UP-P.C.S. Combined Lower Subordinate (Pre.) Exam.
Commerce : Solved Paper

1. Control function of management implies—
(A) To bring harmony in various activities
(B) To keep the workforce satisfied
(C) To take corrective course of action
(D) To dictate the subordinates

2. Coordination function of management aims at—
(A) Providing sufficient personnel
(B) Bringing harmony in various activities
(C) Taking up corrective course of action
(D) All the above

3. "Authority flows downwards from top to the bottom whereas accountability flows upwards from bottom to top." It is found in—
(A) Scalar chain
(B) Functional organisation
(C) Committee structure
(D) Multivariate Approach

4. Maslow's needs hierarchy theory relates to—
(A) Motivation
(B) Leadership
(C) Communication
(D) Directing

5. M.B.O. is a technique of—
(A) Planning only
(B) Controlling only
(C) Neither planning nor controlling
(D) Both planning and controlling

6. Henry Fayol is known for—
(A) Scientific Management
(B) Rationalisation
(C) Industrial Psychology
(D) Principles of Management

7. Unity of command implies having not more than one—
(A) Subordinate
(B) Friend
(C) Boss
(D) Unit

8. 'x' and 'y' theory of Motivation has been propounded by—
(A) McGregor
(B) Maslow
(C) Ouchi
(D) Herzberg

9. Coordination has the following features—
(A) Continuous
(B) Vertical organisation
(C) Horizontal relationship
(D) All of the above

10. Which one of the following is not a barrier in communication ?
(A) Noise
(B) Affection
(C) Fear and distrust
(D) Perception

11. Who can be appointed as a Company Secretary under the Companies Act, 1956 ?
(A) An individual
(B) A partnership firm
(C) A company
(D) None of the above

12. Appointment of a Company Secretary is made by—
(A) Promoters
(B) Board of Directors
(C) Debenture holders
(D) Government

13. Convening meetings of a company is the responsibility of the—
(A) Chairman, Board of Directors
(B) Managing Director
(C) Company Secretary
(D) General Manager

14. What is the quorum of general meetings in the case of private limited company and public limited company ?
(A) 2 members and 5 members respectively
(B) 3 members and 5 members respectively
(C) 5 members in each type of company
(D) 5 members and 7 members respectively

15. Minutes of the annual general meeting must be prepared and signed by the chairman within—
(A) 14 days of the meeting
(B) 21 days of the meeting
(C) 30 days of the meeting
(D) 45 days of the meeting

16. Liability of a Company Secretary is—
(A) Contractual only
(B) Statutory only
(C) Civil only
(D) Both contractual and statutory

17. The primary function of an office is—
(A) Making, using and preserving records
(B) Remunerating personnel
(C) Carrying out management policies
(D) Safeguarding organization's assets

18. In an office, Franking machine is used for—
(A) Punching card
(B) Accounting work
(C) Duplicating
(D) Postal stamp fixing

19. Fax is used for—
(A) Sending telephonic message
(B) Sending copies of documents
(C) Exercising control
(D) Decision making

20. Keyboard of a computer is—
(A) An input device
(B) An output device
(C) A processing device
(D) A storage device

21. Paperless office calls for—
(A) Minimum record keeping
(B) Maximum use of telephone
(C) Maximum use of computers
(D) Elimination of reporting

22. Delegation of authority signifies the delegation of—
(A) Authority
(B) Responsibility
(C) Both of the above
(D) None of the above

23. Management by exception implies focussing attention on—
(A) All variations
(B) Normal variations
(C) Abnormal variations
(D) Randomly selected variations

24. The most recent form of retail distribution is—
(A) Mail order business
(B) Chain stores
(C) Departmental stores
(D) Sky shopping

25. Decentralisation—
(A) Increases the importance of supervisors
(B) Decreases the importance of supervisors
(C) Increases the importance of subordinates
(D) Decreases the importance of subordinates

