KASC-Commerce (PG) - Kongunadu Arts and Science College

KONGUNADU ARTS AND SCIENCE COLLEGE

(AUTONOMOUS)

[Re-accredited by NAAC with ‘A’ Grade 3.64 CGPA-(3rd Cycle)]

Coimbatore – 641 029

SUBJECTS

DEPARTMENT OF COMMERCE (PG) & B.COM PA

QUESTION BANKS

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S.No Name of the Subject

1. C.P.1 Financial Management

2. C.P.2 Global Business Environment

3. C.P.3. Human Resource Management

4. C.P.4. Organizational Behaviour

5. Non-Major Elective I – Managerial Economics

6. C.P.5. Advanced Corporate Accounting

7. C.P.6.Security Analysis and Portfolio Management

8. C.P.7 Management of Small Enterprises

9. C.P.8. Industrial Relations and Labour Law

10. Non-Major Elective-II – Cyber crimes and law

11. C.P.9 Applied Cost Accounting

12. C.P.10 Income Tax Law and Practice

13. C.P.11 International Trade

14. C.P.12 Business Research Methods

15. Major Elective I – Executive communication

16. C.P.13 Management Accounting

17. C.P.14 Customs Duty and Goods and Services Tax

18. C.P.15 Marketing Research

19. Major Elective-II – Insurance and Risk Management

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I M.COM

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KONGUNADU ARTS AND SCIENCE COLLEGE, COIMBATORE

DEPARTMENT OF COMMERCE PG & PA

Class: I .M.COM Semester – I

Sub. Name: Financial Management Sub. Code: 18PCM101

Prepared By: Mrs.C.Goldbell Rachel (Units I , III & V)

Ms.N.Sruthi (Units II , IV & V)

UNIT-1

Answer the following:

1. _____ is a regarded as the life blood of business enterprise.

a) Business

b) Finance

c) Management

d) leverages

2. _____ is concerned with the efficient use of an important economic resource.

a) Leverages

b) Capitalisation

c) Capital budgeting

d) Financial management

3. _____ mainly concerned with the proper management of funds.

a) Financial management

b) Capitalisation

c) Personal finance

d) Business finance

4. Financial management in _____ classification.

a) Five

b) Four

c) Three

d) Two

5. Financial management in _____ objectives.

a) Five

b) Four

c) Three

d) Two

6. Financial management in _____ scope.

a) Two

b) Three

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c) Five

d) Four

7. _____ is defined as the sons of future loss that may be foresees.

a) Return

b) Investment

c) Trade

d) Risk

8. _____ is measured as again or profit expected to be made over a period of the time of making

investment.

a) Risk

b) Return

c) Investment

d) Trade

9. _____ is also reffered as uncontrollable risk.

a) Systematic risk

b) Unsystematic risk

c) Marketing risk

d) Internal rate risk

10. _____ as that portion of total variability of return caused.

a) Systematic risk


c) Marketing risk

d) Business risk

11. _____ is the variation in the single period rates.

a) Business risk

b) Internal rate risk

c) Systematic risk

d) Unsystematic risk

12. _____ is also reffered as controllable risk.

a) Business risk

b) Internal risk

c) Systematic risk

d) Unsystematic rick

13. _____ is caused by the operating environment of the business.

a) Systematic risk


c) Business risk

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d) Internal risk

14. _____ is associated with the organisation efficiency differs firm.

a) Internal business risk

b) External business risk

c) Financial risk

d) Internal risk

15. _____ is the result of operating conditions imposed on the firm.

a) Financial risk

b) Internal risk

c) Internal business risk

d) External business risk

16. _____is associated with the method through which it plans.

a) Internal risk

b) Financial risk

c) Business risk

d) External risk

17. _____ is the possibility that customer to have been granted credit will either fail to pay.

a) Credit risk

b) Currency risk

c) Country risk

d) Liquidity risk

18. _____ involved losses from adverse movement in foreign exchange rates both long term and

short term.

a) Credit risk

b) Country risk

c) Liquidity risk

d) Currency risk

19. _____ arises from an adverse change in the financial conditional of a country.

a) Credit risk

b) Country risk

c) Liquidity risk

d) Currency risk

20. _____ refers to the possibility that the market for a security.

a) Credit risk

b) Currency risk

c) Liquidity risk

d) Country risk

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SECTION B

1. Give the meaning and definition of financial management.

2. Write a note on wealth maximisation.

3. What do you mean by risk in financial management?

4. Enlist the steps for wealth maximisation.

5. What are the causes of risk?

6. Write down the objectives of time value of money.

7. Discuss about internal business risk.

8. What do you mean by systematic risk?

9. Explain about the scope under traditional approach.

10. Discuss the classification of finance

SECTION C

1. Discuss the classification of risk.

2. Explain the role and functions of a financial manager.

3. Discuss the scope of financial management.

4. Explain the term time value of money.

5. What are the functions of a financial management?

6. Discuss the objectives of financial management.

7. Differentiate between business risk and financial risk.

8. Explain the different kinds of financial risk

9. Discuss in brief about business risk.

10. Write a note on risk and return.

ANSWER:

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

B D A C D A C B A C B D C A D B A D B C

UNIT II

SECTION- A (1 marks)

Choose the right answer

1) _______ is the minimum rate of return expected by the investors.

a) Cost of capital b) Capital budgeting c) Capitalization d) Leverage

2) _______ is the weighted average cost of various sources of finance used by a firm.


3) ________ is the process in which the business determines large investments.


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4) The capital used by the firm can be in the form of debt, preference shares, and equity

shares and __________.

a) Assets b) Retained earnings c) Loan d) Investment

5) _____ is the issue of shares at a special price by the company to its existing shareholders.

a) Preference b) Equity c) Rights issue d) Bonus issue

6) ______ are book costs related to the past.

a) Future cost b) Historical cost c) Composite cost d) Specific cost

7) _________ are estimated costs for the future.

a) Future cost b) Historical cost c) Composite cost d) Specific cost

8) ________ acts as a guide for the estimation of future costs.

a) Historical cost b) Explicit cost c) Specific cost d) Composite cost

9) ________ are more relevant than historical cost.

a) Explicit cost b) Specific cost c) Composite cost d) Future cost

10) ________ cost relate to specific source of capital.

a) Composite b) Specific c) Explicit d) Implicit

11) ______ is the combined cost of various sources of capital.

a) Specific cost b) Composite cost c) Explicit cost d) Implicit cost

12) If one form of capital is used in business, _______ is used for decision making.

a) Specific cost b) Composite cost c) Explicit cost d) Implicit cost

13) ________ is the discounted rate which equates the present value of cash inflows with

the present value of cash outflows.

a) Explicit cost b) Implicit cost c) Average cost d) Marginal cost

14) _________ is the cost of the opportunity foregone to take up a particular project.

a) Explicit cost b) Implicit cost c) Average cost d) Marginal cost

15) Implicit cost is also known as _______.

a) Opportunity cost b) Specific cost c) Marginal cost d) Average cost

16) _______ is the average cost of capital which is to be incurred to obtain additional funds

required by a firm.

a) Opportunity cost b) Specific cost c) Marginal cost d) Average cost

17) In the computation of cost of capital, NP stands for _________.

a) Net Process b) Net Proceeds c) Net Price d) Net Progress

18) Weighted average cost of capital is also known as ________ cost of capital.

a) Composite b) Recurring c) Specific d) Incurred

19) In the computation of cost of redeemable debt, RV stands for ________.

a) Redeemable Value b) Redemption Value

c) Recurring Value d) Re-estimated Value

20) _______ are accrued sacrifice of available profits by the shareholders.

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a) Loan b) Investment c) Retained earnings d) Assets

SECTION- B (5 marks)

Answer the following

1) i) X Ltd issued Rs.50,000 8% debentures at par. The tax rate applicable to the company is 50%.

Compute the cost of debt capital.

ii) Y Ltd issues Rs.50,000 8% debentures at a premium of 10%. The tax rate applicable to the

company is 60%. Compute cost of debt capital.

2) i) A Ltd issues Rs. 50,000 8% debentures at a discount of 5%. The tax rate is 50%, compute the cost

of debt capital.

ii) B Ltd issues Rs.1,00,000 9% debentures at a premium of 10%. The cost of floatation are 2%. The

tax rate applicable is 60%. Compute cost of debt capital.

3) X Ltd issues 50,000 8% debentures of Rs.10 each at a premium of 10%. The costs of floatation are

2%. The rate of tax applicable to the company is 60%. Compute the cost of debt capital.

4) A company issues 5,000 12% debentures of Rs.100 each at a discount of 5%. The commission payable

to underwrites and brokers is Rs.25,000. The debentures are redeemable after 5 years. Compute the

after-tax cost of debt assuming a tax rate of 50%.

5) A company issues 10,000 10% preference shares of Rs.100 each. Cost of issue is Rs. 2 per share.

Calculate cost of preference capital if these shares are issued a) at par b) at a premium of 10% c) at a

discount of 5%.

6) A company issues 10,000 10% preference shares of Rs.100 each redeemable after 10 years at a

premium of 5%. The cost of issue is Rs.2 per share. Calculate the cost of preference capital.

7) A company issues 1,000 7% preference shares of Rs.100 each at a premium of 10% redeemable

after 5 years at par. Calculate cost of preference capital.

8) A company issues 1000 equity shares of Rs.100 each at a premium of 10%. The company has been

paying 20% dividend to equity shareholders for the past 5 years and expects to maintain the same in the

future also. Compute the cost of equity capital. Will it make any difference if the market price of equity

share is Rs.160?

9) A firm is considering an expenditure of Rs.60,00,000 for expanding its operations. Number of

existing equity shares – 10,00,000; Market value of existing shares – Rs.60;Net earnings – Rs.90,00,000.

Compute the cost of existing equity share capital and cost of new equity capital assuming that new shares

will be issued at a price of Rs.52 per share and the cost of new issue will be Rs. 2 per share.

10) A firm’s cost of equity is 15%, the average tax rate of shareholders is 40% and it is expected that

2% is brokerage cost that shareholders will have to pay while investing their dividends in alternative

securities. What is the cost of retained earnings?

SECTION- C (8 marks)


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1) A company issues Rs.10,00,000 10% redeemable debentures at a discount of 5%. The cost of

floatation amount to Rs.30,000. The debentures are redeemable after 5 years. Calculate before-tax and

after-tax cost of debt assuming a tax rate of 50%.

2) A 5 year Rs.100 debenture of a firm can be sold for a net price of Rs.96.50. The coupon rate of interest

is 14% per annum, and the debenture will be redeemed at 5% premium on maturity. The firm’s tax rate

is 40%. Compute the before and after tax cost of debenture.

3) Assuming that a firm pays tax at 50% rate, compute the after tax cost of debt capital in the

following cases,

i) A perpetual bond sold at par, coupon rate of interest being 7%

ii) A 10 year, 8% Rs.1,000 per bond sold at Rs.950 less 4% underwriting commission

4) A company issues Rs.10,00,000, 12% debentures of Rs.100 each. The debentures are redeemable

after the expiry of fixed period of 7 years. The company is in 35% tax bracket. i) Compute the cost of

debt after tax if debentures are issued at par, 10% discount, 10% premium;

ii) If brokerage is paid at 2%, what will be the cost of debentures, if issue is at par?

5) i) A company issues 1,000 10% preference shares of Rs.100 each at a discount of 5%. Cost of raising

capital are Rs.2,000. Compute the cost of preference capital.

ii) Assume that the firm pays tax at 50%. Compute after tax cost of capital of a preferred share sold at

Rs.100 with a 9% dividend and a redemption price of Rs.110, if the company redeems it in 5 years.

6) a) A company plans to issue 1000 new shares of Rs.100 each at par. The floatation costs are expected

to be 5% of the share price. The company pays a dividend of Rs.10 per share initially and the growth in

dividends is expected to be 5%. Compute the cost of new issue of equity shares.

b) If the current market price of an equity share is Rs.250, Calculate the cost of existing equity share

capital.

7) The shares of a company are selling at Rs.40 per share and it had paid a dividend of Rs.4 per share

last year. The investor’s market expects a growth rate of 5% per year.

a) Compute the company’s equity cost of capital.

b) If the anticipated growth rate is 7% per annum, calculate the indicated market price per share.

8) Your company’s share is quoted in the market at Rs.20 currently. The company pays a dividend of

Re.1 per share and the investor’s market expects a growth rate of 5% per year.

a) Compute the company’s equity cost of capital.

b) If the anticipated growth rate is 6% p.a. Calculate the indicated market price per share.

c) If the company’s cost of capital is 8% and the anticipated growth rate is 5% p.a, calculate the indicated

market price if the dividend of Re.1 per share is to be maintained.

9) A company is considering raising of funds of about Rs.100 lakhs by one of two alternative methods,

14% institutional term loan and 13% non-convertible debentures. The term loan option would attract no

major incidental cost. The debentures would have to be issued at a discount of 2.5% and would involve

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cost of issue of Rs.1 lakh. Advise the company as to the better option based on the effective cost of

capital in each case. Assume a tax rate of 50%.

10) A mining company’s iron ore reserves are being depleted and its costs are recovering a declining

quantity of iron ore are rising each year. As a sequel to it, the company’s earnings and dividends are

declining at a rate of 10% p.a. If the previous year’s dividend was Rs.20 and the required rate of return

is 20%, what would be the current price of equity share of the company?

Answers:



1) Cost of capital (a)

2) Cost of capital (a)

3) Capital budgeting (b)

4) Retained earnings (b)

5) Rights issue (c)

6) Historical cost (b)

7) Future cost (a)

8) Historical cost (a)

9) Future cost (d)

10) Specific (b)

11) Composite cost (b)

12) Specific cost (a)

13) Explicit cost (a)

14) Implicit cost (b)

15) Opportunity cost (a)

16) Marginal cost (c)

17) Net proceeds (b)

18) Composite (a)

19) Redeemable value (a)

20) Retained earnings (c)



1) i) 4%, ii) 2.9%

2) i) 4.2%, ii) 3.3%

3) 2.9%

4) 8.4%

5) a) 10.2%, b) 9.2%, c) 10.7%

6) 10.5%

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7) 4.7%

8) 18.1%, 12.5%

9) 15%, 18%

10) 8.8%



1) 12%, 6.8%

2) 15%, 10%

3) 3.5%, 5%

4) i) 7.8%, 9.7%, 6% ii) 8.1%

5) i) 10.7%, 10.4%

6) a) 15.5%, b) 11.6%

7) a) 15.5%, b) Rs.50.35

8) a) 10%, b) Rs.25, c) Rs.33.33

9) 13% debentures is the better option.14% term loan – 7%, 13% debentures - 6.7%

10) Rs.60

UNIT- III

1. _____ is one of the most important constituents of financial plan.

a) Finance

b) Management

c) Leverages

d) Capitalisation

2. A _____ is a statement estimating the amount of capital and determining its composition.

a) Financial plan

b) Management plan

c) Leverages

d) Capitalisation

3. The term _____ in its quantitative sense and refers to the process of determining.

a) Leverages

b) Finance

c) Capitalisation

d) Management

4. “The balance sheet values of stocks and bonds outstanding”, said by ____

a) Sharama and Sasi Gupta

b) Bonneville and Deway

c) Gupta

d) Taylor

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5. The theories of capitalisation has _____

a) Two

b) Three

c) Four

d) Five

6. _____ theory is the amount of capitalisation is arrived at by adding up the cost of fixed assets.

a) Over Capitalisation

b) Fair Capitalisation

c) The Earnings theory

d) The Cost theory

7. _____ theory is the capitalisation of a company depands upon its earning and the expected fair

rate of return on its capital investor.

a) The Cost theory

b) The Earning theory

c) Fair Capitalisation

d) Over Capitalisation

8. _____ is the desire of every company to have filly capitalised situation.

a) Capitalisation

b) Over Capitalisation


d) Under Capitalisation

9. When a business is unable to earn fair rate on its outstanding securities it is ____

a) Over Capitalisation

b) Under Capitalisation


d) Capitalisation

10. _____ is the loss of goodwill.

a) Shareholder

b) Society

c) Organisation

d) company

11. _____ is the loss on speculation.

a) Society

b) Company

c) Shareholder

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d) Organisation

12. _____ is the loos to consumer and workers.

a) Shareholder

b) Society

c) Company

d) Organisation

13. The real value of can _____ capitalisation company is more then its book value.

a) Capitalisation

b) Fair Capitalisation

c) Over Capitalisation

d) Under capitalisation

14. _____ is refers to the mix of different sources of long term funds.

a) Capital Structure

b) Capitalisation

c) Leverages

d) Finance

15. The employment of an assets or funds for which the firm pays a fixed cost or fixed return

______.

a) Capital structure

b) Capitalisation

c) Leverages

d) Finance

16. Leverages has _____ types.

a) Two

b) Three

c) Four

d) Five

17. _____ defined as the ability of the firm to use financial charges to increase the efforts of

changes in EBIT.

a) Financial Leverage

b) Operating Leverage

c) Composite Leverage

d) Leverage

18. _____ may be favourable or unfavourable depands upon the use of fixed cost funds.

a) Operating Leverage

b) Composite Leverage

c) Financial Leverage

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d) Leverage

19. _____ may be defined as the company ability to used fixed operating cost.

a) Leverage



d) Operating Leverage

20. _____ was both financial and operating leverage to magnification of change in sales.

a) Leverage



d) Operating Leverage

SECTION B

1. The capital structure of ABC ltd consists of equity share capital of Rs. 1,00,000 [10,000 shares

of Rs. 10 each] and 8% of debenture of Rs. 50,000.

You are required to calculate and verify the degree of financial leverage on earnings before

interest and tax [EBIT] a level of Rs. 20,000.

Answer: Financial Leverage =1.25

2. An analytical statement of AB company is shown below.

I. It is based on output (sales) level of 80,000 units.

Sales

Rs.

9,60,000

(-) Variable cost 5,60,000

Contribution 4,00,000

(-) Fixed cost 2,40,000

EBIT or OP 1,60,000

(-) Interest 60,000

PBT 1,00,000

(-) Tax 50,000

Net Income 50,000

Calculate the degree of operating leverage, financial leverage and composite leverage

from the above date.

Answer: O l = 2.5 , F l = 1.6 , C l= 4

3. Find out the financial leverage from the following data.

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Net worth 50,00,000

Debt/equity 3/1

Interest rate 12%

Operating profit 40,00,000 .

Answer: Financial leverage = 1.13

4. A firm has basis sales of Rs.10,00,000 variable cost Rs. 7,00,000 and fixed cost Rs.2,000,000

and debt of Rs.5, 00,000 at 10% rate of interest.

What are the opening and financial leverage.

Answer: OL= 3, FL= 2

5. Find the operating leverage from the following.

Sales 5,00,000

Variable cost 61%

Fixed cost 1,20,000.

Answer: Operating leverage= 2.5

6. Find the financial leverage from the following data.

Net worth 50,00,000

Debt / Equity 3/1

Interest rate 12%

Operating profit 40,00,000.

Answer: Financial leverage = 1.818

7. Calculate operating leverage and financial leverage from the following data:

Sales (1,00,000 units) Rs. 2,00,000

Variable cost per unit Rs. 0.70

Fixed cost Rs. 65,000

Interest charges Rs. 15,000.

Answer: OL = 2, FL=1.30

8. Critically evaluate the MM Approach.

9. Distinguish between over capitalisation and under capitalisation.

10. Give the formula for calculating operating , financial and composite leverages.

SECTION C

1. Calculate degree of operating leverage, financial leverage and combined leverage from the

following data.

Sales 1,00,000Units @ 2 per unit Rs.2,00,000

Variable cost @ 0.70 per cost

Fixed cost Rs.1,00,000

Interest charge 3.668.

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Answer: OL = 4.3, FL = 1.13, CL= 4.93

2. Calculate degree of operating leverage, financial leverages, and combined leverage, for the

following firm and interest the result.

Particular P

Rs.

Q

Rs.

R

Rs.

Output (Unit) 3,00,000 75,000 5,00,000

Fixed cost (Rs) 3,50,000 7,00,000 75,000

Unit variable cost (Rs) 1 7.5 0.10

Interest expenses (Rs) 25,000 40,000 -

Unit selling price 3 25 0.50

Answer :

Operating leverage P ltd = 2.4, Q ltd = 2.14, R ltd = 1.6

Financial leverage P ltd = 1.11, Q ltd = 1.07, R ltd =1

Combined leverage P ltd = 2.66 Q ltd = 2.29 R ltd = 1.6

3. Calculate the operating, financial and combined leverage from the follow information:

Rs.

Interest 5,000

Sales 50,000

Variable cost 25,000

Fixed cost 15,000.

Answer: OL = 2.5, FL = 2, CL = 5

4. a) Find the operating leverage from the following:

Sales Rs.5,00,000

Variable cost 60%

Fixed cost Rs.1,20,000

b) Find the financial leverage from the following data.

Net work Rs.50,00,000

Debt/ Equity 3/1

Interest rate 12%

Operating profit Rs.40,00,000.

Answer: OL = 2.5 , FL = 1.818

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5. A firm has sales of Rs.20,00,000, variable cost of Rs.14,00,000, fixed cost of Rs.4,00,000

and debenture Rs.10,00,000 in its capital structure obtained @10%. What are its financial,

operating and combined leverage.

Answer: FL = 2, OL = 3, CL =6

6. The following data are variable for X limited:

Selling price per unit = Rs.120

Variable cost per unit = Rs.70

Fixed cost = RS.2,00,000

a) What is the operating leverage when X ltd produces and sells 6,000 units?

b) What is the percentage change that will occur in the EBIT of X ltd. If output increases

by 5%.

Answer: a) OL = 3 b) 15%

7. Calculate degree of operating, financial and combined leverage from the following data.

Sales 1,00,000 units @ Rs.2 per unit – Rs.2,00,000

Variable cost per unit @ Rs.0.70

Fixed costs – Rs.1,00,000

Interest charges- Rs.3,668

Answer: OL = 4.33 , FL = 1.14 , CL = 4.94

8. Explain briefly the Net operating income approach and MM approach to the problem of

capital structure.

9. Discuss the assumptions and implication of net operating income approach.

10. Define capitalisation and discuss about over and under capitalisation.

ANSWER:

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

B A C B A D B C A D C B D A C B A C D B

UNIT IV



1) _______ is the process of making investment decisions in capital expenditure.

a) Capital budgeting b) Leverage c) Capitalization d) Cost of capital

2) Capital budgeting is also known as _______.

a) Investment decision making b) Decision making

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c) Cost function d) Fund management

3) Cost of acquiring building is an example of ________ expenditure.

a) Credit b) Capital c) Fund d) Monetary

4) __________ is important to avoid over-investment or under-investment in fixed assets.

a) Capital budgeting b) Leverage c) Capitalization d) Cost of capital

5) _____ is the first step in capital budgeting process.

a) Identification of investment proposals b) Fixing priorities

c) Evaluation d) Performance review

6) ______ is the capital budgeting decision that helps the firm to ration its limited funds to

various investment proposals.

a) Capital rationing decision b) Cost cutting decision

c) Accept reject decision d) Mutually exclusive project decision

7) _________ is the capital budgeting decision in which independent project that yields

higher rate of return is accepted and the rest are rejected.

a) Capital rationing decision b) Cost cutting decision

c) Accept reject decision d) Mutually exclusive project decision

8) Decision on buying a new machine or a second hand machine is an example of

________ decision.

a) Capital rationing b) Cost cutting c) Accept reject d) Mutually exclusive project 9)

Pay-back period method is also known as ________.

a) Pay out method b) Performance method

c) Pay short method d) Performance off method

10) Which of the following is a traditional method of capital budgeting?

a) Net present value method b) Internal rate of return method

c) Profitability index method d) Payback period method

11) Time adjusted method of capital budgeting is also known as ______.

a) Discounted method b) Direct method c) Short cut method d) Index method

12) _______ represents the period in which the total investment in permanent assets pays

back itself.

a) Post back period b) Payback period c) Return period d) Revenue period

13) Annual cash inflow = ________.

a) Profit after tax before depreciation b) Profit after tax after depreciation

c) Profit before tax after depreciation d) Profit before tax before depreciation

14) _________ method takes into account the returns receivable beyond the payback period.

a) Post payback profitability b) Payback reciprocal

c) Post payback period d) Discounted payback

15) Time value of money is taken into account in _______ method of payback period

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computation.

a) Discounted payback b) Post payback profitability

c) Payback reciprocal d) Post payback period

16) Projects are ranked based on their rate of return under _______ method of capital

budgeting.

a) Rate of return b) Payback period c) Net present value d) Profitability index

17) Internal rate of return method is also known as _________.

a) Time adjusted rate of return method b) Rate of return method

c) Return index method d) Profitability index method

18) Profitability index method is also known as ________.

a) Desirability factor b) Profitability factor c) Return index d) Capital index

19) ________ approach gives more than one estimate of the future cash flow of a project.

a) Probability assignment b) Sensitivity analysis

c) Certainty-equivalent d) Risk adjusted

20) Projects having larger standard deviation are considered _______.

a) Risk free b) Risky c) Profitable d) Acceptable



1) What is capital budgeting? State its importance.

2) Write a note on uncertainty in capital budgeting.

3) What is sensitivity analysis? Explain.

4) Write a note on decision tree analysis.

5) A project costs Rs.1,00,000 and yields an annual cash inflow of Rs.20,000 after 8 years. Calculate its

payback period.

6) A project cost Rs.5,00,000 and yields annually a profit of Rs.80,000 after depreciation at 12% p.a but

before tax of 50%. Calculate the payback period.

7) Determine the payback period for a project which requires a cash outlay of Rs.10,000 and generates

cash inflows of Rs.2,000, Rs.4,000, Rs.3,000 and Rs.2,000 in the first, second, third and fourth year

respectively.

8) Initial outlay – Rs.50,000; Life of the asset is 5 years; Estimated annual cash flow Rs.12,500.

Calculate internal rate of return.

P.V factor for 5 years

6% 7% 8% 9% 10%

4.2123 4.1002 3.9927 3.8896 3.7909

9) There are two projects X and Y. Each project requires an investment of Rs.20,000. Rank these projects

according to the payback method. Given below – net profit before depreciation and after tax.

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Years Project X Project Y

1 1,000 2,000

2 2,000 4,000

3 4,000 6,000

4 5,000 8,000

5 8,000 ---

10) The Tamil Nadu Fertilizers Ltd is considering a proposal for the investment of Rs.5,00,000 on

product development which is expected to generate net cash inflows for 6 years as under:

Years Net cash flows (Rs. In thousands)

1 ---

2 100

3 160

4 240

5 300

6 600

PV factor @15% 0.87 0.76 0.66 0.57 0.50 0.43

Year 1 2 3 4 5 6

The company’s cost of capital is 15%. Advise the company on accepting the proposal.



1) Elaborate and explain about capital budgeting techniques.

2) Discuss on risk analysis in capital budgeting.

3) Explain in detail about capital asset pricing model.

4) What is capital rationing? What are the advantages of capital rationing?

5) Calculate discounted payback period from the information given below:

Cost of project Rs.6,00,000; Life of the project 5 years; Annual cash inflow Rs.2,00,000; Cut off rate

10%.

PV at 10% 0.909 0.826 0.751 0.683 0.621

Years 1 2 3 4 5

6) A project requires an investment of Rs.5,00,000 and has a scrap value of Rs.20,000 after 5 years. It

is expected to yield profits after depreciation and taxes during the 5 years amounting to Rs.40,000;

Rs.60,000; Rs.70,000; Rs.50,000 and Rs.20,000. Calculate a) average rate of return on investment b)

Return per unit of investment c) Return on average investment d) average return on average investment.

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7) A project costs Rs.25,000 and has a scrap value of Rs.5,000 after 5 years. The net profits before

depreciation and taxes for the 5 years are expected to be Rs.5,000; Rs.6,000; Rs.7,000; Rs.8,000 and

Rs.10,000. You are requires to calculate the accounting average rate of return on average investment

assuming 50% rate of tax and depreciation on straight line method.

8) A project costing Rs.10,00,000 has a life of 10 years at the end of which its scrap value is likely to be

Rs.1,00,000. The firm’s cut off rate is 12%. The project is expected to yield an annual profit after tax of

Rs.1,00,000, depreciation being charged on straight line basis. At 12% p.a, the present value of one

rupee received annually for 10 years is 5.650 and the value of one rupee received at the end of 10 years

is 0.322. Ascertain the net value of the project and state whether we should go for the project.

9) The initial cash outlay of a project is Rs.50,000 and it generates cash inflows of Rs.20,000; Rs.15,000;

Rs.25,000 and Rs.10,000 in four years. Using present value index method, appraise profitability of the

proposed investment assuming 10% rate of discount.

Year 1 2 3 4

PV factor @ 10% 0.909 0.826 0.751 0.683

10) A company is considering an investment proposal involving initial cash outlay of Rs.20,00,000. The

proposal has an expected life of 7 years and zero salvage value. At a required rate of return of 12%, the

proposal has a profitability index of 1.182. Calculate the annual cash inflows. The present value of an

annuity of Re.1 for 7 years at 12% discount is 4.5638.

Answers:



1) Cost budgeting (a)

2) Investment decision making (a)

3) Capital (b)

4) Capital budgeting (a)

5) Identification of investment proposals (a)

6) Capital rationing decision (a)

7) Accept reject decision (c)

8) Mutually exclusive project (d)

9) Pay out method (a)

10) Payback period method (d)

11) Discounted method (a)

12) Payback period (b)

13) Profit after tax before depreciation (a)

14) Post payback profitability (a)

15) Discounted payback (a)

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16) Rate of return (a)

17) Time adjusted rate of return method (a)

18) Desirability factor (a)

19) Sensitivity analysis (b)

20) Risky (b)



5) 5 years

6) 5 years

7) 3 years and 6 months

8) 8%

9) Project X - 5 years; Project Y - 4 years. Project Y should be ranked first

10) NPV – Rs.226.40 (in thousands). As the NPV is positive, the proposal is acceptable.



5) 3 years and 9 months

6) a) 10% b) 50% c) 100% d) 20%

7) 16%

8) Rs.1,05,700. Project is acceptable.

9) 0.1235. Since NPI is positive, the proposal is accepted.

10) Rs. 5,17,989.39

UNIT V

SECTION A

1) _______ is the part of the profits of a company distributed to the shareholders.

a) Retained earnings b) Dividend c) Bond d) Capital

2) Dividend paid in the ordinary course of business is known as _______.

a) Liquidation dividend b) Profit dividend c) Final dividend d) Interim dividend

3) Dividend paid out of capital is known as ________.

a) Liquidation dividend b) Profit dividend c) Final dividend d) Interim dividend

4) Dividend declared between two annual general meetings is known as _______.

a) Profit dividend b) Liquidation dividend c) Interim dividend d) Final dividend

5) Dividend recommended to the shareholders at the annual general meeting is known as

________.

a) Profit dividend b) Final dividend c) Interim dividend d) Liquidation dividend

6) Ordinary shareholders prefer to receive dividends in ________.

a) Cash b) Bond c) Property d) Stock

7) Bond dividend is also known as __________.

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a) Cash dividend b) Stock dividend c) Scrip dividend d) Property dividend

8) _________ dividend promises the shareholders to pay at a future specific date.

a) Scrip b) Asset c) Cash d) Property

9) _________ dividend is paid in the form of some assets other than cash.

a) Property b) Cash c) Stock d) Bond

10) ________ dividend constitute the issue of bonus shares to the existing shareholders.

a) Stock b) Cash c) Property d) Bond

11) When the dividend is paid in the form of bonus shares, it is known as:

a) Stock Dividend b) Cash Dividend c) Scrip Dividend d) Property Dividend

12) Bond dividend is otherwise known as:


13) When the dividend is paid by property, it is known as:


14) When the dividend is paid in the form of cash, it is known as:


15) If the company promises to pay the shareholder at a future specific date, this type of dividend

is referred as:


16) Irrelevance theory of Dividend is propounded by:

a) Modigliani & Miller b) Gordon c) Walter d) Steve Jobs

17) Relevance theory of dividend is propounded by:

a) Modigliani & Miller b) Durand c) Walter d) Steve Jobs

18) When the entire profit is given to the shareholders as dividend, dividend payout ratio is:

a) 100% b) 60% c) 20% d) 200%

19) When the entire profit is retained by the company, dividend payout ratio is:

a) 100% b) 60% c) 20% d) 0%

20) Out of total profit of the firm, 20% were retained, in this case dividend pay-out ratio will be:

a) 100% b) 60% c) 20% d) 80%

SECTION B

1. Sahu & Co. earns 6 per share having capitalisation rate of 10 per cent and has a return on investment at

the rate of 20 per cent. According to Walter’s model, what should be the price per share at 30 per cent

dividend payout ratio?

Market price per share P=Rs.102

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2. The following figures are collected from the annual report of XYZ Ltd.:

Net Profit Rs.30 lakhs; Outstanding 12% preference shares Rs.100 lakhs

No. of equity shares Rs.3 lakhs Return on Investment 20%.

What should be the approximate dividend pay-out ratio so as to keep the share price at 42 by using

Walter model?

Dividend pay-out ratio: 52%

3. Subhash & Co. earns Rs.8 per share having capitalisation rate of 10 per cent and has a return on

investment at the rate of 20 per cent. According to Walter's model, what should be the price per share at

25 per cent dividend payout ratio? Is this the optimum payout ratio as per Walter’s Model?

Market price per share : P = Rs.140

4. The earnings per share of a company is Rs.10 and the rate of capitalisation applicable to it is 10 per cent.

The company has three options of paying dividend i.e.(i) 50%,(ii)75% and (iii)100%. Calculate the

market price of the share as per Walter’s model if it can earn a return of 15% on its retained earnings.

Market price per share (i): 50% - Rs.125,

(ii)75% - Rs.112.5

(iii) 100% - Rs.100

5. The earnings per share of a company is Rs.10 and the rate of capitalisation applicable to it is 10 per cent.

The company has three options of paying dividend i.e.(i) 50%,(ii)75% and (iii)100%. Calculate the

market price of the share as per Walter’s model if it can earn a return of 5 per cent on its retained

earnings.

Market price per share (P): 50% - Rs.75,

75% - Rs.87.5

100% - Rs.100

6. The earnings per share of a company is Rs.10 and the rate of capitalisation applicable to it is 10 per

cent. The company has three options of paying dividend i.e.(i) 50%,(ii)75% and (iii)100%. Calculate

the market price of the share as per Walter’s model if it can earn a return of 10% on its retained

earnings.

Market price per share (P): – 50% - Rs.100,

75% - Rs.100

100% - Rs.100

7. What is dividend? What are the forms of dividend?

8. Write a note on property dividend and stock dividend.

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9. How does the nature of industry determine the dividend policy of a firm? Explain.

10. Differentiate between regular dividend policy and irregular dividend policy.

SECTION C

1. From the following information supplied to you, ascertain whether the firm is following an

optional dividend policy as per Walter’s Model?

Total Earnings Rs. 2,00,000

No. of equity shares (of Rs. 100 each 20,000)

Dividend paid Rs. 1,00,000

P/E Ratio: 10

Return on Investment: 15%

The firm is expected to maintain its rate on return on fresh investments. Also find out what should be

the E/P ratio at which the dividend policy will have no effect on the value of the share? Will your

decision change if the P/E ratio is 7.25 and interest of 10%?

Value of the firm: Rs.200 and 75.62.

2. The earnings per share of a company are Rs. 80 and the rate of capitalization applicable to the

company is 12%. The company has before it an option of adopting a payment ratio of 25%. Using

Walter’s formula of dividend payout, compute the market value of the company’s share of the

productivity of retained earnings for 12%.

Market price per share: Rs.62.5

3. From the following data, calculate the MP of a share of ABC Ltd., under (i) Walter’s formula; and

(ii) Dividend growth model.

EPS = Rs. 10 DPS = Rs. 6

Ke = 18% r = 25%

(i) Walter’s formula – Rs.64.22 and

(ii) Dividend growth model – Rs.81.48

4. The following data are available for R Ltd.

— Earnings per share Rs. 8

— Rate of return on investment 16%

— Rate of return to shareholders 12%

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If Gordon’s basic valuation formula is applied what will be the price per share when the

dividend pay out ratio is 25%, 50%, 60% and 100%.

Price per share - 25% - Rs.0,

50% - Rs.100,

60% - Rs.85.71

100% - Rs.66.67.

5. The earnings per share of a company is Rs.10 and the rate of capitalisation applicable to it is 10 per

cent. The company has three options of paying dividend i.e.(i) 50%,(ii)75% and (iii)100%.

Calculate the market price of the share as per Walter’s model if it can earn a return of 15%, 10%

and 5% on its retained earnings.

a) At 15%: Rs.125, Rs.112.5 and Rs.100;

b) At 10%: Rs.75, 87.5 and 100 and

c) At 5%: Rs. 100, Rs.100 and Rs.100)

1. Classify dividend on the basis of mode of payment.

2. Elaborate and explain the determinants of dividend policy.

3. Elaborate and explain the types of dividend policy.

4. Discuss on the role of financial management in determining the dividend policy of a firm.

5. How does institutional investors play a major role in determining the dividend policy of a

company? Explain.

ANSWER:

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

B B A C B A C A A A A C D B C A C A D D


Class: I M.COM Semester- I

Sub. Name: Global Business Environment Sub. Code: 18PCM102

Prepared By: Dr.S.RAJAM

UNIT=I

SRECTION-A

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1.Micro factors of external business environment does not include

a. Competitors b. Customers c. Government Policies d . None of these

2. Macro environment consists of

a. cultural forces b. technological forces c demographic forces d. All of the above

3. What are the factors that contribute to the Business Success?

a. marketing resources b. physical assets c. financial factors d. all of the above

4. What are the important external factors that constitute the economic environment of

Business ?

a economic condition b . economic policy c. economic system d. all of the above

5. ------- environment refers to all forces which have an economic impact on business

a. Political b. Economic c. Natural d. Social

6. --------- and cultural environment refers to the influence exercised by certain factors

a. Political b. Economic c. Natural d. Social

7. Which among these is a factor affecting business Environment?

a Value System b. Human Resources c Both (A) and (B) d Neither (A) nor (B.

8.In which of the following basic categories can business environment be divided? a. Local and Regional b. Regional and National. c. Internal and External. d. Financial and Nonfinancial. 9. In which of the following basic categories can business environment be divided? a. Local and Regional b. Regional and National. c. Internal and External. d. Financial and Nonfinancial. 10. ____ is a statement Which derives the role that an organisation plays in a society. a. Goals. b. Mission. c Objective. d. Success. 11. Economic environment refers to all forces which have a _____. a. political. b. Natural c. economic. d. social. 12. ______environment is within the control of the business. a. Internal. b. External. c Micro. d. Macro. 13. ____ environment is beyond the control of the business. a. Internal. b External. c. Micro. d. Macro. 14.. Micro environment is also called as ________. a. general environment. b . operating environment. c. economics environment. d. political environment. 15. Macro environment is also called as _______. a. general environment. b. operating environment .c. economic environment. d. political environment. 16. The environment which is close to business and affect its capacity to work is known as ___environment. a. internal. b. external. c micro. D. macro. 17. What is the significance of business environment? a. First Mover Advantage. b . Competition. c. Information d. Globalization. 18. Macro environment is also known as _________? a. direct environment b. indirect environment. c. competitive environment. d. social environment. 1 9 .Bu s in e ss e th i c s d ea l s p r im a r i l y w i t h

a . social responsibility. b.The pricing of products and services. c. moral obligation.

d. being unfair to the competition.

20.Benefits derived from social responsibility include;

a. Enhanced organizational efficiency b. Producing better products c.attracting

people who want to work for the firm d. both a & c

SECTION –B

21. Write short note on the ecological view of business

22. Examine the modern view of business?

23. Describe the modern business system

24. Write short notes in the primary and secondary objectives of business

25. Explain the value chain

26. How do economic conditions impact business

27. What are the important characteristics of developing economics?

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28. Give a brief account of social responsibility model

29. Describe the meaning and objectives of social audit

30. Write short notes on concept of social responsibility

SECTION. C

31. What do you mean by business environment? Explain the importance of business environment for

the business firm

32. What is meant by international business environment? Discuss briefly the importance of

understanding the international business environment.

33. What is meant by social responsibility of business? State the responsibilities of business towards

the community.

34. Social environment of business is important for a business enterprise”. Explain ?

35. How would you characterise business environment? Explain, with examples, the difference

between general and specific environment.

36. Explain, with examples, the various dimensions of business environment.

37. What economic changes were initiated by the Government under the Industrial Policy, 1991?

What impact have these changes made on business and industry?

38. What are the essential features of (a) Liberalisation, (b) Privatisation and (c) Globalisation?

49. What is environment analysis? Give brief account of the important approaches to environmental

analysis

40. Examine the important trends in the economic environment of business on India

ANS: 1. c. Government Policies 2 . d. All of the above 3. d. all of the above 4. d. all of the above

5. a. Political 6. d. Social 7. c Both (A) and (B) 8. c. Internal and External. 9. c. Internal and

External 10 b. Mission .11. c. economic 12 a. Internal 13 b External 14 b . operating environment

15 a. general environment 16 c micro 17 a. First Mover Advantage 18 b. indirect environment 19

c.moral obligation 20 d. both a & c

UNIT-II

SECTION-A

1. GATT is established in 1947, under:

a. German leadership b. French leadership c. U.S. Leadership d. U.K. leadership

2. Goals realization continuously will lead to _______.

a. mission fulfilment. b. maximize customers. c. high revenue. d. maximizes suppliers.

3. The first MNC came to India in _______.

a. 1920. b 1921 c. 1919 d. 1923

4. The liberalization of the rules relating to FDI permitting _______% equity in wide range of

Industries.

a. 50. b. 51. c 52. d. 53

5. Multinational corporations is also referred to ____________.

a. multinational collaboration. b. multinational entity. c. transnational corporation. d.

multinational development.

6. Non- tariff trade barriers do not include _____.

a. administrative regulations. b export subsidiaries. c. fiscal barriers. d. quota.

7. GAAT was born in the year--------------

a. 1948 b.1945 c. 1947 d. 1950

8. . What was the predecessor of WTO?

a. GAAT b. IMF c. ADB d. None of the above

9.. In which year WTO was formulated ?

a. 1995 b. 1948 c.1991 d. 1988

10. Where is provision made with regard to the WTO’s institutional arrangements?

a. In the GAAT b. In the WTO agreement c. In the UN Charter d. None of these

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11. U.R. agreement was launched in -----------

a. Culcutta B. New delhi c.Chennai d.Punt del este

12. The final Act of U.R signed by ministers of 125 Government on----------

a. 1991 b. 1994 c. 1995. 1996

13. Gatt was converted a formal international organisation called-----------

a. WTO b. MTN c. U.R agreement d. Trips

14. WTO directed by ministerial conference that will meet at least once---------

a. in a year b. In a month c. in two years d. Every week

15. The WTO’s top level decision making body is the -----------

a. Ministerial conference b. Members of parliament c. governing body d. Councils

16. --------agreement envisages substantial tariff reduction in both industrial and developing countries

a. GATT b. The UR c. TRIPS d.TRIMS

17. --------------- Means the replacement of existing non- tariff restrictions on trade

a. Tariff cuts b.Non tariffs C. Tariffication d. GATT

18. Least developed countries are not required to make ay commitment for reduction of tariffs on ------

-------- products

a. Agricultural b. Industry c. Small scale organisation d. Export goods

19. ----------- subsidies have demonstrably adverse effects on other member countries

a. prohibited b. Actionable c. Non- actionable d. Govt

20. The ---------- defines services as the supply of services from the territory of one member into the

territory of any other member.

a. GATS b. WTO c. UR Agreement d. TRIPS.

SECTION –B

21. What are the Important Salient Features of the Uruguay Round?

22. Important Salient Features of General Agreement on Tariffs and Trade, 1994

23. What are the essential characteristics and code of conduct of MNC?

24. Compare GATT and WTO

25. Give a short account of the salient features of the U.R agreement

26. Write a note on the important problems encountered by developing countries in respect of WTO

27. What are safeguard action under WTO?

28. Explain TRIMS AND TRIPS

29. What are the subsides and domestic support policies of UR agreement?

30. What are the objectives of GATT?

SECTION .C

31. Describe the evaluation of GATT

32. What are the two old GATT’s systems? Explain

33. What are the salient features of UR agreement?

34. Explain UR agreement and developing countries

35. Evaluate the performance of WTO with special reference to INDIA

36. ‘An evaluation of the Uruguay round’- explain

37. Critically examine the role of Multinational Corporation in the world

38. Discuss the merits and demerits of Multinational Corporation with special reference to developing

countries

39. Write a note on the functions and organisational structure of WTO

40. What are the distinctive features of different types of organisation in MNC?

ANS:1. c. U.S. Leadership 2 . a. mission fulfilment 3. b 1921 4. b. 51 5. c. transnational

corporation 6. b export subsidiaries 7. a. 1948 8. a. GAAT 9. a. 1995 10. b.In the WTO

agreement 11. d.Punt del este 12. b. 1994 13. a. WTO 14. c. in two years 15. a.

Ministerial conference 16. b. The UR 17. C. Tariffication 18. a. Agricultural 19. b.

Actionable 20. a. GATS

UNIT-III

SECTION-A\

1. Globalization consists of the following processes except:

a) political process b. environmental process c. social process d.economic process

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2. Multinational corporations is also referred to ____________.

a. multinational collaboration. b. Multinational entity. C. Transnational corporation.

d.multinational development.

3. The focus on increasing profitability and profit growth by reaping the cost reduction that come from

economies of scale is ________.

a. global standardization strategy.b. localization strategy. c .transnational strategy d.

international strategy.

4. Critics of globalization claim-------

a.) countries lose sovereignty. b.) The resultant growth hurts the environment c.) Some

people lose, both relatively and absolutely d.) all of the above

5. The following is not a feature of globalization _____.

a. Similar strategies are adopted by a firm in all markets. b. Only multinational firms

engage in international business. c. Convergence of ideas and culture.

d. Obliteration of national boundaries.

6. Globalization of markets has brought about economies of _____.

a. scale in production. b. distribution and marketing. c. management. d. all business

operations.

7. The following benefit is not expected from globalization ______.

a. Reaping the benefits of free trade. b. Better quality of life through choice of product.

c. Better knowledge through compulsory education. d. Dissemination of information

through new information technology.

8. Anti- globalization has been voiced by ________.

a. all developing countries b. only few developing countries c. supporters from both

developing and developed countries.d only developed countries.

9. Outsourcing of components is an example of globalization of _____.

a. Production b. Marketing. c. Purchase. d. Production and marketing.

10. One of the following does not represent a general market risk in the internationalization process?

a. competition from other organizations in foreign markets. b. lack of tax incentives for

organizations that export.C. language and cultural differences. d. complexity of shipping services to

overseas buyers.

11. Anti- globalization has been voiced by ________.

a. all developing countries.b. only few developing countries c. supporters from both

developing and developed countries.d. only developed countries.

12.Outsourcing of components is an example of globalization of _____.

a. Production.b. Marketing.c. Purchase.d. Production and marketing.

13.Ownership of intellectual property is recognized in law by granting _____.

a. Licenses.b. Patents.c. Copyrights.d. Patent, copyright or trademark as appropriate.

14.---------------- is the process of development of the world into a single integrated economic unit

a. globalisation b GATT c. Multinational d. International

15---------- develop integrated international production logistics and marketing system

a. globalisations b. Multinationals c. liberalisations d. . Transporting

16. International ------ a firm in one country permits a firm in another country to use its intellectual

property.

a. franchising b. Exporting C. Licensing d. Transporting

17. under ---- manufacturing a company doing international marketing contracts with firms in foreign

countries to manufacture or assemble the products.

a. contract manufacturing b. Management contraction c. Turnkey contracts d. Assembly

operations

18. ---- contract is a low risk method of getting into a foreign market and it start yielding income right

from the beginning

a. management b. Turnkey c. Manufacturing d. Purchasing

19. The term 'Digital Economy' was first mentioned in Japan in the 1990

a 1991 b.1992 C. 1993 d. 1990

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20. . Payments are made through credit and debit cards, bank electronic fund transfers or virtual

wallets are called -----------

a. Credit payment b. Debit payment c. Cashless economy d.bank fund

SECTION –B

21. What are the essential conditions for globalisation?

22. Write a note on countertrade

23. What are the important stages of globalisation of economy?

24. Explain the meaning and dimensions of globalisation

25. What are the important features of the current globalisation?

26. Explain how globalization has changed over time and differs both among countries and within

countries.

27. What are international business and globalization? What is the relationship between

them?

28. What is meant by cash less economy and what is its importance

29. What are the benefits of cashless economy?

30. What is international licensing and franchising?

SECTION-C

31. Explain the meaning and dimension of globalisation and examine the importance features of the

current globalisation?

32. Discuss the pros and cons of globalisation and the policy operations of minimize the damages and

maximize the opportunities of globalisation

33. Discuss the problems and prospectus of globalisation of Indian business

34. Give a brief account of the foreign market entry strategy

35. What are the obstacles of globalisation in Indian business/

36. what are the stages of globalisation?

37. What are the types of digital economy

38. What are the benefits and demerits of digital economy?

39. Explain globalisation of world economy

40. What is meant by countertrade and what are the forms of countertrade?

ANSWER: 1. b. environmental process 2. C. transnational corporation 3. A. global

standardization strategy. 4. d.) all of the above 5. a. Similar strategies are adopted by a firm in all

markets 6. d. all business operations 7. c. Better knowledge through compulsory education 8. c.

supporters from both developing and developed countries 9. a. Production 10. b. lack of tax incentives

for organizations that export 11. c. supporters from both developing and developed countries. 12. a.

Production 13. d. Patent, copyright or trademark as appropriate 14. a. globalisation 15. b.

Multinationals 16. C. Licensing 17. a. contract manufacturing 18. a. management 19. d. 1990 20 .

c. Cashless economy

UNIT IV

SECTION -A

1. The Bretton wood twins consist s of IMF and ---------

a. World bank b. ADB c. IDBI d. ICICI

2. Non-financial information can be expressed in ___.

a. qualitative. b. quantitative. c. qualitative and quantitative. d. price and quality.

3. Identify a factor that do not play an important role in attracting FDI

a. Laws, rules and regulations b Language c. Cost of resources d. Administrative

Procedure and efficiency

4. GDP is ____.

a. Gross Domestic Product. b. Gross Domestic Percentage. c. Gross Domestic Personnel.d.

Gross Domestic Public.

5. Foreign sources may give companies -----

a.Higher costs b.New and/or better products c..Conflicting operating knowledge

d..Legal problems

6. Fiscal policy refers to the policy of government regarding taxation public expenditure and --

a. public debt. b. budgets. c policies. d deposits.

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7. Fiscal policy is called as ______ policy.

a. monetary b. Budgetary C. Industrial d. economic.

8. National stock exchange was set up a joint stock company by all Indian financial institution and

banks on November 27 ____.

a. 1991 b. 1992 C. 1993 d. 1994.

9. The first MNC came to India in _______.

a. 1920.b 1921.C. 1919.d. 1923

10. Economic growth can be measured by ___________.

a. the CPI.b. the CBI.C. GDP.d. MPC.

11. GNP stands for_____________________

a. Gross National Product b. Gross negative product C. Gross negotiable product d.

None of the above

12. The total accumulated value of foreign- owned assets at a given period of time is __.

a. flow of FDI b. stock of FDI C. inflow of FDI d. outflow of FDI

13. Who is responsible for presenting the Union Budget before the Parliament?

a. Prime Minister b. Finance Minister C. RBI Governor d none of the above

14 .IMF commenced its operation in the year

a 1948 b. 1950 c. 1947 d. 1952

15. The number of institutions included in the World Bank Group is

a. 5 b. 4 c.9 d. 7

16. If a member has less currency with IMF than its quota, the difference is called ------

a. Reserve b. Margin c. Reserve tranche d. None of these

17. As per 2006 estimates, India’s debt from IMF stands-------

.a. 150 billion dollars b. 190 Billion dollars c. 250 Billion dollars d. 138 Billion dollars

18. When India became the member of IMF, the initial par value of Indian rupee was fixed at -----

grams of Gold.

a. 0.26801. b. 0.364 c. 0.359 d.0.865

19. ----- was the International reserve created by IMF to solve the problem of international liquidity

a. SDR b. APR c. SDC d. None of these

20. India was following a very restrictive policy towards foreign capital and -------

a. technology b. Capital c. infrastructure d. Products

SECTION – B

21. What are the important features of Multinational Corporation?

22. What are the important features of transnational corporation?

23. Write a note on recent global trends in foreign direct investments

24. Give a very brief account of the recent trends in the cross boarder mergers

25. Discuss how companies benefit from foreign direct investment (FDI).

26. What are the significance of foreign investment

27. What are the advantages of foreign private investments?

28. Explain Euro issues

29. What are the factors affecting international investments

30. What are the limitations of foreign capital?

SECTION –C

31. Discuss the role of foreign capital in developing countries

32. Evaluate the benefits and dangers foreign capital

33. Critically examine Government of India policy towards foreign investment and the role of foreign

investment in India

34. Discuss the important features which influence foreign investments

35. Discuss the important types of foreign investments

36. Explain the FDI and production linkage and trade and investments

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37. What are the three clusters of host country economic determinants?

38. Evaluate dispersion of FDI and portfolio investments

39. Explain foreign investment in Indian policy

40. Explain cross border&As

Answer: 1. a. World bank 2. c. qualitative and quantitative 3. b Language 4. a. Gross Domestic

Product 5. bNew and/or better products 6. b. budgets. 7. b. budgetary. 8 .b. 1992. 9. b 1921. 10. C.

GDP 11. a. Gross National Product 12. b. stock of FDI 13. b. Finance Minister 14. c. 1947 15.

a. 5 16. c. Reserve tranche 17. d. 138 Billion dollars 18. a. 0.26801 19. a. SDR 20. a. technology

UNIT- V

SCTION -A 1. FERA is foreign exchange regulation act for _________. a. industries b. small scale C. laboured owner 2. FEMA was passed in the year a 1999 b. 1989 C. 2000 d. 1997 3. FERA means__. a. Foreign Exchange Regulation Act b. Forest Exchange Regulation Act c. Freight Exchange Regulation Act d. Flexible Exchange Regulation Act. 4. The policy of govt. related to Export and Import is a. IMEX policy b. EXIM policy c. Export policy d. None of these

5. SEZ stands for ----

a. Special Economic Zone b. Special Export Zone c. Socially Backward Zone d. None

6. There are policies which are made to govern the import and export trade

a. Export policies b. Import Policies c . EXIM policies d. None of these

7. When was the EXIM policy announced for the first time?

a. 1947 b.1985 c . 1991 d. 1999

8.. EPZ stands for -----

a. Export Processing Zone b. Export Promotion Zone c. External Promotion zone

d. None of these.

9. Export of coffee is regulated by the Coffee Board under the 1942

a. Indian coffee act b. Tea Act c. Art Treasures Act d. Regulation Act

10. The import and export act 1947 came into force on 19th June ---------

a. 1948 b. 1950 c. 1958 d. 1992

11. SEZs units would be virtually foreign branches of India bank but located in ------

a. China b. India c. Australia d. U.S.A

12. Duty exemption as an export promotion measure had its origin in India during the -----------

a. First plan b. Second plan c. Third plan d. Fourth plan

13. the ----------Scheme was designed to make specified inputs like steel and aluminium

a. income tax concession b. Awards c. Other schemes d. IPRS

14. Violation of FEMA was treated by

a. Civil ffence b.Criminaloffence c.Noneofthem d.Both a & b

15. IDRA (IndustrialDevelopment & Regulation Act) was passed by parliament in

a. 1951 b. 2001 c. 1971 d. 1981

16. IBRD (International Bank for Reconstruction and Development) also known as

a. EXIM Bank b. World Bank c. IMF d. International Financial Bank

17. FERA was replaced by _______

a. FEMA b. GATT c. WTO d. ITO

18. The agreement of patent protection for _______

a. 20 years b. 15 years c. 10 years d. 7 years

19. _________ is the Supreme governing authority of World Bank.

a. The president b.The Executive Directors c.The Board of Governors d.Members of the

Board

20 . _____ promotes the development friendly integration of developing countries into the world

economy.

a. UNCTAD b. IBRD c. IMF d. IDA

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SECTION- B

21. State the difference between FEMA and FERA

22. What are the salient features of the foreign Trade Act 1992?

23. What are the objectives of EXIM POLICY?

24. Write a note on special economic zones

25. Give a brief account of the salient features of the Foreign Exchange Management Act

26. What are the importance and objectives of export promotion?

27. Explain organisational set up

28. What are the several measures to ensure export credit?

29. What you mean by export houses and trading houses? Explain

30. How to evaluate export promotion measures?

SECTION - C

31. Give a critical account of the export – import policy of India

32. What are the salient features of EXIM POLICY?

33. What are the export incentives of export promotion?

34. Explain EOUs, EPZs and SEZs

35. Give a brief account of the important export promotion measures on India

36. What are the measures of economic reforms of EXIM policy?

37. What are the export promotion measures?

38. What are the regulations of capital account transactions permitted by the RBI?

39. Explain development and regulation of foreign trade

40. What are the contraventions and penalties of export promotion act?

Ans: 1. a. industries 2. a 1999 3. a. Foreign Exchange Regulation Act 4. b. EXIM policy 5.

a. Special Economic Zone 6. c . EXIM policies 7. b.1985 8. a. Export Processing Zone 9. a. Indian

coffee act 10. d. 1992 11. b. India 12. b. Second plan 13. d. IPRS 14. a. Civil offence 15.

a. 1951 16. b. World Bank 17. a. FEMA 18. a. 20 years 19. c.The Board of Governors 20.

a. UNCTAD

KONGUNADU ARTS AND SCIENCE COLLEGE (AUTONOMOUS),

COIMBATORE – 29.

DEPARTMENT OF COMMERCE WITH PROFESSIONAL ACCOUNTING

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SEMESTER I

18PCM103 – HUMAN RESOURCE MANAGEMENT

PREPARED BY

Dr.M.Revathibala

UNIT- I

SECTION A

1) The process of efficiently achieving the objectives of the organisation with and through people______

a) Management b) Administration c) Decision Making d) Controlling

2) HRM is a ________ subsystem of an organization.

a) Government b) Central c) Both (A) and (b) d) None of these

3) HRM involves both___________ and operative functions.

a) Managerial b) Financial c) Planning d) None of these

4) HRM is a process of ____________ competent human resources in the organization

a) Procuring b) developing c) Controlling d) all of these above

5) Human Resource Management function does not involve

a) Recruitment b) Selection c) Cost control d) Training

6) Which one of the following does not includes under the functions of HRM

a) Planning b) Organizing c) Recruitment d) Profitability

7) The main objective of Human resource management is

a) To increase the welfare of human resource b) To maximize profit

c) To maximize loss d) none of these

8) The focus of Human Resource Management revolves around

a) Machine b) Motivation c) Money d) Men

9) The difference between human resource management and personnel m an ag em en t i s

a ) Ins ig n i f i c an t b ) M ar g i n a l c ) N a r r o w d) Wide

10) The modern term for personnel management

a) HRD b) HRP c) HRM d) HSM

11) To achieve goals organizations require employees

a) Control b) Direction c) Commitment d) Cooperation

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12) The amount of quality output for amount of input means

a) Productivity b) Production c) Sales increase d) Increase in profits

13. Psychology oriented factor of production is ____________.

a) Land b) Finance c) Machine d) labour

14. Human Resource Planning is also known as ______________

a) Strategic Planning b) Human Resource Development

c) Budget Planning d) Manpower Planning

15) Operating functions of HRM are also known as

a) Managerial function b) Organizing functions

c) Staffing functions d) none of these

16) Role of HR mangers is

a) Advisory role b) Mediator role

c) Representative role d) All the above

17) _________is process of determining manpower requirements in order to carry out integrated of

organization.

a) Human Resource Planning b) Human Resource Control

c) Human Resource Development d) Human Resource Management

18) Management function arises as a result of

a) Consumer preferences b) Abundance of capital

c) Expansion of industry d) Shortage of labour

19) Quality goals require alignment with

a) Production b) Human Resources c) Finance d) Purchase

20) Deployment of which resource is difficult to master

a) Human b) Land c) Capital d) Natural

ANSWERS:

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

A B A D C D A D D C C A D D C D A D B A

SECTION – B

1. Define human resources management. Explain the features of HRM.

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2. What are the objectives of human resources management?

3. Explain the scope of human resources management?

4. Write a short note on HR acquisition functions.

5. Explain the significance of HRM.

6. Write a short note on managerial functions.

7. Difference between HRM and personnel management.

8. Describe about concept and nature of human resource policies.

9. What are the characteristics of human resource policies?

10. Discuss about scope of human resources policies.

SECTION – C

1. Explain in detailed about functions of human resource management.

2. What are the features of human resource management?

3. What are the characteristics of human resource management?

4. Explain in brief the scope of personnel management.

5. Write in detail about process of human resource planning.

6. What are the factors affecting personnel policies?

7. Explain the need and importance of human resource policies.

8. Describe about qualities of HR manager?

9. Explain the techniques for forecasting human resource needs?

10. Explain in detailed about functions of personnel management?

UNIT-II

SECTION – A

1. The process of searching prospective workers and stimulation them to apply for jobs in the

Organization

a) Recruitment b) Selection c) Placement d) None of the above

2. Son of the soil recruitment” means

a) Performance to local population b) Performance to areas other than local

c) Performance to foreigners d) None of these

3. _______is the process of screening job applications to ensure that the most appropriate

candidates are hired.

a) Selection b) Recruitment c) Hiring d) Placement

4. A ________ test is a standardized measure of behaviour.

a) Proficiency b) Psychological c) Ability d) Aptitude

5. _________ involves assigning a specific job to each one of the selected candidates.

a) Induction b) Placement c) Interview d) All the above

6. Interview in which a panel of experts interviews each candidate is____

a) Group interview b) Panel interview c) Preliminary interview d) None of these

7. The test designed to measure the potential and ability of an individual test is known as

a) Proficiency test b) Psychological test c) Ability test d) Aptitude test

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8. Which of the following is the area from which applicants can be recruited?

(a) Employment Lines (b) Employees' Association (c) Labour Market (d) Labour Schemes

9.Selection of the candidates is done out of

(a) target population (b) internal sources

(c) external sources (d) internal as well as external sources

10. One of the external sources of recruitment is __

(a) retired managers and employees (b) dependents of deceased employees

(c) gate hiring (d) none of the above

11 Selection is______

(a) Subjective (b) Objective (c) Normative (d) Positive

12 Recruitment

(a) follows selection (b) precedes selection

(c) matches selection (d) none of the above

13. _____refer to training methods that require the trainee to be actively involved in learning.

(a) Hands on learning (b) Jobless learning (c) Self Learning (d) Visual learning

14. . _________ involves assigning a specific job to each one of the selected candidates.

(a) Induction (b) Placement (c) Interview (d) All the above

15. The systems model of training contains three phases __________, training and development,

and evaluation.

(a)Preparation B. Assessment. C. Introduction D. Organizing

16. Training helps to improve and give higher __________.

(a) Productivity B. Mobility C. Viability D. Vitality

17. Many colleges and universities have arranged for students to work part-time in a special

training program as part of their education. This training is called _____

(a) College trainee experience (b) Educational credits program

(c)Coordinated education (d) An internship

18. __________ training seeks to adjust newly appointed employees to the work environment

(a) Production (b) Induction (c) Safety (d)Refresher

19. Which of the following term reflects the process of preparing organizational people according to

the future needs?

(a) Learning (b) Training (c) Development (d) Need analysis

20. Career counselling' is part of which of the following functions of HRM?

(a) Compensation & benefits ( b) Planning & selection

(c) Training & development (d) Maintenance of HRIS

ANSWERS:

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

A A A B B B D C A C A B B C B B A D B B

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SECTION – B

1. What are the objectives of human resource planning?

2. What are the problems faced by human resources planning?

3. Explain purpose of recruitment

4. State the importance of selection.

5. Write a short note on recruitment process.

6. Explain about sources of recruitment.

7. What are objectives of selection interview?

8. What are the qualities of an effective interviewer

9. What are the different types of training

10. Explain the concept of placement.

SECTION-C

1. Explain in detailed about the methods of training.

2. What is sensitivity training? Explain about positive and negative consequences.

3. State the advantages and disadvantages of training and placement.

4. What are the factors affecting recruitment policy and programme?

5. Write in detailed about techniques used for recruitments.

6. What are the steps to be followed for selection process?

7. Explain different types of tests.

8. What are the different types of interview?

9. Write in detailed about barriers of human resource planning?

10. Write in detail about process of human resource planning.

UNIT- III

SECTION – A

1. _________ provides an objective basis for taking personnel decision

(a) Manpower planning (b) Performance Appraisal (c) Documentation (d) Industrial Relations

2. Willingness, capacity & opportunity to perform are said to be;

(a) Performance outcomes (b) Determinants of performance

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(c) Performance appraisals (d) Types of performance standards

3. What is another term for 360-degree feedback?

(a) Feedback loop (b) Multi-source assessment (c) Upward feedback (d) Circle feedback

4. Which of the following measurement methods rates employee performance? relative to

Other employees?

