CIVIL SERVICES (Pre.) EXAM.

, 2008

Commerce : Solved Paper

(Held on 18-5-2008) 1. In case of any default made in complying with the provisions relating to the postal ballot, the officer on default will be punishable with which one of the following fines ? (A) Rs. twenty thousand in respect of each such default (B) Rs. fifty thousand in respect of each such default (C) Rs. one lakh in respect of each such default (D) Rs. two lakh in respect of each such default 2. A listed company opting for buyback of shares under the Companies Act, 1956 has to submit return, after completion of such buy-back within which one of the following periods ? (A) 6 months of such completion to the Registrar of Companies only (B) 45 days of such completion to the SEBI only (C) 30 days of such completion to the Registrar of Companies and SEBI (D) 30 days of such completion to the SEBI only 3. Which one of the following is correct in respect of the doctrine of indoor management and the rule of constructive notice ? (A) The former operates to protect the outsider against the company and the latter protects the company against the outsider (B) The former operates to protect the company against the outsider and the latter protects the outsider against the company (C) Both protect the company against the outsider (D) Both protect the outsider against the company 4. What is Director Identification Number (DIN) ? (A) An identification number which the individual company allots to the intending director (B) A number which the Central Government allots to any individual intending to be appointed as director or to any existing director of a company (C) A number which the SEBI allots to any individual intending to be appointed as director or to any existing director of a company (D) A number which the Central Government allots to retired directors so as to build data base 5. Small shareholders' director is to be appointed by which of the following companies ? (A) Public companies having Rs. 5 crores or more of paid up capital and minimum of 1000 small shareholders (B) Public companies having Rs. 10 crores or more of paid up capital and a minimum of 1000 small shareholders (C) Public companies having Rs. 1 crore or more of paid up capital and a minimum of 100 small shareholders (D) Public companies having Rs. 5 crores or more of paid up capital and a minimum of 100 small shareholders 6. When does a body corporate become capable forthwith of exercising all the functions of a company ? (A) On finalizing Memorandum of Association (B) On obtaining certificate of commencement of business (C) On obtaining certificate of incorporation (D) On having convened its first Annual General Meeting 7. For how many years the books of accounts of a company have to be preserved in good order ?

(A) For a period of not less than eight years immediately preceding the current year (B) For a period of not less than five years immediately preceding the current year (C) For a period of not less than six years immediately preceding the current years (D) For a period of not less than four years immediately preceding the current year 8. Which one of the following is not one of the elements of the 7S McKinsey Model for analyzing and improving organizational effectiveness ? (A) Strategy (B) Structure (C) Shared Values (D) Standard 9. Consider the following statements 1. Aggregate planning implies operational planning concerned with determining a firm's production requirements and manufacturing capacity. 2. Behaviour modification is a concept of motivation totally independent of rewards for the employees. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2 10. What is the correct sequence of the following steps in a strategic planning process ? 1. Inputs 2. Evaluation of alternatives 3. Execution 4. SWOT analysis Select the correct answer using the code given below (A) 1 - 4 - 2 - 3 (B) 4 - 1 - 2 - 3 (C) 1 - 2 - 3 - 4 (D) 4 - 1 - 3 - 2 11. Consider the following statements 1. Managerial grid is an organizational concept that brings together teams of individuals from specialized jobs and departments for achieving specific results in defined periods of time. 2. The matrix management model is based on a matrix of values between 0 and 9 for two primary variables. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2 12. A limited company makes a net profit of Rs. 2,00,000 after writing off preliminary expenses amounting to Rs. 20,000 and providing for depreciation on assets amounting to Rs. 40,000 and gain of Rs. 10,000 on sale of a piece of machinery. What are the funds from operation ? (A) Rs. 2,00,000 (B) Rs. 2,40,000 (C) Rs. 2,50,000 (D) Rs. 2,60,000 13. Consider the following items that are disclosed in a statement of cash flows 1. Cash flow from operating activities. 2. Cash flow from financing activities.

3. Closing cash and cash equivalents. 4. Cash from investing activities What is the correct chronological order of their disclosure of the above cash flows ? (A) 2 - 3 - 1 - 4 (B) 1 - 4 - 2 - 3 (C) 2 - 4 - 1 - 3 (D) 1 - 3 - 2 - 4 14. Consider the following statements A cash flow statement is generally prepared for 1. Ascertaining the net cash flows between two accounting periods. 2. Understanding the trends of cash flows between two accounting periods. 3. Short term cash planning of the business. Which of the statements given above are correct ? (A) 1 and 2 only (B) 2 and 3 only (C) 1 and 3 only (D) 1, 2 and 3 15. Which of the following represents corporate sustainable reporting ? (A) Publishing annual financial statement only (B) Publishing annual financial statements and social accounts (C) Publishing social and environmental accounts annually (D) Publishing annual financial statements incorporating economic, social and environmental performances 16. Sometimes an auditor is called upon to review the operations of an enterprise for evaluating their cost-effectiveness. What is this kind of audit generally known as ? (A) Cost Audit (B) Operations Audit (C) Tax Audit (D) Independent Financial Audit 17. Match List-I with List-II and select the correct answer using the code given below the Lists List-I (Assets and Liabilities) (a) Current assets (b) Fixed assets (c) Deferred revenue expenditure (d) Current liabilities List II (Accepted Principles of Valuation) 1. To be valued at cost less depreciation 2. To be valued at cost or market price whichever is lower 3. To be valued at the maximum figure which might be incurred 4. To be written off within a reasonable period of time Codes : (a) (b) (c) (d) (A) 2 1 4 3 (B) 3 4 1 2 (C) 2 4 1 3 (D) 3 1 4 2 18. Match List-I with List-II and select the correct answer using the code given below the Lists List I (Type of Audit) (a) Statutory Audit (b) Management Audit (c) Cost Audit

(d) Financial Audit List II (Explanation) 1. Judge the correctness of the financial statements and establish their reliability 2. Appraisal of performance of executives 3. Examination of past records 4. Verification of cost records Codes : (a) (b) (c) (d) (A) 3 4 2 1 (B) 1 2 4 3 (C) 3 2 4 1 (D) 1 4 2 3 19. Match List-I with List-II and select the correct answer using the code given below the Lists List-I (Technique of Auditing) (a) Vouching (b) Verification (c) Investigation (d) Valuation List-II (Explanation) 1. It is an enquiry into the value, ownership and title of assets 2. It is testing of the exact value of an asset on the basis of its utility 3. It is the verification of authority and authenticity of transactions as recorded in the books of accounts 4. It is an examination of accounts and records of a business concern with some special purpose Codes : (a) (b) (c) (d) (A) 3 2 4 1 (B) 4 1 3 2 (C) 3 1 4 2 (D) 4 2 3 1 20. Consider the following statements Internal check relates to 1. arrangement of duties of employees. 2. distribution of work in such a way that work of one employee is checked by other employee. 3. review of operations. Which of the statements given above is/are correct ? (A) 1 and 2 only (B) 2 and 3 only (C) 3 only (D) 1, 2 and 3 21. Consider the following categories of documentary evidence from the point of view of the degree of their reliability. 1. Documentary evidence originating from and held by the entity. 2. Documentary evidence originating from third parties and held by the entity. 3. Documentary evidence originating from and held by the third party. 4. Documentary evidence originating from entity and held by the third party. Which one of the following is the correct order (high to low) of their degree of reliability ? (A) 4 - 1 - 3 - 2 (B) 3 - 2 - 4 - 1 (C) 4 - 2 - 3 - 1 (D) 3 - 1 - 4 - 2 22. Which one of the following is not included in the internal check as regards purchases ? (A) Assessment of requirements

(B) Placing orders (C) Despatch of goods (D) Recording and making payments 23. Consider the following statements 1. It is mandatory for all business enterprises to conduct audit of accounts. 2. Audit Note Book is a tool in the conduct of audit. 3. Internal check system is an inbuilt mechanism within an organization to check frauds and errors. Which of the statements given above is/are correct ? (A) 1 only (B) 2 and 3 only (C) 3 only (D) 1, 2 and 3 24. Match List-I with List-II and select the correct answer using the code given below the Lists List-I (Type of Books) (a) Minutes Book (b) Subsidiary Ledger (c) Stores Ledger (d) Log Book List-II (Content) 1. Records of issue of packing materials 2. Records of running hours of machine 3. Records of decisions at a meeting 4. Records entry of receipt from debtors Codes : (a) (b) (c) (d) (A) 3 2 1 4 (B) 1 4 3 2 (C) 3 4 1 2 (D) 1 2 3 4 25. What is the method in which an amount equal to the amount written off as depreciation is invested in outside securities in order to facilitate replacement of an asset at the expiry of its life period, called ? (A) Annuity Method (B) Sinking Fund Method (C) Replacement Method (D) Depletion Method 26. What is Capital Redemption Reserve Account available for ? (A) Redemption of redeemable preference shares (B) Redemption of redeemable debentures (C) Reorganization of share capital (D) Issue of fully paid bonus shares 27. Match List-I with List-II and select the correct answer using the code given below the Lists List I (Item) (a) Earnings per share (b) Cash flow statement (c) Inventory valuation (d) Disclosure of accounting policies List-II (Accounting Standard) 1. AS-3 2. AS-20 3. AS-1 4. AS-2

Codes : (a) (b) (c) (d) (A) 3 1 4 2 (B) 2 4 1 3 (C) 3 4 1 2 (D) 2 1 4 3 28. Government grants related to income as per the Accounting Standard (AS)-12 should be (A) Presented as a credit in the statement of Profit and Loss (B) Presented as a deferred income on the asset side of the balance sheet (C) Presented as a capital grant on the liability side of balance sheet (D) Presented both in the Profit and Loss statement and in the balance sheet 29. What is the renewal fees paid for a patent right ? (A) Capital expenditure (B) Revenue expenditure (C) Deferred revenue expenditure (D) Development expenditure 30. According to the Accounting Standard (AS)-2, the inventory is to be valued at which one of the following ? (A) Actual cost or sales value, whichever is lower (B) Historical cost (C) Net realizable value (D) Historical cost or net realizable value, whichever is lower 31. Match List-I with List-II and select the correct answer using the code given below the Lists List-I (Nature of Expenditures/Receipts) (a) Capital receipts (b) Capital expenditure (c) Revenue expenditure (d) Revenue receipt List II (Example) 1. Sale of fixed assets 2. Improvement of fixed assets 3. Income received as interest 4. Interest on loan for business Codes : (a) (b) (c) (d) (A) 1 2 4 3 (B) 3 4 2 1 (C) 1 4 2 3 (D) 3 2 4 1 32. Which of the following is affected by treatment of an accrued item in accounting ? (A) Profit and Loss A/c only (B) Profit and Loss Appropriation A/c (C) Balance Sheet only (D) Profit and Loss A/c and Balance Sheet 33. Income and expenses for the year 2006 are Fee Received in Cash Rs.24,000 Accrued Fee Rs.6,000 Rent for Chamber Paid Rs.6,000 Outstanding Rent Rs.2,000 Salary Paid to Staff Rs.6,000

Miscellaneous Expenses Paid Rs.200 Salary paid in advance to staff included in the above : Rs. 1,000. What is the income under accrual basis ? (A) Rs. 11,800 (B) Rs. 13,200 (C) Rs. 16,800 (D) Rs. 30,000 34. If Opening Stock Rs.15,000 Purchases Rs.37,500 Direct Expenses Rs.1,500 Closing Stock Rs.7,500 Operating Expenses Rs.3,000 Sales are Rs. 60,000 during the year, what is the net profit ? (A) Rs. 12,000 (B) Rs. 10,500 (C) Rs. 7,500 (D) Rs. 3,000 35. On 1.4.2007, a firm's capital was Rs. 2,00,000, Assets Rs. 2,40,000 and Liabilities Rs. 40,000. It sold goods costing Rs. 10,000 for Rs. 12,000. What will be the position of accounting equation after this transaction has been recorded in accounts ? Assets = Capital + Liabilities (A) 2,42,000 = 2,02,000 + 40,000 (B) 2,52,000 = 2,12,000 + 40,000 (C) 2,30,000 = 2,00,000 + 30,000 (D) 2,22,000 = 1,82,000 + 40,000 36. Which one of the following statements about preparation of financial statements of a limited liability company is correct ? (A) Financial statements should be prepared according to the cash basis of accounting only (B) Financial statements should be prepared according to the accrual basis of accounting only (C) Financial statements should be prepared according to either the cash basis or accrual basis of accounting (D) Financial statements should be prepared according to both the accrual and cash basis of accounting 37. Expenses need to be recorded in the period in which the associated revenues are recognised. This is to be ensured as per which one of the following accounting principles ? (A) Revenue recognition (B) Cost benefit (C) Matching (D) Periodicity 38. How is profit prior to incorporation treated as ? (A) Revenue reserve (B) Secret reserve (C) Capital reserve (D) General reserve 39. Which one of the following has replaced the Budla system in India ? (A) Rolling settlement (B) Trading in equity derivatives (C) Depository system (D) Online trading

40. Which one of the following is not correct ? (A) Mutual Fund ensures its participants a professional management of portfolio selection (B) Mutual Fund schemes can be open-ended and/or closeended (C) Balanced Mutual Fund aims at earning current income and capital appreciation (D) Mutual Fund is an investment company and a merchant banker 41. Which one of the following statements is not correct ? (A) Business firms combine to avoid wasteful competition (B) Business combination is possible only among joint stock companies (C) Business firms may combine to take advantage of patent rights of individual firms (D) During economic depression, small firms are absorbed by financially sound large firms 42. What is the theory of social responsibility that focuses on how companies respond to issues, rather than trying to determine their ultimate social responsibility, called ? (A) Corporate social performance (B) Corporate social responsiveness (C) Stewardship principle (D) Enlightened self-interest 43. What is a systematic evaluation of a company's activities in a given area of social interest such as environmental protection, workplace safety or community involvement, called ? (A) Social responsibility (B) Social accounting (C) Social audit (D) Social forecasting 44. What is cross rate ? (A) A rate of exchange derived from central bank (B) A rate of exchange between two currencies, other than those that form a market's principal rates (C) A rate of exchange derived from the quotations for buying currencies (D) A rate of exchange quoted by a dealer in foreign exchange for selling currencies 45. Which one of the following statements is not correct ? (A) Working capital is made available by the banks to the export sector at subsidized rates of interest (B) Market Development Fund provides the necessary financial assistance for market promotion (C) Export Houses/Star Trading houses are granted additional license against exports made during the preceding year (D) Export profits enjoy a variety of tax concessions in India 46. Which one of the following statements is correct in respect of Duty Drawback Scheme ? (A) Relieving export goods of duties paid for components used for manufacturing the export goods (B) Providing cash incentives to exporters to compensate the duty paid by them in foreign countries (C) Compensating importers to the extent of import duty paid by them for importing life-saving drugs (D) Providing a facility for withdrawing the duty paid by exporters if their exports are rejected in foreign countries 47. In foreign trade, what is the price quoted by a supplier which includes all charges incurred up to door delivery of goods to the buyer, called ? (A) Loco price (B) C.I.F. price (C) Franco price (D) Landed price 48. Consider the following statements

