Question Booklet Series
COMMERCE ACOUNTANCY CODE A 1
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KL-14/Comm Series-A

1. Provision for bad and doubtful debts is created in anticipation of actual bad debts on the basis of:

Conservatism concept Going concern concept


Full disclosure concept Industry practice


2. Which accounting principle is violated by including personal expenses of the owner in the business expenses?

Cost principle Going concern concept


Entity concept Conservatism


3. X, Z are partners in a firm. IfB is to be admitted as a new partner:

Old partnership has to be dissolved


Old firm has to be dissolved


Both old firm and partnership has to be dissolved


Neither firm nor partnership need to be dissolved.


4. Indian Accounting Standard AS-I0 is related to:

Depreciation Accounting for Fixed Assets


Cash Flow Valuation of Inventories


5. In the absence of an agreement to the contrary, the partners:

Are entitled for interest on their capitals, only when there are profits


Are entitled for interest on their capitals, only when there are profits


Are entitled for interest on capital at the bank rate, only when there are profits


Are not entitled for any interest on their capitals


6. New profit sharing ratio is calculated at the time of:

Admission ofa partner Retirement ofa partner


Death ofa partner All ofthe above


7. A, Band C are three partners sharing profits and losses in the ratio of D is admitted for 1/10 share, the new ratio will be:




None ofthese


8. Sec. 37 of Partnership Act provides interest on the amount left by the retiring or deceased partner at:




Bank rate Prime lending rate


9. A, C and D are equal partners. Band D died together in a plane crash. This accident results in:

Dissolution ofpartnership


Dissolution of firm


Dissolution offirm as well as dissolution ofpartnership


Neither dissolution of firm nor dissolution ofpartnership


KL14/Comm Series-A
10. On dissolution all assets are transferred to reaslisation account at

Book value Market value


Cost or market value, whatever is less None ofthe above


11. Realisation account is

Personal alc Real alc


Nominal alc Memorandum alc


12. Definition ofa public company is given in the Indian Companies Act 1956

Section 3 Section 3


Section 3 Section 3


·13. Equity Shareholders are:

Customers ofthe company Owners


Creditors None ofthese


14. On an equity share ofRs. 10, the minimum amount of share application under the law should be:

Rs. 0.50 Re. 1


Rs. 2 Rs. 2.50


15. When shares are forfeited, called up amount on shares is debited to:

Forfeiture Account Capital Reserve Account


General Reserve Alc Capital Ale


16. Redeemable preference shares can be redeemed:

Only ifthey are fully paid


Even ifthey are partly paid


Ifthey are paid not less than 50% ofthe nominal value ofshares


Only ifthey are issued at a premium


17. Bonus shares are issued by the companies because:

Surplus cash is available


There is heavy competition from similar companies


There is heavy accumulated general reserve


They have high gross profit ratio


18. The interest on Debenture Redemption Fund Investments is credited to

Debenture A/c


Debenture Redemption Fund Alc


Debenture Redemption Fund Investment Alc


Name ofthe above


19. The analysis by a banker for the purpose of granting cash credit is an example of:

Internal analysis External analysis


Criticai analysis Horizontal analysis


KLI4/Comm Series-A
20. Vertical analysis is known as:

Static analysis


Both


21. Price-earning ratio is useful to:

Short term creditors


Debenture holders


22. Capital employed is equal to:

Total assets


Fixed Assets working capital



Structural analysis


Dynamic analysis


Investors in shares


None ofthese


Total assets -total liabilities


None of the above


23. According to AS-3 (Revised), purchase of fixed assets is treated as:

Operating activity Investing activity


Financing activity None ofthese


24. Cash flow statement is prepared from:

Balance Sheet Profit and Loss Ale


Additional Information All ofthe above


25. Which of the following will not change working capital?

Purchase of goods for cash


Purchase of machine for cash


Purchase of machine against cheque


Sale of old machine against cheque


26. A transaction does not result into flow of funds

When a current assets is converted into another current assets


When a fixed assets is bought out ofcurrent assets


When a long term liability is paid out of current assets


None of the above


27. Generally Auditing is not necessary for small sole trading business because:

Legally it is not necessary


Its scope is limited


Its proprietor has full control on it


None of the above


28. The selection oftransactions is made for test checking:

According to plan As per tradition


Random As per future strategy


29. Audit Note Book contains:

Various dates of reference


Details of work done


Notes regarding item requiring clarification explanations, etc.


All ofthe above


KL14/Comm Series-A
30. Which ofthe following has a broader scope?