(a) Graphic rating scale (c) Comparative method

(b) Essay method (d) Critical incident method

5. ______ is defined as the record of outcomes produced on a specific job function or activity

during a specific time period.

(a) Performance (b) Work function (c) Evaluation ( d) None of the above

6 ______ is the personnel activity by means of which the enterprise determines the extent to

which the employee is performing the job effectively.

(a) Job evaluation (b) Work evaluation (c) Performance evaluation (d) None of the above

7.In which evaluation method, the evaluator is asked to describe the strong and weak aspects of

the employee’s behaviour.

(a) Graphic rating scale (b) Forced choice

(c) Essay evaluation (d) Management by Objective

8. In this technique, personnel specialists and operating managers prepare lists of statements of

very effective and very ineffective behaviour for an employee.

(a) Critical incident technique (b) Forced choice

(c) Essay evaluation (d) Management by Objective

9. The following technique(s) is based on the critical incident approach.

(a) Behaviorally anchored rating scales (BARS) (b) Critical incident technique

(c) Both (A) and (B) (d) None of the above

10. Paired comparison method can be used by

(A) Superiors (B) Peers (C) Subordinates (D) All of the above

11. The multiple-input approach to performance feedback is sometimes called ____ degree

assessment.

(a) 90 (b) 180 (c) 270 (d) 360

12. An ______ is a vertical move in rank and responsibility.

(a) Increment (b) Appraisal (c) Promotion (d) None of the above

13. The following technique is used to evaluate an employee individually.

(a) Graphic scale rating (b) Ranking (c) Paired comparison (d) Forced distribution

14. The technique that have been used to evaluate an employee in comparison with other

employees

(a) Ranking (b) Forced choice (c) Essay evaluation (d) Critical incident technique

15. The Recognition may be shown in the form of

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(a) A pat on the back of employee (b) Promotion

(c) Assignment of more interesting tasks (d) All of the above

16. Which is the biggest challenge faced while conducting performance appraisal?

(a) Evaluating performance of self – managed teams

(b) Presence of a formal appeal process

(c) Appraisals based on traits are to be avoided

(d) None of the above

17. Which of these options are the activities that constitute the core of performance management?

(a) Performance interview (b) Archiving performance data

(c) Use of appraisal data (d) All of the above

18. Which company first developed the 360 degree system of appraisal?

(a) Wipro in 1990 (b) Godrej Soaps in 1991

(c) General Electric, US in 1992 (d) None of the above

19. Which is the simplest and most popular technique for appraising employee performance?

(a) Rating Scales (b) Critical Incident (c) Cost accounting (d) BARS

20. First step in 'appraising process' is

(a) defining the job (b) training session (c) feedback session (d) interview sessions

ANSWERS:

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

B B B C A C A A C D D C A A D A D C A A

SECTION – B

1. Discuss the characteristics of performance appraisal.

2. What are the objectives of performance appraisal?

3. Explain about performance appraisal of managers.

4. What are the limitations of performance appraisal?

5. Write a short note about graphic rating scale.

6. Explain the steps involved in performance appraisal through management by objectives?

7. Define performance appraisal. Explain its concepts.

8. Discuss about 360-degree appraisal.

9. Describe about assessment centres and its objectives.

10. Write a short on self-appraisal.

SECTION-C

1. Discuss the steps involved in performance appraisal process.

2. Describe about methods of performance appraisal.

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https://hrmpractice.com/performance-appraisal/

https://hrmpractice.com/performance-management/

3. What do you mean by 360- degree appraisal? Discuss merits and demerits of 360- degree

appraisal.

4. Explain the essentials of effective performance appraisal systems.

5. What do you mean by performance appraisal interview? Explain its types.

6. Explain the goal setting approach to performance appraisal. What are are its advantage and

limitations?

7. Distinguish between performance appraisal and potential appraisal.

8. Discuss about barriers and overcoming barriers of performance appraisal.

9. What is behaviourally anchored rating scale? Discuss about process and problems of the scale.

10. What are the elements and uses of performance appraisal?

UNIT- IV

SECTION – A

1. It takes when an employee moves to a position higher than the one formerly occupied

(a) Promotion (b) Demotion (c) Transfer (d) Motivation

2. The promotion criteria is always based on___________

(a)Merit (b) Merit and seniority (c) Seniority (d) Recommendations

3. Movement of an employee from a low level to the higher level is _____

(a) Transfer (b) Promotion (c) Rotation (d)Shifting

4. The downward movement of employee in organizational hierarchy with lower pay status

responsibilities means___________.

(a) Demotion (b) Job change (c) Promotion (d)Transfer

5. A------ takes place when an employee moves to a position higher than the one formerly

occupied.

(a) transfer (b) demotion (c) punishment (d) promotion

6. Prohibiting an employee from attending work_________

(a) Suspension B. Dismissal C. Exit D. Retrenchment

7. The physical environment of a job is ______

(a) Working condition (c) Economic condition

(b) Social condition (d) Political condition

8. In the Grid Seminars, stress is laid on _______.

(a) Teaching (b) Professionalism (c) Training & Development (d) All of the above

9.Stress management is about learning

a) How to avoid the pressures of life

b) How to develop skills that would enhance our body’s adjustment when we are subjected to the

pressures of life

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c) Both ‘1’ & ‘2’ are true

d) None of the above

10.Which of the following are the basic sources of stress

a) The Environment (b) Social Stressors (c) Physiological (d) All the above

11. The following are the characteristics of Positive Stress

(a) It improves performance (c) It feels unpleasant

(b) It decreases performance (d) All of the above

12. The symptoms of stress can be divided in to the following categories

(a) Cognitive (b) Emotional (c) Physical (d) All the above

13. Low absenteeism and turnover is the outcome of which of the following core dimensions

described by the Job Characteristics Model

(a) Autonomy (b) Feedback (c) Task Identity (d) Task Significance

14. High job satisfaction is the outcome of which of the following core dimensions described by

the Job Characteristics Model?

(a) Task identity (b) Task significance (c) Feedback (d) Autonomy

15. The Job Characteristics Model is one of the most influential attempts to_____

(a) design jobs with increased motivational properties

(b) assign jobs with proper motivational properties

(c) analyse jobs with increase and proper motivation

(d)describe jobs with increase motivation for proper jobs

16. Authority being conferred based on technical knowledge or skill of ____.

(a) Technical Power (c) Competence authority.

(b) Machiavellianism (d) Power Distribution.

17. Apart from pay what is the second most common reason for an employee to join a trade

union?

(a)group solidarity (b) friendship groups

(c) political reasons (d) wide range of personal benefits.

18. Non-financial motivator is---------

(a) Bonus (b) Job security (c) Medical reimbursement (d) Leave with pay



20. The Recognition may be shown in the form of

(a) A pat on the back of employee (b) Promotion

(c) Assignment of more interesting tasks (d) All of the above

ANSWERS:

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

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A D B A A A A A B D A D B D A C D A A A

SECTION – B

1. Explain about purpose and advantages of promotion.

2. Define demotion. What are needs of demotion?

3. Define job changes. Explain the purposes of job changes.

4. Explain the need and purposes of transfers.

5. What are the different types of transfers?

6. Discuss about transfer policy.

7. Discuss the causes of absenteeism.

8. What are the effects of absenteeism?

9. Explain the consequences of stress.

10. What are the causes of stress?

SECTION-C

1. Discuss the merits and demerits of promotion.

2. What are the elements of promotion and transfer policy?

3. Give a detailed concept of promotion and demotion policy.

4. Explain about criteria bases for promotion.

5. Discuss in detailed about effects of stress management

6. Write in detailed about causes of stress management

7. Explain the reason for transfer.

8. What are the measures to control absenteeism?

9. Describe about different types and needs of promotion.

10. Explain about criteria bases for promotion.

UNIT-V

SECTION- A

1. Situation which results in putting employees on unpaid absences is classified as

(a) Layoffs (b) retirement buyouts (c) attribution (d) attrition

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2. Support and assistance services given to displaced employees are classified as

(a) attrition services (c) buyout services

(b) outplacement services (d) attribution services

3. In downsizing approaches, encouragement of senior employees for leaving firm is considered as

(a) Buyout (b) early retirement (c) attrition (d)layoffs

4. Process of using present and past conditions for analyzing future aspects is classified as

(a) Forecasting (b) term analysis (c) expectations analysis (d) all of the above

5. In strategic human resource management, HR strategies are generally aligned with:

(a) business strategy (b) marketing strategies (c) finance strategy (d) economic strategy

6. Strategic human resource management aims to achieve competitive advantage in the market through

(a) Price (b) Product (c) People (d) Process

7. Strategic management process usually consists of __ steps

(a) Four (b) Five (c) Six (d) Seven

8. One of the components of corporate level strategy is:

(a) growth strategy' (b) portfolio strategy (c) parenting strategy (d) all of the above

9. Non-citizen employees of a country in which they are working is classified as

(a) Expatriates (b) subordinates (c) coordinates (d) none of above

10 Network in company that allows company's employees to have access to all information given by

some external entities is classified as

(a) wide area network (b) extranet (c) intranet (c) geographic area network

11. System which is designed to provide useful information while making decisions regarding human

resource of an organization is classified as

(a) benefit analysis system

(b) human resource information system

(c) decisional information system

(d) integration HR

12. The three important components in aligning business strategy with HR practice:

(a) Business Strategy, Human Resource Practices, Organisational Capabilities

(b) Marketing Strategy, Human Resource Practices, Organisational Capabilities

(c) Business Strategy, Human Resource Practices, Organisational structure

(d) Marketing Strategy, Human Resource Practices, Organisational structure

13. An interview, in which supervisor and subordinate review appraisal, called

(a) structured interview (c) unstructured interview

(b) appraisal interview (d) hiring interview

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14. Method of keeping and reviewing, record of employees' undesirable behavior at different time

intervals is

(a) critical incident method (c) forced distribution method

(b) alternation ranking method (d) paired comparison method

15. Aligning and evaluating employee's performance with company's set goals is called

(a) appraisal management (c) performance management

(b) hierarchy of management (d) off-the-job training



17. A company's HR team is responsible for

(a) training of supervisors

(b) monitor the appraisal system affectivity

(c) training the employees

(d) all of above

18. Procedure which is based on analysis of present and past data to determine system effectiveness is

classified as

(a) human resource audit (c) human resource research

(b) human resource assessment (d) human staff rating

19. Personnel activities associated with human resource management most likely include all of the

following EXCEPT

a) Orienting and training new employees

b) Appraising employee performance

c) Building employee commitment

d) Developing customer relationships

20. ------------ is the right to make decision, to direct the work of others and to give order.

(a) Leadership (b) authority (c) management (d) responsibility

ANSWERS:

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

A B B A A C B D A B B A B A C A D C D B

SECTION-B

1. Discuss about human resource effectiveness.

2. What are the nature and need HR evaluation?

3. Explain the benefits of effectiveness of HR.

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4. Discuss the overview of HR evaluation.

5. What are E-recruitment and its uses?

6. What are the advantage and disadvantage of E-recruitment?

7. Explain the concept and needs of HRIS.

8. What are the benefits of strategic human resource management (SHRM)?

9. What are the features of IHRM?

10. Explain the nature of E-recruitment.

SECTION – C

1. Describe in detailed Evaluation Framework.

2. Comparison of domestic and international HRM in detailed?

3. Explain the concept of international HR activities

4. Discuss in detailed about strategy implementation and control.

5. What are the roles of HRM in strategic management?

6. Explain the objectives and problems faced by HRIS.

7. What are the E- recruitment strategies? Explain its different types.

8. What is E-HR? Explain the various activities involved in E- HR.

9. Explain about the international training and development in IHRM.

10. Explain how the recruitment and selection of IHRM.

KONGUNADU ARTS AND SCIENCE COLLEGE (AUTONOMOUS)

COIMBATORE – 641 029

QUESTION BANK

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Class: I Mcom Semester: I

Subject: Organizational behaviour Subject code: 18PCM104

Prepared By: N.SRUTHI

UNIT I



1) _______ is the conscious determination of future course of action.

a) Planning b) Staffing c) Organising d) Directing

2) Plans that extend for 5 years or more are known as _______.

a) Intermediate plan b) Short term plan c) Long term plan d) Extensive plan

3) ________ involves manning the various positions created by the organising process.

a) Directing b) Controlling c) Staffing d) Organising

4) __________ includes communicating, motivating and leading by superiors.

a) Planning b) Organising c) Directing d) Controlling

5) Which of these constitute decisional role of the manager?

a) Entrepreneur b) Monitor c) Spokesperson d) Liaison

6) ______ is the knowledge in activities involving methods and procedures.

a) Technical skill b) Human skill c) Conceptual skill d) Organisational skill

7) _________ is the ability to work effectively with others.

a) Conceptual skill b) Human relation skill c) Technical skill d) Communicative skill

8) ________ is the study of people’s behaviour within the organisation.

a) Organizational behaviour b) Management

c) Human resource management d) Personnel management

9) OB model in which the managerial orientation is towards power is known as ________.

a) Autocratic model b) Custodial model c) Supportive model d) Collegial model

10) In OB models, ________ is the extension of supportive model.

a) Autocratic model b) Custodial model c) Collegial model d) Directive model

11) ______ model depends on managerial leadership rather than on power or money.

a) Collegial b) Supportive c) Autocratic d) Custodial

12) The managerial orientation towards the use of money to pay for employee benefits is

known as _______.

a) Autocratic model b) Custodial model c) Supportive model d) Collegial model

13) Studying human behaviour in a scientific manner is called ________.

a) Behavioural research b) Technical research

c) Field research d) Scientific research

14) The word research is derived from the French word “recherchér” which means

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_________.

a) To search b) To know c) To understand d) To recall

15) _______ is an assumption that is to be proved or disproved.

a) Variable b) Methodology c) Hypothesis d) Model

16) The response of a variable as an effect of another variable is called _______ variable.

a) Dependent b) Moderating c) Independent d) Abate

17) Research carried out to find solution to a specific real life problem is known as

_________.

a) Applied b) Fundamental c) Analytical d) Conceptual

18) ________ research enables the researcher to seek proof.

a) Empirical b) Quantitative c) Qualitative d) Analytical

19) The method of distributing questionnaires to the respondents and collecting

information is known as ________.

a) Case study b) Survey research c) Field study d) Simulation

20) _______ enables the understanding of a situation or problem faced by a person or an

organisation.

a) Simulation b) Case study c) Field study d) Survey



1) Define organisation. Explain its features.

2) Bring out the importance of forming an organisation.

3) Explain about the decisional roles performed by the manager in an organisation.

4) Write a note on the scope of Organizational behaviour.

5) List out the points concerning the need for organizational behaviour.

6) Explain organizational behaviour process with a diagram.

7) Write a note on research in Organizational behaviour.

8) Write a note on the types of variables used in organizational behaviour research.

9) Differentiate between applied and fundamental research.

10) Differentiate between quantitative and qualitative research.



1) Elaborate and explain the functions of the manager in an organisation.

2) Write a note on the management roles performed by the manager.

3) What constitute management skills? Explain in detail.

4) Define organizational behaviour. Describe the nature of organizational behaviour.

5) Give a description about OB models.

6) Elaborate and explain the types of research.

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7) List out the various processes carried out in a research.

8) Elaborate and explain the characteristics of a good research.

9) What are the various research methods? Explain in detail.

10) Discuss the role of organizational behaviour as an aid to the manager.

Answers:



1) Planning (a)

2) Long term plan (c)

3) Staffing (c)

4) Directing (c)

5) Entrepreneur (a)

6) Technical skills (a)

7) Human relation skills (b)

8) Organizational behaviour (a)

9) Autocratic model (a)

10) Collegial model (c)

11) Supportive (b)

12) Custodial model (b)

13) Behavioural research (a)

14) To search (a)

15) Hypothesis (c)

16) Dependent (a)

17) Applied (a)

18) Empirical (a)

19) Survey research (b)

20) Case study (b)

UNIT II



1) The term personality is derived from the Latin word “Persona” which means _______.

a) To speak through b) To understand c) To express d) To show

2) In psychoanalytic theory, _______ is the source of psychic energy that seeks immediate

gratification of biological needs.

a) Id b) Ego c) Super ego d) Instinct

3) In psychoanalytic theory, ________ represents the conscious and logical part of human

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personality.


4) In psychoanalytic theory, __________ serves as a socio-ethical constraint on behaviour.


5) ________ theory recognises the inter-dependence of the individual and society.

a) Socio-psychological b) Self c) Trait d) Psychoanalytic

6) Self theory is also known as ______.

a) Field theory b) Trait theory c) Need theory d) Psychological theory

7) In self theory, _________ represents the way one sees oneself.

a) Self image b) Ideal self c) Looking glass self d) Real self

8) In self theory, _________ represents the way one would like to be.


9) In self theory, _________ represents the perception of a person about how others

perceive his character.


10) In self theory, _________ represents the actual nature of the person.


11) ______ theory represents a quantitative approach to the study of personality.

a) Trait b) Self c) Psychoanalytic d) Socio-psychological

12) _______ is defined as any distinguishable way in which one individual differs from

another.

a) Nature b) Character c) Trait d) Personality

13) Traits can be inferred from the measurement of ________.

a) Behavioural indicators b) Environmental situation c) Response d) Reaction

14) In trait theory, Allport classifies common traits into _________ categories.

a) Four b) Five c) Six d) Seven

15) Social, economic and political traits are examples of _______.

a) Common traits b) Personal dispositions c) Surface traits d) Source traits

16) Personal dispositions are grouped into _______ categories.

a) Two b) Three c) Four d) Five

17) _________ are contrary to introverts.

a) Extroverts b) Ambiverts c) Workaholics d) Perceptive

18) ________ refers to the number of goals on which a person focuses his attention.

a) Conscientiousness b) Agreeableness c) Openness d) Extroversion

19) Hard working, impatient, highly achievement oriented are nature of ______ personality.

a) Type A b) Type B c) Judging d) Perceptive

20) Easy going, sociable, non competitive are nature of _______ personality.

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a) Type A b) Type B c) Judging d) Perceptive



1) Briefly explain psychoanalytic theory of personality.

2) Define personality. What do you infer from socio-psychological theory of personality?

3) Highlight the points stated in Self theory of personality.

4) Briefly explain the determinants of personality.

5) Write a note on locus of control and Machiavellianism.

6) Mention the organisational application of personality.

7) What is perception? Explain the factors affecting perception.

8) State the application of perception in an organisation.

9) Write a note on the factors affecting learning.

10) What is attitude? What are the factors in attitude formation?



1) What is trait? Explain the trait theories put forth by Allport and Cattell. .

2) Elaborate and explain the types of personalities.

3) Write a note on the big five personality traits.

4) Discuss on the personalities influencing organizational behaviour.

5) Explain in detail the perceptual process with the help of a diagram.

6) What is learning? Elaborate and explain the components of learning.

7) Give an overview of learning theories.

8) Explain in detail about the type of values.

9) State suitable measures to develop positive attitude by individuals.

10) Elaborate and explain the effects of employee attitudes in an organisation.

Answers:



1) To speak through (a)

2) Id (a)

3) Ego (b)

4) Super ego (c)

5) Socio psychological (a)

6) Field theory (a)

7) Self image (a)

8) Ideal self (b)

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9) Looking glass self (c)

10) Real self (d)

11) Trait theory (a)

12) Trait (c)

13) Behavioural indicators (a)

14) Six (c)

15) Common traits (a)

16) Three (b)

17) Extroverts (a)

18) Conscientiousness (a)

19) Type A (a)

20) Type B (b)

UNIT III



1) The term motivation is derived from the Latin word _______.

a) movee b) movere c) motiv d) motivie

2) Water, food, sleep, air etc. refer to _______ needs.

a) Primary b) Secondary c) General d) Tertiary

3) ________ is the consequence of non-fulfilment of need.

a) Affection b) Frustration c) Positivity d) Negativity

4) __________ needs lie between primary and secondary needs.

a) General b) Functional c) Esteem d) Self-actualisation

5) Secondary needs are also known as ________needs.

a) Learned b) Status c) Basic d) Esteem

6) Which of the following constitute content theories of motivation?

a) Need hierarchy theory b) Equity theory c) Expectancy theory d) Trait theory

7) Which of the following constitute cognitive theories of motivation?

a) Expectancy theory b) Dual factor theory c) Need hierarchy theory d) Trait theory

8) According to Maslow, air, water, food etc constitute _________ needs.

a) Safety b) Social c) Physiological d) Esteem

9) The need for being free of physical danger is known as _________ needs.

a) Security b) Esteem c) Social d) self-actualisation

10) Workers form _________ to fulfil their unfulfilled social need of affiliation.

a) Union b) Informal groups c) committee d) Association

11) ______ need is concerned with self respect, self confidence, feeling of personal worth

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etc.

a) Esteem b) Physiological c) Safety d) Social

12) _______ is the need to maximise one’s potential.

a) Safety need b) Physiological need c) Social need d) self-actualisation need

13) Hergberg’s dual factor theory is based on the survey carried out in _______ companies.

a) Six b) Seven c) Eight d) Nine

14) Hergberg used _________ method to know about the respondent’s previous job

experiences.

a) Structured interview b) Unstructured interview c) Case study d) Field study

15) Hergberg named the hygiene factors as _______.

a) Satisfiers b) Dissatisfiers c) Motivators d) Seekers

16) Hergberg classified motivational factors into _______ categories.


17) _________ means the strength of an individual’s preference to a particular outcome.

a) Valence b) Expectancy c) Instrumentality d) Motivation

18) ________ is the probability that a particular action will lead to the outcome.

a) Expectancy b) Instrumentality c) Valence d) Motivation

19) According to J.S.Adam, a person experiences ________ during equity.

a) Satisfaction b) Dissonance c) Guilt d) Motivation

20) According to equity theory, underpaid inequity causes _______.

a) Dissonance b) Guilt c) Satisfaction d) Irritation



1) Briefly explain the terms motive, motivation and motivating.

2) What are the types of need?

3) Write a note on the role of motivation in an organisation.

4) Write a note on content theories of motivation.

5) What are cognitive theories of motivation? Explain.

6) Bring out your views on the comparison of Hergberg and Maslow theories of motivation.

7) List out the motivational factors of motivation hygiene theory.

8) Explain about the hygiene factors of dual factor theory.

9) Critically analyse Maslow’s need hierarchy theory.

10) What are the assumptions of equity theory of motivation?



1) Elaborate and explain the nature of motivation.

2) What do you understand from Maslow’s need hierarchy theory?

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3) Discuss on the key points highlighted in Hergberg’s dual factor theory.

4) List out the implications of Vroom’s expectancy theory.

5) Illustrate Vroom’s expectancy theory with the help of a diagram.

6) Elaborate and explain J.S.Adam’s theory of motivation.

7) Elaborate and explain the impact of inequity on a person based on equity theory.

8) Mention the ways to re-establish equity as peer equity theory of motivation.

9) Give an overview of theories of motivation.

10) Bring out the interrelationship between need and motivation.

Answers:



1) Movere (b)

2) Primary (a)

3) Frustration (b)

4) General (a)

5) Learned (a)

6) Need hierarchy theory (a)

7) Expectancy theory (a)

8) Physiological (c)

9) Security (a)

10) Informal groups (b)

11) Esteem (a)

12) Self-actualisation need (d)

13) Nine (d)

14) Structured interview (a)

15) Dissatisfiers (b)

16) Six (c)

17) Valence (a)

18) Expectancy (a)

19) Satisfaction (a)

20) Dissonance (a)

UNIT IV



1) _______ is the process of influencing and supporting others to work enthusiastically

towards achieving objectives.

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a) Leadership b) Management c) Motivation d) Administration

2) Leadership is a _______ approach.

a) Transactional b) Transformational c) Temporary d) Target

3) Democratic leadership style is also known as ________.

a) Participative style b) Authoritative style c) Laissez faire style d) Autocratic style

4) In _____ style of leadership the leader centralises power and decision making to himself.

a) Democratic b) Autocratic c) Laissez faire d) Functional

5) ________ leadership style is the opposite of autocratic style.

a) Laissez faire b) Democratic c) Participative d) Directive

6) Autocratic leadership style is also known as ________.

a) Authoritative style b) Democratic style c) Participative style d) Laissez faire style

7) __________ refers to the process by which power and authority is exercised.

a) Capacity b) Potential c) Influence d) Behaviour

8) _________ is defined in terms of potential for action.

a) Power b) Influence c) Authority d) Capacity

9) Power and authority is exerted only in _________ direction.

a) Downward b) Upward c) Lateral d) Horizontal

10) ______ is the bridge between the power approach and behaviour approach of leadership.

a) Influence b) Authority c) Capacity d) Potential

11) Family-managed traditional organisations follow _____ leadership style.

a) Participative b) Authoritative c) Laissez faire d) Directive

12) Professionally managed Indian organisations follow _______ leadership style.

a) Participative b) Authoritative c) Laissez faire d) Directive

13) Public sector organisations follow _______ leadership style.

a) Autocratic b) Democratic c) Laissez faire d) Bureaucratic

14) The behavioural theory of leadership considers problem-solving and _________ as two

major functions of a leader.

a) Group maintenance b) Motivating c) Guiding d) Goal setting

15) In behavioural theory, the leadership behaviour showing poor human relations is termed

as _______.

a) Dysfunctional leadership b) Functional leadership

c) Directive leadership d) Democratic leadership

16) Fiedler’s model consists of _______ elements relating to leadership.

a) One b) Two c) Three d) Four

17) The score on least preferred co-worker is related on _________ items.

a) Fourteen b) Fifteen c) Sixteen d) Seventeen

18) ________ leadership is suitable for very unfavourable situations as per Fiedler’s

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contingency theory.

a) Task directed b) Human relations oriented c) Directive d) Particular

19) _______ is a combination of situational leadership and Vroom’s expectancy theory of

motivation.

a) Equity theory b) Path and goal theory c) Dual factor theory d) Situational theory

20) _______ leader gives specific orders and explains only what is expected from the

subordinates.

a) Directive b) Supportive c) Participative d) Achievement oriented



1) Write a note on leadership.

2) List out the functions of leadership.

3) Differentiate between influence, power and authority.

4) Briefly explain about leadership in Indian organisations.

5) Mention the tendencies shown by functional and dysfunctional leader as per behavioural

theory of leadership.

6) Explain about the situational factors mentioned in situational theory of leadership.

7) How to measure leadership style as per contingency theory?

8) Bring out the relationship between leadership style and situation as pointed out in

Contingency theory.

9) What are the different leadership styles grouped as per Path and goal theory?

10) What are the situational variables of Path and goal theory?



1) Elaborate and explain the types of leadership styles with suitable illustrations.

2) Mention the points to be considered to attain leadership excellence.

3) Explain in detail about behavioural theory of leadership.

4) Discuss on situational theory of leadership.

5) Mention ways for leadership development.

6) Elaborate and explain contingency theory of leadership.

7) Write in detail about path and goal theory of leadership.

8) Discuss on power as a tool of effective leadership.

9) How does the leadership in Indian culture differ from the leadership in western culture?

10) How would you transform yourself as an empowering leader? State your views.

Answers:



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1) Leadership (a)

2) Transformational (b)

3) Participative style (a)

4) Autocratic (b)

5) Laissez faire (a)

6) Authoritative style (a)

7) Influence (c)

8) Power (a)

9) Downward (a)

10) Influence (a)

11) Authoritative (b)

12) Democratic (a)

13) Bureaucratic (d)

14) Group maintenance (a)

15) Dysfunctional leadership (a)

16) Three (c)

17) Sixteen (c)

18) Task-directed (a)

19) Path and goal theory (b)

20) Directive (a)

UNIT V



1) _______ is the alteration of work environment in an organisation.

a) Organisational change b) Organisational development

c) Organisational shift d) Organisational outcome

2) Technological change is an example of _______ organisational change.

a) Internal b) External c) Outdated d) Appropriate

3) ________ relates to change in people’s aspirations, needs and way of working.

a) Behavioural change b) Social change c) Cultural change d) Political change

4) A change touches a sequence of related and supporting changes known as _______.

a) Domino effect b) Dormant effect c) Reactive change d) proactive change

5) ________ is undertaken when pressed by some internal or external factors.

a) Proactive change b) Reactive change c) Internal change d) External change

6) Social systems tend to resist change because of ________.

a) Homeostasis b) Fear c) Loss of skill d) Deficiency

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7) __________ is brought out of anticipation on the impact of internal and external forces

on organisation.

a) Proactive change b) Reactive change c) Internal change d) External change

8) _________ organisations do not entertain change.

a) Defenders b) Prospectors c) Analysers d) Reactors

9) _________ organisations search for new change.

a) Defenders b) Prospectors c) Analysers d) Reactors

10) ________ organisations behave as both defenders and prospectors.

a) Analysers b) Reactors c) Executors d) Directors

11) ________ is the first stage in organisational change cycle.

a) Loss b) Doubt c) Discomfort d) Discovery

12) ________ is the thought during the first stage of change cycle.

a) Skeptical b) Cautious c) Confused d) Pragmatic

13) _______ is the behaviour during the second stage of change cycle.

a) Resistant b) Paralyzed c) Energised d) Generous

14) Organisational change cycle consists of _________ stages.


15) ________ is the feeling in the sixth stage of change cycle.

a) Satisfaction b) Confidence c) Anxiety d) Resentment

16) Discomfort constitutes _______ stage of organisational change cycle.

a) Third b) Fourth c) Fifth d) Sixth

17) _________ is the first stage of organisational growth.

a) Creativity stage b) Direction stage

c) Co-ordination stage d) Collaboration stage

18) ________ is the crisis witnessed in delegation stage of organisational growth.

a) Crisis of control b) Crisis of red tape

c) Crisis of leadership d) Crisis of autonomy

19) Crisis of autonomy is witnessed in _______ stage of organisational growth.

a) Creativity b) Direction c) Delegation d) Collaboration

20) Sensitivity training is also known as _______.

a) S-group b) T-group c) R-group d) F-group



1) What is organisational change? Explain the need for organisational change.

2) Write a note on proactive and reactive change.

3) What do you mean by resistance to change? Explain.

4) What do you understand by the term organisational development?

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5) List out the assumptions of organisational development.

6) Briefly explain the process of organisational development.

7) List out the process OD intervention techniques.

8) Write about the positive and negative consequences of sensitivity training.

9) What are the objectives of role playing?

10) Explain the factors involved in Quality of Work Life.



1) Elaborate and explain the factors in organisational change.

2) Mention the organisational change based classification of companies.

3) Explain in detail about the factors in resistance to change.

4) How to overcome resistance to change? Explain.

5) Explain in detail about organisational change cycle with the help of a diagram.

6) what are the stages in organisational growth? Explain.

7) What is OD intervention? Write in detail about OD intervention techniques.

8) Explain in detail about sensitivity training process.

9) Write a detailed description about the practices adopted to improve Quality of Work Life.

10) Discuss your views on morale building.

Answers:



1) Organisational change (a)

2) External (b)

3) Social change (b)

4) Domino effect (a)

5) Reactive change (b)

6) Homeostasis (a)

7) Proactive change (a)

8) Defenders (a)

9) Prospectors (b)

10) Analysers (a)

11) Loss (a)

12) Cautious (b)

13) Resistant (a)

14) Six (c)

15) Satisfaction (a)

16) Third (a)

17) Creativity stage (a)

18) Crisis of control (a)

19) Direction (b)

20) T-group (b) KASC-Com

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Question bank

Class: I M.COM Semester –I

Sub. Name: Managerial economics Sub. Code: 18PCMMINI


UNIT - I

SECTION - A

1. Micro economics is also called as -----------.

(a) Product theory (b) Economic theory (c) Business economics (d) Price theory

2. ------ is the study of the behavior of consumers and firms in different type of markets.

(a) Micro economics (b) Macro economics (c) Business economics (d) Pure economics

3. Uteri’s Paribas assumption of microeconomics is called as ---------.

(a) Disequilibrium analysis (b) Partial equilibrium analysis (c) Equilibrium analysis

(d) Production analysis

4. Business economics is also called as -------.

(a)Pure economics (b)Mixed economics(c) Dynamic economics (d) managerial economics

5. ------------- is the process of choosing one action from the two or more alternatives available to the

business executive.

(a) Forward planning (b) Decision making (c)Co-coordinating (d) Controlling

6. ----------- means establishing plans for the future.

(a) Forward planning (b) Decision making(c)Co-coordinating(d)Controlling

7. Business economics is --------- in nature.

(a) Mixed economics (b) Dynamic economics (c) Macro economics (d) Micro economics

8. Business economics is ------- in its approach.

(a) Pragmatic (b) Aggressive (c)Conservative (d) Physical

9. --------- is concerned with the economics of production process.

(a) Sales analysis (b) Break even analysis (c) profit management (d) Production analysis

10. --------- is very important area of managerial economics.

(a) Sales forecasting (b) Pricing decision (c) Demand analysis (d) Profit management

11. -------- is great help in managerial decision making.

(a) Break even analysis (b) Profit elasticity (c) Capital management (d) Both a & b

12. The external factors are also called as -------.

(a) Business operation(b) Business environment (c) Market environment (d) None of these

13. Internal factors are also called as -------.

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(a) Controllable factor (b) Uncontrollable factor (c) Business operation (d) Business environment

14. ----------- may be defined as the change in total cost resulting from a particular decision.

(a) Incremental revenue (b) Profit (c) Average cost (d) Incremental cost

15. ------------ is the change in total revenue resulting from a particular decision.

(a) Incremental revenue (b) Average profit (c) Net profit (d) Average cost

SECTION –B

11. What is managerial economics? What is its nature?

12. What are the uses of managerial economics?

13. What are the characteristics of economics?

14. Is managerial economics positive or normative?

15. Analyze the relationship between managerial economics and decision making?

16. Is there any relevance between managerial economics and micro economic theory?

17. Explain the discounting principles?

18. Explain the concept of opportunity cost?

19. What is meant by sales maximization?

20. Is profit maximization a central objective of a business firm?

SECTION –C

21. What is the scope of managerial economics?

22. Explain the functional relationship between managerial economies and other subjects

23. Discuss about roles and responsibilities of managerial economist

24. Write about circular flow of economic activities

25. Managerial economics is economics applied in decision making- explain

26. Distinguish clearly between income elasticity of demand and cross elasticity of demand

27. Critically examine the various methods available for determining advertisement outlays

28. Distinguish between (a) demands function and demand schedule

(b)Individual demand and market demand

© Demand for normal goods and inferior goods

29. Discuss the factors that influence a demand for a product

30. Write an essay on demand distinctions

ANSWERS

1. (d) Price theory 2. (a) Micro economics 3. (b) Partial equilibrium analysis 4. (d) managerial

economics 5. (b) Decision making 6. (a) Forward planning 7. (d) Micro economics 8. (a)

Pragmatic 9. (d) Production analysis 0. (d) Profit management 11. (d) Both a & b 12 (b) Business

environment 13. (c) Business operation 14. (d) Incremental cost 15. (a) Incremental revenue

UNIT - II

1. --------- means the various quantities of goods that would be purchased per period at

different price in a given market.

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(a) Supply (b) Demand (c) Elasticity (d) Utility

2. The demand for the subsidiary product demand is called -------. (a) Demand

(b) Industry demand (c) Derive demand (d) Company demand

3. --------- demand for a commodity is the direct demand for it from the consumer.

(a) Company (b) Primary (c) Industry (d) Autonomous

4. Autonomous demand is ------- of the demand for any other commodity.

(a) Dependent (b) Independent (c) Temporary (d) Permanent

5. --------- denotes the demand for the product of a particular company.

(a) Industry (b) Monopoly (c) Company (d) Duopoly

6. ------------ company demand is completely derived form industry demand.

(a) Perfect competition (b) Imperfect competition (c) Equilibrium (d) Disequilibrium

7. In -------- competition where there are many sellers with differentiated brand of product.

(a)Monopolistic(b) Duopoly (c) Oligopoly (d) Perfect

8. ----------- can be quite important determinant of the demand for consumer non-durable

of the luxury variety.

(a) National income (b) Price (c) Demography (d) Discretionary income

9. Law of demand is known as --------.

(a) Substitution effect (b) Paradox effect (c) Income effect (d) Giffen effect

10. The reduction in demand is technically called -------.

(a)Contraction of supply (b) Extension of demand (c) Contraction of demand

(d) Extension of supply

11. The fall in price the amount of demand raise is called --------.

(a) Extension of supply (b) Contraction of demand (c) Contraction of supply

(d) Extension of demand

12. --------- of demand is commonly called the elasticity of demand.

(a) Income elasticity (b) Price elasticity (c) Supply elasticity (d) Demand elasticity

13. --------- is one in which a small change in price will cause an infinity large change in

amount demanded.

(a) Completely inelastic (b) Perfectly elastic (c) Unitary elasticity (d) Relatively elastic

14. Cross elasticity can vary from minus infinity to --------. (a) Division of infinity

(b) Multiplication of infinity (c) Plus of infinity (d) None of these

15. --------- goods have negative cross elasticity.

(a) Paradox (b) Giffen (c) Substitute (d) Complementary

16. --------- goods have positive cross elasticity.

(a) Complementary (b) Giffen (c) Substitute (d) Paradox

17. Law of diminishing marginal utility is also called as ----------.

(a) Giffen's law (b) Paradox law (c) Gossen's first law (d) Law of demand

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18. ICC refers to -----------

(a) Inventory Consumption Cost (b) Inventory Consumption curve (c) Income Consumption Curve

(d) Income Cross Curve

19. -------- is essential for a firm because it must plan its output.

(a) Forecasting (b)Supply(c) Demand (d) Demand forecasting

20. -------- assumes a static business environmental in future.

(a)Active forecasting(b)Demand forecasting(c) Passive forecasting (d) Supply forecasting

SECTION-B

21. Write a note on Veblen effect and Giffen effect

22. What are the types of elasticity of demand?

23. Why does the demand curve slope downward?

24. What is the importance of elasticity of demand?

25. Explain the factor determining the elasticity of demand

26.State and explain the law of demand?

27.What is the exception to the law of demand?

28.Distinguish between elastic and inelastic demand?

29.How do you estimate demand for a new product?

30.Distinguish between durable goods and non durable goods?

SECTION – C

31. What is forecasting in demand? What are its types?

32. Explain the law a of demand

33.Critically examine the different methods of forecasting demand for established products

34. Spell out the general approach to demand forecasting

35. Explain and illustrate the law of variable proportion

36. What is optimum combination? Explain the principle of least cost combination of factor

37. Discuss the various economies of scale?

38. Bring out clearly the relationship between TC, MC and Ac

39. Define short run cost and long run cost and what is the difference between the above two?

40. Explain the concept of cost output relationship in the short and long run?

41. Explain fixed cost and variable cost and their role in cost structure

42. What are the techniques of cost control?

43. What are the essential for the success of the cost reduction programme?

ANSWERS

1. (b) Demand 2. (c) Derive demand 3. (d) Autonomous 4. (b) Independent

5(c) Company.6. (a) Perfect competition 7. .(a)Monopolistic 8. (d) Discretionary income 9 . (c)

Income effect 10 . (c) Contraction of demand 11. (d) Extension of demand 12. (b) Price elasticity

13. (b) Perfectly elastic 14. (c) Plus of infinity

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15. (d) Complementary 16. (c) Substitute 17. (c) Gossen's first law 18. (b) Inventory Consumption

curve 19. (d) Demand forecasting 20(c) Passive forecasting

UNIT – III

1. Production refers to -------.

(a) Destruction of quality (b)Creation of utilities (c)Exchange value (d)Capital

2. The initial supply price of land is --------.

(a) Zero (b) Greater than one (c) Less than one (d) Equal to one

3. Labour cannot be separated form ----------

(a)Capital(b)Labourer(c)Profit(d)Organization

4. Reward paid to capital is --------.

(a) Interest (b) Profit (c) Wages (d0 Rent

5. A successful entrepreneur is one who is ready to accept.

(a) Innovations (b) Risk (c) Capital (d) Profit

6. Land and labour are called ---------

a) Secondary (b) Primary (c) Rent (d) Profit

7. --------- is limited by the extent of market.

(a) Division of wages (b) Division of rent (c) Division of profit (d) Division of labour

8. --------- is man made physical goods used to produce other goods.

(a) Real (b) capital (c) Profit (d) Organization

9. The functional relationship between inputs and output is known as --------.

(a) Demand function (b) Supply function (c) Production function (d) material function

10. --------- refers to all those natural resources which are provided free to man.

(a) Land (b) Labour (c) Capital (d) Machine

11. ------------ has only limited bargains power.

(a) Dependent labour(b) Independent labour (c) Individual labour (d) Combined labour

12. Isoquants refers to ----------.

(a) Isoquality (b) Iso product (c) Innovation (d) Capital

13. Real cost is --------.

(a) Pain and sacrifice b)Subjective concept c)Efforts and foregoing leisure

(d) All the above

14. Economic cost includes explicit cost and ---------.

(a)Implicitcost(b)Socialcost(c)Fixedcost(d)Moneycost 5.

Social cost is those cost ---------

(a) Not borne by the firms (b)Incurred by the society (c) Health hazards (d) All of the

above

16. Average fixed cost is obtained by dividing ---------.

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(a)TC/Q(b)TFC/Q(c)TVC/Q(d)TVC/TFC 7.

Marginal revenue is the least addition made to the ----------.

(a) Average revenue (b) Total production (c) Total revenue (d) None of these

18. Money cost is also called ---------.

(a) Fixed cost (b) Marginal cost (c) Variable cost (d) Nominal cost

19. Economic profit is the difference between total revenue and ----------.

(a) Implicit cost (b) Social cost (c) Economic cost (d) Money cost

20. Real cost is a ----------- concept.

(a) Economic (b) Production (c) Cost (d) Subjective

SECTION-B

21. What is the production function? What is its importance?

22. Discuss about break-even analysis

23. Explain the uses of production function

24. Difference between incremental cost and sunk cost

25. What is production function?

26. What is law of supply?

27. What are economies of scale of production?

28. Distinguish short run cost from long run cost?

29. What is the advantage of small scale production?

30. Explain the concept of elasticity? What is an isoquant?

SECTION -C

31. What are the types of production function?

32. Discuss about economies of scale of production

33. What are the laws of production function?

34. What is costing and explain its types

35. Bring out clearly the relationship between TC, MC, and AC

36. What are the techniques of cost control?

37. Discuss the uses and limitation of Break even analysis

38. What are the causes of economic scale of production?

39. What are the advantages and disadvantages of small scale production?

40. What is optimum combination /? Explain the principles of at least cost combination

of factors

ANSWERS

1. (b) Creation of utilities 2. (a) Zero 3. (b) Labourer 4. (a) Interest 5. (b) Risk

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6. (b) Primary 7. (d) Division of labour 8. (b) capital 9. c) Production function 10. (a) Land 11.

(c) Individual labour 12.(b)Iso product13.(d)All the above 14.

(a) Implicit cost 15. (d) All of the above 16. (b) TFC/Q 17. (c) Total revenue

18. (d) Nominal cost 19. (c) Economic cost 20 (d) Subjective

UNIT - IV

1. Perfect competition is a market situation where we have -------

(a) Single seller (b) Two seller (c) Large number of seller (d) Few seller

2. A firm can achieve equilibrium when its ----------

(a) MC=MR (b) MC= AC (c) MR=AR (d) MR=AC

3. The firm and industry are one and the same under -----------

(a)Perfectcompetition(b)Duopoly(c)Oligopoly(d)Monopoly .

Under perfect competition the demand curve is -------

(a) upward sloping (b) Horizontal (c) Downward sloping (d) Vertical

5. Most important form of selling cost is --------

(a) Advertisement (b) Sales (c) Homogenous product (d) None of these

6. When the average revenue of the firm is greater than its average cost the firm is earning ---

(a) Average profit (b) Normal profit (c) Nominal profit (d) Super normal profit

7. Under perfect competition the firms are producing -------- product.

(a) Heterogeneous (b) Identical (c) Homogeneous (d) Homogeneous and identical

8. The perfect competition firms are -------.

(a) Sellers (b) Price makers (c) Price takers(d) Buyers

9. Monopoly power achieved through patent right is called --------.

(a) Mutual cooperation (b) Legal profit (c) Legal monopoly (d) Super normal profit

10. The major division of market according to time is ------- short period and long period.

(a) Very long period (b) Very short period (c) Normal period (d) None of these

11. In a very short period the market supply is ------

(a) Imperfectly elastic (b) Perfectly elastic (c) Elastic (d) Perfectly inelastic

12. The short period supply curve is -------

(a) Perfectly elastic (b) Perfectly inelastic (c) Imperfectly elastic (d) Relatively elastic

13. It is the -------- that influence price in the long period.

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(a) Supply (b) Demand (c) Production (d) Sales

14. Perfect competition is defined by -------

(a) Ferguson (b) Bilas (c) Philip Kotler (d) Joan Robinson

15. ---------- is also determined on the basis of future expected price of commodity.

(a) Future price (b) Reservation price (c) Cost of storage (d) None of these

16. ------- preference refers to the instinct among the sellers to keep cash with them.

(a) Liquidity (b) Future demand (c) Perishable (d) Production

17. ---------- revenue means price of the product.

(a) Nominal (b) Economic (c) Average (d) None of these

18. Variable cost is also called -------

(a) Prime cost (b) Separable cost (c) Past cost (d) Book cost

19. -------- are actual cost incurred in producing an output.

(a) Past cost (b) Common cost (c) Separable cost (d) Future cost

20. The average variable cost usually has a ------- shape.

(a)U (b) V (c)S (d) X

SECTION-B

21. What are the components of market?

22. Explain the features of perfect competition

23. Explain the features and causes of monopoly

24. What are the merits and demerits of monopoly

25.Discuss about duopoly

26.What are the dimensions of pricing?

27.What is product line pricing?

28.What is meant by differential pricing?

29.What is price regulation?

30. What is marginal cost pricing

SECTION –C

31. Discuss about the short-run and long-run equilibrium

32. Write about price discrimination under monopoly

33. What are the factors of pricing policy?

34. Explain the types of pricing policy

35. What is the price-output determination under monopoly?

36.What are the difference between perfect competition and monopolistic competition?

37. Explain the term price discrimination? How is price determined in a

Discriminating monopoly?

38.Discuss the role of cost, demand and competition oriented pricing techniques?

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39. How will you fix the price of new product?

40. Explain the methods of product line pricing

41. Explain the pricing of life cycle of a product

ANSWERS

1.(c)Large number of seller 2.(a) MC=MR 3(d)Monopoly .4. (b)

Horizontal 5. (a) Advertisement 6.(d) Super normal profit

7. (d) Homogeneous and identical 8. (c) Price takers 9. (c) Legal monopoly 10.(b)Very short

period 11. (d) Perfectly inelastic12.(d) Relatively elastic

13.(b)Demand14.(d)JoanRobinson 15. (b) Reservation price 16. (a) Liquidity 17. (c) Average 18. (a)

Prime cost 19. (a) Past cost 20. (a)U

UNIT --V

1. ------- refer to the regular fluctuations in economic activity in the economy as a whole.

(a) Business cycle (b) National income (c) Production function (d) Disposable income

2. Monetary policy is controlled by -------

(a) Central government (b) State government (c) Central bank (d) Private sector

3. Currency with the public is known as ------

(a) M1 (b) M2 (c) M3 (d) M4

4. During inflation --------

(a) Businessman gain (b) Wage earners gain (c) Salaries people gain (d) Renters gain

5. A situation marked by rising price and stagnation in demand is known as -----

(a) Cost push inflation (b) Demand pull inflation (c) Stagflation (d) Wage push inflation

6. Deflation is a period marked by --------

(a)Raising (b)Falling (c) Average (d) None of these

7. The equation of exchange (MV=PT) was given by ----------

(a) Marshal (b) Samuelson (c) Adam smith (d) Irving Fisher

8. Galloping inflation is also known as --------

(a) Stagflation (b) Cost push inflation(c) Persistent inflation (d) Wage push inflation

9. Monetary policy is usually effective in controlling ---------

(a) Inflation (b) Deflation (c) Demand (d) Supply

10. The modern economy is described as -------

(a) Inflation (b) Deflation (c) Business cycle (d) Money economy

11. Currency notes in circulation are referred to as --------

(a) Demand (b) Supply (c) Fiat money (d) Dear money

12. To control inflation the central bank will ------ the bank rate

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(a) Increase (b) Decrease(c) Equalize (d) None of these

13. Public finance is concerned with the income and expenditure of -------

(a) Private sector (b) Agricultural sector (c) Public authorities (d) Industrial sector 14.

Tax revenue deals with the -------

(a) Fees (b) Kinds of taxes (c) Revenue (d) None of these

15. The federal form of government control is -------

(a) Central, state and local government (b) Central and state government

(c)Stateandlocalgovernment(d)Aboveall

16. The compulsory charge levied by the government is -------

(a) License (b) Gifts and grants (c) Loan (d) Tax

17. In ZBB every year is considered as a ------

(a) Base year (b) Financial year (c) New year (d) Academic year

18. ------- means different sources of government income.

(a) General revenue (b) Public revenue (c) Direct revenue (d) Indirect revenue

19. -------- are considered as fundamental principles of taxation

(a) Direct tax (b) Indirect tax (c) Wealth tax (d) Canons of taxation

20. -------- tax is a blend of progressive tax and proportional tax. (a) Aggressive

(b) Digressive (c) Education chess (d) House tax

SECTION-B

21. What is trade cycle? What are its features?

22. Explain about TRIMS

23. Explain about TRIPS

24. Explain the effects of industrial sickness

25. Write the types of inflation

26. What is the importance of fiscal policy?

27. What is national income?

28. Explain the concepts of the international trade.

29. Explain the phases of the business cycle

30. State the theory of comparative cost.

31. What is a business cycle?

SECTION-C

31. What are the phases of business cycle?

32. Discuss about national income

33. Briefly discuss about industrial sickness

34. What is the transmission of monetary policy?

35. What are the objectives and limitations of fiscal policy?

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36. What is the method of measuring National Income?

37. Explain the silent features of trade cycle?

38. Explain the classical theory of international trade?

39. Critically examine the modern theory of international trade?

40. How will you measure the gain from international trade?

41. Distinguish balance of trade from balance of payment?

42. What are the features and phrase of trade cycle

ANSWERS

1. (a) Business cycle 2. (c) Central bank 3. (a) M1 4. (a) Businessman gain 5. (c) Stagflation 6.

(b)Falling 7. (d) Irving Fisher 8. (c) Persistent inflation 9(a) Inflation.

10. (d) Money economy 11. (c) Fiat money 12. (a) Increase 13. (c) Public authorities

14. (b) Kinds of taxes 15. (a) Central, state and local government 16. (d) Tax 17. c) New year 18.

(b) Public revenue 19. (d) Canons of taxation 20 (b) Digressive

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Class: I M.COM Semester - II

Sub. Name: Advanced Corporate Accounting Sub. Code: 18PCM205


Section- A

1. The process of two or more companies combining to form a new company is called _______

a) Absorption b) Amalgamation c) reconstruction d)general reserves

2. In the case of amalgamation there are two or more liquidation and one _________

A) Absorption b) formation c) reconstruction d) creditors

3. Goodwill or capital reserve arises only when the amalgamation is in the nature of _______

a) Sales b) purchase c) profit d) loss

4. When there is no formation and no liquidation is known as _______

a) Amalgamation b) absorption c) external reconstruction d) internal reconstruction

5. When there are one or more liquidation and no formation it is known as _____

a) Amalgamation b) absorption c) external reconstruction d) internal reconstruction

6. Under the pooling of interest method the transferee company incorporate the assets and

Liabilities of the transferor company at ________

a) Book value b) fair values c) market values d) resale value

7. Under the purchase methods the transferee company incorporate the assets and liabilities

Of the transferor company at ________

a) Book value b) fair values c) market values d) resale value

8. Under the pooling interest methods shares are issued by the transferee company at_____

a)Par b) discount c) premium d) none

9. As per AS- 14 purchase consideration is what is payable to _________

a) Share holders b) debenture holders c) creditors d) purchasers

10. When amalgamation is in the nature of merger the accounting methods to be followed to is ---

a) Equity method b) purchase method c) pooling of interest method d) consolidated method

11. Under net payment method purchase consideration is calculated by adding the various

Payment made by the __________ company

a) Sales b) purchase c) profit d) loss

12. _______________ is the amount which is paid by the purchasing company for the purchases

of the Business of the vendor company

a) Purchase consideration b) reserves c) goodwill d) cash

13. Accumulated losses in the vendor company should be transferred to _____________A/C

a) Preference share holders b) equity shareholders c) creditors d0 debtors

14. Internal reconstruction is generally resorted to write off the past accumulated __________

A) Losses b) profits c) share capital d) reserves

15. Only _____________ companies undertake capital reduction

a) Capital reduction b) unsuccessful c) profitability d) uncalled

16. No journal entry is required for the cancellation of ________ share capital

a) Un issued b) issued c) discount d) profits

17. In a scheme of capital reduction any new liability to be provided for such an arrears

of preference Dividend must be met out of ___________ account

a) Paid-up capital b) shareholders c) capital reduction d) assets a/c

18. In a scheme of reorganization amount of shares surrendered by shareholders is transferred to ___

a) Capital reduction a/c b) share surrender a/c c) reorganization a/c d) capital reserve a/c

19. Capital reduction account is used in the case of _____________

a) Internal reconstruction b) external reconstruction c) amalgamation d) absorption

20. After granting the scheme of capital reduction the court may order the use of words ___________

After the name of the company for the specified period

a) Increased b) decreased c) reserves d) profits

21. Accounting standard for amalgamation is---------------

A) AS-8 b) AS-20 c) AS-14 d) AS-3

ANSWERS

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1.Amalgamation. 2.formation. 3.purchase 4.external reconstruction 5. absorption 6. book value 7. fair

values 8. Par. 9. share holders 10. pooling of interest method 11. purchase 12. purchase consideration 13.

Equity shareholders 14. Losses 15. unsuccessful 16. unissued 17 capital reduction 18. share surrender a/c

19. Internal reconstruction 20. decreased 21. c) AS-14 29.

SECTION- B

22. What are the two methods of accounting for amalgamation?

23. Distinguish between amalgamation by merger and by purchase?

24. Define amalgamation, absorption and reconstruction?

25. Write short note on Purchase consideration and external reconstruction?

26. The assets of X Ltd are purchased by Y Ltd. The purchase consideration was as

Follows:

a) Cash payment of Rs.90 for every share of X Ltd

b) A cash payment of Rs.550 for every debenture in X Ltd in full discharge

c) An exchange of four shares of Y Ltd. Of Rs.75 each (quoted in the market at

14 each)for every share of X Ltd.

d) the expenses of liquidation amounting to Rs.10000 were met by Y Ltd.

Additional information of X ltd on the date of absorption

Rs

Share capital 6000 equity shares of Rs.500 each 3,00,000

1300 debentures of Rs.550 each 6,50,000

Sundry creditors 2,50,000

Workman saving bank 2,00,000

Calculate purchase considerations

Ans: P.C. Rs. 50,75,000

27. A ltd is absorbed by B ltd, the consideration being the takeover of liabilities the payment of cost

of absorption as part of purchase consideration not exceeding Rs. 10,000 The payment of the

debenture of Rs 15 per share in cash and allotment of one 10 % Preference share of Rs 10 each and

five equity share of rs 10 each fully paid for every four share in A ltd. The no of shares of A ltd are

2 lakhs of Rs.10 each fully paid

Ans : p.c 60,00,000

28. .A ltd agrees to take over the business of B ltd on the following terms:

1. the share holders of B ltd are to be paid of Rs.25 in cash and the offer of four Shares of Rs.10

each in A ltd for every share of B ltd. B ltd had 50,000 equity shares Outstanding 2. the debenture

holders holding 5000 debentures of Rs.100 each are to be Redeemed at a premium of 10% 3. Cost of

liquidation amounting to Rs.25000 is to be borne by A ltd .Compute purchase consideration

29. You are given the balance sheet of Anand Sai Ltd. As on March 31st 2002

Liabilities Rs

10000 equity shares of Rs 10 each fully paid 1,00,000

General reserves 3,00,000

Profit and loss account 1,00,000

Trade creditors 1,50,000

Provision for taxation 1,20,000

Proposed dividend 80,000

Assets

Fixed assets 4,00,000

Investments 1,00,000

Current assets 2,50,000

Preliminary expenses 60,000

Share issue expenses 40,000

On the date of balance sheet the company was taken over by Harsha Ltd

On the following terms

1. Fixed assets are revalued at Rs.5,60,000

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2. Investments have only a market value of Rs.80,000

3. Current assets are agreed at Rs.3,00,000 for the purpose of absorption

4. Harsha Ltd agrees to pay the tax liability which is estimated at Rs.1,30,000

5. Dividends are to be paid before absorption by anand sai Ltd

You are required to compute the purchase consideration

purchase consideration: 5,80,000

30. Strong ltd takes over Weak td in pursuance of a scheme of amalgamation and it was Agreed that

the shareholders of Weak Ltd. Must be issued shares in Strong Ltd and the exchange is to be

determined on the basis of the intrinsic values of the shares of two companies concerned. The capital

Weak td comprises 1,00,000 equity shares of rs. 10 each. The intrinsic values were Strong Ltd Rs.40

and Weak Ltd Rs25. In allotment fractional shares are aggregate to 500. the market value of the shares

of Strong ltd was Rs. 60. You are required to compute the purchase consideration payable to Weak Ltd

purchase consideration25,00,000

31 . Raman Ltd agrees to purchase the business of Krishna Ltd on the following terms;

a) for each of the 10000 shares of Rs.10 each in Krishna ltd. 2 shares in Raman Ltd of Rs. 10

each will be issued at an agreed value of rs.12 per share. In addition Rs.4 per share cash also will be

paid

b)8% Debenture worth Rs.80000 will be issued to settle the Rs.60000 9% debenture in Krishna

Ltd.

c) Rs. 10000 will be paid towards expenses of winding up

SECTION –C

32. What is purchase consideration? Explain various methods of calculation purchase consideration?

33. Give the journal entries that are passed in the books of the company in the case of absorbtion?

34. On 31st march 2008 Thin Ltd was absorbed by thick Ltd the later taking over all the assets and

liabilities of the former at book values. The consideration for the business was fixed at Rs. 4,00,000

to be discharged by the transferee company in the form of its fully paid equity shares of Rs. 10 each

to be distributed amoung the share holders of the transferor company each share holders getting two

shares for every shares held in the transferor company. The balance sheets of the two companies as on

31st march 2008 stood as under

Liabilities Thick

Ltd

Thin

Ltd

Assets Thick Ltd Thin Ltd

Share capital ;

Authorized

Issued and subscribed

capital

Equity share of Rs.10 each

fully paid

General reserve

Profit and loss a/c

Workman compensation

fund

Sundry creditors

Staff provident fund

Provision for taxation

1500000

900000

180000

20502

12000

58567

10200

12300

500000

200000

50000

12900

9000

30456

4000

5000

Goodwill

Plant & machinery

Furniture

Stock in trade

Sundry debtors

Prepaid insurance

Income tax refund

Claim

Cash in hand

Cash at bank

200000

412000

80000

265000

221000

-

-

869

14000

60000

100000

30000

60000

46000

700

6000

356

8300

1193569 311356 1193569 311356

35. A ltd and B ltd were amalgamated on and from 1st April 2002.A new company C ltd was

formed to take over the business of the existing companies. The Balance sheet of A Ltd and B

Ltd as on 31st March 2002 are given below

Liabilities A Ltd B Ltd Assets A Ltd B Ltd

Share capital

Equity shares of Rs. 100

each

12% preference share of

Rs.100 each

Reserves and surplus :

Revaluation reserve

800

300

150

750

200

100

Fixed assets

Land & building

Plant & machinery

Investment

Current assets,

Loans and

advances

550

350

150

400

250

50

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General reserve

Investment allowance

Reserve

P&L a/c

Secured loans:

10% debentures ( RS.100

each)

Current liabilities and

provisions:

Sundry creditors

Bills payable

170

50

50

60

270

150

150

50

30

30

120

70

Stock

sundry debtors

Bills receivable

Cash & bank

350

250

50

300

250

300

50

200

2000 1500 2000 1500

Additional information

1) 10%Debentureholders of A ltd and B ltd are discharged by C Ltd issuing such

number of its 15% debentures of Rs. 100 each so as to maintain the same amount of

interest

ii) Preference share holders of two companies are issued equitant number of 15%

preference shares of C ltd at a price of Rs.150 per share (face value Rs, 100)

iii) c ltd will issue 5 equity shares for each equity shares of A Ltd and 4 equity shares for

each equity shares of B ltd. The shares are to be issued @ Rs. 30 each, having a face value of Rs. 10 per

share.

iv) Investment allowance reserve is to be maintain for 4 more years

prepare the balance sheets of C ltd as on 1st April 2002 after the amalgamation has been

carried out on the basis of amalgamation in the nature of purchase

36. Alpha Ltd and Beta Ltd were amalgamated on 1st April 2001. a New company Gamma Ltd was

formed to take over the business of the existing companies. The balance sheets of alpha Ltd and Beta

Ltd as on 31st March 2001 are given below

Liabilities Alpha

Ltd

Beta Ltd Assets Alpha

Ltd

Bet Ltd

Share capital

Equity shares of 100

each

15% Preference share

of Rs. 100 each

Reserves and surplus

Revaluation Reserve

General Reserve

P& L A/C

Secured Loans

12 % Debenture of Rs.

100 each

Current Liabilities &

Provisions

1000

400

100

200

80

96

24

800

300

80

150

60

80

95

Fixed assets

Current assets,

loans and

advances

1200

880

1000

565

2080 1565 2080 1565

Other information ;

i) 12% Debentures of Alpha Ltd and Beta Ltd are discharged by Gamma Ltd by issuing adequate number

of 16 % Debentures of Rs.100 each to ensure that they continue to receive the same amount of interest

ii) preference shareholders of Alpha Ltd and Beta Ltd have receives same number of 15% preference

share of Rs.100 each of Gamma Ltd.

iii) Gamma Ltd has issued 1.5 equity share for each equity share of Alpha Ltd and 1 equity share for

each equity share of Beta Ltd. The face value of share issued by Gamma Ltd is Rs.100 each.

37. The following is the balance sheets of X Ltd a on 31.3.1996

Liabilities Rs Asset Rs

Share capital

200000 shares of Rs.10 each

General Reserve

2000000

250000

Land & Building

Plant & machinery

Furniture

1000000

1500000

25000

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Dividend equalization

Reserve

P& L A/C

12% Debentures

Sundry creditors

200000

51000

1000000

300000

Stock

Work in progress

Sundry debtors

Cash in hand

600000

300000

250000

126000

3801000 3801000

The company has absorbed by A Ltd on the above date. The consideration for the absorption is the

discharge of the debentures at a premium of 5% taking over the liability in respect of sundry creditors

and payment of Rs.7 in cash and one share of Rs.5 in a Ltd at the market value of Rs.8 per share for

every share in X ltd. The cost of liquidation of Rs.15000 is to be met by the purchasing company.

Close the books of X ltd and pass journal entries in the books o A Ltd.

38. The balance sheets of J co Ltd and H company Ltd as on 31.3.2004 were as follows

Liabilities J Ltd H LTd Assets J LTD H Ltd

Share capital

Rs 100 each

Rs. 10 each

Capital reserve

General reserve

Secured loan

Unsecured loan

Sundry creditors

500000

100000

35000

100000

155000

400000

-

400000

250000

-

180000

Goodwill

Fixed assets

Cash at bank

Other current assets

40000

400000

-

450000

-

800000

100000

330000

890000 1230000 890000 1230000

It was proposed the J Ltd should be taken over by H ltd . the following arrangement were accepted by

both the companies

1) Goodwill of J co Ltd is considered worthless

2) Arrears of depreciation in J co Ltd amounted to Rs.20000

3) He holder of every 2 shares in J ltd was to receive

a) As fully paid, at par, 10 shares in H ltd and

b) so much cash as is necessary to adjust the right of share holders of both

companies in accordance with intrinsic values of the shares as per

their Balance sheets after the adjustment mentioned above

You are required to

i) determine the purchase consideration

ii) Show the balance sheet of H co Ltd after the absorption if the amalgamation is in the

nature of purchase.

