M.Com Entrance Test | Dibrugarh University | Solved Question Paper' 2020

 M.Com Entrance Test
Solved Question Paper’ 2020
Dibrugarh University

1. Human resource management involves the elements of:

(A) Planning, Organising and Controlling

(B) Planning, Organising and Coordinating

(C) Leading, Directing and Coordinating

(D) All of the above

Ans: (D) All of the above

2. Purchase of office equipment results in:

(A) Decrease in liability

(B) Decrease in capital

(C) Increase in capital

(D) Increase in assets

Ans: (D) Increase in assets

3. "Subscriptions collected in advance by a publisher of a magazine” should be classified as:

(A) Accrued Profits

(B) Future Profits

(C) Unearned revenue

(D) Pre-publication receipts

Ans: (C) Unearned revenue

4. The content of Job description involves:

(A) Job title, conditions of work

(B) Educational qualification, skills

(C) Both (A) and (B)

(D) None of the above

Ans: (A) Job title, conditions of work

5. Insurance premium paid by the firm on the life insurance policy of a partner is:

(A) Credited to partner's Capital account

(B) Credited to Profit and Loss account

(C) Debited to Capital account of the partner

(D) None of the above

Ans: (C) Debited to Capital account of the partner

6. Unclaimed dividends are shown on the liability side of the Balance Sheet under the heading:

(A) Current Liabilities

(B) Current Assets

(C) Reserves and Surplus

(D) Provisions

Ans: (A) Current Liabilities

7. What are the major hurdles that require action by HRM for the progress of Indian economy?

(A) Dishonesty and corruption.

(B) Lack of interest in work and production loss.

(C) Unemployment and poverty.

(D) Combating inflation.

Ans: (C) Unemployment and poverty.

8. Depreciation means:

(A) Physical deterioration of a fixed asset

(B) Allocation of the cost of fixed asset over its useful life

(C) Decline in the market value of the asset

(D) None of the above

Ans: (B) Allocation of the cost of fixed asset over its useful life

9. Payment of interim dividend is a

(A) Source of fund

(C) No flow of fund

(B) Application of fund

(D) None of the above

Ans: (B) Application of fund

10. Who is generally known as “the father of modern management theory”?

(A) Henry Fayol

(B) F. W. Taylor

(C) Frank Gilbreth

(D) Chester Bernard

Ans: (A) Henry Fayol

11. When current ratio is 2:5 and the amount of current liabilities is Rs. 25,000 what is the amount of current assets?

(A) Rs. 12,500

(B) Rs. 10,000

(C) Rs. 30,000

(D) Rs. 15,000

Ans: (B) Rs. 10,000 (Watch my video to learn calculation of current ratio)

12. Which of the following item is not an operating expense?

(A) Advertisement

(B) Depreciation of Office Equipment

(C) Salaries of the managerial staff

(D) Loss incurred on the sale of old motor vehicle

Ans: (D) Loss incurred on the sale of old motor vehicle

[Hint: Operating expenses does not include loss on sale of assets]

13. Which of the following is considered the first wage incentive plan in modern industrial era?

(A) Halsey plan.

(B) Taylor's differential piece-rate plan.

(C) Gantt Task plan.

(D) Barth plan.

Ans: (B) Taylor's differential piece-rate plan.

14. Nurseries and selling plants etc. should be classified as:

(A) Extractive industry

(B) Genetic industry

(C) Manufacturing industry

(D) Construction industry

Ans: (B) Genetic industry

15. Four paper mills merge and form a new company. It is a case of

(A) Horizontal combination

(B) Vertical combination

(C) Lateral combination

(D) Circular combination

Ans: (A) Horizontal combination

[Hint: Horizontal combination = Companies deals in same products.

Vertical combination = Companies deals in Different products.