1. Letter of credit cannot be opened by mail. 2. Contracts of export of goods and services against payment to be secured partly or fully beyond 90 days are treated as deferred payment exports. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2 49. Under which principle, all the rights of an insured are transferred to insurance company after making payment of claim ? (A) Subrogation (B) Utmost good faith (C) Contribution (D) Average clause 50. In a marine insurance, when must the insurable interest exist ? (A) At the time of making contract (B) At the time of loss of subject matter (C) Both at the time of making contract and at the time of loss of subject matter (D) At the time of termination of the policy 51. What is/are the consequence(s) of non-registration of partnership firm ? 1. It cannot sue any of its partners. 2. Partners of an unregistered firm can file suits against each other. 3. Partners can sue the firm to enforce their claims. Select the correct answer using the code given below (A) 1 (B) 2 (C) 3 (D) None of the above 52. Consider the following statements In the absence of an agreement, a partner of a firm has the right to 1. claim remuneration for taking part in the management. 2. take part in the conduct and management of business. 3. share the profits of the firm equally with other partners. 4. pledge partnership property as a security for his own private debts. Which of the statements given above is/are correct ? (A) 1 and 4 (B) 2 and 3 (C) 1 only (D) 4 only 53. Match List-I with List-II and select the correct answer using the code given below the Lists List-I (Type of Company) (a) Statutory company (b) Registered company (c) Company limited by shares (d) Company limited by guarantee List-II (Feature) 1. Member's liability is limited to the face value of shares 2. Regulated by the provisions of the Companies Act 3. Generally formed for promotion of culture, art, science, religion etc. 4. Formed under Special Act Codes :

(a) (b) (c) (d) (A) 4 1 2 3 (B) 3 2 1 4 (C) 3 1 2 4 (D) 4 2 1 3 54. Consider the following statements in respect of the Duty Free Import Authorization Scheme. 1. The scheme offers the facility to import the required inputs before exports. 2. The scheme allows the transfer of scrip once the export obligation is complete. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2 55. Under which one of the following is the term Dominant Undertaking defined ? (A) MRTP Act (B) FEMA (C) Companies Act (D) SEBI Directions(Q. 5660) Each of the next five items consists of two statements, one labelled as the Assertion (A) and the other as Reason (R). You are to examine these two statements carefully and select the answers to these items using the codes given below Codes : (A) Both (A) and (R) are individually true and (R) is the correct explanation of (A). (B) Both (A) and (R) are individually true but (R) is not the correct explanation of (A). (C) (A) is true but (R) is false. (D) (A) is false but (R) is true. 56. Assertion (A)A company is accountable to the society since it makes use of community-owned assets and other infrastructural facilities and enjoys concessions provided by State from taxpayers' money. Reason (R)The best way of social responsibility reporting is to prepare a value-added statement which shows the income earned by all the stake-holders. 57. Assertion (A)Income tax paid is not shown on the debit side of the sole proprietor's Profit and Loss account. Reason (R)It is an appropriation of profit and thus goes to Profit and Loss Appropriation Account. 58. Assertion (A)The scope of audit of accounts of a limited company may be restricted by the Board of Directors. Reason (R)The Board of Directors is responsible for adherence to Accounting Standards in preparation of financial statements. 59. Assertion (A)Analytical review procedures are useful only at the time of planning of an audit. Reason (R)Analytical reviews are the test of financial information conducted through a study and review of relationship among financial data. 60. Assertion (A)In dividend stripping or bond washing which is resorted to in some countries, fixedinterest securities are bought when they have gone exdividend and sold before the next dividend is paid. Reason (R)In such countries, dividends are taxed at a higher rate than capital gains. 61. To which one of the following aspects does an established pattern of relationships among the components of an organization refer ? (A) Organization strategy

(B) Organization structure (C) Organization process (D) Organization policy 62. Consider the following statements 1. Authority in an organization is the formal or institutional right to command stemming from official delegation of position. 2. Legitimate power is the right to manage derived from delegation based on ownership or property rights. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2 63. Which one of the following is not correct in respect of the Theory X? (A) It emphasizes that most average human beings avoid to be led, want to lead (B) According to the theory X, the Managers tend to be autocratic (C) The theory X assumes that most human beings must be directly controlled in order to achieve organizational goals (D) The theory X assumes that most individuals have little ambition and want security 64. When Maslow's need hierarchy is compared with Herzberg's two-factor theory of motivation, which of the following statements are correct ? 1. Maslow's psychological needs; security, safety and affiliation or acceptance represent almost the same meanings as Herzberg's maintenance factor. 2. Esteem or status is also a part of maintenance factor. 3. Self-actualization can be compared as a component of motivators as in Herzberg's theory. Select the correct answer using the code given below (A) 1, 2 and 3 (B) 1 and 2 only (C) 2 and 3 only (D) 1 and 3 only 65. Which one of the following is not an element of direction ? (A) Planning and organizing various resources for doing work (B) Continuous training activity in which subordinates are instructed to carry out a particular assignment (C) Motivation of subordinates to try to meet the expectations of manager (D) Maintaining discipline and rewarding those who perform properly 66. Consider the following statements in respect of PERT 1. PERT is a variation of milestone budgeting. 2. PERT employs probabilistic estimate of time required for completion of an activity. 3. PERT also includes the transfer of resources for reduction of duration of completion of a project. Which of the statements given above are correct ? (A) 1, 2 and 3 (B) 1 and 2 only (C) 2 and 3 only (D) 1 and 3 only 67. Some organizations have escalator clause in their labour agreements. What does this clause provide for ? (A) Automatic increase in wage/salary depending on seniority (B) Wage increase depending on output per day by the worker (C) Automatic increase in wage/salary depending upon increase in price index (D) Automatic increase in wage/salary depending on increase in profits of the firm

68. What is an organization structure in which each employee reports to both a functional (or division) manager and to a project (or group) manager, known as ? (A) Strategic business unit (B) Departmentation by customer (C) Matrix structure (D) Departmentation by territory 69. According to force-field theory, every behaviour is the result of equilibrium between which of the following ? (A) Push and pull effect (B) Strong and weak forces (C) Positive and negative forces (D) Driving and restraining forces 70. Life insurance is a contract of which one of the following ? (A) Indemnity (B) Guarantee (C) Contribution (D) Subrogation 71. What is outsourcing of production and concentrating on marketing operations in international business, known as ? (A) Licensing (B) Franchising (C) Contract manufacturing (D) Joint venture 72. Which of the following is not a feature of bonds ? (A) Par value (B) Yield to maturity (C) Coupon rate (D) Maturity 73. On 1st April, 2006, Y Ltd. Issued 1000, 12% debentures of Rs. 100 each at a discount of 6%. These debentures are redeemable in five equal annual instalments at the end of each year. What is the amount of discount to be written off in the first year i.e. on 31st March, 2007, through P & L A/c ? (A) Rs. 2000 (B) Rs. 1800 (C) Rs. 1200 (D) Rs. 600 74. XYZ Ltd. issued 10,000 shares of Rs. 100 each at Rs. 120 per share with Rs. 25 on application, Rs. 45 on allotment including premium, Rs. 20 on first call and Rs. 30 on final call. Govind who held 200 shares did not pay any call money and his shares were forfeited. What is the amount to be credited to Share Forfeiture Account on forfeiture ? (A) Rs. 14,000 (B) Rs. 10,000 (C) Rs. 9,000 (D) Rs. 4,000 75. X Ltd. purchased a car from Maruti Udyog Ltd. for Rs. 5,00,000. As per agreement Rs. 80,000 was to be paid in cash and the balance by issue of shares of Rs. 10 each at a premium of Rs. 5 per share. How many shares should X Ltd. issue to Maruti Udyog Ltd. for the car ? (A) 30,000 shares (B) 29,000 shares (C) 28,500 shares

(D) 28,000 shares 76. A company has issued a 20-year bond at Rs. 1000 par value with a coupon rate of 10 per cent. The required rate of return on similar bonds is 12 per cent. What is the current value of the bond ? (A) Rs. 90533 (B) Rs. 85045 (C) Rs. 83333 (D) Rs. 82020 77. Consider the following statements Current ratio is increased by 1. issue of redeemable preference shares. 2. selling of old furniture for cash. 3. cash realized from debtors. Which of the statements given above are correct ? (A) 1 and 2 only (B) 2 and 3 only (C) 1 and 3 only (D) 1, 2 and 3 78. Which one of the following statements is correct ? When creditors' velocity or creditors' turnover is higher as compared to debtors' velocity, it would (A) improve liquidity (B) reduce liquidity (C) have no effect on liquidity (D) improve financial position 79. Sundry Debtors Rs.15,000 Bills Receivable (B/R) Rs.12,500 Cash at Bank Rs.17,500 Stock Rs.15,000 Profit Rs.20,000 Creditors Rs.25,000 Bills Payable (B/P) Rs.15,000 Sales Rs.1,00,000 What is the Acid Test Ratio ? (A) 15 : 1 (B) 1125 : 1 (C) 16 2/3% (D) 50% 80. Which one of the following transactions changes the current ratio ? (A) Purchase of goods for cash (B) Plant acquired on account (C) Sold goods on credit (D) Debentures converted into equity capital 81. Few items of P/L A/c of a company are Sales Rs.1,60,000 Closing stock Rs.38,000 Non-operating Expenses Rs.800 Non-operating Income Rs.4,800 Net Profit Rs.28,000 What is the Operating Profit Ratio ? (A) 18%

(B) 20% (C) 15% (D) 57% 82. Net profit after tax of Rs. 2,00,000 is Rs. 4,00,000. Share capital is Rs. 8,00,000 and revenue reserve is Rs. 2,00,000. What is rate of return on equity ? (A) 40% (B) 50% (C) 60% (D) 75% 83. Members of a company may apply to which one among the following for relief under the Companies Act, 1956 in cases of oppression ? (A) Central Government (B) High Court of Judicature (C) National Company Law Tribunal (D) National Company Law Appellate Tribunal 84. A company limited by shares has to call the statutory meeting within a period of not less than one month and not more than six months. This period is counted with reference to which one of the following ? (A) The date of incorporation (B) The date at which the company is entitled to commence business (C) The date of actual receipt of certificate of incorporation (D) The date of actual commencement of business 85. Which among the following is eligible to issue Shelf Prospectus ? (A) Any company contemplating for public issue of securities (B) Any public financial institution (C) Only manufacturing companies (D) Only foreign companies engaged in trading in India 86. Which of the following companies do not have the obligation to get its Articles of Association registered along with the Memorandum of Association ? (A) Public Company limited by shares (B) Unlimited companies (C) Private companies limited by shares (D) Companies limited by guarantee 87. What does management audit imply ? (A) Complete audit (B) Detailed audit (C) Efficiency audit (D) Interim audit 88. Which one of the following statements is correct ? (A) Internal audit and Management audit are the same (B) Internal audit and statutory audit are the same (C) Internal audit is compulsory in all cases (D) Statutory audit of company accounts is compulsory 89. Where does an auditor of a cooperative society submit the audit report ? (A) To the managing committee of the society only (B) To the Registrar of Cooperative Societies of the State concerned only (C) To the State Assembly concerned (D) To the Registrar of Cooperative Societies of the State concerned and a copy to the society

90. Which one of the following statements is correct ? (A) Audit of an educational institution is compulsory if it is run by a charitable trust (B) A club is treated as a commercial establishment (C) The accounts of a charitable trust can be audited by any person who belongs to accountancy profession (D) Audit of a charitable trust is not compulsory under law 91. Consider the following statements The vouching of remuneration to directors involve the checking of 1. special resolution. 2. statement of accounts. 3. approval note of the Central Government. 4. Minutes Book. Which of the statements given above are correct ? (A) 1 and 2 only (B) 2 and 3 only (C) 1, 2 and 4 (D) 1, 3 and 4 92. Match List-I with List-II and select the correct answer using the code given below the Lists List-I (Liability of Auditor) (a) Liability for negligence (b) Liability for misfeasance (c) Criminal liability (d) Liability to third party List-II (Example) 1. Breach of trust or duty 2. Untrue statement in the prospectus 3. Not liable for untrue statement in prospectus 4. Dividends paid out of capital Codes : (a) (b) (c) (d) (A) 4 3 2 1 (B) 2 1 4 3 (C) 4 1 2 3 (D) 2 3 4 1 93. Consider the following statements 1. Corporate governance requires the appointment of audit committees by public limited companies. 2. The members of an audit committee should be those non-executive directors who do not represent the controlling group. 3. The independence of the statutory auditors is likely to be affected if he deals directly with the audit committee. Which of the statements given above are correct ? (A) 1 and 2 only (B) 2 and 3 only (C) 1 and 3 only (D) 1, 2 and 3 94. Under the head Secured Loans the following are disclosed 1. Loans and Advances from banks. 2. Debentures. 3. Loans and Advances from subsidiaries. 4. Other loans and advances.

What is the correct chronological order of disclosure of the items given above in balance sheet of a company ? (A) 3 - 1 - 2 - 4 (B) 2 - 4 - 3 - 1 (C) 3 - 4 - 2 - 1 (D) 2 - 1 - 3 - 4 95. Consider the following statements Accounting control comprises 1. The plan of organization concerned with decision process. 2. The plan of organization concerned with safeguarding of assets. 3. The procedure concerned with safeguarding of assets. Which of the statements given above are correct ? (A) 1 and 2 only (B) 2 and 3 only (C) 1 and 3 only (D) 1, 2 and 3 96. Which of the following statements is/are correct ? 1. Internal control includes quality control. 2. Internal control is compulsory for all forms of business organizations. 3. Internal control helps external auditor to design suitable audit programme for client's organization. Select the correct answer using the code given below (A) 1 only (B) 2 only (C) 3 only (D) 1 and 3 97. Which of the following is not a part of the usual contents of the current file and audit working papers ? (A) A copy of accounts on which auditors are reporting (B) Audit programme (C) Minutes of the meetings (D) Memorandum of Association and Articles of Association 98. Consider the following statements Audit working papers are maintained because 1. they act as a guide to subsequent audit. 2. they verify the arithmetical accuracy of the books of accounts. 3. they provide evidence of the work performed by the auditor. Which of the statements given above are correct ? (A) 1 and 2 only (B) 2 and 3 only (C) 1 and 3 only (D) 1, 2 and 3 99. Match List-I with List-II and select the correct answer using the code given below the Lists List-I (Technique) (a) Rotation of Duties (b) Random Sampling (c) Trend Analysis (d) Cash verification List-II (Auditing Procedure) (1) Internal control (2) Physical examination (3) Selective verification (4) Overall assessment

Codes : (a) (b) (c) (d) (A) 1 4 3 2 (B) 2 3 4 1 (C) 1 3 4 2 (D) 2 4 3 1 100. Consider the following stages an auditor has to undergo before commencing an audit 1. Ascertaining the scope of audit work. 2. Gaining knowledge about business of the client. 3. Going through the agreement with the client. 4. Instructions to and information from the client. What is the correct sequence of the above stages ? (A) 2 - 1 - 3 - 4 (B) 3 - 4 - 2 - 1 (C) 2 - 4 - 3 - 1 (D) 3 - 1 - 2 4 101. Which one of the following statements is correct ? (A) If an asset is used by a company, it should be owned by the company (B) Verification of liabilities means that the amounts of current and long-term liabilities shown in the balance sheet are correct (C) Vouching and verification means the same thing (D) It is not the duty of an auditor to confirm the physical existence and ownership of an asset 102. The following steps should be adopted by an auditor for verification of land 1. To examine that the land has been shown in the balance sheet at its original cost. 2. To ensure that the cost of land also includes the expenses like broker's commission, legal expenses, improvement expenses etc. 3. To get a certificate from solicitor of the client regarding validity of the title deeds. 4. To examine that the land is not subject to any charge or mortgage. What is the correct sequence of the above steps to be followed by an auditor during the course of auditing ? (A) 1 - 4 - 2 - 3 (B) 3 - 2 - 4 - 1 (C) 1 - 2 - 4 - 3 (D) 3 - 4 - 2 1 103. What does payout ratio mean ? (A) Ratio of debtors to creditors (B) Ratio of profit distributed to profit retained (C) Ratio of dividends per share and earnings per share (D) Retained earnings 104. Consider the following statements 1. Premium on issue of shares is transferred to General Reserve Account. 2. For declaration of bonus shares out of General Reserve, a resolution in the shareholders' meeting is necessary. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2 105. How is Calls in arrear shown in the balance sheet on the liability side ? (A) By deducting the amount from the called up capital