39. . Ram Ltd and Shyam Ltd have agreed to amalgamate. A new company Rajesh Ltd has been formed

to take over the combined concern as on 31 st December 1998.After negotiations, the assets of the two

companies have been agreed upon as shown below:

Liabilities Ram Ltd Shyam

Ltd

Assets Ram Ltd Shyam

Ltd

Share capital:shares

of Rs.10 each

10,00,000 5,00,000 Land 5,00,000 3,00,000

Reserve fund - 50,000 Machinery 2,00,000 2,50,000

P&L A/ 50,000 50,000 Goodwill - 50,000

Creditors 80,000 50,000 Furniture 1,10,000 -

Stock 1,50,000 20,000

Debtors 1,20,000 20,000

Bank 50,000 10,000

Total 11,30,000 6,50,000 Total 11,30,000 6,50,000

Prepare the balance sheet of Rajesh Ltd assuming

(a) The entire purchase price is paid off in the form of equity shares of Rs.100 each in

Rajesh Ltd (b) The amalgamation is in the nature of merger

(ANS: purchase price: Ram Ltd Rs.10,50,000 Shyam Ltd Rs.6,00,000.Excess of purchaase price

of Rs.1,50,000 adjusted against reserves.B?S Total-Rs.17,80,000)

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40 . The following are the abridged balance sheet of C Ltd and D Ltd as on 31 March 2000

Liabilities C Ltd D LTd Assets C Ltd D LTd

Equity share capital

(Rs.10 each)

1,00,000 40,000 Fixed assets 3,50,000 75,000

8% pref.shares capital

(Rs.100 each)

50,000 20,000

Current assets 50,000 25,000

General reserve 40,000 10,000

Statutory reserve - 5,000

10%

debentures(Rs.100

each)

1,00,000 15,000

Creditors 1,10,000 10,000

Total 4,00,000 1,00,000 Total 4,00,000 1,00,000

On 1 st April 2000, 'C' Ltd takes over 'D' Ltd on the following terms:

1. 'C' Ltd will allot 5,000 equity shares of Rs.10 fully paid to the equity shareholders of 'D'

Ltd

2. 'C' Ltd will allot 2,000 fully paid equity shares of Rs.10 each to the preference shareholders

'D' Ltd.

3. The debentures in 'D' Ltd will be converted into an equal number of 12% debentures

in 'C' Ltd.

4. Statutory reserve of 'D' Ltd is to be continued.

Prepare balance sheet of 'C'Ltd immediately after the scheme of amalgamation is completed

assuming.

(a) That the amalgamation is in the nature of merger

(b) That the amalgamation is in the nature of purchase

(ANS: Purchase consideration: Rs.70, 000; Balance sheet total: (a) Rs.5, 00,000; General Reserve

of Rs.10, 000 is to be adjusted towards excess purchase price. (b)Balance sheet Total Rs.5, 05, 000,

Capital reserve Rs.5, 000)

41. The following is the balance sheet of XYZ Ltd on 31 st Dec 1976

Liabilities Rs Assets Rs

20,000 shares of Rs.10

each

2,00,000 Land & Building 1,00,000

Debebtures 1,00,000 Plant & manchinery 1,50,000

Sundry Creditors 30,000 Work-in-progress 30,000

Reserve fund 25,000 Stock 60,000

Dividend equalisation

fund

20,000 Furniture&fittings 2,500

P&L appropriation A/c 5,100 Sundry debtors 25,000

Cash at bank 12,500

Cash in hand 100

Total 3,80,100 Total 3,80,100

The company is absorbed by ABC Company Ltd on the above date. The consideration for the absorption

is the discharge of debentures at a premium of 5% taking over the liability in respect of the sundry

creditors and payment of Rs.7 in cash and one share of Rs.5 in ABC Co Ltd at the market value of Rs.

8 per share in exchange for one share in XYZ Co Ltd. The cost of liquidation of Rs.5, 000 is to be met

by the purchasing company.pass journal entries in the books of both the companies. Show how the

Purchase price is arrived at.

(ANS: purchaseprice:Rs.3,00,000; profit on realisation:Rs.49,000; Payment to

Shareholders:Rs.3,00,000;Cash:Rs.1,40,000 and Shares;Rs.1,60,000;total goodwill in ABC Co:

Rs.59,000)

42. What is 'Pooling of Interests method'? Explain its features and significance

ANSWERS

1.Amalgamation. 2.formation. 3.purchase 4.external reconstruction 5. absorption 6. book value 7. fair

values 8. Par. 9. share holders 10. pooling of interest method 11. purchase 12. purchase consideration 13.

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Equity shareholders 14. Losses 15. unsuccessful 16. unissued 17 capital reduction 18. share surrender a/c

19. Internal reconstruction 20. decreased 21. c) AS-14 29.

UNIT-II 1. A company in which more than 50% of share are held by another company is termed as a) Holding company b) subsidiary company c) GOVT company d) public company 2. Profits earned by a subsidiary company up to the date of acquisition of share by the holding company are called a) revenue profits b) capital profits c) Revaluation profits d) realization profits 3. Profit made aa subsidiary company after the date of purchase of share by the holding company are known as ---------- a) revenue profits b) capital profits c) Revaluation profits d) realization profits 4. The excess price paid by a holding company to acquire controlling interest in the subsidiary company is transferred to a) capital reserve b) goodwill c) Revenue reserve d) none of the above 5. To excess of share inequity or net assets of the subsidiary company and above the price paid for the investment is shown as a) Capital reserve b) Cost of control c) Revenue reserve d) none of the above 6. A company should purchase more than -------- share of another company in order to become holding company a) 50% b) 20% c) 25% d) 100% 7. The profits included in the closing stock on the date of consolidated balance sheets a) realized profits b) profit control c) unrealized profits d) revenues 8. Monitory interest is shown on the-------- side of consolidated balance sheets a) assets b) liabilities c) profits d) loss 9. Dividend paid out of capital must be credited to ----------- a/c by the holding company a) P& L A/C b) General reserve c) Investment d) machinery 10.Goods in transit and cash in transit should be entered on the ------------- side of the CBS a) liability side b) assets side c) debit side d) credit side 11.Post acquisition profits are also known as ----------- a) realized profits b) profit control c) unrealized profits d) revenues profits 12.Pre acquisition profits is are also known as a) capital profits b) realized profits c ) unrealized profits d) revenues profits 13.dividend paid out of revenue profits should be credited to---------- A/C a) reserve a/c b) net profit a/c c) profit and loss account d) none of the above 14. A contributory is a --------- (a) Unsecured creditor

(b) Preferential Creditors (c) Shareholders (d) Debentureholder

15. List A in statement of affairs gives the list of ---------

(a) Assets specifically pledged (b) Assets not specifically pledged (c) Preferential Creditors (d)

Unsecured creditors

16. List E in statement of affairs gives the list of -------

(a) Preferential Creditors (b) Debenture holders (c) Unsecured Creditors (d) Secured creditors

17. Secured creditors are shown in the statement of affairs under----

(a) list A (b) List B (c) List c (d) List

18. Preferential creditors are shown in the statement of affairs under-----

(a) list D (b) List B (c) List C (d) List A

19. As per the provision of Sec.205A unclaimed dividend should be included in -------

(a) List C (b) List F (c) List D (d) List E

20. ----------- is shown as note at the end of the statement of affairs.

(a) Paid up Capital (b) Uncalled Capital (c) Issued Capital (d) Authorised capital

SECTION- B

21. Write a note on holding company and subsidiary company

22. What is meant by post acquisition profits in the context of holding company account

23. Distinguish between Capital profits and Revenue profits in the context of holding company account?

24. Write a short note on Minority Interest?

25. X Ltd purchased 60% shares of Y Ltd on 1.1.02 when the balance on their P&L A/C and general

reserve were Rs. 150000 and Rs.160000 respectively.

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On 31.12.02 the balance sheet of Y ltd showed P& L a/c balance of Rs.400000 and general reserve Rs.

30000. Calculate capital profits and revenue profits.

Ans: C.P Rs.310000 R.P: Rs.390000

26. P Ltd acquire 65% shares of Q Ltd on 1.10.10. P&L A/C in the books of Q ltd showed a debit

balance of Rs.40000 on 1.4.10. On 31.3.11 the balance sheet of Q Ltd showed P& L A/C balance of Rs.

120000. Calculate capital profits and revenue profits.

Ans: C.P Rs.40000 R.P: Rs.80000

27. Calculate minority interest from the Balance sheet of Mumbai Ltd.

Balance sheet of Mumbai Ltd as on 31.12.1999


Share capital

700000 shares of Rs 2 each

General reserve as on 1.1.99

Creditors

P7L A/c as on 31.12.99

1400000

600000

300000

200000

Sundry assets

Plant & machinery

Other assets

Investment(80% of shares)

1000000

700000

150000

650000

2500000 2500000

Madras ltd acquire 80% of the shares at Rs.650000

Ans: M.I Rs.440000

28. A liquidator is entitled to receive remuneration @ 2% of the assets realised and 3% on te amount

distributed among the unsecured creditors. The assets realised Rs.70, 00,000 against which payment was

made as follows:

Liquidation expenses Rs.50, 000

Preferential creditors Rs.1, 50,000 and Secured creditors Rs.40, 00,000 and unsecured creditors Rs.30,

00,000. Calculate the total remuneration payable to the liquidator.

ANS: Liquidator's remuneration: Rs. 2, 21,845)

29. The following particulars relate to a limited compnay, which went into volunatary liquidation:

Preferential creditors Rs.25, 000;Unsecured Creditors Rs.58, 000; 6%debentures Rs.30, 000

The assets realised Rs.80, 000. The expenses of liquidation amounted to Rs.1,500 and the

liquidator's remuneration was agreed at 2 1/2 % on the amount realised and 2% on the amount paid to

unsecured creditors including preferential creditors. Show the liquidator's final statement of account

ANS: Unsecured Creditors: Rs. 20,588

30. From the following details ascertain unsecured creditors to be shown in statement of affairs:

Creditors for goods Rs.80, 000

Bills Payable Rs. 8,000

Loan from bank (unsecured) Rs. 20,000

Bank overdraft Rs. 6,000

Loan on security of machinery Rs. 40,000

Estimated realisable value of machinery Rs.32, 000

Bills discounted Rs. 31,000(20% expected to rank)

Contingent liabilities Rs. 2,500 (10% expected to rank)

ANS: Unsecured Creditors: Rs. 1, 30,70

SECTION-C

31. What is a Holding company? When does a company become Holding company?

32. Briefly explain the methods of consolidating the balance sheets of a Holding company and its

subsidiary company

33. The balance sheet of C Ltd and D Ltd as at 31st December 1986 are as follows

Liabilities CLtd DLtd Assets CLtd DLtd

Share Capital (in share of Sundry assets 1,32,500 1,38,200

Rs 10 each) 2,00,000 1,00,000 Goodwill -` 20,000

General reserves 18,000 20,000 Shares in DLtd at cost 1,40,000 _

Profit &loss a/c 24,500 23,000

Creditors 30,000 15,200 ________________

2,72,500 158 200 2,72,500 1,58,200

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In the case of D ltd profit for the year ended 31st December 1986 is Rs12,000 and transfer to reserve

is Rs 5000. The holding of C ltd in D ltd is 90% acquired on 30th June 1986. Draft a consolidated

Balance sheet of C ltd and its subsidiary.

34. On 31st march 1996 the balance sheets of H ltd and its subsidiary S ltd stood as follows:

Liabilities H ltd S ltd Assets H ltd S ltd

Equity share capital 800000 200000 Fixed assets 550000 100000

General reserve 150000 70000 75% shares in

Profit $ Loss a/c 90000 55000 S ltd(at cost) 280000 ---\

Creditors 120000 80000 Stock 105000 177000

Other current

Assets 225000 128000

___________________ ______________________

1160000 405000 1160000 405000

Draw a consolidated B/S as at 31st march 1996 after taking into consideration the following

information:

(i) H ltd acquired the shares on 31st July 1995

(ii) S ltd earned profit of Rs.45000 for the year ended 31st march 1996

(iii) In January 1996 S ltd sold to H ltd goods costing Rs.15000 for Rs 20000.

On 31st march 1996 half of these goods were lying as unsold in the go down of H ltd.

Give your working notes

35. H Ltd acquire 80 % of the shares in s ltd on 1.1.96 on which date S Ltd had Rs. 20000 credit balance

in its profit and loss account

The following position was revealed on 31.12.1997

H Ltd(Rs) S Ltd(Rs)

Profit for the year 1997 200000 80000

P& L balance on 31.12.96 120000 70000

S Ltd had not paid any dividend during the years 1996 and 1997

You are requires to prepare consolidated P & l A/c for the year ended 31.12.97.

36. The following information was extracted from the books of a limited company on 31st

December 1993 on which datre a winding up order was made:

Particulars Rs

Equity share capital: 2,000 shares f Rs.10 each 20,000

6%preference share capital:3,000 shares of Rs.10 each 30,000

Calls in arrear(estimated to produce Rs.200) 400

5% first mortgage debentures secured by a floating charge on te

whole of the assets of the company (interset paid to date)

20,000

Crediotrs fully secured(value of securities Rs.4,000) 3,500

Crediotrs partly secured (value of securities Rs.2,000) 4,000

Preferential crediotrs for wages,rates,and taxes etc 750

Unsecured creditirs 27,000

Bank overdraft,secured by a second charge on the whole of the assets

of the company

2,000

Cash in hand 120

Book debts:

Good

Doubtful debts(Estimated to produce Rs.300)

Bad

3,800

800

450

Stock in trade(estimated to produce Rs.6,000) 7,200

Freehold land & builiding(estimated to produce Rs.18,500) 21,000

Plant & machinery (estimated to produce Rs.6,300) 6,000

Fixtures & fittings( Estimated to produce Rs.800) 1,200

Prepare a statement of affairs of the company

(ANS: Estimated deficiency as regards creditors-Rs.15, 230 and Estimated deficiency as regards

members-Rs.65, 030)

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37. M.Co Ltd went into voluntary liquidation on 1.3.1997. The following balances are extracted from

its books on that date:


Capital: 50,000 equity

shares of Rs.10 each

5,00,000 Buildings 1,50,000

Debentures(secured by

floating charge)

2,00,000 Plant & machinery 2,10,000

Bank overdraft 30,000 Stock in trade 95,000

creditors 40,000 Bookdebts 75,000

Less:Provision 10,000

65,000

Calls in arrears 1,00,000

Cash on hand 10,000

P&L A/c 1,40,000

Total 7,70,000 Total 7,70,000

Plant & machinery, and buildings are valued at Rs.1, 50,000 and Rs. 1, 20,000-respectively.On

realisation, losses of Rs.15, 000 are expected on stock. Book debts will realise Rs. 70,000. Calls in

arrears are expected to realise 90%. Banks overdraft is secured against buildings. Preferential creditors

for taxes and wages are Rs.6, 000 and miscellaneous expenses outstanding Rs.2, 000. Prepare a

statement of affairs to be submitted at the meeting of creditors.

(ANS: Estimated surplus as regards creditors Rs.2, 48,000)

38. Shri Chopra is appointed liquidator of Moon Co Ltd in voluntary liquidation on 1 st July

1993.Following balances are extracted from the books on that date:


Share capital: 24,000 shares of

Rs.5 each

1,20,000 Machinery 45,000

Reserves for bad debts 15,000 Leashold properties 60,000

Debentures 75,000 Stock-in trade 1,500

Bank overdraft 27,000 Book debts 90,000

Liabilities for purchases 30,000 Investments 9,000

Calls in arrear 7,500

Cash in hand 1,500

P&L A/c 52,500

Total 2,67,000 Total 2,67,000

Prepare a statement of affairs to be submitted to the meeting of the creditors. The following assets were

realised are valued as under:

Machinery-Rs.90,000; Leasehold properties-Rs.1,09,000; investmetns-Rs.6,000; Stock- in trade-

Rs.3,000; Bad debts are-Rs.3,000 and the doubtful debts are-Rs.6,000 which are estimated to realise-

Rs.3,000.The bank overdraft is secured by deposit of title deeds of leasehold properties. Preferential

creditors are-Rs.1,500. Telephone rent outstanding is Rs.120

ANS: Estimated surplus as regards creditors Rs.1, 67,380

39. The following balances are extracted from 'A' Ltd balance sheet as on 31.3.92

Particulars Rs

Equity share capital 1,00,000

6% prefernce share capital 2,00,000

6% debentures 1,50,000

Fully secured creditors(security value-rs.35,000) 30,000

Partly secured creditors(security value-Rs.10,000) 20,000

Preferential creditors 6,000

Bills payable 1,00,000

Unsecured creditors 70,000

Bank overdraft 10,000

Bills receivable 15,000

Bills discounted(one bill for Rs.10,000 is bad) 40,000

Book Debts:Good 10,000

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Doubtful-(estimated to realise 50%)

Bad

7,000

6,000

Land & Buildings(estimated at Rs.1,00,000) 1,50,000

Stock (Estimated at Rs.40,000) 50,000

Machinery 5,000

Cash in hand 100

Prepare statement of affairs as on 31.3.92

ANS: Deficiency as regards creditors-Rs.1, 77,400 and Deficiency as regards contributories Rs.4,

77,400

40. On Jan 31, 1990 a compulsory order for winding up was made against X Co Ltd the following

particulars being disclosed:

Particulars Book value Estimated to

produce

Cash in hand 100 100

Dentores 4,000 3,600

Buildings 60,000 48,000

Furniture 20,000 20,000

Unsecured creditors 20,000

Debentures:

Secured on buildings

Secured on floating charges

42,000

10,000

Preferential creditors 6,000

Share capoital:32,000 shares of 10

each

3,20,000

Estimated liability for bills discounted was Rs.6, 000 estimated to rank Rs.6, 000. Other contingent

liabilities were Rs.12, 000 estimated to rank at Rs.12, 000. The company was formed on the 1st day of

January 1985 and has made losses of Rs.3, 13,900. Prepare statement of affairs

ANS: Deficiency as regards creditors-Rs.24, 300 and Deficiency as regards contributories-Rs.3,

44,300 Answers

1 b) subsidiary company 2. b) capital profits 3. a) revenue profits 4. b) goodwill 5. a) Capital reserve 6. a) 50% 7. c) unrealized profits 8. b) liabilities 9. c) Investment 10. b) assets side 11. d) revenues profits 12. a) capital profits 13. c) profit and loss account 14. C.Shareholder 15. : b.Assets not specifically pledged 16. C. Unsecured Creditors 17. b.List B 18. c. List C 19. d. List E 20. b. Uncalled Capital

UNIT-III 1.Every banking company is required to close its accounts on

a) 31st Dec b) 31st Mar c)30 the Jun d) 30th sep 2. The percentage of profit to be transferred to statements reserve by the banking company is a) 25% b) 15% c) 20% d) 105 3. An assets which does not generate income to the banker is termed as a) Performing assets b) Fixed assets c) nonperforming assets d) current assets 4. Rebate on bill discount is a) an accrued income b) an item of income c) a liability d) income received in advance 5. Provision for income tax is shown in the bank account under the head a)borrowing b) other liabilities c)operating expenses d)contingent liabilities 6. The heading other assets does not include a) stationary & stamps b)interest accrued c) gold d) silver 7. Demand drafts and telegraphic transfers are shown in the bank account under the head a) contingent liability b) bills payable c) loans & advances d0 borrowings in India 8. Letter of credit and endorsement are shown in the Bank accounts under the head a) contingent liability b) bills payable c)Bills for collection d)other assets 9. Building acquired in satisfactions of a claim and interest accrued but not due on investment are shown in the banks balance sheet under the head a) fixed assets b)Investment c)advances d) other assets 10. Banking companies are governed by the ------------- act 1949 a)Banking regulation act b) schedule c)liability d) income 11. Banks in India are under the general supervision of the --------------

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a) State bank b) RBI c) overseas bank d) Indian bank 12. All appropriation of the profit are shown in IVth part of ------------ a) Balance sheets b) trading account c) p/l a/c d) revenue 13. Acceptance, endorsement and other obligation are shown in the banks balance sheet under the head a) contingent liability b) bills payable c)Bills for collection d)other assets 14. Lockers rent is shown in the P& L a/c of a bank under the head a)Liability b) profits c) other income d) loss 15. At present the SLR for a banking co in India as per the regulations of the RBI is ---------- a) 40% b) 25% c30% d)20% 16. According to present regulation of RBI a banking company is to maintain a minimum of ----- percent as cash reserve over its time and demand liabilities a)10% b)20% c)5% d) 4% 17. Schedule 13 relates to ------------- a) Capital b) interest earned c) operating expenses d) interest expanded 18. Schedule 15 relates to ------------------- a) Capital b) interest earned c) operating expenses d) interest expanded 19. In a bank s balance sheet Gold is shown under Investment and Silver is shown under ---------- a) Contingent liability b) bills payable c)Bills for collection d)other assets 20. A Provision for doubtful debts is shown under “ Provision and contingencies in the---------a/c of the banking co a) P/L A/c b) trading A/c c) balance sheet d) reserve /c

SECTION-B

21. On 31st march 1998 Bharat commercial bank Ltd finds its advances classified as follows

RS

Standard assets 1491300

Sub standard assets 92800

Doubtful assets (Secured)

Doubtful for one year 25660

Doubtful for one year to 3 years 15640

Doubtful for more than 3 years 6580

Loss assets 10350

Calculate the amount of provision to be made by the bank against the above mentioned

advances.

22.The trail balance of Nedungudi Bank Ltd. As on 30th June 1984 shows the following balances.

Interest and discount 4540600

Rebate on bill discounted(1.7.830 4750

Bills discounted and purchases 337400

The unexpired discount as on 30.6.84 is estimated to be Rs.5560. Draft necessary adjusting

entries and calculate the amount of interest and discount to be credited to

P &L A/c.

23. As on 31st Dec., 1985 the books of the Hercules Bank include among others the following balances

Rebate on bills discounted (1.1.85) 320000

Discount received 4600000

Bills discounted and purchased 31547000

Throughout 1985 the bank rate for discounting has been18%.

On investigation and analysis the average due date for the bills discounted and purchased is calculated

as 14th feb.1986.

Show the calculation of the amount to be credited to the banks profit and loss account under discount

earned for the year 1985. Show also the journal entries required to adjust the above mentioned account.

Ans: Amt transferred to P/L l A/C 4219916

24.On 31.12.96 Popular Bank Ltd has the following bills in ots port folio. All the bills are discounted

at 5%.

Amount in Rs Due date

50000

40000

30000

31.1.1997

30.4.97

3.3.97

Calculate rebate on the bills discounted assuming accounts are closed on 31st December.

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Ans; Rebate on bill discounted on 31.12.96 1125

25. The trail balance of N bank Ltd as on 30th June 1984 shows the following balances.

Interest and discount 4540600

Rebate on bills discounted (1.7.83) 4750

Bills discounted and purchases 337400

The unexpired discount as on 30.6.84 is estimated to be Rs.5560. Draft necessary adjusting

entries and calculate the amount of interest and discount to be credited to Profit and loss account.

Ans : Interest debited to P& l A/c is 4539790

26.On 31.12.96 Popular bank Ltd has the following bills in its portfolio. All the bills are discounted at

5%

Due date Amount

31.1.1997 50,000

30.4.97 40,000

3.3.97 30,000

Calculate rebate on bills discounted, assuming are closed on 31 st December.

ANS: Rebate on billa discounted on 31.12.96- Rs.1, 125

27. Calculate rebate on bills discounted as on 31.3.2000

Date of bill Amount Period Rate of

Discount

15.1.2000 25,000 5 months 8%

10.2.2000 15,000 4 months 7%

25.2.2000 20,000 4 months 7%

20.3.2000 30,000 3 months 9%

ANS: Rebate-Rs.1, 604.09

28. Calculate the net profit earned by the Sandhya bank Ltd from the data given below for the year ended

31.3.2003

Interest earned 5, 00,000

Other income 37,000

Interest expended 3, 40,000

Operating expenses 1, 05,000

Rebate on bills discounted:

1.4.2002 48,000

31.3.2003 52,000

ANS: Net profit- Rs.88, 000

29.. From the following balances prepare single column P&L A/c of Lakshmi bank Ltd for the year

ending 31.12.2002

Interest on cash credits and loans 17, 90,000

Interest on deposit 6, 20,000

Administrative expenses 4, 80,000

Discount 2, 10,000

Commission & exchange 3, 00,000

Rebate on bills discounted 1.1.2002 90,000

Determine the profit after making a provision for rebate on bills discounted Rs.2, 90,000

ANS: Net profit-Rs.10, 00, 000

30 . From the following details relating to he New Bank Ltd find out the net profit earned by the bank

in the year 1997-98

Particulars Rs

Interest earned 37,01,738

Other income 4,55,000

Interst expended 20,37,452

Operating expenses 4,80,286

Provisions and contingencies 13,00,000

Profit brought forward from the previous year Nil

Transfer to statutory reserve 84,750

Transfer to other reserve Nil

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Transfer to proposed dividend 1,00,000

Balance carried over to balance sheet 1,54,250

ANS: Net profit- Rs.3, 39,00)

SECTION- C

31. While closing the books of a bank on 31st DECEMBER 1989 you find in the loan ledger as unsecured

balance of rs.2 lakhs in the account of a merchant whose financial condition is reported to you as bad.

Interest in the same account amounted to Rs. 20000 during the year. During the year 1990 the bank

accepted 75 paise in the rupee on account of the debt 31st dec. 1989. Give journal and ledger to record

these transactions under alternative accounting policies.

32. From the following information you are required to prepare the Profit and Loss a/c of the PN Bank

for the year ended 31st March 2003 under the provision of the act applicable thereto;

Rs.(000) Rs(000)

Interest on loans 518 Postage telegram &Telephones 2.8

Interest on Cash Credits 446 Sundry Charges 2

Discount on Bills discounted 390 Advertisement & Publicity 1.4

Interest on overdrafts 108 Directors Fees 6

Interest on Saving Bank deposit 220 Printing & Stationary .4

Interest on fixed deposit 554 Law Charges 1.4

Commission, Exchange and Brokerage16.4 Payment to employees 108

Rent taxes and lighting 36 Locker rent .7

Auditors fees 2.4 Transfer fees 1.4

Depreciation on Bank Property 10

Supplementary information: Rebate on dills discounted Rs.98000 and provided for bad debts Rs.58000.

33. From the following information prepare profit and loss a/c of Thirfty Bank for the year ended on

31st March 2003

Rs.(000) Rs.(000)

Interest on loans 2590 Interest on overdrafts 1540

Interest on fixed deposit 3170 Directors fees Allowance 30

Rebate on bills discounted 490 Auditors fees and expences 12

Commission 82 Interest on saving bank deposit 680

Payment to employees 540 Postage telegram, & telephones 14

Discount on bill discounted (gross) 1540 Printing & stationary 29

Interest on cash credit 2230 Sundry charges 17

Rent, taxes& lighting 180

Additional information:

(1) Provide for contingencies Rs. 2,00,000

(2) Transfer Rs. 15,57,000 to Reserves and

(3) Transfer Rs. 2,00,000 to central govt.

34. Fro0m the following information relating to Adersh Bank Ltd., prepare profit and loss a/c for the yr

ended 31st march 2003 along with the necessary schedule:

Items Amt for the

year ended

31.3.2003

Rs.(000)

Items Amount for

the year

ended

31.3.2003

Rs.(000)

Interest/ discount on

advances/bills

Income on investment

Interest on balances with

Reserve bank of India

Commission exchange and

brokerage

Profit on sale of investment

31,628

11,810

4243

2907

114

Advertisement and publicity

Depreciation on bank property

Directors fees allowances and

expenses

Auditors fees and expenses

Law charges

Postage telegram telephones etc

Repairs and maintenance

87

292

7

14

22

312

91

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Interest on deposit

Interest on reserve bank of India

borrowing

Payment to and provision for

employee

Rent rates and lighting

Printing and stationary

31,404

3362

9717

955

213

Insurance

Other expenditure

Balance of profit and loss a/c b/f

915

884

1524

The following adjustments are to be made:

1. Make a provision for income tax(including surcharge)@51.75%

2. Every year the bank transfers 20% of profit to statutory reserve and 5% of profit to

revenue reserve.

3. Dividend amounting to Rs. 2,00,000 for the year ended 31st March, 2003 is proposed by

the Board of Directors.

35. From the following information prepare a balance sheet of International Bank Ltd as on

31st March 2003 giving the relevant schedule.

Debit balances Rs. In lakhs Credit balances Rs. In lakhs

Current a/c

Cash credit

Cash in hand

Cash with RBI

Cash with other banks

Money at call

Gold

Govt securities

Premises

Furniture

Term loan

28.00

812.10

160.15

37.88

157.87

210.12

55.23

110.17

155.70

70.12

792.88

----------------

2588.22

Share capital

19,80,000 shares of Rs.10 each

Statutory reserves

Net profit before appropriations

Profit& lossa/c

Fixed deposit a/c

Saving deposit a/c

Current a/c

Bills Payable

Borrowings from other banks

198.00

231.00

150.00

412.00

517.00

450.00

520.12

0.10

110.00

----------------

2588.22


Bills for collection 18,10,000

Acceptance and endorsement 14,12,000

Claim against the bank not acknowledged as debt 55,000

Depreciation charges- Premises 1,10,000

Furniture 78,000

50% of the Term Loan are secured by Government guarantees. 10% of cash credits is unsecured. Also

calculate cash reserves required and statutory liquid reserves required.

Note: cash reserves required 3% of dement and time liabilities, liquid reserves required 30% of

demand and time liabilities.

36. On December 1986 , the following stood in the books of Asian bank ltd after preparation of its

P/LA/C

Share capital

Issued and subscribed Rs. 4000

Reserve fund ( under section 17) Rs6200

Fixed deposits Rs42600

Saving bank deposits Rs.19000

Current account Rs23200

Money at call and short notice Rs1800

Investment Rs25000

Profit and loss account (cr) 1st Jan 1986 Rs1350

Dividend for 1985 Rs400

Premises Rs2950

Cash in hand Rs380

Cash with RBI rs10000

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Cash with other bank Rs6000

Bills discounted and purchased Rs3800

Loans cash credits and overdrafts Rs51000

Bills payable Rs.70

Unclaimed divided Rs.60

Rebate on bills discounted Rs.50

Short loan(borrowing from other banks) Rs4750

Furniture Rs1164

Other assets Rs.336

Net profit for 1986 Rs1550

Prepare balance sheets of the bank as on 31st December 1986.

37. From he following ledger balances of Indian bank Ltd prepare the profit and loss account and

balance sheet as on 30th June 1980

Particulars Rs

Freehold and leasehold property 4,15,000

Premises and furniutre 3,37,500

Loans & advances 46,65,000

Bills discounted 3,79,500

Money at call and short notice 2,74,250

Cash in hand and with RBI 15,84,750

Interest, discount and commission 2,44,500

Premises account-account written off 22,500

Current expenditure,salaries and rent 71,250

Amount added to staff retirement fund 3,000

Shares and stock 6,37,500

Govt. securities 6,00,000

Other securities 8,25,000

Interest accrued and paid 25,500

Profit & Loss A/c (1.7.79) 15,300

Acceptance on behalf of customers 12,00,000

Current accounts and deposits 77,31,450

Reserve fund 6,00,000

Share capital 12,500 ordinary shares of Rs.100 each 12,50,000

Make provision for rebate on bills discounted 2,450

Prepare the balance sheet as per the banking regulation Act

ANS: Net profit for he year -Rs.1,19,800;Balance carried to B/S Rs.1,05,150;B/S totalRs.97,19,000;

Difference in trial balance Rs.500 (Cr) excess

38.The following are the balances of Karuna Bank Ltd you are required to prepare the profit and loss

account and the balance sheet as at 31st December 1994 as per the requirements of the following of the

Banking Regulation Act

Particulars Rs

Share capital 2,000 equity share of Rs.500 each 2,00,000

Bad debts written off 12,871

Reserve fund investments 1,00,000

General expenses 18,242

Current accounts 20,24,422

Interest paid 16,052

Deposit account 6,92,023

P &L A/c (Cr) 22.934

Acceptance for customers 1,54,282

Discount 24,376

Bills receivable 1,00,000

Endorsements and guarantees 7,402

Commission 4,424

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Cash in hand 22,654

Interest received 53,226

Cash with banks 2,01,210

Endorsements ad guarantees a per contra 7,402

Owing by foreign correspondents 20,044

Customers liabilities for acceptances 1,54,282

Short loans(Cr) 6,48,206

Loans and advances to customers 15,45,670

investments 9,88,254

Bills discounted 6,22,824

premises 2,21,790

Bills for collection 1,00,000

Statutory reserve 1,00,000

The following information is relevant:

(i) During the year interim dividend of Rs.20,000 was paid

(ii) Reserve Rs.6, 438 as rebate on bills discounted

(iii) Provide Rs.15, 000 for taxation reserve

(iv) Particulars of investments and advances are not required

ANS: Net profit-Rs.13, 423 and Balance sheet total Rs.37, 22,446

39. The following ledger balances of bank of Purasawalkam Ltd as on 31.12.1994 are furnished to you.

Prepare profit and loss account and balance sheet as per requirements of law.

Particulars Rs in thousands

Reserve fund 1,200

Bad debts written off 128

General expenses 182

Current accounts 20,245

Interest paid 160

Deposit account 6,920

P&L A/c b/fd 229

Bills receivables for customers 1,500

Discounts 244

Endorsements and guarantees 575

Commission 45

cash 225

Interest earned 550

Balances with RBI 2,030

Endorsements and guarantees(constituent liabilities) 575

Balance with foreign correspondents 1,206

Bills for collection 1,500

Borrowings from banks 6,482

Cash credit and overdrafts 15,457

Investments 9,882

Bills discounted 6,228

Premises 2,217

Share capital 2,000

The following information is furnished (i) rebate on bills discounted to be provided

Rs.64, 000; (ii) The bank has paid an interim dividend of Rs.2, 00, 000 during the year.

ANS: Net profit Rs.3,05,000 and Balance sheet total Rs.3,72,45,000;Trial balance difference

Rs.2,00,000, presumed as interim divided

40. The following is the trial balance of Dhanalakshmi Bank Ltd as at Dec 31,1984:

Particulars Rs

Loans, cash credit and overdraft 2,85,000

Premises 50,000

Indian government securities 4,00,000

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Salaries 28,000

General expenses 27,400

Rent,taxes and rates 2,300

Stock of stationery 8,500

Director fees 1,800

Bills purchased and discounted 46,000

Interim dividend paid 17,000

shares 50,000

Cash in hand and with RBI 1,93,000

Money at call and short notice 80,000

Subscribed share capital 50,000 equity shares of Rs.10

each fully paid

5,00,000

Reserve fund 2,50,000

Current deposit 1,00,000

Fixed deposits 1,25,000

Savings bank deposit 50,000

P & L A/c91.1.84) 16,000

Interest and discount 1,28,000

Recurring deposit 20,000

The following information should be considered:

(a) Provision for bad and doubtful debts is required amounting to Rs.5, 000

(b) Accrued interest on investments was Rs.8,000

(c) Unexpired discounts amount to Rs.380

(d) Interim dividend declared was 4% actual

(e) Endorsement made on behalf of customers totalled Rs.1, 15,000

(f) Authorised capital was 80,000 equity shares of Rs.10 each

(g) Rs.10,000 were added to the premises during the year. Depreciation 5% on the

opening balance was required.

(h) Market value of Indian government securities was rs.3, 90,000.Prepare P&L A/c for

the year ended 31.12.1984 and the Balance sheet as at that date

ANS: Net profit for the year Rs.69, 120 balances carried to balance sheet Rs.47, 840; Balance sheet

total-Rs.11, 18,500

ANSWERS

1. b) 31st Mar 2 a) 25% 3 c) nonperforming assets 4. d) Income received in advance 5 b) other liabilities

6 c) gold 7. b) Bills payable 8. a) Contingent liability 9. d) other assets 10. a)Banking regulation act

11. b) RBI 12. c) p/l a/c 13. a) contingent liability 14. c) other income 15. b) 25% 16.c)5% 17.

b) interest earned 18. d) interest expanded 19. d)other assets 20 . a) P/L A/c

UNIT-IV 1. In general insurance the policy amount is payable the ------------------ arises a) Assets b) liability c) profits d) losses 2. The bonus which is to be paid on maturity of the policy amount is known as ----------------- a) Reversionary bonus b) annual bonus c) interim bonus d) eventual bonus 3. A valuation of balance sheets is prepared by a) joint stock co b) banking co c) Life insurance co d) General insurance co 4. In Life insurance the profit of the business is ascertained a)Every year b) Once in six months c) once in two years d) once in three years 5 The percentage of profit of life business to be distribute to policy holder is-------------------- a) 95% b) 100% 50% d) 40% 6. Legal fees in respect of claim is ---------------------- a) Debit in revenue a\c b) profit and loss a/ c c) Liability side of balance sheets d)assets side of B/s 7. The document which contain the terms and condition of the contract of insurance is called- a) Claim b) policy c) interest d) dividend 8. ------------ refers to the amount payable by the insurer to the insured when the policy become Due for payment a)Claim b) policy c) interest d) dividend 9. Insurance business in India is now regulated by the provisos of ---------------- a) The insurance Act 1938 b)The IRDA act 1999 c)the banking regulation act 1949

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d) The Indian accompanies act 1956 10. Number of schedule to be prepared by the insurance companies for their financial statements are a) 26 schedules b) 10 schedule c) 12 schedules d) 15 schedules 11. The bonus which is to be paid on maturity of the policy along with the policy amount is known as a)Reversionary bonus b) annual bonus c) interim bonus d) eventual bonus 12. A valuation of balance sheets is prepared by a) joint stock co b) banking co c) LIC d) General insurance co 13. Agents balance (Dr) is shown in the balance sheet of LIC as a) Current liabilities b) other assets c) fixed assets d) borrowing 14. Appropriation like interim dividend proposed final dividend in general insurance business are shown in a) P/L appropriation a/c b) Revenue a/c c)Profit and loss a/c d)trading a/c 15. The percentage of profit of life business to be distributed to policy holder is a)95% b)100 % c)50% d) 40% 16. Lease hold house rent are shown in a) Revenue a/c b) P/L A/C c)schedule 8 investment d)schedule 9 loan 17. The life insurance revenue a/c does not disclose the ------------------ life business A) Profit b) loss c) income d) expenditure 18. The term surrender value is exclusively applicable only for-------------------- a)Life insurance b) banking business c) joint stock co d)general insurance 19. Survey expenses paid in connection with claim should be included in the item ------------ a) Insurance b)claim c) annual bonus d) interest 20. In life insurance revenue account, schedule 4 is named as-------

a) Claims b) Commission c) Benefits paid d) Reserves

ANSWER 1.b) liability 2. a) Reversionary bonus 3. c) Life insurance co 4. c) once in two years 5. a) 95% 6. d)assets side of B/s 7. b) Policy 8. Claim 9 .d) The Indian accompanies act 1956 10.c) 12 schedules 11 .a) Reversionary bonus 12. c) LIC 13. b) other assets 14.c) Profit and loss a/c 15.a) 95% 16. c) schedule 8 investment 17. A) profit 18. a)Life insurance 19. b) claim 20. c. Benefits paid

SECTION –B

21.A Life assurance company prepared its revenue A/c for the year ended 31.3.2006 and ascertained its

Life Assurance fund to be Rs.2835000.It was found later that the following had been omitted from the

account

a) Interest accrued on investments Rs.39000

Income tax liable to be deducted thereon is estimated to be Rs.10500

b) Outstanding premiums Rs.32800

c) Bonus utilized for reduction of premium Rs.6750

d) Claims intimated but not admitted Rs.17400

e) Claims covered under reinsuranceRs.6500

What is the true Life assurance fund?

Ans: LA F = 2825400

22. The Life fund of a Life Insurance company 31.3.2006 showed a balance of Rs.5400000. However

the following items were not taken into account while preparing the revenue A/c for 2005-06. Ascertain

the correct life fund balance.

a) Interest and dividends accrued in investments 20000

b) Income tax deducted at source on the above 6000

c) Reinsurance claims recoverable 7000

d) Commission due on reinsurance premium paid 10000

e) Bonus in reduction of premiums 3000

Ans: L A F= 5431000

23. The revenue account of a Life insurance company showed the life fund at Rs.7317000 on

31.12.1985 before taking into account the following items

a) Claim intimated but not admitted 98250

b) bomus utilized in reduction of premium 13500

c) Interest accrued on investments 29750

d0 Outstanding premium 27000

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e) Claims covered under reinsurance 40500

f) Provision for taxation 31500

Pass journal entries giving effect to the above adjustment and shows the adjusted life fund.

24. The Life assurance fund of an Insurance company on 31.3.98 showed a balance of

Rs. 8776500. It was found later that the following were not taken into account

Dividend from investment 480000

Income tax on above 48000

Bonus in reduction of premium 877500

Claims covered under reinsursnce 423000

Claims intimated but not accepted by company 762000

Ascertain the correct balance of fund

Ans: 8869500

25.The following balances extracted from the books of new life insurance corporation. Calculate the

amount due to the policy holder.

Life assurance fund (as on 31.3.03) 2162000

Net liability as per Actuary valuation 1856000

Interim bonus paid 35000

Divide the surplus between the share holders and policy holders in the ratio of 1:10

Ans: 275000

26 .What do you understand by Life Assurance Fund/

27. What is meant by Annuity and Surrender value

28. What is the difference between Annuities and Consideration for annuities granted?

29. What is re insurance?

30. Give the meaning of Reversionary bonus

SECTION –C

31. Distinguish between Life Insurance and General insurance

32. Prepare Revenue account of a Life insurance business in prescribed form as per the insurance Act

1938 and explained the items there on

33. What is valuation balance sheet why is it prepared? How the surplus is revealed there in dealt with?

34. What is Bonus to Policy Holders? Explain the meaning of

a) Bonus in cash

b) Bonus in reduction of premium and

c) Reversionary bonus

35.Explain the following items relating to insurance business

a) Reinsurance b) Commission on reinsurance ceded c) Reserve for unexpired risk

d) Revenue account

36.The following balance are abstracted from the books of New Bharat Life Insurance co Ltd as on

31.3.2006

Life assurance fund (1.4.2005)

Premium

Consideration for annuities granted

Interest and divided

Fines for revival of policies

Reinsurance premium

Claim outstanding(1.4.2005)

Rs

15,00,000

4,96,000

15,000

1,00,000

750

20,750

4,500

Claims paid during the year

Annuities

Bonus in reduction of premium

Medical fees

Surrenders

Commission

Management expenses

Income tax on dividend

Rs

64,900

2,050

1,600

2,400

4,000

18,650

22,000

8,500

Prepare revenue a/c after making the following adjustment

1) Outstanding balances

Claims 14,000

Premium 4600

2) Further bonus for premium 2400

3)Claim under reinsurance 8000

37. From the following balances extracted from the books of the L.I.C as at 31.3.06 Prepare a Revenue

a/c for the year ending 31.3.2006 in the prescribed form:

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Rs in 000 Rs in 000

Claims by death

Claims by maturity

Agents & Canvassers allowance

Salaries

Traveling expenses

Directors fees

Auditors fees

Medical fees

Commission

Rent

Law charges

Advertising

Bank charges

General charges

surrenders

330000

215000

26500

44200

1200

8700

1000

52000

218000

2800

200

4300

1500

2000

47500

Life Assurance fund(1.4.05)

Premium

Bonus in reduction of premium

Income tax on interest and

dividends

Printing and stationary

Postage and telegram

Receipt stamps

Reinsurance premium

Interest & dividends (gross)

Policy renewal fees

Assignment fees

Endowment fees

Transfer fees

6331000

2065000

1000

5700

13900

14300

2300

40950

272000

9600

540

690

1400

Provide Rs.1500 thousand for depreciation of furniture and Rs.220000 thousands for depreciation on

investment.

38.The books of Jaiprakash Insurance co ltd contain the following information in respect of fire

insurance as on 31.3.2006

----------------------------------------------------------------------------------------------------

Rs.(000) Rs.(000)

Provision for unexpired risk Refund of double taxation 600

(1.4.05) 80,000 Management expenses 55,000

Estimated liability in respect

of outstanding claim; on1.4.05 10,000 Interest & dividends 8,000

on 31.3.06 15,000 Legal expenses regarding

Medical expenses regarding Claims 1,500

Claim 1,000 profit on sale of investment 1,750

Claim paid 70,000 Additional reserves

Reinsurance premium 14,500 on 31.3.05 60,000

Reinsurance recoveries 1,500

Premiums 1,90,000

Commission on direct business 25,000

Commission on reinsurance ceded 3,000

Commission on reinsurance

Accepted 1,000

Additional reserve is to be increased by 10% of the net premium income.

Prepare revenue a/c keeping the reserve for unexpired risks at 50% of premium income

39. From the following particulars relating to Z insurance company ltd .prepare fire revenue a/c for

the year ending 31.3 .2005

__________________________________________________________________-

Claim paid 4,80,000 Premium received 12,00,000

Claim outstanding on1.4.04 40,000 Reinsurance premium

Claim intimated but not paid 1,20,000

Accepted& paid on 31.3 05 10,000 Commission 2,00,000

Claim intimated and accepted Commission on

But not paid on 31.3.05 60,000 reinsurance ceded 10,000

Commission on reinsurance provision for unexpired

Accepted 5,000 risk on1.4.04 4, 00,000

Expenses of management 3,05,000 additional provision

Bonus in reduction of premium 12,000 for un expired risk

On 1.4 .04 20,000

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You are required to provide for additional reserve for unexpired risk at 1% of the net premium to

the opening balance.

40 . Zalid pay insurance co. ltd has furnished the following information for the preparation of

revenue a/c for the fire insurance business for the year ended 31.3.2006 and its profit and loss a/c

for the year.

Claim admitted but not paid 42,376 Bad debts 2,500

Commission paid 50,000 Claim paid 15,000

Commission on reinsurance p /l appropriation a/c 10,000

Received 12,000 Premium received

Share transfer fees 5,000 less reinsurance 5,52,000

Expenses of management 78,000 claim out standing

Reserve for unexpired risk as on 1.4.05 27,000

As on 1.4.05 2,30,000 dividend on share capital 18,500

Additional reserve on 1.4.05 40,000

____________________________________________________________________-

The following further information has also be considered

1. Premium outstanding at the end of the year Rs.40,000

2. additional reserve at 10% of net premium to be maintained 3. It is the policy of the company to maintain 50% of premium towards reserves for unexpired risk.

ANSWER 1.b) liability 2. a) Reversionary bonus 3. c) Life insurance co 4. c) once in two years 5. a) 95% 6. d)assets side of B/s 7. b) Policy 8. Claim 9 .d) The Indian accompanies act 1956 10.c) 12 schedules 11 .a) Reversionary bonus 12. c) LIC 13. b) other assets 14.c) Profit and loss a/c 15.a) 95% 16. c) schedule 8 investment 17. A) profit 18. a)Life insurance 19. b) claim 20. c. Benefits paid

UNIT –V 1. Disclosure of accounting policies is dealt in ---------- a) AS_ 2 b) AS- 1 c) AS- 5 d) AS- 19 2. Inventories should be valued at -------------- a) Cost b) Net realizable value c) cost or net realizable value whichever is lower d)none of the above 3. Deferred research and development expenditure is shown in the balance sheet under the head. a) Fixed assets b) miscellaneous expenditure c) Current assets d) investment 4. Assets which are acquired for own use and not for resale are known as --------- a) Fixed assets b) wasting assets c) current assets d) fictitious assets 5. If the amount of purchase consideration is lower than the value of the net assets acquires the difference should be treated as -------- a) Goodwill b) capital reserve c) Revenue reserve d) none of these 6. The revenue from sales to external customers as reported in the profit and loss account is known as ---- a) Enterprise revenue b) segment revenue c) segment assets d) revenue reserve 7. A lease that transfer substantially all the risks and rewards incident to ownership of an assets is called a) Operating lease b)non-cancellable lease c)finance lease d) none of the above 8. Amortization of an intangible assets means a) Purchasing assets b)selling assets c)recording the assets in books d) writing off over estimates 9.------------- are inflows and outflows of cash and cash equivalents a) Cash flows b) fund flows c)goodwill d) capital reserve 10.----------- is original and planned investigation undertaken with the hope of gaining new scientific or technical knowledge a) goodwill b) capital c) research d) assets 11. -------------- company means the company which is amalgamated into another company a) transferor b) transferee c) borrowing d) creditors 12. A-------------- is an assets that necessarily tales a substantial period of time to get ready for its intended use or sale a) Current assets b) qualified assets c) current liabilities d) fixed assts 13. ------------ of a leased assets is the estimated gait value of the assets at the end of the lease term a) real value b0 current value c) residual value d) none of these 14. Consolidated financial statement are usually prepared by a parent company merging

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the accounting data of itself and its------------ a) subsidiaries b) profits c) loss d) revenue 15.Cash flow statements are discussed under which accounting standards? (a) AS-8 (b) AS-4 (c) AS-5 (d) AS-3 (Revised) 16. Extraordinary items are dealt in under which accounting standard? (a) AS-5 (b) AS-2 (c) AS-1 (d) AS-10 17. Under CPP method, assets are presented at--------

(a) Historical costs adjusted for general price level changes (b) Replacement costs (c) Current costs (d)

Net realisable value

18.Backlog depreciation is debited to-------

(a)Current cost reseve A/c (b) HC P&LA/c (c) CC P&LA/c (d) Asset A/c

19. Inflation accounting is also known as----------

(a) Accounting for price level changes (b) Decision accounting (c) Standard accounting (d) Historical

accounting

20. In the historical accounting system cost represent-------

(a) Replacement cost (b) Current costs (c) Imputed costs (d) Original cost

SECTION- B

21. Write the meaning of accounting standard/ and what are accounting standard

22. What are the objectives of accounting standard?

23. Enumerate the reason for which accounting standards are needed

23. List out the advantage of accounting standards

25. What is direct method of preparing cash flow statement a per AS-4?

26. .How is estimated useful life of a depreciable assets ascertained?

27. Explain the meaning and need for Inflation accounting?

28. State the objectives of Inflation accounting?

29. What is Back Log depreciation?

30. Explain the meaning of Cost of sales Adjustment (COSA)?

SECTION –C

31. define accounting standard and explain their meaning?

32. what are accounting standard? And explain their objectives?

33. What is the need for accounting standard/ discuss the reasons

34. Explain the significance and advantage of accounting standard?

35. List out the international accounting standard?

36. What are the limitations of Historical accounts? How are they overcome with the help of inflation

accounting?

37. What are merits and limitation of accounting for price level changes?

38. Describe different methods of inflation accounting

39.A truck dealet acquired 6 truck on 1.1.97 at Rs.200000 each. His capital on that date was Rs.1200000.

During the year he sold 4 truck at an average price of Rs.300000. The replacement dealer price of the

truck on 31.12.97 was Rs.240000. General Price level went up by 10% during the year.

You are required to show (i) Comparative income statement under HCA, CCP and CCA methods, clearly

showing the realized and unrealized holding gains.

(ii) The balance sheet under all the three methods

40. Ascertain net monetary results or general price level gains or loss from the following information

1.1.98 31.12.98

Cash and bank balance 60000 88000

Accounts receivable 80000 100000

Accounts payable 100000 124000

General retails price index number 100 125

Average index number for the year 120 ---

Ans: 1. b) AS- 1 2. c) cost or net realizable value whichever is lower 3.b) Miscellaneous expenditure

4.a) fixed assets 5. b) capital reserve 6. a) Enterprise revenue 7 c)finance lease 8. d) writing off over

estimates 9. a) cash flows 10. c) research 11 A) transferor 12. b) qualified assets 13. c) residual

value 14. a) subsidiaries 15 d. AS-3 (Revised), 16. a .AS-5 17. a. Historical costs adjusted for general

price level changes 18.a. Current cost reserve A/c 19. a. Accounting for price level changes 20. d.

Original cost

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KONGUNADU ARTS AND SCIENCE COLLEGE (AUTONOMOUS),

COIMBATORE – 29.

DEPARTMENT OF COMMERCE WITH PROFESSIONAL ACCOUNTING

SEMESTER II

18PCM206 Security Analysis and Portfolio Management

PREPARED BY

Dr. M. Usha Rani

2018

18PCM206 Security Analysis and Portfolio Management

UNIT I

1. Investment is the

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a) Net additions made to the nation’s capital stocks b) Person’s commitment to buy a flat or a

house c) Employment of funds on assets to earn returns d) Employment of funds on goods

and services that are used in production process

2. Speculator is a person:

a) who evaluates the performance of the company b) who uses his own funds only c) who is

willing to take high risk for high return d) who considers here says and market behaviour

3. To frame the investment policy the investor should have:

a) knowledge about the company and brokers b) Investible funds c) knowledge about the

investment alternative alternatives d) knowledge about the markets with funds

4. Financial intermediaries

a) do not invest in new long-term securities b) include insurance companies and pension

funds c) include the national and regional stock exchanges d) are usually underwriting

syndicates

5. The investors by investing in the mutual fund get:

a) Professional management b) Return potential c) Diversification d) All of the above

6. Investment made on a house property is a

a) financial investment b) Economic investment c) Non negotiable financial investment

d) Non-financial investment

7. Investment means

a) Investing of money b) lending of loans c) borrowing funds d) None of the above

8. It relates to the reaction of specific stocks (or portfolios) to changes in the general market.

a) Systematic risk b) Unsystematic risk c) Returns d) All the above

9. Which of the following is not a financial investment?

a) Purchase of shares b) Purchase of bonds c) purchase of car d) purchase of debentures

10. Which of the following is a tax saving investment?

a) Fixed deposit b) Shares c) NSC d) PPF

11. Investment are concerned with risk and

a) Profit b) Salary c) returns d) Interest

12. This type of risk is avoidable through proper diversification

a) Portfolio risk b) Systematic risk c) Unsystematic risk d) Total risk

13. Interest rate risk is a type of :

a) Credit risk b) Market risk c) Operational risk d) All of the above

14. Financial risk is defined as:

a) Uncertainties resulting in adverse variation of profitability or outright losses b)

Uncertainties that result in outright losses c) Uncertainties in cash flow d) Variations in net

cash flows

15. A bank suffers loss due to adverse market movement of a security. The security was however

held beyond the defeasance period. What is the type of risk that the bank has suffered?

a) Market risk b) operational risk c) market liquidation risk d) Credit risk

16. Which of the following is not a type of credit risk?

a) Default risk b) Credit spread risk c) Intrinsic risk d) Basis risk

17. The risk that arises due to change in the purchasing power is called

a) Financial risk b) Interest rate risk c) Market risk d) Inflation risk

18. The unsystematic risk is explained by

a) Variance of the index b) Unexplained variance of the index c) Explained variance of the

index d) None of these

19. Systematic risk factor(s) involved in investing in bonds

a) Purchase-power risk b)Yield risk c) both (a) and (b) above d) Interest rate risk

20. OTCEI was incorporated in the year :

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a) 1990 b) 1995 c) 1999 d) 2000

SECTION B

1. Define investment management.

2. Explain the concept of investment.

3. What are the features of investment?

4. Distinguish between investment and gambling.

5. Differentiate between investment and speculation.

6. What are characteristics of investment?

7. What are different alternative forms of investment?

8. Define risk. What are its types?

9. Explain the concept of risk.

10. Explain the concept of returns.

SECTION C

1. Explain the concept of investment and the factors to be considered in investment decision.

2. Explain the importance of investment.

3. Discuss the features of investment.

4. Differentiate between (i) Investment and speculation and (ii) Investment and gambling.

5. Explain the objectives of investment.

6. Explain the various forms of investment.

7. Discuss about the alternative forms of investment.

8. Explain the types of risk.

9. Explain the concept of risk with its causes.

10. Explain the concept of returns with its kinds.

UNIT I – Answer Key

1. 2. 3. 4. 5. 6. 7. 8. 9. 10 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

c d d b d d a a c d c C b a b b d b c a

UNIT II

SECTION A

1. Which of the following is associated with long-term funds?

a) Money Market b) Capital Market c) Stock Market d) Chamber of commerce

2. Which of the following markets is associated with short-term funds?

a) Money Market b) Capital Market c) Stock Market d) Chamber of commerce

3. Primary and secondary markets

a) compete with each other b) Complement each other c) function independently d) control

each other

4. Which of the following are examples of a primary market transaction?

a) A company issues new common stock b) A company issues new bonds c) An investor asks

his broker to purchase 1,000 shares of Microsoft common stock d) statements (a) and (b) are

correct

5. In secondary market, the delivery and payment of hand delivery contract is completed

a) On the same day of the date of contract b) on the next day of the date of contract c) Within

four days from the day of contract d) Within 14 days from the day of contract

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6. The major difference between the primary and secondary stock market is that a) Outstanding

securities of a company are traded in the primary rather that in the secondary market b) Creation

of securities take place in the primary market rather than in the secondary market c) the primary

market is regulated by SEBI whereas the secondary market is regulated by stock market d) the

primary market is one that imparts liquidity and marketability to long-term securities and not the

secondary market

7. If the company offers additional shares to the existing shares, it is called a) bonus shares b) Rights

issue c) both of these d) None of these

8. Debentures are a) non-transferable b) Transferable c) assets of the company d) None of the

these

9. Stock exchange a) helps in the fixation of stock price b) Ensures safe and fair dealing c) induces

good performance by the company d) All the above

10. In BSE, shares are divided into a) two categories b) three categories c) four categories d) five

categories

11. The primary capital market a) imparts liquidity and marketability to long-term financial

instruments b) helps companies to raise funds to finance their projects c) provides an auction

market for long-term securities d) operates through the medium of stock exchanges

12. The major categories of investors in primary market of government securities include a) Reserve

Bank of India b) Financial institutions c) Foreign financial institutions d) All the above

13. SEBI stands for:

a) Securities and Exchange Bank of India b) Securities and Exchange Board for Investment c)

Securities and Exchange Board of India d) None of These

14. SEBI was established in the year: a) 1992 b) 1988 c) 1991 d) 2000

15. SEBI has to be responsive to the needs of which of the following:

a) The Investors b) The Issuers of Securities c) The Market Intermediaries d) All of the Above

16. Which of the following functions rolled into one body by SEBI?

a) Quasi Legislative b) Quasi Judicial c) Quasi Executive d) All of the Above

17. Headquarter of the SEBI:

a) Delhi b) Bengaluru c) Chennai d) Mumbai

18. Stock market is a place where:

a) Stock buyers and sellers meet b) Investors and companies meet c) traders and investors meet d)

employers and employees meet

19. The India Stock Market is regulated by:

a) Reserve Bank of India b) Government of India c) Securities and Exchange Board of India d)

Investors

20. The term bullish indicates:

a) Positive price action b) Negative Price Action c) Neutral price action d) none of the above

SECTION B

1. What is primary market?

2. What are the differences between primary and secondary market?

3. What is NIM?

4. What do you mean by secondary market?

5. What are the features of NIM?

6. What are the limitations of NIM?

7. What are features of secondary market?

8. Write a note on listing of securities.

9. List out the types of brokers.

10. Briefly explain the operations of stock market.

SECTION C

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1. Define new issue market. Explain its features.

2. Discuss the functions of NIM.

3. Discuss about major intermediaries in NIM.

4. Explain the limitations of NIM.

5. Explain the methods of floating NIM.

6. Explain the functions of secondary market.

7. Explain about the kinds of brokers.

8. Discuss the limitations of secondary market.

9. Differentiate between primary and secondary market.

10. Discuss about the regulations of stock exchanges.

UNIT II – Answer Key

1. 2. 3. 4. 5. 6. 7. 8. 9. 10 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

b a b d d a b b d b b d a b d d d a c a

UNIT III

SECTION A

1. Gross domestic product is a logical factor to analyse the economy in picking up a stock

because it indicates a) Inflation or deflation b) the market value of assets c) the status of the

economy d) the condition of the stock market

2. The fall in the interest rate is conducive to the stock market because a) money may flow from

the bond market to stock market b) corporate can borrow at easy terms c) brokers can do

businesses at borrowed funds d) both (a) and (b)

3. One of the following factors leads the activity of stock market a) money supply b) per capita

income c) unemployment rate d) manufacturing and trade

4. The rise of dividend tax from 10% to 20% in a broader sense affects a) the investor b) the

corporate c) the stock market d) the financial institution

5. A growth industry is defined as a) an industry with 15% rate of growth per annum b) an

industry where demand for its product is growing c) an industry with high capital investment

d) an industry with the average growth higher than the growth of economy

6. Mr.A is a daring portfolio manager. He wants to increase the return of his portfolio. He should

choose stock from a) defensive industry b) Industry at a growth stage c) Industry in the

maturity period d) industry at more export potential

7. The market value of the scrip is determined by a) the dividend declared by the company b)

the present status of the stock market c) the number of floating shares d) the interaction of

demand and supply

8. In the stock market, psychology a) investors forget the past b) history repeats itself c) more

faith in future prediction d) both (a) and (b)

9. Dow theory was developed to explain a) New York stock market movement b) the Dow

Jones Industrial average c) Security market price movement d) the buy and sell strategy

10. The share prices a) move either in declining or increasing trend b) may remain flat for a

period of time c) the movement of the share prices form a straight line d) the increasing or

decreasing move may be Zigzag

11. Technical indicators help a) to find out the present state of the stock market b) to estimate the

growth of the stock market c) to indicate the economic activity d) to allow the direction of

the overall market

12. In a bull market, a bearish signal is given when a) advances decline line slopes down b) BSE,

SENSEX is falling c) Fall in the trade volumes d) A/D line slopes downward while BSE,

SENSEX is rising

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13. Oscillators show the share price movement a) over a reference period b) below a reference

point c) through a reference point d) both (b) and (c)

14. The Chartist believes that charts a) spot the current trend for buying and selling b) indicates

the future action to be taken c) shows the past historic movement d) all of the above

15. The goal of fundamental analysis is to find securities a) whose intrinsic values exceeds

market price b) with a positive present value of growth opportunities c) with high market

capitalization rates d) all of the above

16. Fundamental analysis is good for a) long-term investment c) short-term investment c)

systematic investment d) unsystematic investment

17. Dow theory is originated by a) Charles Dow b) Harry Markowitz b) William Sharpe d)

Benjamin Graham

18. Relative strength analysis is proposed by a) Robert A Levy b) Harry Markowitz b) William

Sharpe d) Benjamin Graham

19. To forecast future prices, the fundamental analyst uses data of: a) micro-environment b)

macro-environment c) political environment d) natural environment

20. The process of looking at a business at the basic or fundamental financial level.

a) Technical analysis b) fundamental analysis c) Political analysis d) economic

analysis

SECTION B

1. Explain the concept of fundamental analysis.

2. What do you mean by economic forecasting?

3. What are the objectives of security analysis?

4. What are the types of security analysis?

5. What are the objectives of fundamental analysis?

6. Explain the strengths of fundamental analysis.

7. Explain the types of economic forecasting.

8. What are the major components of company analysis?

9. What are the problems of industry analysis?

10. What are the influencing factors of industry analysis?

SECTION C

1. Explain the concept of fundamental analysis with its strength and weaknesses.

2. What is company analysis? What are the company forecasting methods?

3. Discuss the framework of fundamental analysis.

4. Explain industry analysis.

5. Explain the role of SWOT analysis.

6. Discuss the factors influencing industry analysis.

7. Discuss the factors affecting economic forecasting.

8. Explain the characteristics of Industry analysis.

9. Discuss the problems of industry analysis.

10. Explain the need for industry analysis.

UNIT III – Answer Key

1. 2. 3. 4. 5. 6. 7. 8. 9. 10 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

c d a c d b d b b d d d c d a a a a a b

UNIT IV

SECTION A

1. Grandfather of technical analysis

a) Harry Markowitz b) William Sharpe c) Charles Dow d) Benjamin Graham

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2. The Elliot Wave Theory

a) is a recent variation of the Dow theory b) suggests that stock prices can be described by a set

of wave patterns c) is similar to the Kondratieff Wave theory d) All of the above

3. The efficient market hypothesis:

a) implies that security prices properly reflect information available to investors b) has little

empirical validity c) implies that active traders will find it difficult to put perform a buy-and-

hold strategy d) both (a) and (c) above

4. Tests of market efficiency have focuses on: a) the mean-variance efficiency of the selected market

proxy b) strategies that would have provided superior risk-adjusted return c) Results of actual

investment of professional managers d) both (a) and (b)

5. Which form of market efficiency states that current prices fully reflect the historical sequence of

prices? a) Weak b) Semi-strong c) Strong d) None of these

6. Which form of market efficiency states that current prices fully reflect the publicly available

information? a) Weak b) Semi-strong c) Strong d) None of these

7. Which form of market efficiency states that current prices fully reflect all information, both

private and public? a) weak b) semi-strong c) strong d) none of these

8. Markets would be inefficient if rational investors’

a) existed b) did exist c) like to take more d) did not like to take risk more

9. Markets would be inefficient if rational investors’ existed and actions if arbitragers were

a) limited b) unlimited c) risk more d) no risk

10. The semi-strong form of the Efficient Market Hypothesis requires that:

a) current stock prices reflect all security market information b) stock prices reflect all

information from public and private sources c) stock prices reflect all public information, as well

as security market information d) stock market reflect all price and volume histories and other

phenomena observable from the activities of the market on which the security trades

11. Which of the following most relevant to random walk theory?

a) Stock price changes are random but predictable b) stock prices respond slowly to both new

and old information c) Future price changes are uncorrelated with past price changes d) past

information is useful in predicting future prices

12. Random walk theory occurs when:

a) Stock price changes are random but predictable b) stock prices respond slowly to both new

and old information c) Future price changes are uncorrelated with past price changes d) past

information is useful in predicting future prices

13. Random walk model is also known as

a) Weak form EMH b) Semi-strong form EMH c) Strong form EMH d) None of these

14. Weak form EMH is also known as

a) Random Walk model b) Sharpe model c) Markowitz theory modem d) MM Model

15. Which of the following statement defines the efficient market?

a) Information is fully reflected on the stock prices b) the stock exchange is fully automated c)

the market is monitored by the regulation authorities d) free entry and exit of the investors

16. Efficient market was defined:

a) Information is fully reflected on the stock prices b) the stock exchange is fully automated c)

the market is monitored by the regulation authorities d) free entry and exit of the investors

17. The term ‘efficient market’ was first defined by: a) Fama b) Sharpe c) Dow Jones d)

Markowitz

18. The term ‘efficient market’ was first defined in the year: a) 1965 b) 1975 c) 1985 d) 1995

19. Which of the following defines the efficient market?

a) Free entry and exit of the investors b) the market that is closely watched by the regulatory

agencies c) stock prices fully reflecting all the market information d) when you find more risk-

taker

20. The Dow Theory was developed by W.P.Hamilton and Robert Rhea from the editorial written by

Dow during:

a) 1900 – 1902 b) 1905 – 1907 c) 1910 – 1912 d) 1915 – 1917

SECTION B

1. Write a note on technical analysis.

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2. What are the factors to be considered in technical analysis?

