General knowledge Questions and Answers

76. Following percentage in tea production is treated agricultural income.
(A) 10% (C) 60% (B) 40% (D) 90% (Ans : C)

77. Investment by owner results in–
(A) increase in capital and decrease in liability
(B) increase in capital and increase in liability
(C) increase in capital and decrease in assets
(D) increase in capital and increase in asset (Ans : D)

78. The internal auditor of a joint stock company–
(A) need not possess qualifications laid down in the Companies Act
(B) should be a chartered accountant
(C) should be a chartered accountant or a cost accountant
(D) should hold some other professional qualification (Ans : A)

79. Asset cost Rs. 21,000
Scrap value Rs. 1,000
Depreciation rate 10% p. a.
What is the amount of depreciation for the first year if straight line method is used ?
(A) Rs. 2,100 (B) Rs. 2,000 (C) Rs. 2,200 (D) Rs. 2,400 (Ans : B)

80. Closing stock Rs. 53,400 cost of Goods sold Rs. 75,000, Gross profit Rs. 5,000, Purchases Rs. 82,000 What is the amount of opening stock–
(A) Rs. 46,400 (B) Rs. 41,400 (C) Rs. 60,400 (D) Rs. 55,400 (Ans : A)

81. Charging of capital expenditure to revenue results in–
(A) secret reserve (B) revenue reserve
(C) capital reserve (D) None of the above (Ans : A)

82. Assets of a business are Rs. 21315 and liabilities Rs. 4,120. What is the amount of owner's equity?
(A) Rs. 21,315 (B) Rs. 17,195 (C) Rs. 25,435 (D) Rs. 4,120 (Ans : B)

83. The policy that has been the most successful in increasing agricultural output in developing country is–
(A) import substitution (B) land reforms
(C) mechanisation (D) None of the above (Ans : B)

84. The income tax deducted from interest paid on debentures is shown on the–
(A) asset side of the balance sheet (B) liability side of the balance sheet
(C) credit side of P and L A/c (D) Debit side of P and L A/c (Ans : B)

85. Cash received from debtors is Rs. 12,000 and furniture purchased is Rs. 7,000. What is the net effect on the flow of funds?
(A) Net increase is working capital Rs. 5,000
(B) Net decrease is working capital Rs. 5,000
(C) Net increase in working capital Rs. 19,000
(D) Net decrease in working capital Rs. 7,000 (Ans : D)

86. Income includes following types of receipts-
(A) statutory receipts (B) illegal receipts
(C) statutory and illegal both (D) None of the above (Ans : C)

87. 'Open Market Operations' is a part of–
(A) Income policy (B) Fiscal policy
(C) Labour policy (D) Credit policy (Ans : D)

88. When net sales for the year are Rs. 2,50,000 and debtors Rs. 50,000 the average collection period is–
(A) 60 days (B) 45 days (C) 42 days (D) 72 days (Ans : D)

89. If the cost of goods sold in Rs. 1,20,000 and the rate of gross is 1/4 on sales, the amount of sales is–
(A) Rs. 1,20,000 (B) Rs. 90,000
(C) Rs. 80,000 (D) Rs. 96,000 (Ans : D)

90. When opening stock is Rs. 50,000, closing stock Rs. 60,000 and cost of goods sold Rs. 2,20,000, the stock turnover ratio is–
(A) 2 times (B) 3 times (C) 4 times (D) 5 times (Ans : C)

91. Investment according to Keynesian theory is–
(A) purchase of existing factory (B) purchase of shares of existing firms
(C) purchase of old building (D) establishment of new factory (Ans : D)

92. Which of the following equation is correct?
(A) opening stock + closing stock – purchases = cost of goods sold
(B) opening stock + purchase – closing stock = cost of goods sold
(C) purchases + closing stock – opening stock = cost of goods sold
(D) closing stock – purchase – opening stock = cost of goods sold (Ans : B)

93. Economic liberalisation in India started with–
(A) substantial changes in industrial licensing policy
(B) doing away with procedural formalities for foreign direct investment
(C) significant reduction in import duty (D) All the above (Ans : D)

94. Under capitalization can be remedied by–
(A) issue of bonus shares (B) redemption of preference shares
(C) redemption of debentures (D) redemption of interest on debentures (Ans : A)

95. The opportunity cost of holding money is determined by–
(A) the inflation rate (B) the level of aggregate output
(C) the interest rate (D) the discount rate (Ans : C)

96. Year ending on March 31st immediately prior to assessment year is called–
(A) calander year (B) assessment year
(C) previous year (D) None of the above (Ans : C)

97. If profits are 25% of selling price, what is the percentage of profit to cost?
(A) 20% (B) 25% (C) 30% (D) 33 1/3 % (Ans : D)

98. Say's law of market holds that–
(A) supply is not equal to demand (B) supply creates its own demand
(C) demand creates its own supply (D) supply is greater than demand (Ans : B)

99. If average cost is falling then–
(A) marginal cost is rising (B) marginal cost is falling
(C) marginal cost is equal to average cost
(D) it is impossible to tell if marginal cost is rising or falling (Ans : B)

