Inspector of Statistics • Paper-III
The balance of the share forfeiture account, after the re-issue of forfeited shares is transfered to
A)
Capital redemption reserve account
B)
Capital reserve
C)
Share forfeiture account
D)
Profit & Loss account
Option B is correct: Capital reserve.
Inspector of Statistics • Paper-III
The process of bringing together financial, physical and human resources and establishing productive relations among them for the achievement of goals is
A)
Planning
B)
Organising
C)
Staffing
D)
Directing
Option B is correct: Organising.
Inspector of Statistics • Paper-III
When a right to sell a security is acquired, it is known as
A)
Double option
B)
Call option
C)
Put option
D)
carry over option
Option C is correct: Put option.
Inspector of Statistics • Paper-III
An instrument in writing containing an unonditional undertaking, signed by the maker to pay a certain sum of money only to, or to the order of, a certain person, or to the bearer of the instrument is
A)
Bill of exchange
B)
Promissory note
C)
Endorsement
D)
Banker’s draft
Option B is correct: Promissory note.
Inspector of Statistics • Paper-III
Expenses incurred on research and development is an example of
A)
Capital expenditure
B)
Revenue expenditure
C)
Long term expenditure
D)
Deferred revenue expenditure
Option B is correct: Revenue expenditure.
Inspector of Statistics • Paper-III
In contribution break even chart, the space between total variable cost and sales line represents
A)
Profit
B)
Angle of incidence
C)
Contribution
D)
Margin of safety
Option C is correct: Contribution.
Inspector of Statistics • Paper-III
Which of the following is considered as a product cost in absorption costing
A)
Managing Director’s salary
B)
Administrative expenses
C)
Factory building insurance
D)
Selling expenses
Option C is correct: Factory building insurance.
Inspector of Statistics • Paper-III
Which of the following speculative activities is based on disparity in quoted prices in different market
A)
Option dealing
B)
Arbitrage
C)
Margin trading
D)
Blank transfer
Option B is correct: Arbitrage.
Inspector of Statistics • Paper-III
Net worth of business means
A)
Total assets minus capital
B)
Total assets minus current liabilities
C)
Total assets minus total liabilities
D)
Total assets minus all loans
Option C is correct: Total assets minus total liabilities.
Inspector of Statistics • Paper-III
Residential status of an assessee is determined with reference to:
A)
Citizenship
B)
Place of income
C)
Period of stay in India
D)
Source of income
Residential status for income-tax purposes depends primarily on the assessee's period of stay in India.
Inspector of Statistics • Paper-III
CRR is maintained with:
A)
Commercial banks
B)
RBI
C)
SEBI
D)
Government
Commercial banks maintain CRR balances with the RBI.
Inspector of Statistics • Paper-III
Capital market deals with:
A)
Short-term funds
B)
Long-term funds
C)
Cash only
D)
Deposits
The capital market deals in long-term funds and securities.
Inspector of Statistics • Paper-III
Margin of safety indicates:
A)
Risk level
B)
Profit
C)
Liquidity
D)
Efficiency
Margin of safety shows how far actual sales can fall before reaching break-even, indicating risk.
Inspector of Statistics • Paper-III
Standard costing is used to:
A)
Fix prices
B)
Measure variances
C)
Prepare budgets
D)
Compute profit
Standard costing compares actual performance with standards and measures variances.
Inspector of Statistics • Paper-III
Primary market is concerned with:
A)
Trading of securities
B)
Issue of new securities
C)
Speculation
D)
Settlement
The primary market is where new securities are first issued.
Inspector of Statistics • Paper-III
Agricultural income is exempt under section:
A)
10(1)
B)
10(2)
C)
10(14)
D)
14A
Agricultural income is exempt under section 10(1) of the Income-tax Act.
Inspector of Statistics • Paper-III
Provision for doubtful debts is created to comply with which accounting principle?
A)
Consistency
B)
Matching
C)
Conservatism
D)
Materiality
Provision for doubtful debts reflects prudence/conservatism by recognising expected losses.
Inspector of Statistics • Paper-III
Internal check is best described as:
A)
Independent verification of records by external auditors
B)
A system where work of one employee is automatically checked by another
C)
An audit conducted after completion of accounts
D)
Review of internal policies by management
Internal check means one employee's work is automatically checked by another as part of the system of controls.
Inspector of Statistics • Paper-III
Correlation coefficient ranges between:
A)
0 and 1
B)
–1 and +1
C)
1 and 10
D)
– to +
A correlation coefficient lies between −1 and +1.
Inspector of Statistics • Paper-III
Which method of depreciation results in higher charge in earlier years?
A)
Straight Line Method
B)
Written Down Value Method
C)
Annuity Method
D)
Sinking Fund Method
Written Down Value/declining-balance depreciation charges more in the earlier years.
Inspector of Statistics • Paper-III
Loss from house property can be set off against:
A)
Salary only
B)
Business only
C)
Any income
D)
Capital gains
Loss from house property can generally be set off against income under other heads subject to statutory limits, so 'any income' is the intended choice here.
Inspector of Statistics • Paper-III
Income received in advance is taxable in:
A)
Year of receipt
B)
Year of accrual
C)
Assessment year
D)
Previous year
Income received in advance is generally brought to tax in the year of receipt under the relevant tax treatment.
Inspector of Statistics • Paper-III
Which measure is least affected by extreme values?
A)
Mean
B)
Median
C)
Mode
D)
Range
The median is relatively resistant to extreme observations.
Inspector of Statistics • Paper-III
P/V ratio increases when:
A)
Fixed cost increases
B)
Variable cost per unit decreases
C)
Sales volume decreases
D)
Total cost increases
P/V ratio = contribution/sales; it rises when variable cost per unit falls.
Inspector of Statistics • Paper-III
Which principle of insurance ensures that the insured does not make a profit from a loss?
A)
Utmost good faith
B)
Insurable interest
C)
Indemnity
D)
Contribution
The indemnity principle limits insurance recovery to the amount of the actual loss.
