SAMPLE MULTIPLE CHOICE QUESTIONS

SYBCOM - SEM IV

FINANCIAL ACCOUNTING & AUDITING: AUDITING

1. Which of the following statements is not true?

a. Management fraud is more difficult to detect than employee fraud b. Internal control system reduces the possibility of occurrence of

employee fraud and management fraud c. The auditor’s responsibility for detection and prevention of errors and

frauds is similar. d. Auditor have to review the internal control system

2. Which of the following is not a limitation of audit?

a. Cost

b. Audit evidence not conclusive

c. Audit work involves exercise of judgement

d. Audit report is an evidence in court

3. Window dressing is likely to be committed by ______

a. Employees

b. Management

c. Auditor

d. Accountant

4. Secret reserve means _____ reserve

a. Free

b. Capital

c. Hidden

d. Sinking fund

5. Which of the below is considered as window dressing?

a. Over valuation of liabilities

b. Undervaluation of asset

c. Charging less depreciation

d. Charging high depreciation

6. The auditing where the auditor is constantly engaged in checking the accounts

during the whole period or on regular intervals is known as ______

a. Continuous audit

b. Concurrent audit

c. Internal audit

d. Final audit

7. Which of the following is not an advantage of balance sheet audit?

a. Less costly

b. No dislocation of work

c. No moral check on employees

d. No alteration in accounts

8. From the below statements, pick the incorrect statement.

a. Window dressing is exactly opposite to secret reserve

b. Auditor can give assurance about future profitability and prospects of the

company

c. A hard and fast audit programme may kill the initiative of efficient

assistants

d. Credit sales are vouched on the basis of Cash Memo

9. Ownership of working papers is with _______

a. Assistant

b. Auditor

c. Client

d. Government

10. From the below, identify the source of information which auditor does not collect

the information for preparing audit plan.

a. Internal reports

b. External reports

c. Discussion with management

d. Central Government

11. Which of the following is not a part of current file of working papers?

a. Audit plan

b. Audit programme

c. Management representations

d. Analysis of significant ratios

12. Audit plan should be based on _______

a. Profit of client

b. Client’s business

c. Net worth of client

d. Reputation of client

13. Which of the below is not a part of audit techniques?

a. Inspection

b. Observation

c. Enquiry

d. Reporting

14. Internal control system includes ______

a. Internal audit

b. Internal check

c. Both (a) & (b)

d. Test check

15. Which of the following statement is True?

a. Continuous audit disturbs the working of an organisation

b. Ownership of working papers is with client

c. Audit programme should be rigid

d. Routine checking saves time

16. From the below statements, pick the incorrect statement.

a. Management has no control over internal control system of the company

b. Entries selected for test checking must be representative of all transactions

c. Overcharging or undercharging of depreciation is an Error of Principle

d. There is no risk involved in audit sampling

17. Which of the following is not an advantage of routine checking?

a. Thorough checking

b. Confirmation of accuracy

c. Time consuming

d. Training to juniors

18. Which of the below is not an advantage of test checking?

a. Save in time

b. Reduction in workload

c. Biased

d. Moral check on employees

19. Checking only representative samples from a large number of similar items by

applying scientific techniques is known as ________

a. Test checking

b. Sampling

c. Routine checking

d. Internal check

20. The risk that, although the sample result does not support the auditor’s assessment

of control risk, the actual compliance rate would support such an assessment is

known as ________

a. Risk of under reliance

b. Risk of over reliance

c. Risk of incorrect acceptance

d. Risk of incorrect rejection

21. _________ document is not relevant for vouching cash sales

a. Daily cash sales summary

b. Salesman’s summary

c. Bank statement

d. Monthly statement sent to customers

22. _________refers to examination as to whether assets and liabilities are properly

stated in balance sheet

a. Confirmation

b. Vouching

c. Verification

d. Internal control

23. In verification of fixed assets, the auditor checks _______

a. Confirmation from debtors

b. Bank reconciliation statement

c. The existence, ownership and disclosure of asset

d. None of the above

24. To verify that all goods received by the company have been recorded properly,

auditor should check all ______

a. Vendor invoices

b. Purchase orders

c. Goods received notes

d. Cash payment to creditors

25. Arrears of dividend on preference shares is a ________

a. Current liability

b. Current assets

c. Contingent liability

d. Non – current liability

COMMERCE-IV

1. _______ is the last step in production planning and control.

