aglasem.

com

A
18705 120 MINUTES
1. Motivation may be defined as the sum of
A) Desire and selective manifestation
B) Desire and behavior
C) Desire and direction
D) Desire and active principle

2. Match the following

a. Need Hierarchy theory of motivation 1. Taylor
b. M.B.O 2. Maslow
c. Scientific Management 3. Herzberg
d. Hygiene Theory 4. Peter F. Drucker

A) a – 2, b – 1, c – 4 , d – 3 B) a – 3 , b – 2, c – 4, d -1
C) a – 1, b - 2, c – 3, d – 4 D) a – 2, b – 4, c – 1, d – 3

3. Hawthrone Experiments were carried out at

A) General Motor Co. B) Honda Motor Co.
C) Western Electric Co. D) Suzuki International

4. Which of the following better explains the nature of management?

A) Attainment of goals in an efficient manner through planning, organizing, directing
and controlling.
B) Getting things done through others
C) What managers do every day
D) Management is what it does.

5. The phrase "War of Talent" was coined by:

A) Mc Kinsey B) Chester Barnard
C) Mary Parker Follet D) Frederic Taylor

6. From the below mentioned personalities who opposed the idea of CSR?
A) Milton Friedman B) Ratan Tata
C) Mukesh Ambani D) Kris Gopalakrishnan

7. Horizontal complexity is.

A) The depth of organizational hierarchy.
B) A high degree of specialization between different organizational units.
C) Dispersal of activities in the organization.
D) Fast pace of technological change.

8. Which is not included in the Need Hierarchy Theory proposed by Maslow?

A) Esteem B) Belongingness
C) Achievement D) Safety.
 aglasem.com

9. Which of the following statement is correct?

A) To be effective is to achieve organizational goals and to be efficient is to achieve
goals with least wastage of resources.
B) Many organizations are neither effective nor efficient
C) Organizations cannot be both effective and efficient
D) The word effective includes efficiency too

10. In an organizational setting, dramatic reduction of manpower is referred to as:

A) Termination B) Retirement
C) Downsizing D) Retrenchment

11. The method of designing and shaping jobs to fit the physical abilities and characteristics
of an individual
A) Job design B) Job engineering
C) Enrichment D) Ergonomics

12. Match the following

a. OD Interventions 1. Force field theory
b. Kurt lewin 2. Organizational silence
c. An internal source of resistance to change 3. Ensures continuation of
business while change is
occuring
d. Transition management change 4. Methods that help to
introduce comprehensively
and rapidly

A) a – 4, b – 1, c – 3, d – 2 B) a - 4 , b- 1, c – 2, d - 3
C) a – 3, b – 2, c – 4, d – 1 D) a – 2, b – 4, c – 1, d - 3

13. Human Relations Theory treats an organization as

A) A closed system B) An open system
C) A non-existing system D) A deterministic system

14. State whether the following two statements are TRUE or FALSE:
I BCG matrix is called Growth-Share matrix
II The parameters considered in BCG matrix are market growth rate and relative market
share
A) I and II are true B) I is true but II is false
C) I is false but II is true D) I and II are false

15. Who brings out the estimates on national income?

A) NITI Aayog B) Ministry of Finance
C) Central Statistical Organisation D) National Income Committee

16. Changes in life style is an example of:

A) Demographic environment of business
B) Social environment of business
C) Legal environment of business
D) Political environment of business

2
 aglasem.com

17. Data integrity refers to the

A) Simplicity of data B) Privacy of data
C) Validity of data D) Security of data

18. A sub-system, whose processes are not defined but its inputs and outputs are known is
called
A) Closed system B) Black Box
C) Probabilistic System D) User-machine system

19. A physical system is a

A) Conceptual system B) Logical system
C) Intangible system D) None of the above

20. MIS performs the following activities

A) Captures data, processes data and store information
B) Retrieve information and disseminate information
C) (A) and (B)
D) None of the above

21. Enterprise Resource Planning system is

A) An integrated information system B) Transaction processing system
C) Decision support system D) Expert system

22. Match the following

a. Related Records 1. RDBMS
b. Group of fields 2. Files
c. SQL 3. Fields
d. Group of Characters 4. Record

