Accounting Questions and Answers

Accounting Questions and Answers
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accounting questions

1. Which one of the following functions is served most by information technology?

(a) Replacement of human labour

(b) Provision for a handle to the management to improve industrial relations

(c) Substitution of human information processing

(d) Rationalization of office work

Ans. (d)

2. Match List-I with List -II and select the correct answer using the Code given below the lists:

List- I                                                                List-II

A. Simple Association                               1. Amalgamation

B. Federation                                             2. Cartels

C. Complete consolidation                        3. Chamber of Commerce

D. Partial Consolidation                            4. Holding company

Codes:

A B C D

(a) 3 2 4 1

(b) 2 3 1 4

(c) 2 3 4 1

(d) 3 2 1 4

Ans. (b)

3. Which one of the following NOT a feature of sole proprietorship business?

(a) Undivided risk

(b) No government regulation

(c) Separate entity of the firm

(d) Unlimited liability

Ans. (c)

4. Dumping is an example of:

(a) monopolistic practice in international trade

(b) monopoly in international trade

(c) oligopoly in international trade

(d) perfect competition in international trade

Ans. (b)

5. Who among the following does NOT have insurable rest in fire insurance?

(a) A shop owner in the property of his customers

(b) A creditor in the property mortgaged with him

(c) A trustee in the property of the trust

(d) An insurance company in the property

Ans. (d)

6. In marine insurance, warranty means a guarantee:

(a) against the loss of the ship in the voyage

(b) for the safety of the captain of the ship

(c) for payment of shipping freight

(d) to comply with conditions mentioned in the policy

Ans. (d)

7. In a consequential loss policy which one of the following losses is indemnified?

(a) Loss of corporate image

(b) Loss of net profits due to fire

(c) Loss due to theft during fire

(d) Loss due to damage around the venue of fire

Ans. (b)

8. One of the major disadvantages of the Matrix form of organization structure is that:

(a) it does not pinpoint product – profit responsibility

(b) it is not oriented towards results

(c) there is possibility of disunity of command

(d) it generates rivalry between line and staff members

Ans. (c)

9. Which of the following gives the correct sequence with respect to communication process?

(a) Sender, Message, Encoding Receiver, Channel, Decoding and Feedback.

(b) Message, Sender, Encoding, Receiver, Channel, Decoding and Feedback.

(c) Encoding, Message, Sender, Decoding, Feedback, Receiver and Channel.

(d) Sender, Message, Encoding, Channel, Receiver, Decoding and Feedback

Ans. (d)

10. Maintenance of intended delegation requires that decisions lying within the individual manager’s authority should be made by them and not referred upwards in the organizational hierarchy. This is known as:

(a) principle of unity of command

(b) scalar principle

(c) authority level principle

(d) principle of absoluteness of responsibility

Ans. (c)

11. In which one of the following, Crisis Management is reflected?

(a) Future expansion plans of business

(b) Organization Development Programme

(c) Short-term Manpower Planning

(d) Prudent managerial leadership

Ans. (d)

12. David C. McClelland’s motivating needs are:

(a) Needs for power, affiliation and growth

(b) Needs for affiliation, achievement and security

(c) Needs for power, achievement and relatedness

(d) Needs for power, affiliation and achievement

Ans.(d)

13. Which one of the following, correctly signifies the purpose of an Organization Chart?

(a) Office Decor

(b) Indication of available Office Services

(c) Flow of Authority

(d) High Morale

Ans. (c)

14. Informal organization is as necessary as formal organization chiefly for the reason that it:

(a) resists change

(b) builds morale

(c) has close association with decision making

(d) fulfils separate goals and standards

Ans. (b)

15. Increase in the installation of Personal Computer is mainly due to:

(a) monotony of work

(b) reduction of fatigue

(c) improvement of efficiency

(d) lowering work load

Ans. (c)

16. The most important advantage of centralization of office services is:

(a) specialization

(b) higher departmental loyalty

(c) no delay in providing services

(d) less burden of work

Ans. (c)

17. Management by Exception is to improve:

(a) control over personnel

(b) strategic management

(c) steady flow of information

(d) high morale

Ans. (b)

18. Which one of the following indicates the correct chronological order of management approaches in the History of Management Thoughts?