26. Match the following—
List-I
(a) Principle of subrogation
(b) Principle of ultra vires
(c) Holding company
(d) SEBI
List-II
1. Business combination
2. Insurance
3. Company Law
4. Stock Exchange
Codes :
(a) (b) (c) (d)
(A) 2 3 1 4
(B) 1 3 2 4
(C) 4 2 1 3
(D) 1 2 3 4

27. Reserve Bank of India is a—
(A) Government Company
(B) Departmental Organisation
(C) Statutory Corporation
(D) None of the above

28. Application of Theory 'X' implies practising of—
(A) Free leadership
(B) Democratic leadership
(C) Autocratic leadership
(D) None of the above

29. Which of the following is the Accounting equation ?
(A) Capital = Assets – Liabilities
(B) Capital = Assets + Liabilities
(C) Assets = Liabilities – Capital
(D) Liabilities = Assets – Capital

30. Expenditure on installation of a plant should be debited to—
(A) Installation Expenses account
(B) Sundry expenses account
(C) Plant account
(D) Maintenance of Assets A/c

31. Closing stock appearing in the Trial Balance is shown in—
(A) Balance Sheet only
(B) Trading Account only
(C) Trading Account and Balance Sheet both
(D) None of the above

32. The rate of gross profit is 20% on sales and the cost of goods sold is Rs. 1‚00‚000, the amount of gross profit will be—
(A) Rs. 30‚000
(B) Rs. 25‚000
(C) Rs. 20‚000
(D) Rs. 16‚667

33. The policy "anticipate no profit and provide for all possible losses" arises due to—
(A) Convention of consistency
(B) Convention of conservatism
(C) Convention of Disclosure
(D) None of the above

34. Donations received for the special purpose will be taken to the—
(A) Income and Expenditure Account
(B) Assets side of the Balance Sheet
(C) Liabilities side of the Balance Sheet
(D) Receipts and Payments Account

35. A sports club receives admission fees. It is a—
(A) Revenue receipt
(B) Capital receipt
(C) Deferred receipt
(D) None of these

36. Stock should include—
(A) Goods held as security
(B) Goods held as consignee
(C) Goods with customers for approval on sale or return basis
(D) Goods sold but not delivered

37. Receipts and Payments Account is an abbreviated form of—
(A) Cash Book
(B) Pass Book
(C) Both Cash Book and Pass Book
(D) None of the above

38. At what price the stock is valued under conventional method ?
(A) At cost price
(B) At market price
(C) At cost price or market price whichever is lower
(D) At cost price or market price whichever is higher

39. Which of the following is a personal account ?
(A) Outstanding Expense
(B) Investment
(C) Share premium
(D) Salary

40. On the admission of a partner, fictitious assets are—
(A) Transferred to Revaluation Account
(B) Transferred to Capital Account
(C) Transferred to Reserves
(D) Shown in the new Balance Sheet

41. The profit ratio of A, B and C, who are partners in a firm, is 4 : 3 : 2. After D is admitted, their sacrificing ratio will be—
(A) 4 : 3 : 2
(B) 1 : 3 : 2
(C) Equal
(D) 5 : 3 : 2

42. X and Y are sharing profits in the ratio of 4 : 3. Z joins and new profit sharing ratio of X, Y and Z is 7 : 4 : 3. The sacrificing ratio of X and Y will be—
(A) Equal
(B) 4 : 3
(C) 2 : 1
(D) 1 : 2

43. A and B were partners in a business and were sharing profit and loss in the ratio of 3 : 2. They admitted C as a partner for 15 th share. The new profit sharing ratio shall be—
(A) 3 : 2 : 1
(B) 6 : 4 : 1
(C) 12 : 8 : 5
(D) 12 : 6 : 2

44. At the time of admission of a new partner, general reserve is transferred to—
(A) Old partner's Capital Account
(B) Profit and Loss Adjustment Account
(C) Balance Sheet
(D) None of these

