COMMERCIAL PRACTICE- PAGE 1
COMMERCIAL PRACTICE MCQs- PAGE 1
1:-"The proprietor of a business is treated as a creditor." Which accounting concept is based on this assumption ?
A:-Cost concept
B:-Accounting period concept
C:-Business entity concept
D:-Going concern concept
Ans: C
2:-Among the following which one is not a fictitious asset ?
A:-P and L account debit balance
B:-Patents
C:-Organisation expenses
D:-Discount on issue of shares
Ans: B
3:-How do you treat the item of depreciation while preparing final accounts if it appears in Trial Balance ?
A:-Debited to P and L account only
B:-Deducted from the asset concerned in the Balance Sheet
C:-Both A) and B)
D:-None of these
Ans: A
4:-Heavy advertisement expenses incurred to launch a new product is treated as
A:-Capital expenditure
B:-Revenue expenditure
C:-Deferred revenue expenditure
D:-All of these
Ans: C
5:-Which of the following statements is a false one ?
A:-Single entry method is an incomplete record of transactions
B:-A trial balance cannot be prepared under single entry system
C:-Books maintained under single entry are not reliable with that of double entry system
D:-All accounts are maintained under single entry system
Ans: D
6:-A B C share profits and losses in the ratio of `(1)/(2)` ,`(1)/(3)` and `(1)/(6)` respectively. D, a new partner is admitted with `(1)/(8)` share. Then, what will be new profit sharing ratio ?
A:-`(7)/(16)`, ` (7)/(24)`, `(7)/(48)`, `(1)/(8)`
B:-`(7)/(24)`, `(7)/(48)`, `(7)/(24)`, `(1)/(8)`
C:-`(2)/(8)` , `(7)/(16)`, `(7)/(24)`, ` (1)/(8)`
D:-`(2)/(8)`, `(7)/(48)`, `(7)/(24)`, `(1)/(8)`
Ans: A
7:-At the time of admission of a new partner, when goodwill is raised at full value in which ration the same is credited to capital accounts of partners ?
A:-Sacrificing ratio
B:-Old profit sharing ratio
C:-New profit sharing ratio
D:-None of these
Ans: B
8:-When an existing company takes over the business of one or more existing companies, it is the case of
A:-Amalgamation
B:-Internal reconstruction
C:-External reconstruction
D:-Absorption
Ans: D
9:-A company may utilise the premium received on issue of shares/debentures for
A:-Payment of dividends
B:-Writing off discount on issue of debentures
C:-Writing off any capital loss
D:-Writing off any revenue loss
Ans: B
10:-The aggregate of the cost of indirect material, indirect labour and indirect expenses is called
A:-Overheads
B:-Cost
C:-Prime cost
D:-Works cost
Ans: A
11:-Among the following, which one is not an expense excluded from cost accounts ?
A:-Capital losses
B:-Income tax
C:-Dividend
D:-Distribution expenses
Ans: D
12:-The time lag between indenting and receiving of materials is know as
A:-Re order level
B:-Danger level
C:-Lead time
D:-EOQ
Ans: C
13:-Re apportionment of service department costs to production department is called
A:-Secondary distribution
B:-Allotment
C:-Primary distribution
D:-Absorption
Ans: A
14:-Following are the information available in respect of A Ltd.
Fixed expenses Rs. 50,000
Sales (value) Rs. 2,00,000
Profits Rs. 50,000
Then, the P/V ratio will be
A:-30%
B:-50%
C:-40%
D:-None of these
Ans: B
15:-Which of the following is not a method of absorbing factory overheads ?
A:-Machine hour rate
B:-Dual hour rate
C:-Direct labour hour rate
D:-Marginal cost rate
Ans: D
16:-Policy formulation and objective determination are the main focus of
A:-Management
B:-Administration
C:-Middle level management
D:-None of these
Ans: B
17:-Which one of the following roles does not constitute management roles as proposed by Henry Mintzberg ?
A:-Training role
B:-Interpersonal role
C:-Decision role
D:-Informational role
Ans: A
18:-___________refers to those social interactions which do not have consciously coordinated joint purpose.
A:-Communication
B:-Supervision
C:-Informal communication
D:-Formal communication
Ans: C
19:-Which of the following is a quantitative technique of decision making in management ?
A:-Consensus mapping
B:-Brainstorming
C:-Delphi technique
D:-Game theory
Ans: D
20:-The approach of Scientific Management was developed by
A:-Henry Fayol
B:-Elton Mayo
C:-F. W. Taylor
D:-George R. Terry
Ans: C
21:-Which of the following is not a source of short term finance for business ?
A:-Commercial banks
B:-Retained earnings
C:-Public deposits
D:-Trade credits
Ans: B
22:-Which of the following statement is not applicable to financial planning ?
A:-Determining the duties of finance manager
B:-Determining the amount of capital required
C:-Determination of capital structure
D:-Laying down of policies regarding cash control, borrowing and lending
Ans: A
23:-The type of layout suitable for mass production of products in continuous industries is
A:-Process layout
B:-Fixed position layout
C:-Product layout
D:-None of these
Ans: C
24:-The policy of the enterprise to fix a very high price for a new product at the very outset to recover the amount of capital invested quickly is called
A:-Penetration pricing
B:-Skimming princing
C:-Bait pricing
D:-Full princing
Ans: B
A:-Cost concept
B:-Accounting period concept
C:-Business entity concept
D:-Going concern concept
Ans: C
2:-Among the following which one is not a fictitious asset ?