(a) Classical, Human Relations, Behavioral, Systems, Contingency

(b) Contingency, Systems, Behavioral, Human Relations, Classical

(c) Classical, Behavioral, Human Relations, Systems, Contingency

(d) Classical, Human Relations, Behavioral, Contingency, Systems

Ans. (a)

19. The degree of decentralization in an organization

depends most on:

(a) technology

(b) size of workforce

(c) volume of transactions

(d) competence of subordinates

Ans. (d)

20. Job Evaluation is carried on mainly for:

(a) identifying geographical locational factors of business enterprise

(b) promoting job satisfaction

(c) simplifying wage administration

(d) meeting competition effectively

Ans. (c)

21. Consider the following stages of planned change:

1. Moving

2. Refreezing

3. Unfreezing

According to Kurt Lewin, the correct sequence of these is

(a) l, 2, 3

(b) 2, 3, l

(c) 3, 1, 2

(d) 1, 3, 2

Ans. (c)

22. Wider span of control is effective in organizations

(a) a1thority delegation is inadequate

(b) tasks are complex

(c) through subordinate training scheme exists

(d) the leadership style authoritarian

Ans. (c)

23. The most suitable method of filing for a transnational corporation is:

(a) numerical

(b) alphabetical-numerical

(c) numerical—territorial

(d) territorial

Ans. (b)

24. Which one of the following aims is achieved most through Office Record keeping ?

(a) Efficiency of operations on shop floor

(b) Business reputation

(c) Storage of documents

(d) Helping decision making

Ans. (c)

25. Greater mechanization of offices, results in:

(a) better house keeping

(b) greater accuracy in the work

(c) making employees cogs of the machines

(d) higher cost of running office

Ans. (b)

26. Which one of the following is the most appropriate

task of office management?

(a) Creation of profit centre

(b) Creation of control centre

(c) Making office supplies available

(d) Supervision of production Quality Control

Ans. (b)

27. O & M can be strengthened chiefly through:

(a) wage incentive plans

(b) good store-keeping

(c) improved office-layout

(d) better work measurement

Ans. (d)

28. A director having direct or indirect, interest or concern in a transaction of the company, has to disclose his interest in a meeting to the:

(a) Board of Directors

(b) Shareholders

(c) Company Secretary

(d) Registrar of Companies

Ans. (a)

29. Match List-I with List-II and select the correct answer using the Code given below the lists:

List-I                                                                                    List-II

A. Company Secretary                       1. In charge of statutory and administrative duties

B. Director                                         2. Reports to the shareholders

C. Managing Director                        3. Reports to the Management

D. Internal Auditor                            4. Trustee of Company’s assets

5. Reports to the Board of Directors

Codes:

A B C D

(a) 1 5 2 3

(b) 3 5 2 1

(c) 1 4 5 3

(d) 3 4 5 1

Ans. (c)

30. Which one of the following reports should have “responsibility statement” under the Companies Act, 1956?

(a) Auditor’s report

(b) Board of Director’s report

(c) Company Secretary’s report

(d) Audio Committee’s report

Ans. (b)

31. Consider the following statements:

1. Board of Directors appoints the first auditor of the company

2. A shareholder of a company can become member of the Board

3. Board of Directors can act as auditors

4. Directors of one company can be appointed as Director to any number of companies

Which of the above statements are correct?

(a) 1,2 and 3

(b) 1 and 3

(c) 1 and 2

(d) 2, 3 and 4

Ans. (c)

32. The capital of a public limited company can be reduced with the confirmation of the:

(a) Registrar of Companies

(b) Company Law Board

(c) Securities and Exchange Board of India

(d) High Court

Ans. (b)

33. Match List-I (Concept relating to company meetings) with List-II (Meaning) and select the correct answer using the Code given below the lists:

List-I                                                                List-II

A. Proxy                                  1. Minimum number of members required to be present

B. Quorum                              2. Getting the right to vote only

C. Statutory Meeting              3. Conducted once in a year

D. Annual General Meeting   4. Once in the life time of a company

5. Meeting of a particular group of shareholders

Codes:

A B C D

(a) 5 3 2 1

(b) 2 1 4 3

(c) 5 1 2 3

(d) 2 3 4 1

Ans. (

34. Minimum paid-up capital required to incorporate a public-limited company is:

(a) Rs. 20,000

(b) Rs. 1 ,00.00

(c) Rs. 5,00,000

(d) Rs. 10,00,000

Ans. (d)

35. Consider the following statements:

1. The minimum number of directors in a public company is three.

2. The first directors are appointed by the first general meeting.

3. An official director appointed by the government in a public company is required to possess qualification shares within 2 months of his appointment.

4. The Company Secretary is appointed by Board of Directors.

Which of the above statements are correct?

(a) 1 and 2

(b) l and 4

(c) 2 and 3

(d) 2 and 4

Ans. (b)

36. After the commencement of the Companies Act, 1956 no person, save as otherwise provided in Section 276, shall hold office as director at the same time in more than:

(a) 5 Companies

(b) 10 Companies

(c) 15 Companies

(d) 20 Companies

Ans. (d)

37. Match List-I (Company having paid-up capital more than) with List-II (Must have/be a) and select the correct answer using the Code given below the lists.