A) a – 3, b – 2, c– 4, d – 1 B) a– 2, b – 4, c - 1, d – 3
C) a– 2, b – 3, c– 1, d – 4 D) a– 1, b – 2, c – 3, d – 4

23. State whether the following two statements are TRUE or FALSE.
I In waterfall model of system development, the output of one phase becomes the input
of the next phase
II A prototype is a comprehensive system and include all requirements of the user
A) I and II are true B) I is true and II is false
C) I is false and II is true D) I and II are false

24. The term “Minimum Subscription” refers to:

A) Minimum amount to be collected by a company from its Board of Directors
B) Minimum amount collected by a private company from its promoters
C) Minimum amount to be collected by a public company on its public issues of
shares
D) Minimum amount to be contributed by a public company towards the Provident
fund account of its employees

3
 aglasem.com

25. State whether the following two statements are TRUE or FALSE.
I. Simple profit method of valuing goodwill is commonly used in case of joint stock
companies
II. Net asset method of valuation of shares is useful in case of going concerns
A) I and II are true B) I is true and II is false
C) I is false and II is true D) I and II are false

26. For calculating the value of an equity share by yield method, information is required
regarding:
A) Normal rate of return B) Net asset of the business
C) Face value of the shares D) Capital employed in the business

27. If vendors are issued fully paid shares of Rs.1,00,000 in consideration of net assets of
Rs.80,000, the balance will be debited to:
A) Profit and loss account B) Goodwill account
C) Capital Reserve Account D) Share Premium Account

28. The balance of Debentures Sinking Fund after redemption of debentures is transferred to:
A) Profit and Loss Account B) General Reserve Account
C) Capital Reserve Account D) Debentures Account

29. State whether the following two statements are TRUE or FALSE.
I. Reconstruction necessarily involves liquidation of the company concerned
II. The balance in the issue of share premium account can be transferred to capital
reduction account at the time of Internal Reconstruction
A) I and II are true B) I is true and II is false
C) I is false and II is true D) I and II are false

30. Match the following

a. Of two companies, one exists 1. Amalgamation
b. Two companies windup; a new company is formed 2. Absorption
c. One company purchases majority shares of 3. Internal
another company reconstruction
d. The Same company exists 4. Holding company

A) a – 2, b – 1, c -4, d – 3 B) a – 4, b- 2, c – 3, d – 1
C) a – 2, b – 3, c – 1, d – 4 D) a – 3, b – 1, c – 4, d – 2

31. The accumulated losses under scheme of reconstruction are written off against
A) Share Capital Account B) Capital Reduction Account
C) Capital Reserve Account D) None of these

32. The share capital to the extent already held by the purchasing company is closed by the
vendor company by crediting it to:
A) Investments account B) Purchasing company’s account
C) Share capital account D) None of these

4
 aglasem.com

33. State whether the following two statements are TRUE or FALSE.
I. The convention of conservatism takes into account all prospective profits but leaves all
prospective losses.
II. The convention of disclosure implies that all material information should be disclosed
in the accounts.
A) I and II are true B) I is true and II is false
C) I is false and II is true D) I and II are false

34. The practice of appending notes regarding contingent liabilities in accounting statements
is in pursuant to :
A) Convention of consistency B) Going concern concept
C) Convention of conservatism D) Convention of disclosure

35. Match the following

a. Valuation of closing stock 1. Matriality
b. Closing stock is taken as opening stock in the beginning 2. Conservatism
c. Income rounded to the nearest rupee in tax statement 3. Dual aspect
d. Assets = Liabilities 4. Consistency

A) a – 4, b- 2, c – 3, d – 1 B) a – 2, b – 3, c – 1, d – 4
C) a – 3, b – 1, c – 4, d – 2 D) a – 2, b – 4, c -1, d – 3

36. State whether the following two statements are TRUE or FALSE.
I. ‘Salary paid in advance’ is not an expense because it neither reduces assets nor
increases liabilities
II. Premium paid for the life policy of the proprietor is debited to the Profit and Loss
Account
A) I and II are true B) I is true and II is false
C) I is false and II is true D) I and II are false

37. State whether the following two statements are TRUE or FALSE.
I. A Non-Parametric test does not depend on the particular form of distribution of the
population.
II. There is no restriction for minimum size of samples for Non-Parametric tests.

