### Uttarakhand PCS (P) Exam, 2006 Commerce Solved Paper

Uttarakhand P.C.S. (Pre.) Exam., 2006
Commerce
: Solved Paper
(Held on 9-3-2008)

1. The share of new partner in the profits is 1/5 and his capital is Rs. 20,000. The new profit sharing ratio is 3 : 1 : 1. The share of partners in total capital will be—
(A) 60,000 : 20,000 : 20,000
(B) 80,000 : 20,000 : 20,000
(C) 50,000 : 20,000 : 25,000
(D) None of the above

2. At the time of dissolution the loss of the business, will be compensated first of all from—
(A) Capital
(B) Profits
(C) Personal resources of the partners
(D) Donations

3. The meaning of written down value is—
(A) Original cost – Scrap value
(B) Book value + Depreciation
(C) Book value – Depreciation
(D) None of these

4. Given :
Depreciation on the basis of Fixed Instalment Method Rs. 2,000 p.a.
Establishment expenses Rs. 5,000
Scrap value Rs. 1,000
Span of life 10 years
The cost of assets will be—
(A) Rs. 20,000
(B) Rs. 16,000
(C) Rs. 12,000
(D) None of these

5. Given :
Cost Rs. 1,00,000
Scrap Value Rs. 10,000
Span of Life 10 years
Rate of depreciation 20% p.a.
The amount of depreciation for the first year on the basis of diminishing balance method will be—
(A) Rs. 20,000
(B) Rs. 18,000
(C) Rs. 9,000
(D) Rs. 10,000

6. Match the following List-I with List-II and select the correct answer from the answer codes given below—
List-I
(a) AS-6
(b) AS-10
(c) AS-26
(d) AS-20
List-II
1. Accounting for Earning per share
2. Accounting for intangible and fictitious assets
3. Accounting for fixed assets
4. Depreciation Accounting
Codes :
(a) (b) (c) (d)
(A) 1 2 3 4
(B) 3 2 1 4
(C) 1 3 2 4
(D) 4 3 2 1

7. Establishment expenses of a new machine will be debited to—
(A) Expenses Account
(B) Profit and Loss Account
(C) Machinery Account
(D) None of the above

8. Goodwill is—
(A) Floating Asset
(B) Wasting Asset
(C) Fictitious Asset
(D) Intangible Asset

9. A Balance Sheet shows only—
(A) Personal Accounts and Nominal Accounts
(B) Real Accounts and Nominal Accounts
(C) Personal Accounts and Real Accounts
(D) Personal, Real and Nominal Accounts

10. Discount on Issue of Shares A/c is shown at the—
(A) Debit side of P & L A/c
(B) Assets side of B/S
(C) Liabilities side of B/S
(D) None of the above

11. Pre-incorporation Profit is transferred to—
(A) General Reserve
(B) Capital Reserve
(C) Profit and Loss A/c

12. Which of the following is shown in Profit & Loss Appropriation A/c ?
(A) Provision for Income Tax
(B) Provision for Depreciation
(C) Provision for Doubtful Debts
(D) Contribution to General Reserve

13. On liquidation of a Company first payment is made in respect of—
(A) Liquidator’s remuneration
(B) Legal expenses
(C) Preferential creditors
(D) None of the above

14. Workmen’s Compensation Fund is a—
(A) Provision
(B) Surplus
(C) Current liability
(D) Loan

15. Debentures of Rs. 4,25,000 are issued against the purchase of assets of Rs. 4,50,000. In this case the amount of Rs. 25,000 is—
(A) Capital Reserve
(C) Revenue Profit
(D) Goodwill

16. A Company can reissue its forfeited shares—
(B) At a face value
(C) At a discount
(D) All of the above

17. Which of the following is an example of capital expenditure ?
(B) Taxes and Legal expenses
(C) Depreciation
(D) Custom duty on import of machinery

18. Given :
Average profit of a firm Rs. 21,000
Normal Profit Rs. 18,000
Value of goodwill on the basis of 3 years purchases of super profit shall be—
(A) Rs. 39,000
(B) Rs. 9,000
(C) Rs. 3,000
(D) Rs. 12,000

19. A co-operative auditor starts his work of audit from—
(A) Account Books
(B) Payment Books
(C) Cash Book
(D) None of the above

20. Accounting for research and development relates to—
(A) AS-7
(B) AS-8
(C) AS-9
(D) AS-10

21. Goods worth Rs. 2,000 were distributed to employees free of charge. The account to be debited is—
(A) Profit and Loss A/c
(C) Labour Welfare A/c
(D) Goods A/c

