M.Com Entrance Question BHU – 2019

M.Com Entrance BHU : Question Paper Bifurcation – 2019

Name of subjects cover in M.Com Entrance Examination of Banaras Hindu University (BHU):

S. No	Name of Subjects	No.of Questions
1	Accounting	30
2	Income Tax	6
3	Business Finance	24
4	Business organisation & Management	24
5	Business Law including Company Law	12
6	Monetary Theory and Banking	12
7	Business Economics	6
8	Statistics	6
Total Questions		120

BHU - MCom Entrance -2019

Unit 1 : Accounting – 30 Questions

Financial Accounting

Departmental Profit and Loss Account balance will be transferred in:
1. Trading Account
2. Balance Sheet
3. General Profit and Loss Account
4. Profit and Loss Appropriation Account
Non-departmental items of expenses are charged to :
1. Departments according to fixed assets
2. Departments on the basis of total sales
3. General Profit and Loss-Account
4. None of the three
When the minimum rent is less than the royalty payable, difference is called:
1. Surplus
2. Short working
3. Loss
4. None of three
In case of instalment system, total interest receivable by seller is credited to :
1. Interest Suspense Account
2. Asset Account
3. Sales Account
4. Interest Account
The entry of transfer of goods in inter-departmental transactions at cost price will be recorded in the transferring department in the :
1. Debit side of Profit and Loss Account
2. Debit side of Trading Account
3. Credit side of Trading Account
4. Credit side of Profit and Loss Account
In case of a firm’s dissolution, the balance of Realisation Account is transferred to Partners’ Capital Account:
1. Equally
2. Profit Sharing Ratio
3. Partners’ Loan Ratio
4. Capital Ratio
All adjustment entries in Final Accounts are written two places:
1. Profit and Loss Account and Balance Sheet
2. Trading Account and Profit and Loss Account
3. Trading Account and Balance Sheet
4. Trading Account or Profit and Loss Account and Balance Sheet
Premium received on issue of share is a :
1. Revenue Receipt
2. None of the three
3. Capital Receipt
4. Deferred Capital Receipt
Which one of the following statements is true ?
1. In the books of Hire Purchaser, the Asset Account is debited with Hire Purchase Price.
2. Under Hire Purchase, the buyer charges depreciation on Hire Purchase price of asset.
3. Under the Hire Purchase, the ownership of the goods is transferred as the cash down payment is made.
4. Hire Purchaser has the option to return the goods.
A lease was acquired for five years at a cost of Rs. 20,000. It was decided that depreciation should be written off according to Annuity Method. The annuity of Rs 1 at 5% for 5 years is Rs 0.230975. The amount of depreciation is :
1. Rs. 4619.50
2. Rs. 1154.88
3. Rs. 1548.75
4. Rs. 923.90
Matching concept relates to the preparation of :
1. Profit & Loss Account
2. Fund Flow Statement
3. Balance Sheet
4. Cash Flow Statement
Under Instalment Purchase System, the nature of contract is an:
1. Agreement to Purchase