A) I and II are true B) I is true and II is false

C) I is false and II is true D) I and II are false

38. An interview made as an attempt to identify the cause of certain abnormalities is known
as:
A) Diagnostic Interview B) Clinical Interview
C) Focused Interview D) Selection interview

39. Linear Programming identifies

A) The optimum quantities of the variables
B) The maximum profit or minimum cost that can be expected
C) Both A and B
D) None of the above

5
 aglasem.com

40. Quantitative techniques used to solve business problems are called

A) Operations management B) Operation science
C) Operations research D) Management operation

41. Which of the following is an Operations Research tool?

A) Queuing Theory B) Game Theory
C) Search Models D) All above

42. State whether the following statements are true or false:

Statement I: Accepting a null hypothesis which is actually false is known as
type I error
Statement II: Rejecting a null hypothesis which is actually true is known as
type II error

A) I is false and II is true B) I is true and II is false

C) Both are false D) Both are true

43. “Law of improbable events” is also known as:

A) Poisson distribution B) Binomial distribution
C) Hyper geometric distribution D) Normal distribution

44. A transportation problem with ‘m’ origins and ‘n’ destinations is said to be degenerate
when the basic feasible solution has occupied cells:
A) Equal to m+n-1 B) Greater than m+n-1
C) Less than m+n-1 D) Greater than or equal to m+n-1

45. The mean and variance of a data set is 12 and 9 respectively. If 3 is added to every
observation in the data set then, what will be the coefficient of variation of the resulting
data set?
A) 7.5 % B) 20 % C) 25 % D) 50 %

46. A research study for which data are gathered just once to answer the research question
A) Panel study B) Longitudinal study
C) Cross sectional study D) Qualitative study

47. A scale that has an absolute zero origins, and hence indicates not only the magnitude, but
also the proportion of the differences.
A) Rating scale B) Ratio scale
C) Ranking scale D) Nominal scale

48. Find whether the following statements are TRUE or FALSE.

I. Sampling involves both design choice and sample size decisions.
II. The sample characteristics cannot always be generalized to population.

A) I and II are true B) I is true and II is false

C) I is false and II is true D) I and II are false

6
 aglasem.com

49. Match the following.

a. Analogue of the two independent sample t-test 1. Chi-square test
b. Test for independence of two attributes 2. Sign test
c. A good test for ranked data 3. ANOVA
d. Test for equality of more than two population 4. Mann-Whitney U test
means
.
A) a-2 b-3 c-4 d-1
B) a-4 b-1 c-2 d-3
C) a-1 b-2 c-4 d-3
D) a-2 b-3 c-1 d-4

50. You need a Working Capital in your business. What does the term working capital
means?
A) The investment made on it B) Its fixed assets
C) Its circulating assets D) Amount spent for building up stock

51. The method which recognizes the time value of money by combining pay-back with the
present value is:
A) Pay- back profitability B) Discounted pay –back period
C) IRR D) ARR

52. State whether the following two statements are TRUE or FALSE
I. Cash management is an important task of the finance manager
II. Investment decisions are outside the purview of financial decisions
A) I and II are true B) I is true and II is false
C) I is false and II is true D) I and II are false

53. The value today of the sum to be received in the future is known as
A) Compound value B) Future value
C) Present value D) None of these

54. State whether the following two statements are TRUE or FALSE
I. Financial management deals with two major decisions/ functions, namely investment
and financing decisions
II. Profit/ EPS maximization is the objective of financial management.

