General Knowledge Commerce Questions Answers
1. The following figures are presented to you–
Year Sales Profit/Loss
1999 Rs. 1,00,000 Rs. 10,000 (Loss)
2000 Rs. 2,50,000 Rs. 20,000 (Profit)
Calculate Profit Volume Ratio.
(A) 5% (B) 10%
(C) 15% (D) 20%
See Answer:
2. The following particulars relate to manufacturing factory for the month of March 2013. Variable cost per unit Rs. 11; Fixed factory overhead Rs. 5,40,000; Fixed selling overhead Rs. 2,52,000; Variable selling cost Rs. 3; Sales Price per unit Rs. 20. Find out the Break-Even Point in rupees–
(A) Rs. 26,40,000 (B) Rs. 30,80,000
(C) Rs. 25,20,000 (D) Rs. 27,40,000
See Answer:
3. The following information is obtained from the records of K Co. Ltd.–
Sales (1,00,000 units) Rs. 1,00,000
Variable cost Rs. 40,000
Fixed cost Rs. 30,000
Find out margin of safety.
(A) Rs. 20,000 (B) Rs. 25,000
(C) Rs. 30,000 (D) Rs. 50,000
See Answer:
4. A manufacturer is operating at 50% of its capacity, due to competition. The following are the details. Raw materials Rs. 6 per unit, Direct Labour Rs. 4 per unit. variable overhead - Rs. 3 per unit, fixed overhead - Rs. 2 per unit, output 15,000 units, total cost Rs. 2,25,000, sales value Rs. 2,10,000, loss Rs. 15,000. A foreign customer wants to buy 6,000 units at Rs. 13•50 per unit and the company does not know whether to accept or not as it is suffering losses at the current level. Advise what he should do ?
(A) Accept the offer (B) Reject the offer
(C) Remains indifferent (D) None of the above
See Answer:
5. The liability of a sole proprietor is–
(A) Limited to the extent of his capital invested in the business
(B) Limited to the extent of the value of business assets
(C) Limited to the extent of the value of business assets and his all private assets
(D) None of the above
See Answer:
6. Which of the following documents defines the scope of company’s activities ?
(A) Memorandum of Association (B) Articles of Association
(C) Prospectus (D) Statutory declaration
See Answer:
7. An indent house is one which–
(A) Serves as middleman between importer and exporter of goods for getting orders
(B) Packs and forwards the goods
(C) Guarantees the payments for good
(D) Performs custom formalities on behalf of importer
See Answer:
8. A letter of credit (L/C) is produced by–
(A) An exporter (B) An importer
(C) Custom authorities (D) Shipping company
See Answer:
9. Table ‘A’ of the Companies Act gives a model of–
(A) Minute book (B) Balance Sheet
(C) Memorandum of Association (D) Articles of Association
See Answer:
10. First Auditor of a Company is appointed by the–
(A) Shareholders (B) Central Government
(C) Company Law Board (D) Board of Directors
See Answer:
11. 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
See Answer:
12. 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
See Answer:
13. 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
See Answer:
14. Continuous audit is suitable for–
(A) Big institutions (B) Small institutions
(C) General institutions (D) None of the above
See Answer:
15. Which of the following statements is/are correct ?
1. Internal control includes quality control.
2. Internal control is compulsory for all forms of business organizations.
3. Internal control helps external auditor to design suitable audit programme for client's organization.
Select the correct answer using the code given below–
(A) 1 only (B) 2 only
(C) 3 only (D) 1 and 3
See Answer:
16. Which of the following is not a part of the usual contents of the current file and audit working papers ?
(A) A copy of accounts on which auditors are reporting
(B) Audit programme
(C) Minutes of the meetings
(D) Memorandum of Association and Articles of Association
See Answer:
17. Consider the following statements–
Audit working papers are maintained because
1. they act as a guide to subsequent audit.
2. they verify the arithmetical accuracy of the books of accounts.
18. they provide evidence of the work performed by the auditor.
Which of the statements given above are correct ?
(A) 1 and 2 only (B) 2 and 3 only
(C) 1 and 3 only (D) 1, 2 and 3
See Answer:
19. The proportion of labour in GNP (Gross National Product) becomes low due to the following reasons–
(A) Price lag behind wages (B) Profit lags behind prices
(C) Prices lag behind profit (D) Wages lag behind price
See Answer:
20. Consider the following stages an auditor has to undergo before commencing an audit–
1. Ascertaining the scope of audit work.
2. Gaining knowledge about business of the client.
3. Going through the agreement with the client.
4. Instructions to and information from the client.
What is the correct sequence of the above stages ?