2. Agreement to Sale
3. Agreement to Instalment
4. Agreement to Hire
Depreciation of Branch Fixed Assets will be credited in branch account book in :
1. Fixed Assets Account
2. Branch Account
3. Head Office Account
4. Depreciation Account
Branch account under debtor system is a :
1. Nominal Account
2. Representative Personal Account
3. Personal Account
4. Real Account
In case of a Foreign Branch, Current Assets and Liabilities should be converted at :
1. Rate prevailing on the last date of the year
2. None of the three
3. Rate prevailing on the beginning date of the year
4. Average rate
Depreciation on fixed assets is a:
1. None of the three
2. Revenue Expenditure
3. Deferred Revenue Expenditure
4. Capital Expenditure
Royalty account is a :
1. Real Account
2. Personal Account
3. None of the three
4. Nominal Account
An independent branch is one which:
1. Carries on business on a large scale
2. Does not obey the order of the Head Office
3. Independent in doing any work
4. Purchases goods on own account
Expenses allocated according to sales ratio of departments are :
1. Sales Commission
2. Rent of Building
3. Depreciation
4. Repairs
To ascertain the closing debtors of a branch will be included :
1. Credit Purchases
2. Credit Sales
3. Cash Purchases
4. Cash Sales
The excess of Minimum Rent over actual royalty payable is called :
1. Irrecoverable rent
2. Nazrana
3. Surplus
4. Shortworkings
Corporate Accounting
Which one of the following is not a feature of Bonus Share ?
1. Partly paid Bonus shares can be issued
2. Bonus shares are issued as fully paid
3. Bonus shares can be issued to the existing member only
4. The right of Bonus shares cannot be renunciated
Profit on cancellation of own debentures in transferred to :
1. Profit and Loss Account
2. Capital Reserve
3. General Reserve
4. Debenture Redemption Reserve
According to Companies-Act, 2013 the format of Balance Sheet is given in :
1. Schedule – II
2. Schedule – VI
3. Schedule – III
4. Schedule – I
Pre-incorporation profit is credited in :
1. Secret Reserve
2. Capital Reserve
3. Profit and Loss Account
4. General Reserve
The amount of preferential creditors is shown in :
1. Deficiency Account
2. Balance Sheet
3. Profit and Loss Account
4. Statement of Affairs
Cost & Management Accounting
Increase in total variable cost is due to :
1. Increase in production
2. Increase in fixed cost
3. Increase in sales
4. Decrease in production
Prime Cost is also known as :
1. Fixed Cost
2. Indirect Cost
3. Direct Cost
4. Variable Cost
Consider the following steps
1. Material consumed
2. Factory Cost
3. Prime Cost
4. Cost of production
The correct sequence of these steps in cost sheet is :
1. 1, 3, 4, 2
2. 4, 3, 2, 1
3. 1, 3, 2, 4
4. 1, 2, 3, 4
EBIT may be calculated as
1. Contribution-Fixed Cost
2. None of the three
3. Sales-Variable Cost
4. Sales-Fixed Cost
The nature of Telephone expense is :
1. None of the three
2. Fixed
3. Semi-variable
4. Variable