3. What are the assumptions of technical analysis?

4. Discuss about the criticisms of technical analysis.

5. What are the views of analyst in relation to technical analysis?

6. Explain efficient market theory.

7. What are the assumptions of efficient market hypothesis?

8. Write a note on Random Walk theory.

9. What are the reasons according to Random Walk theory about price fluctuation in stock

market?

10. What are the limitations of Random Walk theory?

SECTION C

1. Discuss the factors and assumptions of technical analysis.

2. How technical analysis is different from fundamental analysis in investment management.

3. Explain the assumptions of efficient market.

4. Discuss the implications of Random Walk theory.

5. Explain the forms of Efficient Market Hypothesis.

6. Discuss the reasons for price fluctuations and limitations of Random Walk theory.

7. Explain weak form of efficient market.

8. Explain semi-strong form of efficient market.

9. Explain strong form of efficient market.

10. Distinguish between Random Walk, Technical and Fundamental analysis.

UNIT IV – Answer Key

1. 2. 3. 4. 5. 6. 7. 8. 9. 10 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

c d d d a b c a a c C c a a a a a a C a

UNIT V

SECTION A

1. The concept of beta is most closely associated with

a) Variance analysis b) Unsystematic risk c) correlation coefficient d) Capital Asset Pricing

Model

2. Which of the following would reduce the applicability of Capital Asset Pricing Model?

a) Investors having different time horizons for investments b) the presence of high transaction

costs in the market c) the different expectations of the investors regarding the risk and return

associated with various securities d) All of the above

3. Diversification reduces

a) Interest rate risk b) market risk c) unique risk d) Inflation risk

4. Simple diversification means

a) purchase of more than 15 stocks b) purchase of treasury bills c) purchase of less than 15

stocks at random d) purchase of large varieties of assets

5. Markowitz approach has its roots in

a) good portfolio management b) proper entry and exit in the market c) Estimation of stock

return d) analyzing the risk and return related to stocks

6. Risk lover’s utility curves have

a) positive slope b) negative slope c) convex to the origin d) negative slope and convex to the

origin

7. A single-index model

a) greatly reduces the number of required calculations, relative to those required by the Markowitz

model b) enhances the understanding of systematic and unsystematic risk c) greatly increases

the number of required calculations, relative to those required by the Markowitz model d) both (a)

and (b)

8. A single-index model uses ___ as a proxy for the systematic risk factor.

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a) A market index, such as the S&P 500 b) the current account deficit c) the growth rate in GNP

d) the unemployment rate

9. One “cost” of the single-index model is that it:

a) is virtually impossible to apply b) prohibits specialization of efforts within the security analysis

and industry c) requires forecasts of the money supply d) allows for only two kinds of risk –

macro risk and micro risk

10. Markowitz theory is called __________ Model.

a) Full co-variance b) correlation c) cause and effect d) index

11. Negative correlation between two securities helps in finding-out

a) reducing risk b) increasing risk c) zero risk d) no risk

12. Sharpe’s model is known as

a) Index model b) Beta model c) MM model d) Cause and effect model

13. The corner portfolio provides an analysis of

a) risk b) return c) stock market d) risk and return

14. The corner portfolio provides an analysis of _________ and return.


15. The corner portfolio provides an analysis of risk and return.


16. This theory relates to diversification of investment.

a) Markowitz theory b) Bea theory c) Dow theory d) Efficient market theory

17. Diversification will not help reduce a portfolio’s

a) systematic risk b) specific risk c) political risk d) overall risk

18. The object of portfolio is to reduce ____ by diversification.

a) Risk b) returns c) uncertainty d) percentage

19. The risks which can be eliminated or minimized through diversification is termed as:

a) Financial risk b) Operating risk c) Diversifiable risk d) non-diversifiable risk

20. Beta is a measure of

a) non-diversifiable risk b) diversifiable risk c) political risk d) natural risk

SECTION B

1. What is portfolio analysis?

2. Explain portfolio risk and return.

3. Explain expected return on portfolio.

4. What are the types of portfolio theory?

5. What are the assumptions of Markowitz Model?

6. What about the assumptions of Sharpe Model?

7. Write a note on Beta concept on risk.

8. What is Risk-free return and Market Risk Premium?

9. Explain in brief about beta and market portfolio.

10. Explain the use of Single Index Model.

SECTION C

1. Explain the concept of Portfolio risk and return.

2. Explain the various types of portfolio theory.

3. Explain Markowitz Portfolio theory.

4. Discuss Markowitz theory of portfolio in detail.

5. Explain Sharpe Index portfolio theory in detail.

6. Explain limitations of Capital Assets Pricing Model.

7. Explain the assumptions of Capital assets of pricing model.

8. Explain the terminologies of CAPM.

9. Explain Efficient Frontier theory.

10. Explain any five assumptions and limitations of CAPM.

UNIT V – Answer Key

1. 2. 3. 4. 5. 6. 7. 8. 9. 10 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

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d d c d c d a d a a a a d a b a a a c a


Class: I M.COM SEMESTER- II

Sub. Name: Management of Small Enterprises Sub. Code: 18PCM207


UNIT-I

SECTION-A

1. The term “entrepreneurs” was applied to business initially by the French economist in the 18th century

--------------

a. Cantillon b. Jan Tinbergen c. J.S.Mill d. None of above

2. The need of entrepreneurship is-----------

a. For new innovation b. To fill gap in growth c. For healthy competition d .All of

above

3. ----------- is the process of entrepreneur developing new products that over time make current products

obsolete

a. New business model b. Anatomization c. Creative Destruction d. None of above

4. Basic problems of women entrepreneurs in India:

a. Lack of education skill b. Male dominating society c. Absence of listen bearing capacity d.

All of the above

5. Which one are not the barriers of Entrepreneurship:

a. Lack of technical skills b. Political instability c. Technical knowledge d. Time pressure and

distractions

6. From the following which ones is the quality of Entrepreneur:

a. Initiator b. Information Seeker c. Motivator d. All of above

7.An --------- must should Innovative, Hard Working, very alert for new opportunities etc.

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a. Entrepreneur b. Wholesale trade c. Retail trade d. Exporter

8.An --------- neither raises the capital nor guarantees any returns to the supplies of capital.

a. Ecopreneur b. Technopreneur c. Intrapreneur d. Social Entrepreneur

9. An entrepreneurs who personally surprises the work to ensure that the work is accomplished according

to the standard set forth is----------------.

a. Solving problems b. Taking initiatives c. Taking responsibility d. Efficient Monitoring

10.Heavily involved in family problems is one of the problem of ------------------

a. Women Entrepreneur b. Technopreneur c. Intrapreneur d .Social Entrepreneur

11.Small scale industries (SSIs) also known as MSMEs are defined & categorized by the Micro, Small

& Medium Enterprises Development Act

a.2006 b. 2007 c. 2008 d. 2009

12.Investment in equipments service sector in Micro scale industry should be

a. Up to 10 Lacs b. 10Lacs – 2 Crores c. 2 Crores – 5 Crores d. 5 crores – 7 crores

13. Investment in equipments service sector in small scale industry should be

a. Up to 5 Lacs b. 10Lacs – 2 Crores c. 2 Crores – 5 Crores d. 5 crores – 7 crores 14. Investment

in equipments service sector in Medium scale industry should be

a. Up to 10 Lacs b. 10Lacs – 2 Crores c. 2 Crores – 5 Crores d. 5 crores – 10 crores

15. Entrepreneurs are best as------------------

a. Managers b. Venture capitalists c. Planners d. Doers

16. -------------- is one method of stimulating, and then capitalizing on, individuals in an organization

who think that something can be done differently and better.

a. strategic orientation b. Capitalisation c. Intrapreneurship d. Management

17.------------ entrepreneurs are characterised by very great caution and scepticism in experimenting

any change in their enterprises

a. innovative b. Imitative c. Fabian d. Drone

18. Managers gets --------- as a reward for the services rendered by him in the enterprises

a. profits b. Salary c. Wages d. Bonus

19. ------partners are those entrepreneurs who start on an enterprise as a joint venture.

a. sleeping b. Capital c. Active d. Buyers

20. The term Entrepreneurs came from---------------

a. Latin b.French c. English d. Britsh

SECTION - B

21. Give the main characteristics of an entrepreneur

22. Explain the concept of entrepreneurs?

23. Point out qualities of successful Entrepreneurs

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24. Explain the main functions performed by the entrepreneurs

25. What is meant by intrapreneur? How will you distinguish intrapreneur from entrepreneurs?

26. Distinguish between entrepreneurs and entrepreneurship

27. What are the functions performed by the women entrepreneurs?

28. What are the concepts of entrepreneurship?

29. What are the basic elements involved in the entrepreneurship?

30. Define Micro, Small and Medium Enterprises

SECTION-C

31. Explain the concept of entrepreneur. How does an entrepreneur differ from a manager?

32. Describe the types of entrepreneurs

33. Define an entrepreneur. What area the distinguishing characteristics of a successful entrepreneurs

34. Give an account of the evolution and growth of industrial entrepreneurship in India

35. Write an essay on the growth of entrepreneurship in India

36. What are the problems are faced by women entrepreneurs on establishing and developing their

enterprises

37. What are the recent trends in the development of women entrepreneurship in India?

38. Discuss the measures taken by the govt of India to promote women entrepreneurship in India

39. What are the roles of entrepreneurship in economic development?

40. Developing countries need imitative rather than innovative entrepreneurs- command

ANS: 1.a. Cantillon 2 .b. To fill gap in growth 3.c. Creative Destruction 4 .d. All of the above 5.c.

Technical knowledge 6.d. All of above 7.a. Entrepreneur 8.c. Intrapreneur 9.. Efficient Monitoring

10.a. Women Entrepreneur 11.a.2006 12.a. Up to 10 Lacs 13.b. 10Lacs – 2 Crores 14.c. 2 Crores –

5 Crores 15.d. Doers 16.c. Intrapreneurship 17.c. Fabian 18.b.Salary 19.c. Active 20.b.French

UNIT –II

SECTION –A

1. The SSI Board at its first meeting held on January 5th and 6th of --------------

a. 1955 b. 1956 c. 1957 d. 1958

2. An ---------- unit is one which sells not less than 50% of its manufactures to one or more industrial

unit.

a. small b. Ancillary c. Large d. Tiny

3. ---------------- industries covering light, repairs, shops necessary to maintain mechanical equipments.

a. manufacturing b. Feeder c. Serving d. Ancillary

4. it’s an institution to set up a network of technical consultancy organizations in the country.

a. TCO b. ITC c. EGB d. None of above

5. Name the institution which was set up in 1982 to promote integrated rural development

a. NSIC b. NABARD c. SIDBI d. NCEUS

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6. Name the institution which is set up as an apex bank to provide direct or indirect financial assistance

under different scheme.

a. SIDBI b. NSIC c. RSBDC d. None of the above

7.95 % is the share of Small scale industries, in total number of industrial units in the country.

a. 95 % b. 100% c. 50 % d.25%

8. India is the largest manufactures of jute in the world.

a. Japan b. India c. China d. Sri Lanka

9. Indian Institute of Entrepreneurship (IIE) is located at Guwahati

a. Guwahati b. Hyderabad c. New Delhi d. Calcutta

10. Name the institution which is set up as an apex bank to provide direct/indirect financial assistance

under different schemes and also coordinates the functions of other institutions in similar activities

a. SIDBI b. NSIC c. RSBDC d.SIDCO

11. Name the institution which was set up in 1982 to promote integrated rural development.

a. NSIC b. NABARD c. SIDBI d. NCEUS

12. Small Industries Service Institutes have been established in each state in ----------as agencies of

SIDO.

a.1956 b.1958 c. 1960 d. 1962

13. The district Industries centres programme was started on May 8, ----------

a. 1970 b. 1972 c. 1974 d. 1978

14. Management of the DIC’s is done by the-------------

a. central govt b. State government c. Private d. General

15. ---------- type of industrial concern provides accommodation to a wide variety and range of industrial

concern

a. General b. special c. govt d. private

16. ---------- types of industrial estates are constructed mainly for very small firms engaged in repair

work

a. Ancillary b. Functional c. Workshop bay d. Private

17. National Institute of small industrial extension training was set up in 1956 in ---------

a. Bombay b. Chennai c. New Delhi d. Hyderabad

18. The ----------- plan especially stressed on the extension of the coverage of small scale industries

a. First plan b. Second plan c. Third plan c. Fourth plan

19. ------------argument impresses the necessity of regional dispersal of industries to promote balanced

regional development in the country.

a. employment b. Equality c. latent resources d. Decentralisation

20. The government of India constituted a Board namely -------- in 1954 to advice on development of

small scale industries in the country.

a. SSIB B. SSIDC C.SISI D. DIC

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SECTION –B

21. Define a small scale industry. What are its chief characteristics?

22. What is the rationale behind the development of small – scale industries in India?

23. List the objectives of small scale industries

24. What is District Industries Centres? Explain the functions of the DICs

25. Define industrial estates and what is the need for industrial estates?

26. Write short note on the following i. SIDCO ii. DICs

27. Give an account of functions performed by Technical Consultancy organisation

28. Discuss the need for policy support to small scale enterprises

29. What are the salient features of New Small Enterprise Policy 1991?

30. What are the functions of District Industries centre?

SECTION –C

31. Describe the role which State small industries Development Corporations play in developing small

enterprises in the country

32. Appreciate the role of small scale industries in the development of national economy

33. Describe the main problems faced by small scale industries in India

34. How do small scale enterprises contribute to the national cake? Discuss

35. Discuss the need for institutional support to small scale industries

36. Discuss the support provided by the National Small Industries Development Corporation Ltd to

small scale industries in the country

37. What are the functions performed by the small industries development corporation to boost the

growth of small scale industries in the country?

38. How is the government’s protective policy beneficial for the development of small scale industries?

39. Give an appraisal of New Small Enterprise Policy 1991

40. What are the incentives offered by the State Government for the promotion and growth of small

business of India?

ANS: 1.a. 1955 2.b. Ancillary 3.c. Serving 4.a. TCO 5.b. NABARD 6.a. SIDBI 7.b. a. 95

% 8. b. India 9.a. Guwahati 10. a. SIDBI 11.b. NABARD 12.a.1956 13.d. 1978 14.b.

State government 15.a. General 16.c. Workshop bay 17.d. Hyderabad 18.c. Third plan 19. d.

Decentralisation 20. a. SSIB

UNIT –III

SECTION – A

1. The term ----- finance refers to credit facilities and techniques of payments at the pre and post

shipment stages

a. export finance b. Import finance c.pre shipment d. post shipment

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2------ Signifies a situation when an enterprises posses excess of assets in relation to its requirements.

a. fixed capital b. Current capital c. Under capitalisation d. Over capitalisation

3. The decision taken by the entrepreneur well in advance regarding the future financial aspects of

enterprise is called ----------

a. Financial planning b. Import finance c. Export finance d. Finance decision

4. Money require for day today operations of business is called------------

a. Long term capital b.Short term capital c. Fixed capital d. current capital

5. The money repayment is arranged for more than five years in future is called

a.Long term capital b.Short term capital c. Fixed capital d.current capital

6. Funds are raised from within the enterprise itself is called --------

a. Internal source b. External source c. Long term d. short term

7. The composition of equity and debt in overall capital of an enterprise is called ---------

a. Owner ship capital b. Borrowed capital c, capital structure d. Fixed capital

8. Total amount of capital employed in an enterprise is called -----------------

a. over capitalisation b. Capitalisation c. Under capitalisation d. Current capital

9. --------- finance refers to financial assistance provided to the exporters before actual shipment of goods

a. Export finance b. Post shipment c. pre shipment d. Package credit

10. The commercial bank introduced the credit guarantee scheme in the year ---------

a. 1955 b. 9156 c. 1958 d. 1960

11. The investment allowance was introduced in the year --------

a. 1975 b. 1976 c,. 1978 d. 1979

12. ------------------- allowance is granted to small scale industries under section 33- B of the Income tax

act 1961

a. Investment b. Rehabilitation c. Depreciation d. Tax holiday

13. --------- aim at coming closer to a generalised get off excise taxation of inputs

a. MODVAT b. Tax holiday c. Tax benefits d. Tax deductions

14. In the small scale industries deduction from the actual cost of plant and machinery is allowed subject

to a maximum of ----------------- lakhs

a. 10 b. 15 c.20 d. 25

15. the Industrial Credit and Investment Corporation of India Ltd was set up in the January---

a. 1995 b. 1996 c. 1997 d. 1998

16. ----------- Mainly to look after the special problems of sick nit and provide assistance for their

speedy recons ruction and rehabilitation

a. ICICI b. IRBI c. LIC d. IFCI

17. The first state financial corporation was set up in ------------ in 1953

a. Punjab b. Ludhiana c. Calcutta d. New Delhi

18. Funds raised from other than internal sources called---------------

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a. Internal sources b. External sources c. Fixed capital d.current capital

19. ------leverage can be defined as that mix of debt and equity which will maximise the market value

of the company.

a. optimum leverage b. Capital c. Loan d. Credit

20. ------------ capital is a form of financing especially designed for funding high technology

a. fixed b. Current c. Long term d. Venture

SECTION- B

21. Appreciate the need for finance in business enterprises. What are the various sources available to a

small enterprise?

22. Define capital structure. What factors do determine the optimum capital structure?

23. Distinguish between ownership capital and borrowed capital

24. What do you understand by term capitalisation?

25. What are the classifications of capitalisation?

26. What are the main functions of SIDBI?

27. Why was IRBI set up? What are its functions?

28. Discuss the special tax benefits available to small scale industries working in rural and backward

area

29. Write short notes on the Tax holiday and rehabilitation allowance

30. What are activities of state finance corporation?

SECTION –C

31. Discuss the various sources used for raising term loans for an enterprises

32. Discuss the various types of assistances the SIDBI provides to small enterprises

33. Appreciate the need for tax benefits to small scale industries

34. Explain the various tax benefits available to small scale industries in India

35. Explain the various steps involved in approaching an institution for project financial assistance

36. Why was EXIM bank set up? Discus the various types of assistance the bank provides to the

entrepreneurs engaged in export and import business in India

37. Write a notes on MODVAT and small scale industries: Amortisation of preliminary expenses:

Investment allowances

38. Write notes on the following a). IDBI b). EXIM BANK c). LIC d). Unit trust of India

39. How do the SFCs contribute to the development of small scale enterprise in the country?

40. Discuss the role of Industrial Development Bank of India in financing small enterprises in the

country

ANS: 1.a. export finance 2.d. Over capitalisation 3.a. Financial planning 4.d. current capital 5.a.Long

term capital 6. a. Internal source 7.c, capital structure 8.b. Capitalisation

c. pre shipment 9.d. 1960 10.b. 1976 11.b. Rehabilitation 12.a. MODVAT 13.c.20

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a. 1995 14.b. IRBI 15.a. Punjab 16.d. Venture 17.a. optimum leverage 18.b. External sources

19. a. optimum leverage 20. d. Venture

UNIT- IV

SECTION –A

1. ---------------- promotion is one of the top agenda items of the economic reforms in India

a. Export b. Import c. Trends d. Major

2. India has been the --------largest producer of a very wide variety of fruits and vegetables in the world

a. first b. Second c. Third d. Fourth

3. ------------ from small sector suffer from the bug bears of credit, infrastructure, technology etc.,

a. imports b. Exports c. Travel d. Purchasing

4. ---------is the first basic and the only complete document in an export transaction

a. Bill of lading b. Commercial invoice c. Letter of credit d. Airway bill

5. ----------- is a document which is issued by the shipping company

a. Bill of lading b. Commercial invoice c. Letter of credit d. Airway bill

6. ----------------- is an instrument or draft used for the payment in the export business

a. bill of exchange b. Commercial invoice c. Letter of credit d. Airway bill

7. --------------- provides the exporters with more security than open account or bills of exchange

a. Letter of credit b. Bill of exchange c. Airway bill d. Commercial document

8. -----------is required to filled in duplicate for all exports other than by post

a. PP form b. G.R form c. V.P form d. SOFTEX

9. Export to all countries by parcel post, except when made on cash on delivery basis should be declared

on -------- forms


10. the main document on the basis of which the customs permission for export is give is ----

a. Draw back shipping bill b. dutiable shipping bill c. shipping bill d. Free shipping bill

11.It is usually issued on the specified form by the consulate of the importing country situated in the

exporting countries is called --------

a. Certificate of origin b. GSP certificate c. Consular invoice d. Certified invoice

12. --------is made out on a specifies form prescribed by the customs authority of the importing country.

a. Certificate of origin b. Consular invoice c.Customs invoice d.Certified invoice

13. Once wagon have been allotted, goods are loaded for which railways will issue ---------

a. package list b. Letter of credit c. G.R form d. Railway receipt

14. After the goods are loaded on board the vessels the captain of the ship issue a receipt known as-----

-----

a. despatch receipt b. Shipping bill c. Mate’s receipt d. Package list

15. After obtaining the bill of lading from the shipping company the clearing and forwarding agents

despatches all the documents to ----------------

a. exporter b. Importer c. Ship captain d. Railway

16. At the end of all the process the exporter presents all the documents to ----------

a. exporter b. Importer c. Ship captain d. Bank

17. -------- is the self certified by the exports about the origin of the goods

a. customs invoice b. Certified invoice c. Export order d. Consular invoice

18. The person who makes and executes the bill of exchange is called ---------------

a. exporter b. Drawee c. Payee d.drawer

19. ----- provides the exporter with more security than open accounts or bill of exchange

a. Letter of credit b. Bill of exchange c. Airway bill d. Commercial document

20. It is required to prepared in triplicate for export of computer software in non- physical form


SECTION – B

21. Discuss the performance of exports from small scale sector in India

22. Bring out the problems of exports from small scale enterprises

23. What are the major commercial documents?

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24. Highlights the salient characteristics of bill of exchange and Bill of lading

25. Discuss the major documents needed by the importing country/

26. Mention the main export incentives available in India

27. Write the notes of letter of credit

28. What are the legal documents for export from India?

29. What are the three types of shipping bills?

30. What are the important export assistance documents?

SECTION- C

31. Discuss the performance and pattern of exports from small scale sector in India

32. Bring out the problems and potentials of exports from small scale enterprises

33. What measures will you suggest to promote exports from small scale sector?

34. What are the major constraints of small scale industries in exporting their products?

35. What is the need for documentation in international business?

36. Discuss the process involved in processing an export order

37. What are the types of documents needed in the export business? Explain

38. Discuss the procedure involved in getting customer clearance

39. Why is a clearing and forwarding agent is appointed by the exporter? What factions does he perform

on behalf of the exporter

40. Write a note on bill of exchange and letter of credit, bill of lading

ANS: 1.a. Export 2.b. Second 3.b. Exports 4.b. Commercial invoice 5.a. Bill of lading 6.a. bill

of exchange 7.a. Letter of credit 8.b. G.R form 9.a. PP form 10c. shipping bill 11.c. Consular

invoice 12.c. Customs invoice 13.d. Railway receipt 14.c. Mate’s receipt 15.a. exporter 16.d. Bank

17.d. SOFTEX 18.d.drawer 19.b. Bill of exchange 20.b. Certified invoice

UNIT- V

SECTION –A

1. ---------serve as competitive advantage and enables small enterprises to withstand the onslaughts of

competitive environment

a. quality b. Processing c. Enterprises d. Creativity

2. -------- strengthen the competitive strength of small enterprise to confirm to the changing requirements

of business

a.ISO b.TQM c. ISI d. Quality

3.the long term success of any business they depends on ---------

a. Processing b. Purchasing power c. Price of the product d. Customer satisfaction

4.-------- customers are those who are the ultimate purchaser or end users of product or services

a. internal b. External c.. ultimate d. Individuals

5.----------- can be defined as a series of inter dependent tasks that produce results

a. improvement b. Purchasing c. Selling d. Processes

6. A group of individuals who work together on one or more common processes is called-------

a.extenal work b. Department work c. Team work d. Others

7. The process of doing business electronically or over internet is called --------

a. e-commerce b. WTO c. Website d. E- marketing

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8. the origin of e-commerce in India coincides with the introduction of internet connectivity in the

country in --------

a. 1980 b. 1984 c. 1986 d. 1989

9. ------ the apex body and chamber of commerce of India’s software drive IT industry

a. NASSCOM b. HCL c. IT industry d.EDI

10. ------- village was visited by the former US president ,Bill Clinton also in March 2000

a. Warana b. Nayala c. Paans c. Mumbai

11.Sankhya Vahini a massive projects commissioned by the ---------------

a. Govt of India b. Govt of Mascow c. Governenet of China d. Government of Tamil nadu

12.---------- . com is crated with an objecticve to provide small enterprise direct acess to the corporate

sector as well as national market.

a. India. Com b. Indianmarket agricultural d. Agro

13. The India Information Technology Bill passed by the Indian Parliament on May 17,-------

a. 2000 b. 2001 c. 2003 c. 2005

14.www was introduced in India in the year --------

a.1992 b. 1994 c. 1996 d. 1998

15.---------- is a pioneer in e- plus technology

a.India b. US c.Singapore d. Sri Lanka

16.-------- commerce solutions allow customer to rduce the cost of sales and open new markets

a. Internet b. CRM c. B2C d. www

17. The India entered the age of e-commerce the day the govt de regulated the internet Service Provider

policy in November--------

a. 1990 b. 1994 c. 1996 d. 1998

18.-------- was the firast business to business application

a. www b. B2B c. EDI d. VSNL

19. -------- time is a time required to deliver a product or service to customer

a. cycle b. Process c. Purchase d. selling

20.--------- means reducing the complexity of a process

a. improvement b. Simplification c. Reducing d. declining

SECTION –B

21. What you mean by TQM and what are the process of TQM?

22. Distinguish between ISO and TQM

23. What are the major benefits of e- commerce?

24. How e-commerce suitable of for small enterprises

25. Write three challenges of e- commerce in small enterprises

26. What you mean by quality

27. Explain the principles of TQM?

28. Explain the concepts of Six Sigma?

29. What are the goals of TPM?

30. Give the seven basic steps to get an organization started toward TPM?

SECTION- C

31. Discuss the need for TQM in small enterprises

32. Explain a TQM process appropriate for small enterprises

33. TQM is continuous process for continuous improvement in organisational performance- explain

34. What are the advantages of e- commerce?

35. Define the term E. Commerce and what are the advantages E- commerce can offer in the customer

and supplier

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36. List prospective areas for e- commerce in small sector

37. E- Commerce is not an unmixed blessing- explain

38. What are the challenges of e-commerce?

39. What are the prospective areas of e-commerce in small enterprises?

40. Define Six Sigma Problem Solving Method? Explain the concepts of Six Sigma?

ANS: 1. a. quality 2. b.TQM 3.d. Customer satisfaction 4.b. External 5.d. Processes

6.c. Team work 7.a. e-commerce 8.d. 1989 9.a. NASSCOM 10.b. Nayala 11.a. Govt of India 12.b.

Indianmarket 13.a. 2000 14.b. 1994 15.c.Singapore 16.a. Internet 17.b. Simplification 18.c. EDI

19.a. cycle 20.d. 1998

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Class: I M.COM Semester – II

Sub. Name: INDUSTRIAL RELATIONS

AND LABOUR LAWS

Sub. Code: 18PCM208

Prepared By: S. Arumugaraj

UNIT I

Section – A

1. How many parties are in industrial relations?

a) Two b) Three c) Four d) Five

2. Objectives of industrial relations includes

a) Industrial peace b) Industrial democracy c) Higher productivity d) All

3. The father of systems approach is ______ .

a) John Philip b) John Dunlop c) Fernandez d) Philip 4. The most widely accepted approach to Industrial Relations is _____ .

a) Pluralist approach b) Marxist approach c) Systems approach d) Unitary approach

5. Industrial relations help in achieving

a) industrial conflicts b) industrial democracy c) industrial unrest d) disputes

6. Industrial relations cover the following area(s)

a) Collective bargaining b) Labour legislation

c) Industrial relations training d) All of the above

7. Which of the following is not an approach to industrial relations? a) Pluralist approach b) Marxist approach c) Employees approach d) Unitary approach

8. Under unitary approach, industrial relation is grounded in

a) Mutual co-operation b) Individual treatment

c) Team work and shared goals d) All of the above

9. Pluralistic approach perceives ______ as legitimate representative of employee interests

a) Trade unions b) Management c) Board of Directors d) None of the above

10. In Marxist approach, concerns with wage related disputes are

a) Primary b) Secondary c) Tertiary d) Not considered

11. For the Marxists, all strikes are

a) Political b) Social c) Legislative d) Religious

12. Which of the following is (are) not acceptable to Marxists?

a) Enterprise bargaining b) Employee participation

c) Co-operative work culture d) All of the above

13. A proactive industrial relations programme must cover the following decision(s)

a) Communication b) Competence c) Discipline and conflict d) All of the above

14. Which of the following department has major interest in harmonious industrial relations

a) HR b) Production c) Finance d) Marketing

15. Industrial relations cover the following :

a) Collective bargaining b) Labour legislation

c) Industrial relations training d) All of these

16. The law relating to labour and employment in India is also known as :

a) Commercial law b) Industrial law c) Company law d) Cyber law

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17. For avoiding industrial conflicts the industry should maintain _____ .

a) Militant actions b) Unethical relations c) Harmonious relations d) Lockout

18. This is not a scope of industrial relations:

a) Labour unrest b) Collective bargaining c) Reasonable wages d) Industrial peace

19. Unhealthy working conditions will lead to _____ .

a) Industrial growth b) Industrial peace c) Industrial conflict d) Cooperation

20. Which one of the following is not the objective of industrial relations?

a) Industrial peace b) Industrial democracy c) Higher productivity d) Industrial conflict

Answer Key

1 2 3 4 5 6 7 8 9 10

b d b c b d c d a b

11 12 13 14 15 16 17 18 19 20

a d d a d b c a c d

Section – B

1. Bring out the objectives of industrial relations.

2. Specify the nature of Industrial Relations.

3. State the effects of poor industrial relations.

4. State the approaches to Industrial Relations.

5. Bring out the concept of industrial relations.

6. State the benefits of industrial relations.

7. Define industrial relations and explain its nature.

8. Explain the Dunlop’s system approach to industrial relations.

9. Explain the sociological approach to industrial relations.

10. Write short note on System approach.

Section – C

1. Discuss the importance on industrial relations in the current economic scenario.

2. Explain the conditions for good industrial relations.

3. Suggest the measures to improve Industrial relations.

4. Highlight the significance of Industrial relations.

5. Discuss the measures to improve Industrial relations.

6. “Industrial relations in India are not conducive to rapid Industrial Growth”. Do you agree?

Suggest measures to bring about harmonious industrial relations for sustained growth.

7. Explain the infrastructure required to develop industrial relations in an eatablishment.

8. Explain the recent trends of industrial relations in India.

9. Explain the various approaches of industrial relations in India.

10. Enlist the causes for poor industrial relations in India

UNIT II

Section – A

1. Industrial Dispute Act was came into the force on ____ .

a) 1st April, 1947 b) 1st April, 1946 c) 1st April, 1945 d) 1st t April, 1948

2. Causes of industrial dispute includes

a) Wages b) Working conditions c) Retrenchment d) All

3. Which of the following mode for the settlement of disputes under Industrial Disputes Act ?

a) Voluntary settlement and conciliation b) Adjudication

c) Arbitration d) All of these

4. The objective of Industrial Disputes Act is/are

a) To secure industrial peace b) To ameliorate the conditions of workers

c) Both (a) and (b) d) None of these

5. Which of the following dispute settlement method is quasi-judicial in nature?

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a) Collective bargaining b) Mediation c) Conciliation d) Adjudication

6. ‘First come last go and last come first go’ is the principle of

a) Lay-off b) Closure c) Retrenchment d) Dismissal

7. The conflict between the employers and employees in the industrial society is termed as

a) Industrial agreement b) Industrial law c) Industrial dispute d) None.

8. Which one is not an effect of grievances?

a) Low performance b) Indiscipline c) Absenteeism d) Motivation

9. Which of the following is not adjudication machinery under the Industrial Disputes?

a) Labour Court b) Court of Enquiry c) Industrial Tribunal d) National Tribunal

10. The temporary closing of a place of employment or the suspension of work, or

refusal by an employer is called ____ .

a) Lay off b) Lock-out c) Retrenchment d) Strike

11. The process by which a Third Party Persuades disputants to come to an amicable

adjustment of claims is called _____ .

a) Arbitration b) Collective Bargaining c) Conciliation d) Award

12. Which of the following is not a semi judicial bodies under the Industrial Disputes?

a) Labour Court b) Court of Enquiry c) Industrial Tribunal d) National Tribunal

13. Token strike is also called as :

a) Sympathetic strike b) Sit-down strike c) General strike d) Economic strike

14. This is dissuading the employees from reporting to work by some men at the gate of the

place of work:

a) Sympathetic strike b) Sit-down strike c) Picketing d) Economic strike

15. This is a formal complaint that is raised by an employee towards an employer in the

workplace:

a) Grievance b) Award c) Conciliation d) Motivation

16. Pen down or tools down strike is also known as _____ .

a) Economic strike b) Sit-down strike c) General strike d) Sympathetic strike

17. Effective collective bargaining requires

a) Freedom of association b) Recognition of trade unions

c) Favorable political climate d) All of the above

18. CBA stands for :

a) Collective Bargaining Agreement b) Cooperative business agreement

c) Common Business Agreement d) Collective Business Aids

19. Economic reforms were introduced since

a) 1971 b)1981 c)1991 d)2001 20. Good industrial relations encourages

a) Collective bargaining b) Capital productivity

c) Inherent distrust d) Suspicion for each other

Answer Key

1 2 3 4 5 6 7 8 9 10

a d d c d c c d b b

11 12 13 14 15 16 17 18 19 20

c b a c a b d a c a

Section – B

1. When does an Individual dispute become an industrial dispute?

2. Differentiate between collective bargaining and cooperation.

3. Distinguish between Grievance and a Dispute.

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4. List out the various forms of strikes.

5. When does a strike become illegal?

6. List out and explain the methods for settlement of industrial disputes.

7. To what extent, conciliation machinery has succeeded to settle industrial disputes in India.

8. Discuss steps in grievance handling.

9. How poor industrial Relations bring Industrial Unrest .Comment

10. Mention the necessary factors that make collective bargaining successful.

Section – C

1. Describe the machineries of settlement of industrial disputes.

2. Explain the forms Industrial Disputes.

3. Write a note on: lay-off, Retrenchment, Lock-out, Strikes.

4. Explain the main causes for industrial disputes in India.

5. Define collective bargaining. State its features.

6. Explain the benefits of collective bargaining.

7. Points out the reasons for the slow progress of arbitration in India.

8. Explain the disadvantages of collective bargaining.

9. Explain the causes for industrial disputes and examine its impact on industrial relations.

10. Discuss the provisions of ID Act relating to voluntarily reference of disputes to

arbitration.

UNIT III

Section – A

1. Which act provides for the Health, Safety and Welfare of Apprentices ?

a) Apprenticeship Act b) Factories Act, 1948

c) Workmen Compensation Act d) Trade Union Act 1926

2. Safety Officers are to be appointed if Organisation is engaging ______ or more

employees.

a) 1000 b) 2000 c) 500 d) 750

3. The space for every worker employed in the Factory after the commencement of

Factories Act, 1948 should be ________ Cubic Meters.

a) 9.9 b) 10.2 c) 14.2 d) 13.2

4. Who is an Adolescent as per Factories Act, 1948?

a) A person who has completed 17 years of age

b) A person who is less than 18 years

c) A person who has completed 15 years but less than 18 years.

d) A person who has completed 15 years

5. Which of the following is not an intramural welfare facility?

a) Canteen b) Workmen safety measures

c) Housing facility d) Drinking water facility

6. Which of the following cannot be regarded as a statutory welfare facility for factory workers?

a) Canteen b) Housing c) Shelter, Restrooms and Launch rooms d) First Aid Box

7. Which of the following statements with regard to labour welfare is not correct ?

a) Welfare is a social concept b) Welfare is a relative concept

c) Welfare is a positive concept d) Welfare is an absolute concept

8. Which one of the following is not Welfare provision under Factories Act, 1948 ?

a) Canteen b) Crèches c) Alcoholic Beverage d) Drinking Water.

9. First Aid Boxes is to be provided for ______ of persons

a) 125 b) 135 c) 150 d) 160

10. Cleanliness is

a) a health provision b) a safety provision

c) a welfare provision d) not required at all

11. Minimum number of women workers required to have a crèche is

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a) 50 b) 100 c) 30 d) 200

12. Safety Officers are to be appointed if Organization is engaging______ or more employees.

a) 1000 b) 2000 c) 500 d) 750

13. Welfare Officers are to be appointed if Organization is engaging______ or more employees.

a) 500 b) 250 c) 600 d) 750

14. Canteen is to be provided if engaging Employees more than______ persons.

a) 250 b) 230 c) 300 d) 275

15. The Ambulance Room is to be provided if engaging employees more than______

a) 400 b) 350 c) 500 d) 450

16. Section 2 (K) of the Factories Act 1947 says about

a) Manufacturing process b) Factory c) Worker d) None of these

17. Which section describes the powers of a inspector?

a) Sec.9 b) Sec.10 c) Sec.11 d) Sec.12

18. To close down a factory, the occupier has to give——— days notice to the authorities.

a) 30 Days b) 60 Days c) 90 Days d) 14 Days

19. A weekly holiday was introduced in the Factories for the first time in the year———.

a) 1948 b) 1931 c) 1926 d) 1923

20. Who is an adult as per Factories Act, 1948?

a) A person who has completed 18 years of age b) A person who is less than 18 years

c) A person who is less than 14 years d) A person who is more than 15 years

Answer Key

1 2 3 4 5 6 7 8 9 10

b a c c c a d d c a

11 12 13 14 15 16 17 18 19 20

c a a a c a a b d a

Section – B

1. Define the term Factory. State the conditions to satisfy as a factory.

2. Who is an Adult, Adolescent and a Child under the Factories Act 1948?

3. What are the powers of inspectors, under the Factories Act?

4. Define the term ‘Worker’ under the Factories Act 1948.

5. Who is an occupier? Enlist the general duties of an occupier.

6. State the contents of the notice by occupier.

7. State the duties , qualifications and conditions of welfare officer.

8. Enumerate the provisions regarding employment of young persons under the Factories Act

1948.

9. Explain the safety provisions under the factories Act, 1948.

10. Discuss the welfare provisions under the Factories Act

11. Write short note on Labour welfare.

12. What do you mean by labour welfare? Explain its features.

Section – C

1. Explain the essential elements of a factory.

2. Explain the safety provisions under the factories Act, 1948.

3. Discuss the health provisions under the Factories Act.

4. Describe the provisions related to annual leave with wages, under the Factories Act.

5. Discuss the welfare provisions under the Factories Act.

6. Explain the duties and responsibilities of welfare officer.

7. Explain the duties and responsibilities of an occupier.

8. Write the importance of maintaining industrial health and welfare measures.

9. Explain the causes for slow progress of labour welfare activities in India.

10. Explain the machinery connected in Labour Welfare Works.

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UNIT IV

Section – A

1. Which of the following is related to a social security measure?

a) EPF Act b) Maternity Act c) Contract Labour Act d) RTI Act

2. The employee state insurance act was introduced in

a) 1947 b) 1948 c) 1950 d) 1952.

3. Who is the head, of the statutory body of 'Employees State Insurance Corporation'?

a) Managing Director b) Chairman c) CEO d) Director

4. The ESI Act 1948 is applicable to

a) Indian Air force b) All factories c) Indian Navy d) Indian Military

5. What percentage is the employers contribution under ESI Act, 1948 ?

a) 4.75 % b) 4% c) 5 % d) 3.5%

6. What percentage is the employee contribution under ESI Act, 1948 ?

a) 4.75 % b) 4% c)1.75 % d) 3.5%

7. Under the Payment of Gratuity Act, 1972 the maximum gratuity payable is

a) Rs. 10 Lakhs b) Rs. 8 Lakhs c) Rs. 5 Lakhs d) Rs. 20 Lakhs

8. Gratuity is forfeited by

a) Employee b) Employer c) Trade union d) All

9. Which of the following is a kind of retirement benefit?

a) Superannuation b) ESI c) General Insurance d) Gratuity

10. Payment of Gratuity Act was enacted in _______

a)1975 b) 1972 c)1976 d) 1974

11. Which Act provides for the provision of Medical Benefit to the insured employees?

a) Workmen Compensation Act, 1923 b) Employees State Insurance Act, 1948

c) Maternity Benefit Act, 1961 d) Contract Labour (Regulation and Abolition Act) 1970

12. The statutory minimum bonus is :

a) 8.33% b) 5% c) 10% d) 20%

13. Maximum bonus under the payment of bonus act is :

a) 10% b) 15% c) 20% d) 24%

14. Maximum tenure for the compensation in case of temporary disability is _____ .

a) 5 years b) 10 years c) 6 years d) 7 years

15. Employees provident funds & miscellaneous act enacted in the year ____ .

a) 1952 b) 1962 c)1972 d) 1982

16. An employee can contribute PF under Voluntary PF Scheme the maximum rate up to :

a) 100% of wages b) 50% of wages c) 12% of wages d) 24% of wages

17. The rate of contribution by the employer under Employees Deposit-linked Insurance

Scheme (EDLI) is:

a) 10% of wages b) 0.5% of wages c) 1% of wages d) 2% of wages

18. The payment of bonus act was implemented in the year :

a) 1965 b) 1970 c) 1975 d) 1980.

19. Usually bonus is paid ———————

a) Twice in a year b) Once in 3 months c) Once in 9 months d) Once in a year

20. Workmen compensation act enacted in the year ____ .

a) 1923 b) 1924 c) 1925 d) 1926

Answer Key

1 2 3 4 5 6 7 8 9 10

a b b b a c d d d b

11 12 13 14 15 16 17 18 19 20

b a c a a a B a d a

Section – B

1. Define social security. State the features of social security.

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2. Who are the persons included in Dependant under the ESI Act 1948?.

3. Explain the benefits available for Employees under ESI Act 1948.

4. What are the objectives of EPF Act, 1952?

5. State the rules regarding the Compensation for permanent and partial disablement.

6. Describe the objectives of the payment of Bonus Act

7. Describe the scope of coverage of Gratuity Act 1972.

8. Explain the features of Gratuity Act.

9. When does an employee forfeit his right to gratuity?

10. Describe the concept of the payment of Bonus Act.

Section – C

1. Discuss the social security legislations in India.

2. Discuss the different types of benefits provided by the ESI Act 1948.

3. Explain the list of occupational diseases.

4. Discuss the rules regarding determination of bonus. How can the employees recover bonus ?

5. Discuss the Employees Deposit- Linked Insurance Scheme.

6. Explain elaborate the PF contribution by the employer and employee under EPF&

Miscellaneous Act 1952

7. Explain the major components of social security.

8. State the objectives and importance of Workmen’s Compensation Act 1923.

9. Explain the rules regarding workmen’s compensation.

10. Explain the major provisions regarding the Payment of Bonus Act 1965.

UNIT V

Section – A

1. Number of employees required to form a works committee under the industrial dispute act is:

a) 100 b) 200 c) 300 d) 500

2. Joint Management Councils were firstly established in ____.

a) 1955 b) 1956 c) 1957 d) 1958

3. The scheme of workers’ participation in management in industry in India was introduced

through

a) Code of Discipline in industry b) 20-point Economic Programme

c) Industrial Employment (Standing Orders) Act d) None of the above

4. Works Committee will not normally deal with

a) conditions of work b) amenities

c) wages and allowances d) administration of welfare funds.

5. Works Committee will normally deal with

a) conditions of work b) Bonus and profit sharing schemes

c) wages and allowances d) Matters connected with retrenchment and lay-off

6. The scheme of workers participation in management was introduced by government of India

in the year

a) 1965 b) 1975 c) 1985 d) 1995 7. Trade Union Act was passed in

a) 1926 b) 1927 c) 1928 d) 1929

8. If any change in the address of the Head Office of trade union, notice of change must be

given to

a) Occupier b) Registrar c) Creditor d) Government

9. The committee which promote workers’ participation in management are usually established

only at the

a) Corporate level b) Plant level c) Shop-floor level d) All of the above

10. Joint management councils are normally formed in an organisation at a level which is

a) Above the board of directors b) Below the board but above the shop-floor level

c) Below the shop-floor level d) None of the above

11. Quality Circle concept was started in India in the year:

a)1984 b) 1992 c)1980 d)1986

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12. What is the primary objective of Quality Circle?

a) Keep employees occupied b) Higher profit

c) Self and mutual development of employees d) To solve the problem

13. Primary aim of quality circle is

a) To solve company’s problem b) To develop people

c) To improve the image of the organization d) To motivate people to work

14. Which is not true in Quality Circles concept?

a) Is to improve the image of the organization

b) Is to solve the problem given by management

c) For mutual development

d) For people to work in teams

15. What is the minimum number of trade union members requires in registering themselves as a

union?

a) 7 b) 10 c) 5 d) 15

16. Which of the following acts do not apply to the registered trade unions?

a) The Co-operative Societies Act, 1912 b) The Societies Registration Act, 1860

c) The Companies Act, 1956 d) All of the above

17. How many member's consent is required to change the name of the registered trade

union?

a)1/4th of the total members b) 3/4th of the total members

c) Half of the total members d) 2/3rd of the total member

18. How many members should sign the notice of dissolution?

a) 5 members and the secretary of the trade union

b) 10 members and the secretary of the trade union

c) 20 members and the secretary of the trade union

d) 7 members and the secretary of the trade union

19. A Trade Union should be registered as per the law must have

a) 20% of the workers b) 150 workmen

c) Minimum 17 persons d) None of the above

20. Which Labour Legislation has been enacted on the basis of Right to Association as given

under the Fundamental Rights of the Indian Constitution?

a) Minimum Wages Act b) Payment of Wages Act

c) Trade Unions Act d) Industrial Disputes Act

Answer Key

1 2 3 4 5 6 7 8 9 10

a d b c a b a b d b

11 12 13 14 15 16 17 18 19 20

c c b c a d d d d c

Section – B

1. State the reasons for the failure of Works Committee.

2. Discuss the functions of Works Committee.

3. What are the factors influencing participation?

4. Explain the reasons for the poor working of joint management councils.

5. State the aims and objectives of workers’ participation in management.

6. What are the steps to be taken for starting quality circles in an organisation.

7. List out the advantages of quality circles.

8. Describe the characteristics of effective quality circles.

9. Explain the need for trade unions.

10. State the provisions to be contained in the rules of a trade union.

Section – C

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1. Elucidate the factors influencing workers participation in management.

2. Explain the importance of workers participation in management. Why is it needed?

3. Explain the reasons for the poor working of joint management councils.

4. Discuss the reasons for failure of Workers participation Movement in India

5. State the measures for making participation in management effective.

6. Explain the rules for Quality circles.

7. State the requisites for the success of quality circles.

8. Explain the duties and liabilities of registered trade union .

9. Explain the objectives and characteristics of trade unions.

10. Explain the rights and privileges of a registered trade union.

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COIMBATORE

DEPARTMENT OF COMMERCE (PG)

QUESTION BANK – 2018-2019

SUBJECT: CYBER CRIMES AND LAW - NON MAJOR ELECTIVE: 18PCM2N2

Staff-in-charge: Dr.R.Maharajothi Priya Class: I M.Com

UNIT-I

SECTION A

1. Cyber law means ---------

a. Crime b. Activity c. Internet law d. Computer law

2. The cyber world has no -----------

a. Physical boundaries b. Loopholes c. Enforcement d. grey areas

3. Cyber law in India can be found in the form of ----------

a. authority b. Organisation c. IT act 2000 d. Cyber crime act 1999.

4. Ideal cyber law in India requires a considerable amount of ------------

a. time b. Money c. Resources d. all the above

5. Cyber space must adopt ----------

a. technology b. Self regulation c. Control d. abilities

6. A traditional crimes have been replaced by --------------

a. cyber crimes b. Cyber tech c. Cyber act d. cyber law

7. The concept of cyber crime is different from -----------

a. ordinary crime b. Conventional crime c. Special crime d. regular crime

8. Cyber crimes is defines as crime against individual or organisations by means of -------

a. computer b. Direct information c. E-mail d. physical hurt.

9. Any person who commits an illegal act with a guilty intention is called ----------

a. adults b. Children c. Individual d. offender

10. -----------is a very common problem in cyber crime

a. access b. Location c. Loss of evidence d. systems

11. Mens rea constitutes crime and is often called as -------------

a. guilty mind b. Fraud c. Physically challenged d. conduct

12. Hackers generally hack the -------------

a. file b. Passwords c. Transactions d. all the above

13. Spoofing is a blacking through ------------

a. email b. Privacy c. Card d. spam

14. The programs that can copy itself are called --------------

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a. worms b. Victims c. Network d. transaction

15. Cyber squatting is where two people claim for the same ------------

a. crime b. Digital money c. Electronic cash c. Domain name

16. Hardware sabotage means to damage the are---------------

a. software b. Information c. Hardware d. computer hardware

` 17. Internet users should avoid -------------

a. Sending photographs b. Ethics c. morality d. chatting

18. It is not at all possible to eliminate cybercrime from ------------

a. network b. Data c. Cyber space d. cyber address.

19. The International Criminal Police Organization, more commonly known as -----------

a. Inter network b. Interpol c. Cyber network d.outerpol

20. CERT in cyber crime stands for ----------

a.Computer Emergency Response Team b. Crime emergency recruit team

c. Computer evolving rescue team d. control emergency retrieving team

SECTION B

1. What is cyber crime?

2. Which of the legal issues does the cyber law govern?

3. State the concept of the cyber crime.

4. Define cyber crime and explain new species of crime.

5. What are the challenges to the criminal justice system?

6. How a sound judicial system be implemented for a successful cyber law?

7. Why is the cyber law needed?

8. How internet is advantageous to the criminals?

9. What is Interpol?

10. How to create cyber law literacy?

SECTION - C

1. Write in detail about role of cyber law in preventing cyber crime?

2. Explain the fundamental principles of crime

3. Describe the scope of cyber crimes.

4. Illustrate model legal regime for cyber crime prevention.

5. Write in detail about cybercriminals and computer crime.

6. Cyber crime rate is increasing year after year. Justify with reasons.

7. Briefly explain classifications of cyber crime.

8. Explain the role of Interpol in cyber crime prevention.

9. Clarify in detail about CERT and its functions.

10.What are the characteristics of cyber crime?.explain.

Answer keys

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1.C 2.A 3.C 4.D 5.B 6.A 7.B 8.A 9.D 10.C 11.A 12.D 13.D 14.A 15.C 16.C 17.A 18.C

19.B 20.A

UNIT 2

1. A computer crime that involves attacking phone lines is ---------------

a. Data diddling b. Phreaking 3. Phishing d. pharming

2. Hackers use all of the techniques except --------------

a. War dialing b. War driving c. War chalking d. war walking

3. the computer crime of piggybacking ----------------

a. involves the use of another user’s Wifi b. Results from spamming c. Requires

permission of another user to gain access d. none of the above

4. a network of computers used in a denial of service attack is called -------------

a. worm b. Botnet c. Rootkit d. splog

5. which of the following is a method used to embezzle money a small amount at a time from

many accounts?

a. Data diddling b. Pretexting c. Spoofing d. salami technique

6. Which of the following is not a method that is used for identity theft?

a. Dumpster diving b. Phishing c. Shoulder surfing d. spamming

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7. A computer fraud and abuse technique that steals information, trade secrets and intellectual

property.

a. Cyber-extortion b. Data diddling c. Economic espionage d. skimming

8. Hacking means unauthorised access to ---------------

a.computer b. Internet c. Cyber law d. crime

9. ----------- are more difficult to access.

a. Ordinary files b. Special files c. Compressing files d. stored files

10. When IT act 2000 came into effect?

a. 17th October b.11th November 2000 c. 17th October 2001

d. 11th November 2001

`11. Which is the Act which provides legal framework for e-Governance in India?

a. Indian Penal Code b.IT Act 2008 c.IT Act - 2000 d. None of the above

12. How many schedules are there in IT Act 2000?

a. 3 b. 4 C. 6 d. 2

13. Which section of IT Act deals with the legal recognition of electronic records?

a.Section 4 b.Section 2 c .Section 5 d. Section 6

14. What is the maximum penalty for damage to Computer, Computer systems?

a. Rs. 5 crore b. Rs.1 crore. c. Rs.75 lakh d.Rs. 50 lakh

15. Which Act in India focuses on data privacy and information technology?

a. Banking Regulation Act 1949 b. IT Act 2000 c. Indian Penal Code

d. IT Act 2008

16. What is the time limit for filing appeal against the order of Cyber appellate tribunal?

a. 30 days b.90 days c. 60 days d. 45 days

17. What is the proposed punishment for Cyber Terrorism in IT Act?

a. 1 crore rupees penalty b.Life Imprisonment c.10 year imprisonment

d. 6 year imprisonment

18. Which is the appeal court on the orders issued by Cyber appellate tribunal?

a. Munsiff Court b.District Court c.High Court d. Supreme Court

19. What is/are component of IT Act 2000 ?

a.Regulation of Certification Authorities. b. Digital Certificates

c.Legal Recognition to Digital Signatures d.All of the above

20.copying the materials published on the internet as one’s own is --------------

a.internet plagiarism b. Internet reference c.internet surfing d.internet publishing

SECTION - B

1. What is copying intellectual property rights?

2. Write short notes on impact of cyber crime on economy.

3. List out the reasons for growth of cyber fraud.

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4. What are the challenges in prevention of cyber fraud?

5. What are the major tools of cyber cheating?

6. Write any two major cyber fraud incidents in India.

7. What are the types of piracy?

8. What is hacking?

9. Computer frauds are witnessing dangerous growth in India. Justify with examples.

10. What is evading evidence?

SECTION - C

1. Explain in detail about dangers of cyber crimes.

2. Describe the role of IT act 2000 in preventing cyber crimes in India.

3. Write in detail about the role of government and individual in cyber fraud prevention.

4. Briefly explain the bulging dimensions of cyber crime.

5. Illustrate the forms of computer frauds with examples.

6. Internet has both advantages and disadvantages. Justify.

7. Define intellectual property. Explain types of crime on IP..

8. Explain Indian legal provisions.

9. Describe the challenges in implementing legal provisions in India.

10. Explain various international crimes with examples

Answer keys

1.B 2.A 3.A 4.B 5.D 6.D 7.C 8.A 9.C 10.A 11.C 12.B 13.A 14.B 15.D 16.C 17.B 18.C

19.D 20.A

UNIT 3

1. ---------- is defined as the intentional use of computers, networks, and public internet to cause

destruction.

a. Cyber terrorism b. Cyber act c. Cyber threaten d. cyber danger

2. Cyber terrorism can weaken -------------

a. Organisation b. Individual c. Economy d. all the above

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3. The term cyber terrorism was coined by -------------

a.Harculus b. Barry.C.Collin d. Jaswanth sinha d. Merry de porter.

4. The terrorist groups are using internet to spread their ------------

a. act b. Technology c. Message d. attack

5. In recent days, cyber terrorist prefer using ---------------

a. cyber attack methods b. Traditional methods c. Identification methods d. open platform

methods.

6. Terrorism can also come in the form of --------------

a. information b. Dis location c. Dishonest d. disinformation

7. Minor attacks come in the form of --------------

a. offline b. Data diddling c. Network c. E-mail.

8. ---------- means buying and selling of goods across internet.

a. commerce b. Business c. Exchange d. e-commerce

9. ------------ is defined as offensive and defensive use of information and systems to destroy

adversary’s information.

a. cyber warfare b. Cyber defect c. Cyber study d. cyber network

10. U.S.A has cyber terrorism section 814 under -------------

a. the terrorism act b. The cyber act c. The patriot act d. the treasury act

11. ---------- authenticates a writing by the signer with the signed document.

a. Signature b. Name c. Act d. message

12. Electronic signature means authentication of electronic record by -----------

a. Receiver b. Subscriber c. Writer d. publisher

13. ----------- are used to create digital signature

a. Password b. Data c. Information d. keys

14. ------------ is the portion of the key that is available to other people

a. Private key b. Public key c. Signature key d. data key

15. ----------- is a way to ensure an electronic document is authentic.

a. Password b. Signature c. Digital signature d. sender name

16. A digital signature provides a greater degree of -------------

a. Access b. Safety c. Legitimacy d. message

17. ------------- is the science of creating code systems to scramble readable message.

a. Cryptography b. Protocol c. Source code d. raw data

18. A power to investigate offences is covered under ---------------

a. Section 45 b. Section 23 c. Section 9 d. section 78

19. A digital signature certificate is normally valid for ------------

a. 1or2 years b. 3or4 years c. 5or8 years d. 10or 15 years

20. A digital certificate includes --------------

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a. Public key b. Serial number c. Owner’s name d. all the above

SECTION - B

1. Write short notes on cyber terrorism.

2. Write the evolution of cyber terrorism

3. Compare traditional and digital era terrorism.

4. What is asymmetric cryptography?

5. What are the reasons behind increased rate of cyber terrorism?

6. Who is cyber terrorist?

7. Infrastructure vulnerable to terrorist attack. Discuss.

8. Clarify global legislative provisions for cyber terrorism in U.S.A.

9. Write shorts notes on international agencies that play an important responsibility in

controlling cyber terrorism.

10. What are the difficulties in implementing security measures against cyber terrorism?

SECTION – C

1. Explain the importance of control measures against cyber terrorism.

2. Describe the role of CERT.

3. Write in detail the various forms of cyber terrorism.

4. Clarify and explain the new perspectives of cyber terrorism

5. Differentiate symmetric and asymmetric cryptography.

6. Explain cyber warfare with examples.

7. Write cyber terror cases in India

8. Compare in detail the method of cryptography and steganography.

9. Explain the control measures.

10. Cyber terrorism has huge impact on society, business and agriculture. Justify.

Answer keys

1.A 2.D 3.B 4.C 5.A 6.D 7.B 8.D 9. A 10. C 11.A 12.B 13.A 14.A 15.C 16.B

17.A 18.D 19.A 20.D

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UNIT IV

1. . _____________ monitors user activity on internet and transmit that information in the

background to someone else.

a.Malware b.Spyware c.Adware d.netware

2. It is a program or hardware device that filters the information coming through an internet

connection to a network or computer system.

a.Anti virus b.Cookies c.Firewall d.Cyber safety

3. Exploring appropriate and ethical behaviours related to online environments and digital

media.

a.Cyber ethics b.Cyber security c.Cyber safety d.Cyber law

4. Which of the following is not an essential element of any defamation claim?

a) a false statement b) publication of the statement c) the statement refers to the

claimant d) damage caused by the statement

5. Which of the following is not an absolute defence to an action for defamation?

a) absolute privilege b) consent c) fair comment d) justification

6. Intellectual property rights and _______________ are two of the most important developing

areas of law.

a.Cyber law b.copyright infringement c.patent law d.trademark infringement

7. What action would a person bring against someone who steals a trade secret?

a.Economic Espionage Act b.Infringement action c.Misappropriation

d.Violation of trademark law

8. To be patented, an invention must be _______________.

a.non-obvious b.useful c.novel d.all of the above

9. Which are the formal sources of international law?

a) Custom, treaties and judicial decisions b) Custom, general principles of law and theory c)

Treaties, custom and general principles of law d) Treaties, custom and General Assembly

Resolutions

10. Commercial use domain names will normally use the following suffix in their website address.

a.net b.gov c.com d..org

11. The following cannot be exploited by assigning or by licensing the rights to others.

a.Patents b.Designs c.Trademark d.All of the above

12. A hacker contacts you my phone or email and attempts to acquire your password.

a.spoofing b.phishing c.spamming d.bugging

13. The meaning of defamation is an injury done to the ---------------- of a person

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a. name b. Network c. Message d. reputation

14. Trademarks are important tool in ------------

a. cyber theft b. Cyber crime c. Commerce d. entities

15. IP stands for ----------

a. intranet protocol b. Internet provision c. Inter protocol d. internet protocol

16.------------- occurs when domain names bearing a resemblance.

a. cyber squatting b. Cyber block c. Cyber theft d. cyber control

17. ----------- can be defined as the lessening of the capacity of a famous mark

a. dilution b. Recreation c. Promotion d. violation

18. ------------- must ensure that he owns the copyrights in all such elements

a. material supplier b. Website owner c. Customer d. internet users

19. ------------- is copying issuing copies to the public

a. transient b. Electronic c. Primary infringement d. secondary infringement

20.----------- is a not-for-profit international association composed of trademark owners and

practitioners

a. WIPO b.TRIP c.TRIM d. INTA

Answer keys

1.B 2.C 3.A 4.D 5.C 6.A 7.C 8.D 9.C 10.C 11.C 12.B 13.D 14.C 15.D

16.A 17.A 18.B 19.C 20.D

SECTION - B

1. Define and write short notes on cyber wrong.

2. What is internet time theft?

3. Discuss about cyber defamation with example.

4. Clarify the concept tort of defamation

5. Write short notes on Indian scene of cyber defamation.

6. What are intellectual property crimes?

7. trademarks are important tool in commerce. Explain.

8. clarify ISP liability for defamatory material on website under Indian law.

9. write brief notes on domain name and domain name system.

10. differentiate domain name and trademark.

SECTION – C

1. Illustrate international cases of cyber defamation.

2. Internet service providers are liable for defamation. Justify.

3. How a domain name is acquired? Explain.

4. Describe cyber squatting in detail and write the ingredients of offence.

5. Explain in detail about international legal provisions for cyber squatting.

6. Describe Indian legal provisions for cyber squatting.

7. What are the legal principles involved in domain name disputes? Discuss.

8. Explain in detail about copyright protection of content on the internet.

9. Describe in detail the spamming.

10. Explain the concept of phishing with examples

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UNIT 5

SECTION - A

1) ___________ is the expansion of Cr.P.C.

a) Code of Criminal Procedure b) Crime of Code Procedure

c) Code of Criminal Programme d) Crime of Code Programme

2) _______ are offences for which court grants bail to the accused.

a) Bailable offence b) Non-bailable offence

c) Cognizable offence d) Non-cognizable offence

3) ________ offences are mentioned in Sec 436 of Cr.P.C.

a) Bailable b) Non-bailable c) Cognizable d) Non-cognizable

4) __________ are offences for which bail is granted as per the discretion of court.

a) Bailable offence b) Non-bailable offence


5) _______ offences are mentioned in Sec 437 of Cr.P.C.


6) An offence, where a police officer can arrest the accused without a warrant is known as

_________ offence.


7) An offence, where a police officer can arrest the accused only with a warrant is known as

_________ offence.


8) An offence, which can be compensated in terms of money is known as ________.

a) compoundable offence b) Non-compoundable offence


9) An offence, which cannot be compensated in terms of money is known as ________.



10) ________ provision has been inserted in Sec 77A of IT (Amendment) act, 2008.

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11) Court shall not compound offences that have been committed against _______.

a) Men b) Women c) Transgenders d) Foreigners

12) The procedure to compound offence has been provided under_______.

a) Sec 323 b) Sec 324 c) Sec 325 d) Sec 326

13) The person accused can file an application for compounding in the court in which the

offence is ________.

a) Pending for trial b) During trial c) After trial d) Before trial

14) The offences punishable with imprisonment less than 3 years are __________ offences.

a) Cognizable b) Non-cognizable c) Compoundable d) Non-compoundable

15) The offences punishable with imprisonment of more than 3 years are _______ offences.

a) Cognizable b) Non-cognizable c) Compoundable d) Non-compoundable

16) Punishment of cyber terrorism is stated in _______ of IT act.

a) Sec 66F b) Sec 66D c) Sec 66C d) Sec 66A

17) Tampering of computer documents is punishable under _________ of IT act.


18) Sending threatening messages through e-mail is punishable under________ of IPC.