a) Routing

b) Scheduling

c) Dispatching

d) Follow-up

2. ______ is a type of continuous production system

a) Project Production

b) Batch production

c) Job Production

d) Mass production

3. _______ is the ratio of output to input

a) Efficacy

b) Quality

c) Productivity

d) Inventory

4. _______ is concerned with keeping the facilities in their operating condition.

a) Materials management

b) Maintenance management

c) Process design

d) Product design

5. In _______ inventory control system, stock levels are reviewed at fixed

intervals

a) Perpetual

b) Periodic

c) Just in Time

d) ABC Analysis

6. State which of these statements is correct?

a) Dispatching refers to determination of the manufacturing path

b) Scheduling is the first step in production planning and control

c) Production Planning and control ensures smooth flow of production.

d) Routing means execution of the production plan

7. The _______ costs are those incurred during the production process

a) appraisal

b) prevention

c) internal failure

d) external failure

8. _______ technique enables the workers to check the quality of items before they

are passed on to the next operation

a) Quality assurance

b) SQC

c) Quality at source

d) Workers participation in management

9. The concept of TQM was introduced by _______

a) Dr. Ishikawa Kaoru

b) William Stanton

c) Dr. W. D. Denin

d) Harold Koontz

10. Quality circle is a _______ group of workers

a) Formal

b) Voluntary

c) Selective

d) Informal

11. DMAIC is a model used in _______ approach

a) TQM

b) Six Sigma

c) Quality Circles

d) Kaizen

12. ISO is based in _______

a) London

b) Geneva

c) Mumbai

d) New York

13. Identify the incorrect statement

a) Quality is a subjective term

b) Serviceability is a dimension of quality

c) Prevention Cost is a type of cost of quality

d) Cost of quality refers to the cost of making a quality product

14. The minimum period of a commercial paper is _______ days

a) 7

b) 30

c) 45

d) 180

15. The oldest stock exchange in India is _______

a) Madras stock exchange

b) Calcutta stock exchange

c) National stock exchange

d) Bombay stock exchange

16. _______ are issued with a face value of Rs. 1 lakh and in multiples of Rs. 1 lakh

thereof

a) Certificate of Deposit

b) Commercial Paper

c) Treasury Bills

d) Commercial Bills

17. _______ is the first credit rating agency established in India

a) CARE

b) S&P

c) CRISIL

d) ICRA

18. _______ is an example of unorganized money market

a) Commercial Bill

b) Commercial Paper

c) Indigeneous Bankers

d) BSE

19. In India, IPO is regulated by _______

a) SEBI

b) RBI

c) SBI

d) Stock Exchanges

20. ______ is a financial intermediary that pools savings of investors for collective

investments in diversified portfolio of securities

a) Bank

b) Financial Institution

c) Mutual Fund

d) Credit Rating Agency

21. Under _______scheme of mutual fund, the investor can invest at any point of

time during the year

a) index

b) close-ended

c) open-ended

d) tax saving

22. _______ is an example of hard commodity

a) corn

b) sugar

c) wheat

d) crude oil

23. SIPs offer the benefit of ______

i) Rupee cost compounding

ii) flexibility of investing

iii) compounding

a) i), ii) and iii)

b) ii) and iii)

c) Only i)

d) i) and ii)

24. ELSS stands for _______

a) Equity Linked Saving Scheme

b) Entity Linked Saving Scheme

c) Entity Linked Standardised Scheme

d) Equity & Liability Standard Scheme

25. Which of these statements is incorrect?

a) Livestock is traded in the commodities market

b) Speculators play an important role in money market

c) SIP investment offers the benefit of compounding

d) Forward markets are unregulated

ACCOUNTANCY & FINANCIAL MANAGEMENT-IV

Q.1. A limited company in India shall be created under _____

a. Indian Companies Act, 1956

b. Indian Partnership Act, 1932

c. Indian Penal Code, 1860

d. Indian Income Tax Act, 1961

[02]

Q.2. Sweat Equity shares are issued to the _____of the company.

a. Directors

b. Creditors

c. Bank

d. Employees

[02]

Q.3. _________ is the maximum amount of capital a company can raise in its

lifetime, as stated in the Memorandum of Association of a Company

a. Issued Capital

b. Subscribed Capital

c. Calls in arrears

d. Authorized Capital

[02]