A) I and II are true B) I is true and II is false

C) I is false and II is true D) I and II are false

55. State whether the following two statements are TRUE or FALSE
I. According to NOI approach, cost of equity is Residual
II. In the traditional approach, the cost of equity is independent of amount of debt
A) I and II are true B) I is true and II is false
C) I is false and II is true D) I and II are false

56. Calculate the pay- back period for a project which requires a cash outlay of Rs 50000 but
the same generates a cash inflow of Rs 20000, Rs 15000, Rs 10000, Rs 10000.
A) 3 years 6 months B) 3 years 8 months
C) 3 years 9 months D) 3 years 4 months

7
 aglasem.com

57. State whether the following two statements are TRUE or FALSE
I. Two mutually exclusive projects (A and B) have been evaluated. Project A has an
NPV of Rs 8 lakhs and an IRR of Rs 16 per cent; project B has NPV of Rs 7 lakhs
but has IRR of Rs 18 per cent. Since project B has higher IRR, it should be
selected.
II. Two competing projects have the following NPV; Project X ,+ 5 Lakh ( with
initial outlay of Rs 25 lakh) and project Y, + Rs 420000 ( initial outlay of Rs
2000000 ) The company should opt for project X as it has higher NPV.

A) I and II are true B) I is true and II is false

C) I is false and II is true D) I and II are false

58. Match the following

a. Owned capital 1. Risk capital
b. Debenture holder 2. Creditor
c. Capital structure 3. Types of securities to be issued and its proportion
d. Trading on equity 4. Financial leverage

A) a – 1, b – 2, c – 3, d – 4 B) a – 3, b- 4, c – 1, d – 2
C) a – 2, b – 3, c – 1, d – 4 D) a – 1, b – 3, c – 4, d – 2

59. State whether the following two statements are TRUE or FALSE
I. The higher is the risk, the higher is the certainty equivalent coefficient
II. Sensitivity analysis is an absolute measure of risk
A) I and II are true B) I is true and II is false
C) I is false and II is true D) I and II are false

60. In a Toy making unit, which of the following costing method is most suitable?
A) Job Costing B) Contract Costing
C) Batch Costing D) Unit Costing

61. State whether the following two statements are TRUE or FALSE.
I. Acquiring Stock results in application of fund
II. Outstanding salary is a non-current liability
A) I and II are true B) I is true and II is false
C) I is false and II is true D) I and II are false

62. State whether the following two statements are TRUE or FALSE.
I. Net losses means drain on working capital
II. A fund flow statement is a substitute of Income Statement

A) I and II are true B) I is true and II is false

C) I is false and II is true D) I and II are false

63. Debtors Turnover Ratio indicates:

A) The velocity of Credit Sales in a year
B) Velocity of debt collection in a year
C) Velocity of Cash Sales in a year
D) Velocity of Bills Receivable received in a year

8
 aglasem.com

64. Current Ratio is 2.6:1; Liquid Ratio is 1.5:1 and Current Liabilities is Rs.50,000, then the
value of Inventory is:
A) Rs.1,30,000 B) Rs.75,000
C) Rs.55,000 D) Rs.62,000

65. Debt-Equity Ratio is the relationship between Outsiders fund and:

A) Equity Share holders fund
B) Preference Shareholders Fund
C) Both Equity & Preference Share holders Fund
D) None of these

66. ROI can be improved :

A) By improving Net Profit Ratio
B) By improving Capital Turnover ratio
C) Either by improving Net Profit ratio or by improving Capital Turn Over Ratio or
both
D) None of these

67. The classification of cost as fixed and variable is based on

A) Controllability of cost B) Behaviour of the cost
C) Identifiability of cost D) Elements of Cost

68. State whether the following two statements are TRUE or FALSE.
I. EOQ is the size of the order which produces the lowest ordering cost
II. EOQ is that quantity which minimizes the sum of carrying cost and ordering cost
A) I and II are true B) I is true and II is false
C) I is false and II is true D) I and II are false

69. Match the following

a. Job Costing 1. Electricity Supply Company
b. Operating Costing 2. Bricks Making
c. Process Costing 3. Ship Building
d. Unit Costing 4. Oil Refinery

A) a – 2, b – 1, c -4, d – 3 B) a – 4, b- 2, c – 3, d – 1
C) a – 2, b – 3, c – 1, d – 4 D) a – 3, b – 1, c – 4, d – 2

70. Variable cost per unit:

A) Remains constant for any level of activity
B) Increases with increase in level of activity
C) Decreases with decrease in level of activity
D) Varies less than in proportion to change in activity