Internal control Internal checking


Internal audit None ofthe above


31. An Internal Auditor is:

Temporary Employee Permanent Employee


Daily wager None ofthe above


32. The main object ofvouching is

To prepare trial balance


To conduct routine checking


To verifY authenticity and authority oftransactions


Checking ofvouchers


33. Which one ofthe following is true?

Entry can be made without a voucher


Comparing the vouchers with entries is not essential


There should be no entry without vouchers and no vouchers without entry


All ofthe above


34. Valuation is the base of:

Verification Vouching


Marketing None ofthe above


35. The double entry system of book-keeping was evolved by:

Luca Pacioli Stevenson


Wilson Churchill


36. Under which section of the Companies Act, the remuneration of the auditor is finalised?

224 225


224 231


37. Under which section ofthe Companies Act the branch auditor is appointed?

224 228


225 231


38. Dividend can be distributed from which ofthe following?

Current year's profit Last year's profit


Both and None ofthe above


39. Alteration of name clause in Memorandum ofAssociation requires:

Special resolution with approval of Central Government in writing


Ordinary resolution with approval of Central Government in writing


Special resolution with the approval of Company Law Board


Ordinary resolution with the approval of Company Law Board


KL14/Comm Series-A
40. Under which of the following section of the Companies Act, shares of a company are issued at a premium?

Section 78 Section 79


Section 81 None ofthe above


41. While auditing accounts ofa Railway, Company Auditor should see:

That the provisions ofMemorandum and Articles ofAssociation are formed


The Director's Statement Book and all other agreements


The Act passed in the parliament


All ofthe above


42. "A plan is a trap to capture the future". This statement is of:

Newman Hurley


Allen Terry


43. The concept of bounded rationality has been given by:

George R. Terry Peter F. Drucker


Herbert A. Simon R.S. Davar


44. "Management by objectives have failed to motivate people". This statement is of:

Harry Levision R.S. Davar


A.M. Brown E.F.L. Brech


45. SWOT analysis is used in:

Environment Analysis


Strategy formulation


Environment analysis and strategy formulation both


None ofthe above


46. "Wrong organisation structure prevents business performance upto the extent that it destroys it". This statement is of:

Drucker Terry


Allen Brech


47. Factor which is common to Maslow, Herzberg and McGregor is that they have
propounded theories of:

Control


Motivation


48. Departmentation is suitable for:

Small Industries


Cottage Industries


49. Maximum discipline exists in:

Line and staff organization


Line organization



Leadership


Communication


Large Industries


All type of industries


Committee organisation


Functional organisation


KL14/Comm Series-A
50. X and Y Theory ofmotivation has been propounded by:

Meslow Ouchi


Herzberg McGregor


51. "The main reason of most business enterprises becoming unsuccessful is the inefficient leadership." This statement is of:

Koontz and O'Donnell Peter F. Drucker


George R. Terry Mooney and Reley


52. Likert's management systems are:

6 8
53. Contingency Model is given by:

Fiedler's Likert's


Blake and Mouton Victor Vroom


54. "Change is compulsory in management." This statement is of:

Terry Allen


Taylor Fayol


55. 'NCLAT' stands for:

National Corporate Law Appellate Tribunal


National Company Law Appellate Tribunal


National Corporate Law Appeal Tribunal


National Company law Appeal Tribunal


56. The Securities and Exchange Board of India was set up in the year:

1991 1992


1981 1982


57. Minimum number of members required to incorporate a company in case of banking business are:

10 20
58. Corporate veil can be lifted or pierced under following circumstances:

Under statutory provisions


Under judicial interpretation


and both


None ofthe above


59. "A company limited by share" is defined under section of Companies Act 1956.

Sec. 12 Sec. 12


Sec. 12 Sec. 12


KL14/Comm Series-A
60. A Government company is defined under section of Companies Act 1956.

617 617


619 620


61. Filing of Article of Association to the Registrar for the incorporation is for the public company adopting Table A.

Compulsory Optional


Necessary Recommendatory


62. Change ofRegistered office from one state to another state requires:

Ordinary resolution only


Ordinary resolution and sanction ofthe company law board


Special resolution only


Special resolution and sanction ofthe company law board.


63. The Doctrine of Ultra Vires implies to those acts which are outside of the ambit of:

Object clause


Capital clause


Liability clause


All ofthe above


64. Doctrine of Constructive Notice applies to:

Article ofAssociation


Memorandum ofAssociation


and Both


None ofthe above


65.
Under which ofthe following section ofthe Companies Act, Self prospectus is defined? W6M (C)61A (D)61B

66.
Book building is a method of:


Issuing shares Buy back of share


Issuing debenture Redemption ofdebenture



67.
A partnership firm having more than 20 partners is termed as:


A company Limited Liability partnership


Illegal association Association not for profit.