Q4 On the basis of number of members, a company may be classified as _______

a. Private Company

b. Public Company

c. All of the above

d. One Person Company

[02]

Q5 An ___________is an account where funds are held in trust whilst two or more

parties complete a transaction. This means a trusted third party will secure the

funds in a trusted account. The funds will be disbursed after they have fulfilled

the agreement.

a. Savings

b. Escrow

c. Fixed Deposit

d. Current

[02]

Q6 ___________ have a right to recover the interest as well as principal out of the

company which are given as charge or security, if interest or principal is not

paid on due date

a. Right Shareholder

b. Debenture holder

[02]

c. Equity Shareholder

d. Preference Shareholder

Q7 When is this Journal entry passed in case of Redemption of Preference Shares

Profit/Loss a/c Dr. 2,00,000 General Reserve a/c Dr. 1,00,000 To Capital

Redemption Reserve a/c a/c 3,00,000?

a. Settle Claim of Preference Shareholders by payment from Bank a/c

b. Making final call on shares

c. Claim of Preference Shareholders transferred to their account

d. Creation of Capital Redemption reserve

[02]

Q8 Capital Redemption Reserve for the purpose of redemption of preference shares

shall be created from _________ profits only

a. Non-divisible profits

b. Both Divisible and Non-Divisible Profits

c. Divisible profits

d. Neither Divisible nor Non-Divisible Profits

[02]

Q9 Which of these profits are considered as divisible profits for the purpose of

redemption of preference shares

a. Debenture Redemption Reserve

b. General Reserve

c. Capital Reserve

d. Capital Redemption Reserve

[02]

Q10 Preference shares must be _______ in order to be redeemed.

a. Forfeited

b. Fully Paid up

c. Calls in arrears

d. Partly paid up

[02]

Q11

The terms of redemption of preference shares shall be specified at the time of

_________

a. Re-issue of Shares

b. Issue of Shares

c. Forfeiture of Shares

d. Call on Shares

[02]

Q12 Amount due to untraceable debenture holders at the time of redemption should

be transferred to __________ account

[02]

a. Capital

b. Contingent Liabilities

c. Loan

d. Current Liabilities

Q13 Mafco ltd issues 500 convertible debentures of Rs.100 each. The offer is to

convert the debenture into Equity shares of Rs. 100 each at a premium of Rs. 25

at any time within 5 years from the date of issue. The number of Equity shares

to be issued for this conversion is ______ shares

a. 700

b. 275

c. 500

d. 400

[02]

Q14 Interest on sinking fund investment for redemption of debentures is credited to

_______ account.

a. Interest

b. Sinking Fund

c. Profit /Loss

d. Sinking fund Investment Account

[02]

Q15 When debentures become due for redemption, the claim of the debenture

holders is credited to _______ account

a. Bank

b. Debenture holders

c. Debenture

d. Profit/Loss

[02]

Q16 As per the provisions of the Indian Companies Act, 1956 a company can create

a Debenture Redemption Reserve equal to ________ of the issue size.

a. 50

b. 75

c. 25

d. 30

[02]

Q17 Aarti Ltd. issued 10,000 7% Debentures of Rs. 10 each at a discount of 10%

redeemable at par in 5 years. What is the amount of discount to be written off

each year?

a. Rs. 8,000

b. Rs. 1,000

c. Rs. 2,000

[02]

d. Rs. 10,000

Q18 Shanti Ltd. issued 2,000 9% Debentures of Rs. 10 each at par redeemable at

premium of 5% in 3 years. What is the amount payable to debenture holders on

redemption?

a. Rs. 50,000

b. Rs. 20,000

c. Rs. 25,,000

d. Rs. 21,000

[02]

Q19 Bhumi Ltd. issued 50,000 8% Debentures of Rs. 100 each at a premium of 10%

redeemable at par in 5 years. What is the amount payable to debenture holders

on redemption?

a. Rs. 50,00,000

b. Rs. 55,00,000

c. Rs. 5,00,00,000

d. Rs. 50,50,000

[02]

Q20 In computing Profit prior to incorporation Travelling Expenses should be

allocated in ___________ ratio

a. Time

b. Sales

c. Purchase

d. Profit

[02]

Q21 In computing Profit prior to incorporation Share Transfer fees should be

allocated in ___________

a. Only to Pre Incorporation period

b. Purchase Ratio

c. Sales Ratio

d. Only to Post Incorporation period

[02]