(B) Under the heading Reserves and Surplus (C) By deducting the amount from Capital Reserve (D) By deducting the amount from the Share Forfeited Account 106. Match List-I with List-II and select the correct answer using the code given below the Lists List-I (Activity) (a) Admission of a partner (b) Partnership dissolution (c) Rectification of errors (d) Transfer of realization profit List-II (Account) (1) Capital Accounts (2) Suspense Account (3) Revaluation Account (4) Realization Account Codes : (a) (b) (c) (d) (A) 3 4 2 1 (B) 2 1 3 4 (C) 3 1 2 4 (D) 2 4 3 1 107. The balance of old provision for doubtful debts on 1-4-2006 was Rs. 10,000. The bad debts written off during the year 2006-07 amounted to Rs. 12,000, and the new provision requiredon 31-3-2007 was Rs. 15,000. What is the total amount to be debited to profit and loss account on account of bad debts and the provision for doubtful debts ? (A) Rs. 37,000 (B) Rs. 27,000 (C) Rs. 17,000 (D) Rs. 15,000 108. A and B sharing profit in the ratio of 3 : 2 and having capitals of Rs. 30,000 (for A) and Rs. 15,000 (for B), decided to dissolve their firm. After paying off all liabilities, cash realized from various assets is Rs. 15,000. How will this amount be distributed to A and B ? (A) ARs. 9,000 and BRs. 6,000 (B) ARs. 10,000 and BRs. 5,000 (C) ARs. 7,500 and BRs. 7,500 (D) ARs. 12,000 and BRs. 3,000 109. X and Y sharing profits in the ratio of 7 : 3 admit Z on 37th share in the new firm. Z takes 27 th from X and 17th from Y. What is the new ratio among X, Y and Z ? (A) 7 : 3 : 3 (B) 4 : 2 : 15 (C) 14 : 6 : 15 (D) 29 : 11 : 30 110. Given Opening inventory : Rs. 3,500 Closing inventory : Rs. 1,500 Cost of goods sold : Rs. 22,000 What is the amount of purchase ? (A) Rs. 20,000 (B) Rs. 24,000 (C) Rs. 27,000

(D) Rs. 17,000 111. Consider the following Amortization refers to writing off the value of (1) tangible assets (2) intangible assets (3) fictitious assets Which of the above is/are correct ? (A) 1 and 2 (B) 2 and 3 (C) 1 only (D) 2 only 112. The following information is disclosed by A Rs. Provision for doubtful debts as on 1.1.2006 : 6,000 Bad debts written off during the year 2006 : 1,200 Total debtors as on 31.12.2006 : 80,000 A provision for Doubtful Debts to be made @ 5% What is the amount to be shown on the credit side of P/L A/c ? (A) Rs. 4,800 (B) Rs. 2,400 (C) Rs. 1,200 (D) Rs. 800 113. What is reduction of paid-up share capital called ? (A) External reconstruction (B) Internal reconstruction (C) Reorganization (D) Redemption of capital 114. Under which of the following methods of depreciation the amount of an asset is never reduced to zero ? (A) Straight line method (B) Diminishing balance method (C) Sums of Years Digit method (D) Annuity method 115. An insurance claim of Rs. 300 was accepted in respect of stock (inventory) of Rs. 500, which was destroyed by fire. Rs. 200 not covered by insurance should be debited to which one of the following ? (A) Stock account (B) Trading account (C) Profit and loss account (D) Goodwill account 116. Debtors turnover ratio is 4. What is the average collection period ? (A) 5 months (B) 4 months (C) 3 months (D) 2 months 117. The net profits of a business after providing for taxation for the past five years are Rs. 80,000, Rs. 85,000, Rs. 92,000, Rs. 1,05,000 and Rs. 1,18,000. Capital employed in the business is Rs. 8,00,000. Normal rate of return is 10%. What is the value of goodwill on the basis of capitalization of super profit method ? (A) Rs. 1,00,000 (B) Rs. 1,50,000 (C) Rs. 1,60,000

(D) Rs. 1,80,000 118. Given Purchases Rs.50,000 Sales Rs.90,000 Closing Stock Rs.7,000 Manufacturing Exp. Rs.5,000 Rate of gross profit Rs.331 3% on cost What is the opening stock ? (A) Rs. 20,000 (B) Rs. 19,500 (C) Rs. 22,500 (D) Rs. 25,000 119. A particular firm provided the following data for a year Current Ratio 25 : 1 Liquid Ratio 15 : 1 Net Working Capital Rs. 3,00,000 What are the current assets and current liabilities of this firm, respectively ? (A) Rs. 3,00,000 and Rs. 1,50,000 (B) Rs. 5,00,000 and Rs. 2,00,000 (C) Rs. 2,00,000 and Rs. 5,00,000 (D) Rs. 3,00,000 and Rs. 1,00,000 120. Depreciation is a process of which one of the following ? (A) Valuation of assets (B) Allocation of acquisition cost over the estimated useful life of the asset (C) Allocation of realizable value over the estimated useful life of the asset (D) Estimating the market value of the asset on the balance sheet date

Answers with Hints

1. (B) 2. (C) 3. (A) 4. (B) 5. (A) Small shareholders of a public company will be able to appoint (elect) one director on the Board of Company if the company has a paid up capital of Rs. 5 crore or more, or has 1000 or more small shareholders as per section 252 Companies (Amendment) Act, 2000. 6. (C) 7. (A) 8. (D) 7S McKinsey Model's elements includes : (i) Strategy, (ii) Structure, (iii) System, (iv) Shared value, (v) Skills, (vi) Style, (vii) Staff 9. (C) 10. (D) 11. (C) 12. (C) Funds from operation computed as follows : Net profit Rs.2,00,000 Add : Preliminary Exp. Rs.20,000 Depreciation Rs.40,000 = 2,60,000 Less : Gain on sale of machinery Rs.10,000 Funds from operation = 2,50,000 13. (C) 14. (C) 15. (D) 16. (A) 17. (A) 18. (C) 19. (C) 20. (A) According to Spicer and Pegler internal check is an arrangement of staff duties whereby no one person is allowed to carry through and record every aspect of a transaction so that, without collusion

between any two or more persons, fraud is prevented and at the same time the possibilities of errors are reduced to a minimum. 21. (B) 22. (C) 23. (C) 24. (C) 25. (B) 26. (D) 27. (D) 28. (D) 29. (B) 30. (D) 31. (A) 32. (D) 33. (B) 34. (B) 35. (B) 36. (B) 37. (A) 38. (C) 39. (A) 40. (D) 41. (B) 42. (A) 43. (C) 44. (B) 45. (C) 46. (C) 47. (C) 48. (C) 49. (A) 50. (B) 51. (D) 52. (B) 53. (D) 54. (C) 55. (C) 56. (A) 57. (D) 58. (D) 59. (A) 60. (B) 61. (B) 62. (C) 63. (A) 64. (B) 65. (C) 66. (C) 67. (D) 68. (C) An organisation in which each employee reports to both a functional manager and to a project manager as Matrix Structure of organisation. 69. (D) 70. (B) 71. (B) 72. (B) 73. (C) 74. (B) 75. (D) 76. (A) 77. (A) 78. (C) 79. (B) 80. (B) 81. (C) 82. (A) 83. (C) 84. (B) 85. (B) 86. (A) 87. (C) 88. (D) 89. (B) 90. (A) 91. (D) 92. (C) 93. (A) 94. (D) 95. (B) 96. (D) 97. (D) 98. (C) 99. (C) 100. (D) 101. (B) 102. (B) 103. (C) 104. (B) 105. (A) 106. (A) 107. (C) 108. (A) 109. (D) 110. (A) 111. (D) 112. (D) 113. (B) 114. (B) 115. (C) 116. (C) 117. (C) 118. (B) 119. (B) 120. (B)

R.A.S./R.T.S. (Pre.) Examination, 2008

(Held on 7-1-2009)

Commerce : Solved Paper

1. The minimum paid-up share capital for a public company shall be (A) Rs. 1 lakh (B) Rs. 2 lakhs (C) Rs. 3 lakhs (D) Rs. 5 lakhs Ans : (D) 2. Internal activity of a company is going to be performed according to established regulations. This assumption is provided as a right by (A) Doctrine of Indoor Management (B) Doctrine of Constructive Notice (C) Doctrine of Ultravires (D) Doctrine of Intravires Ans : (A) 3. A public company can start its business operations after getting (A) Certificate of Incorporation (B) Minimum Subscription (C) Certificate of Commencement of Business (D) Permission of the Controller of Capital Issue Ans : (C) 4. Under Section 275 of the Com panies Act, 1956 a person can become director in public company of not more than (A) 5 companies (B) 10 companies (C) 15 companies (D) 20 companies Ans : (C) 5. Articles of Association can be altered by passing

(A) An ordinary resolution in Annual General Meeting (B) A special resolution in Annual General Meeting (C) A resolution with special notice (D) Without any resolution Ans : (B) 6. In case of Board Meetings the Quorum must be present (A) At the commencement of the meeting (B) At the termination of the meeting (C) Throughout the meeting (D) At the commencement and termination both Ans : (A) 7. In a public company the minimum number for having a Quorum in a meeting is (A) 2 (B) 3 (C) 5 (D) 7 Ans : (C) 8. The capital issues of public limited companies are subject to guidelines issued by (A) Reserve Bank of India (B) Central Government (C) Central Bank of India (D) Securities & Exchange Board of India (SEBI) Ans : (D) 9. Disinvestment of shares means (A) To sale the shares of private company to public (B) To sale the shares of public company to the public (C) To sale the shares of Government company to the public (D) To sale of shares by holding company to its subsidiary company Ans : (B) 10. When the existing companies raise additional funds by issue of shares to the existing shareholders in proportion to their existing shareholdings, it is called (A) Buyback of shares (B) Issue of shares at premium (C) Issue of shares at discount (D) Right shares issue Ans : (D) 11. Bombay Stock Exchange Sensex consists of script as on 31st March, 2005. (A) 10 (B) 20 (C) 30 (D) 40 Ans : (C) 12. The basic aim of Securities and Exchange Board of India (SEBI) is to (A) Develop an effective and efficient monitoring and control system for the Indian Capital Market (B) To help Bombay Stock Exchange only (C) To help National Stock Exchange of India Ltd. only (D) To help OTC Exchange of India only Ans : (A)

13. Who is Father of Scientific Management ? (A) Henry Fayol (B) Elton Mayo (C) Chester Bernard (D) F. W. Taylor Ans : (D) 14. Principle of Unity of Command means (A) Unity of directions (B) To receive orders from one officer only (C) A fixed place for every person (D) Proper delegation to subordinates Ans : (B) 15. Managerial Planning is a (A) Middle Level Function (B) Lower Level Function (C) Top Level Function (D) All Level Function Ans : (D) 16. Organisation is the foundation of management. This statement is given by (A) Henry Ford (B) Haney (C) Keeling (D) Lansberry Fish Ans : (A) 17. The number of subordinates a superior can effectively handle is called (A) Cooperation (B) Coordination (C) Supervision (D) Span of control Ans : (D) 18. In Need Hierarchy Theory of Abraham H. Maslow, Self Actualisation needs are at level (A) Lower level needs (B) Middle level needs (C) Higher level needs (D) Highest level needs Ans : (A) 19. Motivation - Hygiene Theory was propounded by (A) Abraham H. Maslow (B) Fredrick Herzberg (C) Peter F. Druker (D) Argyris Chris Ans : (B) 20. Carrot and Stick principle is given in Theory (A) McGregor Theory X (B) McGregor Theory Y (C) William Ouchi Theory Z (D) None of the above Ans : (C)

21. Organisation is a Management Process by which people, functions and physical factors are brought together to form a controllable unit. This definition is given by (A) Haney (B) Kelling B. Lewis (C) Oliver Sheldon (D) Cornell Ans : (C) 22. Out of the following forms, which form of organisation is the oldest one ? (A) Line and staff organisation (B) Functional organisation (C) Committee organisation (D) Line organisation Ans : (D) 23. A body of persons elected or appointed to meet on an organised basis for the discussion and dealing of matters brought before it. It is called (A) Functional organisation (B) Formal organisation (C) Committee organisation (D) Informal organisation Ans : (C) 24. Due to coordination (A) There is a unity of order (B) There is a unity of direction (C) There is a leadership (D) Employees are motivated Ans : (A) 25. In Direction who is given importance ? (A) To machines (B) To paper work (C) To man (D) To production Ans : (C) 26. The Essence of Control is (A) To take decision (B) To take corrective action (C) To make enquiry (D) To motivate Ans : (B) 27. An annual general meeting may be called after giving shorter notice instead of 21 clear days, if consent is accorded by (A) All the directors of company (B) All the members entitled to vote there at (C) Majority of members entitled to vote there all (D) None of the above Ans : (B) 28. The position of a Company Secretary is like that of a hub in a bicycle wheel. This statement shows the (A) Importance of Company Secretary

(B) Rights of Company Secretary (C) Duties of Company Secretary (D) Liabilities of Company Secretary Ans : (A) 29. The first Secretary of the company is appointed by (A) Shareholders (B) Promoters (C) Government (D) Directors Ans : (B) 30. Appointment of full time Company Secretary is compulsory in all those companies, whose paidup share capital is (A) Rs. 50 lakhs or more (B) Rs. 1 crore or more (C) Rs. 2 crores or more (D) Rs. 3 crores of more Ans : (C) 31. A meeting of the shareholders held only once during the life time of the company is known as (A) Meeting of the Directors (B) Meeting of the Creditors (C) Extraordinary General Meeting (D) Statutory Meeting Ans : (D) 32. For calling the Extraordinary General Meeting a clear notice of days must be given to all the members. (A) 7 (B) 15 (C) 21 (D) 30 Ans : (C) 33. Appointment of a person who is a Director, as a Secretary in the Company would require approval of the company by (A) Special Resolution (B) Ordinary Resolution (C) Resolution by circulation (D) None of the above Ans : (A) 34. The first Stock Exchange in India was established in (A) Calcutta (B) Delhi (C) Bombay (D) Madras Ans : (C) 35. Blue Chips Shares mean (A) Those shares which are listed in Stock Exchange (B) Those shares whose guarantee is given by Government (C) Those shares on whom dividend is paid at higher rate regularly (D) Those shares which are issued at first time Ans : (C)