100. Bank overdraft should be classified as–
(A) current asset (B) current liability
(C) fixed assets (D) fixed liability (Ans : B)

101. X Ltd. purchased land and building worth Rs. 28,80,000 and in lieu issued debentures of Rs. 100 each at a discount of 4%. What is the number of debentures issued–
(A) 28,800 (B) 30,000 (C) 32,000 (D) 32,200 (Ans : B)

102. Which of the following is an economic barometer–
(A) Skewness (B) Median (C) Index number (D) Mode (Ans : C)

103. The term fixed assets include–
(A) bank balance (B) stock of finished goods
(C) goodwill (D) loose tools (Ans : C)

104. During a period of rising prices, which inventory pricing method will result in lower total current assets–
(A) LIFO (B) FIFO (C) simple average method (D) None of the above (Ans : A)

105. When quick ratio is 1.5 : 1 and the amount of quick assets Rs. 30,000, what is the amount of quick liabilities?
(A) Rs. 20,000 (B) Rs. 50,000 (C) Rs. 45,000 (D) Rs. 30,000 (Ans : A)

106. Which of the following is not included in infrastructure in India?
(A) Education (B) Insurance (C) Energy (D) Transport (Ans : B)

107. If an increase in the price of blue jeans leads to an increase in the demand for tennis shoes, then blue jeans and tennis shoes are–
(A) complements (B) inferior goods (C) normal goods (D) substitutes (Ans : A)

108. The net assets of a business on Jan. 1 and Jan. 31 are Rs. 39,000 and Rs. 38,000 respectively. Additional investment by owner and withdrawal by owner during Jan. amount to Rs. 2000 and Rs. 6000 respectively. What is the net income for Jan. ?
(A) Rs. 1000 (Loss) (B) Rs. 3000 (C) Rs. 5000 (D) Rs. 4000 (Ans : B)

109. A Ltd. issued prospectus inviting applications for 2000 shares. Applications were received for 3000 shares and pro-rata allotment was made on the application for 2400 shares. If Ramesh had been alloted 40 shares, how many shares he must have applied for?
(A) 40 (B) 44 (C) 48 (D) 52 (Ans : C)

110. 'Control' function of management cannot be performed without–
(A) planning (B) organising (C) staffing. (D) motivation (Ans : A)

111. Expenditure incurred by a publisher for acquiring copyrights is a–
(A) capital expenditure (B) revenue expenditure
(C) deferred revenue expenditure (D) None of the above (Ans : A)

112. A very senior citizen shall be that individual for purpose of Income Tax whose age is More than following–
(A) 60 years (B) 75 years (C) 80 years (D) 82 years (Ans : C)

113. Classification of employees according to education and skill is called–
(A) two way (B) manifold (C) one way (D) time series (Ans : A)

114. If the cost of goods sold is Rs. 1,20;000 and the rate of gross loss is Rs. ¼ of sales the amount of sales is–
(A) Rs. 90,000 (B) Rs. 96,000 (C) Rs. 1,20,000 (D) Rs. 1,26,000 (Ans : B)

115. A valid definition of a business purpose is to–
(A) create a customer (B) maximise profits
(C) serve the society (D) increase the wealth of the firm (Ans : A)

116. In case of individual assessee, surcharge shall be levied only when income exceeds the following amount–
(A) Rs. one lakh (B) Rs. one crore
(C) Rs. ten lakh (D) None of the above (Ans : D)

117. If government spending is increased by Rs. 700 and taxes are increased by Rs. 700 the equilibrium level of income will–
(A) decrease by Rs. 700 (B) increase by Rs. 700
(C) not change (D) increase by Rs. 1400 (Ans : B)

118. Span of management means–
(A) a good organisation should consist of department
(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 (Ans : D)

119. Any balance in the share forfeiture account after all the forfeiture shares are re-issued should be–
(A) added to the paid up called (B) transferred to goodwill account
(C) transferred to capital reserve account
(D) should be shown in the balance sheet under the heading share forfeiture account (Ans : C)

120. How will you measure development of people ?,
(A) CPI (B) HRI (C) HDI (D) WPI (Ans : C)

121. According to convention of conservation the stock in trade is valued at–
(A) market price (B) cost price
(C) market price or cost price whichever is less
(D) market price or cost price whichever is more (Ans : C)

122. In an open economy, the national income (Y) of the economy is (C, I, G, X, M stand for Consumption, Investment, Government expenditure, total exports and total imports respectively)–
(A) Y = C + I + G + X
(B) Y = C + I + G – X + M
(C) Y = C + I + G + (X – M)
(D) Y = C + I – G + X – M (Ans : C)

123. The break even point is the point at which–
(A) there is no profit no loss (B) contribution margin is equal to total fixed cost
(C) total revenue is equal to total cost (D) All of the above (Ans : D)

124. When cash is Rs. 10,000, stock Rs. 25,000, investments Rs. 5,000 and creditors Rs. 22,000 and bank over-draft Rs. 8,000, the current ratio is–
(A) 2: 1 (B) 3: 4 (C) 4: 3 (D) 1: 1 (Ans : C)

125. Mean – mode = 3 (mean – …)–
(A) mean (B) median (C) mode (D) None of the above (Ans : B)