Unit 2 : Income Tax – 6 Questions

In which of the following section of Income Tax Act exempted incomes have been mentioned?
1. Section 80 1A
2. Section 88
3. Section 10
4. Section 80
The term previous year means in Income Tax :
1. Calendar Year
2. Accounting Year
3. Financial Year before the assessment year
4. None of the three
Deduction allowed from gross salary :
1. Entertainment Tax
2. Income Tax
3. Professional tax
4. Insurance Premium
Perquisite of car, meals, credit card, club etc. will not be taxable, it assessee is :
1. Specified employee
2. Non-specified employee
3. Government employee
4. Non-Government employee
Annual value of a house property is Rs. 1,20,000. B and C are equal co-owners of the house. B’s income from house property shall be Rs. :
1. 40,000
2. 42,000
3. 45,000
4. 60,000
Deduction for other expenses in the computation of Income from hose property is allowable to the extent of :
1. th of Annual Value
2. th of Annual Value
3. th of Rent Received
4. th of Annual Value

Unit 3 : Business Finance – 24 Questions

Financial Leverage is also known as :
1. Trading on equity
2. Interest on capital
3. Interest on Debentures
4. Trading on debt
Business Finance is mainly concerned with:
1. Acquisition and Utilisation of Fund
2. Utilisation of Fund
3. None of the three
4. Acquisition of Fund
Which one of the following is creditorship security ?
1. None of the three
2. Preference shares
3. Equity shares
4. Debentures
The remedies of under capitalization are
1. Share Split
2. Issue of Bonus Shares
3. All of the three
4. Issue of New Shares
Payment of Dividend can not be made from :
1. None of the three
2. Profits
3. Capital
4. Reserves
Pay Back Period is calculated by :
1. None of the three
2.
3.
4.
If EPS is Rs. 4, DPS is Rs. 2.50, cost of capital is 16% and IRR is 18%, as per Walter’s model market price per share will be:
1. Rs. 27.17
2. Rs. 26.17
3. Rs. 24.17
4. Rs. 25.17
The combined leverage is calculated as:
1. DOL DFL
2.
3.
4. None of the three
In the capital budgeting, which of the following is considered?
1. Accounting income
2. Cash Flows
3. All of the three
4. Operating Profit
The optimum utilization of available funds with careful allocation among competing projects is :
1. Capital Positioning
2. Capital Structuring
3. Capital Budgeting
4. Capital Rationing
Financial Management is related to :
1. All of the three
2. Investment Decisions
3. Recruitment decisions
4. Inventory decisions
High Gearing involves:
1. Excess of Debt Capital
2. Deficiency of Equity Capital
3. Deficiency of Debt Capital
4. Excess of Equity Capital
If risk free rate of return is 10% firm’s beta is 1.75 and the return on market portfolio is 15%, cost of equity will be :
1. 18.75%
2. 16.75%
3. 19.75%
4. 21.75%
With the application of debt funds in the capital structure, which of the following will change?
1. Financial Leverage
2. Operating Leverage
3. Operating Ratio
4. None of the three
Which one of the following is the objective of financial management?
1. Wealth Maximisation
2. Sales Maximisation
3. Asset Maximisation
4. Revenue Maximisation
If book value of a share is less than its real value, the company is said to be :
1. Over Capitalised
2. Highly levered
3. Under Capitalised
4. None of the three
Operating leverage is equal to :
1. None of the three
2. Contribution/PAT
3. Contribution/EBT
4. Contribution/EBIT
Working capital Management is managing
1. All of the three
2. Long Term Assets
3. Short Term Assets & Liability
4. Long Term Liabilities
Fixed Cost Capital does not involved
1. Retained Earnings
2. Long Term Loan
3. Preference Shares
4. Debentures
Cost of debt capital is computed as :
1.
2.
3.
4. None of the three
Cost of Retained Earning is equal to :
1. Cost of Preference Shares
2. None of the three
3. Cost of Equity Shares
4. Cost of Debentures
Coupon Rate is also known as :
1. Current Yield
2. Yield to Maturity
3. Market Interest Rate
4. None of the three
Market value of shares of a company is decided by :
1. Government
2. Concerned Company
3. Investment Market
4. All of the three