Lateral combination = Company of same size

Circular combination = Companies operating in same general market with different product]

16. Concept of MBO was first developed by

(A) Peter Drucker

(B) Douglas McGregor

(C) Henry Fayol

(D) Clayton P. Alderfer

Ans: (A) Peter Drucker

17. A foul bill of lading is issued when

(A) Goods are a stolen property

(B) Goods are damaged

(C) Goods are not properly packed

(D) Goods are substandard

Ans: (B) Goods are damaged

18. An indent in foreign trade means

(A) A list of forwarding agents

(B) An order containing terms of trade

(C) A list made by supplier of goods

(D) All of the above

Ans: (B) An order containing terms of trade

19. Change Management is

(A) A systematic approach in dealing with change from the individual and organisational level

(B) A gradual process of approach in the workplace due to new policies, technology or even a new boss

(C) Both (A) and (B)

(D) None of the above

Ans: (C) Both (A) and (B)

20. Accounting information given by a company is as follows:

Total assets turnover - 3 times

Net profit margin 10%

Total assets – Rs. 1, 00,000

Find out the net profit:

(A) Rs. 10,000

(B) Rs. 15,000

(C) Rs. 25,000

(D) Rs. 30,000

Ans: (D) Rs. 30,000

21. The bill of exchange drawn by exporter on the importer is known as

(A) Documentary bill

(B) Bill of trade

(C) Bill of sight

(D) Bill of entry

Ans: (A) Documentary bill

22. Social factor having a potent bearing on HRM practices in India includes

(A) Caste system

(B) Doctrine of karma

(C) Customs and traditions

(D) All of the above

Ans: (A) Caste system

23. Which of the following is an error of commission?

(A) A sale of Rs. 256 omitted to be recorded.

(B) Treating charges as addition to asset.

(C) A purchase of Rs. 560 was wrongly posted

(D) Sales Book over-cast by Rs. 200 and purchase book was under-cast by the same amount

Ans: (C) A purchase of Rs. 560 was wrongly posted

24. In the Balance Sheet of a company, assets are arranged in the order of their

(A) Book value

(B) Liquidity

(C) Permanence

(D) Market value

Ans: (C) Permanence

[Hint: First fixed assets are shown and thereafter current assets are shown]

25. Which of the following is a demerit of time as the basis of wages?

(A) It is simple.

(B) It is liked by trade unions.

(C) All workers are paid equal remuneration.

(D) It does not cause workers to overwork.

Ans: (D) It does not cause workers to overwork.

26. The following are the examples of financial assets except:

(A) Stocks

(B) Bank loan

(C) Bond

(D) Jewellery

Ans: (D) Jewellery

27. A particular investment is risky because:

(A) It is dangerous

(B) It has low returns

(C) Its returns are uncertain

(D) Its raw material is unavailable

Ans: (C) its returns are uncertain

28. Which from the following is the safest investment?

(A) Treasury bills

(B) Government bond

(C) Corporate bond

(D) Stocks

Ans: (A) Treasury bills

29. Regular interest payment to debenture holders is called:

(A) principal

(B) Coupon rate

(C) Face value

(D) Rate of return

Ans: (B) Coupon rate

30. Underwriters are also called:

(A) Book runner

(B) Shareholders

(C) Subscribers

(D) Angel investors

Ans: (A) Book runner

31. GATT is an abbreviation for:

(A) General Agreement on Transport and Trade

(B) General Agreement on Tariffs and Trade

(C) Generally Accepted Telegraphic Transfer

(D) Generally Accepted on Trade and Telegraph

Ans: (B) General Agreement on Tariffs and Trade

32. Which of the following is an example of a credit sale?

(A) Buying furniture with a debit card.

(B) Exchanging a mobile with a new one.

(C) Leasing land for one year.

(D) Buying a car with a deposit and installments.

Ans: (D) Buying a car with a deposit and installments.

33. What standards are used to prepare financial statements by most of the countries and companies?

(A) International Financial Reporting Standards.

(B) International Financial Accounting Standards.

