R4RIN – MCQs, Mock Tests | Economics Economics Business and Finance

Business can be defined as:

1. Selling of goods
2. Buying of goods
3. A market place
4. Trade commerce and industry

✅ Correct Answer: 4

What can be the maximum number of partners in a partnership firm?

1. 10
2. 15
3. 20
4. 25

✅ Correct Answer: 3

Which form of business organisation would be most suitable for a capital intensive business?

1. Sole proprietorship
2. Partnership
3. Co-operative society
4. Joint-stock company

✅ Correct Answer: 4

According to the systems approach a system is the:

1. Sum total of all its components
2. Orderly arrangement of its components in a coordinated manner
3. A combination of some of the components
4. A systemic view of the organisation

✅ Correct Answer: 2

A business organistion has constant and invisible interaction with its:

1. Employees
2. Suppliers and customers
3. External environment
4. Government

✅ Correct Answer: 3

The asset limit above which a company or group would be covered under the MRTP in India for concentration of economic power is:

1. Rs 50 lakh
2. Rs 1 crore
3. Rs 20 crore
4. Rs 100 crore

✅ Correct Answer: 4

Which one of the following refers to factoring services?

1. Guaranteeing realisation from debtors
2. Financing working capital
3. Providing project consultancy
4. None of the above

✅ Correct Answer: 1

A consumer complaint is registered by the MRTP Commission in India on a complaint made by at least:

1. 5 consumers
2. 25 consumers
3. 50 consumers
4. 100 consumers

✅ Correct Answer: 2

Vertical combination implies:

1. Formation of pools and cartels
2. Integration of enterprises engaged in different stages of production of a particular product
3. A group 01 organisations having common sales set-up
4. Integration of enterprises engaged in manufacturing similar products

✅ Correct Answer: 2

An indirect tax is one where:

1. Tax is levied on wealth
2. Tax is levied always on products
3. Points of impact and incidence are the same
4. Points of impact and incidence are different

✅ Correct Answer: 4

Which one of the following is an example of indirect tax?

1. Corporation tax
2. Wealth tax
3. Income tax
4. Sales tax

✅ Correct Answer: 4

The incidence of tax refers to:

1. The effect produced by the tax
2. The rate of taxation
3. One who bears the ultimate money burden of the tax
4. One who is immediately responsible to pay the tax

✅ Correct Answer: 3

Who is generally regarded as the father of modern management?

1. F.W.Taylor
2. Henry Fayol
3. James D.Mooney
4. Alan C. Reiley

✅ Correct Answer: 2

The term Managerical Rovolution refers to the prediction that with the expansion in size of business units world affairs will eventually be in the hands of a few powerful managers. Who made use of this term?

1. J.Burnham
2. F.W.Taylor
3. Alfred Marshall
4. J.K.Galbraith

✅ Correct Answer: 1

The principle of scientific management implies:

1. Replacement of rules of thumb by scientific principles of management
2. Managing business in a scientific way
3. Use of science in business
4. Human approach to management

✅ Correct Answer: 1

Objectives in the context of management may be defined as:

1. Laying down targets to be achieved over a period of time
2. The end result which an organisation tries to attain
3. The purpose for the organizations survival
4. Parameters for unified planning

✅ Correct Answer: 2

The two key factors in management by objectives are:

1. Performance evaluation and objectives
2. Democratic goal-setting and verifiable objectives
3. Systems approach and long-range planning
4. Short-run goods and flexibility

✅ Correct Answer: 2

An informal organisation is one where:

1. There is no division of work
2. Jobs of individuals are not precisely defined
3. The structure is not prescribed by formal authority
4. There are no fixed hours of work

✅ Correct Answer: 3

The first level of needs in Maslows need hierarchy is:

1. Social needs
2. Security needs
3. Physiological needs
4. Esteem needs

✅ Correct Answer: 3

Planning and control are related in such a way that:

1. Planning precedes control
2. Control precedes planning
3. Both are concurrent
4. Both go hand-in-hand with each other in a cyclical manner