Unit 4 : Business Organisation & Management – 24 Questions

Diagonal combination is also called as:
1. Allied Combination
2. Sequence Combination
3. Service combination
4. None of the three
Which from the following is not an evil of combination ?
1. Fear of increases in corruption.
2. Disadvantages of small scale production.
3. Fear of Over Capitalisation
4. Creation of Monopoly
Which from the following is not a feature of business combination ?
1. Combination may be for the lust of power
2. Combination may be a partial consolidation
3. Combination cannot be of informal nature
4. Combination may be for a short period only
Which from the following is not an advantage of Horizontal Combination?
1. Concentration of Economic Power
2. Standard & Better Production
3. Better demand-supply coordination
4. Financial Soundness
Different industrial units controlled by and industrial house is an example of :
1. Circular Combination
2. Convergent Lateral Combination
3. Divergent Lateral Combination
4. Diagonal Combination
Which from the following is used for providing training to the railway electric engine drivers ?
1. Role Playing Method
2. Vestibule training
3. On the job training
4. T-Group training
Which from the following is not a true statement?
1. Direction may be needed in an informal organization also.
2. Free rein technique is the most suitable technique of direction for scientists.
3. Direction is helpful in implementing a change programme.
4. Selection is an integral part of direction.
Transportation of goods is an activity related to
1. Trade.
2. Industry
3. Commerce
4. Aids-to-Trade
Liability of a Sole Trader is :
1. Limited
2. Unlimited
3. Undecided
4. None of the three
Which from the following is not a factor influencing the organizational structure of a company ?
1. Size of the organization
2. Managerial Policies
3. External Environment
4. None of the three
Business Management
“Management is the art of getting things done through and with formally organized groups”. This definition has been given by :
1. J.L.Lundy
2. P.F.Drucker
3. Harold Koontz
4. E.F.L.Brech
From the following, identify the correct statement :
1. Management should give more importance to improving production than productivity.
2. Management should give more importance to improving productivity than production.
3. Management should not worry for improving production or productivity.
4. Management should give equal importance to improving production and productivity.
Which from the following is not true?
1. Management is a developing art, social science and developed profession.
2. Management is a developed art, social science and developing profession.
3. Management is a developed art, pure science and developed profession.
4. Management is a developed art, social science and developed profession.
Who has said, “Management means decision making”?
1. F.W.Taylor
2. Henry Fayol
3. Ross Moore
4. G.R.Terry
Which of the following is not a characteristic of management?
1. Management is a composite process
2. Management is a tangible force
3. Management is universal
4. Management is a social process
Which of the following is not an element of delegation of authority?
1. Power
2. Accountability
3. Responsibility
4. Authority
Which of the following is not a merit of decentralization ?
1. Difficulty in Control
2. Timely Decision
3. Suitable for Routine Work
4. Higher Morale of Staff
A small core group of persons doing their trading basically through internet is an example of :
1. Tall Structure
2. Mixed Structure
3. Virtual Structure
4. None of the three
When a plan is formulated before the occurance of an event, it is known as :
1. Routine Plan
2. Reactive Plan
3. Proactive Plan
4. None of the three
Which from the following is not an advantage of Line organization?
1. Prompt Communication
2. Democratic Nature
3. Better Control
4. Strict Discipline
Which from the following is not an element of planning ?
1. Programmes
2. Policies
3. Procedures
4. Principles
Coordinating subordinates of a department working at different positions shall be called as :
1. None of the three
2. Horizontal coordination
3. Vertical coordination
4. External coordination
“Wearing name plate in the office by the staff is mandatory”, is an example of :
1. Rule
2. Method
3. Policy
4. Objective
Find out the odd from the following
1. Aptitude Test
2. Attitude Test
3. Psychological Test
4. Vision Test

Unit 5 : Business Law Including Company Law – 12 Questions

Business Law

Indian Contract Act

An agreement made without consideration is ?
1. Voidable
2. Valid
3. Illegal
4. Void

Sales of Goods Act

The Sale of Good Act came into existence in :
1. 1932
2. 1930
3. 1956
4. 1931

Partnership Act

In the absence of partnership agreement the profit is shared by the praters :
1. None of the three
2. On the basis of capital invested
3. On the basis of the decision of the court
4. Equally

Negotiable Instrument Act

Who are parties to Bills of Exchange ?
1. Drawer
2. Drawee
3. All of the three
4. Payee
Which one of the following is not a type of cheque ?
1. Open Cheque
2. Bearer Cheque
3. Order Cheque
4. Special Cheque
‘Holder in due course’ is related to :
1. Negotiable Instruments Act
2. Sale of Goods Act
3. Partnership Act
4. Consumer Protection Act

Company Law

The Articles of Association contains:
1. Objects of the Company
2. Limit of share capital
3. Scope of the Company
4. Rules and regulations of internal management
The Registrar shall not register a prospectus, if:
1. It is not accompanied by consent of the auditor
2. It is not signed by every person
3. All of the three
4. It is not dated
A private company can commence its business after obtaining the :
1. None of the three
2. Both Certificate of incorporation and Certificate of commencement of business
3. Certificate of commencement of business
4. Certificate of incorporation
Doctrine of constructive notice as related to the constructive notice of the following public documents :
1. None of the three
2. Memorandum of Association
3. Both Memorandum of Association and Articles of Association
4. Articles of Association
Any act done contrary to the objective clause of the Memorandum of Association is :
1. Ultra-vires
2. Valid
3. Statutory
4. Fiduciary
Which one is modes of winding up of the company?
1. Winding up under the supervision of the Court
2. Winding up under by the Court
3. Voluntary winding up
4. All of the three

