ainfoera.com – MCQs, Mock Tests | Economics Economics Business and Finance

1 Business can be defined as:

A Selling of goods B Buying of goods C A market place D Trade commerce and industry

✅ Correct Answer: 4

2 What can be the maximum number of partners in a partnership firm?

A 10 B 15 C 20 D 25

✅ Correct Answer: 3

3 Which form of business organisation would be most suitable for a capital intensive business?

A Sole proprietorship B Partnership C Co-operative society D Joint-stock company

✅ Correct Answer: 4

4 According to the systems approach a system is the:

A Sum total of all its components B Orderly arrangement of its components in a coordinated manner C A combination of some of the components D A systemic view of the organisation

✅ Correct Answer: 2

5 A business organistion has constant and invisible interaction with its:

A Employees B Suppliers and customers C External environment D Government

✅ Correct Answer: 3

6 The asset limit above which a company or group would be covered under the MRTP in India for concentration of economic power is:

A Rs 50 lakh B Rs 1 crore C Rs 20 crore D Rs 100 crore

✅ Correct Answer: 4

7 Which one of the following refers to factoring services?

A Guaranteeing realisation from debtors B Financing working capital C Providing project consultancy D None of the above

✅ Correct Answer: 1

8 A consumer complaint is registered by the MRTP Commission in India on a complaint made by at least:

A 5 consumers B 25 consumers C 50 consumers D 100 consumers

✅ Correct Answer: 2

9 Vertical combination implies:

A Formation of pools and cartels B Integration of enterprises engaged in different stages of production of a particular product C A group 01 organisations having common sales set-up D Integration of enterprises engaged in manufacturing similar products

✅ Correct Answer: 2

10 An indirect tax is one where:

A Tax is levied on wealth B Tax is levied always on products C Points of impact and incidence are the same D Points of impact and incidence are different

✅ Correct Answer: 4

11 Which one of the following is an example of indirect tax?

A Corporation tax B Wealth tax C Income tax D Sales tax

✅ Correct Answer: 4

12 The incidence of tax refers to:

A The effect produced by the tax B The rate of taxation C One who bears the ultimate money burden of the tax D One who is immediately responsible to pay the tax

✅ Correct Answer: 3

13 Who is generally regarded as the father of modern management?

A F.W.Taylor B Henry Fayol C James D.Mooney D Alan C. Reiley

✅ Correct Answer: 2

14 The term Managerical Rovolution refers to the prediction that with the expansion in size of business units world affairs will eventually be in the hands of a few powerful managers. Who made use of this term?

A J.Burnham B F.W.Taylor C Alfred Marshall D J.K.Galbraith

✅ Correct Answer: 1

15 The principle of scientific management implies:

A Replacement of rules of thumb by scientific principles of management B Managing business in a scientific way C Use of science in business D Human approach to management

✅ Correct Answer: 1

16 Objectives in the context of management may be defined as:

A Laying down targets to be achieved over a period of time B The end result which an organisation tries to attain C The purpose for the organizations survival D Parameters for unified planning

✅ Correct Answer: 2

17 The two key factors in management by objectives are:

A Performance evaluation and objectives B Democratic goal-setting and verifiable objectives C Systems approach and long-range planning D Short-run goods and flexibility

✅ Correct Answer: 2

18 An informal organisation is one where:

A There is no division of work B Jobs of individuals are not precisely defined C The structure is not prescribed by formal authority D There are no fixed hours of work

✅ Correct Answer: 3

19 The first level of needs in Maslows need hierarchy is:

A Social needs B Security needs C Physiological needs D Esteem needs

✅ Correct Answer: 3

20 Planning and control are related in such a way that:

A Planning precedes control B Control precedes planning C Both are concurrent D Both go hand-in-hand with each other in a cyclical manner

✅ Correct Answer: 4

21 Communication is complete when the:

A Message is sent by the sender B Message is received by the receiver C Message is received and understood by the receiver D Message is further transmitted by the receiver

✅ Correct Answer: 3

22 A private company must have at least:

A 2 members B 5 members C 7 members D 10 members

✅ Correct Answer: 1

23 Unless the Articles of Association otherwise provide the quorum for a general meeting of a public company is:

A One-third of the total members B Five members personally present C Seven members personally present D Twenty members personally present

✅ Correct Answer: 2

24 A Special resolution is one which is passed in a general meeting by:

A A simple majority of votes B Two-third majority of votes C Three-fourth majority of votes D Three-fifth majority of votes

✅ Correct Answer: 3

25 A share warrant can be issued by:

A Private companies only B Public companies only C Both public and private companies D Government companies only

✅ Correct Answer: 2

26 What is the minimum number of shareholders necessary for a public company?

A 5 B 7 C 11 D 20

✅ Correct Answer: 2

27 The share capital of a company refers to:

A Equity share capital B Preference share capital C Equity and preference share capital D Equity and preference share capital and debentures