19) ________ is the expansion of IPC.

a) Indian Penal Code b) Indian Procedural Code

c) Indian Protective Code d) Indian Penalty Code

20) Denial of service attack is punishable under _______ of IT act.


Answer Keys

1.A 2.A 3.A 4.B 5.B 6.C 7.D 8.A 9.B 10.A 11.B 12.B 13.A 14.B 15.A 16.A 17.B 18.C

19.A 20.C

SECTION- B

1) Write a note on the precautions to be taken by internet users to prevent cyber crimes.

2) How to protect your e-mail account? Explain.

3) Explain about the jurisdictional problem prevailing in handling cyber crimes.

4) Write a note on bailable and non-bailable offences.

5) Briefly explain about cognizable and non-cognizable offences.

6) What are compoundable and non-compoundable offences? Explain.

7) Write a note on investigation of cyber crimes.

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8) Briefly explain about power of arrest with regard to cyber crimes.

9) What is meant by power of confiscation? Explain.

10) Briefly explain about compounding of offences.


1) Elaborate and explain the ways to prevent cyber crimes.

2) What are the preventive measures to be taken by the organizations to safeguard their

e-resources.

3) State the necessary measures to be taken by the state to avoid cyber crimes.

4) Classify offences on the basis of Code of Criminal Procedure.

5) List out the cyber crime offences and related provisions as stated in IT act.

6) What is tampering of computer documents? How could it be prevented?

7) Write in detail about the punishments for cyber crimes as stated in IT act.

8) Elaborate and explain about identity theft.

9) Write in detail about cyber crimes and other statutes.

10) Explain in detail about regular cyber crimes and applicable provisions.

************************************************************************

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II M.COM


COIMBATORE



SUBJECT: APPLIED COST ACCOUNTING SUBJECT CODE:

Staff-in-charge: Dr.Sheeba.E Class: II M.Com

…………………………………………………………………………………………………..

UNIT – I

PART – A 1 mark

1. Job costing is used in

A. Brick making

B. Cycle manufacturing

C. Repair shops

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D. Road repairs

2. In a job costing system costs are accumulated

A. By specific job

B. On monthly basis

C. By kind of material used

D. By department

3. Which one of the following is best suited for interior decoration

A. Operating costing

B. Job Costing

C. Batch Costing

D. Output Costing

4. Given the cost of production of a job Rs.15,00,000 and profit percentage 20% on sales, the profit

would be

A. Rs.3,75,000

B. Rs.3,57,000

C. Rs.3,15,600

D. Rs.3,71,400

5. Pharmaceutical industry adopts

A. Process costing

B. Batch costing

C. Job costing

D. Unit costing

6. The total of all direct expenses is called as

A. Prime cost

B. Works cost

C. Cost of production

D. Cost of sales

7 Cost accounting has been developed because of ......... of financial accounting.

A. limitations

B. expenditure

C. statutory requirements

D. both (a) and (b)

8 Depreciation is

A. Variable expense

B. Fixed expense

C. Direct expense

D. Semi variable expense

9. Most of the expenses are direct in case of

A. Job costing

B. Batch costing

C. Contract costing

D. Process costing

10. Work in progress in contract account consists of

A. Work certified and profit carried forward

B. Work certified

C. Work certified and Work uncertified

D. Work certified, work uncertified and profit carried forward

11. Profit on incomplete contract is called notional profit because

A. The profit is an approximation

B. It is an imaginary profit

C. Real profit will be known at the end of contract

D. It is a false profit

12. When a contract is not complete at the end of the financial year loss on incomplete contract is

A. Debited to contract a/c

B. Transferred to P & L a/c

C. Transferred to WIP

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D. Transferred partly to P & L and partly to WIP

13. In contract costing, contract a/c is prepared by the

A. Contractor

B. Contractee

C. Supervisor

D. Both contractor and contractee

14. All variable cost of a service center should classified as

A. Standing Charges

B. Maintenance charges

C. Running charges

D. Fixed charges

15. Total passenger km means

A. Total kilometers travelled

B. Total kilometer travelled by one passenger

C. Total kilometer travelled by all the passengers

D. Total kilometer travelled in one round trip

16. Classification and accumulation of cost by fixed and variable cost is of special importance

A. Output costing

B. Process costing

C. Operating costing

D. Batch costing

17. The TamilNadu Transport Corporation must use

A. Job costing

B. Contract costing

C. Process costing

D. Operating costing

18. Vehicle space is the limiting factor. Which of the following is the most appropriate cost charge

rate?

A. Per cubic meter

B. Per mile

C. Per cubic meter mile

D. Per ton mile

19. Calculate total kilometer from the following: Number of buses: 4, Number of days operated in a

month: 30, Distance travelled: 100 km and Number of trips per day: 2

A. 24,000

B. 48,000

C. 12,000

D. 56,000

20. Composite unit is a distinctive feature of

A. Contract costing

B. Operating costing

C. Batch costing

D. Job costing

Answer for part A

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

C A B A B A A D D C C B A D C C D C B A

………………………………………………………………………………………………......

PART – B 5 marks

1. Define cost accounting and bring out its objectives.

2. Graph out the various elements of cost.

3. Indicate which of the following fall under the category “methods of costing” or “techniques of

costing” or “systems of costing”.

i. Differential costing ii. Contract costing iii. Standard costing iv. Uniform costing v. Process

costing vi. Batch costing vii. Service costing viii. Historical costing ix. Marginal costing x. Job costing

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4. “Costing is a reality and pricing is a policy”, comment.

5. From the following information, prepare a cost sheet for the month January 2018

Sl.no Particulars Amount

1 Direct material 90,000

2 Direct wages 75,000

3 Profit 60,900

4 Selling and distribution overheads 52,500

5 Administration overheads 42,000

6 Factory overheads 45,000

Prepare a cost sheet indicating the prime cost, works cost, production cost, cost of sales and the sales

value.

[Ans: prime cost- Rs 165000, works cost- Rs 210000, production cost- Rs 252000, cost of sales-Rs

304500, sales-Rs 365400]

6. The cost of Tarpaulin manufacturing for three months (1-1-2018 to 31-33-2018) period is,


1 Stock of material (1-1-2018) 11,000

2 Stock of material (31-3-2018) 7,000

3 Productive wages 1,66,000

4 Material purchased 1,23,000

5 Sales 2,87,000

6 Indirect expenses 26,000

7 Completed stock (1-1-2018) -

8 Completed stock (31-3-2018) 58,000

The number of sheets manufactured during the three months was 4,400 and the price is to be quoted for

1,296 sheets in order to realise the same percentage of profit as for the period under review, assuming

no alteration in rate of wages and cost of material. Prepare the statement of cost and quotation for the

following data.

[Ans: Prime cost- Rs 293000 Rs 66.59 per sheet, profit Rs 26100 Rs 7.25 per sheet, sales Rs 287100

Rs 79.75 per sheet]

7. The following extract of costing information relates to commodity ‘A’ for the year ending 31st

Dec.2017

Particulars Amount Particulars Amount

Purchase of raw material 120000 Stock (31st Dec 2017)

Raw material

Finished products (2000 tons)

22240

32000

Works overheads 48000

Direct wages 100000

Carriage on purchases 1440 Work in progress (1st July 2017) 4800

Stock (1st July 2017)

Raw material

Finished products (1000 tons)

20000

16000

Work in progress (31st Dec 2017) 16000

Sales – Finished products 300000

Selling and distribution overheads are Rs 1/- per ton sold, 16000tons of commodity were produced

during the period. You are to ascertain i) Cost of raw material used ii) cost of output for the period iii)

Cost of sales iv) Net profit for the period v) Net profit per ton of the commodity.

[Ans:i ) Rs 119200, ii ) Rs 256000, iii ) Rs 255000, IV ) Rs 45000, v) Rs 3 per ton sold]

8. For the end of three months, as at the end of 31st Dec 2017, the following are the particulars of a

manufacturing concern producing electronic fans:

Particulars Rs

Finished goods (1-10-17) Nil

Finished goods (31-12-17) 20250

Material (1-10-17) 5000

Material (31-12-17) 3500

Factory wages 75000

Direct wages 12500

Materials purchased 32500

Sales 112500

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3000 fans were manufactured during the three month. With the help of the above particulars, determine

the cost per unit and the quotation price for 750 fans. The percentage of profit to be taken is the same as

earned during the three months.

[Ans: Cost sheet- Rs 109000, Rs 121500, Rs 11250. Quotation price- 750 fans, Rs 33750, cost per

fan Rs 40.50]

9. The account of ABC ltd shows the following:

Particulars Amount

Material used 700000

Direct labour 540000

Works overheads 162000

Establishment overheads 112160

What price should the company quote to manufacture a machine which will require an expenditure of

Rs 1000 in materials and Rs 800 in wages so that it will yield a profit of 20% on selling price? Make

necessary assumption regarding percentages.

[Ans: Cost sheet – Rs 1240000, Rs 1402000, Rs 1514160, Selling price to be quoted Rs 2754]

10. Fatima company Ltd. Manufactures electric fans which are sold at Rs 800 per piece. The total cost

is composed of 40% direct materials, 30% wages and 30% overheads. An increase in material price by

25% and wage rate by 10% is expected in the forthcoming years; as a result of which the profit at current

selling price may decrease by 39% of present profit. With the above information , you are to prepare i)

a statement showing current and future profit at present selling price and ii) by how much the selling

price is to be increased to maintain the present rate of gross profit?

[Ans: Present position- M-Rs 240, L- Rs 180 OH – Rs 180, profit – Rs 200, sales- Rs 800.

Anticipated position- M-Rs 300, L-Rs 198, OH- Rs 180, profit- Rs 226, sales Rs 904 ]

……………………………………………………………………………………………….

PART – C 8marks

1. Distinguish between financial accounting and Cost accounting.

2. How does cost accounting aid the management? State the advantages and disadvantages of cost

accounting

3. Discuss the various methods of costing along with their applicability to concerned industry.

4. Explain the various classifications of cost.

5. From the following prepare a cost sheet showing the comparative cost per ton for both the period.

Sl.no Particulars Three month ended

31-3-2018 (Rs) 30-6-2018 (Rs)

1 Raw material 72,000 98,000

2 Administrative overhead 24,000 24,000

3 Productive wages 1,44,000 1,96,000

4 Taxes and insurance 1,500 1,500

5 Light and water 2,000 2,000

6 Chargeable expenses 18,000 25,000

7 Depreciation 4,000 4,000

8 Factory rent 3,000 3,000

9 Unproductive labour 60,000 82,000

10 Factory repairs 6,000 9,000

The tonnages produced in the two quarters were 24000 and 32000 tons respectively.

[Ans: prime cost – a. Rs 319000 Rs 9.968 b. Rs 234000 Rs 9.75, works cost a. Rs 420500 Rs

13.1406 b. Rs 310500 Rs 12.937, total cost of production a. Rs 444500 Rs 13.890 b. Rs 334500 Rs

13.937]

6. The company’s record shows the following particulars for this department for the year ending 31st

march 2018:-

Sl.no Particulars 100 units (Rs)

1 Materials 13,000

2 Direct labour 7,000

3 Direct charges 1,000

4 Works on cost 7,000

5 Office on cost 2,800

6 Selling on cost 3,200

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7 Profit 5,000

Total 39,000

Ascertain that 40% of the works on cost fluctuates directly with production and 70% on selling on cost

fluctuates with sales. It is anticipated that the department would produce 500 units per annum and that

direct labour charges per unit will reduced by 20% while fixing works on cost charges will increase by

Rs 3000. Office on cost and fixed selling on cost charges anticipated showing increases of 25% but

otherwise no changed are expected.

[Ans: Prime cost – Rs 21000 Rs 210 per unit, factory cost Rs 28000 Rs 280, office cost- Rs 30800

Rs 308, total cost Rs 34000 Rs 340, profit Rs 5000 Rs 50]

7. Calculate Prime cost, Factory cost, Cost of production, Cost of sales and Profit from the following

particulars:


Direct material 100000 Depreciation: Factor plant

Office premises

500

Direct wages 30000 1250

Wages of foreman 2500 Consumable stores 2500

Electric power 500 Managers salary 5000

Lighting : Factory

Office

1500 Directors fee 1250

500 Office stationary 500

Storekeepers wages 1000 Telephone charges 125

Oil and water 500 Postage and telegram 250

Rent : Factory

Office

5000 Salesmen’s salaries 1250

2500 Travelling expenses 500

Repair and renewals: Factor plant

Office premises

3500 Advertising 1250

500 Warehouse charges 500

Transfer of reserves 1000 Sales 189500

Discount on shares written off 500 Carriage outward 375

Dividend 2000 Income-tax 10000

[ Ans: Prime cost 130000, Factory cost 147000, Cost of production 159375, Cost of sales 163250

and Profit 26250]

8. The following details are available from a company’s books:

Particulars Amount

Stock of material 1-1-2017 12800

Stock of finished goods 1-12-2017 28000

Purchase during the year 292000

Productive wages 198000

Sales of finished goods 592000

Stock of raw material 31-12-2017 13600

Stock of finished goods 31-12-2017 30000

Works overhead 43736

Office and general overheads 35547

The company is about to send a tender for a large plant. The costing department estimates that materials

required would cost Rs 20000 and wages for making the plant would cost Rs 12000. Tender is to be

made keeping a net profit of 20% on selling price. State what would be the amount of the tender if based

on the usual percentages.

[Ans: Tender price Rs 46180]

9.A factory produced 50000 units p.a electric fans at a capacity level of 100%. Estimated cost of

production is as under:

Particulars Amount

Material cost per unit Rs 4

Labour cost per unit Rs 2

Overheads :

Fixed Rs 50000 p.a

Variable Rs 5 per unit

Semi variable Rs 40000 p.a upto 50% capacity

Rs 5000 for every 10% increase in capacity

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If production programme of the factory is as indicated below and the factory wants to make a profit of

Rs 100000 for the year, work out the average selling price at which unit should be quoted. First three

months of the year 50% of capacity and next nine months of the year 80% of capacity.

[Ans: Prime cost – Rs 37500 Rs 6.00 per unit, Rs 180000 Rs 6.00 per unit total 217500, cost of

production Rs 91250 Rs 14.60, Rs 412500 Rs 13.75 Total Rs 503750, Profit Rs 100000, estimated

sales value Rs 603750]

10. The cost of manufacturing 2500 units of a commodity is as follows:

Particulars Amount

Materials 40000

Wages 50000

Direct expenses 800

Variable overheads 8000

Fixed overheads 32000

For manufacturing every 500 extra units of the commodity, the cost of production increases as

follows:

Materials Proportionately

Wages 10% less than Proportionately

Direct expenses No extra cost

Fixed overheads Rs 400 extra

Variable overheads 25% less than Proportionately

Calculate the estimated cost of production of 4000 units of the commodity.

[Ans: Prime cost – Rs 90800, 51000, 141000, cost of production – Rs 130000, 55800, 186600]

…………………………………………………………………………………………………

UNIT – II

PART – A 1 mark

1. If Opening Stock is Rs. 50,000; Raw Materials Purchased is Rs. 3,00,000; and Closing Stock is Rs.

30,000; then Raw Materials Consumed is

A. Rs. 3,50,000

B. Rs. 3,80,000

C. Rs. 3,20,000

D. Rs. 3,00,000

2. Cost of holding the material is called

A. Storage cost

B. Spoilage cost

C. Carrying cost

D. Transporting cost

3. If Annual consumption is 5000 units and EOQ is 283 units per annum. The number of orders per

annum will be

A. 17

B. 18

C. 15

D. 16

4. The method under which the issue of materials is priced at the latest purchase price is

A. Simple Average

B. Weighted Average

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C. LIFO

D. FIFO

5. An important point to be determined in industries where batch costing is employed is

A. Estimated Price

B. Estimated Profit

C. Economic Batch Quantity

D. Economic Order Quantity

6. One among the following, in which level normal issues of the material are stopped

A. Minimum stock level

B. Danger level

C. Maximum stock level

D. Average stock level

7. One among the following, in which level normal issues of the material are stopped

A. Minimum stock level

B. Danger level

C. Maximum stock level

D. Average stock level

8 Minimum stock level - 5,000 units; Average stock level – 7,000 units, then the Re-order quantity will

be

A. 12,000 units

B. 4,000 units

C. 10,000 units

D. 40,000 units

9. One of the following is used as a formal request to the purchasing department to purchase material.

A. Bill of Material

B. Purchase Order

C. Purchase Requisition

D. Indent of Materials

10. Time Allowed is 48 hrs; Time Taken is 40hrs; Therefore, Time Saved is 8hrs. And Rate per hour is

Rs.10. Now, the Earnings under Rowan Plan is

A. Rs. 466.70

B. Rs. 400

C. Rs. 480

D. Rs. 80.70

11. Penalizing a slow worker by paying him a low piece rate was introduced by

A. Taylor

B. Rowan

C. Halsey

D. Merrick

12. One of the following is an Abnormal Idle Time.

A. Waiting for job

B. Waiting for instructions

C. Tea Breaks

D. Power supply failure

13. In Taylor’s differential piece rate system, the number of piece rates set for each job is

A. One

B. Two

C. Three

D. Four

14. One of the following is a Normal Idle Time.

A. Power Supply failure

B. Shortage of Materials

C. Strikes or Lock-outs in factory

D. Tea Breaks

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15. If the Standard Production of a worker for 6 minutes is one unit; then, the standard production per

hour will be

A. 12 units

B. 10 units

C. 5 units

D. 6 units

16. First In First Out method of valuing material issues is suitable in time of

A. Falling prices

B. Rising prices

C. Stable prices

D. Both a and b

17. When the workers are paid at double the rate it is known as

A. Holiday pay

B. Overtime pay

C. Regular pay

D. Extra pay

18. Market price method is considered to be the best method when

A. Quotations have been sent

B. Quotations have not been sent

C. Purchasing of raw material

D. Selling of goods

19. In Taylor’s differential piece rate system ____________ piece rates are set for each job

A. One

B. Two

C. Three

D. Four

20. For a work order, standard time and time taken are 20 hours and 15 hours respectively, time rate

being Rs 2 per hour total wages payable under Rowan Premium Plan will be

A. 37

B. 37.50

C. 39

D. 39.50

Answer for Part A

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

C A B C C B C B C A A D B D B A D A B B

…………………………………………………………………………………………………..

PART – B 5 marks

1. When and why do you advocate pricing the issue at cost price based on LIFO and FIFO methods?

2. Give the names of the methods of valuing material issues.

3. Describe the factors to be kept in mind while adopting a particular type of wages method.

4. What do you mean by premium plans? Explain the principal premium plans.

5. Prepare stores ledger account from the following data. (FIFO method)

2015

Jan 1. Opening balance 500 units at Rs.2 per unit

3. Received 300 units at Rs.3 per unit

4. Issued 200 units


7. Issued 300 units


10. Issued 300 units


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[Ans: prepare stores ledges a/c- receipts, issues and balance- 11400]

6. Prepare stores ledger account from the following data.(Simple average method)

2010

May 1. Opening balance 600 units at Rs.4 per unit


9. Issued 200 units





[Ans: prepare stores ledges a/c- receipts, issues and balance- 1812]

7. Compute the i) re-order level ii) minimum level iii) maximum level and iv) average stock level for A

and B based on the following data:

Particulars

Components

A B

Maximum consumption per week ( in units ) 150 150

Average consumption per week (in units) 100 100

Minimum consumption per week (in units) 50 50

Re-order period (in weeks) 8 to 12 4 to 8

Re-order quantity (in units) 400 600

[Ans: i) re-order level A 1800 units, B 1200 units ii) minimum level A 800 units B 600 units iii)

maximum level A 1800 units B 1600 units and iv) average stock A 1000 units B 900 units ]

8. Calculate the earnings of a worker under Halsey premium plan and Rowan Premium plan. Standard

time 48 hours; Hourly rate Rs.8. Actual time taken by workers A: 36 hours and B: 32 hours.

[Ans: Rs 9]

9. Calculate the earnings of a worker under Halsey premium plan and Rowan Premium plan. Time

Allotted 48 hours; Time taken 40 hours and Rate per hour Rs.10.

[Ans: Rs 96]

10. Calculate the earnings of workers A,B and C under straight piece rate system and Merrick multiple

piece rate system from the following particulars: normal rate per hour Rs 180/-, standard time per unit

1 minute, outputs per day is as follows – worker A: 384 units, B:450 units and C: 552 units.

[Ans: Earnings A-Rs 18, B- Rs 22, C-Rs 22]

…………………………………………………………………………………………………..

PART – C 8 marks

1. Describe the various methods of pricing issues of material. Which method would you recommend for

adoption in a case where prices of raw material not often changes?

2. How would you deal with the following items in stores records and what procedure would you adopt

i. Gain or loss weight due to climate change

ii. Excess material returned to store without advice

iii. Breakage in stores.

3. Explain the fundamental difference between a) Straight piece-work b) Differential piece work and c)

Rowan system of premium bonus, under what circumstances would you recommend the use of each of

the three system?

4. What are the main features of Halsey and Rowan method of payment of remuneration? State how

Rowan scheme is better than Halsey scheme with your own example.

5. Prepare stores ledger account from the following data. (Weighted average method)

2012

April 1. Received 500 units at Rs.5 per unit


3. Issued 300 units


5. Issued 200 units


7. Issued 200 units

[Ans:xx]

6. From the following details, write stores ledger account using FIFO and LIFO methods.

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Purchases:

Jan 2 4,000 units @ Rs.4 per unit

Jan 20 500 units @Rs.5 per unit

Feb 10 6,000 units @Rs.6 per unit

March 15 4,500 units @Rs.5.50 per unit

Issues:

Feb 5 2,000 units

Feb12 4,000 units

March 2 1,000 units

March 5 2,000 units

March 20 3,000 units.

[Ans: FIFO – Rs 16500, 3000 units@ 5.50 per unit, LIFO – Rs14250, 1500 units @ 5.50 per unit]

7. The Lionel granary was not maintaining a perpetual inventory system for its stock. Only physical

inventory was taken at the end of each month. The physical inventory at the end of Dec 2017 showed

200 bags of fine rice at Rs 212.25/- per bag. The following purchases were made in Jan 2018:

3rd 400 bags at Rs 218.00 per bag

10th400 bags at Rs 218.00 per bag

15th400 bags at Rs 218.00 per bag

28th 400 bags at Rs 218.00 per bag

30th 400 bags at Rs 218.00 per bag

On 31st Jan 2018 the physical stock was 1200 bags. You are required to calculate the value of the stock

on 31st Jan 2018 according to i) FIFO ii) LIFO iii) Average cost method

[Ans: FIFO – 1200 bags Rs 260300, LIFO – 1200 bags Rs 263750, 1200 bags Rs 260832]

8. On the basis of following information, calculate the earnings of A, B, C and D under Merrick’s

differential piece rate system. Standard production per hour 12 units; Normal rate per unit 0.70 paisa; In

a day of 8 hours, A produced 64 units and B produced 96 units.

[Ans: earning of workers A-Rs 3.20, B-Rs 5.28, C-Rs 4.62, D-Rs 6.00]

9. Calculate the earnings of X and Y from the following under Straight piece rate system and Taylor’s

differential piece rate system, Standard Production 10 units per hour, Normal Time rate Rs.5 per hour.

Differential piece rate: 80% for below standard and 120% for above standard. Actual performance: X

produced 80 units in a day of 10 hours and Y produced 110 units in a day of 10 hours.

[Ans: X-Rs 35.10, Y- Rs 22]

10. Two workmen, Vishnu and Shiva produce the same product using the same material, their normal

wages rate is also same, Vishnu is paid bonus according to rowan system and Shiva is paid bonus

according to Halsey system, the time allowed to complete the product is 100 hours, Vishnu takes 60

hours and Shiva takes 80 hours to complete the product, the factory overheads rate is Rs 10/- per man

hour actually worked, the factory cost for the product for Vishnu is Rs 7280/- and for Shiva is Rs 7600/-

. You are required to find i) the normal rate of wage ii) the cost of material and iii) prepare a statement

comparing the factory cost of the production made by two workmen.

[Ans: i) Rs 20 per hour ii) Rs 5000 iii) comparative statement – Vishnu: 7280 and Shiva: 7600]

…………………………………………………………………………………………………

UNIT – III

PART – A 1 mark

1. Absorption costing is closely related to which of the following cost elements?

A. Overheads

B. Direct labour

C. Total costs

D. Prime costs

2. Which of the following would not be classed as a service department?

A. The maintenance department

B. The finance department

C. The canteen

D. The assembly department

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3. Which of the following would be an inappropriate method of apportioning service department

costs?

A. Apportioning on the basis of floor area

B. Apportioning on the basis of number of employees

C. Sharing costs out equally between departments

D. Apportioning on the basis of service department activity

4. Which of the following is an unsatisfactory method of dealing with reciprocal service costs?

A. Ignore the service department costs

B. Apportion the service costs over production departments only

C. Use a specified order of apportioning service department costs

D. Use mathematical apportionment techniques

5. The most appropriate method of apportioning the rent of a building would be:

A. To share them out equally amongst all departments

B. On the basis of value of assets

C. On the basis of number of employees

D. On the basis of area of each department

6. Absorption costing refers to the process of absorbing

A. only production service cost centre costs into product costs

B. both production and non-production service cost centre costs into product costs

C. the direct costs of production and service departments into products

D. the direct costs of production into products

7. Which of the following would not normally be a suitable method of absorbing costs into products?

A. Total cost centre overhead / Cost centre total machine hours

B. Total cost centre overhead / Total cost centre direct labour cost

C. Total cost centre overhead / Number of employees

D. Total cost centre overhead / Number of units processed in department

8. Overhead absorption exercises will be most useful where:

A. The total direct cost of a department is needed

B. The market determines the selling price of a product

C. Selling prices can be based on costs

D. A departmental manager will be held responsible

9. Under-recovery of overheads occurs when:

A. The overhead charged to production is lower than the actual overhead incurred

B. The basis of apportioning overheads has changed during the period

C. Actual overheads have fallen in relation to what they were expected to be

D. The actual overhead incurred is less than the overhead that has been charged to production

10. An example of a production overhead would be:

A. Labour costs

B. Supervisory costs

C. Materials

D. Rent

11. During September, 300 labour hours were worked for a total cost of Rs 4800. The variable overhead

expenditure variance was Rs 600 (A). Overheads are assumed to be related to direct labour hours of

active working. What was the standard cost per labour hour?

A. Rs 14

B. Rs 16.50

C. Rs 17.50

D. Rs 18

12. Overhead refers to:

A. Direct or Prime Cost

B. All Indirect costs

C. Only Factory indirect costs

D. Only indirect expenses

13. Allotment of whole item of cost to a cost centre or cost unit is known as:

A. Cost Apportionment

B. Cost Allocation

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C. Cost Absorption

D. Machine hour rate

14. One of the following is not a method of cost absorption

A. Percentage of direct material cost

B. Machine hour rate

C. Labour hour rate

D. Repeated distribution method

15. Service departments costs should be allocated to:

A. Only Service departments

B. Only Production departments

C. Both Production and service departments

D. None of the production and service departments

16. Most suitable basis for apportioning insurance of machine would be:

A. Floor Area

B. Value of Machines

C. No. of Workers

D. No. of Machines

17. Blanket overhead rate is:

A. One single overhead absorption rate for the whole factory

B. Rate which is blank or nil rate

C. Rate in which multiple overhead rates are calculated for each production department, service

department etc.

D. Always a machine hour rate

18. AT Co makes a single product and is preparing its material usage budget for next year. Each unit of

product requires 2kg of material, and 5,000 units of product are to be produced next year. Opening

inventory of material is budgeted to be 800 kg and AT co budgets to increase material inventory at the

end of next year by 20% The material usage budget for next year is

A. 8,000 Kg

B. 9,840 kg

C. 10,000 Kg

D. 10,160 Kg

19. During a period 17, 500 labour hours were worked at a standard cost of Rs 6.50 per hour. The labour

efficiency variance was Rs 7,800 favorable. How many standard hours were produced?

A. 1,200

B. 16,300

C. 17,500

D. 18,700

20. One of the following is not a reason for an idle time variance

A. Wage rate increase

B. Machine breakdown

C. Illness or injury to worker

D. Non- availability of material

Answer for Part A

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

A D C A D A C C A B A B B D C B A C D A

…………………………………………………………………………………………………..

PART – B 5 marks

1. Explain the various classifications of overheads.

2. Write short note on the following

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1) Allocation of overhead

2) Apportionment of overhead

3) Absorption of overhead

3. State the sources from which overhead expenses may be collected

4. What is the difference between actual overhead rate and predetermined overhead rate? Which is the

better method of adoption of overheads?

5. A company has three production department A,B and C and two service department X and

Y. The overheads distribution summary is as follows:

Particulars Production department Service department

Departmental expenses A B C X Y

10000 8500 7500 4000 2000

Percentage basis for service

department

X 20% 25% 35% - 20%

Y 25% 25% 40% 10% -

Apportion the cost of service department by using the repeated distribution method

[Ans: Total OH of service department X Rs 4286 Y Rs 2857, secondary OH – total OH – total –

Rs 32000, A 11571, B10286, C 10143]

6. Compute the overheads allocable to production department X and Y from the following using direct

redistribution method. There are two service departments P and Q – P renders service to X and Y in the

ratio of 5:3 and Q render service to X and Y in the ratio of 3:1. Overheads as per primary distribution

(Rs) are X: 58,800; Y: 39,400; P: 32,800 and Q: 12,400.

[Ans: Total OH of production department – Total 143400, X- 88600, Y- 54800]

7. Work out the Machine Hour Rate for the following machine whose scrap value is nil:

Particulars Amount (Rs)

Cost of machine 190000

Freight and installation charges 10000

Working life 5 years

Repairs and maintenance 40% of depreciation

Annual power expense @ 25 paisa per unit 6000

Eight hourly day charges:

1. Power 24

2. Lubricating oil 20

3. Consumable stores 28

4. Wages 80

[Ans: Rs 47]

8. In an engineering factory the following particulars have been collected for three months period ended

31st march 2018. You are required to re-apportion the service department expenses to production

department

Particulars Production department (Rs) Service

department (Rs)

P1 P2 P3 S1 S2

Expenses as per primary distribution

summary

8850 7165 6285 4515 6010

Apportion the expenses of service department in the ratio to production

department P1 P2 and P3 respectively

3:1:1 3:3:4

[Ans: P1-13362, P2-9871, P3-9592]

9. A company has three production department and two service department and for a period the

departmental distribution summary has the following totals:


P1 P2 P3 S1 S2

Total departmental overheads as per

primary distribution (Rs)

800 700 500 234 300

The company decided to charge the service department cost on the basis of following percentage

Service department Production department (%) Service department (%)

P1 P2 P3 S1 S2

S1 20 40 30 - 10

S2 40 20 20 20 -

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Prepare a statement showing the apportionment of two service department expenses to production

department by trial and error method.

[Ans: S1-300, S2-330]

10. Mayur ltd three manufacturing department and one service department, the following particulars are

available for one month of 25 working days of 8 hours each. All department work all day with full

attendance

Expense Total Service department Production department

S1 P1 P2 P3

Power and lighting 1100 240 200 300 360

Supervisor’s salary 2000

Rent 500

Welfare 600

Others 1200 200 200 400 400

Supervisor’s salary - 20% 30% 30% 20%

Number of workers - 10 30 40 20

Floor area Sq.meter - 500 600 800 600

Service rendered by service department to production department 50% 30% 20%

Calculate the ‘Labour hour rate’ of each of the department P1 P2 and P3.

[Ans:P1 Re 0.30, P2 Re 0.25, P3 Re 0.40]

…………………………………………………………………………………………………..

PART – C 8 marks

1. What do you mean by the term ‘Absorption of overheads’? Explain in detail the various methods

applied for the absorption of overheads.

2. What do you mean by the term ‘under and over absorption of production overheads’? How does it

arise? How is it treated in cost accounts?

3. Define cost allocation and cost apportionment. Explain the distinction between them.

4. What factors would you consider in determining the overhead absorption rate?

5. B ltd has three production departments A, B and C and one service department S. calculate the labour

hour rate for each of production department. The expenses for the period of 12 months are as follows:

Particulars Amount

Rent 36000

Power 8250

Indirect wages 5200

Depreciation on machinery 22000

Electricity 5600

Canteen expenses 6500

Additional information: A B C S

Light point 7 7 9 5

Floor space 300 250 450 200

H.P of machine 65 30 30 40

No.of workers 2 3 6 2

Direct wages 12000 14000 18000 8000

Cost of machine 50000 60000 80000 10000

Working days: 200 days of 8 hrs each. Service rendered by service department S to production

department A, B and C is 30%, 20%, and 50% respectively.

[Ans: Total OH total – Rs 91550, A- 21350, B – 19900, C – Rs 30400, Service dept Rs 19900, labour

hours worked A- 3200, B- 4800, C- 9600, Labour hour rate – 8.54, 4.98, 4.20]

6. D Ltd has three department which are regarded as production departments, service department costs

are distributed to these production departments using step –ladder- method of distribution. Estimates of

factory overheads costs to be incurred by each department in the forthcoming years are as follows.

Department Factory overheads Direct labour hours No.of employees Areas in sq.meters

Production

X 193000 4000 100 3000

Y 64000 3000 125 1500

Z 83000 4000 85 1500

Services

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P 45000 1000 10 500

Q 75000 5000 50 1500

R 105000 6000 40 1000

S 30000 3000 50 1000

The overhead costs of the four services department are distributed in the same order P,Q,R and S

respectively on the following basis

Department Basis

P Number of employees

Q Direct labour hours

R Area in sq. meters

S Direct labour hours

Prepare the schedule showing the distribution of overhead costs of the four services department and

calculate the overhead recovery rate per direct labour hour for the three production department.

[Ans: Total - Rs 595000]

7. Ram Co. Ltd has two production and two services departments namely P1 and P2 and S and S2

respectively. From the following information prepare a statement showing primary distribution of

overheads:

Sl.no Particulars P1 P2 S1 S2

1 Area occupied (sq.feet) 1000 800 200 400

2 Assets value (Rs’000) 200 100 60 20

3 No.of workers 80 40 40 20

4 Light points 20 12 4 4

5 H.P of machine 20 10 8 2

6 Direct wages (Rs’000) 20 16 10 6

7 Direct materials (Rs’000) 30 20 6 4

Total expenses and charges during the period ended are:


1 Rent, rates & taxes 18,000

2 Power 12,500

3 Insurance 9,500

4 Depreciation 38,000

5 Canteen expenses 5,400

6 Electricity 3,600

7 Indirect material 6,000

8 Indirect wages 10,400

9 Repairs & maintenance 19,000

10 Sundries 5,200

[Ans: Total OH – Total – Rs 153600, P1 Rs 61950, P2 Rs 35705, P3 Rs 35660, P4 Rs 20285]

8. The following data were obtained from the books of Light engineering company for the half year

ended 31st Mar 2018:


P1 P2 P3 S1 S2

Direct wages Rs 7000 6000 5000 1000 1000

Direct material Rs 3000 2500 2000 1500 1000

Employees Nos. 200 150 150 50 50

Electricity KWh 8000 6000 6000 2000 3000

Light point Nos. 10 15 15 5 5

Asset values Rs 50000 30000 20000 10000 10000

Area occupied Sq.meter 800 600 600 200 200

Expenses for 6 months were:


Store overhead 400

Motive power 1500

Electric light 200

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Labour welfare 3000

Depreciation 6000

Repairs and maintenance 1200

General overheads 10000

Rent and taxes 600

You are required to prepare Primary overhead distribution summary for the departments showing

clearly the basis of apportionment where necessary.

[Ans:P1 Rs 8340, P2 Rs 6220, P3 Rs 5100, S1 Rs 4100 and S2 Rs 3640]

9. The following particulars relate to a manufacturing company


P1 P2 P3 S1 S2

Total departmental overheads as per

primary distribution (Rs)

6300 7400 2800 4500 2000

The company decided to charge the service department cost on the basis of following percentage

Service department Production department (%) Service department (%)

P1 P2 P3 S1 S2

S1 40 30 20 - 10

S2 30 30 20 20 -

Find out the total overheads of production department charging service department costs to production

department on i) repeated distribution method ii) simultaneous equation method.

[Ans:P1 Rs 9050, P2 Rs 9650, P3 Rs 4300]

10. The manufacturing company has supplied the following particulars relating to the activity of the

production department for the month of March 2018

Particulars Amount

Materials used Rs 36000

Direct labour cost Rs 30000

Direct labour hours worked 24000

Hours of machine operations 20000

Factory overhead chargeable to the department Rs 25000

On one production order wholly carried out within the department during this period, the relevant

data were:

Material used Rs 2000

Direct labour Rs 1650

Direct labour hours 1650

Machine hours 1200

Prepare a comparative statement of cost of this order by using the following method of recovery of

overheads i) Direct labour hour rate method ii) direct labour cost rate method and iii) Machine hour

rate method.

[Ans: i) Rate Rs 1.042 cost 5369 ii) rate5/6 of DLC cost 5025 iii) rate Rs 1.25 per hour cost 5150]

…………………………………………………………………………………………………

UNIT – IV

PART – A 1 mark

1. Input in a process is 8,000 units and normal loss is 20%. When finished output in the process is only

6,480 units there is an

A. Abnormal gain of 80 units

B. Abnormal loss of 80 units

C. Neither abnormal loss or abnormal gain

D. Loss of 1600 units

2. Calculate the equivalent production form the following- Units put into process 2,500, Units

completed 2,000 and Closing work in progress (50% complete)

A. 2,000

B. 2,250

C. 2,300

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D. 1,250

3. The type of process loss that cannot be controlled by management is called

A. Standard loss

B. Seasonal loss

C. Normal loss

D. Abnormal loss

4. Individual product, each of significant value, produced simultaneously from the same raw material

is known as

A. By product

B. Joint product

C. Main product

D. Co-product

5. A bakery produces cakes, biscuits and breads should be treated as

A. Joint product

B. Main product

C. Co-product

D. By-product

6. Cost of previous department is a part of

A. Transferred-in costs

B. Transferred-out costs

C. FIFO costs

D. LIFO costs

7. Total costs incur in a production process, is divided by total number of output units, to calculate the

A. Cost of indirect labor

B. Cost of direct labor

C. Cost of direct material

D. Unit costs

8. If beginning work in process equivalent units are 2500 units, work done in current period equivalent

units are 3800 units and ending work in process equivalent units are 5000, then complete equivalent

units in current period are

A. 1800 units

B. 1500 units

C. 1300 units

D. 1500 units

9. A unit cost calculated in costing system, by assigning total costs incurred to many similar units is

categorized as

A. Accounting period costing system

B. Process costing system

C. Job costing system

D. None of above

10. If beginning work in process equivalent units are 2500 units, work done in current period

equivalent units are 3800 units and units completed in current period are 4000, then ending work in

process equivalent units will be

A. 1800 units

B. 2300 units

C. 10300 units

D. 1500 units

11. First step in process costing system is to

A. Summarize flow of output

B. Compute output in units

C. Summarize total costs

D. Compute cost for each equivalent unit

12. If total incurred cost in a production process are $30000 and number of output units are 5000 units,

then units cost will be Rs

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A. 16

B. 60

C. 6

D. 26

13. If cost incurred for work in process inventory is $350000 and total equivalent units completed till

date are 3500, then weighted average cost will be Rs

A. 10

B. 100

C. 1,000

D. 1,200

14. Abnormal loss is valued at

A. Cost of output

B. Market value

C. Marginal cost

D. Standard cost

15. One of the following is not a feature of a process production system

A. Repetitive production

B. High production volume

C. Low product flexibility

D. Heterogeneous products

16. Which of the following is most likely to use a process cost accounting system?

A. Construction company

B. Print shop

C. Ship builder

D. Sugar refiner

17. The section of the process cost summary in which the details for the calculation of the unit

processing costs for materials, labour, and overhead are shown is the:

A. Costs charged to the department

B. Assignment of costs to the output of the department

C. Equivalent unit processing costs

D. Total costs to be accounted for

18. In a joint process of production, product which yields low volume of sales as compared to total

sales of other products, specify as

A. Second incremental product

B. First incremental product

C. Step down product

D. By-product

19. Manufacturing, distribution and marketing costs incur after split off point is classified under

A. Separable costs

B. Joint costs

C. Main costs

D. Split off costs

20. In a joint process of production, a product which yields high volume of sales as compared to total

sales volume of other products is known as

A. Incremental product

B. Sunk product

C. Main product

D. Split off product

Answer of part A

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

D B C B B A D C B B A C B A D D C D A C

…………………………………………………………………………………………………..

PART – B 5 marks

1. What do you mean by Process costing explain its features.

2. Explain with example of industry where by-product becomes a main product and vise versa.

3. Give main objects of inter-process profit.

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4. What do you mean by joint products? Name the characteristics of it.

5. Cost of the process Rs.1,60,000. Profit to be charged on transfer price 20%. Find out inter process

profit.

[Ans: 40000]

6. You are required to prepare process ‘X’ account from the following details. Raw material Rs.20,000,

Wages Rs.10,000, Direct expenses Rs.5,000 and Overheads are to be taken at 100% of wages.

[Ans: 45000]

7. In process A 100 units of raw material were introduced at a cost of Rs 1000, the other expenditures

incurred by the process was Rs 602, of the units introduced 10% are normally lost in the course of

manufacturing and they possess a scrap value of Rs 3 each. The output of process A was only 75 units.

Prepare process A account and abnormal loss account.

[Ans: 500]

8. In process B, 75 units of a commodity were transferred from process A at a cost of Rs 1310. The

additional expenses incurred by the process were Rs 190. 20% of the units entered are normally lost and

sold @ Rs 4 per unit. The output of the process was 70 units. Prepare process B account and abnormal

gain account.

[Ans: 750]

9. The Rama corporation produces four products in a manufacturing process. The corporation produced

10000 units of A 20000 units of B 15000 units of C and 25000 units of D. The cost before split off point

for the four products was Rs 140000. Using the average unit cost method, calculate the a) unit cost and

b) show how the joint cost would be apportioned among the products.

[Ans: a ) Rs 2 per unit b ) a Rs 20000, B Rs 40000, C Rs 30000 and D Rs 50000]

10. In manufacturing of main product, 200 units of a certain by-product were produced. The market

value of the by-product was Rs 40 per unit. The by-product required further processing costs a mounting

to Rs 3000 and selling and distribution overheads amounting to Rs 500 are incurred. Calculate the

amount to be credited to the Process Account in respect of the by-product.

[Ans: 2200]

…………………………………………………………………………………………………..

PART – C 8 marks

1. Distinguish Job costing and Process costing.

2. Write down the advantages and disadvantages of process costing

3. How would you deal with by-products in costing?

i. When they are of small value?

ii. When they of considerable total value?

iii. Where they require further processing?

4. Write short note on the terms by-product, main product and joint product and distinguish between

them.

5. Calculate the cost of each process and total cost of production from the given below.

Particulars Process 1

Rs.

Process 2

Rs.

Process 3

Rs.

Material

Wages

Direct expenses

Works overhead

2,250

1,200

500

1890

750

3,000

500

2,580

300

900

500

1,875

Other indirect expenses of Rs.1, 275 should be apportioned on the basis of wages.

[Ans: P1- 6140, P2-13720, P3-17520]

6. Product requires three distinct processes and after the third process the product is transferred to the

finished stock. You are required to prepare process accounts from the following information.

Particulars Process I

Rs.

Process II

Rs.

Process III

Rs.

Direct material

Direct wages

Direct expenses

8,000

3,000

1,000

1.200

3,200

600

800

1,800

-

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The total production overhead was Rs.12, 000 and it must be allocated to different processes on the

basis of 150% of direct wages. Production during the period was 400 units but there is no opening

and closing stock.

[Ans: P1-16500, P2-26300, P3-31600]

7. Prepare statement of equivalent production, statement of cost and process account from the

Following information.

Particulars Particulars Amount

- Units produced 7,600

Output (units) 6,000

Process cost (Rs) Material 14,560

Labour 21,360

Overhead 14,240

Degree of completion of closing work in progress Material 80%

Labour 70%

Overhead 70%

[Ans: equivalent production Material 7280 units, labour 7120 units, Cost per equivalent units:

material Rs 2, labour Rs 3 overheads Rs 2 total Rs 7]

8. The product of a company passes through three distinct processes to completion, they are known as

A, B and C. From past experience it is ascertained that loss is incurred in each process as: process A-

2%, Process-B- 5% and process C- 10%. In each case the percentage of loss is computed on the number

of units entering the process concerned. The loss of each process possesses a scrap value. The loss of

processes A and B is sold at Rs 5/- per 100 units and that of process at Rs 20/- per 100 units. The output

of each process immediately to the next process and the finished units are passed from process C into

stock.

Particulars Process A Process B Process C

Rs Rs RS

Materials consumed 6000 4000 2000

Direct labour 8000 6000 3000

Manufacturing expenses 1000 1000 1500

20000 units have been issued to process A at a cost of Rs 10000. The output of each process has been

as under: Process A: 19500, Process B: 18800 and Process C: 16000, there is no work-in-progress in

any process. Prepare process accounts.

[Ans: Process A – 20000, 25000, Process B – 19775, 36385, Process C- 18800,42836]

9. A certain product passes through three processes before it is completed. The output of each process

is charged to the next process at a price calculated to give a profit of 20% on transfer price (25% on

cost price). The output of process III is charged to finished stock account on a similar basis. There was

no work-in-progress at the beginning of the year and overheads have been ignored. Stock in each

process has been valued at prime cost of the process. The following data are obtained at the end on 31st

march 2018.

Particulars Process I Process II Process III Finished stock

Rs Rs Rs Rs

Direct material 4000 6000 2000 -

Direct wages 6000 4000 8000 -

Stock on 31st march 2000 4000 6000 3000

Sales during the year - - - 36000

From the above information prepare i) process cost account showing the profit element at each stage

ii) actual realised profit and iii) stock valued as would appear in the balance sheet.

[Ans: Process I – 10000, 8000, 2000, Process II – 20000,14400,5600, Process III- 30000, 19520,

10480, Finished stock – 36000, 17568, 18432]

10. Granite City Monument Works is a manufacturer of cemetery headstones and architectural granite

slabs. Granite City excavates blocks of granite from its quarry from its joint processes of Quarry and

Cutting. Two joint products (cemetery monuments and architectural granite) are produced along with a

by-product called grit. Cemetery monuments are cut, polished, and engraved in a variety of standard

shapes, sizes, and patterns and sold to funeral homes. Architectural granite slabs are special-ordered by

contractors for office buildings. These slabs are cut and polished to exacting specifications. The small

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pieces of granite resulting from the cutting process are crushed and sold to farm-supply outlets as poultry

grit.

Granite City has provided the following costs and output information:

Process Cost Tons of output

Quarry 350000 100000

Cutting 250000 90000

Monuments 300000 25000

Granite slabs 400000 60000

Grit 10000 5000

Quarry and Cutting are joint processes. A local farm-supply distributor purchases all of the grit that is

produced at Rs 40 per ton. Assume that Granite City uses the physical units method to allocate joint

costs. You are required: What would be the cost per ton of monuments and granite slabs, assuming that

the grit is accounted for as “Other Income”?

[Ans: xx]

……………………………………………………………………………………......................

UNIT – V

PART – A 1 mark

1. A primary purpose of using a standard cost system is to

A. Make things easier for managers in the production facility.

B. Provide a distinct measure of cost control.

C. Minimize the cost per unit of production.

D. Provide employment

2. The standard cost card contains quantities and costs for

A. Direct material only.

B. Direct labor only.

C. Direct material and direct labor only.

D. Direct material, direct labor, and overhead.

3. One of the following statements regarding standard cost systems is true

A. Favorable variances are not necessarily good variances.

B. Managers will investigate all variances from standard.

C. The production supervisor is generally responsible for material price variances.

D. Standard costs cannot be used for planning purposes since costs normally change in the future.

4. In a standard cost system, Work in Process Inventory is ordinarily debited with

A. Actual costs of material and labor and a predetermined overhead cost for overhead.

B. Standard costs based on the level of input activity (such as direct labor hours worked).

C. Standard costs based on production output.

D. Actual costs of material, labor, and overhead.

5. A standard cost system may be used in

A. Job order costing, but not process costing.

B. Process costing, but not job order costing.

C. Either job order costing or process costing.

D. Neither job order costing nor process costing.

6. Standard costs may be used for

A. Product costing.

B. Planning.

C. Controlling.

D. All of the above.

7. A purpose of standard costing is to

A. Replace budgets and budgeting.

B. Simplify costing procedures.

C. Eliminate the need for actual costing for external reporting purposes.

D. Eliminate the need to account for year-end under-applied or over-applied manufacturing

overhead.

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8. Standard costs

A. Are estimates of costs attainable only under the most ideal conditions,

B. Are difficult to use with a process costing system.

C. Can, if properly used, help motivate employees.

D. Require that significant unfavorable variances be investigated, but do not require that

significant favorable variances be investigated.

9. A bill of material does not include

A. Quantity of component inputs.

B. Price of component inputs.

C. Quality of component inputs.

D. Type of product output.

10. An operations flow document

A. Tracks the cost and quantity of material through an operation.

B. Tracks the network of control points from receipt of a customer's order through the delivery of

the finished product.

C. Specifies tasks to make a unit and the times allowed for each task.

D. Charts the shortest path by which to arrange machines for completing products.

11. A total variance is best defined as the difference between total

A. Actual cost and total cost applied for the standard output of the period.

B. Standard cost and total cost applied to production.

C. Actual cost and total standard cost of the actual input of the period.

D. Actual cost and total cost applied for the actual output of the period.

12. A company wishing to isolate variances at the point closest to the point of responsibility will

determine its material price variance when

A. Material is purchased.

B. Material is issued to production.

C. Material is used in production.

D. Production is completed.

13. The material price variance (computed at point of purchase) is

A. The difference between the actual cost of material purchased and the standard cost of material

purchased.

B. The difference between the actual cost of material purchased and the standard cost of material

used.

C. Primarily the responsibility of the production manager.

D. Both a and c.

14. The sum of the material price variance (calculated at point of purchase) and material quantity

variance equals

A. The total cost variance.

B. The material mix variance.

C. The material yield variance.

D. No meaningful number.

15. A company would most likely have an unfavorable labor rate variance and a favorable labor

efficiency variance if

A. The mix of workers used in the production process was more experienced than the normal mix.

B. The mix of workers used in the production process was less experienced than the normal mix.

C. Workers from another part of the plant were used due to an extra heavy production schedule.

D. The purchasing agent acquired very high quality material that resulted in less spoilage.

16. If actual direct labor hours (DLHs) are less than standard direct labor hours allowed and overhead

is applied on a DLH basis, a(n)

A. Favorable variable overhead spending variance exists.

B. Favorable variable overhead efficiency variance exists.

C. Favorable volume variance exists.

D. Unfavorable volume variance exists.

17. If all sub-variances are calculated for labor, the one which cannot be determined is

A. labor rate variance

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B. actual hours of labor used

C. reason for the labor variances

D. efficiency of the labor force

18. The total labor variance can be subdivided into all of the following except

A. Rate variance.

B. Yield variance.

C. Learning curve variance.

D. Mix variance.

19. The standard predominantly used in Western cultures for motivational purposes is a(n)

A. Expected annual standard.

B. Ideal standard.

C. Practical standard.

D. Theoretical standard.

20. A favorable fixed overhead volume variance occurs if

A. There is a favorable labor efficiency variance.

B. There is a favorable labor rate variance.

C. Production is less than planned.

D. Production is greater than planned.

Answer for Part A

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

B D A C C D B C B C D A A D A B C C C D

…………………………………………………………………………………………………..

PART – B 5mark

1. Define standard costing and what are the techniques of standard costing?

2. What are the most important steps to be considered before setting a standard?

3. Differentiate estimate cost from standard cost.

4. What are the merits and demerits of standard costing?

5. From the following data provided by Kamal ltd for August 2017, calculate Overheads Cost

Variance, Fixed Overhead Cost Variance and Variable Overhead Cost Variance

Particulars Budgeted Actual

Output in units 30000 32500

Fixed overheads (Rs) 45000 50000

Variable overheads (Rs) 60000 68000

[Ans: ST – 1 hour, total SH rate – Rs 3.50 per hour, SF OH – Rs 1.50, SV OH – Rs 2, OHCV- Rs

4250(A), VOHCV – Rs 3000(A), FOHCV- Rs 1250(A), VV- Rs 3.750(F), EV – Rs 750(A), CaV- Rs

4500(F), CV – Rs 4500(F)]

6. In a process10,000 units were introduced on 1-1-2011. By 31-1-2011, 8,000 units were completed

and the closing works in progress of 2,000 units were 40% completed. What is the equivalent

production?

[Ans:xx]

7. The budgeted and actual sales of a company producing and selling a single product are as followes

Particulars Amount

Budgeted sales 25000 units @ 6 per unit

Actual sales 30000 units @ 4 per unit

Calculate i) Sales value variances ii) Sales Price variances iii) Sales volume variance.

[Ans:xx]

8. From the following calculate i)total material cost variance ii) material price variance iii) material

usage variance.

Materials Standard Actual

Units Price (Rs) Units Price (Rs)

A 1010 1.0 1080 1.2

B 410 1.5 380 1.8

C 350 2.0 380 1.9

[Ans: Standard cost –total 2325, Actual cost – 2702, MCV- Rs 377(A), MPV- Rs 292(A), MUV- Rs

85(A)]

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9. Using the following information calculate the labour variances


Gross direct wages 3000

Standard hours produced 1600

Standard rate per hour 1.50

Actual hours paid 1500 hours, out of which hours not worked (abnormal ideal time) are 50.

[Ans:LCV- Rs600(A), LRPV – Rs150(F), LEV- Rs 225(F), ITV-Rs 75(A)]

10. Ultra modern laptop ltd has the following budgeted sales and actual sales for March 2018. From the

following particulars calculate all sales variances according to Value method.

Product Standard Actual Cost price per unit (Rs)

Units Price (Rs) Units Price(Rs)

A 1100 50 1300 55 45

B 950 100 1000 95 85

C 1250 80 1200 78 70

[Ans: TSMV- Rs 350(F), SMV- Rs900(A), SMV – Rs 1250(F), SVV- Rs10100, SPV- Rs900(A), SVV

– Rs11000(F), SMV- Rs 4150(A),SQV- Rs15150(F)]

…………………………………………………………………………………………………..

PART – C 8 marks

1. What is the significance of the term ‘variances’ in standard costing? Define and explain the different

types of variances.

2. Explain the primary objectives and the main uses of standard costing.

3. Describe the meaning of ‘Variable analysis’ and its significance in standard costing.

4. What do you mean by standard cost card? Draft its specimen.

5. The standard cost of a chemical mixture is as under: 8 tons of material A at Rs 40 per ton, 12 tons of

material B at Rs 60 per ton, Standard yield is 90% of input. Actual cost for a period is as under: 10 tons

of material A at Rs 30 per ton, 20 tones of Material B at Rs 68 per ton, actual yield is Rs 26.5 tons.

Compute all material variances.

[Ans: MCV Rs 129(A), MPV Rs 60(A), MUV Rs 69(A), MMV Rs 29(A)]

6. A gang of workers usually consists of 10 men, 5 women and 5 boys in a factory. They are paid at

standard hourly rates of Rs 1.25 Re 0.08 and Re 0.70 respectively. In a normal working week of 40

hours the gangue is expected to produce 1000 units of output. In a certain week, the gang consists of 13

men, 4 women and 3 boys. Actual wages were paid at the rate of Rs 1.20, re 0.85 and re 0.65 respectively.

Two hours per week were lost due to abnormal idle time and 960 units of output were produced.

Calculate various labour variances.

[Ans: LCV Rs 70 (A), LRV Rs 24(F), TLEV Rs 94 (A), LEV Rs 50.90(A), LITV Rs 43.10(A), LMV

58.90 (A), LYV Rs 8 (F) ]

7. From the following data calculate all overhead variances: there was an increase of 5% in capacity

Particulars Budgeted Actual

Output 15000 units 16000 units

Number of working days 25 27

Fixed overheads Rs 30000 Rs 30500

Variable overheads Rs 45000 Rs 47000

[Ans: TOCV Rs 3, VOEV Rs 1000(F), FOV Rs 1500(F), VV Rs 2000(F), EV Rs 500(UF), CV Rs

1620 (F), CV Rs 2400(F), EV 2020(UF)]

8. From the following particulars calculate all sales variances according to i) Profit method and ii) Value

method.

Product Standard Actual

Quantity units Cost

per unit

Price

per unit

Quantity units Cost

per unit

Price

per unit

X 3000 Rs 10 Rs 12 3200 Rs 10.50 Rs 13

Y 2000 Rs 15 Rs 18 1600 Rs 14.00 Rs 17

[Ans: a) Rs 800(F), Rs 1600(F), Rs 800(F), Rs 320(A), Rs 480(A) b) Rs 1600(F), Rs 4800(A), Rs

2880(A).]

9. Trishul industries turn out only one article, the prime cost standards for which have been established

as follows:

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Material- 5 lbs @ Rs 4.20 – per completed piece Rs 21, Labour- 3 hours @ Rs 3 – per completed piece

Rs 9. The production schedule for the month of July 2018 required completion of 5,000 pieces; however

5,120 pieces were actually completed. Purchase for the month of July 2018 showed the following actual

results: materials requisitioned and used 25,700 lbs, direct labour- 15,150 hours Rs 48,480, calculate

appropriate material and labour variances.

[Ans: MCV Rs 8130(A), MPV Rs 77109(A), MUV Rs 420(A), LCV Rs 2400(A), LEV Rs 3030 (A)]

10. A cost accountant of a company was given the following information regarding the overheads for

Feb 2018:

a) overhead cost variances Rs 1400 adverse, b) overhead volume variance Rs 1000 adverse, c) budgeted

hour for Feb 2015 1200 hours, d) budgeted overheads for Feb 2015 Rs 6000, e) actual rate of recovery

of overheads Rs 8 per hour.

You are required to assist him in computing the following for Feb 2018: a) Overhead expenditure

variance, b) Actual overhead incurred, c) Actual hour for actual production, d) Overheads capacity

variances, e) Overhead efficiency variances, f) Standard hours for actual production.

[Ans: OEV Rs 400(A), AO Rs 6400, AHAP 800 hours, OCV Rs 2000(A), OEV Rs 1000(F), SHAP

1000 hours]

…………………………………………………………………………………………………

Book for reference: 1. Cost accounting - A.Murthy and S.Gurusamy

2. Cost accounting – S.P Jain and K.L Narang

3. Cost accounting – RSN Pillai V.Bagavathi

***************************************************************************


Class: II M.COM Semester –III

Sub. Name: INCOME TAX LAW AND

PRACTICE

Sub. Code: 18PCM310

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Prepared By: Mrs.P.Geetha M.COM.,MBA.,PGDCA

UNIT I

SECTION A

1. Who introduced income tax?

a) Sir James Wilson b) Ambedkar c) P.Chidambaram d) Arun Jaitley

2. Income Tax Act was first introduced in India on

a) 1st April 1961 b) 1st June 1961 c) 1st September, 1961 d) 1st January, 1961

3. Income tax Act, 1961 came into force on:

a) 1st April 1962 b) 1st June 1962 c) 1st September, 1962 d) 1st January, 1962

4. The term ‘person’ was defined under

a) Section 2(3) of Income Tax Act, 1961

b) Section 2(4) of Income Tax Act, 1961

c) Section 2(5) of Income Tax Act, 1961

d) Section 2(8) of Income Tax Act, 1961

5. The manager of H.U.F. is referred as:

a) Partners b) Co-parceners c) Karta d) spouse

6. For computation of residential status, taxable entities are classified into:

a) 2 categories b) 3 categories c) 4 categories d) 5 categories

7. Income, on which tax was not charged are called:

a) Exceptional income b) Omitted income c) Privileged income d) Exempted

income

8. Exempted income are defined under Income Tax Act, 1961, section:

a) 10 b) 20 c) 30 d) 50

9. An Indian Companies residential status is always:

a) non-resident b) resident c) not ordinary resident d) None of the above

10. Income tax is a

a) direct tax b) business tax c) professional tax d) Indirect tax

11. Who is assessee in case of H.U.F.?

a) Karta b) Father c) Spouse d) Deemed Karta

12. In which year Income Tax was levied in India for the first time?

a) 1860 b) 1960 c) 2000 d) 2010

13. Previous year started from

a) April b) March c) January d) September

14. A person is said to be a non-resident when he is

a) not fulfilling any one of the basic conditions b) fulfilling only basic conditions

c) fulfilling only additional conditions d) fulfilling both basic and additional conditions

15. Residential status is determined for:

a) Assessment year b) Previous year c) Accounting year d) Financial year

16. Under the income-tax act, the incidence of taxation depends on

a) the citizenship of tax payer b) the residential status of the tax payer

c) the age of the tax payer d) the gender of the tax payer

17. Who among the following may be “not ordinarily resident”?

a) Partnership firm b) Company c) Association of persons d) Hindu Undivided Family

18. Residential status of taxable entities is:

a) fixed in nature b) Fixed once in 5 years c) can change from year to year d) none of these

19. An individual who wants to be resident of India must stay in India for at least

a) 730 days in 10 previous years b) 365 days in the previous year

c) 182 days in the previous year d) 150 days in the previous year

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20. Past untaxed income brought to India is taxable in the hands of:

a) resident and not ordinarily resident b) resident and ordinarily resident

c) non-resident d) none of these

21.Integration for agricultural income is done in case of:

a) Individuals b) Firms c) Companies d) Local authorities

SECTION B

1. Define Previous year and assessment year.

2. Define ‘person’ as per Income Tax Ac, 1961.

3. Mr. P, an Indian Citizen, is living in Delhi since 1960, he left for Japan on July 1, 2013 and comes

back on August 7, 2017. Determine his residential status for the previous year 2017-18.

4. Dr. Z, an Indian Citizen and a Professor in IIM, Lucknow, left India on September 15, 2017 for

USA to take up Professor’s job in MIT, USA. Determine his residential status for the assessment

year 2018 - 19.

5. Mohan is a citizen of India. He left for Iran on 18th April, 2017 and could not return to India till

the end of the financial year 2017- 18. Determine his residential status for the assessment year

2018 – 19.

6. Ramavtar left for U.S.A. on 10th March, 2015 after having lived in India for 20 years. He returned

to India on 10th September 2017. Determine his residential status for the assessment year 2018 –

19.

7. What is the residential status of an individual for the assessment year 2018-19 who came to India

for the first time in 2015-16 and was in India as follows:

Previous Year Presence in India

2017 – 18 185 days

2016 – 17 15 days

2015 - 16 26 days

8. Mr.Vikas is Karta of a H.U.F whose property is situated in Bangladesh. During his previous year

2017 – 18 he came to India with his family for 15 days and went back leaving his family in India.

Determine the residential status of India.

9. The following are the details of income of Shri Ram Lal:

1. Share of income from a joint venture in India 10,000

2. Dividend 1,000

3. Income from Agriculture in Pakistan 20,000

4. Salary received in India 9,800 (computed) but the services for the same were

rendered in Iran.

5. Income from business (controlled from India) in Pakistan 10,000 and his income

remitted to India.

6. Income earned and received in Pakistan from bank deposits 5,000

7. Income accrued in India but received in Iran 10,000

Compute Mr.Ram Lal’s taxable income if he is (i) Resident, (ii) Not Ordinary Resident and (iii) Non-

Resident.

10. Following are the incomes of Mr.Amarnath for the financial year 2018-19:

(i) Interest on savings Bank deposit in Chennai 1,200

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(ii) Income from Agriculture in Africa invested in Nepal 10,000

(iii) Dividend received in U.K. from an American

Company, a part of which 2,000 remitted to India

10,000

(iv) Pension received in Belgium for services rendered in

India with a Limited Company

20,000

Compute Mr.Amarnath’s taxable income if he is (i) Resident, (ii) Not Ordinary Resident and

(iii) Non-Resident.

11. Define Agricultural Income. What are the steps involved in computing Agricultural Income.

SECTION C

1. Explain about the conditions laid down in residential status.

2. Define: a) Assessee b) Income c) Incidence of tax.

3. Mr.Ram, an Indian citizen leaves India for the first time on 31st May, 2013 an comes back on 15th

May, 2016. He again leaves India on 10th June 2017 to come back on 14th January, 2018. He is living

in India since then. Determine his status for the previous year 2017 – 18.

4. Mr. B is a foreign citizen. His father was born in Delhi in 1960 and mother was born in England in

1965. Hisgrandfather was born in Delhi in 1935. Mr. A is coming to India to see Taj Mahal and visit

other historical places in India. He comes to India on 1st November, 2017 for 200 days. He has never

come to India before. Determine his residential status for PY 2017-18.

5. A person after about 26 years of stay in India, retired to England in April 2016 and returned to India

on 15th February 2018 to take up a salaried appointment. What is his residential status for the

previous year 2017-18?

6. Mr.B, a married citizen of India left for Germany for the first time on 15-9-2016 on a business trip.

He returned to India on 5-6-2017. During his absence from India he maintained a dwelling house for

himself in Calcutta. What will be his residential status for the assessment year 2018 – 19?