36. FEMA stands for (A) Foreign Exchange Management Act (B) Funds Exchange Management Act (C) Finance Enhancement Monetary Act (D) Future Exchange Management Act Ans : (A) 37. What of the following is false about W.T.O. ? (A) It is the main organ for implementing the Multilateral Trade Agreement (B) It is global in its membership (C) It has far wider scope than GATT (D) Only countries having more than prescribed level of total GDP can become its member Ans : (D) 38. Convertibility of the rupee implies (A) Being able to convert rupees notes into gold (B) Allowing the value of the rupee to be fixed by marketforces (C) Freely permitting the conversion of rupee to other major currencies and vice versa (D) Developing an international market for currencies in India Ans : (C) 39. has been founded to act as permanent watchdog on the international trade. (A) ISRD (B) ADS (C) WTO (D) DIMF Ans : (C) 40. Which of the following statement is correct ? (A) The disinvestment programme has been successfully carried out in India (B) Privatisation up to 100% has been carried out in all the PSU in India (C) Under strategic sale method of disinvestment, the government sells a major share to a strategic partner (D) None of the above Ans : (C) 41. The present World Economic Depression first of all, started from which country ? (A) U.S.A. (B) U.K. (C) France (D) India Ans : (A) 42. Which, institution is known as the Soft Loan Window of World Bank ? (A) I.F.C. (International Financial Corporation) (B) I.D.A. (International Development Association) (C) I.M.F. (International Monetary Fund) (D) Indian Development Forum Ans : (B) 43. Which is not a insurable risk ? (A) Accident Risk (B) Loss of Crops Risk (C) The Risk of Trading in New Market (D) The Risk of Sinking of a Ship

Ans : (C) 44. The Life Insurance in India was nationalised in the year (A) 1870 (B) 1956 (C) 1960 (D) 1966 Ans : (B) 45. Fire Insurance is based on the principle of (A) Utmost Good faith (B) Insurable Interest (C) Indemnity (D) Cooperation Ans : (C) 46. In order to reduce the risk of heavy insurance the insurer passes on some business to the other company, it is called (A) Reinsurance (B) Double Insurance (C) Joint Insurance Policy (D) Separate Insurance Ans : (A) 47. Contents of Marine Insurance include (A) Insurance of Cargo only (B) Insurance of Freight only (C) Insurance of Hull only (D) Insurance of Cargo, Freight & Hull Ans : (D) 48. The object of Agenda is to inform (A) About the profitability and activity (B) About the progress of company (C) About the matter in sequence to be discussed in the meeting (D) About the routine matters Ans : (C) 49. The Branch of Accounting which is concerned with the processing and presenting data for decision making is known as (A) Common Dollar Accounting (B) Social Accounting (C) Cost Accounting (D) Management Accounting Ans : (D) 50. Final accounts prepared in narrative style are in (A) Horizontal form (B) Accounts form (C) Vertical form (D) None of the above Ans : (C) 51. According to Balance Sheet equation concept, the capital will be (A) Capital = Liabilities Assets (B) Capital = Fixed Assets

Current Assests (C) Capital = Assets Liabilities (D) Capital = Assets + Liabilities Ans : (C) 52. In common size Balance Sheet analysis we evaluate (A) Increase or decrease over two years is analysed (B) Only increase over two years is analysed (C) Only decrease over two years is analysed (D) All assets and liabilities are expressed in terms of percentage of total Ans : (D) 53. Increase in fixed asset due to purchase is (A) Source of fund (B) Fund from operation (C) Use of fund (D) None of the above Ans : (C) 54. For the purpose of preparation of fund flow statement, fund means (A) Total resources (B) Cash/bank balances (C) Current Assets (D) Working capital Ans : (D) 55. The following data, relates to manufacturing company for the year 2006-07 Net Profit as per P & L A/cRs. 2,40,000; DepreciationRs. 80,000; Goodwill written-offRs. 40,000, Profit on Sale of Fixed AssetsRs. 16,000, Proposed DividendRs. 96,000. The fund from operation would be (A) Rs. 4,40,000 (B) Rs. 4,00,000 (C) Rs. 6,40,000 (D) None of the above Ans : (D) 56. Total sales is Rs. 7,60,000, cash sales Rs. 30,000 collection period is 25 days, debtors at Balance Sheet date will be (A) Rs. 80,000 (B) Rs. 70,000 (C) Rs. 60,000 (D) Rs. 50,000 Ans : (D) 57. Price earning ratio is 8333% and E.P.S. is Rs. 30. The market price of equity share will be (A) Rs. 3333 (B) Rs. 6667 (C) Rs. 20 (D) Rs. 25 Ans : (D) 58. If the current ratio is 2, current assests are worth Rs. 1,600, if current ratio is not allowed to fall below 15, how much additional can be borrowed by the company on the short term basis ? (A) Rs. 400 (B) Rs. 600 (C) Rs. 2,733

(D) Rs. 800 Ans : (A) 59. Rate of Gross Profit on cost is 25%. Total sales is Rs. 1,00,000 and Average Stock is Rs. 1,60,000. Stock Turnover Ratio will be (A) 05 times (B) 08 times (C) 010 times (D) 04 times Ans : (A) 60. Average stock of firm is Rs. 80,000, the opening stock is Rs. 10,000 less than closing stock. Find opening stock. (A) Rs. 95,000 (B) Rs. 85,000 (C) Rs. 90,000 (D) Rs. 75,000 Ans : (D) 61. Current Ratio is 375, Acid Test Ratio is 125 Stock Rs. 3,75,000, calculate workin g capital. (A) Rs. 3,00,000 (B) Rs. 4,00,000 (C) Rs. 4,12,500 (D) Rs. 4,25,000 Ans : (C) 62. From the information given below, calculate Debt service coverage Ratio Net profit after interest and Tax Rs. 40,000, Depreciation Rs. 5,000, Rate of Income Tax 50%, 10% Mortgage Debentures Rs. 60,000. Fixed Interest Charges Rs. 6,000, Debenture Redemption Fund Appropriation of Outstanding Debentures 10%. (A) 406 times (B) 506 times (C) 606 times (D) 706 times Ans : (A) 63. Share premium account can be used for (A) Paying tax liability (B) Meeting the cost of issue of shares or debentures (C) Paying Dividend on shares (D) Meeting the loss on sale of old asset Ans : (B) 64. Ploughing-back of profits means (A) Dividend declared but not claimed by shareholders (B) Non-declaration of dividend in any year (C) Profits earned from illegal sources and employed in business (D) Retaining the earnings of business for future expansion programme Ans : (D) 65. As per Schedule VI of the Companies Act, 1956, Forfeited Share Account will be (A) Added to paid up capital (B) Deducted from called up capital (C) Added to capital reserve (D) Shown as a revenue reserve Ans : (B)

66. A company invited application for subscription of 5,000 shares. The application were received for 6,000 shares. The shares were allotted on pro-rata basis. If X has applied for 180 shares how many shares would be allotted to him ? (A) 180 shares (B) 200 shares (C) 150 shares (D) 175 shares Ans : (C) 67. Consider the following information pertaining to K Ltd. on September 4, 2005, the company issued 12,000 7% debentures having a face value of Rs. 100 each at a discount of 25%. On September 12, the company issued 25,000 preference shares of Rs. 100 each. On September 29, the company redeemed 30,000 preference shares of Rs. 100 each at a premium of 5% together with one month dividend @ 6% p.a. thereon. Bank balance on August 31, 2005 was Rs. 30,00,000. After effecting the above transaction, the Bank Balance as on September 30, 2005 will be (A) Rs. 35,15,000 (B) Rs. 33,80,000 (C) Rs. 33,45,000 (D) Rs. 35,05,000 Ans : (A) 68. The balance appearing in the books of a company at the end of year were CRR A/c Rs. 50,000, Security Premium Rs. 5,000, Revaluation Reserve Rs. 20,000, P & L A/c (Dr) Rs. 10,000. Maximum amount available for distribution of Bonus Share will be (A) Rs. 50,000 (B) Rs. 55,000 (C) Rs. 45,000 (D) Rs. 57,000 Ans : (B) 69. R. G. Ltd. purchased machinery from K.G. Company for a book value of Rs. 4,00,000. The consideration was paid by issue of 10%. Debenture of Rs. 100 each at a discount of 20%. The debenture account will be credited by (A) Rs. 4,00,000 (B) Rs. 5,00,000 (C) Rs. 3,20,000 (D) Rs. 4,80,000 Ans : (A) 70. Depletion method of depreciation is used in case of (A) Cattle, Loose Tools, etc. (B) Mines, Quarries, etc. (C) Machinery, Building, etc. (D) Books Ans : (B) 71. V. V. Bros. purchased a machine on 1st October, 2003 at cost Rs. 2,70,000 and spent Rs. 30,000 on its installation. The firm written off depreciation 10% per annum on original cost every year. The books are closed on 31st March every year. The machine is sold on 30 September, 2006 for Rs. 1,90,000. How much amount will be transferred to P & L A/c as loss on sale of machinery ? (A) Rs. 10,000 (B) Rs. 20,000 (C) Rs. 30,000 (D) Rs. 40,000 Ans : (B)

72. Accounting for Intangible Assets are related to (A) AS - 10 (B) AS - 12 (C) AS - 24 (D) AS - 26 Ans : (D) 73. Indian Accounting Standard 28 is related to (A) Accounting for taxes on income (B) Financial Reporting of Interests in Joint Venture (C) Impairment of Assets (D) Provisions, Contingent Liabilities and Contingent Assets Ans : (C) 74. Recording of capital contributed by the owner as liability ensures the adherence of principle of (A) Consistency (B) Going concern (C) Separate entity (D) Materiality Ans : (C) 75. A company made the purchases of an item during its financial year. January 2007 200 @ Rs. 50 each May 2007 400 @ Rs. 60 each August 2007 600 @ Rs. 70 each Novem- 2007 300 @ Rs. 80 each ber Closing inventories were 500 articles. Find out the value of closing stock as per Weighted Average Method (A) 33,33333 (B) 16,66666 (C) 66,66667 (D) 96,66666 Ans : (A) 76. A fire occurred in the premises of M Ltd. on 30th September, 2007. The stock was destroyed except to the extent of Rs. 10,000. From the information given below, calculate the value of stock burnt by fire on 30th September, 2007. Stock on 1st April 2006, Rs. 90,000, Purchases less returns during 2006-07 10,00,000, Sales less returns during 2006-07, 15,00,000; Stock on 31st March, 20071,80,000, Purchases less returns from 1st April 2007 to 30th September 2007, 7,00,000. Sales less returns from 1st April, 2007 to 30th September 2007, 10,00,000. It was the practice of the company to value stock less 10% (A) 3,00,000 (B) 2,90,000 (C) 1,90,000 (D) 2,80,000 Ans : (B) 77. Social Accounting means (A) Accounting for social benefits and social costs (B) Accounting for Government Revenue & Govt. Cost (C) Accounting for private revenue and private cost (D) None of the above Ans : (A) 78. It is given that cost of stock is Rs. 100. However, its market price is Rs. 98 (buying) and Rs. 140

(selling). If the market price is interpreted as the replacement cost, then the stock should be valued at (A) Rs. 98 (B) Rs. 100 (C) Rs. 140 (D) Rs. 40 Ans : (A) 79. If the goods purchased are in transit, then the Journal Entry at the end of the period will be (A) Goods in Transit A/c Dr. To Suppliers A/c (B) Goods in transit A/c Dr. To Purchases A/c (C) Stock A/c Dr. To Goods in Transit A/c (D) Suppliers A/c Dr. To Goods in Transit Ans : (B) 80. Calculate Return on Investment/ Return on Proprietors fund. Gross profit of a firm is Rs. 3,20,000, Operating expenses Rs. 1,00,000, Taxes Rs. 20,000, Owners fund Rs . 5,00,000, Debenture Interest Rs. 50,000 (A) 20% (B) 30% (C) 40% (D) 50% Ans : (B) 81. The following figures are presented to you Year Sales Profit/Loss 1999 Rs. 1,00,000 Rs. 10,000 (Loss) 2000 Rs. 2,50,000 Rs. 20,000 (Profit) Calculate Profit Volume Ratio. (A) 5% (B) 10% (C) 15% (D) 20% Ans : (D) 82. The following particulars relate to manufacturing factory for the month of March 2008. Variable cost per unit Rs. 11; Fixed factory overhead Rs. 5,40,000; Fixed selling overhead Rs. 2,52,000; Variable selling cost Rs. 3; Sales Price per unit Rs. 20. Find out the Break-Even Point in rupees (A) Rs. 26,40,000 (B) Rs. 30,80,000 (C) Rs. 25,20,000 (D) Rs. 27,40,000 Ans : (C) 83. The following information is obtained from the records of K Co. Ltd. Sales (1,00,000 units) Rs. 1,00,000 Variable cost Rs. 40,000 Fixed cost Rs. 30,000 Find out margin of safety. (A) Rs. 20,000 (B) Rs. 25,000 (C) Rs. 30,000 (D) Rs. 50,000 Ans : (D) 84. A manufacturer is operating at 50% of its capacity, due to competition. The following are the details. Raw materials Rs. 6 per unit, Direct Labour Rs. 4 per unit. variable overhead - Rs. 3 per unit, fixed

overhead - Rs. 2 per unit, output 15,000 units, total cost Rs. 2,25,000, sales value Rs. 2,10,000, loss Rs. 15,000. A foreign customer wants to buy 6,000 units at Rs. 1350 per unit and the company does not know whether to accept or not as it is suffering losses at the current level. Advise what he should do ? (A) Accept the offer (B) Reject the offer (C) Remains indifferent (D) None of the above Ans : (B) 85. I took the order for 5,000 units at Rs. 50 each because I got more than the cost incurred to produce them, said the Works Manager, and produced the following figures

Particulars Variable costs Fixed costs Total costs Cost/unit

Before accepting the order Rs. 2,50,000 7,50,000 10,00,000 40

After accepting the order Rs. 4,00,000 8,51,000 12,51,000 4170

Analyse the above figures and the decision taken. Acceptance of this offer has (A) Lowered his profit by Rs. 500 (B) Lowered his profit by Rs. 1,000 (C) Lowered his profit by Rs. 1,500 (D) Lowered his profit by Rs. 2,000 Ans : (C) 86. The following data are provided to you. Fixed cost - Rs. 20,000; Selling price per unit - Rs. 25, Variable cost per unit - Rs. 20. Find out selling price per unit if B.E.P. is brought down to 2,000 units. (A) Rs. 30 (B) Rs. 40 (C) Rs. 50 (D) Rs. 60 Ans : (C) 87. Among the following which is not an error of commission ? (A) Wrong totalling (B) Recording with wrong amount (C) Wrong posting (D) Escape from posting Ans : (D) 88. Internal check means (A) Checking of accounts by cashier (B) Checking of accounts by the Internal Auditor (C) Checking the work of one person by another automatically (D) Managerial control internally over the subordinates Ans : (C) 89. Verification includes

(A) Valuation (B) Existence (C) Ownership & Title (D) All of the above Ans : (D) 90. By whom from the following, auditor can be reappointed ? (A) Directors (B) Shareholders (C) Central Government (D) All of the above Ans : (D) 91. Auditor shall be punished with imprisonment for a maximum period of under Section 539 for falsification in the books of accounts. (A) 3 years (B) 5 years (C) 7 years (D) 9 years Ans : (C) 92. Auditor is not an insurer. In which of the following cases, the decision has been given ? (A) The Kingston Cotton Mills Co. Ltd. (1986) (B) London & General Bank (1895) (C) Allen Craig & Co. Ltd. (1934) (D) Irish Woollen Co. Ltd. Ans : (B) 93. The Section 80A of the Companies Act is related with the redemption of (A) Debentures (B) Redeemable preference shares (C) Irredeemable preference shares (D) None of the above Ans : (C) 94. Company Auditor is responsible (A) For directors (B) For shareholders (C) For public (D) For creditors Ans : (B) 95. In Balance Sheet, Audit Accounts are audited (A) Monthly (B) Bi-monthly (C) Annually or half yearly (D) Quarterly Ans : (C)

