MPSC LECTURER IN COMMERCE Screening Test 2011 Question Paper

MPSC LECTURER IN COMMERCE Screening Test 2011 Question Paper

1. According to AS-1, any change in accounting policy

(1) should never be made

(2) is not possible

(3) should be disclosed

(4) requires permission of the Institute of Chartered Accountants of India.

2. Following is an example of an accounting policy:

(1) Entity

(2) Consistency

(3) Going concern

(4) Valuation of stock

3. Which of the following statements is False?

(1) Issued capital can never be more than the authorized capital.

(2) In case of under-subscription issued capital is less than subscribed capital.

(3) Uncalled capital may be converted into reserve capital.

(4) Paid-up capital is equal to Called-up capital less in arrears.

4. Which of the following indicates ‘Depreciable Amount’ as defined under AS 6?

(1) Historical cost

(2) Market value

(3) Realisable value

(4) Net Replacement value

5.Receipts and Payments Account records transactions of

(1) Revenue nature only

(2) Capital nature only

(3) Both Revenue and Capital nature

(4) Credit transactions only

6. A and B are partners sharing ptofits in the ratio 1 : 2. C is admitted and the new profit ratio is 1: 2: C is admitted and the new profit sharing ratio is 1: 2: 3. Sacrificing ratio is

(1) 1 : 3

(2) 2 : 1

(3) 3 : 1

(4) 1 : 2

7. As per Section 78 the Companies Act, Securities Premium A/C can be used

(1) only for making partly paid shares as fully paid up

(2) only for issuing rights shares

(3) only if any allotment money is still unpaid

(4) only for issuing fully paid bonus shares

8. On amalgamation of companies, under purchase method, any excess of purchase consideration over net assets acquired should be recognized as

(1) revenue profit

(2) Revenue loss

(3) Capital reserve

(4) Goodwill

9. Excess of average profit earned by the firm over and above its normal profit is

(1) Bumper profit

(2) Normal returns

(3) Super profit

(4) Excess profit

10. Minority interest consists of

(1) Face value of shares held by outsiders

(2) Proportionate capital profits

(3) Proportionate revenue profits

(4) All of the above

11. Cost Accounting

(1) Disclosed past data

(2) Is used even by outside entities e.g. investors, creditors, banks etc.

(3) Disclosed current data or future estimates

(4) Cannot be used for managerial decisions

12. Prime Cost =

(1) Direct Material + Direct Labour + Indirect Expenses

(2) Indirect Labour + Direct Expenses + Selling Expenses

(3) Direct Material + Direct Labour + Direct Expenses

(4) Indirect Material + Direct Labour + Administrative Expenses

13.Job costing is suitable for

(1) readymade garments

(2) motor workshop

(3) flour mills

(4) oil mills

14. Abnormal loss is charged to

(1) stock account

(2) process account

(3) normal loss account

(4) costing profit and loss account

15. When P/V ratio is 0.6,

Marginal cost is Rs. 20

Then Selling price is

(1) Rs. 40

(2) Rs. 60

(3) Rs. 50

(4) Rs. 80

16. cost control is a

(1) corrective function

(2) preventive function

(3) dynamic function

(4) secondary function

17.Closing stock in costing books is valued at

(1) cost or market price whichever is higher

(2) cost or market price whichever is less

(3) cost of production

(4) factory cost of the goods produced

18. The classification of fixed and variable cost has a special significance in the preparation of

(1) cash budget

(2) zero-based budget

(3) capital budget

(4) flexible budget

19. The standard and the actual requirement of material of a company are as under :

Standard – 2400 units at the rate of Rs. 20 per unit

Actual – 2600 units at the rate of Rs. 19 per unit

The material cost variance is

(1) Rs. 1400 (Adverse)

(2) Rs. 2400 (Adverse)

(3) Rs. 1400 (Favourable)

(4) Rs. 2600 (Adverse)

20. An important feature of cost centre is that

(1) It uses only monetary information

(2) it has clearly defined boundaries

(3) It must be one specific location only

(4) It must be an area of the business through which product passes

21. As per Section 2(9) of the Income-tax Act_______ means a period of 12 months commencing from 1^st day of April every year.

