KVS PGT Commerce Full Mock Test as per New Revised Syllabus: Test No. – 1
- Which of the following kinds of asset is Lease Rights?
(a) Wasted Assets
(b) Tangible Assets
(c) Liquid Assets
(d) Intangible Assets - In India GST became effective from ………….
(a) 1st April, 2017
(b) 1st January, 2017
(c) 1st July, 2017
(d) 1st March, 2017 - Which of the following taxes have been subsumed in GST?
(a) Central Sales Tax
(b) Central Excise Duty
(c) VAT
(d) All of the above - Rent of proprietor’s house paid from business account by cash will :
(a) Decrease the profit
(b) Increase the profit
(c) Reduce the capital of business
(d) Reduce the Cash as well as Capital of business - When interest is charged on Drawings which of the following is true with respect of accounting equation?
(a) Both assets and capital will increase with the same amount
(b) Liabilities will decrease and capital will increase with the same amount
(c) Capital will increase and decrease with the same amount
(d) Liabilities will increase and capital will decrease with the same amount - The amount of Owners‘ equity in a business is not affected by
(a) The percentage of Total Assets held in cash
(b) Investments made in the business by the owner
(c) The profitability of the business
(d) The amount of dividends paid to Stock holders - Which of the following is treated as per the principles of Nominal Account?
(a) Bad Debts Recovery Account
(b) Drawings Account
(c) Commission Received in Advance
(d) Bills Payable Account - Premium on redemption of debenture is
(a) Nominal A/c
(b) Real A/c
(c) Personal Account
(d) None of these - The basic sequence in the accounting process can be best described as-
(a) Transaction, Journal entry, source document, Ledger account, trial balance
(b) Transaction, source document, Journal entry, trial balance, Ledger
(c) Transaction, Source document, Journal entry, Ledger account, trial balance
(d) Source document, Journal entry, Transaction, Ledger account, trial balance - The seller sold goods on credit, price is wrongly charged higher figure from original figure. After some time the error is located. The seller may inform the buyer by sending
(a) Debit Note
(b) Credit Note
(c) Court Notice
(d) Return Invoice - In practice, a compound journal entry is not recorded when :
(i) One account is to be debited and two or more accounts are to be credited
(ii) Two or more accounts are to be debited and one account is to be credited
(iii) Two or more accounts are to be debited and two or more accounts are to be credited
(iv) Only one account is debited and another account is credited.
Choose the correct option.
(a) Only (i) and (ii)
(b) Only (i)
(c) Only (ii)
(d) Only (iv) - When a fixed Asset is obtained as a gift, the account to be credited is
(a) Capital Reserve A/c
(b) General Reserve A/c
(c) Goodwill A/c
(d) Donor’s A/c - Goods costing Rs. 600 is supplied to Ram at the invoice of 10% above cost a trade discount for 5%. The amount of sales will be
(a) Rs. 627
(b) Rs. 660
(c) Rs. 570
(d) Rs. 620 - Purchase book is used to record
(a) All purchases of goods
(b) All purchases
(c) All credit purchases of goods
(d) None of the above - Which of the following types of accounts is/are generally balanced?
1. Real account
2. Personal Account
3. Nominal Account
Choose the correct code.
(a) Both 1 and 2
(b) Neither 1 nor 2
(c) All 1, 2 and 3
(d) 1 only - Overcasting of sales books, could be rectified by-
(a) Debiting suspense account and crediting sales account
(b) Debiting sales account and crediting suspense account
(c) Debiting cash account and crediting sales account
(d) Debiting sales account and crediting cash account - Which of the following errors is an error of omission?
(a) Purchase of Rs. 2,000 has been recorded in the Sales Return Book
(b) Repairs to machinery has been debited to Machinery Accounts
(c) The total of purchase journal has not been posted to the Purchase Account
(d) Legal charges paid to Mr. Lawyer have been debited to his account - When a firm maintains a cash book, it need not maintain
(a) Journal proper
(b) Purchase (journal) book
(c) Sales (journal) book
(d) Bank and cash account in the ledger - Which of the following are not true for a bank reconciliation statement?