(C) International Accounting & Auditing Standards.

(D) Generally Accepted Accounting Principles.

Ans: (A) International Financial Reporting Standards.

34. The _______________ certify or guarantee that the financial statements are correct.

(A) Management

(B) Board of governors

(C) Auditor

(D) Auditor does not

Ans: (C) Auditor

35. A particular firm provided the following data for a year - Current Ratio 2.5:1 Liquid Ratio 1.5:1. 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.

Ans: Ans: (B) Rs. 5, 00,000 and Rs. 2, 00,000. (Watch my video to learn calculation of current ratio)

36. Which of the following is not a Nominal Account?

(A) Salaries account.

(B) Interest paid.

(C) Commission received.

(D) Outstanding wages account.

Ans: (D) Outstanding wages account.

37. A debit entry usually represents:

(A) Assets and Expenses

(B) Assets and Income

(C) Liabilities and Income

(D) Liabilities and Expenses

Ans: (A) Assets and Expenses

38. Banks can avail refinance against loans made to industrial units from:

(A) DICGC

(B) NABARD

(C) ECGC

(D) IDBI

Ans: (D) IDBI

39. What is the full form of CBS?

(A) Core Banking Solution.

(B) Core Banking Software.

(C) Core Banking System.

(D) Core Banking Service.

Ans: (A) Core Banking Solution.

40. Fiscal policy refers to:

(A) Sale and purchase of securities by RBI

(B) Government taxes, expenditure and borrowings

(C) Government borrowings from abroad

(D) Sharing of its revenue by Central Government with States

Ans: (B) Government taxes, expenditure and borrowings

41. The present chairman of SEBI is

(A) Ajay Tyagi

(B) U. K. Sinha

(C) C. B. Bhave

(D) Vijay C. Kelkar

Ans: (A) Ajay Tyagi

42. A lame duck is a.

(A) Bull who does not keep his promise.

(B) Bear who cannot keep his commitments

(C) Cautious speculator

(D) Premium hunter

Ans: (B) Bear who cannot keep his commitments

43. The regulatory body of mutual funds in India is:

(A) RBI

(B) SEBI

(C) IRDA

(D) Government

Ans: (B) SEBI

44. Closing stock is valued at –

(A) Cost

(B) Market value

(C) Cost or market price whichever is lower

(D) None of the above

Ans: (C) Cost or market price whichever is lower

45. Super Profit mean

(A) Average Profit – Net Profit

(B) Average Profit - Normal rate of return

(C) Weighted Average Profit

(D) Net Profit – Average Profit

Ans: (B) Average Profit - Normal rate of return

46. Income tax is levied on total income of ____________ of an assessee.

(A) Previous Year

(B) Current Year

(C) Any of (A) or (B)

(D) Both (A) and (B)

Ans: (A) Previous Year

47. The provisions for determining the residential status of a person are contained in:

(A) Section 5

(B) Section 6

(C) Section 7

(D) Section 8

Ans: (B) Section 6

48. There are __________  heads of Income under Income Tax Act, 1961.

(A) three

(B) Four

(C) five

(D) six

Ans: (C) five

49. Health and Educational cess for the AY2020-21 is levied at the rate of

(A) 2%

(B) 1%

(C) 3%

(D) 4%

Ans: (D) 4%

50. Dividend from an Indian Company is

(A) Fully Taxable

(B) Taxable @ 10%

(C) Fully Exempted

(D) None of these

Ans: (A) Fully Taxable

[Hint: In terms of the provisions of the Income-tax Act, 1961, ("the Act") as amended by the Finance Act, 2020, dividend paid or distributed by a Company on or after April 01, 2020 shall be taxable in the hands of the shareholders]

51. Which of the following is not an objective of financial accounting?

(A) To provide information about the enterprise's assets, liabilities and capital.

(B) To provide information on the personal assets information on the personal assets and liabilities of the owner of an enterprise.