96. Audit adopted by banking company is (A) Continuous Audit (B) Periodical Audit (C) Internal Audit (D) Balance Sheet Audit Ans : (A) 97. Which of the following have lien of Company Auditor ? (A) Books of Accounts of the Company (B) Vouchers of the Company (C) Auditors working paper (D) All of the above Ans : (C) 98. To appoint new auditor in place of retiring auditor, to adopt the procedure, which section of Companies Act, 1956 is applicable ? (A) 223 (B) 224 (C) 225 (D) 226 Ans : (B) 99. A company has a separate legal existence from its members. This principle was first laid down in case of (A) Saloman Vs. Saloman & Co. Ltd. (1897) (B) Daimler Co. Ltd. Vs. Continental Tyre & Rubber Co. (1916) (C) State of U. P. Vs. Renu Sagar Power Co. (1991) (D) Santunu Roy Vs. Union of India (1989) Ans : (A) 100. According to ownership, Government Company means share. (A) Whose paid-up share capitals 48%, shares are owned by Government (B) Whose paid-up share capitals 49% shares are owned by Government (C) Whose paid-up share capitals 50% shares are owned by Government (D) Whose paid-up share capitals 51% shares are owned by Government Ans : (D)

Uttarakhand PCS (Pre) Exam, 2006 : Commerce

Uttarakhand P.C.S. (Pre.) Exam., 2006

Commerce : Solved Paper

(Held on 9-3-2008) 1. The share of new partner in the profits is 1/5 and his capital is Rs. 20,000. The new profit sharing ratio is 3 : 1 : 1. The share of partners in total capital will be (A) 60,000 : 20,000 : 20,000 (B) 80,000 : 20,000 : 20,000 (C) 50,000 : 20,000 : 25,000 (D) None of the above

2. At the time of dissolution the loss of the business, will be compensated first of all from (A) Capital (B) Profits (C) Personal resources of the partners (D) Donations 3. The meaning of written down value is (A) Original cost Scrap value (B) Book value + Depreciation (C) Book value Depreciation (D) None of these 4. Given : Depreciation on the basis of Fixed Instalment Method Rs. 2,000 p.a. Establishment expenses Rs. 5,000 Scrap value Rs. 1,000 Span of life 10 years The cost of assets will be (A) Rs. 20,000 (B) Rs. 16,000 (C) Rs. 12,000 (D) None of these 5. Given : Cost Rs. 1,00,000 Scrap Value Rs. 10,000 Span of Life 10 years Rate of depreciation 20% p.a. The amount of depreciation for the first year on the basis of diminishing balance method will be (A) Rs. 20,000 (B) Rs. 18,000 (C) Rs. 9,000 (D) Rs. 10,000 6. Match the following List-I with List-II and select the correct answer from the answer codes given below List-I (a) AS-6 (b) AS-10 (c) AS-26 (d) AS-20 List-II 1. Accounting for Earning per share 2. Accounting for intangible and fictitious assets 3. Accounting for fixed assets 4. Depreciation Accounting Codes : (a) (b) (c) (d) (A) 1 2 3 4 (B) 3 2 1 4 (C) 1 3 2 4 (D) 4 3 2 1 7. Establishment expenses of a new machine will be debited to (A) Expenses Account (B) Profit and Loss Account

(C) Machinery Account (D) None of the above 8. Goodwill is (A) Floating Asset (B) Wasting Asset (C) Fictitious Asset (D) Intangible Asset 9. A Balance Sheet shows only (A) Personal Accounts and Nominal Accounts (B) Real Accounts and Nominal Accounts (C) Personal Accounts and Real Accounts (D) Personal, Real and Nominal Accounts 10. Discount on Issue of Shares A/c is shown at the (A) Debit side of P & L A/c (B) Assets side of B/S (C) Liabilities side of B/S (D) None of the above 11. Pre-incorporation Profit is transferred to (A) General Reserve (B) Capital Reserve (C) Profit and Loss A/c (D) Trading A/c 12. Which of the following is shown in Profit & Loss Appropriation A/c ? (A) Provision for Income Tax (B) Provision for Depreciation (C) Provision for Doubtful Debts (D) Contribution to General Reserve 13. On liquidation of a Company first payment is made in respect of (A) Liquidators remuneration (B) Legal expenses (C) Preferential creditors (D) None of the above 14. Workmens Compensation Fund is a (A) Provision (B) Surplus (C) Current liability (D) Loan 15. Debentures of Rs. 4,25,000 are issued against the purchase of assets of Rs. 4,50,000. In this case the amount of Rs. 25,000 is (A) Capital Reserve (B) Securities Premium (C) Revenue Profit (D) Goodwill 16. A Company can reissue its forfeited shares (A) At a premium (B) At a face value (C) At a discount

(D) All of the above 17. Which of the following is an example of capital expenditure ? (A) Insurance Premium (B) Taxes and Legal expenses (C) Depreciation (D) Custom duty on import of machinery 18. Given : Average profit of a firm Rs. 21,000 Normal Profit Rs. 18,000 Value of goodwill on the basis of 3 years purchases of super profit shall be (A) Rs. 39,000 (B) Rs. 9,000 (C) Rs. 3,000 (D) Rs. 12,000 19. A co-operative auditor starts his work of audit from (A) Account Books (B) Payment Books (C) Cash Book (D) None of the above 20. Accounting for research and development relates to (A) AS-7 (B) AS-8 (C) AS-9 (D) AS-10 21. Goods worth Rs. 2,000 were distributed to employees free of charge. The account to be debited is (A) Profit and Loss A/c (B) Advertisement A/c (C) Labour Welfare A/c (D) Goods A/c 22. The maximum rate of underwriting commission on debentures is (A) 10% (B) 25% (C) 125% (D) 5% 23. X Ltd. forfeited 20 shares of Rs. 10 each on which Rs. 6 per share were paid. If out of these shares, 8 shares were reissued to Ram as fully paid up on payment of Rs. 550 per share, the amount that will remain standing to the credit of Share Forfeited A/c will be (A) Rs. 48 (B) Rs. 72 (C) Rs. 84 (D) Rs. 120 24. Bonus Shares are issued to (A) Equity Shareholders (B) Preference Shareholders (C) Debenture Holders (D) Secured Creditors 25. On an equity share of Rs. 100, the minimum amount payable on application under the law should

be (A) Rs. 20 (B) Rs. 15 (C) Rs. 10 (D) Rs. 5 26. Share Premium received by a Company may be used for (A) Payment of dividend (B) Payment of remuneration to management (C) Issue of Bonus shares (D) None of these 27. Garner Vs. Murray rule applies in case of (A) Admission of a partner (B) Dissolution of a firm (C) Retirement of a partner (D) Death of a partner 28. When sale is Rs. 4,80,000, gross loss is 25% on cost, purchase is Rs. 3,50,000 and closing stock is Rs. 60,000, the stock in the beginning would be (A) Rs. 70,000 (B) Rs. 94,000 (C) Rs. 1,34,000 (D) Rs. 3,50,000 29. Balance of Debenture Redemption Fund Account is transferred to (A) Capital Reserve A/c (B) Profit and Loss A/c (C) General Reserve A/c (D) None of these 30. Planning includes (A) Objectives (B) Policy (C) Strategy (D) All of the above 31. Hawthorne Experiments were conducted by (A) Elton Mayo (B) Henry Fayol (C) F. W. Taylor (D) Peter F. Drucker 32. Who is called The Father of Scientific Management ? (A) Elton Mayo (B) Henry Fayol (C) E. F. L. Breach (D) F. W. Taylor 33. A plan when expressed in quantitative terms is called (A) Policy (B) Procedure (C) Objective (D) Budget 34. Theory X and Theory Y of Motivation was propounded by

(A) Herzberg (B) Maslow (C) Elton Mayo (D) McGregor 35. Direction involves (B) Physical factors (B) Financial factors (C) Human factors (D) None of the above 36. Which is the oldest form of organisation ? (A) Line (B) Line and staff (C) Functional (D) Matrix 37. Decentralisation (A) Reduces burden of chief executives (B) Increases burden of chief executives (C) Does not effect burden (D) None of the above 38. Planning is a (A) Primary function (B) Secondary function (C) Supplementary function (D) None of the above 39. Planning function of management is performed by (A) Top management (B) Middle management (C) Lower management (D) All of the above 40. MBO approach in management was introduced by (A) M. P. Follet (B) Keith Davis (C) Peter Drucker (D) Oliver Sheldon 41. Which of the following is not an element of marketing mix ? (A) Product (B) Price (C) Promotion (D) Product life cycle 42. Market segmentation means (A) Grouping of buyers (B) Grouping of sellers (C) Grouping of middle men (D) Grouping of producers 43. Standard costing is a technique of (A) Planning (B) Organising

(C) Coordination (D) Control 44. The principle of Unity of Command was introduced by (A) Elton Mayo (B) Henry Fayol (C) F. W. Taylor (D) Urwick 45. The last step of communication process is (A) Controlling (B) Implementation (C) Correction (D) Reaction 46. Strategy is used in (A) Military (B) Business (C) Industry (D) All of the above 47. 3-D Model of leadership is propounded by (A) Likert Reinsis (B) Kurt Levis (C) William Ridin (D) Henry Fayol 48. Personal selling includes (A) Selling (B) Services to the customers (C) Developing goodwill of the firm (D) All of the above 49. The process of evaluating employees is called (A) Performance appraisal (B) Recruitment (C) Induction (D) Job evaluation 50. Franking machine is used for (A) Specimen signature (B) Postage stamps (C) Arrival and departure timings (D) None of the above 51. Grapevine communication is a type of (A) Formal communication (B) Informal communication (C) Horizontal communication (D) Vertical communication 52. The Principle of Exception states that management should (A) Check everything without exception (B) Invariably take corrective action without exception (C) Accept exceptions in emergencies (D) Concentrate their attention on exceptions

53. Which of the following is not a component of SWOT Analysis ? (A) Threats (B) Strengths (C) Weaknesses (D) Options 54. Organisational change is necessitated by (A) External environmental pressure (B) Internal strengths and weaknesses (C) Sequential changes (D) All the above 55. Which management functions are closely related to ? (A) Planning and Organising (B) Organising and Staffing (C) Staffing and Control (D) Planning and Control 56. Match List-I with List-II and select the correct answer from the codes given below List-I (a) Planning (b) Staffing (c) Directing (d) Controlling List-II 1. Training 2. Forecasting 3. Evaluating 4. Motivating Codes : (a) (b) (c) (d) (A) 2 4 1 3 (B) 1 2 3 4 (C) 2 1 4 3 (D) 3 4 2 1 57. Memorandum of Association contains (A) Objective clause (B) Name clause (C) Capital clause (D) All of the above 58. Table A is an alternative to (A) Prospectus (B) Articles of Association (C) Memorandum of Association (D) None of the above 59. The Doctrine of Indoor Management provides protection to the (A) Board of Directors (B) Shareholders (C) Managing Director (D) Outsiders 60. By which of the following methods a Company Secretary can be removed from his post ?

(A) By passing a resolution in Board Meeting (B) By order of Registrar of Companies (C) By passing a resolution in Annual General Meeting (D) None of the above 61. Dividend paid between two Annual General Meetings is known as (A) Final dividend (B) Interim dividend (C) Special dividend (D) None of the above 62. In a Private Company there are restrictions regarding (A) Transfer of shares (B) Issue of prospectus (C) Number of members (D) All of the above 63. The gap between two General Meetings of the Company should not be more than (A) 12 months (B) 18 months (C) 15 months (D) 20 months 64. Statement containing details of items to be considered in a meeting is called (A) Agenda (B) Minutes (C) Resolution (D) Notice 65. The minimum and maximum number of members in a Private Company is (A) 2 and 50 (B) 2 and 20 (C) 2 and 10 (D) None of the above 66. What is the maximum limit of remuneration for a whole time manager in a company ? (A) 3% of net annual profit (B) 5% of net annual profit (C) 7% of net annual profit (D) None of the above 67. Which among the following documents defines the relationship between a company and outsiders ? (A) Memorandum of Association (B) Articles of Association (C) Prospectus (D) None of the above 68. Registration is not essential in case of a (A) Company (B) Co-operative organisation (C) Co-operative Societies (D) Business of Joint Hindu Family 69. The Meeting of Board of Directors must be called at least once (A) In four months (B) In three months

(C) In two months (D) In one month 70. The Secretary of a Company should file copies of Special Resolution passed at Extraordinary General Meeting to the Registrar of Companies within (A) 7 days (B) 14 days (C) 21 days (D) 30 days 71. What is the quorum of General Meetings in the case of a Private Company ? (A) 2 members (B) 3 members (C) 4 members (D) 5 members 72. Which of these must hold a Statutory Meeting ? (A) Public Limited Company (B) Private Company (C) Unlimited Company (D) All of these 73. When three sugar mills combine, it is an example of (A) Vertical combination (B) Horizontal combination (C) Diagonal combination (D) None of the above 74. The first electronic computer system was developed in (A) 1920 (B) 1940 (C) 1930 (D) 1950 75. An Index is (A) A filing system (B) A photostat procedure (C) The procedure to collect data (D) An important help in filing 76. Indian Partnership Act was passed in the year (A) 1956 (B) 1936 (C) 1932 (D) 1930 77. According to the Partnership Act, the maximum number of partners in a banking firm may be (A) 10 (B) 12 (C) 4 (D) 20 78. Dissolution of Partnership takes place when (A) A partner misbehaves (B) A partner becomes of unsound mind (C) Business is running at a loss

(D) A partner dies 79. The existence of a Partnership Firm is (A) Separate from partners (B) Not separate from partners (C) Both (A) and (B) (D) None of the above 80. In which State the Mitakshara form of H.U.F. business does not apply ? (A) Rajasthan (B) Gujarat (C) West Bengal (D) Kerala 81. Letter of Credit is presented by (A) Exporter (B) Importer (C) Custom Officer (D) Shipping Company 82. The Agreement of Partnership (A) Must be oral (B) Must be in writing (C) Can be either oral or in writing (D) Must be in writing on a stamp paper 83. Export procedure begins with (A) Indent (B) Shipping order (C) Marine insurance (D) None of these 84. Self-help by mutual help is a feature of (A) Public enterprise (B) Public corporation (C) Co-operative society (D) All of the above 85. In India private sector entered into the Life Insurance business in the year (A) 1995 (B) 1998 (C) 2000 (D) 2001 86. General Insurance Corporation of India was set up in (A) 1956 (B) 1972 (C) 1980 (D) 2000 87. Salvage Charges is related to (A) Life Insurance (B) Marine Insurance (C) Fire Insurance (D) None of the above