22. The maximum rate of underwriting commission on debentures is—
(A) 10%
(B) 2•5%
(C) 12•5%
(D) 5%

23. X Ltd. forfeited 20 shares of Rs. 10 each on which Rs. 6 per share were paid. If out of these shares, 8 shares were reissued to Ram as fully paid up on payment of Rs. 5•50 per share, the amount that will remain standing to the credit of Share Forfeited A/c will be—
(A) Rs. 48
(B) Rs. 72
(C) Rs. 84
(D) Rs. 120

24. Bonus Shares are issued to—
(A) Equity Shareholders
(B) Preference Shareholders
(C) Debenture Holders
(D) Secured Creditors

25. On an equity share of Rs. 100, the minimum amount payable on application under the law should be—
(A) Rs. 20
(B) Rs. 15
(C) Rs. 10
(D) Rs. 5

(A) Payment of dividend
(B) Payment of remuneration to management
(C) Issue of Bonus shares
(D) None of these

27. Garner Vs. Murray rule applies in case of—
(B) Dissolution of a firm
(C) Retirement of a partner
(D) Death of a partner

28. When sale is Rs. 4,80,000, gross loss is 25% on cost, purchase is Rs. 3,50,000 and closing stock is Rs. 60,000, the stock in the beginning would be—
(A) Rs. 70,000
(B) Rs. 94,000
(C) Rs. 1,34,000
(D) Rs. 3,50,000

29. Balance of Debenture Redemption Fund Account is transferred to—
(A) Capital Reserve A/c
(B) Profit and Loss A/c
(C) General Reserve A/c
(D) None of these

30. Planning includes—
(A) Objectives
(B) Policy
(C) Strategy
(D) All of the above

31. Hawthorne Experiments were conducted by—
(A) Elton Mayo
(B) Henry Fayol
(C) F. W. Taylor
(D) Peter F. Drucker

32. Who is called ‘The Father of Scientific Management’ ?
(A) Elton Mayo
(B) Henry Fayol
(C) E. F. L. Breach
(D) F. W. Taylor

33. A plan when expressed in quantitative terms is called—
(A) Policy
(B) Procedure
(C) Objective
(D) Budget

34. Theory ‘X’ and Theory ‘Y’ of Motivation was propounded by—
(A) Herzberg
(B) Maslow
(C) Elton Mayo
(D) McGregor

35. Direction involves—
(B) Physical factors
(B) Financial factors
(C) Human factors
(D) None of the above

36. Which is the oldest form of organisation ?
(A) Line
(B) Line and staff
(C) Functional
(D) Matrix

37. Decentralisation—
(A) Reduces burden of chief executives
(B) Increases burden of chief executives
(C) Does not effect burden
(D) None of the above

38. Planning is a—
(A) Primary function
(B) Secondary function
(C) Supplementary function
(D) None of the above

39. Planning function of management is performed by—
(A) Top management
(B) Middle management
(C) Lower management
(D) All of the above

40. MBO approach in management was introduced by—
(A) M. P. Follet
(B) Keith Davis
(C) Peter Drucker
(D) Oliver Sheldon

41. Which of the following is not an element of marketing mix ?
(A) Product
(B) Price
(C) Promotion
(D) Product life cycle

42. Market segmentation means—
(B) Grouping of sellers
(C) Grouping of middle men
(D) Grouping of producers

43. Standard costing is a technique of—
(A) Planning
(B) Organising
(C) Coordination
(D) Control

44. The principle of ‘Unity of Command’ was introduced by—
(A) Elton Mayo
(B) Henry Fayol
(C) F. W. Taylor
(D) Urwick

45. The last step of communication process is—
(A) Controlling
(B) Implementation
(C) Correction
(D) Reaction

46. Strategy is used in—
(A) Military
(C) Industry
(D) All of the above

47. ‘3-D’ Model of leadership is propounded by—
(A) Likert Reinsis
(B) Kurt Levis
(C) William Ridin
(D) Henry Fayol

48. Personal selling includes—
(A) Selling
(B) Services to the customers
(C) Developing goodwill of the firm
(D) All of the above

49. The process of evaluating employees is called—
(A) Performance appraisal
(B) Recruitment
(C) Induction
(D) Job evaluation

50. Franking machine is used for—
(A) Specimen signature
(B) Postage stamps
(C) Arrival and departure timings
(D) None of the above