71. State whether the following two statements are TRUE or FALSE.
I. Marginal cost comprises of Prime Cost plus variable overheads
II. Fixed costs are set off against contribution
A) I and II are true B) I is true and II is false
C) I is false and II is true D) I and II are false

9
 aglasem.com

72. Match the following

a. Total fixed cost 1. Cost not assigned to product
b. Unit variable cost 2. Added value of a new product
c. Period cost 3. Remains constant per unit
d. Incremental cost 4. Remains constant in total

A) a – 4, b- 2, c – 3, d – 1 B) a – 4, b – 3, c -1, d – 2
C) a – 2, b – 3, c – 1, d – 4 D) a – 3, b – 1, c – 4, d – 2

73. State whether the following two statements are TRUE or FALSE.
I. At break-even point, contribution will be equal to profit
II. P/V ratio can be improved only by making profits
A) I and II are true B) I is true and II is false
C) I is false and II is true D) I and II are false

74. When sales are Rs.5,00,000 and P/V ratio is 50%, variable cost will be :
A) Rs. 3,00,000 B) Rs.6,00,000
C) Rs.2,50,000 D) Rs.1,50,000

75. Given information, Fixed cost Rs. 75,000; Sales Rs.3,00,000; Direct Materials
Rs.1,00,000; Direct labour Rs.60,000; and Direct expenses Rs.40,000, the BEP is
A) Rs.2,00,000 B) Rs. 2,25,000
C) Rs. 2,75,000 D) Rs. 3,00,000

76. Match the following:

List I List II
a. Job rotation 1. Adding higher level responsibility with existing job
b. Job enrichment 2. Arranging the components of job for specific
Performance
c. Job specification 3. Making the work versatile
d. Job design 4. Detailing the responsibility, qualification and skills

A) a-3, b-4, c-1, d-2 B) a-2, b-4, c-1, d-3

C) a-3, b-2, c-4, d-1 D) a-1, b-2, c-3, d-4

77. A function of management which ensures smoothening of all the activities connected with
an enterprise:
A) Directing B) Staffing C) Co-ordinating D) Motivating

78. State whether the following statements are true or false with regard to
Maslow’s theory of need hierarchy.
Statement I: The more people advance to higher order needs, the lesser they display their
satisfaction and motivation to work
Statement II: The needs of people are arranged in the order of their perceived priority of
hierarchy

A) I is true and II is false B) Both are false

C) Both are true D) I is false and II is true

10
 aglasem.com

79. An ability of a person to look at things or problems from another person’s point of view
is:
A) Self awareness B) Objectivity
C) Subjectivity D) Empathy

80. Which one of the following is not an essential feature of a good control system?
A) Should reflect nature and needs of activity
B) Should report deviations promptly
C) Should be rigid
D) Should be objective

81. Which one of the following is not a variant of perception?

A) Detention B) Review
C) Recognition D) Discrimination

82. State whether the following statements are true or false:

Statement I: Balance of payment of India is classified in BoP on current account, BoP on
capital account and BoP on contingency account
Statement II: The capital account is the net result of public and private international
investments flowing in and out of a country

A) I is false and II is true B) I is true and II is false

C) Both are true D) Both are false

83. Which one of the following is not a cause for inflation?

A) Over expansion of money supply B) Increase in repo rate
C) Expansion of bank credit D) Deficit financing

84. Deregulation is another name for:

A) Globalisation B) Liberalisation C) Privatisation D) Broad Banding

85. Intellectual property protection and transfer of technology are envisaged under:
A) TRIPS B) TRIMS C) TRICS D) TRIFS

86. A platform which provides equal prominence for both private and public sector players is:
A) PPP B) Disinvestment
C) Privatisation D) Opening up

87. Match the following:

Organisation hierarchy Use of MIS
a. CEO and Board 1. Planning and scheduling
b. Department Manager 2. Status facts
c. Supervision 3. Strategic plans
d. Operation Staff 4. Meeting targets

A) a-3, b-1, c-4, d-2 B) a-3, b-1, c-2, d-4

C) a-2, b-4, c-1, d-3 D) a-1, b-2, c-3, d-4

11
 aglasem.com

88. State whether the following statements are true or false:

Statement I: Under transaction processing systems, more than one system is processed
together to produce an undated status and business results where the systems
are networked and interfaced
Statement II: System boundaries define the scope and coverage of the system

