Commerce Questions and Answers - Set 19

(1) Which of the following is not true ?

[1] When all the forfeited shares are not reissued, the forfeited shares account will also show as credit balance equal to gain on forfeiture of shares not yet reissued.

[2] Loss on reissue of shares cannot be more than gain on forfeiture of those shares.

[3] At the time of forfeiture of shares, securities premium is debited along with share capital when premium has not been received.

[4] When forfeited shares are issued at premium, the premium amount is credited to Capital Reserve Account.

Answer: When forfeited shares are issued at premium, the premium amount is credited to Capital Reserve Account.

(2) Preparation of consolidated Balance Sheet of Holding Company and its subsidiary

[1] AS 11

[2] AS 22

[3] AS 23

[4] AS 21

Answer: AS 21

(3) Amount due to outgoing partner is shown in the balance sheet as his

[1] Liability

[2] Capital

[3] Asset

[4] Loan

Answer: Loan

(4) In which one of the following market situations, the pricing above the prevailing market price is used as a more common practice ?

[1] Markets where the selling firms face perfect competitive situations.

[2] Markets where the selling firms want to gain popularity of the products having high cross elasticity of their demand

[3] Markets where sellers rely on their customers’ high propensity to consume a prestigious commodity.

[4] Markets where the selling firms have entered into the stages of maturity and saturation.

Answer: Markets where sellers rely on their customers’ high propensity to consume a prestigious commodity.

(5) Which one of the following statements is false regarding normal distribution ?

[1] Mean, Median and Mode always coincide.

[2] Within ± 1.96 σ limits from Mean value, the area under the distribution is 99 percent of the total area.

[3] The area under the normal curve represents probabilities for the normal random variable and the total area for the normal probability distribution is one.

[4] For every pair of values of Mean and Standard deviation, the curve of the distribution is bell-shaped and symmetric.

Answer: Within ± 1.96 σ limits from Mean value, the area under the distribution is 99 percent of the total area.

(6) Creating the capability of making purchases directly from a firm’s website is known as

[1] Electronic Networking

[2] Electronic Information Transfer

[3] Electronic Data Interchange

[4] Electronic Transactions

Answer: Electronic Transactions

(7) In integrating specialist functions of product management with the line function of sales as major challenge to top management can be achieved by which type of marketing organization ?

[1] Functional organization

[2] Territorial organization

[3] None of the above

[4] Matrix organization

Answer: Matrix organization

(8) That personal leverage can replace corporate leverage’ is assumed by

[1] Traditional Approach

[2] Net Income Approach

[3] M M Model

[4] Net Operating Income Approach

Answer: M M Model

(9) In certainty-equivalent approach, risk adjusted cash flows are discounted at

[1] Accounting Rate of Return

[2] Internal Rate of Return

[3] Hurdle Rate

[4] Risk-free Rate

Answer: Risk-free Rate

(10) Which council was established in India by Government of India in the year 1966 to promote safety consciousness among workers in industries ?

[1] Factory Advise Council

[2] National Industrial Council

[3] Safety Regulations Council

[4] National Safety Council

Answer: National Safety Council

(11) With a view to encourage newer classes of entrepreneurs and bringing about wider dispersal of ownership and control of industrial undertakings, IDBI operates a special scheme for supplementing the equity contribution to projects made by small and new entrepreneurs. This scheme is known as

[1] Bridge Loan Scheme

[2] Soft Loan Scheme for Modernisation

[3] Technical Development Fund Scheme

[4] Seed Capital Assistance Scheme

Answer: Seed Capital Assistance Scheme

(12) Which one of the following is not the objective of UTI ?

[1] To give everyone a chance to indirectly own shares and securities in a large number of select companies.

[2] To maximise mobilisation of people’s savings by making insurance linked savings adequately attractive.

[3] To channelize the pooled savings into productive outlets.

[4] To mobilise savings of the community by offering savers the triple benefits of safety, liquidity and profitability of investments

Answer: To maximise mobilisation of people’s savings by making insurance linked savings adequately attractive.

(13) Which of the following correctly depicts differences between a merger and an acquisition of stock ?

[1] An acquisition of stock results in the total absorption of a firm whereas a merger does not.

[2] In case of a merger, the firm can deal directly with the shareholders of the acquired firm but not in the case of acquisition of stock.

[3] Shareholders of the acquired or target firm vote by their response to a tender offer in an acquisition of stock but cast a formal vote in a merger situation.

[4] A formal vote by the acquired firm’s shareholders is required for an acquisition of stock but not for a merger.

Answer: Shareholders of the acquired or target firm vote by their response to a tender offer in an acquisition of stock but cast a formal vote in a merger situation.

(14) Which of the following statements is correct ?

[1] The oldest stock exchange of India is OTCEI.

[2] In book-building process, the price of the security is announced by the company.

[3] Sensex is an index number of 30 scrips.

[4] Futures and options in shares are traded at all stock exchanges of India.

Answer: Sensex is an index number of 30 scrips.

(15) The concept of achieving maximum profits through increased consumer satisfaction for raised market share focuses on

[1] Product

[2] Selling

[3] Production

[4] Customer

Answer: Customer

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