45. A, B and C are partners sharing profits and losses in the ratio of 5 : 3 : 2. D is admitted in the first as a partner for 1/5th share. The sacrificing ratio of A, B and C will be—
(A) 3 : 2 : 5
(B) 5 : 3 : 2
(C) 5 : 2 : 3
(D) 2 : 3 : 5

46. Advance Income-tax is shown in the—
(A) Debit side of Profit and Loss Account
(B) Liability side of the Balance Sheet
(C) Credit side of Profit and Loss Account
(D) Assets side of the Balance Sheet

47. A and B were sharing profits of a business in the ratio of 3 : 2. They admit C into partnership, who gets 1/3 of A's share of profit from A, 1/2 of B's share of profit from B.
The new profit sharing ratio will be—
(A) 3 : 2 : 5
(B) 2 : 1 : 2
(C) 3 : 2 : 1
(D) 3 : 2 : 2

48. In the absence of a Partnership Deed, the rate of interest allowed on the partner's loan to the firm is—
(A) 5%
(B) 6%
(C) 10%
(D) None of the above

49. Interim Dividend is shown—
(A) In Profit and Loss Account
(B) In Profit and Loss Appropriation Account
(C) On Asset side of Balance Sheet
(D) On Liabilities side of Balance Sheet

50. Redeemable Preference shares of Rs. 1‚00‚000 are redeemed at a premium of 5%. With this object equity shares of Rs. 40‚000 are issued at par. What amount should be transferred to Capital Redemption Reserve Account ?
(A) Nil
(B) Rs. 1‚05‚000
(C) Rs. 65‚000
(D) Rs. 60‚000

51. X Limited forfeited Ram's 20 shares of Rs. 10 each on which Rs. 7 is called up. Ram had paid application and allotment money of Rs. 5 per share. Of these forfeited shares 15 shares were reissued to Hari as fully paid up for Rs. 6 per share. What amount should be transferred to Capital Reserve account ?
(A) Rs. 15
(B) Rs. 20
(C) Rs. 75
(D) Rs. 100

52. In case of a company, "Buy Back" is related to—
(A) Prospectus
(B) Shares
(C) Debentures
(D) Cheques

53. The profit of a company (whose capital is divided into 25‚000 shares of Rs. 10 each) for the last three years are : Rs. 50‚000; Rs. 60‚000 and Rs. 40‚000. The fair return on investment is taken at 10% p.a. The value of company's share will be—
(A) Rs. 10
(B) Rs. 20
(C) Rs. 30
(D) Rs. 40

54. The amount deposited in Securities Premium Account can be used for—
(A) Distributing profits
(B) Issue of Bonus Shares
(C) Paying the amount to director
(D) None of the above

55. Profit prior to incorporation is transferred to—
(A) Capital reserve
(B) General reserve
(C) Profit and Loss Account
(D) Trading Account

56. If super profit is Rs. 4‚000 and normal rate of return is 8 per cent, the amount of goodwill will be—
(A) Rs. 40‚000
(B) Rs. 50‚000
(C) Rs. 4‚00‚000
(D) Rs. 5‚000

57. Goodwill, Copyright and Trademarks should be classified as—
(A) Tangible assets
(B) Intangible assets
(C) Current assets
(D) Fictitious assets

58. The portion of share capital which can be called up only on the winding up of a company is known as—
(A) Called up capital
(B) Paid up capital
(C) Authorised capital
(D) Reserve capital

59. Which one of the following is called backbone of auditing ?
(A) Routine checking
(B) Vouching
(C) Internal check
(D) Internal control

60. Internal Audit is provided for in the—
(A) Companies Act
(B) Partnership Act
(C) Both (A) and (B)
(D) Neither (A) or (B)

61. A vacancy caused by the resignation of the auditor is filled only by the—
(A) Board of Directors of the Company
(B) Central Government
(C) General Meeting of the shareholders
(D) Managing Director of the company

62. The first auditor of a company appointed, holds office—
(A) For a period of one year
(B) For that period till new auditor is appointed
(C) Till the conclusion of first Annual General Meeting
(D) Till the holding of statutory meeting of the company