(1) Assessment year

(2) Previous year

(3) Accounting year

(4) Calendar year

22. Shivaji University is assessable under the Income Tax Act as

(1) as individual

(2) a local authority

(3) artificial judicial person

(4) None of the above

23. Income which accrues outside India from a business controlled from India is taxable in case of

(1) Resident only

(2) Not ordinarily resident

(3) Both ordinarily resident and not ordinarily resident

(4) Non-resident

24. Entertainment allowance is deductable to the extent of Rs. 5000 for

(1) Private co-employee

(2) Govt. employee

(3) Both of (1) and (2)

(4) None of the above

25. Winning from lotteries, Crossword puzzles, Horse races and Game shows etc., are casual incomes and hence they are

(1) fully exempt

(2) exempt upto Rs. 5000

(2) fully taxable

(3) None of the above

26. Gratuity received by Govt. Employee is

(1) fully taxable

(2) fully exempt

(3) partly taxable

(4) none of the above

27. Service tax is normally

(1) paid and borne by the person who provides service

(2) paid and borne by the person who receives service

(3) paid by the person who provides service and borne by the person who receives service

(4) None of the above

28. ‘Goods’ are defined under MVAT Act, 2002 to include

(1) Lottery tickets

(2) Growing crops

(3) Actionable claims

(4) Immovable property

29. Payment of Excise Duty depends on

(1) removal of goods from the place of removal

(2) manufacture of goods in the factory

(3) deemed manufacture of goods

(4) removal of goods for branch transfer

30. Loss arising from business or profession can be carried forward and set-off but only against profits and gains from business or profession

(1) for 4 succeeding assessment years

(2) for 8 succeeding assessment years

(3) for 16 succeeding assessment years

(4) None of the above

31. U/S 208 of Income Tax Act. It is obligatory to pay during the financial year in every case where the advance tax payable is

(1) Rs. 20,000 or more

(2) Rs. 10,000 or more

(3) Rs. 5,000 or more

(4) Rs. 50,000 or more

32. Tax invoice is to be issued

(1) only by registered dealer

(2) only by an importer

(3) only by a manufacturer

(4) by any dealer registered or unregistered

33. Test checking is

(1) Checking the transactions which are tested

(2) checking the selected transactions

(3) checking the vouchers only

(4) checking cash memos only

34. Verifying the signature of the authorized official voucher during vouching helps the auditor to check the

(1) occurrence of transaction

(2) amount of transaction

(3) validity of transaction

(4) period of transaction

35. The main object of an audit is

(1) expression of opinion

(2) detection and prevention of fraud and error

(3) depends on the type of audit

(4) Both (1) and (2)

36. The Board of Directors shall appoint first auditor of the company

(1) within one month of completion of capital subscription stage of the company

(2) within one month of promotion of the company

(3) within one month of commencement of business of the company

(4) within one month of incorporation of the company

37. Computer Assisted Audit Techniques (CAAT) are the techniques used for audit purposes by the

(1) Computer itself

(2) Audit

(3) Auditor’s assistants

(4) auditor and his assistants

38. When an auditor is not able to form an opinion about the true and fair view of the accounts he gives

(1) Qualified Report

(2) Negative Report

(3) Disclaimer of Opinion

(4) Clean Report

39. Statutory Audit of Bank is an example of

(1) Concurrent Audit

(2) Continuous Audit

(3) Balance-Sheet Audit

(4) Revenue Leakage Audit

40. Concurrent Audit is

(1) Continuous Audit

(2) Internal Cheek System

(3) Internal Audit System

(4) None of the above

41. The Government of India has two main regulatory arms to control Financial System of India:

(1) SBI and Commercial Bank

(2) RBI and SBI

(3) RBI and Rural Development Bank of India

(4) RBI and SEBI

42. Remove odd man out from the following:

(1) Market Mortgages

(2) Treasury Bill market

(3) Industrial Security Market

(4) Indigenous Bankers

43. Which type of ratio indicates how the equits stock of the company is assessed in capital market?

(1) Debt-equity ratio

(2) Valuation ratio

(3) Profitability ratio

(4) Turnover ratio

44. The company Law Board has its principal branch at

(1) Chennai

(2) Mumbai

(3) Kolkata

(4) Delhi

45. The technique of acquiring material and manufacturing goods only as needed to satisfy customers orders is called as

(1) Just In Time

(2) Maintaining levels of stock

(3) Buffer Stock

(4) Economic Order Quantity

46. The insurance sector was opened up to the private sector in

(1) December 1991

(2) August 2000

(3) April 1996

(4) October 2004

47. The capital Issues (Control) Act 1947 (CICA) was repealed in the year

(1) 1956

(2) 1972

(3) 1980

(4) 1992

48. From the ones stated below which function Management is not of a routine nature?

(1) Maintaining custody of securities and other valuable papers

(2) Safeguarding of cash receipts and payments

(3) Record keeping and reporting

(4) Evaluating financial performance

49. Terminal cash flow is calculated as

(1) After tax salvage value from new asset – After tax salvage value of old asset (if retained)

(2) Operating cash flow from new asset – Operating cash flow from old asset which is retained