51. Grapevine communication is a type of—
(A) Formal communication
(B) Informal communication
(C) Horizontal communication
(D) Vertical communication

52. The ‘Principle of Exception’ states that management should—
(A) Check everything without exception
(B) Invariably take corrective action without exception
(C) Accept exceptions in emergencies
(D) Concentrate their attention on exceptions

53. Which of the following is not a component of ‘SWOT Analysis’ ?
(A) Threats
(B) Strengths
(C) Weaknesses
(D) Options

54. Organisational change is necessitated by—
(A) External environmental pressure
(B) Internal strengths and weaknesses
(C) Sequential changes
(D) All the above

55. Which management functions are closely related to ?
(A) Planning and Organising
(B) Organising and Staffing
(C) Staffing and Control
(D) Planning and Control

56. Match List-I with List-II and select the correct answer from the codes given below—
List-I
(a) Planning
(b) Staffing
(c) Directing
(d) Controlling
List-II
1. Training
2. Forecasting
3. Evaluating
4. Motivating
Codes :
(a) (b) (c) (d)
(A) 2 4 1 3
(B) 1 2 3 4
(C) 2 1 4 3
(D) 3 4 2 1

57. Memorandum of Association contains—
(A) Objective clause
(B) Name clause
(C) Capital clause
(D) All of the above

58. ‘Table A’ is an alternative to—
(A) Prospectus
(B) Articles of Association
(C) Memorandum of Association
(D) None of the above

59. The ‘Doctrine of Indoor Management’ provides protection to the—
(A) Board of Directors
(B) Shareholders
(C) Managing Director
(D) Outsiders

60. By which of the following methods a Company Secretary can be removed from his post ?
(A) By passing a resolution in Board Meeting
(B) By order of Registrar of Companies
(C) By passing a resolution in Annual General Meeting
(D) None of the above

61. Dividend paid between two Annual General Meetings is known as—
(A) Final dividend
(B) Interim dividend
(C) Special dividend
(D) None of the above

62. In a Private Company there are restrictions regarding—
(A) Transfer of shares
(B) Issue of prospectus
(C) Number of members
(D) All of the above

63. The gap between two General Meetings of the Company should not be more than—
(A) 12 months
(B) 18 months
(C) 15 months
(D) 20 months

64. Statement containing details of items to be considered in a meeting is called—
(A) Agenda
(B) Minutes
(C) Resolution
(D) Notice

65. The minimum and maximum number of members in a Private Company is—
(A) 2 and 50
(B) 2 and 20
(C) 2 and 10
(D) None of the above

66. What is the maximum limit of remuneration for a whole time manager in a company ?
(A) 3% of net annual profit
(B) 5% of net annual profit
(C) 7% of net annual profit
(D) None of the above

67. Which among the following documents defines the relationship between a company and outsiders ?
(A) Memorandum of Association
(B) Articles of Association
(C) Prospectus
(D) None of the above

68. Registration is not essential in case of a—
(A) Company
(B) Co-operative organisation
(C) Co-operative Societies
(D) Business of Joint Hindu Family

69. The Meeting of Board of Directors must be called at least once—
(A) In four months
(B) In three months
(C) In two months
(D) In one month

70. The Secretary of a Company should file copies of Special Resolution passed at Extraordinary General Meeting to the Registrar of Companies within—
(A) 7 days
(B) 14 days
(C) 21 days
(D) 30 days

71. What is the quorum of General Meetings in the case of a Private Company ?
(A) 2 members
(B) 3 members
(C) 4 members
(D) 5 members

72. Which of these must hold a Statutory Meeting ?
(A) Public Limited Company
(B) Private Company
(C) Unlimited Company
(D) All of these

73. When three sugar mills combine, it is an example of—
(A) Vertical combination
(B) Horizontal combination
(C) Diagonal combination
(D) None of the above

74. The first electronic computer system was developed in—
(A) 1920
(B) 1940
(C) 1930
(D) 1950

75. An Index is—
(A) A filing system
(B) A photostat procedure
(C) The procedure to collect data
(D) An important help in filing

76. Indian Partnership Act was passed in the year—
(A) 1956
(B) 1936
(C) 1932
(D) 1930

77. According to the Partnership Act, the maximum number of partners in a banking firm may be—
(A) 10
(B) 12
(C) 4
(D) 20

78. Dissolution of Partnership takes place when—
(A) A partner misbehaves
(B) A partner becomes of unsound mind
(C) Business is running at a loss
(D) A partner dies