63. Internal Auditor is appointed by the—
(A) Management
(B) Shareholders
(C) Government
(D) Statutory Auditor

64. "Auditor is a watchdog and not a blood hound" was a remark made in the case of—
(A) The London Oil Storage Co. Ltd. 1904
(B) Kingston Cotton Mills Ltd. 1896
(C) London and General Bank 1895
(D) Delightful Cigarette Co. Ltd. 1943

65. The auditor is generally expected to carryout the following in a particular sequence—
1. Verification of Assets and Liabilities.
2. Vouching of transactions.
3. Checking of valuation of Assets and Liabilities.
Select the correct sequence of the above from the following—
(A) 1, 3 and 2
(B) 3, 2 and 1
(C) 2, 1 and 3
(D) 3, 1 and 2

66. Auditing of accounts is compulsory for—
(A) Sole proprietory business
(B) Partnership firms
(C) Joint Stock Companies
(D) None of the above

67. Under vouching, checking is done of—
(A) Journal and Ledger
(B) Profit and Loss Account
(C) Balance Sheet
(D) All of the above

68. The goods taken by the proprietor from the shop is debited to—
(A) Shop account
(B) Goods account
(C) Capital account
(D) Drawings accounts

69. Which of the following types of business organisation has a separate legal entity ?
(A) Joint Hindu family business
(B) Partnership
(C) Joint Stock Company
(D) None of the above

70. The organisation in which power of authority runs in straight line is called—
(A) Line organisation
(B) Functional organisation
(C) Committee organisation
(D) None of the above

71. 'Profit objective' is of least priority in case of—
(A) Private enterprise
(B) Public enterprise
(C) Department undertaking
(D) Cooperative society

72. Partnership may come into existence by—
(A) The operation of law
(B) An express agreement only
(C) An express or implied agreement only
(D) Inheritance of property

73. A public company can start business—
(A) After incorporation
(B) After promotion
(C) After registration
(D) After getting certificate of commencement of business

74. Consumers cooperative store is set up by the—
(A) Central Government
(B) State Government
(C) Registrar of Cooperative Societies
(D) Members

75. 'Object Clause' of a Memorandum of Association can be altered by—
(A) Ordinary resolution
(B) Special resolution
(C) Special resolution and confirmation by Registrar of Companies
(D) Special resolution and confirmation by Company Law Board

76. A special resolution is passed in a company meeting by—
(A) Simple majority
(B) 2/3 majority
(C) 3/4 majority
(D) None of the above

77. Articles of Association of a company can be altered by—
(A) An ordinary resolution
(B) A resolution with a special notice
(C) A special resolution
(D) None of the above

78. The liability of the shareholders of a public limited company is limited to the extent of—
(A) Par value of the share
(B) Paid up value of the shares
(C) Market price of the shares
(D) Intrinsic value of the shares

79. The first directors of a company are appointed by—
(A) Promoters
(B) Government
(C) Shareholders
(D) Company Law Board

80. In a public limited company, the minimum number of directors are—
(A) 2
(B) 3
(C) 5
(D) None of the above

81. An association of cement manufacturers is an example of—
(A) Diagonal combination
(B) Vertical combination
(C) Horizontal combination
(D) Lateral combination

82. The product range is widest in case of—
(A) Chain store
(B) Departmental store
(C) Speciality shop
(D) One price shop

83. A public corporation is set up—
(A) By a Special Act of Parliament
(B) By a special order of the Government
(C) Under Indian Companies Act, 1956
(D) By none of the above

84. The minimum number of members required for registration of a cooperative society are—
(A) Two
(B) Seven
(C) Ten
(D) Twenty

85. Insurable interest must be present at the time of insurance proposal and payment of claims in—
(A) Fire Insurance
(B) Marine Insurance
(C) Life Insurance
(D) Motor Insurance

86. The technique of "Carrot and Stick" is used in business organization for—
(A) Reducing absenteeism
(B) Motivation
(C) Effective leadership
(D) Rewarding workers