(3) Cost of new asset—cost of old asset

(4) Cash flow with project—- Cash flow without project

50. Which of the following is zero interest bond?

(1) Deep discount bond

(2) Floating rate bond

(3) Commodity linked bond

(4) Bonds with embedded option

51. The opportunities to respond to changing market conditions and influence the customer of a project is known as

(1) Real option

(2) Time option

(3) Flexibility option

(4) None of the above

52. The main symptom of under trading is

(1) low inventory turnover ratio

(2) high inventory turnover ration

(3) high current ratio

(4) very efficient credit management

53. The credit for initiating Merchant Banki9ng Services in India goes to

(1) SBI

(2) RBI

(3) Standard Chartered Bank

(4) Grind lays Bank

54. Modigliani and Miller (MM) approach to capital structure maintains that

(1) the overall cost of capital changes as per the changes in debt-equity ratio

(2) The overall cost of capital does not change with the changes in debt-equity ratio

(3) the overall cost of capital sometimes changes as per debt-equity ratio

(4) None of the above

55. Which one the following is not the assumption of Modigliani and Miller (MM) theorem?

(1) There is no tax advantage/disadvantage associated to dividend

(2) The investment and dividend decisions are independent

(3) One firm can issue stock without incurring transferction cost raise money

(4) Stock market places more weight on dividend than retained earnings

56. What will be the dividend per share of a company for the year 2011?

When – EPS – Rs. 3

DPS – Rs 1.2

Target payout ratio – 0.6

Adjustment rate – 0.7

Apply Lintner Model

(1) 1.62

(2) 1.26

(3) 1.66

(4) 2.16

57. Watered capital means, the difference between

(1) long term working cap[ital and short term working capital

(2) net working and gross working capital

(3) the book value and the realizable value of assets

(4) the market value and book value of assets

58. capital structure refers to the composition of firm’s

(1) Long term funds comprising of equity, preference shares and long term loans

(2) short term funds comprising of cash, creditors, overdrafts, purchase/discounting of bills and public deposits

(3) Long term funds comprising lease financing, assumulated earnings and inter corporate deposits

(4) short term funds comprising preference shares, short term loans from banks

59. The exact extent of time required for a firm to recover its initial investment in a project as calculated from cash inflows is known as

(1) payback period

(2) Lead time

(3) Reorder time

(4) Waiting period

60. Which profitability ratio is not related to sales?

(1) Material consumption ratio

(2) Conversion cost ratio

(3) Return on investment ratio

(4) Expense ratio

61. Commercial Bill Market is part of

(1) Organized money market

(2) Unorganized money market

(3) Stock market

(4) None of the above

62. MIGA is related to

(1) Cargo Insurance

(2) Life Insurance

(3) Non-Life Insurance

(4) FDI Insurance

63. Indigenous bankers are regulated by

(1) Reserve Bank of India

(2) Ministry of Finance

(3) Registrar of Co-operative Societies

(4) None of above

64. IMF is related to assistance towards

(1) Capital A/c of BoP

(2) Current A/c of Bop

(3) SDR A/c of Bop

(4) Gold Reserves A/c of BoP

65. major players in the money market are

(1) General Public

(2) IDBI, ICIC, IFCs

(3) Stock Exchange

(4) RBI, NBFCs, State Government, PSUs

66. LIBOR is related to calculation of

(1) Reserves and Surplus

(2) Depreciation

(3) Amortisation

(4) International Based Interest Rates

67. Indentify the credit rating agency of India.

(1) S&P

(2) Moody’s

(3) CARE

(4) ICICI

68. Offshore financial Centres are located at

(1) Mumbai

(2) London

(3) Switzerland

(4) New York

69. What is the meaning of Universal Banking?

(1) Banks which caters to the universe

(2) Functions offered by banks are universal in nature

(3) It is name of a Foreign Bank

(4) One-stop shop all banking services

70. Crisis in European Union is related to

(1) Debts

(2) Deficits

(3) Profits

(4) Losses

71. Which is the institution established in 1964 for mobilization of small savings in India?

(1) SIDBI

(2) UTI

(3) SFCs

(4) ECGE

72. Which credit rating agency downgraded Indian banking performance recently?

(1) CRISIL

(2) Moody’s

(3) S&P

(4) IBA

73. Name the intermediary that has to register with SEBI.

(1) Commodity exchange

(2) Co-operative banks

(3) Merchant banks

(4) None of the above

74. CRR is related to

(1) Credit rating ratio

(2) Courier Representative Relationship

(3) Customer Repo rate

(4) Controlling Liquidity Ratio

75. NABARD is a/an

(1) All India Financial Institution

(2) Specialized Financial Institution

(3) Investment Institution

(4) Refinance Institution