✅ Correct Answer: 3

28 Within how many days of the declaration of divident must divident warrants be posted to shareholders?

A 21 days B 30 days C 42 days D 60 days

✅ Correct Answer: 3

29 In which year was the Indian Contract Act passed?

A 1850 B 1872 C 1926 D 1939

✅ Correct Answer: 2

30 Any agreement by a minor which is beneficial to him is a:

A Void agreement B Illegal agreement C Valid contract D Void contract

✅ Correct Answer: 3

31 The liability of partners in a partnership firm is:

A Joint and several B Joint and alternative C Alternative D Joint

✅ Correct Answer: 1

32 What is the maximum number of partners necessary in a partnership firm carrying on banking business?

A 5 B 10 C 15 D 20

✅ Correct Answer: 1

33 The suit for specific performance in case of breach of contract may be filed only where the subject matter relates to:

A Movable goods B Immovable property C Perishable goods D Personal skill and qualifications

✅ Correct Answer: 2

34 Which one of the following is a void agreement?

A Agreement in restraint of trade B Agreement whose object is illegal C Agreement in respect of sale of goodwill D Service agreements containing negative stipulations during the tenure of service

✅ Correct Answer: 1

35 Crossing a cheque Not Negotiable affords security against:

A Negotiation of cheque B The ft of cheque C Payment to wrong banker or account D None of the above

✅ Correct Answer: 2

36 Non-registration of a partnership does not affect the:

A Suit by a partner against the firm or other co-partners B Suit by the firm against third parties C Suit by third parties against the firm D Claim of set-off or other proceedings on a contract by the firm

✅ Correct Answer: 3

37 Organisation Theory is concerned with the:

A Development of an organisation as an economic unit B Study to explain the nature and composition of organisations as a social or human group C Rules governing an organisation D Human behaviour at work

✅ Correct Answer: 2

38 With which of following is Behavioural Science in management related?

A Organizational response to its environment B Scientific study of human behaviour C Superior-subordinate behaviour within an organisation D None of the above

✅ Correct Answer: 2

39 Job-enrichment means:

A More tasks of the same general nature B More tasks providing greater challenge C Change or variation of job after a time perior D None of the above

✅ Correct Answer: 3

40 An organisation structure refers to the:

A Nature of superior-subordinate relationship B Relationships and dependencies within an organisation C Extent of delegation of authority in the organisation D Flow of authority and responsibility

✅ Correct Answer: 4

41 Finance is concerned with:

A Arrangement of funds B Identification of sources of funds C Recording utilisation of funds D All of the above

✅ Correct Answer: 4

42 Current Ratio is the ratio of:

A Current assets to current liabilities B Current liabilities to current assets C Fixed assets to total liabilities D Current assets to total liabilities

✅ Correct Answer: 1

43 Debt Equity Ratio refers to the ratio of:

A Debtors to equity share capital B Long term debt to shareholders equity C Total debt to equity share capital D Long term debt to equity share capital

✅ Correct Answer: 2

44 Trading on eqrity means:

A Use of equity share capital for trade financing B Use of fixed-interest borrowed funds for getting a higher return on equity C Having no borrowed funds D Trading in equity share capital

✅ Correct Answer: 2

45 Cost of goods sold refers to:

A Sales minus gross profits B Sales minus profits C Cost of materials labour and overheads D None of the above

✅ Correct Answer: 1

46 In the pay back period method of capital budgeting investment is divided by:

A Annual profits B Return on investment C Constant annual cash flow D Cumulative cash flow

✅ Correct Answer: 3

47 The relationship between EBIT and EPS gives:

A Operating leverage B Financial leverage C Nornal leverage D Composite leverage

✅ Correct Answer: 2

48 Break-even-point is a situation where:

A Profits are negative B There is no profit no loss C Profits-Costs D Business is at the point of dissolution

✅ Correct Answer: 2

49 Under-capitalisation refers to a situation where:

A The capital base is larger for the earnings made B The capital base does not justify the amount of earnings made and needs to be enhanced C The capital base justifies the earnings made D The earnings ratio of the company equals the industrys earnings ratio

✅ Correct Answer: 2

50 A schedule of balances drawn from the ledger is called:

A A trial balance B A balance sheet C A profit and loss account D A statement of account

✅ Correct Answer: 1

51 Goodwill of a firm represents:

A Fixed assets B Tangible assets C Intangible assets D Fictitious assets

✅ Correct Answer: 3

52 Under-capitalisation refers to a situation where:

A The capital base is larger for the earnings made B The capital base does not justify the amount of earnings made and needs to be enhanced C The capital base justifies the earnings made D The earnings ratio of the company equals the industrys earnings ratio

✅ Correct Answer: 2

53 Goodwill of a firm represents:

A Fixed assets B Tangible assets C Intangible assets D Fictitious assets

✅ Correct Answer: 3

54 A bank account is a:

A Personal account B Real account C Liability account D Nominal account

✅ Correct Answer: 1

55 Prepaid expenses appearing in a trial balance will figure in the:

A Balance sheet B Profit and loss account C Profit and loss account and balance sheet D Prepaid expenses account