(i) Part of double entry system
(ii) Not Part of double entry system
(iii) Sent by the firm to the bank
(iv) Posted to the ledger account
(a) (ii) (iii) and (iv)
(b) (i) and (ii)
(c) (i) (iii) and (iv)
(d) (i) (ii) and (iv) - Which one of the following is NOT a transaction as per Accounting Principles?
(a) Mr. X started a business with capital (brought in cash) of Rs.40,000
(b) Mr. X paid salaries worth Rs.5,000 to staff
(c) Mr. X purchased machinery worth Rs.20,000 in cash
(d) Mr. X placed an order with D’Souza & Co. for goods worth Rs.10,000 - Which of the following is not an attribute of reliability of accounting information?
(a) Neutrality
(b) Timeless
(c) Verifiability
(d) Faith fullness - Which of the following statements is correct?
(a) Accounting involves only the recording of business transactions
(b) Amount owed to outsiders (other than proprietor) is called capital
(c) Debit means decrease in assets
(d) Accounting is the language of business - According to ………personal expenses paid by owner from his own pocket should not be recorded in accounting-books.
(a) Going Concern Concept
(b) Cost Concept
(c) Business Entity Concept
(d) Conservatism - Heavy initial expenditure on advertising to introduce a new product is classified as
(a) Capital expenditure
(b) Revenue expenditure
(c) Deemed liability
(d) Deferred revenue expenditure - Which method is followed to have a uniform charge for depreciation and repairs and maintenance together?
(a) Straight Line Method
(b) Sum of Years Digits Method
(c) Double Declining Method
(d) Written Down Value Method - What is the correct sequence of the following actions required for the preparation of financial accounts?
(1) Trading account
(2) Making adjusting Entries
(3) Balance Sheet
(4) Profit and Loss A/c
Select the correct answer from the codes given below :
Codes :
(a) 4, 2, 1, 3
(b) 2, 4, 3, 1
(c) 2, 1, 4, 3
(d) 4, 2, 3, 1 - If profits are 25% of selling price, what is the percentage of profit to cost?
(a) 20%
(b) 25%
(c) 30%
(d) 33 1/3 % - If opening stock is Rs. 10,000 net purchase Rs. 70,000 wages Rs. 2,500 carriage inward Rs. 500 and closing stock Rs. 15,000. What is the manufacturing cost
(a) Rs. 65,000
(b) Rs. 83,000
(c) Rs. 68,000
(d) Rs. 73,000 - If a trader’s sales amount to Rs. 18,000 and his gross profit and net profit are 60% and 40% of sales respectively, then his expenses are
(a) Rs. 7,200
(b) Rs. 2,500
(c) Rs. 3,600
(d) Rs. 2,600 - Gross Book Value of a fixed assets is its
(a) Cost less depreciation
(b) Historical cost
(c) Fair market value
(d) Realisable value - The Balance sheet of a business reveals
(a) Financial position of a business on a particular day
(b) Financial position of a business for a particular period
(c) Both of the above
(d) None of the above - Partner and Firm are mutually related
(a) Management
(b) Servant
(c) Agent
(d) Shareholder - A partner withdrew Rs. 20,000 at the beginning of each half year. Interest on his total drawings will be calculated for how many months?
(a) 6
(b) 9
(c) 1.5
(d) 4.5 - When guarantee is given to a new partner by some existing partner deficiency will be borne by :
(a) Partnership Firm
(b) Partners who gave the guarantee
(c) All the other partners
(d) None of above - R, J and D are partner sharing profits in the ratio 7:5:4. D died on 30th June 2016 and profits for the accounting year 2015-16 were Rs.24,000. How much share in profits for the period 1st April 2016 to 30th June 2016 will be credited to D’s account?