87. The clearing agent is appointed by the—
(A) Shipping company
(B) Custom's Authority
(C) Importer
(D) Exporter

88. The importer cannot take delivery of goods unless he produces the—
(A) Bill of sight
(B) Bill of lading
(C) Shipping Bill
(D) Mate's receipt

89. The principle of indemnity is not related to—
(A) Life Insurance
(B) Fire Insurance
(C) Marine Insurance
(D) Crop Insurance

90. In Marine Insurance, the existence of insurable interest is necessary—
(A) When the loss is caused
(B) When the policy is taken
(C) Both when the policy is taken and when the loss is caused
(D) Throughout the period of contract

91. The liability of a sole proprietor is—
(A) Limited to the extent of his capital invested in the business
(B) Limited to the extent of the value of business assets
(C) Limited to the extent of the value of business assets and his all private assets
(D) None of the above

92. Which of the following documents defines the scope of company's activities ?
(A) Memorandum of Association
(B) Articles of Association
(C) Prospectus
(D) Statutory declaration

93. An indent house is one which—
(A) Serves as middleman between importer and exporter of goods for getting orders
(B) Packs and forwards the goods
(C) Guarantees the payments for good
(D) Performs custom formalities on behalf of importer

94. A letter of credit (L/C) is produced by—
(A) An exporter
(B) An importer
(C) Custom authorities
(D) Shipping company

95. Table 'A' of the Companies Act gives a model of—
(A) Minute book
(B) Balance Sheet
(C) Memorandum of Association
(D) Articles of Association

96. Liability of partners in respect of the firm's debt is—
(A) Limited to the amount of his capital in the business
(B) Unlimited
(C) Limited to the amount of guarantee given by the partner
(D) Limited to the amount of capital and the loan to the firm, if any

97. A Government Company is one in which at least the following percentage of share capital is held by the Central and/or State Government—
(A) 25%
(B) 26%
(C) 50%
(D) 51%

98. Planning function of management is performed by—
(A) Top level management
(B) Middle level management
(C) Lower level management
(D) None of the above

99. Special plans made for facing competition are known as—
(A) Objectives
(B) Strategies
(C) Policies
(D) Budgets

100. 'Span of Management' means—
(A) A good organization should consist of five departments
(B) Authority of each person must be clearly defined
(C) Each subordinate should have one superior
(D) A manager can supervise a limited number of executives

>Answers :
1. (C) 2. (B) 3. (A) 4. (A) 5. (B) 6. (D) 7. (C) 8. (A) 9. (D) 10. (D)
11. (A) 12. (B) 13. (C) 14. (A) 15. (C) 16. (D) 17. (A) 18. (D) 19. (B) 20. (A)
21. (C) 22. (C) 23. (C) 24. (D) 25. (C) 26. (A) 27. (A) 28. (C) 29. (A) 30. (C)
31. (A) 32. (B) 33. (B) 34. (C) 35. (A) 36. (B) 37. (A) 38. (C) 39. (A) 40. (A)
41. (A) 42. (D) 43. (C) 44. (A) 45. (B) 46. (D) 47. (B) 48. (B) 49. (B) 50. (D)
51. (A) 52. (B) 53. (B) 54. (B) 55. (A) 56. (B) 57. (B) 58. (D) 59. (B) 60. (D)
61. (C) 62. (C) 63. (A) 64. (B) 65. (C) 66. (C) 67. (D) 68. (D) 69. (C) 70. (A)
71. (D) 72. (C) 73. (D) 74. (D) 75. (D) 76. (C) 77. (C) 78. (B) 79. (A) 80. (B)
81. (C) 82. (B) 83. (A) 84. (C) 85. (A) 86. (B) 87. (C) 88. (B) 89. (A) 90. (A)
91. (C) 92. (A) 93. (A) 94. (B) 95. (D) 96. (B) 97. (D) 98. (D) 99. (B) 100. (D)