ARMY WELFARE EDUCATION SOCIETY

WRITTEN TEST PAPER FOR TEACHERS SELECTION: 09 DEC 2012

PART-‘B’ : Commerce (PGT) : SUBJECT CODE : (P43)
GENERAL INSTRUCTIONS
1. DO NOT open this booklet until you are asked to do so.

2. FILL SCHOOL CODE, REGN NUMBER ON OMR ANSWER SHEET CAREFULLY AND SIGN ON THE
RIGHT BOTTOM CORNER OF OMR SHEET.

3. Total duration of the test is 2 Hours and Maximum Marks are 120.

4. There are total 100 questions. All questions are objective type-multiple choices. All questions
carrying equal marks.

5. DO NOT write anything on this question booklet.

6. After the test, please return this booklet along with OMR-Answer sheet to the invigilator.

7. You are not allowed to leave the examination hall before 1300h.

Instructions for filling the OMR Sheet

8. Read instructions printed on the OMR Sheet carefully before answering. Each item has four
choices; A, B, C and D. Each choice is denoted by a circle. Shade the appropriate circle using
Blue/Black Pen. Be absolutely sure of your option before shading the circle since you are not
permitted to erase your response once shaded. More than one response will make your
answer invalid. There is NEGATIVE MARKING for wrong answer.

Rough Work

9. For any rough work use the separate sheet provided along with the text booklet. DO NOT do
any rough work on the answer sheet or any other paper.

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 PAPER - B
WRITTEN TEST PAPER FOR SELECTION OF TEACHERS : CSB 2013
COMMERCE(PGT) : SUBJECT CODE : P43
1. The term “current asset” does not include 14. If stock worth Rs.10,000 (that has not been insured)is
(a)Cash (b)Stock-in-trade destroyed by fire, the accounting entry is
(c)Furniture (d)Advance payment (a) Dr Profit &Loss A/c 10,000
Cr Trading A/c10,000
2. According to the _________concept, the proprietor is treated (b) Dr Stock A/c10,000
as a creditor to the extent of his capital. Cr Trading A/c 10,000
(a)Cost (b)Entity (c)Dr Trading A/c 10,000
(c)Money measurement (d)Dual aspect Cr Stock A/c10,000
(d) None of the above
3. The comparison of net profit with the sales of the same year
is termed__________comparison 15. An entry of Rs 840 being debited to Surbhi ’s A/c as Rs 480
(a)Horizontal (b)Vertical would be an error of
(c)Elliptical (d)Multidimensional (a) Principle (b) Commission
(c) Omission (d)Negligible significance
4. Convertible debentures are those on which
(a)Accumulated interest payable is converted into equity 16. If M.Gul a debtor of Rs 4000 has become insolvent and a
shares dividend of 50% is declared, the entry is
(b)Interest is not paid when the company is running in a loss (a) Dr Bad Debts 2000
(c)Interest is payable and if not paid, keeps on accounting To P & L A/c 2000
d)Equity shares may be exchanged at the option of the (b)Dr Cash 2000
debenture holders To Bad Debts 2000
(c) Dr Cash 2000
5. Heavy initial expenditure on advertising the launch of a new To Debtors 2000
product should be classified as (d) Dr Bad Debts 2000
(a)Capital expenditure (b)Revenue expenditure To Debtors 2000
(c)A loss (d)Deferred revenue expenditure
17. Investment by the owner would result in ____________ in
6. Insurance unexpired account is a ___________ account capital and increase in __________.
(a)Personal (b)Nominal (a) Increase; liability (b) Decrease; liability
(c)Real (d)Fictitious (c) Increase; asset (d) Decrease; asset
7. Which of the following is/are member (s) of the International 18. Given: Net assets of a business on Jan.1 are Rs 40,000, and
Accounting Standards Committee? on Jan.31 Rs 8,000.Find the net income for January.
(a)The ICAI (b) The ICWAI (a) 6000 (b) 8000
(c) Both(a) and(b) (d) Neither(a) nor(b) (c) 2,000 (d) Zero