Q22 In computing Profit prior to incorporation Salaries to employees should be

allocated in ___________

a. Time Ratio

b. Only to Post Incorporation period

c. Only to Pre Incorporation period

d. Sales Ratio

[02]

Q23 If date of incorporation is 1st October 2019 and the books of accounts close on

31st March 2020, what is the time ratio?

a. 1 : 2

b. 2 : 1

c. 1 : 1

d. 3 : 2

[02]

Q24 If date of incorporation is 1st October 2019 and the books of accounts close on

31st March 2020 and the sales for the first half of the year are Rs. 5,00,000

whereas the sales for the full year are Rs. 15,00,000 what is the Sales ratio?

a. 3 : 2

b. 1 : 2

c. 2 : 3

d. 2 : 1

[02]

Q25 Profits prior to Incorporation is transferred to ______

a. Goodwill

b. General Reserve

c. Capital Reserve

d. Profit/loss a/c

[02]

BUSINESS ECONOMICS IV

1. When expenditure exceeds total tax revenue, it is called:

a. Surplus budget

b. Balanced budget

c. Deficit budget

d. Equal budget

2. The government provides subsidies in various sectors. Which of the

following are the effects of subsidies?

a. Increases inflation

b. Increases fiscal deficit

c. Decreases export competitiveness

d. Increases surplus

3. The Fiscal Responsibility and Budget Management Act (FRBM Act)

aimed for_______

a. Eliminating both revenue deficit and fiscal deficit

b. Giving flexibility to RBI for inflation management

c. Correcting budget deficit

d. Increasing government surplus

4. What is meant by Open Market Operations?

a. Purchase and sale of government securities by RBI

b. Rationing of the credit allocated to the commercial banks by RBI

c. Request by the RBI to the commercial banks to take some

measures

d. Purchase of securities by the commercial banks

5. The goals of monetary policy do NOT include the promotion of

_________________

a. Maximum employment

b. Low Taxes

c. Stable Prices

d. Moderate long-term interest rates

6. Maximum Social Advantage is achieved,

a. at the point where the marginal social benefit of public expenditure

and the marginal social sacrifice of taxation are equated

b. at the point where the marginal social benefit of public expenditure

is higher than the marginal social sacrifice of taxation

c. at the point where the marginal social benefit of public expenditure

is lower than the marginal social sacrifice of taxation

d. at the point where the marginal social benefit of public expenditure

and the marginal social sacrifice of taxation are zero

7. A multilevel decentralized fiscal system involving sharing of fiscal

responsibilities between central, state and local governments is referred to

as:

a. Fiscal Union

b. Fiscal Federalism

c. Fiscal Equalisation

d. Fiscal Generalism

8. Which tax cannot be shifted to others?

a. Excise duty

b. Sales tax

c. Entertainment tax

d. Wealth tax

9. Fiscal Federalism refers to ….

a. Sharing of political power between center and states

b. Organizing and implementing economic plans

c. Division of economic functions and resources among different

layers of Govt.

d. Understanding resource allocation

10. Loans taken by the government for the purpose of war, earthquakes for

covering budget deficit are?

a. Productive Debts

b. Unproductive Debts

c. Voluntary Debts

d. Foreign debt

11. In India, deficit financing is used for raising resources for

a. economic development

b. redemption of public debt

c. adjusting the balance of payments

d. reducing the foreign debt

12. Policy related to public revenue and expenditure is called ……

a. Monetary policy

b. Tax policy

c. Fiscal policy

d. Expenditure policy

13. Wiseman‐Peacock hypotheses support in a much stronger manner the

possibility of?

a. An upward trend in public expenditure

b. A downward trend in public expenditure

c. A constancy of public expenditure

d. A mixed trend in public expenditure

14. Fiscal policy refers to the____________

a. government's ability to regulate the functioning of financial

markets.

b. spending and taxing policies used by the government to influence

the level of economic activity.

c. techniques used by firms to reduce their tax liability.

d. the policy by MAS to affect the cash rate.

15. Which of the following does NOT function as an automatic stabilizer?

a. The personal income tax system

b. Government expenditure on road-building programs

c. Unemployment benefit payments

d. The Goods and Services Tax (GST)

16. If the economy were in a recession, we would expect

a. government expenditure to be low and tax revenues to be low,

probably leading to a budget surplus.

b. government expenditure to be high and tax revenues to be low,

probably leading to a budget surplus.

c. government expenditure to be high and tax revenues to be low,

probably leading to a budget deficit.

d. government expenditure to be high and tax revenues to be high,

probably leading to a budget deficit.

