Commerce Questions and Answers - Set 23

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.

View Answer

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

View Answer

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

View Answer

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.

View Answer

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.

View Answer

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

6 If unexplained variation between variables X and Y is 36%, what is the coefficient of correlation between the variables ?

1 0.36

2 0.60

3 0.64

4 0.80

View Answer

Answer: 0.80

7 A researcher wants to test the significance of the difference between the average performance of the two small sized samples when the information of the population standard deviation is not available, which one of the following hypothesis-testing is suitably used ?

1 Z-test

2 Chi-square test

3 F-test

4 t-test

View Answer

Answer: t-test

8 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

View Answer

Answer: Matrix organization

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

View Answer

Answer: Risk-free Rate

10 ‘That personal leverage can replace corporate leverage’ is assumed by

1 Traditional Approach

2 Net Income Approach

3 Net Operating Income Approach

4 M M Model

View Answer

Answer: M M Model

11 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 Safety Council

3 National Industrial Council

4 Safety Regulations Council

View Answer

Answer: National Safety Council

12 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

View Answer

Answer: Seed Capital Assistance Scheme

13 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.

View Answer

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

14 Under which of the following schemes, the IFCI procures equipment for an actual-user industrial concern by making payment to the machinery/equipment supplier, and then resells/transfers the equipment to the actual-user-industrial concern at the same cost, subject, however, to any liability arising out of taxes and other levies, being put to the account of the actual user industrial concern ?

1 Equipment Credit Scheme

2 Equipment Finance Scheme

3 Equipment Procurement Scheme

4 Scheme of Equipment Leasing

View Answer

Answer: Equipment Procurement Scheme

15 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.

View Answer

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.