8. Mark out which is not a capital expenditure. 19. Which of the following transaction result in increase of
(a)Cost of issuing shares and debenture assets and increase in owner’s equity ?
(b)Wages paid for construction of a new office (a) Bonus shares issued (b) shares issued for cash
(c)Purchase of a new spark plug for Rs.9.75 (c) A dividend is declared (d) All of the above
(d) Repair on a secondhand vehicle newly purchased
20. Identify the transaction that will result in decrease in owner’s
9. If Rs.15,000 is spent on the repair of a secondhand equity and increase in liabilities.
machinery and Rs.2,500 on freight in connection with its (a) Issue of bonus shares
acquisition, what is the amount of capital expenditure ? (b) Shares issued in payment of bills payable
(a)Rs 15,000 (b)Rs 17,500 (c) Shares issued for purchase of land and building
(c)Rs 12,500 (d)Rs 2,500 (d) None of the above

10. When net profit is Rs 44,000 and profit on sale of a fixed 21. In the absence of an agreement to the contrary, the partners
asset is Rs4,000, what is the fund from operations? are entitled to________ interest on loans to the firm,________.
(a) Rs 40,000 (b)Rs 44,000 (a) 6%; only when there are profits
(c) Rs 48,000 (d)Cannot be computed (b) 9%; only when there are profits
(c) 6%; whether or not there are profits
11. When total sources of funds are Rs 1,25,000 and total (d) 9%; whether or not there are profits
applications of funds are Rs 1,50,000, The result would be
(a)Net increase in working capital by Rs 25,000 22. X and Y are partners sharing profits in ratio of 3:2. A is
(b)Net decrease in working capital by Rs25,000 admitted as a partner entitled to 1/3 Share of the profit. Tick
(c) No effect on working capital the new profit sharing of X ,Y and A.
(d) None of the above (a) 3:2:1 (b) 1:2:3
(c) 5:4:6 (d) 6:4:5
12. ___________ consistency calls for financial statements for a
number of years to be reviewed and analysed. 23. A, B and C are partners in the ratio of 1/5 : 1/3 : 7/15 .C retires
(a)Horizontal (b)Vertical and his share is taken up by A and B in the ratio of 3 : 2.The
(c)Internal (d) External new profit-sharing ratio will be
(a) 13 : 12 (b) 14 : 15
13. Window dressing is prohibited owing to (c) 15 : 14 (d) 12 : 13
(a) Convention of disclosure
(b) Convention of materiality
(c) Convention of conservatism
(d) Accrual concept

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24. What would be the accounting entry for a partner ’s 36. Match the following:
withdrawal of cash in lieu of salary ? List I List II
(a) Dr salary A/c A. Test of activity I. Acid test ratio
To Cash A/c B. Test of liquidity II. Debt equity ratio
(b) Dr Cash A/c C. Test of profitability III. Debtor’s turnover ratio
To Partner’s Current A/c D. Test of solvency IV.ROI
(c) Dr Cash A/c
To Salary A/c A B C D
(d) Dr Partner’s Current A/c a) I II III IV
To Cash A/c b) II I IV III
25. Adjustment Entry for rent received in advance would be- c) IV III II I
(a) Cash A/c ’ Dr, d) III I IV II
To Rent Received in Advance A / c
(b) Cash A/c Dr. 37. If at an annual general meeting, no auditors are appointed
To Rent A / c or reappointed,
(c) Rent A/c Dr. a) The board of directors appoint a person to fill the
To Rent Received in Advance A/ c vacancy
(d) Advance Rent A / c Dr. b) The union government appoints an auditor
To Rent A / c c) The managing director appoints an auditor
26. The minimum amount called on application for issue of d) An extraordinary meeting is called
shares is ——– of face value.
(a) 5% (b) 25% 38. In which year the Charted Accountants Act was passed?
(c) 30% (d) 40% a) 1947 b) 1948
c) 1949 d) 1950
27. Given: Stock of stationery on Jan. 1, 2011 Rs 400.Stock of
stationery on Dec. 31,2011 Rs 100.Payment for stationery 39. What determines the duties of an auditor of a partnership
during 2011 Rs.1200. Creditor for stationery on Dec. 31, 2011 firm ?
Rs 150. a) The Partnership Act
What is the amount of stationery that will be posted to the b) The Partnership deed
Income and Expenditure A/c for the year ending Dec.31,2011? c) The agreement entered between the partnership and
(a)Rs. 1150 (b)Rs.1650 auditor
(c)Rs. 850 (d)Rs.1050 d) Relevant provisions of the Companies act