79. The existence of a Partnership Firm is—
(A) Separate from partners
(B) Not separate from partners
(C) Both (A) and (B)
(D) None of the above

80. In which State the Mitakshara form of H.U.F. business does not apply ?
(A) Rajasthan
(B) Gujarat
(C) West Bengal
(D) Kerala

81. Letter of Credit is presented by—
(A) Exporter
(B) Importer
(C) Custom Officer
(D) Shipping Company

82. The Agreement of Partnership—
(A) Must be oral
(B) Must be in writing
(C) Can be either oral or in writing
(D) Must be in writing on a stamp paper

83. Export procedure begins with—
(A) Indent
(B) Shipping order
(C) Marine insurance
(D) None of these

84. ‘Self-help by mutual help’ is a feature of—
(A) Public enterprise
(B) Public corporation
(C) Co-operative society
(D) All of the above

85. In India private sector entered into the Life Insurance business in the year—
(A) 1995
(B) 1998
(C) 2000
(D) 2001

86. General Insurance Corporation of India was set up in—
(A) 1956
(B) 1972
(C) 1980
(D) 2000

87. ‘Salvage Charges’ is related to—
(A) Life Insurance
(B) Marine Insurance
(C) Fire Insurance
(D) None of the above

88. In ‘Life Insurance Contract’ the insurable interest is examined at the time of—
(A) Entering the contract
(B) Filing the claim
(C) Both (A) and (B)
(D) Never

89. In connection with marine insurance the ‘Doctrine of Utmost Good Faith’ is based on the concept of—
(A) Disclosure
(B) Concealment
(C) Misrepresentation
(D) None of the above

90. Which statement is not true in respect of a Balance Sheet ?
(A) It is an account
(B) It is prepared every month
(C) It is prepared to check the mathematical accuracy
(D) All the above

91. A machinery is purchased for Rs. 3,00,000 and Rs. 50,000 is spent on its installation. Rs. 5,000 is spent on fuel. What will be the amount of capital expenditure ?
(A) Rs. 3,00,000
(B) Rs. 3,50,000
(C) Rs. 3,55,000
(D) None of these

92. Which of the following errors are not disclosed by Trial Balance ?
(A) Compensatory Errors
(B) Errors of Principle
(C) Errors of Omission
(D) All the three

(A) Capital Expenditure
(B) Revenue Expenditure
(C) Revenue Loss
(D) Deferred Revenue Expenditure

94. Double Entry System was introduced in—
(A) America
(B) Japan
(C) India
(D) Italy

95. According to going concern concept a business entity is assumed to have—
(A) A long life
(B) A small life
(C) A very short life
(D) A definite life

96. The policy of ‘anticipate no profit and provide for all possible losses’ is followed due to—
(A) Convention of consistency
(B) Convention of conservation
(C) Convention of disclosure
(D) None of the above

97. Receipts and Payments Account is prepared by—
(A) Companies
(B) Banks
(C) Partnership firms

98. Examination of documents and vouchers is called—
(A) Physical verification
(B) Test checking
(C) Vouching
(D) None of the above

99. Internal Audit is done by—
(A) External Auditors
(B) Employees of the organisation
(C) Both (A) and (B)
(D) Neither (A) nor (B)

100. Audit Programme is prepared by—
(A) The Auditor
(B) The Company
(C) Internal Auditor
(D) Financial Controller

101. First Auditor of a Company is appointed by the—
(A) Shareholders
(B) Central Government
(C) Company Law Board
(D) Board of Directors

102. Which of the following is not qualified to be a Company Auditor ?
(A) A body corporate
(B) An employee of the company
(C) A person who is indebted to the company for an amount exceeding Rs. 1,000
(D) All of the above

103. Which of the following statement is correct ?
(A) Valuation is a part of verification
(B) Verification is a part of valuation
(C) Valuation has nothing to do with verification
(D) None of the above

104. Test checking refers to—
(A) Testing of accounting records
(B) Testing of honesty of employees
(C) Intensive checking of a select number of transactions
(D) Checking of all transactions recorded

105. Continuous audit is suitable for—
(A) Big institutions
(B) Small institutions
(C) General institutions
(D) None of the above

106. The function of an Auditor is—
(A) To examine arithmetical accuracy of accounts
(B) To detect and prevent errors
(C) To detect and prevent frauds
(D) All of the above

