Commerce Questions and Answers - Set 6

(1) Which one of the following is not a major punishment ?

[1] Withholding of increments

[2] Demotion

[3] Transfer

[4] Suspension

Answer: Transfer

(2) NAFTA came into force from January, 1994 embracing :

[1] The USA, Canada, Cuba, Trinidad and Tobago

[2] The USA, Canada, Mexico

[3] Cuba, Mexico, USA, Havana

[4] Trinidad, The USA, Mexico

Answer: The USA, Canada, Mexico

(3) A common market is one where :

[1] all the trading nations agree commonly to levy a common and uniform tariff rate for all goods.

[2] all the trading nations agree commonly to rationalise tariff and non-tariff barriers mutually to promote intra-region trade.

[3] there is a customs union along with free intra - union movement of factors of production.

[4] there is an economic union along with free intra-union movement of residents

Answer: there is a customs union along with free intra - union movement of factors of production.

(4) The Maastricht Treaty of February, 1992 renamed the European Community (EC) as :

[1] the European Union (EU)

[2] the European Economic Union (EEU)

[3] the European Monetary Union (EMU)

[4] the European Economic Community (EEC)

Answer: the European Union (EU)

(5) In which of the following cases, Assessing officer has the discretion to assess the income of the previous year in the previous year or in the subsequent assessment year ?

[1] Shipping business of non-residents

[2] Association of Persons (AOP) or Body of Individuals (BOI) formed for a particular event or purpose

[3] Assessment of persons likely to transfer property to avoid tax

[4] Discontinued business

Answer: Discontinued business

(6) Rental income received by a foreign individual, from another foreign individual, in respect of the property situated in Delhi is taxable in the hands of :

[1] Resident and Ordinarily Resident (OR) only

[2] Ordinarily Resident (OR) and Not Ordinarily Resident (NOR) only

[3] Non Resident (NR) only

[4] Ordinarily Resident (OR), Not Ordinarily Resident (NOR) and Non Resident (NR)

Answer: Ordinarily Resident (OR), Not Ordinarily Resident (NOR) and Non Resident (NR)

(7) Which of the following income is not chargeable under the head ‘income from business and profession’ ?

[1] Profits and Gains carried on by an assessee during the previous year.

[2] Income derived by a trade professional or similar association from specific services performed for its members.

[3] Income from the activity of owning or owning and maintaining race horses.

[4] Salary received by a partner of a firm from the same firm

Answer: Income from the activity of owning or owning and maintaining race horses.

(8) Mr. A earned a capital gain of ` 100 lakhs on 31-2-2014 from the sale of a long term capital asset (land) within the limits of Jaipur corporation. If he invests ` 60 lakhs, out of ` 100 lakhs, in Rural Electricity Corporation Bonds approved under Sec. 54 EC in 20-2-2014, what is the amount of exemption he can claim under Sec. 54 EC of Income Tax Act for the AY 2014-15 ?

[1] 60 lakhs

[2] 50 lakhs

[3] 100 lakhs

[4] 100 lakhs

Answer: 50 lakhs

(9) This paper contains fifty (50) objective type questions of two (2) marks each. All questions are compulsory

[1] KOSPI

[2] Nikkie

[3] NASDAQ

[4] Dow Jones

Answer: NASDAQ

(10) The Human Development Index (HDI) is introduced by :

[1] UNDP

[2] UNICEF

[3] IMF

[4] World Bank

Answer: UNDP

(11) The basic difference between a static budget and flexible budget is that

[1] A flexible budget considers only variable costs but a static budget considers all costs.

[2] Flexible budgets allow management latitude in meeting goals, whereas static budget is based on fixed standards.

[3] A flexible budget is applicable for a single department only but a static budget for entire production facility

[4] A flexible budget can be prepared for any production level within a relevant range but a static budget is based on one specific level of production

Answer: A flexible budget can be prepared for any production level within a relevant range but a static budget is based on one specific level of production

(12) A retiring partner continues to be liable for obligations incurred after his retirement :

[1] If unpaid amount is transferred to his loan account.

[2] If he does not give public notice.

[3] If he starts a similar business elsewhere

[4] In all the situations till he survives

Answer: If he does not give public notice.

(13) When opening stock is ` 50,000, closing stock is ` 60,000 and the cost of goods sold is ` 2,20,000, the stock turnover ratio is :

[1] 2 times

[2] 3 times

[3] 4 times

[4] 5 times

Answer: 4 times

(14) A rectangular hyperbola shaped demand curve on all its points has

[1] Equal slopes of the price demand curve

[2] Price elasticity equal to unity

[3] Varying price elasticity

[4] Both slope and price elasticity equal

Answer: Price elasticity equal to unity

(15) In case of short-run equilibrium, a perfectly competitive firm while earning abnormal profits operates at an output level where :

[1] Marginal cost is the minimum

[2] Average cost is the minimum

[3] Both marginal cost and average cost are equal

[4] Marginal cost is higher than average cost

Answer: Marginal cost is higher than average cost

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