(a) Rs. 6,000
(b) Rs. 1,500
(c) Rs. 2,500
(d) Rs. 2,000 - The Shares of a Public Limited Company are :
(a) Freely Transferable
(b Transferred with Restriction
(c) Non Transferable
(d) Transferable in the prescribed manners of Articles - Reserve share capital means:
(a) Part of authorized capital to be called at beginning
(b) Portion of uncalled capital to be called only at liquidation
(c) Oversubscribed capital
(d) Under subscribed capital - Ram has 50 shares of Rs.100 each. On these shares Rs. 80 per share has been received. At non-receiving final call money the shares were forfeited. In this condition the share forfeiture account will be credited by :
(a) Rs.5,000 (b) Rs.4,000
(c) Rs.2,000 (d) None of the above - Proposed dividend is treated as:
(a) Contingent liability
(b) Current liability
(c) Non Currently liability
(d) Tangible assets - Bank overdraft is shown in the liabilities side under the sub-head:
(a) Current liability
(b) Short Term Borrowings
(c) Other Current Liabilities
(d) Short-Term Provision - Which one is not the purpose (objective) of analysis of financial statements?
(a) To assess the current profitability and operational efficiency of the firm
(b) To judge the ability of the firm to repay its debt
(c) To show financial position through balance sheet and profitability through profit & loss account
(d) To identify the reasons for change in the profitability / financial position of the firm - Ratio provides a ___________________ measure of a company’s performance
(a) Definitive
(b) Gross
(c) Relative
(d) Quantitative - Liquid Ratio is also known as:
A. Quick Ratio
B. Acid Test Ratio
C. Working Capital Ratio
D. Efficiency Ratio
Choose the correct answer form the options given below
(a) A and B only
(b) A and C only
(c) B and C only
(d) D and C - Current liability of a company is Rs. 30,000. If current ratio is 3:1 and quick ratio is 1:1, than, the value of stock in trade
(a) 80,000
(b) 1,00,000
(c) 60,000
(d) 1,20,000 - The cost of goods sold is Rs.10,00,000, Operating stocks Rs. 80,000. Closing stock Rs. 1,20,000. Calculating inventory turnover ratio
(a) 40 times
(b) 10 times
(c) 30 times
(d) 20 times - The budgeted annual sales of a firm is Rs. 80 lakhs and 25% of the same is cash sale. If the average amount of debtors of the company is Rs. 5 lakhs, the average collection period of credit sales is
(a) 2 months
(b) 15 days
(c) 1 month
(d) 3 months - For the purpose of calculating return on investment, operating profit is calculated as which of the following options?
(a) Operating profit = Net profit + Fixed cost – Non – fixed expenses
(b) Operating profit = Net profit + Investment income – Operating expenses
(c) Operating profit = Net profit + Current expenses – Non – Current income
(d) Operating profit = Net profit + Non-operating expense – Non – operating income - Which one of the following statement is false.
(a) Cash flow statement is based upon cash basis of accounting.
(b) Cash flow statement is based upon accrual basis of accounting
(c) Increase in the amount of creditors is a source of cash in cash flow statement
(d) Increase in the amount of debtors results in decrease in cash in cash flow statement. - While preparing cash flow statement ‘cash and cash equivalents’ consist of assets which can be converted into cash within
(a) 2 months
(b) 4 months
(c) 3 months
(d) 6 months - Given-Total sales Rs. 5,00,000 Credit sales Rs.2,25,000, Total purchases Rs. 2,48,000, Credit purchases Rs.1,80,000 and cash operating expenses Rs. 40,000 Cash form operations will be
(a) Rs.1,90,000
(b) Rs.1,30,000
(c) Rs. 95,000
(d) Rs. 81,000 - During the year 2017-18, the Net Profit of a company is Rs. 7,00,000 after incorporating the following:
Gain on sale of Non-current Investment Rs.1,00,000
Premium on Redemption of preference shares Rs.15,000
Depreciation of Furniture and Fixtures Rs.2,00,000
Patents written off Rs. 3,00,000
Loss on sale of Fixed Assets Rs. 4,00,000
The net inflow of cash operating activities will be :
(a) Rs. 9,15,000
(b) Rs. 15,15,000
(c) Rs. 7,00,000
(d) Rs. 5,95,000 - How sale of equipment Rs. 90,000 (Book Value Rs. 1,00,000) should be shown in the cash flow statement :
(a) Cash inflow from investing activity Rs. 1,00,000
(b) Cash used for financing activity Rs. 1,00,000
(c) Cash inflow from investing activity Rs. 90,000
(d) Cash inflow from investing activity Rs. 10,000 - Which one is a human cause for business risks?
