M.Com Entrance Test Solved Question Paper' 2023 [Dibrugarh University MCOM Admission Test (DUAT)]

M.Com Entrance Test Solved Question Paper' 2023 
[Dibrugarh University MCOM Admission Test (DUAT)]

1. Net profit is calculated in which of the following account?

(A) Profit and Loss Account

(B) Balance Sheet

(C) Trial Balance

(D) Trading Account

Ans: (A) Profit and Loss Account

2. What is the total of all direct costs known as?

(A) Cost of production

(B) Works cost

(C) Prime cost

(D) Cost of sales

Ans: (C) Prime cost

3. The purpose of management accounting is to:

(A) help banks make decisions

(B) past orientation

(C) help investors make decision

(D) help managers make decisions

Ans: (D) help managers make decisions

4. Which one of the following types of information, a creditor would be interested to gather while reading Annual Reports of an enterprise?

(A) Profitability

(B) Liquidity

(C) Continuity

(D) Solvency

Ans: (B) Liquidity (Short term)

5. Contingent Liability is shown in the Balance Sheet because of:

(A) Convention of Consistency

(B) Convention of Materiality

(C) Convention of Full Disclosure

(D) Convention of Conservatism

Ans: (C) Convention of Full Disclosure

6. Which of this best explains fixed assets?

(A) Are bought to be used in the business

(B) Are expensive items bought for the business

(C) Are items which will not wear out quickly

(D) Are of long life and are not purchased specifically for resale

Ans: (D) Are of long life and are not purchased specifically for resale

7. Assets which have a fixed content and the value of asset goes down as the contents are taken out are called

(A) Intangible assets

(B) Fictitious assets

(C) Wasting assets

(D) Floating assets

Ans: (C) Wasting assets

8. What does a low stock turnover indicate?

(A) Managerial efficiency

(B) Solvency

(C) Over investment in stock

(D) All of these

Ans: (C) Over investment in stock

9. Debt Equity Ratio is a test of:

(A) Liquidity

(B) Profitability

(C) Solvency

(D) Turnover

Ans: (C) Solvency

10. What is the first stage of energy audit?

(A) Survey

(B) Report

(C) Checking

(D) Preparation

Ans: (D) Preparation

11. If accounting information is based on facts and it is verifiable by documents, it has the quality of:

(A) relevance

(B) Understandability

(C) reliability

(D) comparability

Ans: (C) reliability

12. As per revenue recognition concept, revenue is deemed to be realised:

(A) when purchase order is received from the purchaser

(B) when goods are delivered to the purchaser

(C) when the title of the goods has been transferred to the purchaser

(D) when cash is received from the purchaser

Ans: (C) when the title of the goods has been transferred to the purchaser

13. Under the accrual concept, which one of the following will not be shown as an asset/liability in the Balance Sheet of an entity?

(A) Interest due but not paid

(B) Interest due but not received

(C) Interest due and received

(D) Interest paid but not due

Ans: (C) Interest due and received

14. Governmental economic policy which deals with taxation, expenditure, borrowing and the management of public debt in the economy is

(A) Monetary Policy

(B) Credit Policy

(C) Fiscal Policy

(D) Taxation Policy

Ans: (C) Fiscal Policy

15. For calculating the cost of preference shares capital, the dividend of preference share is divided by ________ and multiplied by 100.

(A) Net income

(B) Net proceeds

(C) Net sales

(D) Net expenditure

Ans: (B) Net proceeds

16. Long term loans from the public is called

(A) Debentures

(B) Retained earnings

(C) Shares

(D) Public deposits

Ans: (D) Public deposits

17. Dividend capitalisation model was developed by

(A) Ezra Solomon

(B) Myron J Gordon

(C) James E Walter

(D) Merton H Miller and Franco Modigliani

Ans: (B) Myron J Gordon

18. The financial market for securities with maturities of less than one year is known as

(A) Derivatives market

(B) Cash market

(C) Money market

(D) Rupee market

Ans: (C) Money market

19. The exchange rate is:

(A) the price of one currency relative to gold

(B) the value of a currency relative to inflation

(C) the change in the value of money over time

(D) the price of one currency relative to another

Ans: (D) the price of one currency relative to another

20. Pooling of Interest is a method of

(A) Valuation of Inventory

(B) Calculation of purchase consideration

(C) Accounting of amalgamation

(D) Valuation of Goodwill

Ans: (C) Accounting of amalgamation

21. The first development financial institution of India was

(A) IDBI

(B) IFCI

(C) ICICI

(D) UTI

Ans: (B) IFCI

22. What is the meaning of novation?

(A) Rescinding of a contract

(B) Alteration of contract

(C) Change in provisions of a contract

(D) Substituting an old contract for a new one

Ans: (D) Substituting an old contract for a new one

23. 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) Retaining the earnings of business for future expansion programme