Unit 6 : Monetary Theory and Banking – 12 Questions

In the equation , which element is not assumed to be constant :
1. M
2. P
3. T
4. V
With regard to nature of methods of credit control, find out the odd from the following :
1. Variable Reserve Ratio
2. None of the three
3. Moral Suasion
4. Credit Rationing
Which of the following is not the principle of investment of a bank?
1. Principle of Centralised Investment
2. Principle of National Interest
3. Principle of probability of Investment
4. Principle of tax free Investment
Which from the following is not a consequence of deflation ?
1. None of the three
2. Beneficial for the General Public
3. Harmful for the Labour
4. Beneficial for the Government
Which of the following versions is based on the ‘Medium of Exchange’ function of money?
1. Both American Version and Cambridge Version
2. None of the three
3. Cambridge Version
4. American Version
Which from the following is also called as ‘Emergency Currency’?
1. Inconvertible Paper Money
2. Fiat Money
3. Convertible Paper Money
4. Representative Paper Money
The loans given by which of the following institutions are called ‘Credits’ :
1. World bank
2. IFC
3. IDA
4. IMF
Which of the oldest form of Gold Standard?
1. Gold Currency Standard
2. Gold Parity Standard
3. Gold Reserve Standard
4. Gold Bullion Standard
Which is not a function of Reserve Bank of India?
1. None of the three
2. Control on Commercial Banks
3. Issue of Notes
4. Creation of Credit
Which from the following is not a factor influencing the size of cash reserve kept by the commercial banks?
1. Size of Deposits
2. Dead Stock
3. Past Practice
4. Nature of Investments
Which one of the following measures will not help in checking inflation?
1. Increasing Bank Rate
2. Sanctioning Liberal Loans
3. Adoption of Rationing
4. Promoting Savings
Who has said, “There cannot be a more insignificant thing in the economy of the society than money”?
1. J.S.Mill
2. Irving Fisher
3. Adam Smith
4. J.M.Keynes

Unit 7 : Business Economics – 6 Questions

The second law of Gossen is :
1. Theory of indifference curve
2. Law of diminishing marginal utility
3. Law of Equi-product
4. Law of Equi-marginal utiliity
Duties of a Business Economist is/are:
1. All of the three
2. Analysing the problem
3. Setting the objectives
4. To reduce the risk of business
Which of the following is included in Business Economics ?
1. Profit Planning and Control
2. All of the three
3. Forms of Market
4. Theory of Firm
The concept of “Consumer’s Equilibrium” was propouned and developed by :
1. J.B.Clark
2. J.H.Richardson
3. Alfred Marshall
4. J.M.Keynes
Which of the following is the basis for the indifference curve analysis ?
1. Diminishing Utility
2. Cardinal Utility
3. Ordinal Utility
4. Independent Utility
Which is the method of measuring elasticity of demand ?
1. All of the three
2. Total Outlay Method
3. Percentage Method
4. Geometrical Method

Unit 8 : Statistics – 6 Questions

Which one is not method of calculating correlation ?
1. Coefficient of concurrent deviation method
2. Fisher’s coefficient of correlation
3. Spearman’s coefficient of correlation.
4. Karl Pearson’s coefficient of correlation.
Formula for computing quartile deviation is :
1.
2.
3.
4.
Relationship of Mean, Median and Mode are as follows :
1.
2.
3.
4.
Time and Factor reversal test is satisfied by :
1. Broweley’s Index
2. Laspeyer’s Index
3. Fisher’s Index
4. Paasche’s Index
Data are arranged either in ascending or descending order in computing ———–
1. Arithmetic mean
2. Geometric mean
3. Harmonic mean
4. Median
Formula of least square method is :
1. Y c = a + bx
2. Y c = ax+b
3. Yc = x + ab
4. Yc = b+ax

M.Com Entrance Question BHU – 2019

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