68. The first auditor or auditors are appointed by:

Central Government Company Law Board


Board of Directors Shareholders


69. Special Audit is specified under section of Companies Act.

233A 233B


232A 232B


KL14/Comm Series-A
70.
71.

72.

73.

74.

75.

76.


Disqualification ofDirector includes:
Unsound mind Undischarged insolvent
Convicted by a court failed to pay any call.

IandII


II and III


II, III and IV


II, III and IV


After the commencement of the Companies (Amd.) Act 2000, no person can be director ofmore than:

10 companies 20 companies


15 companies 12 companies


Criminal Liability ofDirector includes:
Willful Misconduct Misstatement in prospectus
Acting dishonestly Breach oftruch
Match the following:
Issue ofshare at discount 79A
Issue of share at premium 79
Sweat equity share 77A
Buy Back of own share 78

(iv




Special resolution is required to pass for the following:

To pass annual account


To declare dividend


To alter memorandum


To issue sweat equity share


(A)aand b

band c


c and d


(D)dand a
Extraordinary General Meeting can be called by:

Directors Requisitionists


Company Law Board All ofthe above


How many day's written notice to every shareholder, director and auditor of the company to call an annual general meeting is required?

14 days 15 days


21 days one month


Series-A KL14/Comm
77. The Board meeting ofthe Directors should be held at least:

2 times a year 3 times a year


4 times a year 5 times a year


78. Which ofthe following is a statutory duty ofa Company Secretary?

To sign documents requiring authentication


To sign annual return


To sign annual accounts ofthe company


All ofthe above


79. The theory oftrusteeship ofthe business assets was pronounced by:

Henry fayol Mahatma Gandhi


Jawaharlal Nehru Karl Marx


80. In which form of combination, all the member units submit their output on paper to the central authority which in tum allocates the output to all the member units:

Pool Gentlement agreement


Cartels Amalgamation


81. "Delegation means assigning work to others and giving them authority to do it." This statement is given by:

Brech Terry


Allen F.G.Moore


82. Horizontal integration is combination of companies engaged in the production of:

Same product


Product in successive stages ofproduction


Product having a number ofby product


Different type ofunrelated product.


83. FICCI was formed in the year of:

1921 1926


1930 1953


84. A partner who merely lends his name to the firm is called:

Dormant partner Nominal partner


Active partner Partner by holding out


85. The equity share of a company are first issued in the:

Money market Primary market


Secondary market None ofthe above


86. EPCG schemes in international trade allows:

Duty free imports of all goods


Duty free import of capital-goods


Remission ofduty in export


Duty drawback iIi export


KL14/Comm Series-A
87. 'Bill of lading' in export is issued by:

Commercial bank Shipping company


Custom authorities Exporter


88. Import procedure begins with:

Indent Marine insurance


Mat's Certificate Shipping order


89. Duty ad valorum means imposition ofduty according to:

Weight of goods Number of items


Value ofgoods None ofthe above


90. Trading on equity leads to higher returns for:

Equity shareholder Preference shareholder


Debenture holder AU ofthe above


91. When custom duty is levied according to the weight ofgoods, it is known as

Ad valorum duty Specific duty


Excise duty General duty


92. Principle of utmost good faith is applicable to:

Insurer only


Insured only


Both insurer and insured


t
Insured in some policies and insurer in other
93. Fidelity insurance policy covers risk of loss due to

Theft by outsider Theft by employees


Fraud by supplier All of the above


94. Principle ofIndemnity does not apply to:

Life insurance Marine insurance


Life and marine insurance Fire insurance


95. Bombay Stock Exchange was established in:

1887 1900


1912 1925


96. In stock market terminology, a Taravaniwala is

Broker Dealer


Agent of broker None of the above


97. The minimum number of members required to form a co-operative society is:
2 5
10 20
KL14/Comm Series-A
98. Which ofthe following has implied authority to bind HUF firm of his conduct
in business?

Only karta


Only co-parceners ofthe firm


Karta as well as co-parceners


None ofthe above


99. Which ofthe following type oforganisation can be wind-up very easily?
Sole proprietorship Co-operative society

Government company


Public limited company


100. Dematerialisation of shares means:

Selling shares to non registered member


Holding shares in electronic form


Future trading ofthe share


Repurchase of share from the market


KL14/Comm Series-A