(C) To maintain records of business transactions.

(D) To provide information on the performance of an enterprise.

Ans: (B) To provide information on the personal assets information on the personal assets and liabilities of the owner of an enterprise.

52. The information provided in the annual financial statements of an enterprise pertains to:

(A) Individual business enterprise

(B) Business and industries

(C) The economy as a whole

(D) None of the above

Ans: (A) Individual business enterprise

53. During the life time of an entity the accountants produce financial statements at arbitrary in accordance with which accounting principles?

(A) Conservatism.

(B) Materiality.

(C) Periodicity.

(D) Cost-benefit.

Ans: (C) Periodicity.

54. The accounting principle that conforms to the tendency of accountants to resolve uncertainty and doubt in favour of understanding assets and revenues and overstating liabilities and expenses is known as:

(A) Industry practice

(B) Materiality

(C) Conservatism

(D) None of the above

Ans: (C) Conservatism

55. Revenue is generally recognized at the point of sale of a product/service. Which principle is applied herein?

(A) Consistency.

(B) Revenue recognition.

(C) Cost principle.

(D) None of the above.

Ans: (B) Revenue recognition.

56. When information about two different enterprises has been prepared and presented in a similar manner, the information exhibits the characteristics of:

(A) Relevance

(B) Reliability

(C) Consistency

(D) None of the above

Ans: (D) None of the above. Correct Answer is Comparability

57. The assumption that a business enterprise will not be sold/winded up in the near future is known as:

(A) Economic entity

(B) Monetary unit

(C) Prudence

(D) None of the above

Ans: (D) None of the above. Correct answer is Going Concern Concept.

58. Primary qualities that make accounting information useful for decision making are:

(A) Comparability and consistency

(B) Materiality and timeliness

(C) Relevance and freedom from bias

(D) Reliability and relevance

Ans: (D) Reliability and relevance

59. Which of the following is correct?

(A) Assets = Liabilities - Capital.

(B) Assets = Capital – Liabilities.

(C) Assets = Liabilities + Capital.

(D) Assets = Equities - Current liabilities.

Ans: (C) Assets = Liabilities + Capital.

60. Liabilities of a firm are Rs. 16,000 and the capital of the proprietor is Rs. 20,000 total assets are :

(A) Rs. 36,000

(B) Rs. 4,000

(C) Rs. 20,000

(D) None of the above

Ans: (A) Rs. 36,000

61. According to the Companies Act, 2013 the preparation and presentation of financial statements should be in conformity to:

(A) Section 211 read with the schedule VI

(B) Section 129 read with the schedule III

(C) Section 209

(D) All of the above

Ans: (B) Section 129 read with the schedule III

62. Which of the following is not a part of non-current fixed assets in a company Balance Sheet?

(A) Tangible assets.

(B) Intangible assets.

(C) Capital work in progress.

(D) Deferred tax assets.

Ans: (D) Deferred tax assets.

63. Which one of the following is not a reason which may be advanced to account for the individual's time preference for money?

(A) Uncertainty.

(B) Preference for consumption.

(C) Investment opportunities.

(D) Past expenses.

Ans: (D) Past expenses.

[Hint: Reasons for Individual’s Time preference for money:

1) Risk: There is always uncertainty in receipt of money in future. That’s’ why most of the individual have preference for present money.

2) Preference for consumption: Most of the individual have a preference for present consumption of money due to urgent need.

3) Investment opportunities: Most of the individuals have preference for present money because of availabilities of various investment opportunities of investment for earning additional cash flows.]

64. Which one of the following is not an investment evaluation criterion?

(A) Estimation of future cash inflows and outflows.

(B) Estimation of required rate of return.

(C) Application of the decision rule for making choice.

(D) Estimation of future liabilities.

Ans: (C) Application of the decision rule for making choice.

65. Which of the following rules based on Net Present Value (NPV) is incorrect?

(A) Accept, when NPV is smaller than zero.