A) I is false and II is true B) I is true and II is false

C) Both are true D) Both are false

89. Match the following:

List I List II
a. Cash flow statement 1. AS 6
b. Borrowing cost 2. AS 3
c. Depreciation 3. As 10
d. Accounting for fixed assets 4. AS 16

A) a-3, b-1, c-4, d-2 B) a-1, b-3, c-2, d-4

C) a-3, b-2, c-4, d-1 D) a-1, b-2, c-3, d-4

90. State whether the following statements are true or false:

Statement I: Trial balance can be prepared under single entry system also
Statement II: In an income statement, excess of revenues over expenses is known as
deficit

A) I is false and II is true B) I is true and II is false

C) Both are true D) Both are false

91. Following details are available in respect of salary account of an enterprise for the year
2017-18: Opening salary outstanding Rs.500, opening salary prepaid Rs. 200, Closing
salary outstanding Rs.700, closing salary prepaid Rs. 400 and salary paid during the year
Rs. 60,000. What is the amount of salary to be charged to P/L account?
A) Rs. 60,000 B) Rs. 60,400 C) Rs. 60,600 D) Rs. 59,600

92. If a share having face value of Rs. 10 is forfeited for non payment of second and final call
amounting to Rs. 4, what shall be the minimum price at which it can be re-issued as fully
paid?
A) Rs.10 B) Rs. 6 C) Rs. 5 D) Rs.4

93. Which one of the following will not affect P/L account of an entity?
A) Provision for doubtful debts
B) Claims against the company pending before a court of law
C) Provision for doubtful debts no longer required written back
D) Interest on investments

94. If dividend declared is 30 % of paid up capital, what is the minimum percentage of

current year profits needs to be transferred to general reserve as per Companies’ Transfer
to General Reserves Rules?
A) 2.50 B) 5 C) 7.50 D) 10

12
 aglasem.com

95. Capital funds as per opening and closing statements of affairs are Rs. 60,000 and Rs.
80,000 respectively. If drawing amounts to Rs. 5,000, interest on capital Rs. 8,000 and
interest on drawings Rs. 500, what will be the amount of current year profit?
A) Rs. 33,000 B) Rs. 32,500 C) Rs. 17,000 D) Rs. 16,500

96. Locate the correct sequence with regard to the steps involved in database design:
A) Graphical representation—Data analysis—Relational identity—Design process
B) Data analysis—Relational identity—Graphical representation—Design process
C) Graphical representation—Relational identity — Data analysis—Design Process
D) Graphical representation—Relational identity —Design Process— Data Analysis

97. Under which one of the following sampling techniques, the sampling unit and unit of
enquiry are never identical?
A) Stratified sampling B) Quota sampling
C) Simple random sampling D) Cluster sampling

98. Measurable function of sample values is known as:

A) Statistic B) Variable C) Parameter D) Element

99. Control Group is a term used in:

A) Historical research B) Survey research
C) Descriptive research D) Experimental research

100. Which one of the following is not a valid assumption of linear programming?
A) Proportionality of objective function and constraints
B) Additivity of variables
C) Uncertainty existing among coefficients of objective function and Constraints
D) Continuity in decision variables

101. State whether the following statements are true or false:

Statement I: A set of variables is called a feasible solution to LPP, if it satisfies the
constraints as well as non-negativity restrictions
Statement II: If the value of objective function can be increased or decreased indefinitely,
the solution is called unbound solution
A) I is false and II is true B) I is true and II is false
C) Both are false D) Both are true

102. Which one of the following time estimates will be the highest when compared with others
in PERT?
A) Pessimistic B) Most likely
C) Optimistic D) Cannot be said

103. Identify the rule which doesn’t fit into, while constructing a network diagram:
A) Arrows pointing in opposite direction need to be avoided
B) Two or more activities may have the same tail and head events
C) No subsequent activity can begin until its tail event is completed
D) Arrows should not cross each other