107. Audit is compulsory for—
(B) Partnership Firms
(C) Joint Stock Companies
(D) All of the above

108. Match List-I with List-II of the following and select the correct answer from answer codes given below—
List-I
(a) At cost price
(b) At market price
(c) Intrinsic value method
(d) Average profit method
List-II
1. Valuation of shares
2. Perishable goods
3. Raw material
4. Valuation of Goodwill
Codes :
(a) (b) (c) (d)
(A) 3 2 1 4
(B) 1 2 3 4
(C) 4 3 2 1
(D) 1 4 3 2

109. In the absence of Articles of Association, an Auditor should keep in mind—
(A) Prospectus
(B) Table ‘A’
(C) Memorandum of Association
(D) Legal Declaration

110. Who may recommend Special Audit of a Company ?
(A) Directors of the Company
(B) Shareholders of the Company
(C) Debentureholders of the Company
(D) Central Government

111. Internal check is a part of—
(A) Internal Audit
(B) Internal Control
(C) Annual Audit
(D) Standard Audit

112. Cost Audit Report is to be submitted to—
(A) The Company
(B) The Central Government with a copy to the Company
(C) The Central Government
(D) The Company Secretary

113. A company auditor addresses his report to—
(A) Board of Directors
(B) Members
(C) Managing Director
(D) Company Secretary

114. Which of the following Sections of the Companies’ Act 1956 relates to the maintenance of proper books of accounts ?
(A) Section-211
(B) Section-217
(C) Section-209
(D) Section-205

115. X and Y are partners sharing profits in the ratio of 4 : 3. They admit a new partner Z and new profit sharing ratio is 7 : 4 : 3. The sacrificing ratio between X and Y will be—
(A) Equal
(B) 4 : 3
(C) 2 : 1
(D) 1 : 2

116. Given :
Realised value of assets Rs. 60,000
Profit on Realisation Rs. 3,000
Book value of assets will be—
(A) Rs. 63,000
(B) Rs. 57,000
(C) Rs. 60,000
(D) Rs. 61,500

117. A, B and C are partners sharing profits and losses in the ratio of 4 : 3 : 2. D is admitted for 1/10 share. The new ratio will be—
(A) 5 : 4 : 3 : 2
(B) 4 : 4 : 3 : 2
(C) 4 : 3 : 2 : 1
(D) None of the above

118. If actual average profit is Rs. 30,000 and normal rate of return is 12%, then capitalization value of the profits will be—
(A) Rs. 3,60,000
(B) Rs. 2,50,000
(C) Rs. 3,05,000
(D) None of the above

119. Under which Section of Companies’ Act an auditor has a right to participate and to speak in the General Meeting ?
(A) 231
(B) 229
(C) 226
(D) 224

120. New profit sharing ratio is calculated at the time of—
(A) Admission of a new partner
(B) Retirement of a partner
(C) Death of a partner
(D) All of the above

1. (A) 2. (B) 3. (C) 4. (A) 5. (B) 6. (D) 7. (C) 8. (D) 9. (C) 10. (B)
11. (B) 12. (D) 13. (C) 14. (B) 15. (A) 16. (D) 17. (D) 18. (B) 19. (C) 20. (B)
21. (A) 22. (B) 23. (D) 24. (A) 25. (D) 26. (C) 27. (B) 28. (D) 29. (C) 30. (D)
31. (A) 32. (D) 33. (D) 34. (D) 35. (C) 36. (A) 37. (A) 38. (A) 39. (D) 40. (C)
41. (D) 42. (A) 43. (D) 44. (B) 45. (D) 46. (D) 47. (C) 48. (D) 49. (A) 50. (B)
51. (B) 52. (D) 53. (D) 54. (D) 55. (D) 56. (C) 57. (D) 58. (B) 59. (D) 60. (A)
61. (B) 62. (D) 63. (C) 64. (A) 65. (A) 66. (B) 67. (A) 68. (D) 69. (B) 70. (D)
71. (A) 72. (A) 73. (B) 74. (B) 75. (D) 76. (C) 77. (A) 78. (D) 79. (B) 80. (C)
81. (B) 82. (C) 83. (A) 84. (C) 85. (C) 86. (B) 87. (B) 88. (A) 89. (A) 90. (D)
91. (B) 92. (D) 93. (D) 94. (D) 95. (A) 96. (B) 97. (D) 98. (C) 99. (B) 100. (A)
101. (D) 102. (D)103. (A) 104. (C) 105. (A) 106. (D) 107. (C) 108. (A) 109. (B) 110. (D)
111. (B) 112. (B) 113. (B) 114. (C) 115. (D) 116. (C) 117. (C) 118. (B) 119. (A) 120. (D)