MCQ Questions on Commerce
1- According to Fiedler’s Contingency Model of Leadership, which one of the following is a situational variable?
(a) Leader – Member relationship
(b) Organisational System
(c) Degree of task structure
(d) Leader’s position power
2- Which of the following is not shown by a funds flow statement on cash basis?
(a) The changes in Working Capital
(b) The uses of Cash
(c) Decrease in Cash
(d) Increase in Cash
3- Which of the following is not an assumption made under the Modigliani and Miller approach for explaining the irrelevance of dividends policy for a firm?
(a) Existence of perfect capital markets
(b) Non-existence of differential tax rates for the dividend income and capital gains
(c) Absence of transaction costs
(d) Higher growth rate of dividends compared to cost of equity capital.
4- Which of the following errors will not cause a mismatch in the trial balance?
(a) Recording a transaction in the wrong subsidiary book
(b) Posting to an account on the wrong side
(c) Omitting to write the cash balance in the trial balance
(d) Wrong casting of a subsidiary book
5- Which of the following is true with regard to the degree of operating leverage (DOL) for a company?
(a) DOL of a company is positive above the operating break-even point
(b) DOL of a company is positive below the operating break-even point
(c) DOL of a company is negative above the operating break-even point
(d) DOL is zero at the operating break-even point.
6- As per Marginal Costing approach the measurement of Fixed Cost is the result of the product of which of the following?
(a) Break-even sales and margin of safety
(b) Sales and margin of safety
(c) Sales and profit-volume ratio
(d) Profit-volume ratio and break even sales
7- The capital markets consist of the primary market and secondary market. Which of the following statements is TRUE regarding the differences between the two markets?
(a) New issues are distributed to investors in the primary market while existing securities are traded in the secondary market.
(b) Existing securities are traded in the primary market while new issues are distributed to investors in the secondary market.
(c) New issues are traded in the primary market while existing securities are distributed in the secondary market.
(d) Existing securities are distributed to investors in the primary market while new issues are traded in the secondary market.
8- Which of the following is not a limitation of a Balance Sheet?
(a) It does not contain certain assets and liabilities despite its claim to be the statement of all assets and liabilities
(b) Assets and liabilities are shown in the liquidity or permanency order in the balance sheet of a company.
(c) The values of various assets within the balance sheet are not always measured according to the same rule.
(d) Balance sheet is prepared on a particular date and hence there is every possibility of window-dressing
9- A depository participant _______________
(a) is an investor who buys/sells shares through the depository.
(b) Trades in the de-materialized shares.
(c) Destroys the share certificates and makes a credit entry for his clients.
(d) is an agent of the depository and takes physical share certificates from his clients and sends them for de-materialization.
10- All the following items are excluded from cost while preparing a cost sheet except
(a) Goodwill written off
(b) Provision for taxation
(c) Property tax on Factory Building
(d) Interest Paid
1-(b), 2-(a), 3-(d), 4-(a), 5-(a), 6-(d), 7-(d), 8-(b), 9-(d), 10-(c)