✅ Correct Answer: 4

Communication is complete when the:

1. Message is sent by the sender
2. Message is received by the receiver
3. Message is received and understood by the receiver
4. Message is further transmitted by the receiver

✅ Correct Answer: 3

A private company must have at least:

1. 2 members
2. 5 members
3. 7 members
4. 10 members

✅ Correct Answer: 1

Unless the Articles of Association otherwise provide the quorum for a general meeting of a public company is:

1. One-third of the total members
2. Five members personally present
3. Seven members personally present
4. Twenty members personally present

✅ Correct Answer: 2

A Special resolution is one which is passed in a general meeting by:

1. A simple majority of votes
2. Two-third majority of votes
3. Three-fourth majority of votes
4. Three-fifth majority of votes

✅ Correct Answer: 3

A share warrant can be issued by:

1. Private companies only
2. Public companies only
3. Both public and private companies
4. Government companies only

✅ Correct Answer: 2

What is the minimum number of shareholders necessary for a public company?

1. 5
2. 7
3. 11
4. 20

✅ Correct Answer: 2

The share capital of a company refers to:

1. Equity share capital
2. Preference share capital
3. Equity and preference share capital
4. Equity and preference share capital and debentures

✅ Correct Answer: 3

Within how many days of the declaration of divident must divident warrants be posted to shareholders?

1. 21 days
2. 30 days
3. 42 days
4. 60 days

✅ Correct Answer: 3

In which year was the Indian Contract Act passed?

1. 1850
2. 1872
3. 1926
4. 1939

✅ Correct Answer: 2

Any agreement by a minor which is beneficial to him is a:

1. Void agreement
2. Illegal agreement
3. Valid contract
4. Void contract

✅ Correct Answer: 3

The liability of partners in a partnership firm is:

1. Joint and several
2. Joint and alternative
3. Alternative
4. Joint

✅ Correct Answer: 1

What is the maximum number of partners necessary in a partnership firm carrying on banking business?

1. 5
2. 10
3. 15
4. 20

✅ Correct Answer: 1

The suit for specific performance in case of breach of contract may be filed only where the subject matter relates to:

1. Movable goods
2. Immovable property
3. Perishable goods
4. Personal skill and qualifications

✅ Correct Answer: 2

Which one of the following is a void agreement?

1. Agreement in restraint of trade
2. Agreement whose object is illegal
3. Agreement in respect of sale of goodwill
4. Service agreements containing negative stipulations during the tenure of service

✅ Correct Answer: 1

Crossing a cheque Not Negotiable affords security against:

1. Negotiation of cheque
2. The ft of cheque
3. Payment to wrong banker or account
4. None of the above

✅ Correct Answer: 2

Non-registration of a partnership does not affect the:

1. Suit by a partner against the firm or other co-partners
2. Suit by the firm against third parties
3. Suit by third parties against the firm
4. Claim of set-off or other proceedings on a contract by the firm

✅ Correct Answer: 3

Organisation Theory is concerned with the:

1. Development of an organisation as an economic unit
2. Study to explain the nature and composition of organisations as a social or human group
3. Rules governing an organisation
4. Human behaviour at work

✅ Correct Answer: 2

With which of following is Behavioural Science in management related?

1. Organizational response to its environment
2. Scientific study of human behaviour
3. Superior-subordinate behaviour within an organisation
4. None of the above

✅ Correct Answer: 2

Job-enrichment means:

1. More tasks of the same general nature
2. More tasks providing greater challenge
3. Change or variation of job after a time perior
4. None of the above

✅ Correct Answer: 3

An organisation structure refers to the:

1. Nature of superior-subordinate relationship
2. Relationships and dependencies within an organisation
3. Extent of delegation of authority in the organisation
4. Flow of authority and responsibility

✅ Correct Answer: 4

Finance is concerned with:

1. Arrangement of funds
2. Identification of sources of funds
3. Recording utilisation of funds
4. All of the above

✅ Correct Answer: 4

Current Ratio is the ratio of:

1. Current assets to current liabilities
2. Current liabilities to current assets
3. Fixed assets to total liabilities
4. Current assets to total liabilities

✅ Correct Answer: 1

Debt Equity Ratio refers to the ratio of:

1. Debtors to equity share capital
2. Long term debt to shareholders equity
3. Total debt to equity share capital
4. Long term debt to equity share capital

✅ Correct Answer: 2

Trading on eqrity means:

1. Use of equity share capital for trade financing
2. Use of fixed-interest borrowed funds for getting a higher return on equity
3. Having no borrowed funds
4. Trading in equity share capital

✅ Correct Answer: 2

Cost of goods sold refers to:

1. Sales minus gross profits
2. Sales minus profits
3. Cost of materials labour and overheads
4. None of the above

✅ Correct Answer: 1

In the pay back period method of capital budgeting investment is divided by:

1. Annual profits
2. Return on investment
3. Constant annual cash flow
4. Cumulative cash flow

✅ Correct Answer: 3

The relationship between EBIT and EPS gives:

1. Operating leverage
2. Financial leverage
3. Nornal leverage
4. Composite leverage

✅ Correct Answer: 2

Break-even-point is a situation where:

1. Profits are negative
2. There is no profit no loss
3. Profits-Costs
4. Business is at the point of dissolution

✅ Correct Answer: 2

Under-capitalisation refers to a situation where:

1. The capital base is larger for the earnings made
2. The capital base does not justify the amount of earnings made and needs to be enhanced
3. The capital base justifies the earnings made
4. The earnings ratio of the company equals the industrys earnings ratio

✅ Correct Answer: 2

A schedule of balances drawn from the ledger is called:

1. A trial balance
2. A balance sheet
3. A profit and loss account
4. A statement of account

✅ Correct Answer: 1

Goodwill of a firm represents:

1. Fixed assets
2. Tangible assets
3. Intangible assets
4. Fictitious assets

✅ Correct Answer: 3

Under-capitalisation refers to a situation where:

1. The capital base is larger for the earnings made
2. The capital base does not justify the amount of earnings made and needs to be enhanced
3. The capital base justifies the earnings made
4. The earnings ratio of the company equals the industrys earnings ratio

✅ Correct Answer: 2

Goodwill of a firm represents:

1. Fixed assets
2. Tangible assets
3. Intangible assets
4. Fictitious assets

✅ Correct Answer: 3

A bank account is a:

1. Personal account
2. Real account
3. Liability account
4. Nominal account

✅ Correct Answer: 1

Prepaid expenses appearing in a trial balance will figure in the:

1. Balance sheet
2. Profit and loss account
3. Profit and loss account and balance sheet
4. Prepaid expenses account

✅ Correct Answer: 1

Sale of old furniture on credit will appear in the:

1. Sales day book
2. Cash book
3. Journal
4. Debtors ledger

✅ Correct Answer: 3

The excess of current assets over current liabilities is called:

1. Net worth
2. Working capital
3. Net tangible worth
4. Turnover

✅ Correct Answer: 2

Depreciation is the process of:

1. Allocation of costs
2. Valuation of assets
3. Use of assets
4. None of the above

✅ Correct Answer: 1

What is the objective of cost accounting?

1. Cost determination
2. Cost analysis
3. Cost control
4. All of the above

✅ Correct Answer: 4

What is Conersion Cost?

1. Cost of materials and labour
2. Cost of transforming direct materials into finished products
3. Cost of labour
4. Total cost of running business

✅ Correct Answer: 2

In an integrated costing system most of the data relevant to cost accounting comes from the:

1. Cost accounting system
2. Financial accounting system
3. Stores accounting system
4. Sales and distribution system V H-

✅ Correct Answer: 2

Which method of costing is used by sugar mills?

