Commerce Objective Type MCQs Questions and Answers 2017

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1. A sum of money placed at a compound interest doubles itself is 5 years. In how many years will this amount become 16 times?
(a) In 15 years (b) In 40 years (c) In 16 years (d) In 20 years (Ans : d)

2. If % increase in the price of a commodity leads to only % reduction in demand, then such demand will be–
(a) Inelastic demand (b) Perfectly elastic demand
(c) Perfectly inelastic demand (d) Highly elastic demand (Ans : c)

3. Adjustment Entry for rent received in advance would be–
(a) Cash A/c Dr. To Rent Received in Advance A/c (b) Cash A/c Dr. To Rent A/c
(c) Rent A/c Dr. To Rent Received Advance A/c (d) Advance Rent A/c Dr. To Rent A/c (Ans : c)

4. If own debenture of Rs. 1,000 is purchased for Rs. 975 from the market by the company, the difference of Rs. 25 will be assumed–
(a) Profit on redemption of debenture (b) Loss on redemption of debenture (c) Goodwill (d) None of these (Ans : a)

5. Which of the following is an item of capital expenditure?
(a) Insurance Premium paid for plant and machinery
(b) Sales Tax paid in connection with purchase of office equipments
(c) Interest on loan taken for purchasing office furniture
(d) Monthly rent installment paid for the machine taken on hire-purchase system (Ans : b)

6. The original cost of an asset is Rs. 4,15,000. The useful life of the asset is 20 years and net scrap value is estimated to be Rs. 65,000. The amount of depreciation to be charged every year will be–
(a) Rs. 17,000 (b) Rs. 17,500 (c) Rs. 18,000 (d) Rs. 18,500 (Ans : b)

7. In how many years will Rs. 9,000 become Rs. 10,890 at the rate of 6% simple interest?
(a) 3 years (b) 3 years 6 months (c) 4 years (d) 2 years (Ans : b)

8. The face value of a company’s share is Rs. 100 p.s. The company issued it at Rs. 150 p.s. The present market price of the share is Rs. 200. The company declares a dividend of 20% on these shares. The amount of dividend on per share will be–
(a) Rs. 40 (b) Rs. 30 (c) Rs. 20 (d) Rs. 10 (Ans : c)

9. Which of the following is not included in Financial Statement?
(a) Profit and Loss A/c also known as Income Statement (b) Balance Sheet (Statement of Affairs)
(c) Cash Flow Statement (d) Directors’ Report (Ans : c)

10. The mean marks of 100 students were found be be 40. Later on it was discovered that a score of 53 was misread as 83. The correct mean will be–
(a) 39.5 (b) 39.7 (c) 39.8 (d) 39.9 (Ans : b)

11. The average of the nos. 2, 4, 6, 8, 10, 12, 14 and 16 is–
(a) 9 (b) 10.2 (c) 8.6 (d) 11 (Ans : a)

12. Which of the following errors will not affect the Trail Balance?
(a) Goods for Rs. 5,000 purchased on cash, expenses account was debited instead of purchases account
(b) Purchase Returns Book for December was overcast by Rs. 500
(c) Sales Book carried forward Rs. 2,200 instead of Rs. 2,000
(d) None of these (Ans : a)

13. A saree manufacturer marks 20% higher price on his sarees. He allows 10% discount to the coustomer and earns a profit of Rs. 56 The cost of the saree is–
(a) Rs. 700 (b) Rs. 600 (c) Rs. 800 (d) Rs. 1,000 (Ans : a)

14. In case of opening stock Rs. 5,000, purchases Rs. 15,000, direct expenses Rs. 2,000 and closing stock Rs. 2,500, the cost of goods sold had been–
(a) Rs. 20,000 (b) Rs. 19,500 (c) Rs. 21,500 (d) Rs. 22,000(Ans : b)

15. If a partner introduces additional capital over and above his normal share or gives loans to the firm he is entitled to get interest per annum at the rate of–
(a) 9% (b) 6% (c) 12% (d) Bank rate (Ans : b)

16. If median = 27 and Mean = 30, Mode will be–
(a) 20 (b) 21 (c) 22 (d) 23 (Ans : b)

17. A and B are partners sharing profit & loss in 2 : 5 ratio. They admit C into partnership for a ¼ share. C brings in goodwill in cash which is shared by A and B. New profit sharing ratio of A, B, C will be–
(a) 15 : 6 : 7 (b) 6 : 7 : 15 (c) 6 : 15 : 7 (d) 7 : 6 : 15 (Ans : c)

18. On 31st December, 2007 the assets and liabilities of a firm were Rs. 40,000 and Rs. 30,000 respectively. The firm was dissolved and a sum of 60 paise per rupee was paid to the creditors. Loss on realization was–
(a) Rs. 10,000 (b) Rs. 12,000 (c) Rs. 18,000 (d) Rs. 22,000 (Ans : b)

19. If trade credits are Rs. 10,000, outstanding expenses are 10%of creditor, current ratio being 2 : 1, Stock is Rs. 7,000, then the amount of other current asset will be–
(a) Rs. 10,000 (b) Rs. 18,000 (c) Rs. 15,000 (d) Rs. 8,000 (Ans : c)

20. X and Y are partners sharing profits in the firm in the ratio of 2 : 3 Goodwill appears in the books of the firm at Rs. 10,000. Z joins the firm as new partner for 1/5 share of profits. His share of Goodwill is estimated to be Rs. 15,000. The old partners’ account will be credited with Goodwill by–
(a) Rs. 50,000 (b) Rs. 40,000 (c) Rs. 75,000 (d) Rs. 65,000 (Ans : c)