(a) Political disturbance like fluctuations in exchange rate
(b) Uncertainty relating to collection of dues from customers
(c) Stoppage of work due to power failure
(d) Heavy rains - The industry which assembles different components parts in to a new product is known as?
(a) Analytical industry
(b) Synthetic industry
(c) Processing industry
(d) Assembling industry - Which of the following is NOT an economic activity?
(a) Painting for self-use
(b) Running an academic school
(c) Maintenance of public park by local administration
(d) Painting for commercial use - The term industry includes:
(a) Construction of buildings
(b) Banking companies
(c) Insurance companies
(d) Transport companies - Which of the following statements is false about sole proprietorship form of business?
(a) A proprietor is not bound to publish his accounts to the public.
(b) The sole trader is the monarch of business.
(c) The proprietor’s personal property can be utilized when the business is in loss.
(d) A proprietor’s knowledge and skills in various fields like production, finance, marketing, etc. leads to better functioning. - ‘Membership by birth’ is related to
(a) Sole Trader
(b) Partnership
(c) Cooperative Undertaking
(d) Joint Hindu Family Business - What is the person who, without being a real partner, so behaves as to lead others to believe him to be a partner called?
(a) Partner By Estoppel
(b) Dormant Partner
(c) Sub Partner
(d) Sleeping Partner - ‘Equal Voting Rights’ is related to
(a) Cooperative Organisation
(b) Public Corporation
(c) Private Company
(d) Government Company - Document which contains rules for indoor management of company is known as:
(a) Memorandum of Association
(b) Articles of Association
(c) Prospectus
(d) Certificate of Incorporation - Table A of the companies Act can be adopted for–
(a) Memorandum of Association
(b) Articles of Association
(c) Prospectus
(d) None of the above - Which of the following does not form the part of the important information to be incorporated in the Memorandum of Association as specified in the Companies Act, 2013?
(a) The name of the company and the state in which it is situated
(b) The object for which the company is proposed to be incorporated.
(c) The rules, regulations and bye-laws for the internal management of the company
(d) The liability of the members of the company, whether limited or unlimited. - Which of the following is a Prominent Joint Sector Enterprise in India?
(a) Visakha Refineries
(b) Cochin Refineries
(c) Reliance Refineries
(d) None of the above - The entry is created by a special Law. Defining as objectives, powers and privileges while prescribing the form of management and its relationship with government department are feature of
(a) Government Companies
(b) Departmental Undertakings
(c) Multinational Companies
(d) Public Corporations - Match the items of List-I with those of List-II and indicate the code of correct matching.
List-I
(a) Indian Railways
(b) Unit Trust of India
(c) Bharat Heavy Electricals Limited
List-II
(i) Government Company
(ii) Department Undertaking
(iii) Statutory Corporation
Codes :
(a) (a)-(i), (b)-(ii), (c)-(iii)
(b) (a)-(ii), (b)-(iii), (c)-(i)
(c) (a)-(ii), (b)-(i), (c)-(iii)
(d) (a)-(iii), (b)-(ii), (c)-(i) - In India, Commercial Banks are given license of operation by
(a) State Government
(b) The Ministry of Finance
(c) Reserve Bank of India
(d) Banking Companies Regulation Act, 1949 - Insurance works on the principle of:
(a) Law of contract
(b) Large numbers
(c) Probabilities
(d) Sharing of losses - In which of the following types of insurance should insurable interest be present only at the time when policy is taken?
(a) Fire insurance
(b) Life insurance
(c) Marine insurance
(d) Life and Marine insurance - Which one is false ?