28. What amount on account of subscription income will be 40. During the course of an audit, the auditor stumbled upon a
parted to the Income and Expenditure A/c for the year ended balance of Rs 12,500 in the Goodwill A/c and ascertained
Dec.31,2011? that it had not been written off over a long period. What may
(a)Rs 8000 (b)Rs 8200 the auditor do with it ?
(c)Rs 8400 (d)Rs 8600 a) Advise the concern to write it off
b) Hide it from the management
29. To arrive at the subscription income for a year, which of the c) Insist that it be written off the same year
following would you deduct from the amount of subscription d) Recommend to the concern that it be written off over a
received during the year ? period of five years
a) Subscription received pertaining to the previous year
b) Subscriptions received in advance for the following year 41. Matrix type of marketing organization is most suited for
c) Subscriptions in arrear in the beginning of the year a)Single product, single market situation
d) All of the above b) Multi product, multi market situation.
c) Multi product, single market situation
30. Given: Machinery cost Rs 30,000. Scrap value Rs 10,000. Life d) single product, multi market situation
5 years. Rate of interest 5% . Reference to sinking fund table
0.180975.The depreciation per year will be 42. Generated increased sales by neglecting quality control,
a) Rs 4,000 b) Rs 3619.50 production efficiency and /or cash flow management are.
c) Rs 8,000 d) Rs 5429.25 a) Over marketing b) Remarketing
c) Under marketing d) demarcating
31. When a company issues shares at a premium, the premium
amount will be received by it along with 43. When a change in customers tastes and preferences and
a) Application money b) Allotment money market structures in general occurs, it is termed as
c) Calls d) Any of the above a) market inertia b) market planning
c)Market drift. d) market change
32. To what rate does the law limit the commission payable on
the issue of debentures? 44. Market orientation is a technique of selecting.
a) 2% b) 2 ½ % a)Product integration b)Concentrated marketing
c) 3 ½ % d) 4 ½ % c) Additional segmentation d) Marketing mix

33. What rate should the commission payable on the issue of 45. When buyers have too narrow an image of brand, is known as
debentures not exceed? a) under positioning error
a) 2% b) 3% b)doubtful positioning error
c) 4% d) 5% c)confused positioning error
d)over positioning error.
34. When FIFO method is in use, the closing inventory is valued
at 46. Under the companies act, 1956, a person can be a director in
a) Prevailing market price b) Recent cost paid a) 7 companies b) 10companies
c) Oldest price paid d) Price furthest from actual cost c) 20 companies. d) 25 companies

35. If the cost of goods sold is Rs 1 Lakh and the opening and 47. Which one of the following is not an example of profitability
closing stocks are Rs 20,000 and Rs 30,000 respectively, what ratios?
will be the stock turnover ratio ? a) OPERATING RATIO b) ROI
a) 3.33 times b) 4 times c) EPS d) INTEREST COVERAGE RATIO
c) 5 times d) 6 times
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48. The budget which commonly takes form of budgeted profit 62. The fixed price at which an option may be exercised, known
and loss account and balance sheet is as ________price
a) cash budget b) master budget. a) striking b) bid
c) flexible budget d) sales budget c) hammer d)called up
49. The physical possession of equity shares in case of GDR is 63. For registering the transfer of shares in the name of the buyer
with share transfer stamps are required at _____ % ad valorem
a) depository b) custodian. a) 0.25 b) 0.5 c) 1 d) 5
c) foreign investor d) Government
64. Black- scholes pricing model is used for
50. For calculating the value of equity share by yield method a) option b) forward
information is required regarding c) future d) all of the above
a) NRR. b) net asset of business
c) face value of share d) all of the above 65. An investor would buy a bond if
a) the intrinsic value is lower than the market value
51. Life insurance premiums received by an insurance company b) the intrinsic value is higher than the market value.
should be classified as c) the current market value is lower than the redemption
a) accrued asset b) accrued liability value
c) prepaid expense d) unearned revenue d) the required rate of return is equal to coupon rate of
interest
52. The speculative activity that seeks a profit from price
variations of securities in the different markets is 66. Low asset turnover may indicate
a) Margin trading b) Market rigging a) low assets b) high cost of maintenance
c) Option dealings d) Arbitrage c) idle assets d) all of the above

