and Debtor System the Branch A/c is a

            (a) Nominal A/c              (b) Personal A/c             (c) Real A/c                   (d) None of the above

Q.19     In Debtors’ method, profit for Hire Purchase transactions is ascertained by preparing

(a)   Hire Purchase Trading A/c

(b)   Consignment A/c

(c)   Hire Purchase A/c

(d)   None of the above

Q.20     The term ‘Current Assets’ includes

(a)   Depreciable Assets

(b)   Cash surrender value of Life Insurance Policy

(c)   Both (a) and (b)

(d)   None of the above

Q.21     Stores Ledger is a record of only

(a)   Perpetual Inventory System

(b)   Periodic Stock taking system

(c)   Both (a) and (b)

(d)   None of the above

Q.22     Production is not hampered when stock-taking is done by

(a) Perpetual Inventory System

(b)   Periodic Stock taking system

(c)   Both (a) and (b)

(d)   None of the above

Q.23.    Reconciliation of Bin Cards and Stores Ledger is necessary due to posting in

(a)   Bin Card and non-posting in stores Ledger and Vice-versa

(b)   Wrong posting in Bin Card or Stores Ledger

(c)   Entries in wrong columns in Bin Card or Store Ledger

(d)   All the above

Q.24     Inventory Turnover Ratio should normally be

            (a) 1:1               (b) 2:1               (c)3:1                (d) 4:1

Q.25     Control Ratios may be employed for exercising control on

            (a) Labour                      (b) Inventory                   (c) Overheads                (d) Assets

Q.26     The purpose of material control is to avoid

(a)   Overstocking of raw materials

(b)   Under-stocking of raw materials

(c)   Both (a) and (b)

(d)   None of the above

Q.27     Direct Material cost includes

(a)   Materials including component parts

(b)   Small tools for general use

(c)   Stores items used for maintenance of machines

(d)   Some minor items like cost of nails in shoe-making

Q.28     Cost of Production of an item consists of

(a)   Prime Cost

(b)   Factory overheads

(c)   Administrative over heads

(d)   All the above

Q.29     Job Costing is suitable for

(a)   Biscuit making

(b)   Printing Press

(c)   Engineering goods

(d)   None of the above

Q.30     Differential Piece Rate System of payment of wages was first introduced by

            (a) Fayol                       (b) Taylor                       (c) Merrick                     (d) None of the above

Q.31     Function-wise overheads expenses may be classified as

(a)   Manufacturing overheads

(b)   Administrative overheads

(c)   Selling and distributive overheads

(d)   All the above

Q.32     To determine the Economic Batch Quantity, costs may be grouped into

(a)   Setting up costs

(b)   Carrying Costs

(c)   Both (a) and (b)

(d)   None of the above

Q.33     In Absorption Costing, profit is equal to

(a)   Sales minus cost of sales

(b)   Contribution minus fixed cost

(c)   Any of the above

(d)   None of the above

Q.34     Marginal Costing is useful for

(a)   Cost control

(b)   Profit planning

(c)   Both (a) and (b)

(d)   None of the above

Q.35     FIFO method for valuation of materials is preferably used when

(a)   Prices are rising

(b)   Prices are falling

(c)   Prices seldom change

(d)   prices change very often

Q.36     P/V ratio indicates

(a)   Profit efficiency

(b)   Volume efficiency

(c)   Profit volume relationships

(d)   Production sales relationships

Q.37     With a change in Fixed Costs

(a)   Key factor changed

(b)   P/V ratio is changed

(c)   B.E.P. is changed

(d)   All the above change

Q.38     Marginal Costing technique is an aid to

            (a) Management             (b) Shareholders

            © Creditors                                (d) All the above

Q.39     A budget which is designed according to the level of activity is      

            (a) Cash budget                         (b) Sales budget

            © Production budget                  (d) Flexible budget

Q.40     Funds Flow Statement indicates the change in

            (a) Cash position                        (b) Working capital

            © Shareholder’s Funds               (d) None of the above

Q.41     Earning before Interest and Tax and Earning Per Share Analysis is used to determine the appropriate level of

            (a) Debt (b) Share Capital            (c) Assets                     (d) None of the above

Q.42     A Company’s extra earning power depends upon

(a)   Weakness in the management of a competitor

(b)   Secret manufacturing process

(c)   Good labour relations

(d)   All the above

Q.43     Issue of Bonus Shares must be permitted by

(a)   Memorandum of Association of the Company

(b)   Articles of Association of the Company

(c)   Both (a) and (b)

(d)   None of the above

Q.44     Portfolio management is the process of selecting a bundle of securities to get

(a)   Maximum yield at a minimum risk

(b)   Maximum yield at a moderate risk

(c)   Lower yield at minimum risk

(d)   Any of the above

Q.45     Aggressive policy of Portfolio management lays emphasis on

(a)   Yield from securities

(b)   Risk of investments

(c)   Safety of principal money

(d)   All the above

Q.46     Cash disbursements may be delayed by

(a)   Delaying outward payment

(b)   Slowing disbursement by use of drafts

(c)   Making payroll periods less frequent

(d)   All the above

Q.47     For making a choice between Leasing and Hire Purchase, consideration is to be made of

(a)   Depreciation and Investment

(b)   Tax advantage

(c)   Salvage value of the Asset

(d)   All the above

Q.48     Warrants and Convertible Debentures in India are becoming popular as they are

(a)   A cheaper debt

(b)   Can be issued at a premium

(c)   Both (a) and (b)

(d)   None of the above

Q.49     For Investors seeking greater details, the most comprehensive source of information for stock markets is perhaps

(a)   Coverage in The Economic Times

(b)   The Daily Official Quotations List

(c)   Television Reporting

(d)   Business Periodicals

Q.50     In an inflationary period, the current rupees at the time of receipt will have

(a)   Lesser Purchasing Power

(b)   Greater Purchasing Power

(c)   Sometimes greater, sometimes lesser

(d)   None of the above


1.           Answers—economics -2

1.d                    2.d                    3.d                    4.c                    5.b                    6.b        7.d

8.a                    9.c                    10.c                  11.b                  12.a                  13.b      14.b

15.a                  16.c                  17.b                  18.c                  19.c                  20.d      21.c

22.b                  23.d                  24.d                  25.a                  26.c                  27.a      28.d     

29.b                  30.b                  31.d                  32.c                  33.a                  34.b      35.d

36.c                  37.d                  38.a                  39.c                  40.b                  41.b      42.d

43.d                  44.a                  45.d                  46.d                  47.a                  48.c      49.b



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