Commerce Questions and Answers for Competitive Exams | Commerce Quiz Set 2

Questions
1 4. For which one of the basic reasons, the “Structural Adjustment Programme” was undertaken in India in 1991 ?
1 Curbing competition among private sector
2 Establishing predominant role of public sector
3 Establishing a free market economy
4 Regional balancing through planning and licensing

Answer: Establishing a free market economy
2 7. The balance of property at cost has been ` 20,000 and ` 17,000 in 2015 and 2016, respectively. The profit on the sale of property of ` 2,000 is credited to Capital Reserve Account. New property costing ` 5,000 was bought in 2016. Determine the sale proceeds from property.
1 3,000
2 7,000
3 10,000
4 15,000

Answer: 10,000

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3 A Ltd. issued a prospectus inviting applications for 2,000 shares. Applications were received for 3,000 shares and pro-rata allotment was made on the applications of 2,400 shares. If A has been allotted 40 shares, how many shares he must have applied for ?
1 40
2 44
3 48
4 52

Answer: 48
4 Which one of the following receipts is of revenue nature ?
1 Amount realised from the sale of investments
2 Dividend received on investment
3 Amount borrowed from a bank
4 Compensation received from municipal corporation for the acquisition of land for the construction of road.

Answer: Dividend received on investment
5 Which one of the following statements is true ?
1 Pure profit is the return in excess of the opportunity cost
2 Accounting profit is the excess of total revenue over and above the explicit and implicit
3 Profit maximization is the sole objective of the modern firms
4 Profit is maximum when the difference between marginal revenue and marginal cost is maximum

Answer: Pure profit is the return in excess of the opportunity cost
6 Which one of the following is not the assumption on which the theory of consumer behaviour is based on the cardinal utility approach ?
1 Rationality
2 Constant marginal utility from successive units
3 Constant marginal utility of money
4 Utility is measurable

Answer: Constant marginal utility from successive units
7 15. Which one of the following is not the basic property of indifference curves ?
1 Negative slope
2 The indifference curves do not intersect nor are they tangent to one another
3 Indifference curves of two imperfect substitutes are concave to the point of origin
4 Upper indifference curves indicate a higher levels of satisfaction

Answer: Indifference curves of two imperfect substitutes are concave to the point of origin
8 The scale of measurement which has no order, distance and unique origin is known as which one of the following ?
1 Nominal scale
2 Ordinal scale
3 Interval scale
4 Ratio scale

Answer: Nominal scale
9 Which one of the following is not the characteristics of normal distribution ?
1 Bell - shaped and symmetric
2 Mean, Median and Mode of the distribution are equal
3 The total area under the curve for the normal probability distribution is one
4 The two tails of the distribution in both the directions touches the horizontal axis

Answer:The two tails of the distribution in both the directions touches the horizontal axis
10 When Walt Disney World’s Magic kingdom lets customers visit a fairy kingdom, a pirate ship, or a haunted house, then what is marketed in this example ?
1 Services
2 Events
3 Experiences
4 Ideas

Answer: Experiences
11 Which one of the following statements is true according to VALS framework of psychographic segmentation ?
1 The consumers who are primarily motivated by ideals are guided by knowledge and principles.
2 The consumers who are motivated by achievement look for knowledge and principles.
3 The consumers who are motivated by self expression don’t desire social or physical activity, variety, and risk
4 The consumers who are motivated by achievement desire social or physical activity, variety, and risk.

Answer: The consumers who are primarily motivated by ideals are guided by knowledge and principles.
12 Select the correct sequence for Hierarchy-of-effects model related to marketing communication :
1 Awareness→ Knowledge → Liking → Preference→ Conviction → Purchase
2 Knowledge → Awareness → Liking → Conviction → Preference → Purchase
3 Awareness → Liking → Knowledge → Conviction → Preference → Purchase
4 Liking → Awareness → Knowledge → Preference → Conviction → Purchase

Answer: Awareness→ Knowledge → Liking → Preference→ Conviction → Purchase
13 Which of the following statements is false ?
1 The opportunity cost of an input is considered in capital budgeting
2 Capital budgeting decisions are reversible in nature
3 Cash flows and accounting profits are different
4 An expansion decision is a capital budgeting decision

Answer: Capital budgeting decisions are reversible in nature
14 Main objective of employing Financial Leverage is to :
1 Reduce the risk associated with profits
2 Maintain the stability in profits
3 Decrease the cost of debt capital
4 Magnify the return on equity share capital

Answer: Magnify the return on equity share capital
15 Which one of the following is not a method of calculating cost of equity capital ?
1 Dividend yield method
2 Dividend yield plus growth method
3 Yield to maturity method
4 Earnings yield method

Answer: Yield to maturity method

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