✅ Correct Answer: 1

56 Sale of old furniture on credit will appear in the:

A Sales day book B Cash book C Journal D Debtors ledger

✅ Correct Answer: 3

57 The excess of current assets over current liabilities is called:

A Net worth B Working capital C Net tangible worth D Turnover

✅ Correct Answer: 2

58 Depreciation is the process of:

A Allocation of costs B Valuation of assets C Use of assets D None of the above

✅ Correct Answer: 1

59 What is the objective of cost accounting?

A Cost determination B Cost analysis C Cost control D All of the above

✅ Correct Answer: 4

60 What is Conersion Cost?

A Cost of materials and labour B Cost of transforming direct materials into finished products C Cost of labour D Total cost of running business

✅ Correct Answer: 2

61 In an integrated costing system most of the data relevant to cost accounting comes from the:

A Cost accounting system B Financial accounting system C Stores accounting system D Sales and distribution system V H-

✅ Correct Answer: 2

62 Which method of costing is used by sugar mills?

A Unit or output costing B Job costing C Process costing D Batch costing

✅ Correct Answer: 3

63 Premium on redemption of debentures is accounted for in the:

A Personal account B Real account C Nominal account D Assets account

✅ Correct Answer: 1

64 After debentures are redeemed the balance in the sinking fund account is transferred to:

A Capital reserve B General reserve C Profit and loss account D Secret reserve

✅ Correct Answer: 2

65 To the extent redemption of preferece shares takes place out of profits an equal amount has to be transferred to:

A Development rebate reserve B Capital redemption reserve C General reserve D Share premium account

✅ Correct Answer: 2

66 When shares are forfeited the share capital account is debited by:

A Calls-in-arrears B Called-up-amount C Paid-up amount D Face value of shares

✅ Correct Answer: 2

67 The profit on re-issuing forfeited shares is transferred to:

A Capital reserve B Capital redumption reserve C General reserve D Revaluation reserve

✅ Correct Answer: 1

68 The share application account is a:

A Real account B Personal account C Nominal account D Asset account

✅ Correct Answer: 2

69 The excess of purchase price over net assets is:

A Goodwill B Capital reserve C Preliminary expense D Revenue reserve

✅ Correct Answer: 1

70 In the balance sheet of a company the items goodwill patents and trade marks are shown under the heading:

A Current assets B Loans and advances C Fixed assets D Investments

✅ Correct Answer: 3

71 A preliminary expense is a:

A Current asset B Fictitious asset C Current liability D Non-current liability

✅ Correct Answer: 2

72 Divisible profits do not include:

A Reserve fund B Profit on revaluation of assets C Post-incorporation profits D None of the above

✅ Correct Answer: 2

73 Advance payment of tax should be shown on the:

A Assets side of a balance sheet B Liabilities side of a balance sheet C Debit side of a profit and loss account D Credit side of a profit and loss account

✅ Correct Answer: 1

74 Dividends are usually paid on the:

A Called-up capital B Paid-up capital C Subscribed capital D Nominal capital

✅ Correct Answer: 2

75 When two or more companies dissolve to form a new company the process is known as:

A Amalgamation B Absorption C Reconstruction D Combination

✅ Correct Answer: 1

76 Absorption is said to take place when:

A A company is formed to take over another company B Two or more companies are dissolved to form a few company C Two or more companies dissolve to be taken over by a existing company D Two companies decide for virtual integration of their operations

✅ Correct Answer: 3

77 For calculating market value using P/E ratios it is necessary to know:

A The rate of dividend B Average profits C Market price of the share D Earnings per share and market price of the share

✅ Correct Answer: 4

78 The relationship between normal rate of return and P/E ratio is:

A Inverse B Direct C Irregular D None of the above

✅ Correct Answer: 1

79 For a company to carry out capital reduction permission is required from the:

A Controller of Capital Issues B Competent Court C Company Law Board D Board of Directors

✅ Correct Answer: 2

80 Any balance in the capital reduction account after writing off lost capital is tansferred to:

A Capital reserve B General reserve C Debenture redemption reserve D Capital redemption reserve

✅ Correct Answer: 1

81 In a scheme of reorganization the amount of shares surrendered by shareholders is transferred to the:

A Shares surrendered account B Capital reduction account C Capital reorganization account D Capital sacrificed account

✅ Correct Answer: 2

82 Amounts sacrificed by shareholders are credited to the:

A Capital reserve account B General reserve account C Capital reduction account D Capital redemption reserve account

✅ Correct Answer: 3

83 At the commencement of winding up a contributory is a:

A Creditor B Debtor C Shareholder D Debenture holder

✅ Correct Answer: 3

84 The shareholding of the government in a government company must be at least:

A 33% B 50% C 51% D 100%

✅ Correct Answer: 3

Economics — Learn

Economics Business and Finance