7. a) Mr.Ram, an Indian Citizen leaves India for the first time on 31st May, 2013 and comes back on

15th May, 2016. He again leaves India on 10th June 2017 to come back on 14th January 2018. He is

living in India since then. Determine his status for the previous year 2017 – 18.

b) Mr.Vikas is Karta of a H.U.F whose property is situated in Bangladesh. During his previous

year 2017 – 18 he came to India with his family for 15 days and went back leaving his family in

India. Determine the residential status of India.

8. Which of the following incomes are taxable when the residential status of Mr.Mukesh is: (i)

Resident, (ii) Not Ordinary Resident and (iii) Non-Resident.

1. Income accrued in Canada received in India Rs.2,000

2. Rs.5,000 were earned in Africa and received there brought to India

3. Rs.5,000 earned in India but received in Canada

4. Rs.10,000 earned and received in Sri Lanka from a business controlled from India

5. House property income (computed) from Srilanka Rs.2,000

6. Rs.4,000 was past untaxed foreign income which was brought to India during the

previous year.

7. Profit earned from a business in Kanpur Rs.10,000.

9. The following are the incomes of Shri Kiran for the previous year 2017 – 18.

Rs.

i) Profit from business in Dharwad 7,000

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ii) Income accrued in India but received in Italy 6,000

iii) Profit from business in England received in India 5,000

iv) Income from house property in Africa but received in India 4,000

v) Profit from business established in Iran and deposited in a

bank there, the business being controlled from India

3,000

vi) Income from house property in Pakistan and deposited on

bank there

2,000

vii) Past untaxed foreign income brought in to India during this

previous year

1,000

Compute the total income of Shri Kiran for the assessment year 2018 – 19 if he is (i) Ordinary

Resident, (ii) Not Ordinary Resident and (iii) Non – resident.

10. The following are the incomes of Shri Raman for the previous year 2017 – 18.

Rs.

i) Profit on sale of machinery in Bangladesh but received in

Australia

30,000

ii) Profit from business established in Iran and deposited in

bank there, the business being controlled from India (1/3rd

received in India)

42,000

iii) Income from house property in Africa 20,000

iv) Agricultural Income in England and was received there but

later brought in to India

8,000

v) Past untaxed foreign income brought in to India during this

previous year

6,000

Compute the total income of Shri Kiran for the assessment year 2018 – 19 if he is (i) Ordinary

Resident, (ii) Not Ordinary Resident and (iii) Non – resident.

11.Compute the tax liability for the assessment year 2015-16 in following cases:

Case A

Mr.Joseph

Case B

Mrs.Mary

Case C

Mr.John

Agricultural Income 46,000 30,360 60,360

Non agricultural Income 2,96,560 5,60,300 4,60,000

Mr. John is 70 years old.

UNIT I – Answer Scheme

Section A

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21.

a c c a c b d a b a a a a a b b d b b d a

SECTION B

3. Resident & Ordinary resident (Satisfied both basic and additional conditions)

4. Non-resident (have not satisfied basic conditions)

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6. Ordinary Resident(Satisfied both basic and additional conditions)

7. Ordinary Resident (Satisfied both basic and additional conditions)


9. OR Rs.64,800, NOR Rs. 39,800 and NR Rs.29,800

10. Resident Rs.41,200, NOR Rs.2,200 and NR Rs.21,200

SECTION C

3. Ordinary resident – Satisfied both basic and additional conditions

4. Non-resident – have not satisfied basic conditions

5. Non-resident – have not satisfied basic conditions

6. Ordinary Resident (Satisfied both basic and additional conditions)

7. a) Ordinary Resident (Satisfied both basic and additional conditions)

b) Non-resident – have not satisfied basic conditions

8. OR: Rs.34,000, NOR: Rs.27,000 and NR: Rs.17,000

9. OR: Rs.27,000, NOR: Rs.25,000 and NR: Rs.22,000

10. OR: Rs.1,00,000, NOR: Rs.72,000 and NR: Rs.44,000

UNIT II

SECTION A

1. Which section of the Income Tax Act, 1961 defined ‘Income from House Property’?

a) Section 6 b) Section 22 c) Section 38 d) Section 61

2. The basis of charge for tax on income from house property is:

a) Annual value b) Rental value c) Municipal value d) Market Value

3. ERV of let-out house if standard rent is not applicable is:

a) Least of MRV or FRV b) Higher of MRV or FRV c) Lower of FRV or MRV

d) None of these

4. GAV of self occupied house is:

a) Always nil b) Always fully taxable c) Higher of MRV/FRV d) None of these

5. Standard Deduction u/s 24 is:

a) ¼ of NAV b) 1/5 of NAV c) 30% of NAV d) 10,000

6. Preconstruction interest is deductible in:

a) 4 instalments b) 5 instalments c) 6 instalments d) 3 instalments

7. Arrears of rent recovered are subject to standard deduction u/s 24 up to:

a) 1/5th of arrears b) 1/4th of arrears c) 1/6th of arrears d) 30% of arrears

8. In case of self-occupied house, standard deduction is a) Nil b) 20% of NAV c) 30% of NAV

d) 10,000

9. The rent fixed as per municipal valuation is called a) Municipal value b) F.R.V. c) Standard

Rent d) Actual Rent

10. Interest on loan is allowed as deduction up to a maximum of a) Rs.30,000 b) Rs.50,000 c)

Rs.60,000 d) Rs.1,00,000

11. Exemption limit of HRA in case of assessee living in metropolitan cities is:

a) 50% of salary b) 40% of salary c) 15% of salary d) 20% of salary

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12. Exemption limit of HRA in case of assessee living in non metropolitan cities is:


13. Education allowance is exempted upto a maximum of:

a) One child b) Two children c) Three children d) Four children

14. Children education allowance is exempted upto:

a) 200 p.m. per child b) 300 p.m. per child c) 100 p.m. per child d) 400 p.m. per child

15. Hostel expenditure allowance is exempted up to:

a) 300 p.m. per child b) 200 p.m. per child c) 150 p.m. per child d) 250 p.m. per child

16. Interest on RPF balance is exempted up to:

a) 9.75% b) 9.5% c) 10% d) 12%

17. Employer’s contribution to RPF is exempted upto:


18. Gratuity in case of government employee is:

a) Fully taxable b) Partly taxable c) Fully exempted d) Government pays the tax

19. Pension is taxable under _________ head.

a) salary b) House property c) Capital gains d) Other sources

20. Rent free accommodation is an example for

a) Allowance b) Compensation c) Perquisite d) Profit in lieu of salary

SECTION B

1. Mr. Ashikh retired in September, 2012 after having put in 42 years of service in a company. His

average salary for 10 months preceding Sept. 2012 was Rs:2500 p.m. He received a gratuity of Rs.

60,000. Compute his taxable gratuity.

2. Mr. Athul, covered under the Payment of Gratuity Act, 1972, retires on 10th January, 2013 after

serving the company for 16 years. At the time of retirement his basic salary was Rs: 4,400 p.m. and

DA Rs: 800 p.m. On retirement he receives Rs: 1,00,000 as gratuity. Compute the amount of gratuity

exempt U/s 10(10).

3. Mr.Suhil is a government employee. He draws a monthly salary of Rs.20,000 and Rs. 500 p.m. as

entertainment allowance. Find out the amount of deduction for the entertainment allowance.

4. Mr. Aswin is entitled to a basic salary of Rs 5,000 p.m. and dearness allowance of Rs 1,000 p.m.,40%

of which forms part of retirement benefits. He is also entitled to HRA of Rs 2,000 p.m. He actually

pays Rs 2,000 p.m. as rent for a house in Delhi. Compute the taxable HRA.

5. Compute Gross annual value:

Actual rent Rs. 24,000 p.a.,

Fair rent Rs.28,000 p.a.

Standard rent Rs. 20,000 p.a.

6. Calculate annual rental value from the following particulars for the assessment year 2018-19.

Actual rent Rs. 14,000 p.m.;

MRV Rs. 1,20,000 p.a.;

FRV Rs.1,32,000 p.a.

Standard rent Rs. 1,38,000.

During the previous year, the assessee is not able to realise two month rent.

7. Rinju is the owner of 2 houses. From the following, find out annual value of the houses:

House-1 House-2

Municipal value 30,000 35,000

Actual rent 40,000 32,000

FRV 36,000 30,000

SRV 30,000 36,000

Municipal tax paid 4,000 3,500

8. Compute Annual Rental Value from particulars given below:

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Municipal Rental Value 60,000 p.a.

Fair Rental Value 66,000 p.a.

Standard Rent 63,000 p.a.

Real Rent 6,000 p.m.

Date of completion: 31- 05-2017 Date of letting : 1-08-2017.

9. Define the term ‘salary’ as per Income Tax Act, 1961.

10. Explain: i) Arrears in rent ii) pre-construction interest.

SECTION C

1. Justin Kuriakose retired on 31-10-2012 after serving 20 years. He received Rs;96,000 as leave

encashment for 12 months. His average salary at the time of retirement amounted to Rs:7,400. He

had 2 months leave at his credit. Find out the taxable amount of Leave encashment.

2. Compute gross salary from information given below for each situation separately:

(i) Salary @ Rs.30,000 p.m.

(ii) D.A. @ Rs. 6,000 p.m.

(iii) C.C.A. @ Rs.1,000 p.m.

(iv) House Rent Allowance @ Rs.8,000 p.m.

(v) Commission on turnover achieved by him is Rs. 40,000

Situation a) living in own house, ii) living in rented house at Delhi and D.A. enters

into pay for retirement benefits and rent paid is Rs.7,000 p.m. c) Living in rented

house at Chandigarh and D.A. does not enter into pay for retirement benefits and

rent paid is Rs.10,000 p.m.

3. Mr.A is employed at Hyderabad at a basic salary of Rs.25,000 p.m and he is also getting following

allowances :

Rs.

1. Dearness Allowances

2. Lunch allowance

3. Servant allowance (he is paying Rs.1,200 p.m. to a servant)

4. Transport allowance

5. Education allowance allowed per child for three children

6. Hostel allowance to one child

7. Conveyance allowance

8. Overtime allowance

9. Officiating allowance

10. Cash allowance

11. Entertainment allowance

12. Medical allowance

13. City Compensatory allowance

14. House Rent allowance

2,000 p.m.

1,000 p.m.

1,000 p.m.

2,000 p.m.

200 p.m.

500 p.m.

800 p.m.

2,000 p.m.

2,000 p.m.

1,200 p.m.

2,000 p.m.

800 p.m.

600 p.m.

5,000 p.m

He is having a family house at the place of his posing but he is living in a rented house and is

paying a rent of Rs.7,000 p.m. Find out his Gross salary.

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4. Mr.Jai, a manager with a company was transferred to Bangalore where he stayed in a hotel free of

rent. His salary particulars are:

Salary Rs.25,000

D.A. (p.m.) Rs.5,000

Conveyance allowance (p.m.) Rs. 1,000

Actual expenditure incurred for employment (p.m.) Rs.600

City Compensatory allowance (p.m.) Rs.1,000

Calculate the value of rent free accommodation if he stayed in a hotel:

a) 14 days and actual bill is Rs.6,600

b) 38 days and actual bill is Rs.30,950.

5. Mr.D owns a house at Vijay nagar and submits the following particulars:

Rs.

Rent received 1,75000

Standard rent 1,60,000

Municipal Valuation 1,70,000

Fair Rental Value 1,72,000

Municipal taxes 12% of MRV + 2% of Municipal taxes as

Sanitation charges

Compute the net annual value.

6. From the following particulars given below for two self-occupied houses. Advise the owner as to

which house he should choose as self-occupied for the assessment year 2018 – 19:

House A

(Rs.)

House B

(Rs.)

Municipal Rental Value 24,000 p.a. 30,000 p.a.

Municipal Taxes (50% paid) 2,000 p.a. 3,000 p.a.

Ground rent 500 p.a. 1,000 p.a.

Fire Insurance Premium paid 1,000 p.a. 2,000 p.a.

Interest on loan taken to construct the house 15,000 p.a. 18,000 p.a.

Other Income 2,00,000

p.a.

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7. Mr.X has three house properties which he uses for is residential purposes.

I

Rs.

II

Rs.

III

Rs.

Municipal value 40,000 60,000 80,000

F.R.V. 50,000 70,000 65,000

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Standard Rent 60,000 84,000 72,000

Municipal taxes 4,000 6,000 9,000

Expenses on repair 2,000 4,000 3,000

Insurance premium 1,000 2,500 3,000

Year of loan 1998 2002 2007

Interest on loan paid in the p.y. 2017 -18 35,000 40,000 25,000

Find out income from house property.

8. Compute income from house property from the particulars given below for the assessment year

2018 -19:

Municipal Rental value Rs.24,000 p.a.

Actual rent received Rs.30,000 p.a.

Municipal taxes Rs.2,400 p.a.

Date of completion 31.03.2014

Date of letting 1.04.2014

Fire insurance premium due 400 p.a.

Ground rent due 600 p.a.

Interest on loan taken to construct the house: 2011-12 to 2016-17 @ Rs.15,000 p.a.

2017 – 18 Rs.10,000 and Interest on delayed payment of interest Rs.1,000.

9. Explain the types of allowances in detail.

10. Write a note on taxable perquisite.

UNIT II – ANSWER SCHEME

SECTION A

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

a a b a c d d a a a a a b a a a c c a c

SECTION B

1. Taxable gratuity: Rs.7,500

2. Amount of gratuity exempt U/s 10(10). : Rs.48,000

3. Amount of deduction for the entertainment allowance: Rs.5,000

4. Taxable HRA : Rs.6,480

5. Gross Annual Value : Rs. 24,000

6. Annual rental value: Rs.1,40,000

7. ARV: House 1 : Rs.36,000; House 2: Rs.31,500

8. Annual Rental Value: Rs.48,000

SECTION C

1. Taxable amount of Leave encashment: Rs.14,800

2. Gross Salary: Situation a) living in own house – Rs.5,80,000,

b) living in rented house at Delhi - Rs.5,43,200

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c) Living in rented house at Chandigarh – Rs.5,00,000

3. Gross salary: Rs.4,78,800

4. Value of rent free accommodation if he stayed in a hotel:

a) 14 days and actual bill is Rs.6,600 - Taxable value - Nil

b) 38 days and actual bill is Rs.30,950 – Taxable value – Rs.4,791

5. Net Annual Value:Rs.1,54,192

6. Option I : a) House A : Self-occupied – Loss: Rs.15,000; House B deemed to be let out; Option

II : b) House B : Self-occupied – Loss: Rs.18,000; House A deemed to be let out; Income:

Rs.1,100; Hence option II is better.

7. House I : Loss - Rs.2,800; Income from House II: Rs.4,800 and House III: Rs.19,100

8. Income from house property: Rs.3,320

UNIT III

SECTION A

1. Profits earned from an illegal business are:

a) Taxable b) Tax free c) Ignored by Tax Authorities d) Treated as ‘other income’.

2. Contribution made to an approved scientific research association is eligible for deduction upto:

a) 50% b) 80% c) 100% d) 175%

3. Unabsorbed capital expenditure on scientific research can be carried forward for:

a) 15 Years b) 14 Years c) 8 Years d) Indefinite period

4. Excise duty and sales tax are allowed as deduction if paid before:

a) Late date of filing of return b) Previous year end c) before 31st December of the previous

year d) None of these

5. Technical know-how acquired after 1-4-98 is eligible for depreciation at:

a) 10% p .a. b) 20% p.a. c) 25% p.a. d) 40% p.a.

6. Which one of the following is not an admissible expense? a) Income tax b) Excise duty c) Bad

debt d) sales tax

7. Preliminary expenses shall be allowed as deduction in a) 10 instalments b) 8 instalments c) 5

instalments d) 3 instalments

8. Bad debts allowed earlier and recovered latter on is a) business income b) non-business income

c) exempted income d) other sources

9. Gifts from clients are a) Professional income b) Business income c) Other sources d) exempted

income

10. Repair incurred before installation of an assets is a) capital expenditure b) capital receipt c)

Revenue expenditure d) revenue receipt

11. To be a short-term capital asset, non financial capital asset” must be held for

a) less than 36 months b) less than 24 months c) less than 12 months d) less than 6 months

12. What is the time limit for holding of a financial asset, to be called ‘Short Term Capital Asset”?

a) Not more than 6 months b) Not more than 12 months c) Not more than 24 months d)

Not more than 36 months

13. To be a long term capital asset, a non financial asset should be held more than

a) 12 months b) 24 months c) 36 months d) 60 months

14. If shares were held for less than 12 months, it is then called as:

a) Short term capital asset b) Long term capital asset c) Exempted Capital asset d) None of

these

15. Indexing is applicable to:

a) Long term capital asset b) Short term capital asset c) Exempted capital asset d) Financial

asset

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16. Land held for 56 months

a) Long term capital asset b) Short term capital asset c) Exempted capital asset d) None of

these

17. Short term capital gain on sale of unlisted shares are a) taxable b) exempted c) partially exempted

d) partially taxable

18. Long term capital gain on sale of unlisted shares are a) taxable b) exempted c) partially exempted

d) partially taxable

19. Exemption u/s 54 is allowed when a residential house is sold and the investment is made on a)

another residential house b) shares c) land d) Jewellery

20. Cost of long term debentures are a) eligible for indexing b) not eligible for indexing c) both (a)

and (b) d) none of these

SECTION B

1. Mr.R declared a bonus of Rs.1,00,000 for employees but due to paucity of funds he could pay

Rs.40,000 on 31-03-2018. He paid Rs.3,000 on 14-07-2018 and Rs.3,000 on 1-10-2018. He filed his

return on 31-7-2018.

2. To what extent following are allowed as deductions in computing the income of business carried on

by Mr.A:

(i) Entertainment expenditure incurred during the previous year ending 31-3-2017 is 50,000

(ii) Daily allowance given to Mr.Mohan, employees is at the rate of 2,000 per day. He was on

tour for 5 days and was given 10,000 as daily allowance during previous year 2017-18.

(iii)Ten items were presented during previous year 2017-18 on advertisement each costing

2,000

(iv) Income-tax deposited in advance during the previous year 2017-18 amounted to 2,000

3. A payment of 42,000 by cheque as employer’s contribution to provident fund, made on 30-11-

2017, due date being 15-12-2017. The cheque was realized on 31-12-2017. Calculate the

admissibility income under the head profits and gains.

4. From the following information given below find out how much amount can be deducted during

the previous year 2017 -18. These expenses relate to previous year 2017 – 18.

S.No. Expenses Amount and Date of

Payment

Due Date

1. Interest to Financial Corporation Rs.1,00,000 on 1-06-2018;

Rs.1,00,000 on 31-03-2019

31.07.2018

2. Employee’s contribution to P.F. Rs.20,600 on 13-04-2018 by

cheque which was encashed

on 26-04-2018

15.04.2018

3. Advance Income Tax Rs.62,000 on 29-07-2018 31.07.2018

4. Excise Duty Rs.1,40,000 paid on 1-1-

2019

31.07.2018

5. Cost of acquisition in 2002-03 is 1,20,000. Find out the Indexed Cost if sold in 2017-18. [CII for

2002-033 is 105 and for 2017-18 is 272].

6. Find out the indexed cost and capital gain: W.D.V of Office Furniture which as on 1-4-2017

18,000 (which was purchased on 15-9-2008 for 20000 & sold on 1-9-2017(CII = 272) for 26,000.

7. Find out the indexed cost and capital gain: Bonds purchased on 1-11-2006 (CII = 122) for

2,60,000 were sold on 1-1-2018 (CII = 272) for 4,00,000.

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8. Mr.X purchased a house on 1-11-2001 for 2,00,000 which was improvised in 2010-11 at the cost

of 1,00,000. What will be its indexed cost during 2017-18 if C.I.I. for 2001-02 is 100, in 2010-11 is

167 and for 2017-18 is 272).

9. Define the term ‘capital gain’.

10. Distinguish between Cost of acquisition and Cost of Improvement.

SECTION C

1. From the following statement, compute income from profession of Dr.S.K.Kapoor if accounts

are maintained on mercantile system:

Notes:

1. Electricity and water charges includes domestic bill of 2,500

2. Half of motor car expenses are for professional use.

3. Telephone expenses include 40% for personal use

4. Opening stock of medicine was 6,000 and closing stock was 4,000.

2. Calculate taxable profit of the assessee for the assessment year 2018-19 from the particulars

given below:

Profit for the previous year 2017-18 (Before charging the following

amounts)

2,60,000

(i) Amount given to Punjab University for Research in the field

of social sciences

20,000

(ii) Cost of land acquired for constructing research laboratory 1,00,000

(iii) Cost of Building and P & M required for research 3,50,000

(iv) Amount given as salary to staff engaged in research (relating

to a field not related to assessee’s own business) during

2017-18 (Business started on 1-4-2017)

30,000

(v) Salary given to staff engaged in research within premises

during 2017-18

60,000

3. Following is the profit and loss account of Kesari Mlya for the previous year 2017 – 18.

PROFIT AND LOSS ACCOUNT

Rs. Rs.

To salaries 25,650 By Gross profit 80,000

Rs. Rs.

To Dispensary Rent 36,000 By Visiting fees 45,000

To Electricity & water charges 6,000 By Consultation fees 1,25,000

To Telephone Expenses 6,000 By sales of medicines 72,000

To Salary to nurse & compounder 36,000 By Dividends 5,000

To Depreciation on Surgical Equipment 6,000

To purchase of medicines 36,000

To Depreciation on X-ray Machine 4,000

To Income Tax 5,500

To Donation to RamaKrishna Mission 4,000

To Motor Car expenses 9,600

To Depreciation on car 4,800

To Net Income 93,100

2,47,000 2,47,000

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To rent 1,000 By bank interest 450

To commission on sales 100 By Bad Debts recovered (last

year allowed)

2,000

To Income – tax 2,600 By rent from house property 4,800

To Entertainment expenses 600 By interest on commercial

securities

2,000

To Commission paid to collect

Interest on Securities

25

To Embezzlement by cashier 1,000

To Municipal tax of H.P. 600

To Bad Debts (allowed) 450

To repairs to house 1,625

To Office expenses 9,180

To depreciation 5,000

To L.I.C premium 1,320

To net Profit 40,100

Total 89,250 Total 89,250

Depreciation on the assets is Rs.4,500

Compute the taxable business income for the assessment year 2018 – 19.

4. Mr.H submits the following particulars about sale of assets during the year 2014-15:

Jewelery

Plot

Gold

Sale price 5,00,000 20,24,000 2,40,000

Expenses on sale Nil 24,000 Nil

Cost of acquisition 1,50,000 7,00,000 80,000

Year of acquisition 2007-08 2004-05 2009-10

C.I.I. 129 113 148

He has purchased a house for 12,00,000 on 1-3-2018. Calculate the amount of taxable capital

gain if C.I.I. for 2017-18 is 272.

5. Mr.Raman Raju inherited a house from his father Mr.D.Raju on 1-1-2006. [C.I.I. = 117]. The house

was acquired by Mr.D.Raju in 1989-90 for 60,000 and its F.M.V. as on 1-4-2001 was 5,20,000

and it was sold in 2017-18 [C.I.I. = 272] for 13,50,000.

6. From the following information of Mrs.Juhi, compute taxable capital gains for the Assessment year

2018-19:

(i) Cost of acquisition of residential house 5,50,000

(ii) Sale proceeds on 2-8-2017 21,00,000

(iii) Cost of construction of new residential house.

(The house was constructed during 2017-18.

4,00,000

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The house is used by Juhi’s sister for her

residence)

The Cost inflation index in 2001-02 was 100 and 2017-18 is 272.

7. From the following information of Mrs.Karishma, compute taxable capital gains for the Assessment

year 2014-15:

i. Purchased Agricultural Land (Agra city) in 2002-03

(self cultivated)

1,60,000

ii. Sold the land on 10-8-2017 for 7,00,000

iii. Invested in purchase of a house on 10-9-2017 2,00,000

iv. Purchased another piece of agricultural land on 10-

10-2017

1,50,000

The cost inflation index for 2002-03: 105, for 2017-18 was 272. She does not own any other house.

8. Mr.Sundar purchases a house property for RS.92,000 on 16-6-90. He dies on 12-9-1998. The

property transferred to Mrs.Sundar by his will. Mrs.Sundar spends to Rs.1,40,000 during 2004-05 for

re-construction of the property. Mrs.Sundar sells the house property for Rs.16,75,000 on 20th March,

2018. Brokerage paid by Mrs.Sundar is Rs.16,750. The fair market value of the house on 1st April

2001 is Rs.3,00,000. Compute the capital gain. (Cost inflation index for 2004-05 is 113, and for 2001-

02 is 100 and for 2017-18 is 272).

9. Explain income exempted from capital gain.

10. Write a note on capital gain.

UNIT III - Answer Scheme

Section A

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

a a c a c a d a a a b a c a c a a a a b

SECTION B

1. Rs. 70,000 allowed during assessment year 2018 – 19 and Rs.30,000 during 2019 – 20

2. (i) Fully Allowed; (ii) Fully Allowed (iii) Fully Allowed and (iv) Disallowed

3. Payment of 42,000 will not be allowed in any of the previous years as cheque was not

realized within 15 days

4. (1) Rs.1,00,000 paid on 1-6-2018; (2) Rs.20,600; (3) Not Allowed and (4) Nil

5. Indexed Cost: Rs.3,10,857

6. Short term Capital Gain: Rs.8,000

7. LTCG Rs.1,40,000; No indexing

8. Indexed Cost Rs.7,06,874

SECTION C

1. Professional Receipts: Rs.2,42,000; Professional Payments Rs.1,34,300 and Professional Gain

Rs.1,07,700

2. (i) 100% i.e. Rs.25,000 to be allowed; (ii) and (iv) not allowed (v) allowed (iii) Capital

expenditure adjusted up to Rs.1,75,000 and the balance to be c/f Rs.1,75,000; Taxable Profit :

Nil.

3. Business Profit Rs.39,520

4. Taxable LTCG: a) Jewellery : Nil; b) Plot Rs.2,42,584 and Gold Nil

5. LTCG Rs.1,41,111

6. LTCG: Rs.6,04,000; Exempted u/s 54 Rs.4,00,000 and Taxable LTCG Rs.2,04,000

7. LTCG Rs.2,85,524, exemption u/s 54B Rs.1,50,000, exemption u/s 54F Rs.81,578; Taxable LTCG

Rs.53,946

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8. Taxable L.T.C.Gain: Rs.5,05,259

UNIT IV

SECTION A

1. Dividends from co-operative society are

a) Exempted b) Taxable c) Partly Taxable d) None of these

2. ‘Interest on securities’ accrues

a) Day by day b) Quarterly c) After a fixed period mentioned on the face of the security d)

None of these

3. ‘Grossing up’ of interest on securities is required when

a) Interest is received after T.D.S. b) They are central govt. securities c) Interest on bank

deposits is less than 10,000 d) None of these

4. Tax is reduced from casual incomes at

a) 10% + surcharge and cesses b) 20%+surcharge and cesses c) 30% d) none of these

5. Interest on bank term deposits is subject to tax deduction at source if the interest amount during the

relevant previous year exceeds

a) 2,000 b) 5,000 c) 10,000 d) 30,000

6. Which of the following gifts is taxable?

a) Gifts in kind from relatives b) Gifts from wife c) Gifts from son d) Gifts from office

colleague

7. Loss from long term capital asset can be set-off against

a) STCG b) Business Income c) LTCG d) Salary Income

8. Loss on accounting of maintenance of race horses can be carried forward for


9. Loss under the head house property can be carried forward for


10. Business loss can be carried forward for


11. Unabsorbed depreciation can be carried forward for

a) 4 years b) 8 years c) 9 years d) unlimited period

12. Loss under the head capital gain can be carried forward for


13. Which one of the following is not an income from other sources?

a) Interest on fixed deposit in bank b) Winnings from cross word puzzles

c) Gift in excess of Rs.50,000 from an unrelated person d) Profit on sale of building

14.Which of the following income from other sources is not taxable?

a) Dividend from co-operative society b) Dividend from foreign company c) Dividend from

domestic company d) Winnings from lottery

15. Income from other sources is a.................

a) Residuary head of income b) Major head of income c) Income from a single source d) Constant

and regular income

16. In case of compacy, surcharge on MAT for Assessment year 2018 -19 for book profit exceeding

Rs.10 crore was

a) 10% on tax b) 12% of tax c) 15% of tax d) 20% of tax

17. Rate of income tax in the case of every firm:

a) 20% b) 30% c) 15% d) 25%

18. Rate of income tax in the case of an individual whose income is below Rs.2,50,000:

a) Nil b) 5% c) 15% d) 25%

19. Education cess for the assessment year is:

a) 3% b) 5% c) 7% d) 10%

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20. STCG on the transfer of capital asset is

a) 15% b) 20% c) 30% d) 50%

SECTION B

1. Explain the deductions U/S 80 DD and 80 DDB.

2. Explain the methods of taxation in computation of tax liability.

3. Explain the deduction U/S 80 U.

4. Mr. D is karta of an H.U.F . The H.U.F has a child( son of D’s brother) who is mentally

disorder. Mr. D’s mother is also physically disabled. The H.U.F has spent Rs.24000 on their

treatment. Can H.U.F claim deduction U/S 80 DD and if yes , how much? (Ans: yes,75,000)

5. Mr. X is government employee and he his father and his son are suffering from notified

illness. He has incurred the following expenses :

Rs.

On his own treatment 50,000

Amount reimbursed by employer 20,000

On treatment of his son 40,000

Insurance claim received 18,000

On treatment of his father 20,000

Insurance claim received 6000

calculate deduction U/S 80 DDB . No deduction of any expenditure incurred on treatment of

his father who is not dependent on him. (Ans: Rs.2000)

6. If a professional man has his gross taxable income of Rs. 3,60,000 and pays rent of Rs. 5000

p.m at varanasi. Calculate the amount of deduction U/S 80 GG.

(Ans: Rs.24,000)

7. Compute the tax liability of Mr. A for the assessment year 2018-19 if his total income is:

A. Rs. 2,31,670 (Ans: a. Nil

B. Rs.2,64,371 b. Rs,719)

8. Compute the tax liability of an individual assessee whose income is Rs. 2,94,800 for the year

2018-19 along with rebate U/S 87A. (Ans: Rs.2307)

9. Mr. Raman, a Chartered Accountant, is living at kanpur and is carrying on his profession

there, For the year 2017-18 he has supplied the following particulars. Compute his total

income for the assessment year 2018-19:

Rs.

Professional Gain 5,00,000

Rent received from house at Delhi 18,000 p.a

Municipal taxes 1,500 p.a

Long term capital gain 10,000

Part time salary as lecturer in taxation laws 1,24,000

Rent paid at Kanpur 6000 p.m

Interest on Govt. Securities 19,000

He also deposited Rs.15,000 in PPF (Ans :Rs.6,41,510)

10. Compute the tax liability of Mr. Z if his total income is Rs. 7,84,096 for the year 2018-19 as

in case : A. Citizen

B. Senior citizen (Ans: a. Rs.71,400 b.

Rs.58,525)

8 MARKS

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1. Explain the deductions U/S 80E, 80EE, 80G, 80GG, 80GGB, 80TTA.

2. Explain the income tax rates for:

i. Individual

ii. Co-operative society

iii. Firm

iv. Local authority

v. Company

3. From the following particulars of Mr. X . Compute the amount of deduction U/S 80 C

for the previous year 2017-18.

Life insurance premium paid:

On own policy -30,000

On the life of his wife -10,000

On the life of father - 10,000

On the life of married daughter and her

husband ( joined policy) - 10,000

All life policy were taken in 2010.

Contribution of recognised PF - 2000 p.m

Deposit in PPF in march 2018 - 45000

Group insurance premium - 3000

Investment made during 2017-18 in NSC VIII issue - 10,000

Repayment of loan taken from LIC for the construction

of residental house Rs.4000p.m[ including 1000p.m as interest] 48000 Accured

interest on NSC VIII issue - 4000

Insurance premium on the life of minor son paid on 2.4.2018 - 8000

(Ans: Rs.1,50,000)

4. Mr. Sony whose gross total income is Rs. 40,00,000 makes the following donation during the

previous year 31.03.2018

Rs.

To PM national relief fund 1,00,000

To national defence fund 2,00,000

To temple of public worship for its repair 2,00,000

To a local collage for construction of commerce block 1,00,000

To poor student as guide 10,000

To municipal committee 1,00,000

To Chandigarh for promotion of Family Planning 50,000

To CM earthquake relief fund Maharashtra 20,000 The gross total income includes

10,00,000 as profit on sale of long term capital assets. Compute his total income for the assessment

year 2018-19.

(Ans: Rs.35,05,000)

5. The following are particulars of income of Mr. Behl for the Assessment year 2018-19:

Rs.

1. Income from House property 61,200

2. Business Income 1,80,000

3. Dividends from co-operative society 15,500

4. Long Term Capital Gain:

a. from Land 60,000

b. from Jewellary 35,000

5. He paid Rs. 28,000 as Life Insurance Premium on his own policy of

Rs. 2,00,000 ( policy issued on May 1,2013). He also paid Rs. 6000 on a life policy of

Rs. 50,000 which he acquired in 2010.

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6. He gave Rs. 30,000 as donation to a charitable institution approved under section 80

G.

7. During the year he deposited Rs. 18,000 in an equity linked saving scheme notified

U/S 80 C

8. He deposited Rs. 12,500 in National Saving Scheme 1992.

9. Interest accrued on N.S.C. VIII issue purchased in November 2016 for Rs. 30,000

is Rs. 2,260.

10. Interest accrued on a fixed deposit in a Bank Rs. 6000.

Compute his Total Income. (Ans:2,83,290)

6. Compute the amount of tax payable for the assessment year 2018-19 in the following

cases:

(a) Total income of Mr. X is Rs. 5,20,064

(b) Income of Mr. Y [ a resident senior citizen] is Rs. 5,20,064

(c) Income of Mr. Z [a resident super senior citizen] is

Rs.5,20,064.

(Ans: a. Rs.17,007

b. Rs.14,432

c. Rs.4132 )

7. Mr. A got medical insurance of all family members and paid premium in the previous

year 2017-18 as under:

Rs.

1. Medical insurance of self paid by cheque 10,000

2. Medi-claim premium of wife paid in cash 5,000

3. Medical insurance premium of 16 years old son

paid by cheque to a private insurance company

by Insurance Regulatory and Development Authority 3,000

4. Medi-claim premium paid on the medical insurance of

father and mother 22,000

5. Medi-claim premium on the policy of dependent younger

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brother 4,000

6. Preventive medical check-up of wife 4,000

And also find the deduction amount if the insurance taken for his parents

U/S 80D.

(Ans: own policy:Rs.17,000

parents :Rs.39,000)

8. From the particulars given below compute the total income of Mr. S.K. Giri a, physically

handicapped person, for the assessment year 2018-19:

Rs.

1. Salary received from employer 2,10,000

2. Annual rental value of let out house 15,000

3. Interest on loan taken to purchase another house

which is self-occupied 20,000

4. He had sold another residental house on 1-4-2017 for Rs. 23,48,000. Its fair market

value on 1-4-2001 was Rs. 6,50,000. Out of capital gain of the house he invested Rs.

5,00,000 in bonds of National Highway Authority of India notified u/s 54EC [ CII for

2017-18 is 272]

5. He won Rs. 40,000 in race course betting and Rs. 2000 in lottery.

6. He paid Rs. 6000 by cheque as premium to secure health insurance policy of GIC for

his family.

7. His mother who is dependent on him is suffering from cancer and he spent Rs. 46,500

on her treatment.

8. His minor son is mentally retarded on whose special education he spent Rs. 15,000

during the year.

9. He donated Rs. 10,000 to Karnataka State Chief Minister’s Relief Fund. 10.He gave

Rs. 2000 for repair of a notified temple and Rs. 1,500 to Family

Planning Association of India. (Ans: Rs.1,22,000)

9. Mrs. Kamala has attain the age of 65 years on 3-10-2017. She had the following incomes for

the previous year 31-3-2018:

Rs.

i. Short-term capital gain on sale of plot 1,56,000

ii. Long-term capital gain on sale of jewellary 2,05,000

iii. She has deposited Rs. 35,000 in PPF.

You are requested to compute the tax liability of Mrs. Kamala for the assessment year 2018-

19. (Ans: Rs.2,780)

10. An assessee, who is an individual received the following incomes during the financial

year 2017-18:

Rs.

i. Insurance commission received from L.I.C 10,656

ii. Cloth Business Profits 2,75,000

iii. He made the following payments during the year:

a. Deposit of Rs. 10,000 in National Saving Scheme 1992

b. Payment of Rs. 500 p.m to Jeevan Dhara Policy

c. Investment of Rs. 10,000 in units of mutual funds

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notified u/s 80C as equity linked saving scheme

d. Donation given to:

Rs.

National Children Welfare Fund 5,000

P.M. National Relief Fund 5,000

Gujarat Relief Fund 2,000

P.M. Folks Arts Fund 1,000

P.M. Students Aid Fund 2,000

Maharastra C.M’S Earthquake Relief Fund 2,000

Local authority to promote Family Planning 2,000

Public Charitable Trust 10,000

National Fund for control of drug abuse 4,000

iv. He paid Rs. 6000 by cheque to General Insurance Company under Medi claim.

Compute his total income.

(Ans: Rs. 2,26,104)

UNIT IV - Answer Scheme

Section A

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

b a a c c a c d b d d b d a a b b a a a

UNIT V

SECTION A

1. Deductions from G.T.I. are available when

a) G.T.I. is a positive figure only b) Even when G.T.I. is negative c) When G.T.I. is ‘Nil’ d)

In all the above cases

2. Maximum amount deductible under section 80C, 80CCC and 80CCD cannot exceed

a) 1,00,000 b) 50,000 c) 80,000 d) 1,50,000

3. Which of the following is not to be included to compute gross qualifying amount for Section

80C?

a) Contribution to PPF b) Subscription to NSS c) Payment of Life Insurance Premium

d) Payment of school fees of a poor neighbour’s children

4. Deduction u/s 80CCC in respect of

a) Mediclaim insurance b) Pension fund premium c) LIC Premium d) NSS

5. If assessee is senior citizen, maximum permissible deduction for premium paid for medical

insurance u/s 80D is

a) 5,000 b) 10,000 c) 20,000 d) 30,000

6. Deduction u/s 80DD in respect of:

a) medically handicapped dependant b) Treatment of a specified disease

c) Contribution to PPF d) LIC premium paid

7. Maximum deduction u/s 80DD shall be

a) 10,000 p.a. b) 20,000 p.a. c) 30,000 p.a. d) 75,000 p.a.

8. Deduction in respect of interest on loan taken for higher education of self or spouse or children

is fully deductible under

a) Section 88 b) Section 92 c) Section 80E d) Section 16B

9. Donation to NDF is allowed as deduction at the rate of

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a) 100% b) 50% c) 10% d) Nil

10. Donation to Rajiv Gandhi Foundation allowed as deduction at the rate of

a) 10% b) 50% c) 100% d) 25%

11. Maximum deduction in respect of Royalty income of authors of literary, Artistic or scientific

nature is

a) 3,00,000 b) 2,00,000 c) 1,00,000 d) 40,000

12. Deduction u/s 80U is allowed to

a) All assessees b) Handicapped assessee c) Member of HUF d) None of these

13. Determining the tax liability is called

a) Assessment b) Scrutiny c) Enquiry d) Evaluation

14. The number allotted by income tax authorities to assessees for identification and which should

be quoted in all documents and correspondence is

a) I.D.No. b) Register No. c) PAN d) Licence No.

15. Deduction of tax at source made for incomes which can be calculated in advance is called

a) T.D.S b) PAS c) FAS d) MAS

16. Due date of first instalment of advance tax by assessees other than companies is:

a) 15th June b) 15th September c) 30th June d) 30th November

17. Due date of filing of return by a non business assessee is

a) 30th June b) 31st August c) 31st July d) 30th November

18. In case of a salaried employee, due date of filing of return is

a) 30th June b) 31st August c) 31st July d) 30th November

19. Last date for filing of return by a company assessee is

a) 30th June b) 31st August c) 31st July d) 30th September

20. Maximum marginal rate of tax:

a) 30% b) 50% c) 60% d) 75%

SECTION B

1. Define filing of return and due dates for filing of return.

2. What is tax evasion and tax avoidance ?

3. Explain about TDS and write any four provisions of the TDS act.

4. The total income of an individual (45 years old) computed under the normal provisions of the

Income Tax Act is Rs. 10,00,000. However the ‘ adjusted total income’ of the individual

[computed as per sec 115JC(2)] amounted to

Rs. 30,00,000. Calculate the Final Tax Liability of the individual for the Assessment Year 2018-

19.

(Ans: Rs.5,71,650)

5. The total income of H.U.F computed under the normal provisions of Income Tax Act is Rs.

2,77,930. However the ‘adjusted total income’ of the H.U.F [computed as per sec 115JC(2)]

amounted to Rs. 25,00,000. Calculate the Final Tax Liability of the H.U.F for Assessment Year

2018-19 along with Rebate U/S 87A.

(Ans: Rs.4,76,375)

6. Mr. S runs a firm with his partners M and V . The book loss of the firm is Rs. 30,000

and he provides Rs. 1,80,000 as Remuneration to his working

partners. Compute his Total Income of the firm for the Assessment Year 2018-19.

(Ans: Rs.(-) 1,80,000)

7. The total income of XYZ Ltd, a domestic company, computed under the normal provisions of

Income Tax is Rs. 2,50,000. However, the Book profits of the company (calculated as per sec

115JB) amount to Rs. 8,15,000. Calculate the tax liability of company for Assessment Year

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2018-19, on assumption that the total turnover of the company for the previous year 2015-16

did not exceed

Rs. 50 crores.

(Ans: Rs.1,55,300)

8. The estimated tax liability (after deducting TDS) of Mr. Sanjeev for the previous year 2017-

18 is Rs. 1,00,000. Calculate advance tax payable by him in various instalments during the

previous year 2017-18.

(Ans: IV installment Rs.25,000)

9. Compute the tax payable by a company for the Assessment year 2018-19 if its total income

is Rs. 4,00,000 and Book profit is Rs. 15,00,000.

(Ans: Rs. 3,58,900)

10. The estimated tax liability of Anand Ltd for the previous year 2015-16 is Rs.

5,00,000. Calculate advance tax payable by the company in various

instalments during the previous year 2015-16 (Ans:IV installment Rs.1,25,000)

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SECTION C

1. Explain briefly about Advance Payment of Tax.

2. What is PAN ? What is the procedure for obtaining the PAN ?

3. Write down the format for computation of total income of the assessment of firm.

4. The following are the particulars of the income of the GND University teacher during the

year ending 31st

March 2018:

a) Salary Rs. 37,400 p.m plus Rs. 9000 p.m as grade pay from which 10 per cent is

deducted for statutory provident fund to which the University contributes 12 per

cent.

b) Rent-free bungalow of the annual letting value of Rs. 18,000

c) Wardenship allowance Rs. 2000 p.m

d) 12 % interest on Government Loan of Rs. 65,000

e) Income from house property (computed) Rs. 29,560

f) He received Rs. 3,500 for writing articles in a journal.

g) He paid Rs. 2000 by cheque to G.I.C under mediclaim.

h) Interest on postal saving bank deposit Rs. 6500

i) Interest (gross) Rs. 2,500

j) Examinership remuneration Rs. 3,500

k) During the year, he sold shares of Relience Industries Ltd and earned a long

term capital gains Rs. 60,000

During the year he paid Rs. 24,000 as life insurance premium on his own policies and spent

Rs. 600 on books purchased for his own use.

Find out his Total Income , tax and exempted income. Population of Amritsar is 12 lakhs.

(Ans:Rs. 34,310)

5. The following details of income have been supplied by Karta of H.U.F. You are required to

compute the total income and tax of H.U.F. It has deposited

Rs. 10,000 in PPF.

Rs

a) Profit from business 2,62,000

b) Salary received by a member of H.U.F 8,000

c) Director’s fee received by Karta 6,000

d) Rental value of house property let 12,000

e) Municipal Taxes 600

f) Interest on a fixed deposit of Axis Bank 450

g) Long-term Capital gains from the transfer of building 9,500

h) Long-term Capital gains from the transfer of investments 10,000

i) Donation to a collage which is an approved institution 4,000

j) Profit from an AOP (1/4th share) 10,000

(Ans: Rs. 4,450)

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6. The Profit and Loss a/c of the firm in which XYZ shares P&L in the ratio of 5:4:1 respectively.

Discloses profit of Rs. 80,525 for accounting year ending

31st

March 2018.

DEBIT Rs Rs CREDIT Rs Rs

Donation to

National Defence

Fund

11,000 Capital gain on

sale of scarp

Machinery

5,000

Salary to partners

X

Y

Z

15,000

19,000

22,000

56,000

Interest on

debentures after

deduction of tax

at source 2500

22,500

Commission to X 6,000 Interest on

securities

(gross)

3,500

Office Rent (paid

to Y)

12,000

Compute the Total Income of the firm for the Assessment year 2018-19. The firm has

submitted the certificate copy of instrument partnership along with return and it provides for

payment of salary, commission to working partners X,Y and Z as per above. (Ans: Rs.25,660)

7. Compute the tax payable by a company for the Assessment year 2018-19 if:

a) its total income is Rs. 5,00,000 and book profit is Rs. 20,00,000.

b) its total income is Rs. 6,20,000 and book profit is Rs. 10,00,000.

8. Krishnamoorthy born on 5th

January 1975 has furnished the following information

Particulars Rs

Salary income 1,00,000

Rent from house 58,000

Municipal taxes paid 6,000

STCG on sale of shares 5,000

Winning from lottery 50,000

Interest on Bank deposits 6000

Interest on Govt. securities 2,000

Interest on debentures 14,000

Deposit in PPF account 90,000

LIC on own life policy premium 20,000

Crossword puzzle winnings 80,000

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Compute the net tax payable by Krishnamoorthy for the Assessment year 2018-19

9. HUF with more than one co-parcenr entitled to claim partition, owns a property which is let

out at Rs. 600 p.m per unit. The property consists of 10 identical r residential units. The

municipal rental value of the property is Rs. 60,000 p.a

Following deductions are claimed as expenses: Rs.

Municipal taxes 4,200

Lift maintenance 2,000

Water pump expenses 800

Actual expenses on repairs 8,000

Cost of renovation of the property 50,000

Education cess levied by the State Govt 2,000

Rent Collector’s monthly salary 200

Interest on loan taken by mortgaging the property and loan was

used for the family business 5,000

Income from the family business for the Assessment year 2018-19 was Rs. 2,10,000

after charging interest on loan.

A lottery ticket worth Rs. 100 was purchased out of family funds on the name HUF. It won a

prize of Rs. 1,00,000.

The karta had acquired a shop out of his own savings which he gifted to his wife.

Shop has an annual income(computed under the head HP) is Rs. 24,000.

Compute total income of HUF and tax payable for the assessment year 2017-18.

(Ans: Tax payable Rs.31,180)

10. From the particulars given below calculate the total income of firm assessed u/s 184 and

income of the partners P,Q and R for the assessment year 2018-19.

The firm has submitted its deed and the payment of remuneration and interest is in accordance

with such deed. Profit-sharing ratio is 4:3:2.

Rs. Rs.

Profit as per P&L Account after deducting the

following amounts (-)3,40,000

Remuneration to working partners

P 1,20,000

Q 90,000

R 60,000

Interest paid on capital capital

P 2,00,000 28,000

Q 3,00,000 42,000

R 1,00,000 14,000

(Ans: Book loss Rs. 58,000 Partners

income P Rs.90,667 Q Rs.86,000

R Rs.45,333)

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UNIT V – Answer Scheme

Section A

1

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2

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3

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4

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5

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6

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7

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9

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10

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11

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12

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14

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15

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16

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17

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18

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19

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20

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a d a b d a d c a b a b a c a b b c c a

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COIMBATORE



SUBJECT: INTERNATIONAL TRADE SUBJECT

CODE: 18PCM311

Staff-in-charge: Dr.R.Maharajothi Priya Class: II M.Com

UNIT-I

SECTION A

1. David Ricardo illustrated the Comparative Cost Theory in________ by using a two-country,

two-commodity model.

a) 1819 b) 1817 c) 1821

2. The Opportunity Cost Theory, propounded by______ in 1983.

a) Heckscher b) Ohlin c) Professor Gottfried Haberler

3. According to HO Theory the product and the factor markets in both the countries are

characterized by__________ competition.

a) Perfect b) Imperfect c) Monopoly

4. Kravis states that, there are________ bases of availability factor.

a) 5 b) 4 c) 3

5. The Production Possibility Curves of different countries may be________..

a) Different b) Similar c) Identical

6. There is long chain of middlemen in_______ trade.

a) Internal b) Domestic c) International

7. ________ is one of the features of international trade.

a) No government control b) Several documents c) Limited rules

8. The ________ theory demonstrates the fact that international trade can increase real income

and consumption.

a) Balance of Payment b) Opportunity Cost c) Comparative Cost

9. ________ is one of the measurements of the gains from international trade to a particular

country.

a) Balance of Payment b) Terms of Trade c) Balance of Trade

10. ________ Terms of trade relate to the ratio of exchange between commodities.

a) Income b) Real Cost c) Utility

11. Net Barter Terms of Trade, N= ______

a) PY/Pm b) PX/Pm c) PQ/Px

12. The concept of real cost terms of trade was introduced by_________.

a) Geralad Meier b) Adam Smith c) Jacob Viner

13. Elasticity of Demand and _____

a) Notice money b) Liquid money c) Overnight money

14. __________ is the problem in the measurement of terms of trade.

a) Tariff b) Taste c) Changes in quality

15. The Income terms of trade indicates a nation’s capacity to________.

a) Import b) Export c) Income

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16. In Single Factoral terms of trade Zx is the _________ index.

a) Single Productivity b) Export Productivity c) Import Productivity

17. Gerald M. Meier has classified the different concepts of terms of trade into_______

categories

a) 2 b) 4 c) 3

18. One of the most important restrictions on international competition is imposed by

the________.

a) Customs authority b) Government c) Public

19. _________ is the only element of cost in the comparative theory.

a) Capital b) Land c) Labour

20. _________ Theory recognizes the importance of all the items in the BOP.

a) PPP Theory b) IRP Theory c)BOP Theory

Answer keys

1.A 2.C 3.A 4.B 5.A 6.C 7.B 8.C 9.B 10.A 11.B 12.C 13.C 14.C 15.A 16.B 17.C 18.B

19.C 20.C

SECTION B

1. What are the features of international trade?

2. What are the advantages of international trade?

3. What are the disadvantages of international trade?

4. Define terms of trade?

5. What is the need for terms of trade?

6. What gain countries obtain from international trade?

7. List out the various types of terms of trade?

8. Why international trade is important?

9. List out the benefits obtained by our nation through international trade?

10. What are factors that influence terms of trade?

SECTION C

1. Distinguish between domestic and international trade in detail.

2. Explain the opportunity cost theory.

3. Describe income and utility terms of trade.

4. Explain the various concepts of terms of trade.

5. Describe the comparative cost theory.

6. Explain the HO theory.

7. Discuss why international trade is essential for the development of world economy?

8. Explain types of terms of trade.

9. Explain the barriers in international trade.

10. What are the gains from terms of trade? Explain.

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UNIT-II

SECTION A

1. ________ is a systematic and summary record of a country’s economic and financial

transactions with the rest of the world over a period of time.

a) Balance of payment b) Balance sheet c) Balance of trade 2. ________ consider only the exports and imports of the visible terms.

a) Current account b) Capital account c) Balance of trade 3. BOP’s are recorded in the standard ________ book keeping form.

a) Single entry b) Double entry c) Triple entry

4. _________ includes all transactions which give rise to or use up national income.

a) Current account b) Capital account c) Official reserve account

5. _________ is the sale of goods abroad.

a) Merchandise imports b) Merchandise trade c) Merchandise exports

6. Purchase of goods from abroad are_______ entries.

a) Credit b)Debit c) None of these

7. _________ consist of short and long term capital transactions.

a) Unilateral transfer account b) Capital account c) Current account

8. Unilateral transfer is another term for________.

a) Gifts b) Loan c) Investment abroad

9. An invisible export means sale of_______.

a) Products b) Capital goods c) Services

10. _________ in general business activity are one of the prominent reasons for the balance of

payment disequilibrium.

a) Development disequilibrium b) Cyclincal fluctuation c) Secular disequilibrium

11. Change in taste, preference, fashions etc are ______ factors that influence the balance of

payment.

a) Economic b) Political c) Social

12. _________ means a reduction in the official rate at which one currency is exchanged for

another currency.

a) Appreciation b) Revaluation c) Devaluation

13. ________ is a popular method employed to influence the balance of payment position of a

country.

a) Exchange control b) Export promotion c) Import control

14. ________ can be controlled by imposing duties.

a) Exports b) Imports c) Trade

15. _________ can be promoted by providing subsidies and incentives.

a) Import b) Export c) Income

16. Automatic correction worked well under the_________ standard.

a) Paper currency b) Gold c) Silver

17. In balance of payment, if the credit balance is higher than the debit balance then it is called

as_______

a) Deficit b) Equilibrium c) Surplus 18. The payment of interest on loans and dividend payments are recorded in the________

account.

a) Official reserve b) Capital c) Current 19. Unilateral payment received from abroad are________.

a) Debits b) Credits c) Donation

20. The various debit and credit entries of the BOPs are generally grouped under______ heads.

a) 4 b) 3 c) 5

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Answer Keys

1.A 2.C 3.B 4.A 5.C 6.B 7.B 8.A 9.C 10.B 11.C 12.C 13.A 14.B 15.B 16.B 17.C

18.C 19.B 20.A

SECTION B

1. Write a short note on balance of payment?

2. Distinguish between BOT and BOP?

3. Discuss the nature of balance of payment accounting?

4. What is the role of current account in balance of payment?

5. Write the items included in the debit side of the capital account?

6. What do you mean by BOP equilibrium?

7. Define devaluation?

8. Explain exchange control and its role in BOP?

9. What is the role of import control in the correction of BOP disequilibrium?

10. What do you mean by Export promotion?

SECTION C

1. Describe the components of BOP

2. List out the items involved in BOP

3. Describe the factors that cause disequilibrium in BOP

4. Discuss how to correct the disequilibrium in BOP?

5. Discuss the role of BOP in the growth of India

6. What do you mean by import substitution?

7. How to contract and expand the monetary value of a currency?

8. Illustrate the structure of Bop with examples.

9. Explain various assistances provided by export promotion councils.

10. What are the various schemes offered by the government to promote trade?

UNIT-III

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SECTION A

1. The term foreign exchange is used to refer to_________.

a) Foreign trade b) Foreign currencies c) Foreign investment

2. The foreign Exchange Regulation Act [FERA] was established in the year_________.

a) 1983 b) 1989 c) 1973

3. The primary function of a foreign exchange market is the_________.

a) Transfer of purchasing power b) Provision of credit c) Provision of hedging

facilities

4. Hedging refers to the coverage of_______ risk.

a) Import b) Investment c) Export

5. _________ is the quickest method of transmitting funds from one centre to another.

a) Mail transfer b) Telegraphic transfer c) Cheque

6. _________ is an unconditional order in writing addressed by one person to another.

a) Letter of credit b) Bill of lading c) Bill of exchange

7. The market for the forward transactions is known as the________ market.

a) Future b) Forward c) Foreign exchange

8. The essence of purchasing power parity theory is clearly expressed by__________.

a) Prof.S.E.Thomas b) D.M.Mithani c) Dr.K.R.Gupta

9. A change in the purchasing power of the currencies is reflected in their_________.

a) Exchange rate b) Price c) Product

10. Balance of payment theory is otherwise known as the________ theory.

a) Demand and supply b) Exchange rate c) Interest rate

11. The value of a currency appreciates when the demand for it_________.

a) Decreases b) Increases c) Remains the same

12. ________ is one of the important means of achieving certain national objectives.

a) Exchange control b) Exchange rate c) Balance of payment

13. In India, there are_________ and money changers who are entitled to conduct foreign

exchange business.

a) Brokers b) Authorised dealers c) Banks

14. In_________ currency pegs, the country pegs to a major currency.

a) Single b) Composite c) Double

15. Expand EMS?

a) Export Monetary Service b) European Monetary System c) None of these

16. _________ is considered as the commodity in foreign exchange dealings.

a) Foreign currencies b) Domestic currencies c) US Dollar

17. Home currency quotation is otherwise known as_________ quotation.

a) Indirect b) Direct c) Currency

18. The buying rate is also known as the_________ rate.

a) Offer b) Standard c) Bid

19. ________ Quotation is used in London foreign market.

a) Indirect b) Direct c) Standard

20. When the agreement to buy and sell is agreed upon and executed on the same date, the

transaction is known as_________ transaction.

a) Currency b) Cash c) Forward

Answer Keys

1.B 2.C 3.A 4.C 5.B 6.C 7.B 8.A 9.A 10.A 11.B 12.A 13.B 14.A 15.B 16.A 17.B

18.C 19.A 20.B

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SECTION B

1. What do you mean by foreign exchange?

2. What is the role of foreign exchange market?

3. Define exchange rate and write its importance

4. What are the functions of foreign exchange market?

5. Brief the term exchange quotation

6. How to determine exchange rate?

7. Distinguish between spot and forward transaction

8. What are the features of forward exchange contract?

9. What is TT selling rate?

10. What is TT buying rate?

SECTION C

1. Explain in detail the various functions of foreign exchange market

2. Discuss purchasing power parity theory

3. Discuss interest rate parity theory

4. Explain forward exchange contract.

5. Describe the various methods of quotation

6. What are the factors that influences forward margin?

7. Describe Bills selling rate

8. Compare spot and forward contract in detail with examples.

9. Explain the advantages and disadvantages of spot contract.

10. Explain the favours and barriers of forward transaction in the view of importer and exporter.

UNIT IV

SECTION A

1. In advance payment, the burden of export finance is carried by the_________.

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a) Importer b) Exporter c) Bank

2. _________ has become the most popular terms of payment in recent days.

a) Letter of credit b) Document against payment c) Document against acceptance

3. A letter of credit which cannot be revoked is called as ____________ letter of credit.

a) Confirmed b) Irrevocable c) Revocable

4. In documentary credits, __________ parties are involved.

a) 3 b) 2 c) 4

5. In open account, the burden of export finance is carried by the_________.

a) Importer b) Exporter c) Bank

6. Shipment on consignment basis is usually made to_________.

a) Brokers b) Trusted Agents c) Shipper

7. In India_________ is usually shipped on consignment basis.

a) Diamond b) Automobiles c) Coffee

8. Preshipment finance is otherwise known as__________.

a) Packing credit b) Shipment credit c) Personal credit

9. Usually Preshipment finance will be obtained for a period of maximum__________.

a) 185 days b) 4 months c) 180 days

10. The concessional rate of interest on Preshipment finance is_______.

a) 15% b) 10% c) 12.5%

11. Under packing credit, the banks are free to change any interest beyond_______.

a) 260 days b) 300 days c) 270 days

12. Post shipment loans may be classified into _______ types.

a) 2 b) 3 c) 5

13. ________ enables an exporter to convert overseas credit sales into cash sales.

a) Discounting b) Underwriting c) Forfeiting

14. Credits extended beyond 180 days to 5 years are generally classified as_________.

a) Medium term b) Short term c) Long term

15. The bank in the importing country which establishes the letter of credit is called__________.

a) Opening bank b) Confirming bank c) Negotiating bank

16. _________ Letter of credit enables the beneficiary to draw a predetermined value of letter of

credit.

a) Red claused b) Confirmed c) Transferable

17. EXIM Bank was established on Jan1, _______.

a) 1985 b) 1982 c) 1984

18. EXIM bank was established for the purpose of financing, facilitating and promoting________

in India.

a) Investment b) Exports c) Foreign trade

19. _________ is offered directly to foreign importers by EXIM Bank.

a) Rediscounting of bills b) Relending facility c) overseas buyer’s credit

20. EXIM Bank operates _______ broad programmes of financing.

a) 4 b) 3 c) 5

Answer Keys

1.A 2.A 3.B 4.A 5.B 6.B 7.A 8.A 9.C 10.B 11.C 12.A 13.C 14.A 15.A 16.C 17.B

18.C 19.C 20.A

SECTION B

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1. How much important role does payment play in international trade?

2. Write a short note on open account?

3. Define documentary credit?

4. What are the factors to be considered while deciding terms of payment?

5. Write a short note on medium and long term post shipment finance?

6. Why ECGC is important for promoting exports?

7. What are the different types of letter of credit?

8. What is the need for EXIM Bank?

9. Define transit insurance?

10. List out the risk covered under standard policies in ECGC?

SECTION C

1. Explain about Pre shipment finance

2. Explain about Post shipment finance

3. Describe the export financing programme operated by EXIM Bank

4. Describe the various modes of payment

5. Explain in detail about ECGC

6. List out the objectives of EXIM Bank

7. What are the functional groups in EXIM Bank?

8. Explain export documents and procedures.

9. Elucidate recent exim policy of India

10. Explain incentives for exporters.

UNIT V

SECTION A

1. __________ is the basic document in an export transaction.

a) Consular invoice b) Commercial invoice c) Letter of credit

2. ___________ has been prescribed by the Reserve Bank of India under FERA Act.

a) GR form b) Invoice c) Bill of exchange

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3. When a draft is drawn on a foreign bank, it is known as a__________.

a) Letter of credit b) Bill of exchange c) Bill of lading

4. __________ is a customs document.

a) Invoice b) GR form c) Shipping bill

5. ___________ is widely used for moving valuables and urgently required goods.

a) Air transport b) Water transport c) Road transport

6. An exporter must also put up the________ as a collateral security when he gets an advance

against his bank credit.

a) Marine insurance policy b) License c) Confirmed order

7. _________ is a document of title to the goods shipped.

a) Bill of exchange b) Mate receipt c) Bill lading

8. Airway bill is__________ document.

a) Negotiable b) Non negotiable c) Transferable

9. Combined transport document is a document of carriage relating to_________ transport.

a) Single b) Multimodal c) Two way

10. Customs Act was introduced in the year________.

a) 1970 b) 1978 c) 1962

11. Regarding dispatch of goods________ is sent to the work manager or factory manager.

a) Day slip b) Inventory records c) Delivery note

12. AR-Form is to be prepared in_________.

a) Duplicate b) Triplicate c) Sixtuplicate

13. The Mate’s receipt is signed by_________.

a) Forwarding agent b) Exporter c) Captain of the ship

14. _________ is one of the documents to be presented to the negotiating bank.

a) Packing list b) Port trust copy c) Export order

15. _________ is one of the documents to be submitted by the exporter to the port authority.

a) GR form b) Cart ticket c) Bill of lading

16. For obtaining medium term credit________ is to be submitted by the exporter and the port

authority.

a) Bank certificate b) Proposal form c) Export contract

17. Tea and CSNL Cardinol included for benefits under VKGUY at ________ of FOB value of

exports.

a) 5% b) 7% c) 9%

18. Zero duty EPCG Scheme was introduced in August, _______.

a) 2010 b) 2009 c) 2007

19. Readymade garment sector granted enhanced support under MLFPS for a period of further

________.

a) 120 days b) 6 months c) 1 year

20. __________ Scheme is said to be the most popular and exporter friendly scheme.

a) DEPB b) EPCG c) MLFPS

Answer Keys

1.B 2.A 3.B 4.C 5.A 6.A 7.C 8.B 9.B 10.C 11.C 12.C 13.C 14.A 15.B 16.C 17.A

18.B 19.B 20.A

SECTION B

1. How export document are classified on the basis of function?

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2. How to categories documents under specific requirements?

3. Write a short note on bill of lading?

4. Write briefly about Marine insurance policy?

5. What do you mean by export order?

6. How to register for doing Exports?

7. What is the need for IEC code number?

8. What are the documents to be submitted by the exporter to the customs authorities?

9. Who is a clearing and forwarding agent?

10. Write a short note on EXIM policy?

SECTION C

1. Describe the procedure to be followed to become an exporter

2. Explain the significance of export document

3. Discuss in detail about EXIM Policy in India

4. Describe the various amendments made in EXIM Policy

5. Explain the various incentives provided for exporter

6. What do you mean by EDI?

7. List out the amendments made recently for exports of engineering and electronic goods

8. Illustrate logistics interface with marketing with a neat diagram.

9. Why is the marine insurance needed in international trade? Explain.

10. Explain the concept and objectives of supply chain management.

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COIMBATORE

DEPARTMENT OF COMMERCE PA & PG

Class: II M.Com Semester –III

Sub. Name: Business Research Methods Sub. Code: 18PCM312

Prepared by: Dr. M. USHARANI

UNIT-I

SECTION-A

CHOOSE THE CORRECT ANSWER

1. Research is____________

(a) Searching again and again (b) finding solution to any problem (c)

working in a scientific way to search for truth of any problem (d) all of these.