53.The maximum limit of partners in a firm has been specified by 67. The phenomenon of over trading in working capital is
a) the Indian partnership act 1932 characterized by
b) the Indian contract act 1872 a) less amount of cash invested in current assets
c) the Indian companies act 1956 b) overcapitalization of the company as compared to volume
d) both A & B of sales
c) high amount of cash invested in current assets
54. Accounting entry for recording loss on the realization of d) All of the above
sinking fund investment is
a) Sinking fund a/c Dr 68. Underwriting commission on shares as per SEBI guide lines
Sinking fund investment a/c a) 4% and above b) 3.5 - 4%
b) Sinking fund investment a/c Dr c) 3 - 3.25% d) up to 2.5%
Sinking fund A/c
c) Profit & loss A/c Dr 69. ‘Ulta badla’ is a charge payable by a_____ to a ________.
Sinking Fund Investment A/c a) Bull, broker b) Bear, broker
d) Sinking fund investment A/c Dr c) Bear, bull d) Bull, bear
Profit & loss A/c
70. Euro convertible bonds issued by Indian companies refer to
55. The method ignores cash generation beyond period when bonds issued in foreign currency in
cash inflow exceeds investment a) India or any country outside India
a) pay back method. b) ARR b) European countries only
c) NPV d) IRR c) India and any country in Europe
d) any country other than India
56. Contago charge is one paid by a___________ spectator to a
____________ spectator. 71. Which of the following provides liquidity to money market
a) Bear, bull b) Bull, bear instruments by creating a secondary market where they can
c) Lame duck, bull d) Lame duck, bear be traded?
a) DFHI b) NSDL
57. When the name of the transferee is not filled in the transfer c) SBI d) OTCEI
deed, it is called a/an
a) Carryover b) Option dealing 72. GIVEN FIXED COST=Rs 20000/-, the operating BEP in
c) Blank transfer d) Forward dealing units=2500 and financial BEP = Rs 4000, the overall BEP in
units is…
58. The salient features of Deep Discount Bonds doesn’t include a) 3000 b) 5000
a) it carries a fixed rate of interest c) 8000 d) 4000
b) DDBs are issued to face value bond
c)These are zero interest bonds 73. The agency which has to give approval to any company
d) difference between sales price and original cost is intending to come out with a public or right issue, issue
investors profit related guidance etc is
a) RBI b)SEBI
59. Total leverage is a combination of c) STCL d) CCI
a) financial leverage and EPS
b) operating Leverage and EPS 74. As per earning per share approach cost of equity can be can
c) financial leverage and operating leverage be calculated as (where g is growth rate)
d) financial leverage and operating leverage and EPS a) EPS(I+g)/current market price
b) EPS/CURRENT MARKET PRICE
60. ___________risk refers to risk which is caused due to factors c) EPS(i+g)/current market price(I-g)
unique or related to a firm or industry d) EPS/current market price(I+g)
a) systematic b) unsystematic
c) market d) interstate 75. What does ‘blue chip’ denote ?
a) Shares likely to yield meager returns
61. According to DOW theory the market is always considered b) Shares listed in the stock exchange
as having _______movements, all growing at the same time c) Shares guaranteed by the government
a) 1 b) 3 c) 2 d) 4 d) Shares consistently yielding high returns
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76. When credit balance in invisibles account is greater than 90. Where all the debentures are redeemed, the balance left in
the debit balance in merchandize account, there is a the debenture sinking fund account is transferable to
a) capital account surplus a) debentures a/c
b) current account surplus b) sinking fund investment a/c
c) capital account deficit c) capital redemption reserve
d) current account deficit d) general reserve