24. The insurance companies collect a fixed amount from its customers at a fixed interval of time, what is it called?

(A) Premium

(B) EMI

(C) Contribution

(D) Instalment

Ans: (A) Premium

25. Which of the following is not an example of a method of protection of risk?

(A) Group insurance plans

(B) Employee benefits

(C) Social insurance

(D) Humanitarian aid

Ans: (D) Humanitarian aid

26. How many days' clear notice should be given to hold an AGM?

(A) 7 days

(B) 14 days

(C) 21 days

(D) 28 days

Ans: (C) 21 days

27. The formation and regulation of LLP is governed by the

(A) Partnership Act, 1932

(B) Companies Act, 2013

(C) Limited Liability Partnership Act, 2008

(D) Limited Liability Partnership Act, 2010

Ans: (C) Limited Liability Partnership Act, 2008

28. Who will sign return of income of HUF?

(A) Any member

(B) Karta

(C) Chartered Accountant

(D) None of these

Ans: (B) Karta

29. IGST tax levy means

(A) within state

(B) between two states

(C) between two countries

(D) None of these

Ans: (B) between two states

30. The basis of determination of total income of a person is:

(A) his citizenship in India

(B) his residential status in India

(C) Both (A) and (B)

(D) None of these

Ans: (B) his residential status in India

31. Which assesses are allowed deduction under section 80C?

(A) An Individual or a HUF

(B) An Individual and a company

(C) An individual; HUF or AOP/BOI

(D) An Individual; HUF; AOP/BOI or a company

Ans: (A) An Individual or a HUF

32. Present liability of uncertain amount which can be measured reliably by using a substantial degree of estimation:

(A) liability

(B) contingent liability

(C) provision

(D) None of these

Ans: (C) provision

33. Which of the following equation is correct?

(A) Gross profit = Net Sales - Cost of goods sold

(B) Gross profit = Sales + Closing stock - Opening stock - Purchase

(C) Cost of goods sold + Gross profit = Sales

(D) All of the above

Ans: (D) All of the above

34. When there is a change in the value of rupee, it is said to be change in?

(A) Overall price level

(B) General price level

(C) Individual price level

(D) Discounting price level

Ans: (B) General price level

35. Environmental accounting concept is applied on:

(A) Cement industries

(B) Steel industries

(C) Textile industries

(D) All of these

Ans: (D) All of these

36. Which of the following is a deferred revenue expenditure?

(A) Legal expenses incurred on purchase of land

(B) Expenses on a mega advertisement campaign while launching a new product

(C) Expenses incurred on installation of a new machine

(D) Wages paid for construction of an additional room in the building

Ans: (B) Expenses on a mega advertisement campaign while launching a new product

37. Which one of the following will not affect the working capital?

(A) Realisation of cash from debtors

(B) Sale of plant and machinery in cash

(C) Issue of equity shares

(D) Redemption of debentures

Ans: (A) Realisation of cash from debtors

38. Which one of the following receipts is of revenue nature?

(A) Amount realised from the sale of investments

(B) Dividend received on investments

(C) Amount borrowed from bank

(D) Compensation received from municipal corporation for the acquisition of land for construction of road

Ans: (B) Dividend received on investments

39. Identify which of the following partnership's characteristics is a disadvantage:

(A) Voluntary association

(B) Minimal legal restrictions

(C) Unlimited liability

(D) None of these

Ans: (C) Unlimited liability

40. What is economic order quantity?

(A) Cost of an order

(B) Cost of stock

(C) Reorder level

(D) Optimum order size

Ans: (D) Optimum order size

41. All the following are the benefits of Accounting Standards except

(A) Ind. AS cannot override the statute

(B) Ind. AS reduce to a reasonable extent confusing variations in the accounting treatments used to prepare financial statements