21. All adjustment entries in Final A/c are written at two places–
(a) Trading A/c and Balance Sheet (b) Profit & Loss A/c and Balance Sheet
(c) Trading A/c, Profit & Loss A/c and Balance Sheet (d) Trading and profit & Loss A/c and Balance sheet (Ans : d)

22. As a result of increase in the price of tea from Rs. 40 to Rs. 50 per pound, the demand for coffee increases from 500 pounds to 600 pounds. The cross elasticity of demand is–
(a) ½ (b) 2/3 (c) ¾ (d) 4/5 (Ans : d)

23. A bag contains 5-rupee, 2-rupee, 1-rupee and 50-paise coins. These coins are in the ratio of 4 : 3 : 2 : 1. If the total coins amount to Rs. 285, find out the number of each type of coins.
(a) 20 of 50 paise, 20 Re. 1,20 of Rs. 2 and 43 of Rs. 5
(b) 40 of Rs. 5,30 of Rs. 2,20 of Re. 1 and 10 of 50 paise
(c) Both (a) and (b) (d) None of the above (Ans : b)

24. If sales are Rs. 18,000, Gross Profit Rs. 5,000, Net Loss Rs. 1,000, the operating expenses will be–
(a) Rs. 4,000 (b) Rs. 6,000 (c) Rs. 13,000 (d) Rs. 17,000 (Ans : b)

25. Due to reduction of interest rate from 8% to 7.5% by bank, one man got Rs. 600 less as compared to early annual receipts. The amount deposited in the bank is–
(a) Rs. 1,00,000 (b) Rs. 1,50,000 (c) Rs. 1,20,000 (d) Rs. 2,00,000 (Ans : c)

26. Received Rs. 5,000 from Ram but credited his account by Rs. 50,000 is–
(a) Error of Omission (b) Error of Principles (c) Compensation Error (d) None of these (Ans : a)

27. The minimum amount called on application for issue of share is ………. of face value.
(a) 5% (b) 25% (c) 30% (d) 40% (Ans : a)

28. A firm had a capital balance of Rs. 1,00,000 at the beginning of a year. At has total assets of Rs. 1,50,000 and total liabilities of Rs. 70,000. If the total withdrawals during the period were Rs. 30,000, what was the amount of Net Profit/Net Loss for the year?
(a) Rs. 10,000 profit (b) Rs. 20,000 loss
(c) Rs. 50,000 loss (d) Rs. 10,000 loss (Ans : a)

29. Fixed assets received as a gift will be credited to–
(a) Donor’s A/c (b) Capital Reserve A/c (c) Capital A/c (d) Profit & Loss A/c (Ans : b)

30. In an Economy, where capital output ratio is 5.2, what should be the saving income ratio to bring about a growth rate of 6.2% in the National Income?
(a) 1.00% (b) 32.24% (c) 11.4% (d) 1.19% (Ans : a)

31. After re-issue of forfeited shares the balance of forfeited share account is transferred to–
(a) General Reserve (b) Profit & Loss A/c (c) Capital Reserve (d) None of these (Ans : c)

32. X Ltd. has current ratio of 2 : 1 and quick ratio of 1.5 : 1. If the current liabilities are Rs. 80,000 then the value of stock would be–
(a) Rs. 1,60,000 (b) Rs. 1,20,000 (c) Rs. 40,000 (d) Rs. 80,000 (Ans : c)

33. On the death of a partner the amount of joint life insurance policy should be credited to the Capital A/c of–
(a) All partners (including deceased one) in their profit sharing ratio) (b) Remaining partners in their old profit sharing ratio
(c) Remaining partners equally (d) All partners (including deceased) in their capital ratio (Ans : a)

34. If the rate of Gross profit is 25% of sales and the total cost of goods sold is Rs. 1,00,000, the amount of gross profit will be–
(a) Rs. 25,000 (b) Rs. 20,000 (c) Rs. 30,000 (d) Rs. 33,333 (Ans : d)

35. A company has capital of Rs. 10,00,000. Its turnover is 3 times. Margin on sale is 6%. The Return on Investment will be–
(a) 20% (b) 15% (c) 18% (d) 23% (Ans : c)

36. A machine was purchased for Rs. 10,000 and its life was estimated to be 3 years, and at the end of its life, its book value was Rs. 5,120. If depreciation is calculated according to Diminishing Balance Method, the rate of depreciation would be–
(a) 25% (b) 15% (c) 20% (d) 10% (Ans : c)

37. A, B and C are partners sharing profit & loss in 2 : 2 : 1 ratio. C dies on 31.3.2008. Profit for the year 2007-08 (ending 31st March, 2008) is Rs. 64,000. The share of C in those profits is–
(a) Rs. 9,600 (b) Rs. 8,200 (c) Rs. 12,800 (d) Rs. 5,800 (Ans : c)

38. If debentures of Rs. 3,25,000 are issued for the consideration of net assets of Rs. 3,50,000, balance of Rs. 25,000 will be credited to–
(a) Capital Reserve A/c (b) General Reserve A/c (c) Profit & Loss A/c (d) Goodwill A/c (Ans : a)

39. Carriage charges paid on purchase of a new machine is debited to–
(a) Carriage Inward A/c (b) Cash A/c (c) Pland & Machinery A/c (d) Profit & Loss A/c (Ans : c)

40. A, B, and C are partners in a business. A invested Rs. 10,000 for 5 months, B invested Rs. 20,000 for 3 months and C invested Rs. 25,000 for 4 months. In the end business resulted in a profit of Rs. 6,300. The share of partners will be as under–
(a) A Rs. 2,000, B Rs. 1,300, C, Rs. 3,000 (b) A Rs. 1,500, B Rs. 1,800, C, Rs. 3,000
(c) A Rs. 3,000, B Rs. 1,500, C, Rs. 1,800 (d) A Rs. 1,800, B Rs. 1,500, C, Rs. 3,000(Ans : b)

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