List-I                                                         List-II

A. One lakh rupees                       1. Whole-time Director

B. Ten lakh rupees                       2. Secretarial compliance report

C. Fifty lakh rupees                     3. Qualified Company Secretary

D. Five crore rupees                    4. Public Limited Company

5. Private Limited Company

Codes:

A B C D

(a) 5 4 3 1

(b) 3 4 1 5

(c) 5 2 3 1

(d) 3 2 1 5

Ans. (a)

38. Match List—I with List—II and select the correct answer using the Code given below the lists:

List-I                                                           List-II

A. SEBI                             1. Apex institution of development banks

B. OTCEI                          2. Credit rating

C. IDBI                             3. Trading in securities of small company and government

D. CRISIL                        4. Regulation and development of capital market

Codes:

A B C D

(a) 4 3 1 2

(b) 3 4 1 2

(c) 4 3 2 1

(d) 3 4 2 1

Ans. (a)

39. Merchant Banker does NOT offer services in regard to:

(a) project appraisal

(b) capital issue

(c) project preparation

(d) subscription of Equity shares

Ans. (a)

40. Match List—I with List—II and select the correct answer using the Code given below the lists:

List—I                                          List—II

A. Reducing capital                        1. Contribution margin

B. Sales> Variable cost                  2. Reorganization

C. Sales> Break even sales            3. Absorption

D. Take-over of firm                     4. Margin of safety

Codes:

A B C D

(a) 2 1 3 4

(b) 1 2 3 4

(c) 1 2 4 3

(d) 2 1 4 3

Ans. (d)

41. Mechanistic structures are designed to:

(a) promote flexibility and quick responses to fast changing situations

(b) induce people to behave in predictable and accountable manner

(c) make people happy by assigning specific tasks to. them

(d) perform assigned tasks within the scheduled time

Ans. (d)

42. The Net asset Value (NAV) of a unit of mutual fund scheme is computed as:

Market value of the fund’s investments ± Receivables + Accrued income —

(a) Liabilities — Accrued expenses

No. of units outstanding

(b) Market value of the fund’s investment

No. of units outstanding

(c) Assets of the fund — Liabilities of the fund

No. of units outstanding

(d) Face value of the unit + Dividend per unit

Ans. (a)

43. Which one of the following reports deals with “Corporate government”?

(a) Sabhanayagam Report

(b) Kurmaramangalam Birla Report

(c) Narasimham Report

(d) L. C. Gupta Report

Ans. (b)

The following Seven (7) items consist of two statements one labelled the ‘Assertion A’ and the other labelled the Reason R’. You are to examine these two statements carefully and decide the Assertion (A) and the Reason (R)are individually true and if so, whether the Reason is a correct explanation of the Assertion. Select your answers to these items using the Code given below and mark your answer sheet accordingly:

Code:

(a) Both A and R are true and R is the correct explanation of A

(b) Both A and R are true but R is NOT the correct explanation of A

(c) A is true but R is false

(d) A is false but R is true

44. Assertion (A): The best way of reporting of social responsibility is to prepare a Value Added Statement (VAS) to show the income earned by the providers of capital, the employees and the government.

Reason (R): A business is accountable to the society since it makes use of community-owned assets such as roads, railways, communication and other infrastructural facilities and concessions provided by the state from the taxpayer’s money.

Ans. (a)

45. Assertion (A): The interest on borrowed funds can be capitalized upto the completion of fixed assets.

Reason (R):The completion of fixed assets has been possible only because of these funds.

Ans. (b)

46. Assertion (A): A claim lodged with Railways in March 1998 for loss of goods of Rs. 2,00,000 had been passed for payment in March 2001 for Rs. 1,50,000. No entry was passed in 1998.

Reason (R): The collectability of the claim was not certain in 1998.

Ans. (a)

47. Assertion (A): Life-membership fees is to be capitalized.

Reason (R) : Often these are non-recurring receipts and the members take advantage of the services provided during the tenure of membership.

Ans.(b)

48. Assertion (A): The company is said to be trading on equity.

Reason (R): The capital structure of the company is highly geared.

Ans. (b)

49. Assertion (A): R.O.I. measures the final outcome of all recorded business activities. It is the ratio that measures the performance of the firm that generates returns.

Reason (R): However, interpretation regarding the amount of capital invested and size of returns generated by a firm differ from one interpreter to another and one organization to another. In other words, practices are not uniform and as such the acceptability of the concept is being questioned.

Ans. (b)

50. Assertion (A): An auditor of a company gives a critical review of accounts.

Reason (R): He gives collaborative evidence that accounts are properly drawn up.

Ans. (c)

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