13
 aglasem.com

104. Four different paths exist for completion of a construction project. Which one of the
following can be its critical path?
A) 60 days B) 40 days C) 45 days D) 55 days

105. Lower corporate tax rate will result into --------- effective cost of debt.
A) Constant B) Higher C) Lower D) Minimum

106. MM Model argues that dividend is irrelevant as:

A) Dividend decision is a residual decision
B) Investors buy shares for capital appreciation
C) Value of the firm depends upon earning capacity of the firm
D) Dividend payment is insignificant when compared to the investment

107. The value of EBIT at which EPS is equal to zero is known as:
A) Financial breakeven point B) Operating breakeven point
C) Combined breakeven point D) Margin of safety

108. If profitability index is 1.75 and PV of cash outflows is Rs. 2,00,000, what will be PV of
cash inflows:
A) Rs. 1,75,000 B) Rs. 2,50,000 C) Rs. 3,00,000 D) Rs. 3,50,000

109. State whether the following statements are true or false:

Statement I: When total current liabilities exceeds total current assets, the resultant figure
is known as temporary working capital
Statement II: Financing short term needs with short term funds alone is designated as
liberal working capital policy

A) I is false and II is true B) I is true and II is false

C) Both are true D) Both are false

110. If ‘r = Ke’, then as per Walter’s and Gordon’s models, the market price of equity shares
for different payout ratios would be:
A) Different B) Constant C) Equal D) Zero

111. State whether the following statements are true or false:

Statement I: A situation in which consumer purchases are unplanned is called impulse
buying
Statement II: Reference group means group of people likely to buy the identified Product

A) I is false and II is true B) I is true and II is false

C) Both are true D) Both are false

112. Match the following:

List I List II
a. Geographic segmentation 1. Loyalty
b. Behavioural segmentation 2. Performance
c. Demographic segmentation 3. Rural
d. Segmentation by benefit 4. Income

A) a-3, b-1, c-4, d-2 B) a-3, b-1, c-2, d-4

C) a-1, b-3, c-4, d-2 D) a-1, b-2, c-3, d-4
14
 aglasem.com

113. Pick the one which is a cash flow associated with investing activity:
A) Cash payment or refunds of taxes on corporate profits
B) Cash payment to and on behalf of employees
C) Cash advances and loans made to third parties by a company other than a financial
enterprise
D) Payment of dividend on preference shares

114. If profit for the year is Rs. 2,00,000 and variable cost to sales ratio is 60 %, what will be
the margin of safety?
A) Rs. 4,00,000 B) Rs. 5,00,000 C) Rs. 10,00,000 D) Rs. 12,00,000

115. An increase in selling price:

A) Lowers profit B) Lowers BEP
C) Increases BEP D) Does not affect BEP

116. If EPS is Rs. 5 and PE ratio is 20 times, what will be the market price of the share?
A) Rs. 4 B) Rs. 20 C) Rs. 100 D) Rs.200

117. State whether the following statements are true or false:

Statement I: Contingent liabilities are liabilities which may or may not arise in the future
on account of events which are certain to happen
Statement II: When the exact amount of losses or expenditure is not ascertainable,
provision is created

A) I is true and II is false B) I is false and II is true

C) Both are true D) Both are false

118. Match the following:

List I List II
a. Profitability ratio 1. Stock velocity
b. Liquidity ratio 2. Debt-equity ratio
c. Long term solvency ratio 3. Acid test ratio
d. Activity ratio 4. ROE

A) a-2, b-4, c-1, d-3 B) a-4, b-3, c-2, d-1

C) a-3, b-2, c-4, d-1 D) a-1, b-2, c-3, d-4

119. A company produces two types of gels through a joint process. Gel A can be sold at split
off while Gel B can either be sold at Rs. 2 at split off or at Rs.7 after further processing.
What should be the maximum amount of further processing cost per unit that can be
incurred so that a profit of Re. 1 per unit is ensured?
A) Rs. 5 B) Rs. 4 C) Rs. 3 D) Rs. 2

120. A product which is recovered incidentally from the materials used in the manufacturing
activity is known as:
A) Joint product B) By product
C) Co-product D) Defectives

***********************
15