77. If the convertibility of currency is restricted to certain 91. Capital employed in a business is Rs 150000.profits are
foreign currency transactions, it is termed as Rs 50000/-and the normal rate of profits is 20%.the amount
a) full convertibility of goodwill as per capitalization method would be
b) partial convertibility a) Rs100000 b) Rs150000
c) current account convertibility c) Rs 200000 d) Rs 300000
d) capital account convertibility
92. The basis of theory Z is the reliance on
78. The exchange market of India consists of a) external control of human behaviour
a) authorized dealers b) self control and self direction
b) RBI c) the belief that productivity is linked to trust, openness,
c) Overseas banks to some extent subtlety and intimacy in the work environment.
d) all of the above d) Government regulatory frame work
79. Which committee was formulated to look into the matter of 93. Which of the following forms of combinations involve
capital account convertibility in India? certain degree of control over supply of goods in the market ?
a) Narasimham committee b) Tarapore committee a) Trade association
c) Tendon committee d) Chore committee b) Chamber of commerce
c) Pool
80. A TOM rate quoted is for delivery on the d) All of the above
a) same day b) second working day
c) third working day d) following day 94. Deferred payment arrangement aim at financing
a) working capital needs
81. According to Haney, ‘excessive competition’ served as a b) redemption of debts
_________ force in leading to the formation of business c) purchase of GDRs
combinations. d) import of plant and machinery
a) Beckoning b) Driving
c) Facilitating d) Compelling 95. The combination of firms in successive stages of same
industry may be referred to as
82. Leading and lagging are used for a) horizontal integration
a) hedging b) speculating b) vertical integration
c)reducing taxes d)any of the above c) forward integration
d) backward integration
83. Which of the following are the internal techniques for
managing foreign exchange exposure? 96. The motivational process and not the motivators as such is
a) netting b) futures associated with
c) leading and lagging d) all except(b) a) need hierarchy theory
b) two factor theory
84. When operating profit ratio is 25% and capital turnover artio c) berg theory
is 2%what is the ROI? d) expectancy theory
a)75% b)50%
c)25% d)none of the above 97. When jobs are broad ended in scope and complexity so that
the persons overall area of job responsibility increases, it is
85. Cash flow statement is prepared as per accounting standard a case of
a)As-5 b) As-4 c)As-3 d)As-2 a) job evaluation b) job specification
c) job enlargement d) job enrichment
86. Which one of the following formulae is used to calculate
cross relationship under the span of control? 98. Owners equity stands for
a) n (n-1) b) n {2n -1} a) fixed assets- fixed liabilities
c) n { 2n +n-1} d) None of the above b) fixed asstes – current liabilities
c) current assets-fixed liabilities
87.Cartel is a form d) total assets –total liabilities
a) Federation
b) Trade association 99. The form of combination that sees a group of common
c) Chamber of commerce shareholders or directions managing the policies of several
d) Complete consolidation companies, without any formal central administration, is
a) Community of interest b) Trust
88. Complete consolidation as a class of business combination c) Informal agreement d) Holding company
may include
a) Mergers and acquisitions 100. The ACC (Associated Cement Company) in India that does
b) Pools and cartels not operate its own plant, but was established only to
c) Trusts and holding companies control the subsidiaries is an instance of a/an
d) Trade associations and chambers of commerce _______________ .

89. In stock exchange operations, when the speculator buys the a) Offspring
right to sell ascertain number of shares on an agreed amount b) Pure
at a specified time , it is known as c) Mixed
a) no option b) call option d) Primary
c) put option d) double option

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