(A) 2 - 1 - 3 – 4 (B) 3 - 4 - 2 - 1
(C) 2 - 4 - 3 – 1 (D) 3 - 1 - 2 – 4
See Answer:
Year Sales Profit/Loss
1999 Rs. 1,00,000 Rs. 10,000 (Loss)
2000 Rs. 2,50,000 Rs. 20,000 (Profit)
Calculate Profit Volume Ratio.
(A) 5% (B) 10%
(C) 15% (D) 20%
See Answer:
2. The following particulars relate to manufacturing factory for the month of March 2013. Variable cost per unit Rs. 11; Fixed factory overhead Rs. 5,40,000; Fixed selling overhead Rs. 2,52,000; Variable selling cost Rs. 3; Sales Price per unit Rs. 20. Find out the Break-Even Point in rupees–
(A) Rs. 26,40,000 (B) Rs. 30,80,000
(C) Rs. 25,20,000 (D) Rs. 27,40,000
See Answer:
3. The following information is obtained from the records of K Co. Ltd.–
Sales (1,00,000 units) Rs. 1,00,000
Variable cost Rs. 40,000
Fixed cost Rs. 30,000
Find out margin of safety.
(A) Rs. 20,000 (B) Rs. 25,000
(C) Rs. 30,000 (D) Rs. 50,000
See Answer:
4. A manufacturer is operating at 50% of its capacity, due to competition. The following are the details. Raw materials Rs. 6 per unit, Direct Labour Rs. 4 per unit. variable overhead - Rs. 3 per unit, fixed overhead - Rs. 2 per unit, output 15,000 units, total cost Rs. 2,25,000, sales value Rs. 2,10,000, loss Rs. 15,000. A foreign customer wants to buy 6,000 units at Rs. 13•50 per unit and the company does not know whether to accept or not as it is suffering losses at the current level. Advise what he should do ?
(A) Accept the offer (B) Reject the offer
(C) Remains indifferent (D) None of the above
See Answer:
5. The liability of a sole proprietor is–
(A) Limited to the extent of his capital invested in the business
(B) Limited to the extent of the value of business assets
(C) Limited to the extent of the value of business assets and his all private assets
(D) None of the above
See Answer:
6. Which of the following documents defines the scope of company’s activities ?
(A) Memorandum of Association (B) Articles of Association
(C) Prospectus (D) Statutory declaration
See Answer:
7. An indent house is one which–
(A) Serves as middleman between importer and exporter of goods for getting orders
(B) Packs and forwards the goods
(C) Guarantees the payments for good
(D) Performs custom formalities on behalf of importer
See Answer:
8. A letter of credit (L/C) is produced by–
(A) An exporter (B) An importer
(C) Custom authorities (D) Shipping company
See Answer:
9. Table ‘A’ of the Companies Act gives a model of–
(A) Minute book (B) Balance Sheet
(C) Memorandum of Association (D) Articles of Association
See Answer:
10. First Auditor of a Company is appointed by the–
(A) Shareholders (B) Central Government
(C) Company Law Board (D) Board of Directors
See Answer:
11. 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
See Answer:
12. 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
See Answer:
13. 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
See Answer:
14. Continuous audit is suitable for–
(A) Big institutions (B) Small institutions
(C) General institutions (D) None of the above
See Answer:
15. Which of the following statements is/are correct ?
1. Internal control includes quality control.
2. Internal control is compulsory for all forms of business organizations.
3. Internal control helps external auditor to design suitable audit programme for client's organization.
Select the correct answer using the code given below–
(A) 1 only (B) 2 only
(C) 3 only (D) 1 and 3
See Answer:
16. Which of the following is not a part of the usual contents of the current file and audit working papers ?
(A) A copy of accounts on which auditors are reporting
(B) Audit programme
(C) Minutes of the meetings
(D) Memorandum of Association and Articles of Association
See Answer:
17. Consider the following statements–
Audit working papers are maintained because
1. they act as a guide to subsequent audit.
2. they verify the arithmetical accuracy of the books of accounts.
18. they provide evidence of the work performed by the auditor.
Which of the statements given above are correct ?
(A) 1 and 2 only (B) 2 and 3 only
(C) 1 and 3 only (D) 1, 2 and 3
See Answer:
19. The proportion of labour in GNP (Gross National Product) becomes low due to the following reasons–
(A) Price lag behind wages (B) Profit lags behind prices
(C) Prices lag behind profit (D) Wages lag behind price
See Answer:
20. Consider the following stages an auditor has to undergo before commencing an audit–
1. Ascertaining the scope of audit work.
2. Gaining knowledge about business of the client.
3. Going through the agreement with the client.
4. Instructions to and information from the client.
What is the correct sequence of the above stages ?
(A) 2 - 1 - 3 – 4 (B) 3 - 4 - 2 - 1
(C) 2 - 4 - 3 – 1 (D) 3 - 1 - 2 – 4
See Answer:
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