1.

The Basic difference between a Sole Trader, and Partnership is

(a) Limited Growth
(b) Unlimited Liability
(c) Personal Contact with the customer
(d) Number of Members

2. How many people can start a Sole Proprietory concern

(a) 1
(b) 3
(c) 4
(d) 2

3. How many people can start a Partnership concern for doing Banking business
(a) 15
(b) 10
(c) 12
(d) 20

4. What is the maximum number of members for a Public Limited Company.

(a) Unlimited
(b) 400
(c) 250
(d) 100

5. Which of the following is a Government Company.

(a) Export Credit Guarantee Corporation of India

(b) Maruthi Udyog Limited
(c) Larsen & Toubro
(d) Dr. Reddy Labs
6. The amount borrowed from a Bank is known as

(a) Deposits
(b) Bank Loan
(c) Equity Shares
(d) Debentures
7. If the Operating Cycle increases, what will be the effect on Working Capital?

(a) The Gross Working Capital remains unchanged

(b) The Gross Working Capital Decreases
(c) The Net Working Capital Decreases
(d) The Net Working Capital Increases
8. What is the decision criterion for selecting a Project in Net Present Value?
(a) The Net Present Value should be more between two projects
(b) The Net Present Value should be same between two projects
(c) The Net Present Value should be less between two projects
(d) The Net Present Value has no relationship with the selection of a project
9. A firm is considering a project with an initial outlay of Rs.20,000/- and project life of 4 years. The annual cash
inflows are Rs.12,000/- for a period of 4 years. What is the ARR.
(a) 100%
(b) 50%
(c) 120%
(d) 75%

10. If the Discount rate increases from 10% to 15% what will be effect on the Profitability Index?
(a) Profitability Index will fall
(b) Profitability Index and Discount Rate have no relationship
(c) Profitability Index will rise
(d) Profitability Index will remain unchanged

11. Computer is a

(a) Intangible Asset

(b) Fictitious Asset
(c) Tangible Asset
(d) Current Asset

12. Which account is Credited when the Purchased Goods are Returned?

(a) Goods Account

(b) Purchases A/c
(c) Cash Account
(d) Purchase Return A/c

13. Cash Rs.10,000/-, Capital Rs.1,00,000/-, Fixed Assets Rs.40,000/-, Sundry Debtors Rs.50,000/-. What is the total
of trial Balance?

(a) Rs.1,00,000/-
(b) Rs.10,000/-
(c) Rs.2,00,000/-
(d) Rs.50,000/-

14. What is a Profit and Loss Account?

(a) Where the net profit of a concern is ascertained

(b) It is a Trial Balance
(c) Where the gross profit of a concern is ascertained
(d) It is a book of Journal

15. Bank Loan repayable after a period of 2 Years is

(a) Reserve and Surplus

(b) Fixed Asset
(c) Current Liabilities
(d) Long Term Liability

16. In the adjustment entries for final accounts, the Closing Stock is treated as under

(a) Debit - Trading A/c. Credit - P&L A/c

(b) Debit -. P&L A/c Credit - Trading A/c
(c) Liabilities -. Balance Sheet Credit - Trading A/c
(d) Assets -. Balance Sheet Credit - Trading A/c

17. If the Current Liabilities increases what will be effect on Current Ratio?

(a) Current Ratio increases

(b) There will not be any impact on Current Ratio
(c) Current Ratio Remains Unchanged
(d) Current Ratio Decreases

18. Ratio measuring the Activity of a company is

(a) Debt-equity Ratio

(b) Interest Coverage Ratio
(c) Current Ratio
(d) Debtors Turnover Ratio

19. The Debt-Equity Ratio for the year 2002 and 2003 are 2:1 and 1:2. What does the Ratio indicate?

(a) Debt of the Company has gone up in the year 2003

(b) Debt of the Company has remained unchanged in the year 2003
(c) Debt of the Company has gone down in the year 2003
(d) Equity of the Company has remained unchanged in the year 2003

20. Return on Assets

(a) Net Profit after taxes/Total Tangible Assets

(b) Net Profit after taxes Total Investment
(c) Net Profit before taxes/Total Investment
(d) Total Tangible Assets/Net Profit after taxes