(B) Accept, when NPV greater than zero.

(C) May accept when NPV is equal to zero.

(D) Reject when NPV is smaller than zero.

Ans: (B) Accept, when NPV greater than zero.

66. If a general manager asks the sales manager to recruit some salesmen on his behalf, it is an instance of —

(A) Division of authority

(B) Decentralization of authority

(C) Delegation of authority

(D) Delegation of responsibility

Ans: (A) Division of authority

67. ‘Non-convertible' debentures refers to

(A) Owners Capital

(B) Loan Capital

(C) Short Term Debts

(D) All of the above

Ans: (B) Loan Capital

68. Human Resource departments are

(A) Line department

(B) Authority department

(C) Functional department

(D) Service department

Ans: (D) Service department

69. Income and Expenditure Account of a school will be debited with --

(A) Annual prizes given out of Prize Fund

(B) Cost of maps on Geography

(C) Fines realized from students

(D) Tuition fees

Ans: (B) Cost of maps on Geography

70. The term depletion is used in relation to –

(A) Fixed Assets

(B) Wasting Assets

(C) Current Assets

(D) Intangible Assets

Ans: (B) Wasting Assets (It includes Natural resources and Depletion is related with natural resources)

71. Job Analysis is a systematic procedure for securing and reporting information defining a:

(A) Specific job

(B) Specific service

(C) Specific Product

(D) All of these

Ans: (A) Specific job

72. M.B.O. is a technique which requires that the objectives of the enterprise

(A) Be written and defined in broad terms

(B) Lay down the time period for achieving the results

(C) Include a plan of action for achieving the desired results

(D) Be defined in terms of measurable results

Ans: (D) Be defined in terms of measurable results

73. FIFO is advisable in case of:

(A) Rising prices

(B) Falling prices

(C) Constant prices

(D) None of the above

Ans: (B) Falling prices

74. Human Resource planning is compulsory for:

(A) Effective employee development programme

(B) Base for recruitment

(C) Base for selection policy .

(D) All of these

Ans: (D) All of these

75. Span of control means that:

(A) An organization consists of various departments

(B) Each person's authority is clearly defined

(C) Every subordinate has one superior

(D) A manager can supervise only a limited number of subordinates

Ans: (D) A manager can supervise only a limited number of subordinates

76. The persons who agree to insure cargo, hull or freight are called:

(A) Undertakers

(B) Caretakers

(C) Underwriters

(D) Book Keepers

Ans: (C) Underwriters

77. Who laid the foundation of HRM practices?

(A) Elton Mayo

(B) Mary Parker Follett

(C) Peter Ducker and Douglas McGregor

(D) Davis McClelland

Ans: (C) Peter Ducker and Douglas McGregor

78. Which of the following management functions are closely related?

(A) Planning and Organizing.

(B) Staffing and Control.

(C) Planning and Control.

(D) Planning and Staffing.

Ans: (C) Planning and Control.

79. Window dressing is prohibited due to:

(A) Convention of conservation

(B) Convention of disclosure

(C) Convention of materiality

(D) Accrual concept

Ans: (B) Convention of disclosure

80. Job Specification includes:

(A) Physical characteristics

(B) Psychological characteristics

(C) Personal characteristics

(D) All of these

Ans: (D) All of these

81. Goodwill should be classified as a

(A) Current asset

(B) Liquid asset

(C) Floating asset

(D) Intangible asset

Ans: (D) Intangible asset

82. The preparation of a Trial Balance helps in locating:

(A) Compensating errors

(B) Error of omission

(C) A clerical error

(D) None of these

Ans: (C) A clerical error

83. TQM's major emphasis is on :

(A) Product quality

(B) Company profitability

(C) Customer satisfaction

(D) Employee training

Ans: (A) Product quality

84. Consider the following:

1. Export Duty

 2. Export Subsidy

3. Liberal Import entitlement

 4. Revaluation of Currency

Which of the above policy measure would lead to an expansion of exports ?