A:-P and L account debit balance
B:-Patents
C:-Organisation expenses
D:-Discount on issue of shares
Ans: B
3:-How do you treat the item of depreciation while preparing final accounts if it appears in Trial Balance ?
A:-Debited to P and L account only
B:-Deducted from the asset concerned in the Balance Sheet
C:-Both A) and B)
D:-None of these
Ans: A
4:-Heavy advertisement expenses incurred to launch a new product is treated as
A:-Capital expenditure
B:-Revenue expenditure
C:-Deferred revenue expenditure
D:-All of these
Ans: C
5:-Which of the following statements is a false one ?
A:-Single entry method is an incomplete record of transactions
B:-A trial balance cannot be prepared under single entry system
C:-Books maintained under single entry are not reliable with that of double entry system
D:-All accounts are maintained under single entry system
Ans: D
6:-A B C share profits and losses in the ratio of `(1)/(2)` ,`(1)/(3)` and `(1)/(6)` respectively. D, a new partner is admitted with `(1)/(8)` share. Then, what will be new profit sharing ratio ?
A:-`(7)/(16)`, ` (7)/(24)`, `(7)/(48)`, `(1)/(8)`
B:-`(7)/(24)`, `(7)/(48)`, `(7)/(24)`, `(1)/(8)`
C:-`(2)/(8)` , `(7)/(16)`, `(7)/(24)`, ` (1)/(8)`
D:-`(2)/(8)`, `(7)/(48)`, `(7)/(24)`, `(1)/(8)`
Ans: A
7:-At the time of admission of a new partner, when goodwill is raised at full value in which ration the same is credited to capital accounts of partners ?
A:-Sacrificing ratio
B:-Old profit sharing ratio
C:-New profit sharing ratio
D:-None of these
Ans: B
8:-When an existing company takes over the business of one or more existing companies, it is the case of
A:-Amalgamation
B:-Internal reconstruction
C:-External reconstruction
D:-Absorption
Ans: D
9:-A company may utilise the premium received on issue of shares/debentures for
A:-Payment of dividends
B:-Writing off discount on issue of debentures
C:-Writing off any capital loss
D:-Writing off any revenue loss
Ans: B
10:-The aggregate of the cost of indirect material, indirect labour and indirect expenses is called
A:-Overheads
B:-Cost
C:-Prime cost
D:-Works cost
Ans: A
11:-Among the following, which one is not an expense excluded from cost accounts ?
A:-Capital losses
B:-Income tax
C:-Dividend
D:-Distribution expenses
Ans: D
12:-The time lag between indenting and receiving of materials is know as
A:-Re order level
B:-Danger level
C:-Lead time
D:-EOQ
Ans: C
13:-Re apportionment of service department costs to production department is called
A:-Secondary distribution
B:-Allotment
C:-Primary distribution
D:-Absorption
Ans: A
14:-Following are the information available in respect of A Ltd.
Fixed expenses Rs. 50,000
Sales (value) Rs. 2,00,000
Profits Rs. 50,000
Then, the P/V ratio will be
A:-30%
B:-50%
C:-40%
D:-None of these
Ans: B
15:-Which of the following is not a method of absorbing factory overheads ?
A:-Machine hour rate
B:-Dual hour rate
C:-Direct labour hour rate
D:-Marginal cost rate
Ans: D
16:-Policy formulation and objective determination are the main focus of
A:-Management
B:-Administration
C:-Middle level management
D:-None of these
Ans: B
17:-Which one of the following roles does not constitute management roles as proposed by Henry Mintzberg ?
A:-Training role
B:-Interpersonal role
C:-Decision role
D:-Informational role
Ans: A
18:-___________refers to those social interactions which do not have consciously coordinated joint purpose.
A:-Communication
B:-Supervision
C:-Informal communication
D:-Formal communication
Ans: C
19:-Which of the following is a quantitative technique of decision making in management ?
A:-Consensus mapping
B:-Brainstorming
C:-Delphi technique
D:-Game theory
Ans: D
20:-The approach of Scientific Management was developed by
A:-Henry Fayol
B:-Elton Mayo
C:-F. W. Taylor
D:-George R. Terry
Ans: C
21:-Which of the following is not a source of short term finance for business ?
A:-Commercial banks
B:-Retained earnings
C:-Public deposits
D:-Trade credits
Ans: B
22:-Which of the following statement is not applicable to financial planning ?
A:-Determining the duties of finance manager
B:-Determining the amount of capital required
C:-Determination of capital structure
D:-Laying down of policies regarding cash control, borrowing and lending
Ans: A
23:-The type of layout suitable for mass production of products in continuous industries is
A:-Process layout
B:-Fixed position layout
C:-Product layout
D:-None of these
Ans: C
24:-The policy of the enterprise to fix a very high price for a new product at the very outset to recover the amount of capital invested quickly is called
A:-Penetration pricing
B:-Skimming princing
C:-Bait pricing
D:-Full princing
Ans: B