(Paper) RAS Exam Paper Commerce (Solved) : Year 2009

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

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

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

4. Under Section 275 of the Companies’ 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

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

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

7. In a public company the minimum number for having a Quorum in a meeting is—
(A) 2
(B) 3
(C) 5
(D) 7

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)

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

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

11. Bombay Stock Exchange Sensex consists of ……… script as on 31st March, 2005.
(A) 10
(B) 20
(C) 30
(D) 40

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

13. Who is Father of Scientific Management ?
(A) Henry Fayol
(B) Elton Mayo
(C) Chester Bernard
(D) F. W. Taylor

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

15. Managerial Planning is a—
(A) Middle Level Function
(B) Lower Level Function
(C) Top Level Function
(D) All Level Function

16. “Organisation is the foundation of management.” This statement is given by—
(A) Henry Ford
(B) Haney
(C) Keeling
(D) Lansberry Fish

17. The number of subordinates a superior can effectively handle is called—
(A) Cooperation
(B) Coordination
(C) Supervision
(D) Span of control

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

19. Motivation – Hygiene Theory was propounded by—
(A) Abraham H. Maslow
(B) Fredrick Herzberg
(C) Peter F. Druker
(D) Argyris Chris

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

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

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

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

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

25. In ‘Direction’ who is given importance ?
(A) To machines
(B) To paper work
(C) To man
(D) To production

26. The Essence of Control is—
(A) To take decision
(B) To take corrective action
(C) To make enquiry
(D) To motivate

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

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

29. The first Secretary of the company is appointed by—
(A) Shareholders
(B) Promoters
(C) Government
(D) Directors

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

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

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

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

34. The first Stock Exchange in India was established in—
(A) Calcutta
(B) Delhi
(C) Bombay
(D) Madras

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

36. FEMA stands for—
(A) Foreign Exchange Management Act
(B) Funds Exchange Management Act
(C) Finance Enhancement Monetary Act
(D) Future Exchange Management Act

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

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

39. ……… has been founded to act as permanent watchdog on the international trade.
(A) ISRD
(B) ADS
(C) WTO
(D) DIMF

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

41. The present World Economic Depression first of all, started from which country ?
(A) U.S.A.
(B) U.K.
(C) France
(D) India

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

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

44. The Life Insurance in India was nationalised in the year—
(A) 1870
(B) 1956
(C) 1960
(D) 1966

45. Fire Insurance is based on the principle of—
(A) Utmost Good faith
(B) Insurable Interest
(C) Indemnity
(D) Cooperation

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

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

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

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

50. Final accounts prepared in narrative style are in—
(A) Horizontal form
(B) Accounts form
(C) Vertical form
(D) None of the above

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

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

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

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

55. The following data, relates to manufacturing company for the year 2006-07—
Net Profit as per P & L A/c—Rs. 2,40,000; Depreciation—Rs. 80,000; Goodwill written-off—Rs. 40,000, Profit on Sale of Fixed Assets—Rs. 16,000, Proposed Dividend—Rs. 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

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

57. Price earning ratio is 83•33% and E.P.S. is Rs. 30. The market price of equity share will be—
(A) Rs. 33•33
(B) Rs. 66•67
(C) Rs. 20
(D) Rs. 25

58. If the current ratio is 2, current assests are worth Rs. 1,600, if current ratio is not allowed to fall below 1•5, 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

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) 0•5 times
(B) 0•8 times
(C) 0•10 times
(D) 0•4 times

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

61. Current Ratio is 3•75, Acid Test Ratio is 1•25 Stock Rs. 3,75,000, calculate working capital.
(A) Rs. 3,00,000
(B) Rs. 4,00,000
(C) Rs. 4,12,500
(D) Rs. 4,25,000

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) 4•06 times
(B) 5•06 times
(C) 6•06 times
(D) 7•06 times

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

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

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

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

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 2•5%. 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

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

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

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

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

72. Accounting for Intangible Assets are related to—
(A) AS – 10
(B) AS – 12
(C) AS – 24
(D) AS – 26

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

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

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) 33,333•33
(B) 16,666•66
(C) 66,666•67
(D) 96,666•66

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, 2007—1,80,000, 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

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

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

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 Supplier’s 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) Supplier’s A/c Dr. To Goods in Transit

80. Calculate Return on Investment/ Return on Proprietor’s fund. Gross profit of a firm is Rs. 3,20,000, Operating expenses Rs. 1,00,000, Taxes Rs. 20,000, Owner’s fund Rs. 5,00,000, Debenture Interest Rs. 50,000—
(A) 20%
(B) 30%
(C) 40%
(D) 50%

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%

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

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

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. 13•50 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

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

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

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

89. Verification includes—
(A) Valuation
(B) Existence
(C) Ownership & Title
(D) All of the above

90. By whom from the following, auditor can be reappointed ?
(A) Directors
(B) Shareholders
(C) Central Government
(D) All of the above

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

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.

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

94. Company Auditor is responsible—
(A) For directors
(B) For shareholders
(C) For public
(D) For creditors

95. In Balance Sheet, Audit Accounts are audited—
(A) Monthly
(B) Bi-monthly
(C) Annually or half yearly
(D) Quarterly

96. Audit adopted by banking company is—
(A) Continuous Audit
(B) Periodical Audit
(C) Internal Audit
(D) Balance Sheet Audit

97. Which of the following have lien of Company Auditor ?
(A) Books of Accounts of the Company
(B) Vouchers of the Company
(C) Auditor’s working paper
(D) All of the above

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

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)

100. According to ownership, Government Company means ……… share.
(A) Whose paid-up share capital’s 48%, shares are owned by Government
(B) Whose paid-up share capital’s 49% shares are owned by Government
(C) Whose paid-up share capital’s 50% shares are owned by Government
(D) Whose paid-up share capital’s 51% shares are owned by Government