2. The essential qualities of a research are_________

(a) Spirit of free enquiry (b) reliance on observation and evidence (c)

systematization or theorising of knowledge (d) all of these

3. __________ aims at finding a solution for an immediate problem facing a society.

(a) Descriptive research (b) applied research (c) analytical research (d) empirical

research

4. _______ is the procedure that improves the quality of data for coding.

(a) Coding (b) tabulation (c) editing (d) none of the above

5. Independent variables that are not related to the purpose of the study, but may affect

the dependent variable are termed as ______________variable

(a) Extraneous (b) control (c) treatments (d) discrete

6. __________refers a mere assumption or some supposition to be proved or disproved.

(a) review of literature (b) hypothesis (c) sampling (d) report

7. In the process of conducting research ‘Formulation of Hypothesis’ is followed by____

(a) Selection of research tool (b) collection of data (c) statement of objectives (d)

analysis of data

8. A hypothesis is a________about the predicted relationships among events or variables

(a) Statement (b) conclusion (c) prediction (d) none of these

9. _______research is mainly concerned with generalizations and with the formulation of

a theory.

(a) Basic (b) exploratory (c) applied (d) experimental

10. __________research is a preliminary study of a new problem about which the

researcher has little or no knowledge.

(a) Basic (b) exploratory (c) applied (d) experimental

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11. The _________research leads to discovery of new theories and development of

existing theories.

(a) Pure (b) exploratory (c) applied (d) experimental

12. The major use of__________research is explanation of the state of affairs, as it

exists at present.

(a) Formulative (b) causal (c) descriptive (d) none of these

13. The objective of ________research is to test hypotheses about cause and effect

relationships.

(a) Formulative (b) causal (c) descriptive (d) none of these

14. Exploratory research is a____________study of an unfamiliar problem.

(a) Final (b) preliminary (c) causal (d) none of these

15. _______is a method or technique or an approach of exploring or analyzing the life of

a social unit.

(a) Preliminary study (b) secondary study (c) case study (d) pilot

16. A__________study is a small scale preliminary study conducted before the main

research, in order to check the feasibility or to improve the design of the research.

(a) Preliminary (b) secondary (c) case (d) pilot

17. Correctly defining the problem is the essential__________step in the business

research process.

(a)First (b)second (c)third (d)last

18. Plan of study of a researcher is called the_________

(a) Research design (b) research method (c) research procedure (d)

research problem.

19. If one variable depends upon another variable is termed as _________variable.

(a) Independent (b) dependent (c) extraneous (d) none of these.

20. A __________analysis is a preliminary investigation or informal gathering of

background information.

(a) Situational (b) causal (c) descriptive (d) exploratory

Answers

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

c d b c a b a a a b a c b b c d a a b a

SECTION-B

ANSWER THE FOLLOWING

1. Define the term research and explain the objectives of research.

2. How do you define a research problem? Give three examples to illustrate your

answer.

3. What is the necessity of defining a research problem?

4. Distinguish between research methods and research methodology.

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5. What is a hypothesis? What characteristics it must possess in order to be a good

research hypothesis.

6. Point out the limitations of the test of the hypotheses.

7. Explain the meaning and significance of a research design.

8. What are the various types of research?

9. Describe fully the technique of defining a research problem.

10. Briefly discuss the features of a good research design.

SECTION-C


1. List out and explain the criteria of good research.

2. Describe the different steps involved in a research process.

3. State the problems that are usually faced by the researchers.

4. Write a short notes on: (i) experience survey (ii) pilot survey

(iii) components of a research problem (iv) rephrasing the research problem.

5. Describe some of the important research design used in experimental hypothesis-testing

research design

6. Discuss the important points relating to research design.

7. Explain in detail the significance of research.

8. Examine the points to be considered before selecting a research problem.

9. Enumerate the procedure for Hypothesis testing.

10. Mention the important concepts relating to hypothesis testing

UNIT-II

SECTION-A


1. Number of items to be selected from the universe constitutes a__________

(a) population (b) sampling unit (c) survey (d) sample

2. Probability sampling is also known as________ sampling

(a) random (b) cluster (c) judgement (d) stratified

3. Which of the following observation takes place in the natural setting?

(a) Structured (b) unstructured (c) controlled (d) uncontrolled

4. ___________technique is used for describing the social relationship among individuals

in a group.

(a)Play (b) sociometry (c) content analysis (d) Rorschach test

5. A research paper is a brief report of research work based on__________

(a) primary data only (b) secondary data (c) both primary and secondary data

(d) none of these

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6. A good sampling frame must be__________

(a) relevant (b)complete (c) precise (d) all of these

7. _________Data can be obtained by communication or by observation.

(a)Secondary (b) primary (c) sample (d) none of these.

8. A ________Design is a definite plan for obtaining a sample from a given population.

(a)Research (b) sample (c) popular (d) none of these.

9. Probability sampling is also known as _________Sampling.

(a) Chance (b) non random (c) restricted (d) none of these.

10. Under _________Sampling method the population or universe is divided into number

of clusters or large groups.

(a) Restricted (b) random route (c) cluster (d) none of these.

11. Research __________is the blue print for the study.

(a) variable (b) problem (c) design (d)none of these.

12. ______surveys are used to gather information on a population at a single point in

time.

(a)cross-sectional (b) historical (c) Longitudinal (d) none of these.

13. The ___________method involves a complete enumeration of all units of the

population or universe.

(a)census (b) sample (c) both (a) & (b) (d) none of these.

14. A questionnaire is a devise that is most frequently used in collecting ________Data.

(a) Secondary (b) primary (c) both (d) none of these.

15. _________questions are also called fixed alternative questions.

(a) Open ended (b) closed (c) both (d) open response-option questions.

16. _________Questionnaires contain definite, concrete and direct questions.

(a) Unstructured (b) structured (c) closed form (d) none of these.

17. A ____________is a device that is most frequently used in collecting primary data.

(a) Schedule (b) questionnaire (c) both (a) & (b) (d) none of these.

18. A _________refers to one which provides several set of alternatives for its answers.

(a) Closed (b) open (c) multiple choice question (d) none of these.

19. A__________Is a set of questions which are asked and filled in by the interviewer in

a face to face situation with another person.

(a) Schedule (b) questionnaire (c)check-list (d) none of these.

20. Mail survey is the other method of collecting__________data.

(a) Secondary (b) primary (c) both (d) none of these

Answers

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

d a d b c d b b a c c a a b b b c c a b

SECTION-B


1. Define sample. What is sampling used?

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2. How will you optimize sampling and non-sampling errors?

3. How will you differentiate between simple random sampling and complex random

sampling design?

4. Clearly explain the difference between collection of data through questionnaire and

Schedules.

5. Briefly explain secondary data and point out its characteristics.

6. Explain the characteristics of observation method.

7. What are the various considerations to be kept in mind while designing a Mail-

Questionnaire?

8. Differentiate validity and reliability

9. List out the characteristics of a good sample design

10. State the advantages and disadvantages of Simple Random Sampling.

SECTION-C


1. Explain in detail the steps of sampling design.

2. Discuss the various types of sampling design.

3. What are the guiding considerations in the construction of questionnaire? Explain

4. Explain the merits and limitations of case study method

5. Describe the several methods of collecting primary data?

6. Differentiate Stratified random sampling Vs Cluster sampling

7. Describe the probability and non probability sampling methods.

8. Discuss the merits and demerits of various probability sampling techniques

9. Analyze the importance of sampling technique

10. Describe the methods of determining sample size

UNIT-III

SECTION-A


1. ____________ scale is the least powerful level of measurement.

(a) Nominal (b) ordinal (c) interval (d) ratio

2. __________refers to the process of assigning numerals or symbols to answers.

(a) Editing (b) coding (c) tabulating (d) transposing

3. Index must be prepared and appended at the__________

(a) Top (b) centre (c) end (d) anywhere

4. The expansion of SPSS is___________________

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(a) Statistical package for social sciences (b) Scientific program for social studies

(c) Statistical program for self-study (d) systematic pack for space study

5. When a ____________ scale is used for the purpose of the identification, there is strict

one to one correspondence between the numbers and the objects.

(a) Nominal (b) ordinal (c) interval (d) ratio

6. Which of the statistics is not permissible with nominally scaled data?_______

(a) Chi square (b) median (c) range (d) both (b) and (c) are not permissible.

7. In business research, attitudinal data obtained from rating scales are often treated as

______ Data.

(a) Nominal (b)ordinal (c) interval (d) ratio

8. Which of the following scale is not a type of comparative scale?____________

(a) Semantic differential (b) constant sum (c) likert (d) both (a) and(c).

9. The term___________is used to indicate measuring of something.

(a) Scaling (b) ratio (c) rating (d) none of these.

10. The__________Scale places events in order.

(a) Nominal (b) ordinal (c) interval (d) ratio.

11. ___________Scale is used to draw out a yes or no answer.

(a) Lickert (b) rating (c) dichotomous (d) category.

12. _________ type of scale makes extensive use of words rather than numbers.

(a) Sematic (b) likert (c) rating (d) numerical.

13. Data processing consists of_________coding and tabulation.

(a) Editing (b) entry (c) classification (d) none of these.

14. _______helps to become the data accurate, consistent with the intent of the question

and other information in the survey, and to see the data is complete in all respects.

(a) Coding (b) tabulation (c) editing (d) classification.

15. In statistics, a_________is a graphical display of tabulated frequencies.

(a) Histiogram (b) bar diagram (c) histogram (d) none of these.

16. If the study is related one variable it is called_____analysis.

(a) Bivaralite (b) correlation (c) casual analysis (d) unidimensional

17. ________Report is a report prepared for a layman.

(a) Technical (b) popular (c) general (d) specific.

18. A ___________ is a list of the sources used by the researcher to get information for

research report.

(a)Bibliography (b) Content (c) appendix (d) none of these.

19. A________ is a circular chart divided into sectors, illustrating relative magnitudes or

frequencies.

(a) pie chart (b) bar (c) pictogram (d) none of these.

20. The __________is a line chart.

(a) Lorenz curve (b) pie chart (c) bar (d) pictogram.

Answers

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

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a b c a a d a d a b c a a c c d b a a a

SECTION-B


1. Point out the possible sources of measurement error.

2. List out and explain the common comparative scaling techniques.

3. State any five types of analysis with suitable examples.

4. State the principles of report writing

5. Explain the different research writing stages.

6. Explain the essentials of measurement scale.

7. List out the different measurement scales

8. State the importance of tabulation

9. What are the precautions for writing research report?

10. Bring out the techniques of interpretation

SECTION-C


1. Write short notes on: (i) Likert scale (ii) Semantic differential scale (iii) Stapel scale

2. Explain the significance of research report and Narrate the various steps involved in

writing such a report.

3. List out and explain the layout of the research report

4. Describe the precautions that the researcher should take while interpreting his findings.

5. Discuss the Uses of SPSS in research

6. Compare likert scale and semantic differential scale. What are the special features of

the semantic differential scale

7. What is measurement scale? Explain the different types of measuring scales and

describe the construction of the scale

8. Explain the types of research report and the precautions for writing a research

9. Discuss the content of a business research report in Detail

10. Why tabulation is considered essential in research study? Narrate the characteristics of a

good table.

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COIMBATORE



SUBJECT: EXECUTIVE COMMUNICATION SUBJECT CODE: 18PCM3E1

Staff-in-charge: Dr.R.Maharajothi Priya & Dr.Sheeba.E Class: II M.Com

UNIT-1

SECTION-A

1. _________ involves exchanging facts, ideas and opinions between two or more

persons.

a. Clarity b. Communication c. Courtesy d. Concreteness

2. _________ is an essential component of communication.

a. Feedback b. Communication c. Ideas d. Opinions

3. The main purpose of communication is to achieve organisational _________

a. Effectiveness b. Goals c. Culture d. Norms

4. Effective internal communication implies _________

a. Increased sales b. Conducive work atmosphere c. Better public image d. Higher

revenue

5. Effective external communication implies_________

a. Increased sales b. Conducive work atmosphere c. Better coordination d. Public

relations

6. ________ is one of the most important objectives of communication is passing or

receiving information about a particular fact or circumstances.

a. Warning b. Information c. Advice d. Order

7. ________ is subjective and to influence one’s opinion / his behavior.

a. Warning b. Information c. Advice d. Order

8. ________ often means psychological handling.

a. Counseling b. Warning c. Information d. Suggestions

9. Employees should be encouraged to give ________

a. Order b. Suggestions c. Persuasion d. Advice

10. _________ may be defined as an effort to influence the attitudes, feelings or beliefs of

others.

a. Order b. Suggestions c. Persuasion d. Counseling

11. _________ is a very conscious process of communication.

a. Education b. Warning c. Persuasion d. Raising moral

12. _______ stands for mental health.

a. Morale b. Advice c. Education d. Counseling

13. ________ communication can be informal, good for interpersonal relationships.

a. Oral b. Written c. Upward d. Downward

14. _______ communication flows from a superior to a subordinate.

a. Downward b. Upward c. Horizontal d. Vertical

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15. _______ can be achieved through monetary & non- monetary incentives.

a. Motivation b. Leadership c. Appraisal d. Incentives

16. _______ importance is to provide feedback to the superiors.

a. Upward b. Downward c. Horizontal d. Vertical

17. _______ communication flows between people at the same level.

a. Horizontal b. Upward c. Downward d. Vertical

18. _______ is important for promoting understanding & coordinating among various

people or departments.

a. Upward b. Downward c. Horizontal d. Vertical

19. ______ communication is the communication between two individuals at different

levels in different departments.

a. Diagonal b. Horizontal c. Upward d. Vertical

20. _________ is an informal channel of communication.

a. Appraisal b. Motivation c. Leadership d. Grapevine

Answer Keys

1. B 2. A 3. B 4. B 5. A 6. B 7. C 8. A 9.B 10.C 11.B 12.A 13.A

14.A 15.A 16.A 17.A 18.C 19.A 20.D

SECTION-B

1. Give introduction about Business communication.

2. Write the significance of communication.

3. Write the meaning and definition of communication.

4. What are the objectives of communication?

5. Explain the communication process.

6. Explain downward communication and its advantages.

7. What is Grapevine communication? Write its types.

8. Describe horizontal communication and its advantages.

9. Explain upward communication and its advantages.

10. Explain the physical barriers of communication.

SECTION-C

1. Explain in detail about the types of communication.

2. Describe in detail about the communication media.

3. Elucidate the methods of communication in detail.

4. Describe in detail about the channel of communication.

5. Explain the 6 C’s in principles of communication.

6. What are the different types of body language in non verbal communication?

7. Explain organizational body language.

8. What are the factors influencing body language?

9. What are the barriers of communications?

10. Explain the characteristics of an effective order.

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UNIT-2

SECTION-A

1._____ communication flows like a chain.

a. Single strand b. Gossip c. Cluster d. Probability

2.______ is the communication insists that one person tells everybody else.

a. Gossip b. Cluster c. Probability d. Single strand

3.________ information may move from anybody to anybody.

a. Probability b. Cluster c. Gossip d. Single strand

4.________ moves through selected groups.

a. Cluster b. Probability c. Gossip d. Single strand

5.________ is one of the biggest barriers to communication.

a. An unsuitable medium b. Miscommunication c. Noise d. Resistance to change

6._________ barriers are from noise, time and distance.

a. Physical b. Semantic c. Mental d. Perception

7.________ means giving a particular bias or slant to the reality.

a. Abstracting b. Slanting c. Inferring d. Filtering

8.________ means drawing inferences from observation.

a. Abstracting b. Slanting c. Inferring d. Loss by transmission

9.In socio- psychological barriers, words and gestures may be interpreted differently in

different _________

a. Attitudes b. Cultures c. Opinions d. Biological

10._______ implies respect for the reader’s point of view

a. Consideration b. Courtesy c. Correctness d. Clarity

11.________ serves as a record for future reference.

a. A business letter b. A Order letter c. A sales letter d. Offer letter

12.______ is written below the address, leaving some space for a better look.

a. Date b. Salutation c. Heading d. Inside address

13._________ is the complimentary greeting with which the writer opens his letter.

a. Inside Address b. Heading c. Salutation d. date

14.________ is that part of the letter which contains the message or the information to be

communicated.

a. Body of the letter b. Mechanical structure c. Main paragraph d. Salutation

15._________ is the written equivalent of Salutation or “Good- bye”.

a. Heading b. Address c. Complimentary close d. Signature

16.__________ are helpful in fixing the responsibility for typing and dictating the letter.

a. Initials b. Enclosures c. Punctuation d. Attachments

17.________ is something written after the letter is closed.

a. Initials b. Postscripts c. Punctuation d. Hanging

18._______ refers to the marks of ‘period’ at the end of each line of the letterhead and the

inside address.

a. Initials b. Postscripts c. Punctuation d. Strips

19.________ enquiry made in response to the seller’s advertisement and publicity.

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a. Solicited b. Unsolicited c. Routine d. Enquiry for some favor

20.________ includes all relevant instructions about time allowed for execution of the

order and about terms of payment.

a. Order form b. Tender c. Offer d. Quotation

Answer Keys

1.A 2.A 3.A 4.A 5.D 6.B 7.B 8.C 9.C 10.D 11.A 12.B 13.C 14.A 15.C 16.A 17.B

18.D 19.A 20.B

SECTION-B

1. Write a letter about order confirmation.

2. Describe proforma invoice in detail.

3. Describe about the letter of credit.

4. Write the application letter for obtaining EPCG license.

5. Write the letter of the importer requests the banker to open irrevocable credit in favor

of the exporter.

6. Write the important terms in Import- Export correspondence.

7. Letter to a customer whose account has been overdrawn. Informing him that such a

practice is not normally allowed by the banker.

8. Write a letter to a customer requests his bank to step payment of a cheque.

9. Write a letter of requests for opening a customer account.

10. Write a job application letter to the personnel manager Hindustan company pune in

response to an advertisement in daily sakal news paper for the post of welfare officer.

SECTION-C

1. Write a letter by the importer requesting his bank to open an account in favor of

exporter.

2. Write a letter of importer informs the exporter about the opening of credit.

3. Write a letter of corresponding about the carriage of goods.

4. What is business communication? What is the structure /layout of business letter?

5. Write a letter format for proforma invoice with examples.

6. Explain in detail about the hints in Enquiries and replies letter.

7. Describe in detail about the Mechanical structure/ parts of a letter in detail.

8. A customer wishes to have his order executed by a trader on credit. Draft the letter for

A) the trader asking the customer to furnish references. B) The customer giving

reference.

9. Write a letter to your bank to get you necessary information about the credit standing

of a firm desirous of operating a credit account with you.

10. Write a letter by a CHA to the importer regarding the payment of duty.

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UNIT-3

SECTION-A

1. A presentation is a form of oral communication in which a person shares factual

information with an audience that is ----------

a. Large b. small c. mixed d. specific

2. The presenter act as the -----------

a. Supporter of the information b. deliver of the information c. medium of the

information d. advocate of the information.

3. The three major elements of presentation do not include ---------------

a. A presenter b. specific content c. visual aids d. an audience

4. Reading out a presentation is ------------

a. Dull b. not allowed c. allowed d. helpful

5. International conference should last at least for ------------

a. Half a day b. two days c. one day d. five days

6. Which of this is not considered in a telephonic conversation?

a. Tone of speaker b. the volume of the speaker c. body language d. the

emotional content of communication.

7. After about how many ring should the telephone be lifted ?

a. Two b. four c. five d. six.

8. Delegation of responsibility must be done with -----------

A, empathy b. rudeness c. dominancy d. disrespect.

9. What is the first thing you must utter when you pick up an official call?

a. Name and designation b. who is calling? C. why did you call? D. what do you

want?

10. A person who meets the media must have greater ------------

a. Restraint b. honesty c. agitation d. aggressiveness.

11. The attempt to influence the spending pattern of the Public by the business is

a. Publicity b. Advertisement c. Public relations d. Press release

12. Working with others to find a mutually agreeable outcome means----------

a. listening skills b. negotiation c. verbal communication d. interactive skills.

13.The skills in verbal communication writing and speaking are----------

a. transmitter b. receiver c. professional d. interactive .

` 14. Reaching out to a well spread out target audience is aimed by________

a. verbal communication b. mass communication c. advertisement d. publicity

15. The attitudinal and behavioral characteristics of a group is referred to as_____

a. group dynamics b. group attitude c. group behavior d. group action

16. Group dynamics is a system of behaviors and psychological processes occurring within

a ________

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a. community b. social group c. friends d. family

17. The process in which a person, group of people, or an organization sends a message

through a channel of communication to a large group is---------

a. verbal communication b. mass communication c. advertisement d. personal

relationship

18. Delivery of messages to general public by utilizing mass media such as national press,

radio, and television marketing is------------

a. verbal communication b. mass communication c. advertisement d. public

relationship

19. The technology that makes mass communication possible is known as ---------

a) Mass media. b) Mass communication. c) Mass transmission. d) Mass activity

20. The goodwill letter or a friendly letter set by the organisation to their customers is------

- a) Public relations letter b) Advertisement c) Press release d) Offer letter

Answer Keys

1.D 2.D 3.C 4.B 5.B 6.C 7.A 8.A 9.A 10.A 11.A 12.B 13.C 14.B 15.A 16.B 17.B

18.B 19.B 20.A

SECTION B

1. What is meeting?

2. Define conference. List the objectives

3. What is the procedure for conducting an official meeting?

4. Write short notes on interactive communication.

5. Write the essentials of presentation skills.

6. What do you mean by the term ‘Group Dynamics’? Explain its types.

7. Select one method and draft publicity to the public for a new product launched by you.

8. What is meant by public relations letters?

9. What are press releases? List out the features of an ideal press release.

10. Explain in detail the various types of mass communication

SECTION – C

1. Explain about telephone talks in business.

2. How to make presentation more attractive?

3. What are the objectives in presentation skill?

4. Explain interactive communication.

5. What are the types of meeting? Explain it.

6. Discuss the advantages and disadvantages of a large group and small group.

7. Give specimen advertisement for the jewellery shop to its customers offering some

discount for the festival upcoming.

8. Illustrate the various factors affecting group dynamics in an organisation.

9. "The greater the loyalty of a group toward the group, the greater is the motivation

among the members to achieve the goals of the group, and the greater the probability

that the group will achieve its goal." Comment this statement with regard to group

dynamics.

10. Explain the use of mass communications in the process of announcing the plans to

merge into one company, after being former competitors.

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Unit – IV

Part - A 1 Mark

1. The basic management tool used in decision-making is

a. A report b. A business letter c. A Credit letter d. offer letter

2. The report that can be denied at any time is a/an

a. oral report b. written report c. functional report d. optional report

3. The report that is a permanent record is a/an

a. oral report b. written report c. functional report d. evidence report

4. The report that is usually in the form of a person- to- person communication is

a. Informal b. Formal c. Special d. non-special

5. The report that can be statutory or non- statutory is

a. Informal b. Formal c. Special d. specific

6. The report that can be prepared and presented according to the form and procedure laid down

by law is

a. Non- statutory b. Formal c. Statutory d. non-formal

7. The report that are prepared and presented at regular, prescribed intervals in the usual routine

of business is

a. Periodic b. Formal c. Special d. statutory

8. The reports that are related to a single occasion or situation.

a. Special b. Formal c. Periodic d. non- formal

9. The report can be informative or interpretative on the basis of

a. Function b. Nature c. Number of persons d. number of members

10. A orderly arrangement of presentation of data in rows and columns is

a. charts b. pictorials c. table d. all the above

11. The commonly used figures to present volumes, proportions, ratios and relationship is

a. graphs b. charts c. tables d. diagrams

12. The graph based on a grid of uniformly spaced horizontal and vertical lines are

a. line graph b. break even chart c. pictogram d. pie chart

13. The graph with horizontal or vertical bars representing the values is

a. organizational chart b. bar graph c. flow chart d. histogram

14. A circle graph whose area is divided into components wedges is a

a. bar graph b. line graph c. pie chart d. pie chart

15. The point where the total sale is equal to the total costs and that presented in a chart is

a. basic chart b. organizational chart c. point chart d.break even chart

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16. The chart that gives a bird’s eye view of the whole structure of the organisation at a glance

is

a. Organisational chart b. line chart c. bar chart c. pie chart

17. The diagrammatic representation of the procedure for solving a problem is called

a. flow chart b. organisational chart c. pie chart d. line chart

18. The box in flow chart that is used to indicate the beginning and the end of the procedure is

a. continue box b. Terminal box c. decision box d. link box

19. The most popular diagrammatical presentation on a frequency distribution is

a. ideogram b.pictogram c. histogram d. sympogram

20. The method of presenting the data in a pictorial presentation or symbols is called

a. pictogram b. histogram c. sympogram d. ideogram

…………………………………………………………………………………………………..

Part B 5 Marks

1. Explain about oral and written report.

2. Write the importance of report.

3. Write short note about report by individuals.

4. Write short about report by committees.

5. How to investigate the source of information while prepare a report.

6. Explain about the letter of transmittal.

7. Write the characteristics of good report.

8. Explain about the special features of a report.

9. Explain about the body of the report.

10. Discuss on the term report writing and write down the characteristics of a good report.

…………………………………………………………………………………………………..

Part C 8 Marks

1. Explain about the types of business reports.

2. How you will select a suitable type of report? Explain.

3. Describe in detail about the 3 ways of organization of a report.

4. Describe in detail about the organization of a long report.

5. Explain in detail about the preparation of a report.

6. Illustrate the use of charts, diagrams and tables in report writing with a suitable example.

7. What are all the important norms for including exhibits and appendices in a report?

8. Construct your own topic for a project and explain the layout for preparing a report.

9. What are the various parts of a good report?

10. What are flow charts? Give the model of a flow chart of your own problem as example.

…………………………………………………………………………………………………..

Answers for Part A

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A A B A B C A A A C A A B C D A A B C A

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Unit – V

Part - A 1 Mark

1. The medium of trade cycle in modern business is

a. E-mail b. E-commerce c. internet d. video-conferencing

2. A good presentation should be

a. organized b. planned c. clear d. all the above

3. A routine and important part of modern business communication is a

a. Reports b. E-mails c. Circulars d Letters

4. Common stock that is widely distributed among individuals describes what type of

corporate governance structure?

a. Public b. Network c. Supervisory d. Market.

5. One of the following is not a code of corporate governance

a. Vienot b. The Sarbanes–Oxley c. Cromme d. King

6. To make our communication effective, we should follow _____ C’s and _____ S’s.

a. seven, four b. seven, three c. six, four d. six, three

7. The skills that you need in delivering effective and engaging presentations to a variety of

audiences are

a. Presentation skills b. Communication skill c. Interpersonal skill d. attitudinal skill

8. The first step to improve your presentation skills is

a. Practice the presentation b. Research the audience before presenting c. prepare the

presentation d. ask advice from other experts

9. The principle governing communication, the right and wrong aspects of it, is termed as.

a. Business ethics b. Corporate ethics c. Communication Ethics d. Company ethics

10. The only vehicle for transmission of thought and also a manifestation of the ethical aspects

is

a. Writing b. Reading c. Attitude d. Language

11. Taking groundwater from local farmers in India is a the modern ethical Lapses of

a. Coca-Cola b. Jonh and Johnson c. dominoes d. pizza hut

12. Communication should be to help others and to make business run as effectively as

possible; thereby gaining the respect of colleagues and customers is a statement of

a. organisational policy b. communication policy c. company policy d. interactive policy

13. Having a good ……………… in place reduces conflicts and misunderstandings, and also

eases transitions such as layoffs or mergers.

a. publication policy b. interactive policy c. organisational policy communication policy

14. The policy that supports coordinated, coherent and strategic publishing and ensures

production of high quality external publications is.

a. Communication policy b. Individual policy c. Industrial policy d. Publications Policy

15. A field of study that looks at how people from differing cultural backgrounds communicate,

in similar and different ways among themselves is called

a. Cross-cultural communication b. Inter cross cultural communication c. Intra cultural

communication d. internal cultural communication

16. The way of thinking and living whereby one picks up a set of attitudes, values, norms and

beliefs that are taught and reinforced by other members in the group is

a. Behavior b. Culture c. Attitude d. Society

17. The system by which people belonging to different cultures communicate with each other

is termed as.

a. Crossed cultural communication b. Inter cross cultural communication c. Cross-cultural

communication d. Internal cultural communication

18. The cultures that rely on explicit verbal communication is

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https://www.unfpa.org/admin-resource/publications-policy

https://en.wikipedia.org/wiki/Culture

a. low-context cultures b. high-context cultures c. medium context culture d. large context

culture.

19. The cultures those that are communicated in ways that are implicit and rely heavily on

context is

a. small context culture b. high-context cultures c. low context culture d. large context

culture

20. Providing basic social comfort and creating an environment where others feel comfortable

and secure, this is possible through better communication is

a. Business etiquette b. Business ethics c. Business policy d. Business tricks

…………………………………………………………………………………………………..

Part -B 5 Marks

1. Explain the new trends found in communication.

2. Write down the usefulness and harmfulness of social media as easy way for

communication.

3. What do you understand by the term ‘Cross cultural communication’?

4. List down the various communication policies.

5. To be an effective communicator what are the interactive skills one should poses’.

6. Define the term Business etiquette, how is it important for an individual’s carrier.

7. List out few of the modern ethical lapses of companies in India.

8. Explain the four ethical principles of communication.

9. What are the basic principles to be kept in mind to frame a communication policy?

10. Write down the new norms in cross cultural communication.

…………………………………………………………………………………………………..

Part -C 8 Marks

1. Draft a power point presentation for any of a topic of your choice.

2. What are all the important points to be kept in mind for the preparation of a professional

presentation?

3. What do you mean by Corporate communication, how is it correlated to communication

4. Imagine you to be the Human resource manager of an organisation, what basic Business

etiquette will you adopt for the smooth management?

5. Define professional presentation. What are the steps to be taken to improve the

presentation skills?

6. What do you understand by the term ethical communication? Explain the fundamentals of

it.

7. Explain the ground rules of good communication set in the communication policy

8. What do you mean by cross cultural communication? How is it implemented in a college

program?

9. Write short note on High context culture and Low context culture.

10. Explain Laray Barna’s sources of miscommunication in cross cultural exchange.

………………………………………………………………………………………………….

Answers for Part A

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b d b d b a a b c d a b c d a b c a b a

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Question bank

Class: II M.COM Semester - IV

Sub. Name: Management accounting Sub. Code: 18PCM413


UNIT –I

SECTION- A

1.The term ‘Management Accountancy’ was first used in-------

a) 1910 b) 1939 c) 1950 d). 1958

2 . …………… accounting is concerned with providing information to management for taking

managerial decisions.

a)management b)Financial c)Cost d)Final

3. The use of management accounting

a) Compulsory b) Optional c) Obligatory d). Regular

4.Management accounting assists the management------

a)Only in control b)Only in direction c)Only in planning d) In planning,

direction and control

5.Management accountancy is a structure for

a) Costing b) Accounting c) Decision making d) Management

6.Who coined the concept of management accounting?

a) R.N Anthony b) James H. Bliss c) J. Batty d) American Accounting

Association

7. Which among the following do not belong to the category of Accounting ?

a)management Accounting b)Financial accounting c)Cost accounting d)None of

these

8. Trend percentages and trend ratios are used in

a) Static Analysis b) Dynamic Analysis c) Horizontal Analysis d) Vertical

Analysis

9. The basic function of Management Accounting is to ……………………….

a)record all business transactions b)interpret the financial data c)assist the

management in performing its functions effectively d) collect data

10. Management accounting provides invaluable services to Management in

performing…………..

a)All management functions b)Co-ordination functions c)Controlling functions

d)collecting function

11. Accounting designed to serve parties external to the operating responsibility of the firm is

termed as…………….

a) Management Accounting b)Financial Accounting c)Cost accounting d)final

accounting

12.Cost Accounting and Management Accounting are ……………….. in nature.

a)complementary b)contradictory c)Different d)Similar

13. Management accounting has a ……….. scope than cost accounting.

a) Wider b)Narrow c) shortly d) lengthy

14. ……………explains what has happened to a business unit as a result of

operations between two balance sheet dates.

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a) Income statement b)Profit and Loss Account c)Both of these d) balance

sheet

15. ……………….are the statements, in which figures reported are converted into

percentages to some common base.

a) Comparative statements b) common size statements c) profit and loss account

d)balance sheet

16. Income statement matches the …………… incurred in the accounting year

a) Revenue and costs b) Incomes and expenses c) Both of these d) final account

17. …………..are statements of financial position at different periods

a) comparative statements b) common size statements c) profit & loss account

d)Final account

18. Management accounting provides-------

a) Qualitative information b) Quantitative information c) Both Qualitative and

qualitative d) non monetary item

19. In Trend percentage, the base year would be

a) the first year b) the last year c)any year d) Middle year

20. Management Accounting is also known as

a) Cost Accounting b) Financial Accounting c) Decision Accounting d) Corporate

Accounting

SECTION – B

21. What are called financial statements?

22. What is the scope of management accounting?

23. State any two objectives of management accounting.

24. What is trend analysis

25. From the following Profit and Loss Account of Ram Ltd. for the yearending 31st

December 1998, and 1999 prepare common size IncomeStatement and give your

interpretation.

Profit & Loss Ale of Ram Ltd. for the year ending 31st December

Particular 1998 (Rs.) 1999 (Rs.)

Net Sales

Less Cost of Goods sold

Gross Margin

Less Operating Expenses

Income before interest & tax

Less Interest

Net Income before Tax

Less Tax @ 50%

Net Income After Tax

22,30,000

15,35,000

6,95,000

4,02,000

2,93,000

18,000

2,75,000

1,37,500

1,37,500

31,85,000

22,70,000

9,15,000

6,02,000

3,13,000

30,000

2,83,000

1,41,500

1,41,500

( ANS: Net income tax 1998- 6.15 ; 1999 -4.45)

26. Convert the following statement of profit and loss into the comparative statement of profit

and loss of BCR Co. Ltd

Particulars 2013- 2014 2014-2015

i) Revenue from operations

ii) Other incomes

(iii) Expenses

(iv) Income tax

60,00,000

1,50,000

44,00,000

35%

75,00,000

1,20,000

50,60,000

40%

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27. From the following statement of profit and loss of Madhu Co. Ltd., prepare comparative

statement of profit and loss for the year ended March 31, 2014 and 2015:

Particulars 2013-14 2014-15

Revenue from operations

Employee benefit expenses

Other expenses

Tax rate 40 %

16,00,000

8,00,000

2,00,000

20,00,000

10,00,000

1,00,000

28. From the following profit and loss account and balancesheet of Jayaprakash industries Ltd.

Prepare a comparative income statement (Rs. in lakhs)

1999 2000 1999 2000

To cost of goods sold

To Operating expenses:

Administrative expenses

Selling expenses

To Net profit

500

20

30

150

700

640

20

40

200

900

By sales 700

700

900

900

29. Interpret the results of operations of a manufacturing concern usingtrend ratios, on the

following information:

(Amount in ’000Rupees) For the year ended 31st March

Items 1996 1997 1998 1999

Sales (net)

Cost of goods sold

Gross Profit

Selling Expenses

Net Operating Profit

13,000

7,280

5,720

1,200

4,520

12,000

6,960

5,040

1,100

3,940

9,500

5,890

3,610

970

2,640

10,000

6,000

4,000

1,000

3,000

30. The following are the Balance Sheets of J. Ltd. as at March 31, 2014 and 2015. Prepare a

Comparative balance sheet.

Particulars March 2014 March 2015

I. Equity and Liabilities

1. Shareholders’ Funds

a) Share capital

b) Reserve and surplus

2. Non-current Liabilities

Long-term borrowings

3. Current liabilities

Trade payables

Total

II. Assets

1. Non-current assets

a) Fixed assets

- Tangible assets

- Intangible assets

2. Current assets

- Inventories

- Cash and cash equivalents

20,00,000

3,00,000

9,00,000

3,00,000

35,00,000

20,0000

9,00,000

3,00,000

3,00,000

15,00,000

4,00,000

6,00,000

2,00,000

27,00,000

15,00,000

6,00,000

4,00,000

2,00,000

SECTION –C

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31. Bring out the importance of Management Accounting.

32. Explain the major tools of financial analysis

33. Distinguish management accounting from financial accounting

34. Distinguish between Management accounting and Cost accounting

35. The following are the Balance sheets of a concern for the years 2010 and

2011. Prepare a comparative Balance sheet and study the financial position of

The concern

36. From the following profit and loss account and balance sheet of Jayaprakash industries

Ltd. Prepare a comparative income statement and a comparative balance sheet.

(Rs. in lakhs)

Particulars 1999 2000 Particulars 1999 2000

To cost of goods sold

To Operating expenses:


Selling expenses

To Net profit

500

20

30

150

700

640

20

40

200

900

By sales 700

700

900

_____

900

37. From the following information you should prepare the Common size balance sheet

Liabilities 2010 2011 Assets 2010 2011

Equity share capital 3000 4000 Land and Building 4000 4000

General reserve 3000 3000 Plant and Machinery 6500 8000

Profit & Loss A/c 1400 2660 Furniture 600 800

12% Debentures 5000 4000 Stock 1500 1200

Sundry Creditors 630 720 Debtors 300 400

Bills Payable 80 150 Cash at Bank 150 50

Cash in Hand 60 80

13110 14530 13110 14530

Balance sheets of company ABC and DEF as on 31st March 2015 ABC DEF

Cash 2500 1500

Accounts receivable 4000 1000

Inventory 5000 1100

Current assets 11500 3600

Plant and equipment 35000 11000

Goodwill 1700 500

Total assets 48200 15100

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Total liabilities & equity 48200 1510

38. The following details are provided by C ltd. For the year ended 31st March, 2015 and

2016 prepare Comparative Statement:

39. What are the advantages of Management Accounting?

40. Enumerate the limitations of management accounting.

Ans: 1. c) 1950 2. a)management 3. b) Optional 4. d) In planning, direction and control

5. c) Decision making 6. b) James H. Bliss 7. d)None ofthese 8. a) Static Analysis 9.

c)assist the management in performing its functions effectively 10. a)All management

functions 11. b)Financial Accounting 12. a)complementary 13. a) Wider 14. c)Both of

these 15. b) common size statements 16. c) Both of these 17. a) comparative statements

18. c) Both Qualitative and qualitative 19. a) the first year 20. c) Decision Accounting

UNIT –II

SECTION-A

1. Current ratio is a_____________

a. short-term solvency ratio b. long-term solvency ratio c. profitability ratio.

d. turnover ratio.

2. Proprietary ratio is a ___________.

a. short-term solvency ratio. b. long-term solvency ratio. c. profitability ratio.

d. turnover ratio.

3. Fixed assets ratio is a __________

a. short-term solvency ratio. b. long-term solvency ratio. c. profitability ratio. d.

turnover ratio.

4. The ratios which reflect managerial efficiency in handling the assets is.

Current liabilities 10000 1000

Long term debt 27000 5000

Total liabilities 37000 6000

Equity 11200 9100

Particulars 31/03/15 31/03/16

Share capital 24,00,000 26,10,000

General Reserves 2,40,000 2,90,000

Profit and Loss A/c 4,20,000 6,00,000

11% Debentures 10,00,000 6,00,000

Goodwill 2,00,000 1,60,000

Land &Building 14,00,000 13,00,000

Plant and Machinery 12,00,000 13,20,000

investment (Non trading) 4,80,000 4,40,000

Creditors 3,70,000 4,30,000

Provision for Tax 1,60,000 2,10,000

Proposed Dividend 2,72,000 2,88,000

Stock 8,00,000 7,70,000

Debtors 5,76,000 8,30,000

Cash at Bank 1,76,000 1,86,000

Prepaid Expenses 30,000 22,000

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a turnover ratios b. profitability ratios. c. short term solvency ratio. d. long term

solvency ratio.

5. The ratios which reveal the final result of the managerial policies and performance

is_____.

a. turnover ratios. b. profitability ratios. c. short term solvency ratio. d. long

term solvency ratio.

6. Return on investment is a_________.

a. turnover ratios. b. short term solvency ratio. c. profitability ratios. d. long

term solvency ratio.

7. Net profit ratio is a ___________.

a. turnover ratio. b. long term solvency ratio. c. short term solvency ratio

d. profitability ratio.

8. Stock turnover ratio is a___________.

a. turnover ratio. b. profitability ratio. c. short term solvency ratio. d. long term

solvency ratio.

9. Fixed assets turnover ratio is a _______

a. short-term solvency ratio. b. long-term solvency ratio. b. profitability ratio.

d. turnover ratio.

10. The overall net increase or decrease in working capital is found out by

preparing…………………

a)Fund flow statement b)Cash flow statement c)statement showing changes in.

working capital d) none of these

11 ……………is only internal source of funds

a. Fund from operations b. Net profit C. both of these d. none of these

12. Return on equity is also called______

a . return on investment. b. gross profit ratio. c. return on shareholders’ funds.

d. return on net worth.

13. Fund flow refers to changes in ------------- capital

a. Fixed b. working c. both of these d. none of these

14 . Turnover ratio is also known as ______________.

a. activity ratios. b. solvency ratios. c. liquidity ratios. c. profitability ratios.

15.Inventory or stock turnover ratio is also called_______________.

a. stock velocity ratio. b. debtors velocity ratio. c. creditor’s velocity ratio.

d. working capital turnover ratio.

16. Sales – Gross Profit = _______________________.

a. net profit. b. administrative expenses. c. cost of production. d. cost of goods

sold.

17. Opening stock + purchases + direct expenses – closing stock = ____________

a. net profit. b. cost of production c. administrative expenses. d. cost of goods

sold.

18 . Which ratio measures the number of times the receivables are rotated in a year in terms

of sales?

a. stock turnover ratio. b. debtors turnover ratio. c. creditors velocity ratio. d.

working capital turnover ratio.

19. Debtors turnover ratio is also called___________________.

a. stock turnover ratio. b.

debtor’s velocity ratio. c. creditors velocity ratio.

d. working capital turnover ratio

20. Creditors turnover ratio is also called ________________.

a. stock turnover ratio. b. debtors velocity ratio. c . accounts payables ratio.

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d. working capital turnover ratio.

SECTION - A

21. M/s M Ltd. Has submitted the following balance sheet as on 30th June 2000.

Particulars Rs Particulars Rs

Equity capital 150000 Fixed Assets 162000

Revenue reserves 30000 Current Assets

8% Debentures 20000 Stock 32000

Current liabilities

Sundry creditors

49000

Debtors 41000

Bills receivable 2000

Bank 12000

249000 249000

Find the current ratio and quick ratio and comment on the financial condition of the

company. 22. Calculate Gross profit ratio, Operating profit ratio, Operating ratio, Net profit ratio 23.

Compute the Payout ratio and retained earnings ratio from the following data Rs Rs

Net profit 10000 Provision for tax 5000

No. of equity shares 3000 Preference dividend 2000

Dividend per equity share 40 paise

24. Cash 10,000

Bills Receivables 5,000

Sundry Debtors 25,000

Stock 20,000

Sundry Creditors 30,000

Cost of sales 1,50,000

Calculate working capital turnover ratio Ans: 5 times

25. Total sales = 520,000; Sales returns = 20,000; Cost of goods sold 400,000

Required: Calculate gross profit ratio.

26. Explain the Nature of Ratio analysis

27. Calculate funds from operations from the information given below as on 31stMarch 2008

1. Net profit for the year ended 31st march 2008 650000

2. Gain on sale of building Rs 35500

3. Good will appears in the books at Rs 180000.out of that 10% has been written off

during the year

4. Old machinery worth Rs. 8000 has been sold for 6500 during the year

5. Rs. 125000 has been transferred to the general reserve fund

6. Depreciation has been provided during the year on machinery and furniture at 20%

whose total cost is 650000

28. From the following balance sheet of A Ltd . Prepare a cash flow statement.

Liabilities 30.6.98

`

30.6.99

`

Assets 30.6.98

`

30.6.99

`

Particulars Rs Particulars Rs Sales 21000 Income from investment 200 Sales return 1000 Administration expenses 1300 Cost of sales 16400 Selling expenses 700

Interest expenses(Non

operating)

100 Depreciation 200

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Share capital

Retained earning

Creditors

Mortgage loan

8000

1450

900

--

8500

2450

500

500

Land

Plant

Debtors

Stock

cash

5000

2400

1650

900

400

5000

3400

1950

700

900

29. From the following prepare a statement showing changes in working capital during 1999

Balance sheet of Sree Ganesh Ltd as on 31st December

Liabilities 1998 ` 1999 ` Assets 1998 ` 1999 `

Share capital

Reserve

P/L Account

Debentures

Creditors for

goods

Provision for

Income tax

6,00,000

50,000

40,000

3,00,000

1,70,000

60,000

6,00,000

1,80,000

65,000

2,50,000

1,60,000

80,000

Fixed assets

Less: Depreciation

Stock

Book debts

Cash in hand and

at Bank

Preliminary

expenses

10,00,000

3,70,000

6,30,000

2,40,000

2,50,000

80,000

20,000

11,20,000

4,60,000

6,60,000

3,70,000

2,30,000

60,000

15,000

12,20,000 13,35,000 12,20,000 13,35,000

30. From the following summarized balance sheet of Sri Krishna Ltd., Prepare a schedule of

changes in working capital

Liabilities 1998 ` 1999 ` Assets 1998 ` 1999 `

Share capital

Creditors

P/L Account

4,00,000

1,06,000

14,000

5,75,000

70,000

31,000

Plant

Stock

Debtors

Cash

75,000

1,21,000

1,81,000

1,43,000

1,00,000

1,36,000

1,70,000

2,70,000

5,20,000 6,76,000 5,20,000 6,76,000

SECTION -C

31. From the following information you are asked to prepare a Balance sheet

1. Current liabilities 100000

2. Reserves and surplus 50000

3. Bills payable 40000

4. Debtors 35000

5. Current ratio 1.75

6. Acid test ratio 1.15

7. Fixed assets to proprietors fund 0.75

8. Ratio of fixed assets to current assets 3

32. Prepare a balance sheet from the following data

a. Current ratio1.4

b. Liquid ratio

c. Stock turnover ratio 8 [ based on closing stock]

d. Gross profit ratio 20%

e. Debt collection period 1.5 months

f. Reserves and surplus to capital 0.6

g. Fixed assets turnover ratio 1.6

h. Capital gearing ratio 0.5

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i. Fixed assets to net worth 1.25

j. Sales for the year Rs.1000000

33. The comparative balance sheet of M/s Ram brothers for the two years were as follows

Liabilities 31.12.2007

`

31.12.20

08`

Assets 31.12.200

7`

31.12.200

8`

Capital

Loan from bank

Creditors

Bills payable

Loan from SBI

150000

160000

90000

50000

----

450000

175000

100000

100000

40000

25000

440000

Land&building

Machinery

Stock

Debtors

Cash

110000

200000

50000

70000

20000

450000

150000

140000

45000

80000

25000

440000

Additional Information: i) Net profit for the year 2008 amounted to ` 60000 ii) During the year a machine costing `25000( accumulated depreciation `10000)

was sold for `13000

The provision for depreciation against machinery as on 31.12.2007 was 50000 and

on 31.12.2008 `85000.

You are required to prepare a cash flow statement

34. Calculate 1. Gross profit ratio 2. Operating ratio 3. Operating profit ratio 4. Net profit

ratio


Sales

Sales returns

Cost of sales

Interest expenses

(non operating)

21,000

1,000

16,400

100

Income from investments


Selling expenses

Depreciation

200

1,300

700

200

35. From the following information prepare a balance sheet. Show the workings `

Working capital

Reserves and surplus

Bank overdraft

Current ratio

Liquid ratio

Fixed asset to proprietor’s fund

Long term liabilities

75,000

1,00,000

60,000

1.75

1.15

0.75

nil

36. Write the following ratios and further information given below; prepare a Trading

Account, Profit and Loss account and a Balance sheet of Shree Ganesh &co

i). Gross profit ratio 25%

ii). Net profit / sales 20%

iii). Stock turnover ratio 10

iv). Net profit/ capital 1/5

v). Capital to total liabilities ½

vi). Fixed assets / capital 5/4

vii). Fixed assets/total current assets 5/7

viii). Fixed assets Rs.10, 00,000

ix). Closing stock Rs. 1, 00,000

37. From the following information of a textile company complete Performa balance sheet

If its sales are Rs.23, 00,000

Sales to net worth 2.3 times

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Current debt to net worth 42%

Total debt to net worth 75%

Current ratio 2.9 times

Net sales to Inventory 4.6 times

Average collection period 90 days

Fixed assets to net worth 53.2%

No of working days in a year 360

Performa balance sheet

Liabilities Amount Assets Amount

Net worth ? Fixed assets ?

Long term debt ? Cash ?

Current debt ? Sundry debtors ?

38. From the following balance sheets of Apple Ltd. On 31st December,1998 and 1999 you are

required to prepare funds flow statement

Balance sheets

Liabilities 1998 Rs 1999 Rs Assets 1998 Rs 1999 Rs

Share capital 1,00,000 1,00,000 Goodwill 12,000 12,000

General reserve 14,000 18,000 Building 40,000 36,000

Profit& Loss a/c 16,000 13,000 Plant 37,000 36,000

Sundry creditors 8,000 5,400 Investment 10,000 11,000

Bills payable 1,200 800 Stock 30,000 23,400

Provision for

taxation

16,000 18,000 Bills receivable 2,000 3,200

Provision for

doubtful debts

400 600 Debtors 18,000 19,000

Cash

6,600 15,200

The following additional information has also been given;

a). Depreciation charged on plant was Rs. 4,000 and on building Rs.4,000

b). Provision for taxation of Rs. 19,000 was made during 1999

c). Interim dividend of Rs. 8,000 was paid during 1999

39. The comparative balance sheet of M/S. Ram brothers for the two years were as follows

Liabilities 20007 Rs 2008Rs Assets 2007Rs 2008 Rs

Share capital 1,50,000 1,75,000 Land&Building 1,10,000 1,50,000

Loan from bank 1,60,000 1,00,000 Plant 2,00,000 1,40,000

Sundry creditors 90,000 1,00,000 Stock 50,000 45,000

Bills payable 50,000 40,000 Debtors 70,000 80,000

Loan from SBI --- 25,000 Cash 20,000 25,000

4,50,000 4,40,000 4,50,000 4,40,000


a). Net profit for the year 2008 amounted to Rs. 60,000

b). During the year a machine costing Rs.25000 (accumulated depreciation Rs.

10,000) was sold for Rs 13,000

the provision for depreciation against machinery as on 31.12.2007 was Rs. 50,000 and on

31.12.2008 Rs. 85,000.

You are required to prepare a cash flow statement.

40. With the following ratios and further information given below, prepare a trading account,

profit and loss account and balance sheet of Shree Ganesh & Co

Gross profit ratio- 25%

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Net profit/ sales 20%

Stock turnover ratio -10%

Net profit / capital -1/5

Capital to total liabilities – ½

Fixed assets /capital – 5/4

Fixed assets / Total current assets- 5/7

Fixed assets – Rs. 10,00,000

Closing stock 1,00,000

Ans: 1. a. short-term solvency ratio 2. b. long-term solvency ratio 3. b. long-term solvency

ratio 4. a turnover ratios 5. b. profitability ratios 6. c. profitability ratios 7. d. profitability

ratio 8. a. turnover ratio 9. d. turnover ratio 10. a)Fund flow statement 11. a.Fund from

operations 12. d. return on net worth 13. b. working 14. a. activity ratios 15. a. stock

velocity ratio 16. d. cost of goods sold. 17. d. cost of goods sold. 18. b. debtors

turnover ratio 19. b. debtors velocity ratio 20. c . accounts payables ratio

UNIT-III

SECTION –A

1. Increase in Accounts payable when compared to previous year results in

…………….of working capital

a. Increase b. Decrease. C. No change d. None of these

2. Decrease in Working capital constitutes …………………

a. Source of fund b. application of funds c. Neither source nor application

d. Current account

3. ……………….refers to firms investment in current assets.

a. Working capital b. Gross working capital. C. Net working capital d. Nil working

capital

4……………..means excess of current assets over current liabilities.

a. Working capital .b. Gross working capital c. Net working capital d. Current

working capital

5. Which among the following results in decrease of working capital?

a. Increase in current liabilities b. Increase in current assets c. decrease in current

liabilities d. Decrease current assets

6. Net working capital is the excess of current assets and ----------

a. current assets b. Current liabilities c. Fixed assets d. Fixed liabilities

7. Working capital is also known as -------- capital

a. revolving circulate b. Current capital c. Fixed capital d. Quick capital

8. The gross working capital is a ------- concern concept

a. monetary b. Cash c. Going d. Regulatory

9. Larger the process period of manufacture, -------- is the amount of working capital required.

a. larger b. Shorted c. Big d. Small

10. There is a time gap between cash inflows and ----------

a. cash outflows b. Cash receivable c. cash movement d. Cash withdrawn

11. ---------------- refers to the time taken b bank in collecting cheque

a, bank cheques b. bank pass book c. bank float d. Banker

12. -------------is a form of finance receivable

a. cash receivable b. Cash payable c. Collecting cheques d. Factoring

13. ------------management is essential because investments in stocks are high

a. investment b. Material c. Stock d. Receivable

14. The time required to process and execute an order is called ----------

A. idle time b. Lead time c. Process d. working time

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15. --------------are the costs of purchasing materials

a. ordering cost b. Return material c. Process cost d. Collecting cost

16. ------------ management is a trade off between the cost of carrying cash and the need of

maintaining liquidity

a. time b. Material c. Cost d. Cash

17. Trade off between -----------and cost of maintaining receivables is important for effective

receivable management

a. purchasing b. Profitability c. Collectively d. Processing

18. Cash planning is a technique to plan and control the use of -------

a. cheque b. Cash c. Deposits d. Banker

19. Receivable represents amounts owed to the firm as a result of sale or goods or services in

the ordinary course of -----------

a. job b. Work c. Business d. Goods

20. --------- provide loans for working capital

a. financial institutions b. commercial banks c. Non commercial bank d. City bank

SECTION-B

21. What is the concept of working capital?

22. Name the various kinds of working capital

23. What ate the principles of working capital management?

24. What is a letter of credit?

25. What are cash inflows?

26. Distinguish between a deposit float and bank float

27. Enumerated the various cost of receivables

28. Give the objectives of holding inventories

29. What are the risks and costs of holding inventories?

30. Write short notes on codifications of inventories?

SECTION-C

31. Explain various factors of influencing working capital?

32. Discuss the importance of working capital for a manufacturing concern

33. What are the advantages of adequate working capital?

34 .What do you understand by receivable management?

35. What is receivable management? How it is useful for business concern/

36. Discuss the various aspects or dimensions of receivable management?

37. Define the inventory control?

38. What are the inventory control systems?

39. What is selective control of inventory? Why it is needed?

40. Define safety stock how it affects the computation of reorder level

ANS: 1.b. Decrease 2. a. Source of fund 3.b. Gross working capital 4.c. Net working capital 5.

a. Increase in current liabilities 6.b. Current liabilities 7.a. revolving circulate 8.c. Going 9.a.

larger 10.a. cash outflows 11.c. bank float 12.d. Factoring13. a. investment 14. Lead time

15.a. ordering cost 16. Cash 17.b. Profitability 18.b. Cash 19.c. Business 20.b. commercial

banks

. UNIT- IV

SECTION- A

1. Budget is a ______________.

a. a post-mortem analysis b. a substitute of management c. an aid to

management d. calculation .

2. One of the most important tools of cost planning is _________.

a. budget. b. direct cost. c. unit cost. d. cost sheet.

3. Sales budget is a _________.

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a. Functional budget. b. Expenditure budget. c. Master budget . d. Flexible

budget.

4. The budget which usually takes the form of budgeted profit and loss account and balance

sheet is known as ___________

a. Flexible budget. b. Master budget. c. Cash budget. d. Purchase budget.

5. The fixed-variable cost classification has `a special significance in the preparation

of________.

a. Capital budget. b. Cash budget. c. Master budget . d. Flexible budget .

6. The budget, which is prepared first of all is.________

a. Master budget. b. Cash budget. c. Budget for key factor. d. Flexible budget.

7. What type of budget is designed to take into account forecast change in costs, prices, etc?

a. Master budget. b. Rolling budget. c. Flexible budget. d. Functional budget.

8. Operation budgets normally cover a period of _____.

a. one to ten years. b. one to two years. c. one to five years. d. one year or less.

9. Budgetary control starts with ________________.

a. Planning. b. Organizing. c. Budgeting. d. Controlling.

10. Budgetary control ends with ____________.

a. Planning. b. Organizing c. Budgeting d. Control.

11. Budget designed to remain constant irrespective of the level of activity attained is

called______________.

a. Fixed budget. b. Flexible budget. c. Sales budget. d. Production budget

12. Long-term budgets are prepared for _______________.

a. 1 year. b. 1-3 years. c 1-5 years. d. 5-10 years.

13. The budget which shows the budgeted quantity of output to be produced during a specific

period is.

a. Fixed budget. b. Flexible budget. c. Sales budget. d. Production budget

14. Material consumption budget is prepared on the basis of ______________.

a. Production budget. b. Sales budget. c Fixed budget. d. Flexible budget.

15. Labour budget is a part of ____________.

a. Fixed budget. b. Sales budget. c. Production budget. d. Flexible budget.

16. Labour budget is prepared by ________________.

a. Personnel department b. Sales department. c. Purchase department.

d. Accounts department.

17. The budget prepared to estimate the expenditure to be incurred for planning, organizing,

direction and control function of the management is___________.

a. Production overhead budget. b. Administration overhead budget. c. Selling and

distribution overhead budget. d. Master budget.

18. The budget prepared to estimate expenditure to be incurred to sell the product and its

distribution is ____________.

a. Production overhead budget. b. Administration overhead budget. c. Selling and

distribution overhead budget. d. Master budget

19. Fixed budget is prepared for only _________.

a. One level of activity. b. Range of activity. c. Two level of activity. d. Three

level of activity.

20. The budget starts without any base is _______________.

a. Master budget. b. Flexible budget. c. Zero base budgeting. d. Fixed budget.

SECTION –B

21. Distinguish between Budget and Forecasting.

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22. Ashish Engineering Co. Ltd. manufacturer’s two articles X and Y. Its sales department has

three divisions: West, South and East. Preliminary sales budgets for the year ending 31st

December 2003, based on the assessments of the divisional executives:

Product X: West 40,000 units: South 1,00,000 units and East 20,000 units

Product Y: West 60,000 units: South 8,00,000 units and East Nil

Sales price X Rs. 2 and Y Rs. 3 in all areas.

Arrangements are made for the extensive advertising of product X and Y and it is estimated

that West division sales will increase by 20,000 units. Arrangements are also made to advertise

and distribute product Y in the Eastern area in the second half of 2003 when sales are expected

to be 1,00,000 units.

Since the estimated sales of the South division represented an unsatisfactory target, it is agreed

to increase both the estimates by 10%. Prepare a sales budget for the year to 31stDecember

2003.

23. From the following particular, you are required to prepare production budget of Mittal Ltd.

a manufacturing organization that has three products X, Y and Z.

Product Estimated stock at the

beginning of the budget

period

Estimated stock at

The end of the budget

period

Estimated sales as Per sales

budget

X

Y

Z

5,000 units

4,000 units

6,000 units

6,400 units

3,850 units

7,800 units

21,600 units

19,200 units

23,100 units

24. Production cost of a factory for a year is as follows:

Direct wages Rs. 40,000

Direct materials Rs. 60,000

Production overhead fixed Rs. 20,000

Production overhead variable Rs. 30,000

During the forthcoming year, it is expected that

(a) The average rate for direct labour remuneration will be far from Rs. 3 per

hour to Rs. 2 per hour

(b) Production efficiency will remain unchanged

(c) Direct labour hours will increase by 331/3%

The purchase price per unit of direct materials and of the other materials and services which

comprise overheads will remain unchanged. Draw up a budget and a factory overhead rate, the

overhead being absorbed on direct wage basis.

Ans: cost of production - 1,45,556

25. Draw up a material purchase budget from the following information: Estimated sales of a

product are 30,000 units. Two kinds of raw materials A and B are required for manufacturing

the product. Each unit of the product requires 3units of A and 4 units of B. The estimated

opening balance in the beginning of the next year: finished goods 5,000 units; A, 6,000 units:

B, 10,000 units. The desirable closing balance at the end of the next year: finished product,

8,000units; A, 10,000 units, B 12,000 units. Material purchase budget for the year

Ans: Quantity of material purchased A 1,03,000; B 1,34,000

26. With the following data for a 60% activity prepare a budget for production at80%

and 100% capacity

Production at 60% capacity 300 units

Materials Rs. 100 per unit

Labour Rs. 40 per unit

Expenses Rs. 10 per unit

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Factory expenses Rs. 40,000 (40% fixed)

Administrative expenses Rs. 30,000 (60% fixed)

27. Larsen Ltd plans to sell 1,10,000 units of a certain product line in the first fiscal quarter ,

1,20,000 units in the second quarter ,1,30,000 units in the third quarter and 1,50,000 units

in the fourth quarter and 1,40,000 units in the first quarter pf the following year. At the

beginning of the first quarter of the current year, there are 14,000 units of product in

stock. At the end of each quarter the company plans to have an inventory equal to one-

fifth of the sales for the next fiscal quarter.

Prepare production budget

28. The standard cost data for R Ltd., shows that 2 hours of direct labour are required to produce

one unit of finished product. The standard rate per hour is Rs.5. but it has to be raised to Rs.6

from the third month of the first quarter of 2008. The budgeted productions for the first quarter

ending 31.3.08 are as follows

January 5,000 units; February 8,000 units; & March 10,000 units. Prepare labour cost budget

for the first quarter.

29. The income and expenditure forecasts for month of march to August 2005 are given as

follows

month Sales(cr) Purchase

(cr)

wages Man.

expenses

Off.

expenses

Sell.

expenses

March

April

May

June

July

August

60000

62000

64000

58000

56000

60000

36000

38000

33000

35000

39000

34000

9000

8000

10000

8500

9500

8000

3500

3750

4000

3750

5000

5200

2000

1500

2500

2000

1000

1500

4000

5000

4500

3500

3500

4500

You are given the following information

i) Plant costing Rs. 16000 is due for delivery in July payable 10 % on delivery and

the balance after 3 months

ii) Advance tax of Rs. 8000 is payable in March and June each

iii) Creditors allow 2 months credit and debtors are paying 1 month late opening

balance of cash Rs. 8000 lag of one month in expenses

Prepare Cash budget for the month of May to July

30. Prepare Production Budget for three months from January to March from the following

Months Opening stock Estimated sales Desired closing

stock

Jan

Feb

Mar

April

2000

3000

4000

5000

10000

12000

14000

13000

5000

4000

3000

2000

SECTION - C

31. Prasad and Co. wishes to prepare cash budget from January. Prepare a cash budget for the

first six months from the following estimated revenue and expenses:

Month Total sales

(Rs.)

Materials Wages (Rs.) Production

overheads(Rs.)

Selling and

distribution

overheads (Rs.)

January

February

Mar

April

10,000

11,000

14,000

18,000

10,000

7,000

7,000

11,000

2,00

2,200

2,300

2,300

1,600

1,650

1,700

1,750

400

450

450

500

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May

June

15000

20000

10000

12500

2000

2500

1600

1800

450

600

Additional information

1. Cash balance on 1st January was Rs. 5,000. New machinery is to be installed

at Rs.10,000 on credit, to be repaid by two equal instalments in March and April.

2. Sales commission @ 5% on total sales is to be paid within a month of

following actual sales.

3. Rs. 5,000 being the amount of 2nd call may be received in March. Share

Premium amounting to Rs. 1,000 is also obtainable with the 2nd call.

4. Period of credit allowed by suppliers- 2 months.

5. Period of credit allowed to customers- 1 month.

6. Delay in payment of overheads- 1 month.

7. Delay in payment of wages- ½ month.

8. Assume cash sales to be 50% of total sales.

32. Prepare a flexible budget for overheads on the basis of the following data.

Ascertain the overhead rates at 50%, 60% and 70% capacity.

At 50% capacity (Rs.)

Variable overheads:

Indirect material 3000

Indirect labour 9 9000

Semi-variable overheads:

Electricity (40% fixed 60% variable) 15,000

Repairs (80% fixed 20% variable) 1500

Fixed overheads:

Depreciation 8,250

Insurance 2,250

Salaries 7,500

Total overheads 46,500

Estimated direct labour hours 93,000

33. The expenses budget for production of 1000 units in a factory furnished below

Particulars Per unit

(Rs)

Materials

Labour

Variable overheads

Fixed expenses (Rs100000)

Variable expenses(Direct)

Selling expenses(10% fixed)

Distribution expenses(20% fixed)


Total Cost

70

25

20

10

5

13

7

5

155

Prepare budget for production of

i) 8000 units’ ii) 6000 units iii) indicate cost per unit at both levels

34. A glass manufacturing company request you to calculate and present the budget

for the next year from the following information

Sales:

Glass 300000

Bent glass 500000

Direct material cost 6% of sales

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Direct wages-20 workers @ Rs 150 per month

Factory overhead:

Indirect labour:

Works manager Rs. 500 per month

Foreman Rs. 400 per month

Stores and spares 2½% in sales

Administrative, selling &distribution expenses-Rs 14,000 per year

Depreciation on machinery Rs 12,600

Light and power Rs 5,000

Other sundries 10 % on direct wages

Repairs and maintenance Rs 8,000

35. The following information at 50% capacity is given. Prepare a flexible budget and forecast

the P/L account at 60%, 70%and 90% capacity.