17. If the government wants to try to reduce unemployment, it could

________ spending and/or taxes should be ________.

a. decrease; increased

b. increase; increased

c. decrease; decreased

d. increase; decreased

18. Fiscal policy is the policy of:

a. RBI

b. NABARD

c. Government

d. Foreign Agency

19. The following is an example of direct taxes:

a. Sales tax

b. Income tax

c. Excise duties

d. Toll tax

20. If the rate of tax falls with an increase in income, it is called:

a. Proportional tax

b. Progressive tax

c. Regressive tax

d. Falling tax

21. The difference between revenue expenditure and revenue receipts is

a. Revenue deficit

b. Fiscal deficit

c. Budget deficit

d. Primary deficit

22. The difference between total expenditure and total receipts is

a. Fiscal deficit

b. Budget deficit

c. Primary deficit

d. Revenue deficit

23. When expenditure exceeds total tax revenue, it is called:

a. Surplus budget

b. Balanced budget

c. Deficit budget

d. Equal budget

24. Which of the following is not a fiscal instrument?

a. Open market operations

b. Public expenditure

c. Taxation

d. Public debt

25. The concept of ‘Canon of taxation’ was first propounded by?

a. Dalton

b. J.M. Keynes

c. Adam Smith

d. Edwin Canon

BUSINESS LAW-II

1. What are the maximum number of members in case of private company?

a. 20

b. 75

c. 100

d. 200

2. What is the minimum strength of the directors in case of public company?

a. 2

b. 3

c. 5

d. 10

3. New Companies Act was introduced in

which year? a. 2010

b. 2011

c. 2012

d. 2013

4. In case of Government company what is the minimum share holding

which is in the hands of Government

a. 49

b. 51

c. 7

5 e.

100

5. Out of the following which is not an advantage of the company?

a. Common seal

b. Perpetual succession

c. Limited liability

d. Lengthy process of incorporation

6. What are the disadvantages of a company?

a. Tax burden

b. Separate legal entity

c. Sue and be sued

d. Can purchase property on its own name

7. There are total clauses in MOA.

a. 5

b. 6

c. 7

d. 8

8. Charitable company is formed under which section?

a. 7

b. 8

c. 15

d. 22

9. Which prospectus doesn’t specify value of the shares which are going to be

issued?

a. Shelf

b. Abridged

c. Red herring

d. General prospectus

10. Which clause define business activity of the company?

a. Capital

b. Object

c. Registered office

d. Liability

11. Which form is required to file for name availability during the

incorporation process?

a. INC 1

b. INC 2

c. MGT 14

d. CHG 9

12. What is the meaning of ultra vires?

a. Powers of the company

b. Insolvency situation of the company

c. Beyond the power

d. Unlimited authority

13. Word must be added at the end of the name of the private company.

a. Ltd

b. OPC

c. Pvt ltd

d. Inc.

14. Foreign company is created outside-

a. Mumbai

b. Maharashtra

c. India

d. Limit of Registrar

15. OPC must be converted into private company or public company if

turnover exceeds Rs. crore

a. 2

b. 3

c. 4

d. 5

16. In case of OPC there is requirement of minimum member.

a. 1

b. 2

c. 3

d. 4

17. Who is in charge of partnership?

a. Karta

b. Sole Trader

c. Director

d. Partner

18. A company is created by-

a. State Government

b. Central Government

c. Law

d. Society

19. When one company is controlling another company then

controlling company is known as-

a. Holding company

b. Subsidiary company

c. Small Company

d. Private Company

20. Minimum member in case of public company is .

a. 3

b. 7

c. 10

e. 20

21. Board meeting is participated by-

a. CS

b. Lawyers

c. CA

d. Shareholders

22. When vote is given through electronic medium then it is known as-

a. Postal Ballot

b. By show of hands

c. E Vote

d. By separation

23. Name clause should NOT have the words

a. Pvt.Ltd

b. One person company

c. Indian National Flag

d. Ltd

24. Which meeting is conducted once in a year?

a. Board meeting

b. AGM

c. Creditors meeting

d. Local meeting

25. A person can become a shareholder by purchasing of the company.

a. Goods

b. Services

c. Shares

d. Assets