(a) Business should engage in socially responsible behaviour to avoid regulation by government
(b) Managers are the agents of owners (Shareholders) and their decisions in business need to be governed only by the desire to maximise profits.
(c) Social responsibility refers to the obligations of businessmen to pursue those policies which are desirable in terms of the objectives of the society.
(d) If the innovative ability of business can be turned to need social problems, many problems could be handled profitable according to traditional business concepts. - A systematic assessment of an activity on some meaningful, definable domain of companies activities that have social impact is :
(a) Environmental Audit
(b) Green Audit
(c) Social Audit
(d) Public Audit - Match the items of List – II with the items of List – I relating to Methods of Raising Finance and select the code of correct matching.
List I
(1) Short Term Capital
(2) Medium Term Capital
(3) Long Term Capital
List II
(i) Issue of Equity Shares
(ii) Clean Advance from Bank
(iii) Public Deposits
(iv) Factoring
(v) Discounting of Bills
(iv) Issue of Preference Shares
(a) (1) – (iii) (v); (2) – (ii); (3) – (i) (iv)
(b) (1) – (i) (iv) (v); (2) – (ii) (iii); (3) – (iv)
(c) (1) – (iv) (v); (2) – (ii) (iii); (3) – (i) (iv)
(d) (1) – (iii) (iv) (v); (2) – (ii) (iii); (3) – (i) (iv) - Match List 1 with List 2
List 1
(A) Mezzanine capital
(B) Private equity
(C) Global depository receipts
(D) Venture capital
List 2
(1) It is the speedy source of finance less regulated by the regulatory environment of debt and capital markets.
(2) It is long terms capital embraced by the high network and high risk appetite investors.
(3) It is an equity instrument issued in overseas markets and is listed and traded on bourses on an OTC basis.
(4) It refers to subordinated debt or preferred equity that allows firms to borrow additions wiling to finance through the bank loans.
Choose the correct answer from the options given below:
(a) (A) –(2), (B) –(4), (C)-(1), (D)-(3)
(b) (A) –(1), (B) –(3), (C)-(4), (D)-(2)
(c) (A) –(4), (B) –(1), (C)-(3), (D)-(2)
(d) (A) –(3), (B) –(2), (C)-(1), (D)-(4) - Arrange the following sources of finance in the order of their duration, starting from short-term to long-term:
(A) Leasing financing
(B) Venture capital financing
(C) Factoring
(D) Commercial paper
(a) A, C, D, B
(b) D, C, A, B
(c) C, D, A, B
(d) A, B, D,C - The definition of management given by Lawrance A. Appley indicates the
(a) Effort of other people
(b) Cooperative group
(c) Formally organized groups
(d) Both (a) and (b) - Assertion (A): Management is a set of principles relating to its functions.
Reasoning (R): Management is essential to run all types of organizations.
Code :
(a) (A) and (R) both are correct; and (R) is the right explanation of (A).
(b) (A) and (R) both are correct; but (R) is not the right explanation (A).
(c) Both (A) and (R) are incorrect.
(d) (A) is correct ; but (R) is incorrect. - 78. From the following, identify the correct statement:
(a) Management should give more importance to improving production than productivity.
(b) Management should give more importance to improving productivity than production.
(c) Management should not worry for improving production or productivity.
(d) Management should give equal importance to improving production and productivity. - “What distinguishes a successful manager from a less successful one is the ability to put the principles into practice.” Which aspect of the nature of management is highlighted in the above statement?
(a) Management as a science
(b) Management as an art
(c) Management as a profession
(d) Management is an intangible force. - It is the manager’s ability to coordinate all organisational activities and varied interests involved in it. It involves viewing the organisation in its totality and understanding the interdependence of its individual parts. Name the managerial skill?
(a) Technical skill
(b) Functional skill
(c) Conceptual skill
(d) Human skill - Which one of the following order indicates the correct logical order of managerial functions?