88. In Life Insurance Contract the insurable interest is examined at the time of (A) Entering the contract (B) Filing the claim (C) Both (A) and (B) (D) Never 89. In connection with marine insurance the Doctrine of Utmost Good Faith is based on the concept of (A) Disclosure (B) Concealment (C) Misrepresentation (D) None of the above 90. Which statement is not true in respect of a Balance Sheet ? (A) It is an account (B) It is prepared every month (C) It is prepared to check the mathematical accuracy (D) All the above 91. A machinery is purchased for Rs. 3,00,000 and Rs. 50,000 is spent on its installation. Rs. 5,000 is spent on fuel. What will be the amount of capital expenditure ? (A) Rs. 3,00,000 (B) Rs. 3,50,000 (C) Rs. 3,55,000 (D) None of these 92. Which of the following errors are not disclosed by Trial Balance ? (A) Compensatory Errors (B) Errors of Principle (C) Errors of Omission (D) All the three 93. A large amount spent on special advertisement is (A) Capital Expenditure (B) Revenue Expenditure (C) Revenue Loss (D) Deferred Revenue Expenditure 94. Double Entry System was introduced in (A) America (B) Japan (C) India (D) Italy 95. According to going concern concept a business entity is assumed to have (A) A long life (B) A small life (C) A very short life (D) A definite life 96. The policy of anticipate no profit and provide for all possible losses is followed due to (A) Convention of consistency (B) Convention of conservation (C) Convention of disclosure (D) None of the above 97. Receipts and Payments Account is prepared by

(A) Companies (B) Banks (C) Partnership firms (D) Non-trading organizations 98. Examination of documents and vouchers is called (A) Physical verification (B) Test checking (C) Vouching (D) None of the above 99. Internal Audit is done by (A) External Auditors (B) Employees of the organisation (C) Both (A) and (B) (D) Neither (A) nor (B) 100. Audit Programme is prepared by (A) The Auditor (B) The Company (C) Internal Auditor (D) Financial Controller 101. First Auditor of a Company is appointed by the (A) Shareholders (B) Central Government (C) Company Law Board (D) Board of Directors 102. Which of the following is not qualified to be a Company Auditor ? (A) A body corporate (B) An employee of the company (C) A person who is indebted to the company for an amount exceeding Rs. 1,000 (D) All of the above 103. Which of the following statement is correct ? (A) Valuation is a part of verification (B) Verification is a part of valuation (C) Valuation has nothing to do with verification (D) None of the above 104. Test checking refers to (A) Testing of accounting records (B) Testing of honesty of employees (C) Intensive checking of a select number of transactions (D) Checking of all transactions recorded 105. Continuous audit is suitable for (A) Big institutions (B) Small institutions (C) General institutions (D) None of the above 106. The function of an Auditor is (A) To examine arithmetical accuracy of accounts (B) To detect and prevent errors

(C) To detect and prevent frauds (D) All of the above 107. Audit is compulsory for (A) Sole Trader (B) Partnership Firms (C) Joint Stock Companies (D) All of the above 108. Match List-I with List-II of the following and select the correct answer from answer codes given below List-I (a) At cost price (b) At market price (c) Intrinsic value method (d) Average profit method List-II 1. Valuation of shares 2. Perishable goods 3. Raw material 4. Valuation of Goodwill Codes : (a) (b) (c) (d) (A) 3 2 1 4 (B) 1 2 3 4 (C) 4 3 2 1 (D) 1 4 3 2 109. In the absence of Articles of Association, an Auditor should keep in mind (A) Prospectus (B) Table A (C) Memorandum of Association (D) Legal Declaration 110. Who may recommend Special Audit of a Company ? (A) Directors of the Company (B) Shareholders of the Company (C) Debentureholders of the Company (D) Central Government 111. Internal check is a part of (A) Internal Audit (B) Internal Control (C) Annual Audit (D) Standard Audit 112. Cost Audit Report is to be submitted to (A) The Company (B) The Central Government with a copy to the Company (C) The Central Government (D) The Company Secretary 113. A company auditor addresses his report to (A) Board of Directors (B) Members (C) Managing Director

(D) Company Secretary 114. Which of the following Sections of the Companies Act 1956 relates to the maintenance of proper books of accounts ? (A) Section-211 (B) Section-217 (C) Section-209 (D) Section-205 115. X and Y are partners sharing profits in the ratio of 4 : 3. They admit a new partner Z and new profit sharing ratio is 7 : 4 : 3. The sacrificing ratio between X and Y will be (A) Equal (B) 4 : 3 (C) 2 : 1 (D) 1 : 2 116. Given : Realised value of assets Rs. 60,000 Profit on Realisation Rs. 3,000 Book value of assets will be (A) Rs. 63,000 (B) Rs. 57,000 (C) Rs. 60,000 (D) Rs. 61,500 117. A, B and C are partners sharing profits and losses in the ratio of 4 : 3 : 2. D is admitted for 1/10 share. The new ratio will be (A) 5 : 4 : 3 : 2 (B) 4 : 4 : 3 : 2 (C) 4 : 3 : 2 : 1 (D) None of the above 118. If actual average profit is Rs. 30,000 and normal rate of return is 12%, then capitalization value of the profits will be (A) Rs. 3,60,000 (B) Rs. 2,50,000 (C) Rs. 3,05,000 (D) None of the above 119. Under which Section of Companies Act an auditor has a right to participate and to speak in the General Meeting ? (A) 231 (B) 229 (C) 226 (D) 224 120. New profit sharing ratio is calculated at the time of (A) Admission of a new partner (B) Retirement of a partner (C) Death of a partner (D) All of the above

Answers
1. (A) 2. (B) 3. (C) 4. (A) 5. (B) 6. (D) 7. (C) 8. (D) 9. (C) 10. (B) 11. (B) 12. (D) 13. (C) 14. (B) 15. (A) 16. (D) 17. (D) 18. (B) 19. (C) 20. (B) 21. (A) 22. (B) 23. (D) 24. (A) 25. (D) 26. (C) 27. (B) 28. (D) 29. (C) 30. (D)

31. (A) 32. (D) 33. (D) 34. (D) 35. (C) 36. (A) 37. (A) 38. (A) 39. (D) 40. (C) 41. (D) 42. (A) 43. (D) 44. (B) 45. (D) 46. (D) 47. (C) 48. (D) 49. (A) 50. (B) 51. (B) 52. (D) 53. (D) 54. (D) 55. (D) 56. (C) 57. (D) 58. (B) 59. (D) 60. (A) 61. (B) 62. (D) 63. (C) 64. (A) 65. (A) 66. (B) 67. (A) 68. (D) 69. (B) 70. (D) 71. (A) 72. (A) 73. (B) 74. (B) 75. (D) 76. (C) 77. (A) 78. (D) 79. (B) 80. (C) 81. (B) 82. (C) 83. (A) 84. (C) 85. (C) 86. (B) 87. (B) 88. (A) 89. (A) 90. (D) 91. (B) 92. (D) 93. (D) 94. (D) 95. (A) 96. (B) 97. (D) 98. (C) 99. (B) 100. (A) 101. (D) 102. (D)103. (A) 104. (C) 105. (A) 106. (D) 107. (C) 108. (A) 109. (B) 110. (D) 111. (B) 112. (B) 113. (B) 114. (C) 115. (D) 116. (C) 117. (C) 118. (B) 119. (A) 120. (D)
1. The 1. 2. 3. 4. Which (A) (B) (C) (D) vouching Consider of remuneration statement note the 1 2 1, 1, statements the to special directors the following involve of above the Central are 2 3 and and statements checking of resolution. accounts. Government. Book. correct ? only only 4 4

approval of

of Minutes given and and 2 3

92. Match List-I with List-II and select the correct answer using the code given below the Lists List-I (Liability of Auditor) (a) Liability for negligence (b) Liability for misfeasance (c) Criminal liability (d) Liability to third party List-II (Example) 1. Breach of trust or duty 2. Untrue statement in the prospectus 3. Not liable for untrue statement in prospectus 4. Dividends paid out of capital Codes : (a) (b) (c) (d) (A) 4 3 2 1 (B) 2 1 4 3 (C) 4 1 2 3 (D) 2 3 4 1 93. Consider the following statements 1. Corporate governance requires the appointment of audit committees by public limited companies. 2. The members of an audit committee should be those non-executive directors who do not represent the controlling group. 3. The independence of the statutory auditors is likely to be affected if he deals directly with the audit committee. Which of the statements given above are correct ? (A) 1 and 2 only (B) 2 and 3 only (C) 1 and 3 only (D) 1, 2 and 3 94. Under the head 'Secured Loans' the following are disclosed 1. Loans and Advances from banks. 2. Debentures. 3. Loans and Advances from subsidiaries. 4. Other loans and advances. What is the correct chronological order of disclosure of the items given above in balance sheet of a company ? (A) 3 1 2 4 (B) 2 4 3 1 (C) 3 4 2 1 (D) 2 1 3 4 95. Accounting 1. The 2. The 3. The Consider plan of plan of procedure statements comprises organization concerned with decision process. organization concerned with safeguarding of assets. concerned with safeguarding of assets. control the following

Which (A) (B) (C) (D)

of

the 1 2 1 1,

statements

given and and and 2

above

are 2 3 3 and

correct

? only only only 3

96. Which of the following statements is/are correct ? 1. Internal control includes quality control. 2. Internal control is compulsory for all forms of business organizations. 3. Internal control helps external auditor to design suitable audit programme for client's organization. Select the correct answer using the code given below (A) 1 only (B) 2 only (C) 3 only (D) 1 and 3 97. Which of the following is not a part of the usual contents of the current file and audit working papers ? (A) A copy of accounts on which auditors are reporting (B) Audit programme (C) Minutes of the meetings (D) Memorandum of Association and Articles of Association 98. Audit 1. 2. 3. Which (A) (B) (C) (D) Consider the working papers are they act as a guide they verify the arithmetical accuracy they provide evidence of the work of the statements given 1 and 2 and 1 and 1, 2 following statements maintained because to subsequent audit. of the books of accounts. performed by the auditor. above are correct ? 2 only 3 only 3 only and 3

99. Match List-I with List-II and select the correct answer using the code given below the Lists List-I (Technique) (a) Rotation of Duties (b) Random Sampling (c) Trend Analysis (d) Cash verification List-II (Auditing Procedure) (1) Internal control (2) Physical examination (3) Selective verification (4) Overall assessment Codes : (a) (b) (c) (d) (A) 1 4 3 2 (B) 2 3 4 1 (C) 1 3 4 2 (D) 2 4 3 1 100. Consider the following stages an auditor has to undergo before commencing an 1. Ascertaining the scope of audit 2. Gaining knowledge about business of the 3. Going through the agreement with the 4. Instructions to and information from the What is the correct sequence of the above stages (A) 2 1 3 (B) 3 4 2 (C) 2 4 3 (D) 3 1 2 audit work. client. client. client. ? 4 1 1 4

101. Which one of the following statements is correct ? (A) If an asset is used by a company, it should be owned by the company (B) Verification of liabilities means that the amounts of current and long-term liabilities shown in the balance sheet are correct (C) Vouching and verification means the same thing (D) It is not the duty of an auditor to confirm the physical existence and ownership of an asset 102. The following 1. To examine that steps should be adopted the land has been shown by in an the auditor balance for verification of land sheet at its original cost.

2. To ensure that the cost of land also includes the expenses like broker's commission, legal expenses, improvement expenses etc. 3. To get a certificate from solicitor of the client regarding validity of the title deeds. 4. To examine that the land is not subject to any charge or mortgage. What is the correct sequence of the above steps to be followed by an auditor during the course of auditing ? (A) 1 4 2 3 (B) 3 2 4 1 (C) 1 2 4 3 (D) 3 4 2 1 103. (A) (B) (C) (D) What does Ratio of Ratio of profit Ratio of dividends per payout debtors distributed share and Retained ratio to mean profit per ? creditors retained share earnings

to earnings

104. Consider the following statements 1. Premium on issue of shares is transferred to General Reserve Account. 2. For declaration of bonus shares out of General Reserve, a resolution in the shareholders' meeting is necessary. Which of the statements given above is/are correct ? (A) 1 only (B) 2 only (C) Both 1 and 2 (D) Neither 1 nor 2 105. (A) (B) (C) (D) How By 'Calls in arrear' deducting the Under the By deducting By deducting the is shown in the balance sheet on the liability amount from the called up heading 'Reserves and the amount from 'Capital amount from the 'Share Forfeited side ? capital Surplus' Reserve' Account'

106. Match List-I with List-II and select the correct answer using the code given below the Lists List-I (Activity) (a) Admission of a partner (b) Partnership dissolution (c) Rectification of errors (d) Transfer of realization profit List-II (Account) (1) Capital Accounts (2) Suspense Account (3) Revaluation Account (4) Realization Account Codes : (a) (b) (c) (d) (A) 3 4 2 1 (B) 2 1 3 4 (C) 3 1 2 4 (D) 2 4 3 1 107. The balance of old provision for doubtful debts on 1-4-2006 was Rs. 10,000. The bad debts written off during the year 2006-07 amounted to Rs. 12,000, and the new provision requiredon 31-3-2007 was Rs. 15,000. What is the total amount to be debited to profit and loss account on account of bad debts and the provision for doubtful debts ? (A) Rs. 37,000 (B) Rs. 27,000 (C) Rs. 17,000 (D) Rs. 15,000 108. A and B sharing profit in the ratio of 3 : 2 and having capitals of Rs. 30,000 B), decided to dissolve their firm. After paying off all liabilities, cash realized 15,000. How will this amount be distributed to (A) ARs. 9,000 and (B) ARs. 10,000 and (C) ARs. 7,500 and (D) ARs. 12,000 and (for A) and Rs. 15,000 (for from various assets is Rs. A and B ? BRs. 6,000 BRs. 5,000 BRs. 7,500 BRs. 3,000

109. X and Y sharing profits in the ratio of 7 : 3 admit Z on 37th share in the new firm. Z takes 27 th from X and 17th from Y. What is the new ratio among X, Y and Z ? (A) 7 : 3 : 3 (B) 4 : 2 : 15

(C) (D) 110. Opening Closing Cost What (A) (B) (C) (D) 111. Amortization (1) (2) (3) Which (A) (B) (C) (D)

14 29 inventory inventory goods the

: : : :

6 11 Rs. Rs.

: :

15 30 Given 3,500 1,500 22,000 ? 20,000 24,000 27,000 17,000 following of assets assets assets ? 2 3 only only

of is

sold amount Rs. Rs. Rs. Rs. writing tangible intangible fictitious above 1 2

: of

Rs. purchase

refers

Consider to

the off

the

value

of

the 1 2

is/are and and

correct

112. The following information is disclosed by 'A' Rs. Provision for doubtful debts as on 1.1.2006 : 6,000 Bad debts written off during the year 2006 : 1,200 Total debtors as on 31.12.2006 : 80,000 A provision for Doubtful Debts to be made @ 5% What is the amount to be shown on the credit side of P/L A/c ? (A) Rs. 4,800 (B) Rs. 2,400 (C) Rs. 1,200 (D) Rs. 800 113. (A) (B) (C) (D) What is reduction of External Internal paid-up share capital called ? reconstruction reconstruction Reorganization capital

Redemption

of

114. Under which of the following methods of depreciation the amount of an asset is never reduced to zero ? (A) Straight line method (B) Diminishing balance method (C) Sums of Years Digit method (D) Annuity method 115. An insurance claim of Rs. 300 was accepted in respect of stock (inventory) of Rs. 500, which was destroyed by fire. Rs. 200 not covered by insurance should be debited to which one of the following ? (A) Stock account (B) Trading account (C) Profit and loss account (D) Goodwill account 116. What (A) (B) (C) (D) is Debtors the turnover average 5 4 3 2 ratio collection is period 4. ? months months months months

117. The net profits of a business after providing for taxation for the past five years are Rs. 80,000, Rs. 85,000, Rs. 92,000, Rs. 1,05,000 and Rs. 1,18,000. Capital employed in the business is Rs. 8,00,000. Normal rate of return is 10%. What is the value of goodwill on the basis of capitalization of super profit method ? (A) Rs. 1,00,000 (B) Rs. 1,50,000 (C) Rs. 1,60,000 (D) Rs. 1,80,000 118. Purchases Sales Closing Manufacturing Given Rs.50,000 Rs.90,000 Rs.7,000 Rs.5,000

Stock Exp.