(C) Ind. AS facilitates comparison of financial statements of companies

(D) Ind. AS may call for disclosure beyond that required by law

Ans: (A) Ind. AS cannot override the statute

42. Right shares are the shares

(A) that have a right of redemption

(B) offered to the existing equity shareholders

(C) legally issued to the public at large

(D) issued by a newly formed company

Ans: (B) offered to the existing equity shareholders

43. When a company takes over another one and clearly becomes a new owner, the action is called?

(A) Merger

(B) Acquisition

(C) Strategic Alliance

(D) None of these

Ans: (B) Acquisition

44. What is the effect of increase in fixed cost?

(A) Reduces Profit Volume Ratio

(B) Raises Break Even Point

(C) Increases Margin of Safety

(D) Reduces Contribution

Ans: (B) Raises Break Even Point

45. What is the ideal quick ratio?

(A) 1:1

(B) 2:1

(C) 3:1

(D) 4:1

Ans: (A) 1:1

46. SPV stands for

(A) Securities Pool Vehicle

(B) Special Pool Vehicle

(C) Securities Purpose Vehicle

(D) Special Purpose Vehicle

Ans: (D) Special Purpose Vehicle

47. The concept of cost of capital can also be explained in terms of ________ cost.

(A) Opportunity

(B) Variable

(C) Fixed

(D) Capital

Ans: (A) Opportunity

48. In order to encourage investment in the country, the RBI may:

(A) reduce CRR

(B) increase CRR

(C) sell securities in the Open Market

(D) increase Bank Rate

Ans: (A) reduce CRR

49. Wages owing is a:

(A) Personal account

(B) Impersonal Account

(C) Real Account

(D) Nominal Account

Ans: (A) Personal account

50. From the following calculate the amount of Gross Profit:

Cash Sales Rs. 5,00,000; Credit Sales Rs. 2,00,000;

Sales Return Rs. 5,000;

Cost of Goods Sold during the year Rs. 6,00,000.

(A) 90,000

(B) 1,00,000

(C) 95,000

(D) None of these

Ans: (C) 95,000

51. Skimming in E-Banking is a method of

(A) converting debit card into credit card

(B) transferring cash from one account to another account

(C) stealing credit card information

(D) intimating the customer about his heavy withdrawals

Ans: (C) stealing credit card information

52. A Call option is

(A) a contract to buy a certain number of shares at a stated price within a specified period of time

(B) a contract to sell a certain number of shares at a stated price within a specified period of time

(C) the option of the issuing company to demand the shareholders to pay for the partly paid shares

(D) the option available the convertible debenture holders to demand equity shares in conversion of debentures

Ans: (A) a contract to buy a certain number of shares at a stated price within a specified period of time

53. Office equipment is a ________ asset for a computer manufacturer and the same office equipment is a ________ asset for a company that deals in this equipment.

(A) Current, Fixed

(B) Fixed, Intangible

(C) Tangible, Intangible

(D) Fixed, Current

Ans: (D) Fixed, Current

54. Profit Volume Ratio can be obtained by:

(A) expressing variable cost in terms of sales

(B) expressing contribution in terms of sales

(C) expressing profits in terms of sales

(D) expressing fixed cost in terms of sales

Ans: (B) expressing contribution in terms of sales

55. The difference between fixed and variable cost has a special significance in the preparation of:

(A) Flexible budget

(B) Master budget

(C) Cash budget

(D) All of these

Ans: (A) Flexible budget

56. Since investors can diversify away their ________ risk, they have to be compensated only for ________ risk.

(A) Systematic, Non-Systematic

(B) Non-Systematic, Systematic

(C) Both (A) and (B)

(D) None of these

Ans: (B) Non-Systematic, Systematic

57. A portfolio having two risky securities can be turned riskless if

(A) the correlation ranges between zero and one

(B) the securities are completely positively correlated

(C) the securities are completely negatively correlated

(D) None of the above

Ans: (C) the securities are completely negatively correlated

58. The cost of issuing new stock is called:

(A) the cost of equity

(B) the marginal cost of capital

(C) floatation cost

(D) None of these

Ans: (C) floatation cost

59. "Make sufficient provisions for future losses but do not anticipate future profits." This statement is in accordance with the concept of