(A) 1, 2 and 4

(B) 1 and 3

(C) 2 and 4

(D) 2 and 3

Ans: (C) 2 and 4

85. Which of the following is non-current liability ?

(A) Long term loans.

(B) Current liabilities.

(C) Bank overdraft.

(D) Sundry creditors.

Ans: (A) Long term loans.

86. What is the scope of HRM ?

(A) Training and development of employees for their growth

(B) Maintenance of good industrial relations and worker's morale for higher productivity.

(C) Further research in behavioural science, management and advances in the field of training and development.

(D) None of the above.

Ans: (C) Further research in behavioural science, management and advances in the field of training and development.

87. Stock turnover ratio is calculated as

(A) Turnover at cost/Stock at cost

(B) Turnover at selling prices/Stock at cost

(C) Turnover at selling prices/Stock at selling prices

(D) Any of these

Ans: (A) Turnover at cost/Stock at cost

88. Which of the following is a document of the title of goods ?

(A) Bill of Lading

(B) Shipping Bill

(C) Bill of Entry

(D) Letter of Credit

Ans: (D) Letter of Credit

89. What is the importance of controlling?

(A) Ensure that activities are in accordance with the terms of the plan.

(B) An important mental process on the part of a manager.

(C) Power to influence people's behavior.

(D) Process of regulating the activities.

Ans: (A) Ensure that activities are in accordance with the terms of the plan.

90. The primary function of an office is:

(A) Remunerating personnel

(B) Carrying out the management policies

(C) Safeguarding of company's assets

(D) Making, using and preserving records

Ans: (D) Making, using and preserving records

91.When net profit is Rs. 2,45,000, taxes Rs. 45,000 and net worth Rs. 10,00,000. What is the rate of return on shareholders' equity ?

(A) 10%

(B) 15%

(C) 20%

(D) 25%

(C) 20%

Ans: (C) 20%

92. What should be the strategy of HRM ?

(A) Making the long-term and short-term planning.

(B) Planning the optimum level of manpower.

(C) Introducing training programme to personnel.

(D) All of these.

Ans: (D) All of these.

93. A company is called an artificial person because

(A) It does not have the shape of a normal man

(B) It cannot be sued in the court of law

(C) It is invisible and intangible

(D) It exists only in contemplation of Law

Ans: (D) It exists only in contemplation of Law

94. In calculating the return on capital employed, the profit figure to be taken into account is:

(A) Net profit after deducting interest

(B) Net profit after taxes

(C) Net profit after taxes and interest

(D) Net profit after taxes, interest and dividends

Ans: (C) Net profit after taxes and interest

95. Quality improvement is

(A) A team effort

(B) Achieved by quality Inspector

(C) Zero things gone wrong

(D) Hard job and not possible

Ans: (B) Achieved by quality Inspector

96. Any donation received for a specific purpose is a

(A) Liability

(B) Asset

(C) Revenue receipt

(D) Capital receipt

Ans: (D) Capital receipt

97. Internal audit is helpful in:

(A) Making record ready for official audit

(B) Prevention of errors and frauds

(C) Detection of errors and frauds

(D) Auditing for self-satisfaction

Ans: (C) Detection of errors and frauds

98. What is Laissez-faire view point?

(A) A minimum public intervention in economic activities.

(B) Business enterprise must get opportunity to earn more profit.

(C) The change in the concept of labour from commodity approach to human concept.

(D) None of the above.

Ans: (A) A minimum public intervention in economic activities.

99. Gross capital employed is equal to:

(A) Fixed assets

(B) Fixed interest plus current assets

(C) Current assets

(D) None of the above

Ans: (B) Fixed interest plus current assets

100. Sale of a building results into -

(A) Source of fund

(B) Application of fund

(C) No flow of fund

(D) None of the above

Ans: (A) Source of fund

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