Rate 3% What (A) (B) (C) (D) 119. Current Liquid Net Rs. What (A) (B) (C) (D) A

of is

gross the

on Rs. Rs. Rs. Rs. the 25 15 Working current

profit opening

stock

Rs.331 cost ? 20,000 19,500 22,500 25,000 year 1 1 Capital 3,00,000 respectively ? 1,50,000 2,00,000 5,00,000 1,00,000 following of of the the ? assets asset asset a

particular

firm Ratio Ratio

provided

following

data

: :

for

are

the

Rs. Rs. Rs. Rs.

current

assets and 3,00,000 5,00,000 2,00,000 3,00,000

liabilities and and and and

of

this

Rs. Rs. Rs. Rs.

firm,

120. Depreciation is a process of which one of (A) Valuation of (B) Allocation of acquisition cost over the estimated useful (C) Allocation of realizable value over the estimated useful (D) Estimating the market value of the asset on the balance sheet date

the life life

Answers

1. (B) 2. (C) 3. (A) 4. (B) 5. (A) Small shareholders of a public company will be able to appoint (elect) one director on the Board of Company if the company has a paid up capital of Rs. 5 crore or more, or has 1000 or more small shareholders as per section 252 Companies (Amendment) Act, 2000. 6. (C) 7. (A) 8. (D) 7S McKinsey Model's elements (i) Strategy, (ii) Structure, (iii) System, (iv) Shared value, (v) Skills, (vi) Style, (vii) Staff 9. (C) 10. (D) 11. (C) 12. (C) Funds from operation computed Net profit Add : Preliminary Exp. Depreciation = Less : Gain on sale of machinery Funds from operation = 2,50,000 13. (C) 14. (C) 15. (D) 16. (A) 17. (A) 18. (C) 19. (C) 20. (A) According to Spicer and Pegler internal check is an arrangement of staff duties whereby no one person is allowed to carry through and record every aspect of a transaction so that, without collusion between any two or more persons, fraud is prevented and at the same time the possibilities of errors are reduced to a minimum. 21. (B) 22. (C) 23. (C) 24. (C) 25. (B) 31. (A) 32. (D) 33. (B) 34. (B) 35. (B) 41. (B) 42. (A) 43. (C) 44. (B) 45. (C) 51. (D) 52. (B) 53. (D) 54. (C) 55. (C) 61. (B) 62. (C) 63. (A) 64. (B) 65. (C) 66. (C) 67. (D) 26. 36. 46. 56. (D) (B) (C) (A) 27. 37. 47. 57. (D) (A) (C) (D) 28. 38. 48. 58. (D) (C) (C) (D) 29. 39. 49. 59. (B) (A) (A) (A) 30. 40. 50. 60. (D) (D) (B) (B) as follows : Rs.2,00,000 Rs.20,000 Rs.40,000 2,60,000 Rs.10,000 includes :

68. (C) An organisation in which each employee reports to both a functional manager and to a project manager as Matrix Structure of organisation. 69. 79. 89. 99. 108. 117. (D) 70. (B) 71. (B) 72. (B) 73. (C) (B) 80. (B) 81. (C) 82. (A) 83. (C) (B) 90. (A) 91. (D) 92. (C) 93. (A) (C) 100. (D) 101. (B) 102. (B) 103. (A) 109. (D) 110. (A) 111. (D) 112. (C) 118. (B) 119. (B) 120. (B) 74. 84. 94. (C) (D) (B) 75. (D) 76. (A) 77. (A) 78. (B) 85. (B) 86. (A) 87. (C) 88. (D) 95. (B) 96. (D) 97. (D) 98. 104. (B) 105. (A) 106. (A) 107. 113. (B) 114. (B) 115. (C) 116. (C) (D) (C) (C) (C)

R.A.S./R.T.S. (Pre.) Examination, 2008

Public Administration : Solved Paper

(Held on 7-1-2009) 1. Which of the following theories focuses on informal organization and participative management ? (A) Human Relations Theory (B) Scientific Management Theory (C) Behavioural Theory (D) Contingency Theory Ans : (A) 2. Until administrative description reaches a that rapid progress will be made towards principles. Who (A) (B) (C) (D) Ans higher level of sophistication, there is little reason to hope the identification and verification of valid administrative said it ? Henri Fayol Leonard White Herbert Simon Robert Dahl : (D)

3. Which of the following attempts to construct a theory of public organization in tune with consumer interests and individual preferences ? (A) Development Administration Approach (B) Public Choice Approach (C) Co-optation Concept (D) Behavioural Approach Ans : (B) 4. Who theorized that Every person has certain basic assumptions about other peoples attitude toward work and organization. ? (A) Elton Mayo (B) Frederick Herzberg (C) Chris Argyris (D) Douglas McGregor Ans : (D) 5. Which of the following has been termed as the biological parent of Public Administration ? (A) Sociology (B) Political Science (C) Business Administration (D) Psychology

Ans 6. (A) (B) (C) (D) Ans The central theme

: of Comparative Administrative Citizen-Administration : the List-I with List-II Job Study Human Social D. W. F. Herbert (b) 3 4 3 2 2 3 2 4 : (c) 1 2 4 1 F. and select the correct Public Administration

(B) is structure Bureaucracy Relations Leadership (B) answer : (Theme) Enrichment Process Dimensions Attitude (Thinker) Waldo Willoughby Herzberg Simon : (d) 4 1 1 3 (A)

7. Match List-I (a) (b) (c) (d) List-II 1. 2. 3. 4. Codes (a) (A) (B) (C) (D) Ans

Mechanical

of Equity

the

8. The most preferred perspective to distinguish public and private in administration is (A) Agency (B) Interest (C) Access (D) Commitment Ans : (B) 9. Lack of courage to delegate properly and of knowledge how to do it is one of the most general causes of failure in organization. Who said it ? (A) Henri Fayol (B) Lyndall Urwick (C) Paul H. Appleby (D) Dwight Waldo Ans : (A) 10. (A) (B) (C) (D) Ans 11. (A) (B) (C) (D) Ans Who was the Chairman of the Comparative Herbert Robert Fred Franc : of of the norms Administration Group 1963 ? Simon Dahl Riggs Marini (C)

Politicisation Responding to the will Sacrificing professional Supporting Attending

bureaucracy government of every for party party party

means complexion consideration ideology assemblies (B)

12. In the past the man was first. In the future the system will be the first. Who said it ? (A) Frederick Taylor (B) Peter Drucker (C) Marshall Dimock (D) Leonard White Ans : (B) 13. (A) (B) (C) (D) Ans 14. (A) (B) (C) (D) Ans Rensis Likerts System Supportive Low Self : The basic premise Governments as the Large More flexible of primary I is characterised by Leadership Motivation Regulation Openness (B)

New Public Management is agent of all social action governmental bureaucracies and open governments Paternal governments : (C) correct answer :

15. Match the List-I with List-II and select the List-I (a) Direct (b) Delegated (c) Functional (d) Personal List-II 1. 2. Unbroken line between Issuer 3. An Intermediate Agency between Issuer 4. Intrinsic by special Codes (a) (b) (c) (A) 1 2 (B) 2 1 (C) 2 3 (D) 1 3 Ans : 16. According (a) (b) (c) (d) Codes (A) (B) (C) (D) Ans 17. (a) (b) to Mary Parker Follett, the principles Intellectual of

Authority Authority Authority Authority Seniority Acceptor Acceptor knowledge : (d) 4 3 1 4 (C) are Ability Continuity Reciprocity Consultation : (b) (c) (c) (d) (C)

and and

3 4 4 2

effective

coordination

Mutual (a) (a), (b) (b), (c) : his book The Unchanging Emotions Administrative Principles in (b) and and State of has and and

Dwight Waldo in Notion of Human

attacked Administration Organization

(c) Narrowness of (d) Inconsistencies in Codes (A) (a), (B) (b), (C) (a), (D) (a), Ans 18. (A) (B) (C) (D) Ans Human Relations

Values Methodology

of used (b) (c) (c) (b) :

in

Economy and determining the and and and and

Efficiency principles : (d) (d) (d) (c) (C)

Theory

believed Economic

that

the

people

are Men Homogeneous Heterogeneous Atomistic (C) answer :

19. Match the List-I with List-II and select the correct List-I (a) Substantive (b) Internal (c) Horizontal (d) Procedural List-II 1. Between Units in the same 2. Between different units within the 3. Generalised description of the behaviour and relationship of the members of the 4. Content of the organizations Codes (a) (b) (c) (A) 4 2 1 (B) 1 4 2 (C) 3 4 1 (D) 2 1 3 Ans : 20. The (A) (B) (C) (D) Ans linking process for interaction under systems approach does

Coordination Coordination Coordination Coordination level organisation organization activities : (d) 3 3 2 4 (A)

Decision :

not include Communication Delegation Balance Making (B)

21. Work division is the foundation of organization, indeed, the reason for organization. Who said it ? (A) Frederick Taylor (B) Henri Fayol (C) Luther Gulick (D) Mary Parker Follett Ans : (C) 22. (A) (B) (C) (D) Ans The semantic barrier to communication is not Environment Noise Distance Habits (C)

Distracting Poor : Listening

23. The Bills which can be introduced but cannot be considered without the prior recommendation of the President is (A) Money Bills under Article 110 (B) Financial Bills not consisting solely of matters specified in Article 110 (C) Ordinary Bills involving expenditure from the Consolidated Fund (D) Bills affecting taxes in which States are interested Ans : (C) 24. New (A) (B) (C) (D) Ans Public Administration shares this feature Effective Change Temporal Ecological : with Development Administration coordination orientation Dimension Perspective (B)

25. As long as the study of Public Administration is not comparative, claims for a science of Public Administration is rather hollow. Who said it ? (A) Fred Riggs (B) Max Weber (C) Robert Dahl (D) Ferrel Heady Ans : (C) 26. (A) (B) (C) (D) Ans 27. (A) (B) (C) (D) Ans In Britain the Priestly formula relates to Recruitment Promotion Pay Action (B)

Disciplinary : Council in UK Discussion Ventilation Settlement of Disputes Settlement of Individual cases relating : Whitley is

to

not a forum for and Negotiation of Grievances on Service Conditions Promotion & Disciplinary Action (D)

28. Neutral bureaucracy can be found only in a secular political culture. Who said it ? (A) M. E. Dimock (B) Glenn Stahl (C) G. A. Almond (D) Max Weber Ans : (C) 29. Match List-I (a) (b) (c) (d) List-II 1. 2. 3. 4. Codes the List-I with List-II Monte and select the correct answer : (Concept) Carlo Gambler Synetics Contract (Meaning) Solutions Simulation Authority Risk :

Generation Narrow Formal To

of Form Basis take

Alternative of of Greater

(a) (A) (B) (C) (D) Ans 30. (A) (B) (C) (D) Ans The most

(b) 2 2 1 4 effective means of 4 1 4 1 : citizens

(c) 1 3 2 3 control over

(d) 3 4 3 2 (C) administration is Elections Groups Committees Opinion (A)

Pressure Advisory Public :

31. The U.S. Presidents principal staff agency in fiscal, legislative and administrative management is (A) Bureau of the Budget (B) The Office of Management and Budget (C) Department of the Treasury (D) White House Office Ans : (B) 32. (A) (B) (C) (D) Ans Which of the following is not a feature Competitive Lateral Post-entry : of U.S. personnel system ? Service Entry Training Three (B)

Rule

of

33. Grants from Centre to the States are regulated by the following Articles of the Constitution (A) 268, 269, 270, 272 (B) 270, 271, 274 (C) 273, 275, 282 (D) 275, 282, 287 Ans : (A) 34. The expectancy theory of motivation depends upon the employees perception of the relationship between (A) Need, Performance and Achievement (B) Effort, Performance and Reward (C) Desire, Performance and Response (D) Preference, Performance and Action Ans : (B) 35. Who referred the interaction between politicians and administrators as administrative politics ? (A) Michael Murray (B) Michael Crozier (C) David Rosenblom (D) Peter Self Ans : (D) 36. The (a) (b) (c) (d) Codes techniques applied in performance Rating Critical Forced Forced appraisal in U.S.A. are Scale Incidents choice Distribution :

(A) (B) (C) (D) Ans

(a) (c) (a), (a), (b), : (b) (c)

and and and and

(b) (d) (c) (d) (D)

37. The political rights granted to the Civil Servants in France are (a) Right to become member of a political party (b) Right to participate in political activities (c) Right to criticise governments policies (d) Right to contest elections to any representative office Codes : (A) (a) and (b) (B) (a), (b) and (d) (C) (c) and (d) (D) (a), (b), (c) and (d) Ans : (D) 38. The functions performed by the then Secretary to the Governor-General before Independence are now performed by (A) Chief Secretary (B) Cabinet Secretariat (C) Prime Ministers Office (D) Ministry of Home Affairs Ans : (C) 39. Match the List-I with List-I (a) (b) (c) Link (d) List-II 1. Trial and Error 2. Subordinate becomes a 3. 4. Graphic Method Codes (a) (b) (A) 3 (B) 2 (C) 3 (D) 1 Ans List-II and select the correct answer :

Economic Decision Pin

Man Tree Concept Simulation Complex Problems Superiors Decision Unit Decision Alternative Solutions : (c) (d) 2 1 3 4 1 2 4 2 (A)

Approach to Member of the Optimum to see

4 1 4 3 :

40. In USA the authority to regulate the formation and dissolution of Federal Departments is vested in (A) President (B) Congress (C) Constitution (D) President in consultation with the Secretary of State Ans : (B) 41. List-I (a) (b) Match the List-I Zone Zone with List-II and select of of the correct answer :

Acceptance Indifference

(c) (d) List-II 1. 2. 3. 4. Codes (a) (A) (B) (C) (D) Ans

Span Scalar

of

Attention chain Graicunas Fayol Simon Barnard : (d) 1 2 1 4 (B)

Henri Herbert Chester (b) 2 3 4 3 3 4 3 2 : (c) 4 1 2 1

42. Which of the following, according to Bruce Stone, is not a Bottom -Up concept of accountability ? (A) Parliamentary control (B) Judicial and Quasi-Judicial Review (C) Constituency Relationship (D) Market Ans : (B) 43. Match List-I (a) (b) (c) (d) List-II 1. 2. 3. 4. Codes (a) (A) (B) (C) (D) Ans the List-I with List-II and select Service by Open Centralised the correct answer :

Civil Recruitment

Commission Promotion Competition Recruitment 1917 1926 1919 1833 : (d) 4 3 4 2 (B)

(b) 2 2 3 4 3 1 1 3 :

