Commerce - MCQ Important Questions and Answers Part - 1

1. FEMA stands for_____
(A) Foreign Exchange Management Act
(B) Funds Exchange Management Act
(C) Finance Enhancement Monetary Act
(D) Future Exchange Management Act
Answer: Foreign Exchange Management Act

2. 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
Answer: Only countries having more than prescribed level of total GDP can become its member

3. 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
Answer: Freely permitting the conversion of rupee to other major currencies and vice versa

4. _________ has been founded to act as permanent watchdog on the international trade.
(A) ISRD 
(B) ADS
(C) WTO
(D) DIMF
Answer: WTO

5. 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
Answer: Under strategic sale method of disinvestment, the government sells a major share to a strategic partner

6. 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
Answer: Assets side of the Balance Sheet

7. 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
Answer: 2 : 1 : 2

8. 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
Answer: 6%

9. 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
Answer: In Profit and Loss Appropriation Account

10. 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
Answer: Rs. 60‚000

11. Match List-I with List-II and select the correct answer from the codes given below–
List-I
(a) Planning 
(b) Staffing
(c) Directing 
(d) Controlling
List-II
1. Training 2. Forecasting
3. Evaluating 4. Motivating
Codes :
(a) (b) (c) (d)
(A) 2 4 1 3
(B) 1 2 3 4
(C) 2 1 4 3
(D) 3 4 2 1
Answer: 2 1 4 3

12. Memorandum of Association contains_____
(A) Objective clause 
(B) Name clause
(C) Capital clause 
(D) All of the above
Answer: All of the above

13. ‘Table A’ is an alternative to_____
(A) Prospectus 
(B) Articles of Association
(C) Memorandum of Association 
(D) None of the above
Answer: Articles of Association

14. The ‘Doctrine of Indoor Management’ provides protection to the_____
(A) Board of Directors 
(B) Shareholders
(C) Managing Director 
(D) Outsiders
Answer: Outsiders

15. By which of the following methods a Company Secretary can be removed from his post ?
(A) By passing a resolution in Board Meeting
(B) By order of Registrar of Companies
(C) By passing a resolution in Annual General Meeting
(D) None of the above
Answer: By passing a resolution in Board Meeting

16. Which one of the following statements is correct in respect of Duty Drawback Scheme ?
(A) Relieving export goods of duties paid for components used for manufacturing the export goods
(B) Providing cash incentives to exporters to compensate the duty paid by them in foreign countries
(C) Compensating importers to the extent of import duty paid by them for importing life-saving drugs
(D) Providing a facility for withdrawing the duty paid by exporters if their exports are rejected in foreign countries
Answer: Compensating importers to the extent of import duty paid by them for importing life-saving drugs

17. In foreign trade, what is the price quoted by a supplier which includes all charges incurred up to door delivery of goods to the buyer, called ?
(A) Loco price (B) C.I.F. price
(C) Franco price (D) Landed price
Answer: Franco price 

18. Consider the following statements______
1. Letter of credit cannot be opened by mail.
2. Contracts of export of goods and services against payment to be secured partly or fully beyond 90 days are treated as deferred payment exports.
Which of the statements given above is/are correct ?
(A) 1 only (B) 2 only
(C) Both 1 and 2 (D) Neither 1 nor 2
Answer: Both 1 and 2

19. Under which principle, all the rights of an insured are transferred to insurance company after making payment of claim ?
(A) Subrogation (B) Utmost good faith
(C) Contribution (D) Average clause
Answer: Subrogation 

20. In a marine insurance, when must the insurable interest exist ?
(A) At the time of making contract
(B) At the time of loss of subject matter
(C) Both at the time of making contract and at the time of loss of subject matter
(D) At the time of termination of the policy
Answer: At the time of loss of subject matter 

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