1. Unit or output costing
2. Job costing
3. Process costing
4. Batch costing

✅ Correct Answer: 3

Premium on redemption of debentures is accounted for in the:

1. Personal account
2. Real account
3. Nominal account
4. Assets account

✅ Correct Answer: 1

After debentures are redeemed the balance in the sinking fund account is transferred to:

1. Capital reserve
2. General reserve
3. Profit and loss account
4. Secret reserve

✅ Correct Answer: 2

To the extent redemption of preferece shares takes place out of profits an equal amount has to be transferred to:

1. Development rebate reserve
2. Capital redemption reserve
3. General reserve
4. Share premium account

✅ Correct Answer: 2

When shares are forfeited the share capital account is debited by:

1. Calls-in-arrears
2. Called-up-amount
3. Paid-up amount
4. Face value of shares

✅ Correct Answer: 2

The profit on re-issuing forfeited shares is transferred to:

1. Capital reserve
2. Capital redumption reserve
3. General reserve
4. Revaluation reserve

✅ Correct Answer: 1

The share application account is a:

1. Real account
2. Personal account
3. Nominal account
4. Asset account

✅ Correct Answer: 2

The excess of purchase price over net assets is:

1. Goodwill
2. Capital reserve
3. Preliminary expense
4. Revenue reserve

✅ Correct Answer: 1

In the balance sheet of a company the items goodwill patents and trade marks are shown under the heading:

1. Current assets
2. Loans and advances
3. Fixed assets
4. Investments

✅ Correct Answer: 3

A preliminary expense is a:

1. Current asset
2. Fictitious asset
3. Current liability
4. Non-current liability

✅ Correct Answer: 2

Divisible profits do not include:

1. Reserve fund
2. Profit on revaluation of assets
3. Post-incorporation profits
4. None of the above

✅ Correct Answer: 2

Advance payment of tax should be shown on the:

1. Assets side of a balance sheet
2. Liabilities side of a balance sheet
3. Debit side of a profit and loss account
4. Credit side of a profit and loss account

✅ Correct Answer: 1

Dividends are usually paid on the:

1. Called-up capital
2. Paid-up capital
3. Subscribed capital
4. Nominal capital

✅ Correct Answer: 2

When two or more companies dissolve to form a new company the process is known as:

1. Amalgamation
2. Absorption
3. Reconstruction
4. Combination

✅ Correct Answer: 1

Absorption is said to take place when:

1. A company is formed to take over another company
2. Two or more companies are dissolved to form a few company
3. Two or more companies dissolve to be taken over by a existing company
4. Two companies decide for virtual integration of their operations

✅ Correct Answer: 3

For calculating market value using P/E ratios it is necessary to know:

1. The rate of dividend
2. Average profits
3. Market price of the share
4. Earnings per share and market price of the share

✅ Correct Answer: 4

The relationship between normal rate of return and P/E ratio is:

1. Inverse
2. Direct
3. Irregular
4. None of the above

✅ Correct Answer: 1

For a company to carry out capital reduction permission is required from the:

1. Controller of Capital Issues
2. Competent Court
3. Company Law Board
4. Board of Directors

✅ Correct Answer: 2

Any balance in the capital reduction account after writing off lost capital is tansferred to:

1. Capital reserve
2. General reserve
3. Debenture redemption reserve
4. Capital redemption reserve

✅ Correct Answer: 1

In a scheme of reorganization the amount of shares surrendered by shareholders is transferred to the:

1. Shares surrendered account
2. Capital reduction account
3. Capital reorganization account
4. Capital sacrificed account

✅ Correct Answer: 2

Amounts sacrificed by shareholders are credited to the:

1. Capital reserve account
2. General reserve account
3. Capital reduction account
4. Capital redemption reserve account

✅ Correct Answer: 3

At the commencement of winding up a contributory is a:

1. Creditor
2. Debtor
3. Shareholder
4. Debenture holder

✅ Correct Answer: 3

The shareholding of the government in a government company must be at least:

1. 33%
2. 50%
3. 51%
4. 100%

✅ Correct Answer: 3