(c) 1 4 2 1

44. The concept of Citizens Charter as a means to greater accountability and openness was first introduced in 1991 in (A) USA (B) U.K. (C) France (D) India Ans : (B) 45. (A) (B) (C) (D) Ans Which of the following Training is not an by informal training type ? Communication Method Training Method (D)

Conference Departmental Syndicate :

46. (A) (B) (C) (D) Ans

grant

for

meeting an unexpected Supplementary Votes on Votes on Exceptional :

demand

is

called Grant Account Credit Grant (D)

47. Budget is a document which is unstitched and reassembled by the Appropriation Committees of both the Houses. This statement of Aaron Wildrasky applies to the budget of (A) United States of America (B) United Kingdom (C) France (D) India Ans : (A) 48. (A) (B) (C) (D) Ans The best check on bureaucratic power, according to Powerful Private Strong Bureaucratic Strong Technical Knowledge of the : Weber, lies with Groups leadership Parliament Executive (D)

Superior

Chief

49. If a society is not at all differentiated, if there are no specialists, if everyone can do everything. Riggs calls it a (A) Society (B) Prismatic Society (C) Diffracted Society (D) Transitional Society Ans : (B) 50. (A) (B) (C) (D) Ans Which one is not correctly Compromiserpoor decision Executivegood Bureaucratcontrol of situation Developerinterest in harmony, : List-I with List-II and of and Achieving select the matched ? maker motivator rules conflicts (B)

by avoids

51. Match the List-I (a) The (b) (c) (d) List-II 1. 2. 3. 4. Codes (a) (A) (B) (C) (D) Ans

correct

New Science Organization The Eupsychian David Abraham Chris Herbert (b) 1 3 4 4 2 1 3 2 :

Management

(c) 3 4 1 3

answer : (Books) decision Innovation Society Management (Author) McClelland Maslow Argyris Simon : (d) 4 2 2 1 (C)

52. The bureaucracy is a circle, which no one can escape, its hierarchy is a hierarchy of knowledge. Who said it ? (A) Max Weber (B) Karl Marx (C) Blau and Scott (D) T. Parsons Ans : (B) 53. (A) (B) (C) (D) Ans 54. (a) (b) (c) (d) Codes (A) (B) (C) (D) Ans Which of Review following is an area of Planning Commission ? of the Union and State Finances Maintaining Macro-economic Stability Public and Foreign Loans Ways and Means to Restructure Public Finance : (A) of a Utilisation Operational Degree Autonomy (a) (a) (a), (b), (b) (c) : departmental undertaking of Financial of in and and and and are Resources Flexibility Accountability working : (b) (c) (d) (d) (B) the

Suggesting

The

advantages Optimum High

55. Match the List-I with List-II and select the correct answer : List-I (a) Endo-prismatic (b) Exo-prismatic (c) Ortho prismatic (d) Diffracted List-II 1. Semi differentiated and malintegrated 2. Congruence of aspiration and reality 3. Impetus from outside 4. Internally generated movement towards diffraction Codes : (a) (b) (c) (d) (A) 3 2 4 1 (B) 4 3 1 2 (C) 2 4 3 1 (D) 1 2 3 4 Ans : (B) 56. The authority which can make rules for the transaction of the business of the Government of India is (A) President (B) Prime Minister (C) Parliament (D) Ministry of Home Affairs Ans : (A) 57. List-I Match the List-I with List-II and select the correct answer : (Concept)

(a) (b) (c) (d) List-II 1. 2. 3. 4. Codes (a) (A) (B) (C) (D) Ans

Domination Action-centred Organization

Knowledge by

Organization Leadership as

John Max Chester Peter (b) 1 1 4 4 2 3 3 3 : (c) 3 2 1 2

Worker personality Theory Bureaucracy (Thinkers) Adair Weber Barnard Drucker : (d) 4 4 2 1 (C)

58. No money shall be withdrawn from the Consolidated Fund except under appropriation made by law. This has been provided in (A) Article 110 (B) Article 112 (C) Article 113 (D) Article 114 Ans : (D) 59. Match the List-I with List-II and select the correct List-I (a) All India (b) Classification of Civil (c) Regulation of Recruitment and Conditions of (d) General Policies Regarding all Central List-II 1. Parliamentary 2. Ministry of Personnel, Public Grievances and 3. Article 4. Civil Service Rules Codes (a) (b) (c) (A) 1 2 3 (B) 3 4 1 (C) 3 2 4 (D) 1 2 4 Ans : answer :

Services Services Service Services Act Pensions 312 1930 : (d) 4 2 1 3 (B)

60. Increasing efficiency must begin with those higher ups. This is the essence of scientific management. Who said it ? (A) Woodrow Wilson (B) Louis Brandis (C) Frederick Taylor (D) Harrington Emerson Ans : (D) 61. The conditions necessary to ensure that neutrality does not lead to a state of inertia and status-quo maintenance are (a) cultural or class congruence between Ruling group and Administrative elite (b) absence of fundamental disagreement over social core values

(c) (d) Codes (A) (B) (C) (D) Ans

active a

participation shared (a) (a), (a), (a),

in belief and (c) (b) (b) :

political systems

and and and

process presence : (b) (d) (c) (d) (D)

62. Riggs concept of development considers penetration as a factor of integration. Consider the following (a) The ability of the government to make and carry out decisions. (b) Peoples receptivity to law (c) Peoples will to participate (d) Peoples ability to participate Which of the above is correct regarding penetration ? Codes : (A) (a) (B) (b) and (d) (C) (c) (D) (c) and (d) Ans : (A) 63. Who recommended that the National Development Council should be given a constitutional status under Article 263 and renamed as National Economic and Development Council ? (A) Administrative Reforms Commission (B) Sarkaria Commission (C) P. J. Rajamannar Committee (D) Chief Secretarys Conference Ans : (B) 64. What falls within the purview of consultation of Union Public Service Commission ? (a) Direct Appointment (b) Promotion and Transfer (c) Pay and Service Conditions (d) Classification and Training Codes : (A) (a) and (b) (B) (b) and (c) (C) (a), (b) and (c) (D) (b), (c) and (d) Ans : (A) 65. In a State the (a) Principal Adviser (b) Coordinating link (c) Secretary to (d) Chairman of all Planning and Codes (A) (a) (B) (c) (C) (a), (b) (D) (b), (c) Ans : Chief Secretary acts as the Governor in inter-State Disputes the Chief Minister Development Coordination Committees : and (c) and (d) and (c) and (d) (B) to

66. Which of the following provided for the appointment of the same person as Governor of two or more

States (A) (B) (C) (D) Ans 67. (A) (B) (C) (D) Ans Audit

7th 11th

Article Article Constitutional Constitutional : State Government State Union on of : Accounts is

? 153 155 Amendment Amendment (C) a Subject Subject List Policy (B)

of

Subject Subject

Concurrent Fiscal

68. The body that examines the expenditure of the Departments and questions the propriety of these expenditures is (A) Public Accounts Committee (B) Estimate Committee (C) Comptroller and Auditor General (D) Committee on Assurances Ans : (C) 69. (A) (B) (C) (D) Ans Reappropriation Between voted and Between different grants Within the To meet any expenditure not is permissible only charged items of expenditure voted by the Lok Sabha same grant only already sanctioned by the Lok Sabha : (C)

70. It is a comprehensive account of the receipts and expenditure of the Government under various heads and sub-heads of the Budget (A) The Appropriation Account (B) The Finance Account (C) Economic Classification of the Budget (D) Functional Classification of the Budget Ans : (B) 71. Which of the following statements are true about Lokayukta in Rajasthan ? (a) He is appointed by the Governor and is responsible to the legislature. (b) His jurisdiction spans over Ministers, Members of State Legislature and higher Civil Servants. (c) He considers the cases of corruption and mal administration. (d) His job is confined to investigate allegations and not grievances. Codes : (A) (a) and (d) (B) (a), (b) and (c) (C) (a), (b), (c) and (d) (D) (a) and (c) Ans : (D) 72. Among the critical dimensions of the leadership situation the most important dimension, according to Fiedler, is (A) Position Power (B) Task Structure (C) Leader-Member Relations (D) Least Preferred Co-worker Ans : (D)

73. Match List-I (a) (b) (c) (d) List-II 1. 2. 3. 4. Codes (a) (A) (B) (C) (D) Ans 74. (A) (B) (C) (D) Ans 75. (A) (B) (C) (D) Ans

the

List-I

with

List-II Citizens

and

select

the

correct

answer

Right Judicial Legislative Total Accountability Guarantee (b) 3 1 3 1 4 2 1 3 :

to

Charter Information Control Control Approach Decision Transparency Arbitrariness : (d) 2 4 4 2 (D)

Quality for against (c) 1 3 2 4

Which one of the following is not a function of the Directorate ? Formulation of the Budget of the Department Inspection of the execution of work by Field Officers Rendering technical advice to the Minister/Secretary Coordination of interdepartmental functions : (A) Which of the following is not correctly matched ? InjunctionStrong arm of equity Quo WarrantoPrevents illegal assumption of Public Office ProhibitionIssued against administrative authorities Habeas CorpusThe bulwark of individual liberty. : (C)

76. The recommendation to the Union Government for the grant of financial assistance to the States is made by (a) The President (b) The Comptroller and Auditor General of India (c) The Finance Commission (d) The Planning Commission Codes : (A) (a) and (c) (B) (b) and (c) (C) (c) and (d) (D) (b), (c) and (d) Ans : (C) 77. It transforms the representative democracy into participatory democracy. This statement has a reference to (A) Parliamentary System of the Government (B) Article 40 of the Constitution (C) 73rd Constitutional Amendment (D) 74th Constitutional Amendment Ans : (C) 78. Which of the following is not a corporation form ?

(A) (B) (C) (D) Ans

Unit Indian Food State

Trust Oil Corporation Bank :

of of of

India Corporation India India (B)

79. Which of the following statements are correct about the National Development Council ? (a) It symbolises a federal approach to planning. (b) It was set up by a proposal of the Cabinet Secretariat in August 1952. (c) It was reconstituted in 1968 on the recommendation of the Administrative Reforms Commission. (d) The initiative to convene its meeting lies with the Planning Commission. Codes : (A) (a) and (b) (B) (a), (b) and (c) (C) (a), (b) and (d) (D) (a), (b), (c) and (d) Ans : (C) 80. For which form of Public Enterprise it is said that It is a child of the State which grows into maturity as soon as it is born ? (A) Departmental Form (B) Company Form (C) Corporation Form (D) Commission Form Ans : (C) 81. (A) (B) (C) (D) Ans 82. (A) (B) (C) (D) Ans 83. (A) (B) (C) (D) Ans 84. (A) (B) (C) (D) Ans 85. (a) Voluntary provisions of 73rd Constitutional Amendment Three Tier Panchayati Raj Reservation for Backward Reservation for Women up to 1/3 Five Year term for : Which the following Union Ministry Department Staff of is the Public of of : An urban body in the modern sense was first established in Central Personnel Agency Service Home Personnel and Selection in include Institutions Classes seats PRIs (B) India ? Commission Affairs Training Board (C) the year 1660 1687 1951 1992 (B)

: It is not created Notified Town Cantonment : The is Central Council an of Local advisory by an act Municipal of State Area Area or Union

Legislature Corporation Committee Committee Board (B) Government body.

(b) is constituted under Article 263 (c) Consists of Union Minister for Urban Development and State Ministers for Local Self Government (d) Controls the Central financial assistance to local bodies Codes : (A) (a) and (c) (B) (b) and (d) (C) (a), (b) and (c) (D) (b), (c) and (d) Ans : (C) 86. The Powers, Authority and Responsibilities of Panchayats in India are mentioned in the Article (A) 243 B (B) 243 D (C) 243 G (D) 243 W Ans : (C) 87. Match the List-I with List-II and select the correct List-I (a) Miniature (b) King-pin of Revenue (c) Unit for Revenue and Criminal (d) First Line Supervisor in the chain of Revenue List-II 1. Sub 2. 3. 4. Codes (a) (b) (c) (A) 1 2 3 (B) 1 4 3 (C) 3 2 4 (D) 3 4 1 Ans : 88. (A) (B) (C) (D) Ans Gram Sabha has been Balwantray Ashok V. L. called Embodiment of Direct Mehta Mehta K. Rao Singhvi : answer :

District Administration Administration Administration Division Kanungo Tehsil Patwari : (d) 4 2 1 2 (D)

G.

M.

Democracy by Committee Committee Committee Committee (D)

89. The transitional area, smaller urban area, larger urban area are differentiated on the basis of (a) population and its density (b) level of per capita income (c) revenue generated for local administration (d) percentage of employment in non-agricultural activities Codes : (A) (a) and (c) (B) (a), (b) and (c) (C) (c) and (d) (D) (a), (c) and (d) Ans : (D) 90. With the advent of development administration, the Collector has emerged as

(A) (B) (C) (D) Ans

Symbol Head Coordinator Executive

of of of Head : of

State General Development Development

Power Administration Programmes Programmes (C)

Directions(Q. 91100) The following consist of two statements, one labelled as Assertion (A) and the other as Reason (R). You are to examine these two statements carefully and select the answers to these questions using the codes given below (A) Both (A) and (R) are true and (R) is the correct explanation of (A) (B) Both (A) and (R) are true, but (R) is not the correct explanation of (A) (C) (A) is true, but (R) is false (D) (A) is false, but (R) is true 91. Assertion (A) : The study of Public Administration lacks cross cultural concepts and principles for being able to be recognised as science. Reason (R) : Administrative culture cannot transcend the national frontiers and national experiences. Ans : (C) 92. Assertion (A) : The Contingency approach and the Transactional approach, both are mutually complementary and quite interrelated. Reason (R) : Unlike the Contingency models, which concentrate only on the problems confronting the leader in dealing with a small group, Transactional approaches also analyse the leaders subordinates and the problems confronting them. Ans : (B) 93. Assertion (A) : Like any social science, Public Administration has its own corpus of methodologies. Reason (R) : Public Administrationists are aware that the central methodologies of the mother discipline usually are irrelevant of practising Public Administration. Ans : (A) 94. Assertion (A) : The Human Relations Theory focuses on management as a web of interpersonal relations. Reason (R) : Richard Franke and James Kaul concluded that the human relations were not the reason behind workers efficiency. Ans : (C) 95. Assertion (A) : The Government has no power to regulate, through an appropriate legislation, the recruitment to civil services. Reason (R) : The Constitution provides for the establishment of an impartial and independent Union Public Service Commission for recruiting civil servants in India. Ans : (D) 96. Assertion (A) : In the open model, what is good for the individual is also good for the society. Reason (R) : Open model of organization, like the closed model, is an ideal type. Ans : (B) 97. Assertion (A) : Individuals and organizations over invest in information. Reason (R) : Information intensive decisions have a greater organizational acceptance and smoother implementation. Ans : (A) 98. Assertion (A) : The first principle of democratic governance is that the rulers should be accountable to the people. Reason (R) : Transparency and accountability in governance depend on citizens easy access to reliable information and data.

Ans

(B)

99. Assertion (A) : The disadvantaged states perceive that they have been punished for the better performance, whereas the laggard states continue to be rewarded. Reason (R) : The Finance Commission has the constitutional responsibility to provide succour to the underdeveloped States. Ans : (B) 100. Assertion (A) : The bureaucracy and the political leadership can achieve the goals by working closely and harmoniously. Reason (R) : If political leadership represents the input functions of a political system, the output function is performed by the administration. Ans : (A)