(A) Matching

(B) Objectivity

(C) Conservatism

(D) Materiality

Ans: (C) Conservatism

60. Which of the following is a non-operating expense?

(A) Salary of managing director

(B) Depreciation

(C) Advertisement expenditure

(D) Interest on loan

Ans: (D) Interest on loan

61. Which accounting principle differentiate between owners and management?

(A) Going Concern

(B) Dual Aspect

(C) Separate Entity

(D) Conservatism

Ans: (C) Separate Entity

62. According to money measurement concept, which of the following will not be recorded in the books of accounts?

(A) Extra profits arising out of revaluation of assets

(B) Commission payable to a salesman

(C) Quality of the products

(D) All of the above

Ans: (C) Quality of the products

63. The Long-Term Asset that has no physical existence but are rights that has value is known as

(A) Current Asset

(B) Fixed Asset

(C) Intangible Asset

(D) Investment

Ans: (C) Intangible Asset

64. Stock of Semi-Finished goods is a

(A) Fixed Capital

(B) Working Capital

(C) Liquid Capital

(D) Watered capital

Ans: (B) Working Capital

65. Goodwill account is a

(A) Nominal account

(B) Real Account

(C) Personal Account

(D) None of these

Ans: (B) Real Account

66. Which of the following is a profitability ratio?

(A) Stock Turnover Ratio

(B) Debt Equity ratio

(C) Return on Investment

(D) Acid Test Ratio

Ans: (C) Return on Investment

67. Purchase account always has a

(A) Debit Balance

(B) Credit Balance

(C) Either Debit or Credit Balance

(D) None of these

Ans: (A) Debit Balance

68. Rs. 5,000 paid for purchase of furniture is charged to repairs. It is an error of

(A) Omission

(B) Commission

(C) Principle

(D) Clerical

Ans: (C) Principle

69. The allocation of owner's private expenses to his/her business violates which of the following?

(A) Accrual Concept

(B) Matching Concept

(C) Business Entity Concept

(D) Consistency Concept

Ans: (C) Business Entity Concept

70. Financial Statements mainly help in

(A) assumption of economic events

(B) anticipation of economic events

(C) recording of economic events

(D) communication of economic events

Ans: (D) communication of economic events

71. Current Assets are also known as

(A) Gross working capital

(B) Capital

(C) Assets

(D) Cash

Ans: (A) Gross working capital

72. The central bank significantly influences the savings, investments and consumer spending in the economy through which one of the following policies?

(A) Fiscal Policy

(B) Monetary Policy

(C) Industrial Policy

(D) Foreign Exchange Policy

Ans: (B) Monetary Policy

73. Residential status in Indian Income Tax Act is determined for which one of the following?

(A) Previous year

(B) Assessment Year

(C) Accounting Year

(D) Both Previous and Assessment year

Ans: (A) Previous year

74. Which category of speculators expects a fall in the price of securities in the near future?

(A) Bull

(B) Bear

(C) Stag

(D) None of these

Ans: (B) Bear

75. The value of the firm in wealth maximization objective is measured by

(A) present value of all expected future cash flows

(B) all expected cash flows

(C) present value of all expected future profits

(D) all expected future profits

Ans: (A) present value of all expected future cash flows

76. Which one of the following is a long term source of finance?

(A) Commercial paper

(B) External commercial borrowings

(C) Factoring

(D) Line of Credit

Ans: (B) External commercial borrowings

77. What is Repo Rate?

(A) Is the rate at which RBI lends to State Governments

(B) Is the rate at which international aid agencies lends to RBI

(C) Is the rate at which the RBI lends to banks in case of short maturity

(D) Is the rate at which RBI borrows funds from the commercial banks in the country

Ans: (C) Is the rate at which the RBI lends to banks in case of short maturity

78. The headquarters of ASEAN is located in which of the following country?

(A) Indonesia

(B) Vietnam

(C) Thailand

(D) Singapore

Ans: (A) Indonesia

79. Which one is odd?

(A) Economic policies

(B) Economic planning

(C) Socio Cultural factors

(D) Macro-economic scenario

Ans: (C) Socio Cultural factors

80. Which of the following sources of finance has an implicit cost of capital?

(A) Equity share capital

(B) Preference share capital

(C) Debentures

(D) Retained earnings

Ans: (D) Retained earnings

81. Banking ombudsman scheme was introduced by RBI with effect from

(A) 1998

(B) 1995

(C) 2001

(D) 2005

Ans:

82. Banks are required to classify non-performing assets into

(A) Sub-standard assets, doubtful assets and loss assets

(B) Standard assets and sub-standard asset

(C) Doubtful assets and bad debts

(D) Doubtful assets, bad debts and loan assets

Ans: (A) Sub-standard assets, doubtful assets and loss assets

83. Which one of the following is not the function of RBI?

(A) Issue of Bank Notes

(B) Custodian of cash reserves of commercial banks

(C) Accepting deposits and advancing loans to public

(D) Controller of credit

Ans: (C) Accepting deposits and advancing loans to public

84. Which of the following is not an example of financing activities with reference to cash flow statement?

(A) Repayment of bank loan

(B) Interest on debentures/dividend paid

(C) Cash proceeds from public deposits

(D) Sale of fixed assets

85. ________ refers to the process of removing the legal status of a currency.

(A) Digitisation

(B) Financial inclusion

(C) Demonetisation

(D) Microfinance

Ans: (C) Demonetisation

86. The certificate which evidences an unsecured corporate debt of short term maturity is known as

(A) Certificate of deposit

(B) Short term loan certificate

(C) Treasury bill

(D) Commercial paper

Ans: (D) Commercial paper

87. In SARFAESI Act, E stands for

(A) equity

(B) enhancement

(C) empowerment

(D) enforcement

Ans: (D) enforcement

[Hint: The full form of the SARFAESI Act is "Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002]

88. The prospectus issued in order to test the market before finalising issue size/price is known as

(A) Deemed Prospectus

(B) Shelf Prospectus

(C) Red Herring Prospectus

(D) None of these

Ans: (C) Red Herring Prospectus

89. RWA with regard to capital adequacy stands for which one of the following:

(A) Risk Withdrawal Adjustments

(B) Risk Withdrawal Arrangements

(C) Risk Weighted Assets

(D) Risk Free Weighted Assets

Ans:

90. An auditor is a watchdog but not a bloodhound. This statement has been given in the decision of which case

(A) Kingston Cotton Mills Case

(B) Garner vs. Murray Case

(C) Paglar Cotton Mills Case

(D) None of these

Ans: (A) Kingston Cotton Mills Case

91. In case of Giffen goods like Bajra, a fall in the price tends to

(A) reduce the demand

(B) increase the demand

(C) demand will remain constant

(D) None of these

Ans: (A) reduce the demand

92. The capital market in India is controlled by?

(A) RBI

(B) NABARD

(C) SEBI

(D) IRDA

Ans: (C) SEBI

93. How many companies are included in the BSE Sensex?

(A) 25

(B) 30

(C) 50

(D) 111

Ans: (B) 30

94. The most widely used monetary policy tool among these is:

(A) Open market operations

(B) Issuing of notes

(C) Close market operations

(D) Discount rate

Ans:

95. What is the primary goal of financial management?

(A) To minimise the risk

(B) To maximise the owner's wealth

(C) To maximise the return

(D) To raise profit

Ans: (B) To maximise the owner's wealth

96. Preference shares are those which carry preferential rights in respect of

(A) dividends

(B) repayment of capital

(C) Both Dividend and Repayment of capital

(D) None of the above

Ans: (C) Both Dividend and Repayment of capital

97. Profits can be fraudulently inflated by

(A) Suppression of Sales returns

(B) Treating Capital Expenditure as Revenue

(C) Overestimation of Liabilities

(D) Omission of Prepaid Expenses

Ans: (A) Suppression of Sales returns

98. Which of the following does not appear in the Balance Sheet?

(A) Building

(B) Cash

(C) Goodwill

(D) Rent Expenses

Ans: (D) Rent Expenses

99. Transaction cost include

(A) brokerage

(B) commission

(C) printing

(D) All of these

Ans: (D) All of these

100. The cost of debt financing is generally ________ the cost of preferred or common equity financing.

(A) less than

(B) equal to

(C) more than

(D) None of these

Ans: (A) less than