(a) Organizing, planning, directing, staffing, coordination and control
(b) Planning, Organizing, Staffing, Directing, coordination and control
(c) Planning, directing, organizing, staffing and control and coordination
(d) Organizing, planning, staffing, directing, control and coordination - Choose the false statement about coordination.
(a) Coordination between various positions at the same level in the organization is called vertical coordination.
(b) Coordination helps in resolving the conflict of personal goals and orgahisational goals.
(c) Coordination provides unity of action in the organisation.
(d) The need for coordination increases with an increase in the interdependence between organisational units. - Scalar chain means:
(a) Division of work
(b) One head, one plan
(c) Unity of direction
(d) Chain of superiors - ‘Gang plank’ breaks which one of the following ?
(a) Cross communication
(b) Scalar chain
(c) Mass communication
(d) Vertical communication - According to Henry Fayol, which of the following qualities are required in a manager?
(a) Physical, mental, moral, educational, technical and experience
(b) Physical, mental, moral, administrative, technical and experience
(c) Physical, mental, moral, conceptual, technical and experience
(d) Physical, mental, moral, conceptual, technical and commercial - F.W. Taylor called “The military type of Foreman” to
(a) Unity of Command
(b) Span of Control
(c) Delegated Legislature
(d) Department - Which of the following is not component of environment?
(a) Economical factors
(b) Geographical factors
(c) Political factors
(d) None of the above - ____________ refers to the process of removing or stripping the legal status of a currency.
(a) Digitisation
(b) Financial Inclusion
(c) Demonetization
(d) Micro finance - What is not correct for strategy?
(a) It is concerned with evolving a new course of action
(b) It is static
(c) It aims at deploying available resources for achieving objectives
(d) It is confined to long-term goals and objectives - A matrix organisation refers to a form of :
(a) organisation in which two or more basic types of departmentation are combined
(b) mathematical arrangement of events in columns and rows.
(c) organisation where mathematical simulations are employed for task completion
(d) organisation where authority and responsibility co-exist - Which is the oldest form of organisation structure?
(a) Line organization
(b) Functional organisation
(c) Matrix organization
(d) Committee organization - Staffing is an act of:
(a) Matching the people with jobs
(b) Matching the people with planning
(c) Controlling the people
(d) Motivating the people - Which of the following statement is not correct?
(a) Motivation is an inner state that energises, activates and directs behaviour towards goals
(b) Security needs are related to the survival and maintenance of human life
(c) Directing abilities of manager mainly depend upon his communication skills
(d) None of the above - Give the correct order of stages in goal setting theory.
(a) Goal acceptance →Goal definition → Efforts → Performance → Reward → Satisfaction.
(b) Goal definition → Goal acceptance → Efforts → Performance → Reward → Satisfaction.
(c) Goal acceptance → Goal definition → Performance → Efforts → Rewards → Satisfaction.
(d) Goal definition → Goal acceptance → Efforts → Satisfaction → Performance → Rewards. - SWOT is related to
(a) Organization
(b) Staffing
(c) Planning
(c) Control - Consider the following basic steps involved in the process of control:
I. Identifying the strategic control points
II. Establishing the standards
III. Measuring performance against standard
IV. Correcting deviations from the standard
The correct sequence of the above steps in the process of control is:
(a) I, IV, III, II
(b) IV, III, II, I
(c) II, I, IV, III
(d) II, III, I, IV - The basic objective of financial Management is:
(a) Maximization of profits
(b) Profit planning of the organization
(c) Maximization of shareholders’ wealth
(d) Ensuring financial discipline in the organization - Financial decisions of the firm are guided by:
(a) Risk-return trade-off
(b) Financial leverage
(c) Retention ratio
(d) Firm’s wealth - Capital structure designing has nothing to do with:
(a) Profitability
(b) Solvency
(c) Flexibility
(d) Transferability - Which of the following is not a money market instrument?
(a) Treasury Bill
(b) Certificate of Deposit
(c) Commercial paper
(d) Treasury Bond - The duration of call money market operation is_____
(a) 1-14 days
(b) 182 days
(c) 91 days
(d) 364 day