Model Questions on Accountancy

1. Trading in securities beyond the official trading hours of the stock exchange is called
A. Hammering
B. Margin trading
C. Short trading
D. Kerb trading

2. A blue chip security is one which
A. Gives assured high returns
B. Almost every investor is willing to buy
C. Offers the highest liquidity and sells always much above par
D. ls issued by the reputed and profit making company

3. Type II complaints received by SEBI refers to
A. Non receipt of dividend
B. Non receipt of bonus shares
C. Non receipt of annual reports
D. Non receipt of interest

4. An important advantage of vertical combination is that it helps in
A. Avoiding competition
B. Coordinating the sequential operations
C. Controlling quality
D. Capturing the market

5. Amalgamation is a form of
A. Federation
B. Partial consolidation
C. Complete consolidation
D. Trade association

6. A holding company set up only to unite and control its subsidiaries is called
A. Proprietary holding company
B. Primary holding company
C. Political holding company
D. Pure holding company

7. Rationalization may be achieved through
A. Creation of monopolies
B. Market research
C. Standardization of products
D. Modernization of plant

8. Which one of the following does not represent a restrictive trade practice?
A. Discriminatory dealings
B. Price control arrangements
C. False representation
D. Collective price fixation

9. Hoarding of goods results in
A. Unfair trade practices
B. Monopolistic trade practices
C. Restrictive trade practices
D. Competitive trade practices

10. The export procedure begins with the
A. Indent
B. Shipping order
C. Marine insurance
D. Consular invoice

11. What does the shipping company issue upon the entire ship being hired?
A. Bill of entry
B. Letter of credit
C. Shipping order
D. Charter party

12. The bill of exchange drawn by an exporter on the importer is called
A. Bill of entry
B. Bill of sight
C. Bill of lading
D. Documentary bill

13. How many copies are generally prepared of bill of entry?
A. 1
B. 2
C. 3
D. 4

14. Gold card scheme was introduced by
A. RBI
B. Central Government
C. ECGC
D. IDBI

15. ln the case of fire insurance, the insured must have insurable interest in the thing at the time
A. The policy is taken
B. The loss is incurred
C. Both the above
D. Throughout the period of insurance contract

16. A policy acquires surrender value if the premiums have been paid on it for atleast
A. 6 Months
B. 1 Year
C. 3 Years
D. 5 Years

17. In which year was General Insurance nationalized in India?
A. 1962
B. 1966
C. 1972
D. 1994

18. A person who agree to insure cargo, hull of freight are called
A. Undertakers
B. Caretakers
C. Underwriters
D. Bookkeepers

19. The first life insurance company, Oriental Life Insurance Company was established in
A. Calcutta
B. Delhi
C. Goa
D. Gujarat

20. ln marine insurance, a partial loss is technically called
A. Warranties
B. Average
C. Total loss
D. Liabilities

21. If a general manager asks the sales manager to recruit some salesman on his behalf it is an instance of
A. Division of authority
B. Decentralization of authority
C. Delegation of authority
D. Delegation of responsibility

22. Job specification is
A. The specification required for the job
B. A statement of the skills and abilities needed in the performance of a job
C. A statement of duties and responsibilities of a job
D. The manner in which the job is to be performed

23. Planning and policy making are essentially functions of
A. Top management
B. Middle management
C. Operating management
D. Entire staff

24. Organization theory deals with
A. Forms of business organization
B. Structure of an organization
C. Industrial relations
D. Incentives and wage policy

25. The basis of theory Z is the reliance on
A. External control of human behaviour
B. Self-control and self-direction
C. The belief that productivity is linked to trust, openness, subtlety and intimacy in the work environment
D. Government regulatory framework

26. Which one of the following is the oldest form of organization?
A. Functional Organization
B. Line organization
C. Line and staff organization
D. Departmentation

27. An important function of the office is
A. Appointing the company secretary
B. Recruiting employees
C. Training recruits
D. Providing the requisite information

28. Outgoing mails refers to
A. Mails received in the office
B. Mails sent out to customers
C. Mails sent by the employees
D. Personal mails received by employees

29. What does mimeograph refer to?
A. Method of photocopying
B. Process of blue printing
C. Process of electrical photography
D. Stencil Duplicator

30. Which of the following functions does the memory unit perform?
A. Calculating at high speed
B. Giving out the end product
C. Storing data
D. Controlling all operating units

31. The office is
A. A nerve centre of activities
B. A place to keep files and papers
C. Where management takes principal decisions
D. An organization of chaos into form

32. Office correspondence does not include
A. Routine correspondence
B. Personalized correspondence
C. Circulars
D. Minutes of general meting

33. The use of office machine cannot
A. Enhance production
B. Save labour
C. Promote accuracy
D. Relieve monotony

34. Preliminary contracts are
A. Binding on the company
B. Binding on the company if ratified after incorporation
C. Binding on the company after incorporation
D. Not binding on the company

35. Before the company obtains certificate of commencement of business, directors have to buy a certain number of shares are called
A. Bonus shares
B. Qualification shares
C. Right issue
D. Sweat equity shares

36. A company can invest money in another company only if it is so authorised by its
A. Memorandum of Association
B. Articles of Association
C. Auditors
D. Company Secretary

37. Who appoints the company secretary?
A. Government
B. Shareholders
C. Debenture-holders
D. Board of Directors

38. The annual general meeting requires a notice of atleast
A. 14 Days
B. 21 Days
C. 30 Days
D. 60 Days

39. How often is a meeting of the Board of Directors required to be held?
A. Every month
B. Every three months
C. Biannually
D. Once a year

40. A proxy appointed
A. Must be a member of the company
B. Can only be an employee of the company
C. Need not be either of the above
D. Must be a minor

41. In case of listed company the annual returns are to be signed by
A. Company secretary
B. Shareholders
C. Debenture-holders
D. Directors

42. Power to make calls on shares can be exercised by
A. Shareholders of the company in general meeting
B. Company secretary on his own
C. Board of directors
D. Managing directors

43. Window dressing is prohibited by the
A. Accrual concept
B. Convention of materiality
C. Convention of disclosure
D. Convention of conservatism

44. Accounting for Government grants is the subject matter of
A. AS-12
B. AS-10
C. AS-11
D. AS-7

45. Which of the following is of a revenue nature?
A. Cost of acquiring land
B. Cost of painting an old building
C. Purchase of freehold land
D. Cost of extension of factory building

46. Admission fees received during the year should be treated as
A. Capital income
B. Revenue income
C. Revenue unless the amount involved is large
D. Capital except for large amount involved

47. By which of the following will the cash account not be affected?
A. Cash sales
B. Cash received from debtors
C. Cash paid to creditors
D. Discount received

48. Under annuity method the amount of depreciation is
A. Increasing every year
B. Decreasing every year
C. Fixed for all years
D. Fluctuating from year to year

49. A company that has adopted table A can charge interest on calls in arrears at the rate of
A. 4%
B. 5%
C. 6%
D. 7%

50. Cost of carrying inventory implies
A. The acquisition cost of the items as per invoice
B. Cost of economic lot size
C. Risk of obsolescence and interest
D. Moving average of cost of items