Expenses of 50% capacity (RS)

Fixed expenses

Salaries 50,000

Rent and taxes 40,000

Depreciation 60,000

Administrative expenses 70,000

Variable expenses

Material 2,00,000

Labour 2,50,000

Others 40,000

Semi variable expenses

Repairs 1,00,000

Indirect labour 1,50,000

Others 90,000

It is estimate that fixed expenses will remain constant at all capacities. Semi

variable expenses will not change between 45% and 60% capacity will rise by 10%

and between 60% and 75% capacity crosses 75%. Estimate sales at various level of capacity

are

Capacity Sales(Rs)

60% 11,00,000

70% 13,00,000

90% 15,00,000

36. Draw up a Flexible budget for overhead expenses on the basis of the following data and

determine the overhead rates at 70%,80%and 90% capacity.

Particulars At 80%

capacity

Variable overhead:

Indirect labour

Stores including spares

Semi variable overheads:

Power(30% fixed,70% variable)

Repairs and maintenance

(60% Fixed and 40% variable)

Fixed overheads:

Depreciation

12,000

4,000

20,000

2,000

11,000

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Insurance

Salaries

Total overheads

Estimated direct labour hours

3,000

10,000

62,000

1,24,000

37. What do you mean by budgetary control? What are the advantages of budgetary control?

38. What are the different classifications of budget?

39. The expenses for budgeted production of 10,000 units in a factory are furnished below:

Per unit

Material

Labour

Variable overheads

Fixed overheads(Rs. 1,00,000)

Variable expenses(Direct)

Selling expenses (10% on Fixed)

Distribution expenses (20% fixed)

Administration expenses

Total cost per unit

70

25

20

10

05

13

07

05_________

155

Prepare a budget for production of :

a).8,000 units b). 6,000 units c). Indicate cost per unit at both the levels

Assume that administration expenses are fixed for all levels of production.

40. ITC Ltd has prepared the budget for the production of 1 lakh units of the only commodity

manufactured nut it fit a costing period as under:

Rs. in lakhs

Raw material

Direct labour

Direct expenses

Works overhead (60% Fixed)

Administrative overhead (80 % Fixed)

Selling overhead (50% Fixed)

2.52

0.75

0.10

2.25

0.40

0.20

The actual production during the period was only 60,000 units. Calculate the

revised budgeted cost per unit.

ANS:1. c. an aid to management 2. a. budget 3. a. Functional budget 4. 5. d. Flexible budget

6. c. Budget for key factor 7. b. Rolling budget 8. d. one year or less 9. a. Planning 10. d.

Control 11 a. Fixed budget 12. d. 5-10 years 13. d. Production budget 14. a. Production

budget 15. c. Production budget 16. a. Personnel department 17. b. Administration overhead

budget 18. c. Selling and distribution overhead budget. 19. a. One level of activity 20 c.

Zero base budgeting

UNIT- V

SECTION -A

1. Profit Volume ratio is the ratio of ……………. To sales

a. Contribution b. Profit c. Sales d. none of these

2. Contribution margin is also known as __________.

a. marginal income .b gross profit. c. net profit. d. net loss.

3. Period costs are__________.

a. overhead costs . b. prime cost. c. variable cost. d. fixed costs. 4. Contribution

margin is equal to___________.

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a. fixed cost - loss . b. profit + variable cost. c. sales — fixed cost- profit . d. sales –

profit.

5. P/V Ratio is an indicator of _______________.

a. the rate at which goods are sold . b. the volume of sales c. the volume of profit. d.

the rate of profit.

6. Margin of Safety is the difference between___________.

a. planned sales and planned profit . b. actual sales and break-even sales. c. planned

sales and actual sales d. planned sales and planned expenses. 7. An increase in

variable costs______________.

a. increases p/v ratio . b. increases the profit. c. reduces contribution . d. increase

margin of safety.

8. An increase in selling price____________.

a. increases the break-even point. b. decreases the break-even point. c. does not affect

the break-even point. d. optimize the breakeven point.

9. A large Margin of Safety indicates____________.

a. over production. b. over capitalization . c. the soundness of the business. d. under

capitalization. 10. if` fixed costs decrease while variable cost per unit remains

constant, the new B.E.P in relation to the old B.E.P will be___________.

a. lower b. higher. C. unchanged . d. indeterminate.

11. Marginal costing is a …………… of costing

a. system b. Method c. Technique d. all of these 12. Under marginal costing,---------- Costs are regarded as costs of the products. a. variable costs b. Fixed costs c. Both of these. d. none of these

13. Under marginal costing, stocks of finished goods and work in process are valued at ------

cost only

a. variable costs b. fixed costs c. marginal cost d. none of these

14 ………………..is the excess of sales over marginal cost of sales

a. profit b. margin c. loss d. contribution

15. The Profit/Volume ratio or marginal ratio expresses the relation of …………

to sales.

a. Profit b. marginal cost c. contribution d. none of these

16. .Profit Volume ratio is the ratio of ……………. To sales

a. Contribution b. .Profit c. Sales d. none of these

17.The ratio of contribution to ……………. Is called P/V ratio

a. volume b. sales c. profit d. none of these

18 …………..is the angle caused by intersection of total cost line and total

sales line

a. angle of contribution b.angle of incidence c. all of these .d. none of these

19. At Breakeven point contribution will be equal to …………….

a..variable cost b.fixed cost c. profit d.none of these

20..Marginal cost is the aggregate of prime cost and ……………….

a. fixed overheads b. variable overheads c. contribution d. none of these

SECTION-B

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21. What do you understand by contribution? How does it help management in solving

various problems?

22. Determine the amount of fixed expenses and prepare marginal cost statement from the

following particulars:

Sales

Direct material

Direct labour

Variable overheads

profit

Rs

2,50,000

80,000

50,000

20,000

60,000

23. . From the following information relating to Quick standards Ltd., You are required to

find out (a)P.V ratio (b) Breakeven point (c)Profit (d)Margin of safety

Rs

Total Fixed cost 4, 500

Total variable cost 7,500

Total sales 15,000

(e)Also calculate the volume of sales to earn profit of Rs.6, 000.

24. a).A company has the capacity to produce 16000 units per month. At present it is producing

10000 units and selling at RS15.Cost per unit is as follows

Material Rs. 5

Labour Rs. 3

Variable expenses Rs. 1

Fixed expenses Rs. 2.50

Rs 11.50

Should the company accept the order for addition 4000 units to sell at Rs 10

25. Prepare marginal cost statement from the following particulars

Variable cost: Direct material 4,500; direct wages 2,500; factory overheads 1,500

Fixed cost: Administrative expenses 1,250

Total cost 9,750 ; Profit 5,250

26. .fill in the blanks for each of the following independent situations

Case No., of

units sold

Selling

price p.u

Variable cost

% of sales

Contributio

n margin

Fixed cost profit

I

II

III

15,000

2,000

?

?

160

15

90

?

75

?

80,000

?

30,000

?

25,000

0

(2,000)

50,000

27. Calculate breakeven point

Sales

Fixed expenses

Variable cost

Direct material

Direct labour

Other variable expenses

Rs

6,00,000

1,50,000

2,00,000

1,20,000

80,000

28. The following information is given for two companies.

X Ltd Y Ltd

Units produced & sold

Revenues

Fixed costs

Operating income

17000

1,70,000

85,000

51,000

17,000

1,70,000

34,000

51,000

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Variable cost 34,000 85,000

Find out the breakeven point of each company both in units as well as in volume

29. Given: fixed cost Rs.8,000; Break even sales(in Units) 4000:sales 7000 units;selling price

per unit Rs.10. Calculate variable cost and profit.

30. Pepsi Company produces a single article. Following cost data is given about its product:‐ Selling price per unit Rs.40

Marginal cost per unit Rs.24

Fixed cost per annum Rs. 16000

Calculate:

(a)P/V ratio (b) break even sales (c) sales to earn a profit of Rs. 2,000 (d) Profit at sales of Rs.

60,000 (e) New break even sales, if price is reduced by 10%.

SECTION-C

31. Raj Corporation Ltd., has prepared the following budget estimates for the year

1999-2000 Sales (units) 15,000

Fixed expenses Rs.34,000

Sales Rs.1,50,000

Variable cost Rs. 6 per unit

You are required to;

(i)Find the P.V ratio, breakeven point and margin of safety.

(ii) Calculate the revised P.V ratio, breakeven point and margin of safety in each

of the following cases:

a). Decrease of 10% in selling price

b). Increase of 10% in variable cost

c). Increase of sales volume by 2,000 units

d). Increase of Rs.6, 000 in fixed costs.

32. Assuming that the cost structure and selling price remain the same in period I and II

Find out i) Profit volume ratio ii) Fixed cost iii) Profit when sales are Rs 100000

iv) Sales required to earn a profit of Rs 20000 v) Margin of safety for II period

Period Sales Profit

I 120000 9000

II 140000 13000

33. Product X can be produced either by machine A or machine B. machine A can produce

100 units of X per hour and machine B 150 units per hour. Total machine hours

available during the year are 2,500. Taking into account the following data determine

the profitable methods of manufacture:

Per unit of X

Machine A

Rs

Machine B

Rs

Marginal cost

Selling price

Fixed cost

5

9

2

6

9

2

(OR)

34. The cost per unit of the three products A,B,& C of a company are given below:

Products

A Rs B Rs C Rs

Direct materials

Direct labour

Variable overhead

Fixed expenses

20

12

8

6

46

16

14

10

6

46

18

12

6

4

40

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Profits

Selling price

No of units produced

18

64

10,000

14

60

5,000

12

52

8,000

Production arrangements are such that if one product is given up

the production of the others can be raised by 50%. The directors propose that C

should be given up because the contribution from that products is the lowest.

Do you agree?

35. .from the following data, calculate breakeven point expressed in terms of units and also

the new B.E.P if selling price is reduced by 10%

Fixed expenses: Depreciation Rs.1,00,000; salaries Rs.1,00,000

Variable expenses: Materials Rs.3 per unit; labour Rs.2 per unit: selling price Rs.10

per unit

36. from the following information relating to Quick standards LTD you are required to find

out P.V ratio, Breakeven point, Profit and margin of safety.

Total fixed cost Rs.4500; total variable cost Rs.7500; total sales 15000

Also calculate the volume of sales to earn profit of Rs.6000.

37. From the following data calculate i) P.v ratio ii). Profit when sales are Rs.20,000 iii)New

breakeven point if selling price is reduced by 20%; fixed expenses Rs.4000; Breakeven sales

Rs.10000.

38. A company produces and markets industrial container and packing cases. Due to

competition the company proposes to reduce the selling price. If the present level of profit is

to be maintained indicate the number of units to be sold if the proposed reduction in selling

price is i). 5% ii). 10% iii) 15%

The following additional information is available.

Present sales (30,000 units) 3,00,000

Variable cost (30,000 units) 1,80,000

Contribution 1,20,000

Less; fixed cost 70,000

Profit 50,000

39. following information has been made available from the cost records of united automobiles

Ltd manufacturing spare parts.

Direct material Per unit

X Rs.8

Y Rs.6

Direct wages

X 24 hours at 25 paise per hour

Y 16 hours at 25 paise per hour

Variable overheads 150% of wages

Fixed overheads Rs750

Selling Price

X Rs.25

Y Rs.20

40. The directors want to be acquainted with the desirability of adopting any one of the

following alternative sales mixes in the budget for the next period. a) 250 units of X and 250 units of Y b) 400 units of y only c) 400 units of X and 100 units of Y d) 150 units of X and 350 units of Y

State which of the alternative sales mixes you would recommended to the management?

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Ans:1.a.Contribution 2.a. marginal income 3.d. fixed costs 4.a. fixed cost - loss 5.d. the

rate of profit 6.b. actual sales and break-even sales7. a. increases p/v ratio 8.b. decreases the

break-even point 9.c. the soundness of the business 10b. Higher 11. c. technique 12.a.

variable costs 13.c. marginal cost 14.c. loss 15.c. contribution 16.a. Contribution 17.b.

sales 18.b.angle of incidence 19.b.fixed cost 20.b. variable overheads


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Class: II M.Com Semester –IV

Sub. Name: Customs Duty and Goods and

Service Tax

Sub. Code: 18PCM414

Prepared by: Dr. M. USHARANI

UNIT-I

SECTION-A


1. Of the gross tax revenue of the Union Government the indirect taxes account for

nearly __________________

(a) 55 per cent (b) 65 per cent (c) 75 per cent (d) 85 per cent

2. The phenomenon of a continuous decrease in prices of goods and services in the

economy is, known as ______

(a) Inflation (b) Deflation (c) Stagflation (d) Market crash

3. Direct taxes includes______________

(a) Income Tax (b) Property Tax (c) Gift Tax (d) All of these

4. Sales Tax is _____________

(a) Direct Taxes (b) Indirect taxes (c) wealth tax (d) None of these

5. Which of the following is not a direct tax?_________

(a) Sales Tax (b) Wealth Tax (c) Estate Duty (d) Income Tax

6. An ad valorem duty is a tax on the basis of _____________

(a) the value added (b) the unit of the commodity (c) the price of a commodity

(d) the advertisement expenditure

7. The income tax in India is_________________

(a) direct and proportional (b) direct and progressive (c) indirect and proportional

(d) indirect and progressive

8. Government imposes taxes to ______________

(a) check the accumulation of wealth among the rich (b) run the machinery of state

(c) uplift weaker sections (d) none of these

9. Which of the following states became the first state in the country to launch RBI’s e-

payment system for commercial tax payers? ____________

(a) Kerala (b) Karnataka (c) Maharashtra (d) Andhra Pradesh

10. Which of the following comes under sin tax? ____________

(a) Pan Masala (b) Tobacco (c) Alcohol (d) All of the above

11. The country with second highest tax slab i.e. 27% is___________

(a) South Korea (b) Ireland (c) Argentina (d) Netherland

12. Which of the following tax will be abolished by the GST? _________

(a) Service Tax (b) Income Tax (c) Wealth Tax (d) Corporation tax

13. The objective of taxation by the Government are ________________

(a)Raising revenue for the state (b)To maintain economic stability (c)To remove

disparities in the distribution of income (d)All of the above

14. In the tax avoidance the provisions law________

(a) Not abided (b) Misused (c) Wrong interpretation (d) All of above

15. Causes of tax evasion___________

(a) Higher tax rates (b) Complex of provisions (c) Corruption (d) All of the

above

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16. Better way of reducing tax liability is___________

(a) Tax evasion (b) Tax avoidance (c) Tax planning (d) Both (A) and (B)

17. Pick out the factor which is not a feature of indirect taxes __________

(a) Convenience (b)Tax evasion is difficult (c)Fair to the poor (d)Powerful

tool of economic policy

18. Which factor has no role in the shifting of a tax? ____________

(a) Change in prices (b) Elasticity of demand and supply (c)Nature of Demand

(d)Income of the consumer

19. Impact of a tax refers to _________

(a)Final money burden (b) Immediate money burden (c)Indirect real burden

(d)None of the above

20. Which of the following is a union tax? __________

(a) Land revenues (b) Corporation tax (c) Capitation taxes (d) taxes on

agricultural income

Answers

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

b b d b a c b b b d c a d b d c c d b b

SECTION-B


1. Define tax and list out the criteria of tax.

2. Briefly explain the importance of taxation.

3. Point out the specific objectives of taxation.

4. Write a short note on:

(a) Impact (b) Incidence (c) Shifting

5. List out and explain the principles of taxation advocated by Adam Smith.

6. Distinguish between Advalorem duty and specific duty.

7. Who are all the members of GST council?

8. Mention the functions of GST council.

9. Bring out the Merits of Advalorem duty

10. How the impact is difference from incidence.

SECTION-C


1. Explain the important characteristics of tax.

2. Describe the general objectives of taxation.

3. Discuss the major features of indirect tax laws in India in detail.

4. Give a detailed note on merits and demerits of direct tax.

5. Explain the constitutional basis of taxation in India.

6. Write a note on the Key features of constitution (101st Amendment) Act, 2016.

7. Narrate about the distribution of revenue between the Union and the States.

8. Differentiate direct tax from indirect tax with suitable examples.

9. Confer the concept of tax evasion.

10. List out and explain the features of tax avoidance

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UNIT-II

SECTION-A


1. Which of the following commodities is not subjected to payment of Export Duty at the

time of export? ___________

(a) Iron Ore Pallets (b) Gold Ore (c) Snake skin (d) Ferrous Waste and Scrap

2. A person can make an application to the settlement commission under Custom Act?

(a) Before issue of show cause notice. (b) Before adjudication (c) Within thirty days from

the date of issue of O-I-O (d) none of the above

3. Which of these is not an adjudicating authority under Customs Act, 1962? __________

(a) Commissioner of Customs (b) Principal Commissioner of Customs (c)

Commissioner (Appeals) (d) Assistant Commissioner of Customs

4. Which section of the Customs Act, 1962 provides for levy of Customs duty on import and

export of goods? ___________

(a) Section 3 (b) Section 12 (c) Section 14 (d) Section 28

5. Where shall an appeal against the Order passed by the CESTAT relating to the valuation of

goods shall lie?

(a) High Court (b) Supreme Court (c) Central Government (d) CESTAT

cannot pass an order on valuation matters

6. Under Section 14 of the Customs Act 1962, the transaction value shall be calculated with

reference to the rate of exchange as in force on the date on which:

(a)Date of Invoice (b) the date of issuance of the Bill of lading (c) date of filing IGM

(d) date of filing the Bill of Entry

7. Under which of the following Export Promotion Schemes, Capital Goods are allowed to be

imported duty free?

(a) Export Promotion Capital goods scheme (b) Export Oriented Unit Scheme (c)

Software Technology Park Scheme (d) All of the above

8. Under which provision of the Customs Act, 1962, the duty of Customs is leviable on

imported goods?________

(a) Section 17 (b) Section 14 (c) Section 12 (d) Section 15

9. Custom duty is an instrument of _______________

(a) Monetary Policy (b) Foreign Trade Policy (c) Industrial Policy (d) Fiscal Policy

10.Which country is the largest producer of diamonds in the world? __________

(a) Canada (b) Australia (c) Russia (d) South Africa

11. Which of the following taxes is not shared by the Central Government with the states?___

(a) custom duty (b) union excise duties (c) income tax (d) estate duty

12. An area beyond 200 nautical miles from the base line is called___________

(a) high seas (b) forest area (c) mountain (d) desert

13. One nautical miles is equal to _______________

(a) 1.515 miles (b) 1 miles (c) 0.75 miles (d) 0.25 miles

14. The expansion of CVD is __________

(a) Counter void duty (b) common vailing duty (c) countervailing duty (d) none of

the above

15. General rate of customs duty on non-agricultural goods is _____

(a) 5 % (b) 10% (c) 25 % (d) 30 %

16. The apex body for customs matter is___________

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(a) CBEC (b) CEBC (c) CCEB (d) BECC

17. Customs duty is on ‘goods’ as per section_________

(a) 12 of Customs act (b) 14 of Customs act (c) 21 of Customs act (d) 41 of Customs act

18. Bringing goods from the place of outside India is known as__________

(a) export (b) Indian customs water (c) re-export (d) Import

19. In case of warehoused goods, the goods continue to be in __________

(a)Ware house (b) territorial water (c) EXIM (d) customs bond

20. The goods which can be imported into India with prior permission are____________

(a) free goods (b) restricted goods (c) pets and live animals (d) endangered plants

Answers

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

a b c b b d d c b c a a a c b a a d d c

SECTION-B


1. Give any five important definitions under customs act 1962.

2. Mention the objectives of customs duty.

3. What do you mean by goods under customs act 1962?

4. Define ‘Indian customs water’, what is its significance in terms of Customs act 1962?

5. Explain the purpose of ‘Safeguard duty’.

6. Define the term anti-dumping duty and state the reason for charging anti-dumping

duty.

7. Briefly explain the basic customs duty.

8. State the reason for charging compensation charge.

9. List out the events chargeable under customs act.

10. Bring out the drawbacks of customs duty.

SECTION-C


1. Discuss the two basic acts for charging customs tax.

2. Explain in detail the types of duties charged under customs act.

3. Name any five commodities which are prohibited for Import into India? Also write

the legal authority specifying such prohibition?

4. Discuss briefly the power of the appellate tribunal to order ‘rectification of mistake”

under Customs Ac

5. Explain about duty liability in special circumstances under customs.

6. Write a note on Duties free zones.

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7. Elaborate the situation where and when the penalties are levied under customs act.

8. Mention the provisions under the customs act related to export goods.

9. Write brief note on – Refund of special CVD paid on goods imported by a trader and

also explain who can file refund claim under customs act?

10. What do you understand by “Compounding of Offences”. Indicate the types of cases

which cannot be compounded.

UNIT-III

SECTION-A


1. What kind of Tax is GST? _______________

(a) Direct Tax (b )Indirect Tax (c)Depends on the type of goods and

services (d) None of the above

2. The headquarters of GST council is located at _______.

(a) New Delhi (b) Lucknow (c)Ahmadabad (d) Mumbai

3. Which state became the first state of India to ratify GST bill?____________

(a) Bihar (b)Telangana (c) Assam (d)Andhra Pradesh

4. GST was introduced as the _____ amendment Act.

(a) 100 (b) 101 (c) 102 (d) 103

5. A special purpose vehicle _______ has been launched to cater the needs of GST.

(a) GSTS (b) GSTR (c) GSTM (d) GSTN

6. Who is the chairman of GST council? ___________

(a) RBI Governor (b) Prime Minister (c) Finance secretary (d)Finance Minister

7. GST is a ___ based tax on consumption of goods and services.

(a) Origin (b) Destiny (c) Development (d) Destination

8. In which year GST was first introduced in India?_________

(a) 2000 (b) 2002 (c) 2004 (d)None of the above

9. The Indian government has implemented the new indirect tax regime – GST from: __

(a) 1.01.2017 (b) 1.03.2017 (c) 1.07.2017 (d) 1.09.2017

10. From which country India has borrowed Dual GST Model?______________

(a) Canadian (b) Japan (c) China (d) USA

11. _________ is the first state that passed GST Bill.

(a) Bihar (b) Gujarat (c) Telangana (d) Andhra Pradesh

12. GST rate on Smart Phones is _____________

(a) 0% (b) 5% (c) 12% (d)28%

13. The Central Board of Excise and Customs (CBEC) announced that every year

________ will be considered as GST Day.

(a)April 1 (b)March 1 (c) June 1 (d) July 1

14. Under GST, Insurance is taxed _______ per cent.

(a) 0% (b) 5% (c) 12% (d) 18%

15. Which of the following country is the first one to implement GST to reduce tax-

evasion?____

(a) USA (b) France (c) Germany (d) Switzerland

16. GST exemption threshold limit of North Eastern States is ______ lakh.

(a) 5 (b) 10 (c) 12 (d) 15

17. GSTN comes under which Act? _____________

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(a) Banking Regulation Act 1949 (b) RBI Act 1934 (c) Companies Act, 2013

(d) Limitation Act, 1963

18. Coal comes under which GST rate Structure? ___________

(a) 0% (b) 5% (c) 12% (d) 18%

19. How many types of GST in India? _______________

(a) 2 (b) 3 (c) 4 (d) 5

20. The country with highest GST Rate in the world is___________

(a) USA (b) India (c) China (d) Greece

Answers

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

b a c b d d d a c a c c d d b b c c b b

SECTION-B


1. Give the meaning of Goods and Service Tax.

2. GST is destination based tax system. Explain the concept of destination based tax

system.

3. Mention the goods that are not covered under GST.

4. Briefly explain the levies made under GST.

5. Point out the services rendered by GSTN.

6. Write a short note on the concept of Zero rate.

7. Define the term taxable supply.

8. What is rate structure? How many rates are specified in GST?

9. Briefly point out the types of registration under GST.

10. Who are all responsible to register under GST?

SECTION-C


1. Explain the major features of GST recently implemented in India.

2. List out and explain the benefits of GST.

3. Explain the taxes subsumed under GST.

4. Discuss the concept Goods and Service Tax Network (GSTN).

5. Write a detailed note on taxable supplies.

6. Discuss the merits and demerits of GST

7. Under what circumstances GST authorities will order a person to register under GST.

8. Comment on compulsory registration and the persons covered under it.

9. What is annual return? Explain the provisions relating to filing and audit of annual

return.

10. When a registration can be cancelled? State the procedure to cancel registration.

UNIT-IV

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SECTION-A


1. In IGST, ‘I’ stands for _____________

(a) Intra (b) Integrated (c) Internal (d) Innovation

2. The tax IGST charged by _______ Government.

(a) Central (b) State (c) Concerned department (d) Both A and B

3. The highest rate of tax prescribed under IGST is ________.

(a) 5% (b)18% (c) 28% (d) No such limit

4. What is Integrated Goods and Services Tax?______________

(a) Tax on international trade (b) Tax imposed on interstate trade (c) Tax

imposed on value additions to exports (d) Tax imposed on imported goods and

services

5. GST will be levied on ___________ .

(a) Manufacturers (b) Retailers (c) Consumers (d) All of the above

6. What is the rate applicable under CGST to a registered person being a manufacturer

opting to pay taxes under composition scheme?

(a) 2.5% (b) 1% (c) 0.5% (d) No composition for manufacturer

7. Section 25 of CGST Act,2017 deals with____________

(a) Registration (b) cancellation (c) payment (d)exemption

8. Section 41 of CGST Act, 2017 explains___________

(a)Goods (b) tax input credit (c) services (d) tax output credit

9. What are the taxes levied on an intra-state supply?__________

(a)CGST (b)SGST (c)IGST (d) CGST and SGST

10. What is the maximum rate prescribed under CGST?____________

(a)12 % (b) 20 % (c) 28% (d) 18 %

11. Which of the following taxes will be levied on imports of goods and

services?_________

(a)CGST (b) SGST (c) IGST (d) exempt

12. SAC code stands for__________________

(a)Service Accounting Code (b) Software Accounting Code (c) System

Accounting Code (d) System Application code

13. What is the validity of the registration certificate?__________

(a)Five years (b) ten years (c) no validity (d) valid till it is cancelled

14. When can a registered person avail credit on inputs?__________

(a)On receipt of goods (b) on receipt of documents (c) both (a) & (b) (d) none

of the above

15. A ‘taxable person’ is defined in ___________

(a)Section 90 of IGST act (b) Section 90 of CGST act (c) Section 9 of CGST act

(d) Section 9 of IGST act

16. Tax invoice must be issued by________

(a) Every supplier (b)Every taxable person (c) Registered persons not paying tax

under composition scheme (d) All the above

17. The tax invoice should be issued _______the date of supply of service:

(a) Within 30 days from (b) Within 1 month from (c) Within 15 days from (d) On

18. A credit note is issued by ________ and it is a document accepted for GST purposes:

(a)Supplier, for reducing the tax/ taxable value (b)Recipient, for reducing the tax/

taxable value (c) Supplier, for increasing the tax/ taxable value (d)Recipient, for

increasing the tax/ taxable value

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19. For an increase in the tax/ taxable value, a debit note for GST purposes__________

(a) Should be issued by the supplier (b) Should be issued by the recipient (c)

May be issued by the supplier (d) May be issued by the recipient

20. The receipt voucher must contain______________

(a) Details of goods or services (b) Invoice reference (c) Full value of supply

(d) None of the above

Answers

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

b a c b d c a b d b c a d c c c a a a a

SECTION-B


1. Briefly explain the taxable event under GST.

2. Is TCS and TDS the same? If no, explain the differences

3. Give the meaning of IGST.

4. List out the products exempted from IGST

5. What is credit note and debit note.

6. Mention the contents of delivery challan.

7. State the scope of the term ‘supply’ as defined in the CGST Act, 2017?

8. Point out and explain the effective dates for composition of levy under GST?

9. How to ascertain the taxable value for levy of CGST & SGST? 10. What are the consequences, if a taxable person violates the conditions prescribed for

composition scheme? SECTION-C


1. Explain the concept of supply and its main ingredients.

2. Discuss the different types of assessments under GST.

3. Sketch on the different methods of collection of tax under GST.

4. Give any five important definitions under IGST.

5. Describe the term interstate supply and intra state supply? How it is important for

charging IGST.

6. Explain the contents of invoice to be issued by Goods transport agency.

7. Elucidate the circumstances under which an invoice can be revised.

8. Enlist the activities or transactions which shall not be considered as ‘supply’ for GST

by way of Schedule III?

9. What is the rate of tax applicable on intra-State supplies?

10. Can every taxable person opt to pay tax under composition scheme?- Discuss.

UNIT-V

SECTION-A

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1. Any transfer of title to goods is______

(a) Sales (b) supply (c) transaction (d) turnover

2. Time of supply of goods and services was explained in______

(a) Sec 12 of CGST Act,2017 (b) Sec 12 of TNGST Act,2017

(C) Sec 21 of CGST Act,2017 (d) Sec 21 of TNGST Act,2017

3. GSTR-1 has to be filed by registered taxable person containing details

about_________

(a) Inward supplies of taxable goods (b) inward supply of services

(c)outward supplies of taxable goods or services (d) none of the above

4. The application for GSTIN number can be made through__________

(a) Proper channel (b)Tax officers (c) GST online portal (d) e-sevai mayam

5. Every registered taxable person is required to give details of inward supply for a tax

period in___________

(a) GSTR-1 (b) GSTR-2 (c) GSTR-4 (d) GSTR-8

6. The details of outward supplies of goods or services shall be submitted by _________

(a) 10th of the succeeding month (b) 18th of the succeeding month

(c) 15th of the succeeding month (d) 20th of the succeeding month

7. Details of Outward supplies shall include __________

(a) Invoice (b) Credit and Debit notes (c) Revised invoice issued in

relation to outward supplies (d) All the above

8. The details submitted by the outward supplier in Form GSTR 1 shall be furnished to

the recipient regular dealer in form____________

(a) GSTR 4A (b) GSTR 5A (c) GSTR 2A (d) GSTR 6A


the recipient compounding dealer in form ___________



the input service distributor in form _________


11. The details of inward supplies of goods or services in Form GSTR 2 shall be

submitted by _____________of succeeding month

(a) 10th (b) 18th (c) 15th (d) 20th

12. Any modification / deletion done by the recipient to the details contained in Form

GSTR 2 shall be communicated to the supplier in_____________

(a) Form GSTR 1A (b) Form GSTR 3A (c) Form GSTR 6A (d) Form GSTR 2A

13. The supplier on receiving the communication in Form GSTR 1A shall accept, reject

or modify the details by_________

(a) 18th of the succeeding month (b) 20th of the month succeeding the quarter

(c) 17th of the succeeding month (d) 10th of the succeeding month

14. The certificate of details of tax deducted by the deductor shall be furnished to the

deductee in Form _____________

(a) GSTR 7 (b) GSTR 7A (c) GSTR 2A (d) GSTR 1A

15. The e-commerce operator collecting tax under section 52 shall file its monthly return

in ____

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(a) Form GSTR 8 by 18th of the succeeding month (b) Form GSTR 7 by 20th of

the month succeeding the quarter (c) Form GSTR 8 by 17th of the succeeding

month (d) Form GSTR 8 by 10th of the succeeding month

16. Every registered taxable person shall be entitled to take credit of input tax in his

return and such input tax credit shall be credited to __________

(a) Personal Ledger Account (b) Refund account (c) Electronic Cash Ledger

(d) Electronic Credit Ledger

17. The annual return shall be filed by the registered taxable person (other than dealers

paying tax under section 10) in form___________

(a) GSTR 7 (b) GSTR 9 (c) GSTR 9A (d) GSTR 10

18. Notice to non-filers of return shall be sent in Form ___________

(a) GSTR 5 (b) GSTR 3 (c) GSTR 3A (d) GSTR 10

19. The final return shall be filed by the registered taxable person within___________

(a) 3 months of the date of cancellation (b) Date of order of cancellation

(c) Later of the (a) or (b) (d) Earlier of the (a) or (b)

20. A goods and service tax practitioner can undertake the following activities if

authorized by the taxable person____________

(a) Furnish details inward and outward supplies (b) Furnish monthly / quarterly

return (c) Furnish Annual and Final return (d) All of the above

Answers

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

b a c c b a d c a d c a c b d d b c c d

SECTION-B


1. Briefly explain the FORM GSTR-2A?

2. State the late fees on filing belated return?

3. What are the details that are required to be submitted in FORM GSTR-4?

4. Mention some of the important consequences of not filing any particular return?

5. List out the registered person who need not file GSTR-2.

6. Write a short note on revision of GSTR-2 and GSTR-2A

7. Give the meaning of services and supply of services.

8. Define the term (a) Outward supply (b) inward supply

9. Through points on Time limit for filing of returns.

10. Define refund of tax and explain the time limit to claim refund under Section 54?

SECTION-C


1. Discuss the various returns prescribed under the GST Act?

2. Who is required to furnish the details of outward taxable supply? In what format should

such details be furnished? What is the due date for furnishing such details?

3. What are the details to be submitted while furnishing the details of outward supply in

FORM GSTR-1?

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4. Write a note on Annual return. Explain the provisions relating to filing and audit of

annual return.

5. State the evidences which are required to be produced by the supplier of deemed

export supplies for claiming refund.

6. Discuss the procedure to file the form GSTR-1

7. List out and explain the forms used for filing under GST.

8. Describe final return and explain the persons required to file final return.

9. Write a detailed note on Input service distributor.

10. Under what circumstances would refund be paid to the applicant?


COIMBATORE


Class: M.Com Semester –VI

Sub. Name: Marketing Research

Sub. Code: : 18PCM415

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Prepared by: Dr. S. Rajam

UNIT-I

SECTION-A


1. The word market is derived from the Latin word__________

(a) Marcatus (b) markas (c) market (d) market

2. Which of the following is central to any definition of marketing?

(a) Making a profit (b) Making a sale (c) Transactions (d) Customer relationships

3. Modern marketing aims to attract_____________

(a) Suppliers (b) investors (c) customers (d) employees

4. _______________ refers to marketing activities carried on in more than one nation.

(a) Domestic marketing (b) international marketing (c) deemed marketing

(d) green marketing

5. _________ may be defined as principles that define acceptable conduct in marketing.

(a) Consumer ethics (b) promotional ethics (c)product ethics (d) marketing ethics

6. Which of the following is not a type of marketing concept?

(a) Production concept (b) selling concept (c) societal marketing concept

(d) supplier concept

7. ____________is the father of modern marketing.

(a) Peter Drucker (b) Philip Kotler (c) Lester (d) Maslow

8. Inside sale is known as _____________

(a) Direct marketing (b) Social marketing c) Tele-marketing (d) Viral marketing

9. Marketing refers to the_______________

(a) Sale of product (b)goods and services are exchanged to each other

(c)goods distribution (d) All of these

10. Marketers often use the term ________ to cover various groupings of customers.

(a) people (b) buying power (c) demographic segment (d) market

11.Adding new features to a product is advocated by which of the approaches?_________

(a) Product Approach (b) Production Approach (c) Marketing Approach (d) Selling

Approach

12. Which is not a form of Internet Marketing?_____________

(a) On-line marketing (b) Internet advertising (c) e-Marketing (d) Product Mix and

Branding

13.The Market environment consists______________

(a) Socio-economic (b) Technology (c) Competition (d) All of these

14. Modern Marketing includes___________

(a) Digital Marketing (b) Social Marketing (c) Green Marketing (d) All of the

above

15.False and mishandling claims vulgarity in advertisement do not match with__________

(a) Aggressive advertising (b) Ethics in advertising (c) Mass level of advertising (d)

Sales promotion

16. Marketing is_______________

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(a) Essential an operational and purposive pursuit (b) A cost of service (c) cost of

product (d) An expense

17. Which one of the following is controllable variable of marketing management?________

(a) Packaging (b) Legal Environment (c)Advertisement (d) political environment

18. Internet Marketing does not deal_____________

(a) Advertising (b) Interactive Marketing (c) E-mail Marketing and Web advertising (d)

Display Advertising

19.The accurate meaning of "International Marketing" is ___________

(a) Marketing goods to developed countries (b) Marketing products worldwide (c) Selling

global products in domestic market (d) Marketing using WW

20. Which one of the following facilitates E-Commerce?

(a) Public relations (b) Direct marketing(c) Personal selling (d) Product quality

Answers

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

a d c b d d b c D d a d d d b a c d b b

SECTION-B


1. What is market?

2. What are the marketing activities?

3. List out the objectives of marketing.

4. Differentiate between micro and macro marketing.

5. Write the importance of marketing to the society

6. In what way the marketing is beneficial to the individual firms?

7. What is consumer approach marketing?

8. What is e-marketing?

9. Define international marketing. List its benefits.

10. Highlight the recent career opportunities in marketing.

SECTION-C


1. Write the evolution of marketing.

2. Explain the factors influencing marketing concept.

3. Describe the market classification.

4. Explain the modern marketing concept.

5. What are the approaches to the study of marketing? Explain.

6. Write in detail about features of the marketing concept.

7. Explain various activities involved in international marketing.

8. What are the advantages and disadvantages of e-marketing?

9. Ethical behaviour is necessary in marketing. Justify.

10. Explain the advantages and disadvantages of telemarketing.

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UNIT-II

SECTION-A


1._____________ has classified marketing functions into concentration and dispersion

(a) Clark and Clark (b) Huegy (c) Pyle (d) Mitchell

2. The buying behaviour of consumers is influenced by ___________

(a) Cultural (b) Social (c) Personal (d) All of the above

3._____________is the heart of marketing task

(a)Production (b) demand (c) place (d) selling

4. _____ means the physical movement of persons and goods from one place to another.

(a) export (b) promotion (c) transportation (d) exchange

5.The most structured marketing problems are likely to be those dealing with___________

(a) Product (b) Promotion (c) Place (d) Price

6. In the social-cultural arena, marketers may not understand_____________

(a) People’s views(b) Organisation’s views(c) Society’s views(d) Government’s views

7. One-level channel consists of_______________

(a) Producer-consumer(b) Producer-dealer-consumer(c) Producer-dealer-retailerconsumer(d)

Producer-dealer-wholesaler retailerconsumer

8. In the buying decision process, what is the term used for a person who first suggests

buying the product or service?

(a) Influencer (b) Initiator(c) Decider(d) Buyer

9. The _______________ is the set of consumers who are buying the company’s products.

(a) Potential market (b) Target market (c) Available market (d) Penetrated market

10._________combination of quality, service & price

(a) Marketing Triad (b) Customer Value Triad (c) Customer Satisfaction Triad

(d) Service Quality Trial

11. __________is the acquisition of goods and services by the seller or industrial user for the

purpose of resale.

(a) Selling (b) Assembling (c) Buying (d)Transportation

12.__________is establishment of certain standards or specifications for products

(a) Standardization (b) Gradation (c) Product Control (d) Product Development

13. Testing before launching a product is known as ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐. (a)Acid test (b) Concept testing (c) Market test (d) Test marketing

14. _____is the act of obtaining a desired object from someone by offering something in

return.

(a) A value proposition (b) Exchange (c) Bribery (d) Value creation

15. The art and science of choosing target markets and building profitable relationships with

them is called ________.

(a) marketing management (b) positioning (c) segmentation(d) selling

16. Which of the following is an activity of physical distribution?___________

(a) Order processing(b) Warehousing(c) Advertising(d) Transportation 17.Marketing

channels means?_______________

(a) Delivery objects (b) Sales targets (c) Delivery outlets (d) Delivery boys

18.A distribution channel has several ______ Points

(a)Exchange (b)Distribution (c)Selling (d)Buying

19.Intermediaries play an important role in matching _______

(a) dealer with customer (b) supply and demand (c) product to region

(d) manufacturer to product

20. Producers today sell their goods to___________

(a) final users (b) final users and marketing members (c) intermediaries

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(d) the government at various level

Answers

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

C d d c c d b b D b b a d b a c c a b c

SECTION-B


1. What are the basic functions involved in marketing functions?

2. Listout the functions involved in physical supply.

3. Define market management. Listout its activities.

4. What is buying?

5. What are the problems in buying?

6. What is selling?

7. Write short notes on importance of transportation in marketing.

8. Write the role of finance in successful marketing.

9. How to bear the risk in marketing.

10. What is market information?

SECTION-C


1. Explain the broad classifications of marketing function by Clark and Clark.

2. Explain kinds of buyers with an example.

3. Describe various purchasing methods in marketing.

4. What is assembling? Highlight the advantages of assembling.

5. Explain the elements of selling.

6. Illustrate the functions of transport in marketing.

7. Write in detail about the basic modes of transport.

8. Elucidate advantages and essentials of good storage.

9. Explain the types of standards and grading.

10. Explain the types of marketing risks with examples.

UNIT-III

SECTION-A


1. Who is the king of any business?____________

(a) Consumers (b) Shareholders (c)Institutions (d) Management

2. _____________ include factors unique to a particular person.

(a) Personal factors (b) group factors (c) product factors (d) price factors

3. The process of dividing market into smaller homogeneous markets is called

market___________

(a)planning (b)segmentation (c) positioning (d)targeting

4. The expansion of CRM is______________

(a)Consumer Related Marketing (b) Consumer Relation Marketing (c) Customer

Relation Marketing (d) Customer Related Marketing

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5. What is the last stage of the consumer decision process? ______________

(a) problem recognition (b) post purchase behaviour (c) alternative evaluation (d) purchase

6. Which of the following point is responsibility for effective market segmentation?

(a) Measurability (b) Easy & accessibility (c) Substantiality (d) All of the above

7. Example for a personal factor that influences consumer behaviour is________

(a) Religion (b) Reference group c) Sub-culture (d)Occupation

8.Following is a Macro environmental force except _____________

(a)Monetary policies (b)Organisational culture (c)Inflation (d)Demographics

9.Which of the variables is not used by marketers for demographic segmentation?______

(a) Age (b) Income(c) Gender (d) Poverty

10.Highest percentage of ideas for new products originates with/from which of the

following sources? ____________

(a) Competitors (b)Customers (c) Employee (d) Top management

11. The term Marketing Myopia was written by___________

(a) Philip Kotler (b) Royal Dutch Shell (c)Theodore Levitt (d) Henry Ford

12. The buying process starts from which one of the following stage in which the buyer

recognizes a problem or need?

(a) Need recognition (b)Information search (c) Evaluation of alternative(d) Purchase

decision

13. When customers don't know what they want or don't even know what's possible, the most

effective strategy is ________ marketing.

(a) customer-driven (b) customer-driving (c) societal (d) production

14. Of the following, which is the most important concept of modern marketing?____

(a) customer relationship management (b) societal marketing (c) consumer-generated

marketing (d) properly trained salespeople

15. Customer-perceived value is determined by a customer's ________ of the benefits and

costs of a market offering relative to those of competing offers.

(a) personal assessment (b) rational expectations (c) accurate assessment (d) objective

evaluation

16.Which of the following is the term for customers who make repeat purchases and tell

others about their positive experiences with a product or service?

(a) satisfied customers (b) customer evangelists (c) butterflies (d) full partners

17. The final step in the marketing process is ________.

(a) capturing value from customers (b) creating customer loyalty (c) creating customer

lifetime value (d) understanding the marketplace

18. A consumer buying behaviour is influenced by__________

(a) Cultural and social factors (b) Personal factors(c) Both a and b(d) None of the above

19._________ focuses on customer and stakeholder needs, characteristics and behaviour to

form beneficial partnerships

(a) Customer relation marketing (b) Frequency marketing (c) Aftermarketing

(d) Relationship marketing

20._________ is the study of how individuals, groups and organizations select, buy, use and

dispose off goods, services, ideas or experiences to satisfy their needs and wants.

(a) Consumer behaviour(b) Product cycle(c) Purchase behaviour (d) None of the above

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Answers

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

a a b c b d d b D b c a b a a b a c a a

SECTION-B


1. What is consumer behaviour?

2. Write the impact of consumer behaviour in marketing.

3. How to understand consumer perception in marketing?

4. Define market segmentation. List out the objectives.

5. Why is the market segmentation needed for extended marketing?

6. Write the process of market segmentation.

7. What are the levels of segmentation?

8. What are customer relations marketing?

9. What are the objectives of CRM?

10. How to delight the customers in marketing?

SECTION-C


1. What is the need for understanding consumer behaviour?

2. Explain the factors influencing consumer buying behaviour.

3. Illustrate consumer buying decision process.

4. Write the requirements of effective market segmentation.

5. What are the methods of market segmentation? Explain.

6. What is meant by Market Segmentations? What are the criteria of successful

market segmentation?

7. How should a policy be purposefully adopted in segmenting the markets? Explain.

8. Explain the steps involved in relationship marketing.

9. Describe customer response model in delighting the customers.

10. Compare transactional marketing and relationship marketing.

UNIT-IV

SECTION-A


1. The concept of marketing mix was developed by____________

(a) N.H. Borden (b) Philip Kotler (c) Stanton (d) Anderson

2. __________mean classification of standardised product into certain well defined classes

or groups

(a) Gradation (b) Segmentation (c) Standardisation (d) Specification

3. Testing before launching a product is known as ___________

(a) Acid test (b) Concept testing (c) Market test (d) Test marketing

4. NPD stands for ________________

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(a) National Production development (b) New Product Department (c) New

Product Design (d) New Product Development

5. Which is the feature of Direct marketing?____________

(a)One to one communication (b) Open dialogue (c) Personal relationship (d) All of

the above

6. A consumer contest is an example of ___________

(a) Advertising (b) Indirect selling (c) personal selling (d) Sales promotion

7. Advertising appropriations are largest in __________type of products

(a) Convenience goods (b) High priced products (c) Speciality goods (d) Industrial

products

8. Which of the following is not an element of marketing mix?_____________

(a) Distribution (b) Promotion (c) Production (d) Pricing

9. __________________ is the 5th P of marketing as stated by Philip Kotler

(a)Persistent (b) Purpose (c) People (d) Process

10. ____________is the combination of the product, distribution, price and promotional

activities.

(a)Marketing mix (b) product mix (c)price mix (d) place mix

11. Which of the following goods are purchased by the consumers only after a careful

comparison?___________

(a) Convenience (b) shopping (c) speciality (d) none of the above

12. __________refers to the total number of items in product mix.

(a)Length (b) depth (c) width (d) consistency

13. ____________involves a high introductory price in the initial stage to skim the cream of

demand.

(a)Psychological pricing (b) customary pricing (c) skimming pricing (d)penetration

pricing

14.The promotion “P” of marketing is also known as ________.

(a)Product Differentiation (b)Distribution (c)Cost (d)Marketing Communication

15. Sales promotion includes all promotional activities other than advertising, personal selling

and __________________

(a) Publicity (b) Advertisement (c) Production (d) Coupon

16. Brand concept not includes______________

(a) Digital marketing (b) Brand name (c) Brand identity and value (d) Brand

personality

17. In marketing mix, which four P's are covered?______________

(a) Product, Price, Place, Promotion (b) Product, Price, Penetration, Promotion (c)

Product, Price, power, public (d) Product, Price, Positioning, Promotion

18. A Product line is a group of Products that are closely related to______________

(a) Product (b) Promotion (c) Production style and Brand (d) Power

19. Who plays their significant role in distribution of goods when they do not sell to ultimate

users or consumers?____________

(a) Retailer (b) Wholesaler (c) Mediator (d) Commission agent

20. Pricing is one of the essential components of _____________

(a) Promotion mix (b) Marketing mix (c) Product mix (d) STP strategy

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Answers

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

a a d d d d a c B a b a c d a a a a b b

SECTION-B


1. Define marketing mix. What are the major decisions involved.

2. Write short notes on concept of marketing mix.

3. What are the factors determining marketing mix?

4. Define branding. List out its elements.

5. What are the functions of branding?

6. Write the advantages of labelling.

7. Write the significance of price in marketing.

8. Write the importance of personal selling.

9. What is retailing?

10. Write short notes on sales promotion.

SECTION-C


1. Explain the components of marketing mix.

2. What are the advantages and arguments against branding?

3. Enumerate the stages of Product Life Cycle.

4. Illustrate the major branding decisions.

5. Explain pricing objectives in marketing.

6. Describe the factors affecting price of a product.

7. Differentiate personal selling and sales promotion.

8. Write the importance of channels of distribution.

9. Explain in detail about functions of middlemen.

10. Elucidate importance of retailing in today’s context.

UNIT-V

SECTION-A


1.BIS came into effect on _________________

(a)30th Dec 1986 (b)25th Oct 1990 (c)23rd Dec 1986 (d)27th Nov 1998

2. Green marketing is the marketing of ____________friendly products and services.

(a) environment (b) producer (c) seller (d) consumer

3. A _________is a contract between two parties to undertake an exchange of the underlying

asset at a specific future date at a pre-determined price.

(a) Future (b) swap (c) option (d) forward

4. AGMARK is a certification mark employed on _______ products in India.

(a) Sea products (b) animal products (c) agricultural products (d) hosiery products

5.ISI mark is mentioned on the products related to_______

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(a) Industrial products(b) Processed food(c) Non polluting vehicles(d) Agricultural

product.

6. Which certificate is required to jewellers in the market? ____________

(a) FPO mark(b) AGMARK(c) BIS hallmark(d) None of these

7. AGMARK is a guarantee of standard_________________

(a) size (b)weight (c)quantity (d) quality

8. Consumer protection act is applicable to______________

(a)movable goods (b)immovable goods (c)specific goods and services (d) all goods and

services

9. Who issues ISI mark in India?____________________

(a) Food Safety and Standard Authority of India(b) National Standard Oganisation of India(c)

Bureau of Indian Standard(d) b and c both

10. COPRA is related to_____________

(a) Environment friendly products(b) Child Rights(c) Protection of consumer rights(d) Organic

products

11. Coffee is adulterated with________________

(a) Saw dust(b) Chicory (c) Ghee (d) All of these

12. Agmark act 1937 comes under _______________

(a)Dept. of consumer affairs, Govt. of India(b) Dept. of Agriculture and Cooperation

(c)Dept. of Marketing and inspection (d) Dept. of Legal Meterology

13. According to the American Marketing Association, which of the following is marketing

of products that are presumed to be environmentally safe?______________

(a) Gray Marketing (b) Green Marketing (c) Global Marketing (d) Social

Marketing

14.A consumer is not satisfied with district forum. In how many days he can challenge the

same and approach the State Commission?_____________

(a) 20 days (b) 30 days (c) 50 days (d) 100 days

15. To charge fair prices from the customers is an example of_____________

(a) Good habit (b) Bad habit (c) Good ethics (d) Bad ethics

16. _______provides separate definitions of consumer for the purpose of goods and service.

(a) Consumer Protection Act, 1988 (b) Consumer Protection Act,1989 (c)

Consumer Protection Act,1986 (d) Consumer Protection Act,2000

17. _______________can sue in negligence for injury caused by a defective product.

(a) Good customer (b) Bad customer (c) Regular customer (d)

Diseased customer

18. The redressal of consumer grievances, the consumer protection Act is a ______________

(a) One tier enforcement (b) Two-tier enforcement (c) Three-tier

enforcement (d) Four-tier enforcement

19. ____________provides a safeguard for consumers against goods and services which are

hazardous to health.

(a) Right to safety (b) Right to be informed (c) Right to choose (d) Right to be heard

20. A futures contract ______________

(a)is a direct contract between two parties created to meet the specific needs of the

parties(b)has more counterparty risk than a forward contract (c) are standardized because

they are offered by and traded on an exchange (d)are used more frequently than swaps

Answers

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

c a d c a c d d D c b a b b c c d c a c

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SECTION-B


1. Define Marketing and discuss its significance in the Modern World.

2. Write the role of government in marketing.

3. Explain the unique aspects of how government buyers make their buying decisions.

4. Write the procedure to buy the government projects.

5. Why is the standardisation needed for a product?

6. Write the role of standardisation in agricultural marketing

7. What is consumerism?

8. Write the evolution of consumerism.

9. Write the role of government in consumer awareness on their rights.

10. What is green marketing?

SECTION-C


1. Explain the role of Bureau of Indian Standard.

2. Write in detail about AGMARK.

3. Briefly explain the need for consumer protection.

4. Comment on measures for consumer protection.

5. Clarify the approaches to consumerism.

6. Summarise the laws to protect interests of consumers.

7. Discuss the role of three tier machinery for redressal of consumers’ grievances

8. Explain benefits of green marketing concept.

9. Explain forward trading in commodities.

10. “Indian consumers have or do not have awareness on consumer rights”. Justify.


COIMBATORE – 641 029

QUESTION BANK

Class: II Mcom Semester: IV

Subject: Insurance and risk management Subject code: 18PCM4E2

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Prepared By: N.SRUTHI

UNIT I



1) _______ is a co-operative form of distributing a certain risk over a group of persons who

are exposed to it.

a) Banking b) Insurance c) Mutual fund d) Co-operatives

2) In insurance, _______ undertakes to compensate the losses arising in future.

a) Insurer b) Insured c) Lessor d) Lessee

3) In insurance, ________ is a person whose risk is meant to be compensated by the

insurance company.

a) Insurer b) Insured c) Lessor d) Lessee

4) The consideration amount paid in insurance is known as __________.

a) Interest b) Debt c) Payment d) Premium

5) Premium amount is generally calculated by using the theory of __________.

a) Probability b) Possibility c) Prediction d) Problem

6) ______ is the oldest form of insurance.

a) Marine insurance b) Fire insurance c) Life insurance d) Crop insurance

7) The marine policies of the present form were found in the _________ century.

a) 14th b) 15th c) 16th d) 17th

8) Fire insurance originated in ________.

a) UK b) USA c) France d) Germany

9) The first registered life insurance office was at ________.

a) England b) France c) Germany d) Italy

10) ________ is the first registered life insurance company.

a) Co-operatives b) Hand-in-hand society

c) Lloyd’s association d) Fidelity corporation

11) Orient Life insurance company was established in ________.

a) 1818 b) 1820 c) 1840 d) 1861

12) _________ is the insurance against losses arising due to employee’s dishonesty.

a) Accident insurance b) Fidelity insurance

c) Burglary insurance d) Aviation insurance

13) ________ is the insurance that assures the insured in the event of death of animals.

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a) Property insurance b) Burglary insurance

c) Cattle insurance d) Liability insurance

14) _________ is the insurance related to the injury, loss of life or cargo while travelling in

aircraft.

a) Property insurance b) Burglary insurance

c) Aviation insurance d) Liability insurance

15) Employees State Insurance Corporation was established in _______ .

a) 1946 b) 1947 c) 1948 d) 1949

16) Deposit Insurance Corporation was established in _________.

a) 1960 b) 1961 c) 1962 d) 1963

17) LIC started its functioning on _________.

a) Sep 1,1956 b) Aug 1,1956 c) Dec 1,1956 d) Jan 1,1956

18) ________ is the insurance with two or more insurers.

a) Re-insurance b) Double insurance c) Social insurance d) Personal insurance

19) An insurer with large risk can arrange with another insurer to insure a portion of the

insured risk in ________.

a) Re-insurance b) Double insurance c) Social insurance d) Personal insurance

20) GIC was established in _______.

a) 1970 b) 1971 c) 1972 d) 1973



1) What do you mean by the term “insurance”? Explain its nature.

2) Explain about the functions of insurance.

3) Write a note on the principles of insurance.

4) Briefly write about the uses of insurance to an individual.

5) What are the uses of insurance to business concerns and society?

6) Write a note on Export Credit and Guarantee Corporation.

7) What is GIC? Explain its functions.

8) Explain about the duties of IRDA.

9) What do you mean by doctrine of subrogation? Explain.

10) Explain the terms: a) Utmost good faith b) Proximate cause.



1) Elaborate and explain the evolution of insurance.

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2) What are the insurance organizations in India? Explain.

3) Explain in detail about the kinds of insurance.

4) State the essentials of insurance contract.

5) Differentiate between life insurance and marine insurance.

6) Bring out the functions of IRDA.

7) Discuss on the recent trends in insurance.

8) Write a note on LIC and its purpose, initiatives in India.

9) Explain the importance of Deposit Insurance Corporation in India.

10) What are the legal elements to be noted while entering into an insurance contract?

Explain.

Answers:



1) Insurance (b)

2) Insurer (a)

3) Insured (b)

4) Premium (d)

5) Probability (a)

6) Marine insurance (a)

7) 14th (a)

8) Germany (d)

9) England (a)

10) Hand-in-hand society (b)

11) 1818 (a)

12) Fidelity insurance (b)

13) Cattle insurance (c)

14) Aviation insurance (c)

15) 1948 (c)

16) 1962 (c)

17) Sep 1, 1956 (a)

18) Double insurance (b)

19) Re-insurance (a)

20) 1972 (c)

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UNIT II



1) ________ re terms, which are implied in every contract of marine insurance unless they

are expressly excluded.

a) Guarantee b) Express warranties c) Implied warranties d) Waiver Clause

2) _______ are those terms, which are written on the policy.

a) Expressed warranties b) Implied warranties

c) Memorandum clause d) Valuation clause

3) Notice of abandonment is necessary in the case of ________.

a) Actual total loss b) Constructive total loss

c) Partial total loss d) None of the above

4) When the subject matter insured is destroyed wholly it refers to __________.

a) Partial total loss b) Actual total loss

c) Constructive total loss d) None of the above

5) ________ policy is issued on the basis of the number of persons assured.

a) Annuity policy b) Multiple life policy

c) Single life policy d) Level Premium policy

6) Assignment of life policy means ______.

a) Transferring rights to the assignee

b) Policy holder is entitled to the paid up value

c) Paid up value is always higher than surrender value

d) Value payable on death of assured or maturity

7) _________ means a wilful and intentional act on the part of the self destroyer.

a) Death b) Suicide c) Murder d) Accident

8) The central office of LIC is located at _________.

a) Delhi b) Kolkata c) Mumbai d) Chennai

9) A person employed to do any act for another or to represent another in dealing with a

third person refers to_________.

a) Principal b) Employee c) Agent d) Development officer

10) The person who is entrusted with the insurance scheme development is called ________.

a) Principal b) Employee c) Agent d) Development officer

11) The term ‘run off’ or ‘fully declared’ refers to ________.

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a) Floating policy b) Wagering policy

c) Builders risk policy d) Open cover policy

12) Wagering policy is otherwise termed as _______.

a) Policy proof of interest b) Open policy c) Builders risk policy d) Port risk policy

13) Risk insured against death is a contract of ________.

a) Assurance b) Agreement c) Indemnity d) None of the above

14) Life insurance in its present form came to India from _________.

a) UK b) USA c) Canada d) Germany

15) Life insurance company was set up in _______.

a) 1824 b) 1823 c) 1822 d) 1821

16) LIC was nationalised in _______.

a) 1951 b) 1952 c) 1954 d) 1956

17) LIC was formed with a capital contribution of _________.

a) 10 crores b) 15 crores c) 5 crores d) 20 crores

18) The term ‘Assurance’ relates to ________.

a) Life insurance business b) Marine insurance business

c) Fire insurance business d) Motor vehicle insurance business

19) ______ life policy is payable throughout the life of the assured.

a) Whole life policy b) Endowment policy c) Term policy d) Money back policy

20) In _______ policy, the sum assured becomes payable either on the death of the policy

holder or on attaining maturity, whichever is earlier.

a) Whole life policy b) Endowment policy c) Term policy d) Money back policy



1) What is life insurance? State its role in Indian scenario.

2) What are the essentials of life insurance contract? Explain.

3) Write a note on proximate cause relating to life insurance.

4) What are the ways in which premium is paid in life insurance policies? Explain.

5) How does insurable interest affect life insurance policy?

6) Explain about profit linked life insurance policy.

7) What is surrender value? Explain.

8) Write a note on double insurance.

9) What are annuities? Explain.

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10) What do you understand by the term non-conventional policies? Explain.



1) Elaborate and explain the nature of life insurance contracts.

2) How are life insurance policies classified?

3) What are the methods of payment of claim amount with respect to life insurance policies?

4) What are the points to be considered while calculating premium for life insurance policies?

5) Elaborate and explain about life insurance for the under privileged.

6) How are lapses and renewals administered in life insurance policies? Explain.

7) Explain in detail about proofs of death to be considered in the case of life insurance policy.

8) Differentiate between assignment and nomination.

9) Differentiate between surrender value and paid up value.

10) Discuss on life insurance as a method of saving.

Answers:



1) Implied warranties (c)

2) Express warranties (a)

3) Constructive total loss (b)

4) Actual total loss (b)

5) Multiple life policy (b)

6) Transferring rights to the assignee (a)

7) Suicide (b)

8) Mumbai (c)

9) Agent (c)

10) Development officer (d)

11) Floating policy (a)

12) Policy proof of interest (a)

13) Assurance (a)

14) UK (a)

15) 1823 (b)

16) 1956 (d)

17) 5 Crores (c)

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18) Life insurance business (a)

19) Whole life policy (a)

20) Endowment policy (b)

UNIT III



1) With profit policy is also known as _______.

a) Multiple life policy b) Participating policy

c) Level premium policy d) Lump sum policy

2) The insurer who grants a guarantee from the direct insurer is called _______.

a) Direct insurer b) Ceding insurer c) Re-insurer d) None of the above

3) The proportion of the risk which the direct insurer holds on his account refers to

__________.

a) Line b) Retention c) Retrocession d) Cession

4) A re-insurance of re-insurance refers to __________.

a) Line b) Retention c) Retrocession d) Cession

5) Re-insurance is also termed as ________.

a) Insurance of insurance b) Double insurance c) Over insurance d) External insurance

6) When the same risk and subject matter is insured with more than one insurer, it is called

___________.

a) Double insurance b) Over insurance c) Re-insurance d) External insurance

7) When the amount of the subject matter is insured more than its actual value, it is

called ________.

a) Double insurance b) Over insurance c) Re-insurance d) External insurance

8) Committee of reforms in insurance sector during 1993 was headed by ________.

a) R.N.Malhotra b) S.Narashiman c) Manmohan Singh d) None of the above

9) The danger of loss from the unforeseen circumstances in future refers to ______.

a) Risk b) Perils c) Hazard d) Damage

10) _________ involves those losses that occur even if there were no changes in the

economic environment.

a) Dynamic risks b) Static risks c) Fundamental risks d) Particular risks

11) Risks not suited to treatment by insurance refer to ______.

a) Static risk b) Property risk c) Dynamic risk d) Liability risk

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12) Fundamental risk is also termed as _______.

a) Particular risk b) Speculative risk c) Group risk d) Pure risk

13) Unemployment, war, inflation, earthquake etc are examples of _______.

a) Pure risk b) Particular risk c) Personal risk d) fundamental risk

14) Any risk involving a situation where there is a possibility of gain refers to _________.

a) Liability risk b) Personal risk c) Pure risk d) Speculative risk

15) Direct or consequential losses refer to _______.

a) Dynamic risk b) Particular risk c) Property risk d) Pure risk

16) Spreading of risk is otherwise known as _______.

a) Shifting of risk b) Acceptance of risk c) Reduction of risk d) Scattering of risk

17) The quote ‘prevention is better than cure’ refers to _________.

a) Avoiding risk b) Reduction of risk c) Transferring of risk d) Shifting of risk

18) When the subject is partially lost by a peril insured against, it is called ________.

a) General average loss b) Constructive total loss

c) Actual total loss d) Particular average loss

19) International code of York Antwerp is applied to ________.

a) Marine losses b) Losses of fire c) Losses of crop d) Losses of life

20) Cargo ship caught on fire is an example of _______.

a) Particular average loss b) General average loss

c) Constructive total loss d) Actual total loss



1) What do you understand by the term ‘risk’? Explain.

2) Differentiate between risk and uncertainty.

3) Write a note on degree of risk.

4) Explain about the causes of risks in finance.

5) Enumerate the dangers of uncontrolled risks.

6) What are the characteristics of insurable risks?

7) What do you mean by static and dynamic risks.

8) What are portfolio risks? Explain.

9) Bring out the features of risk management.

10) List out the methods of handling business risks.



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1) Discuss on selection of risk.

2) Elaborate and explain about the factors affecting risk.

3) What are the sources of risk? Explain.

4) Explain about information classes of risk.

5) What are the methods of risk classification? Explain.

6) Explain in detail about measurement of risk.

7) Bring out the importance of mortality table in ascertaining risk.

8) What are the types of sub-standard risk? Explain.

9) What are the conditions relating to commencement of risk?

10) Explain in detail about natural causes of risk.

Answers:



1) Participating policy (b)

2) Re-insurer (c)

3) Retention (b)

4) Retrocession (c)

5) Insurance of insurance (a)

6) Double insurance (a)

7) Over insurance (b)

8) R.N.Malhotra (a)

9) Risk (a)

10) Static risks (b)

11) Dynamic risk (c)

12) Group risk (c)

13) Fundamental risk (d)

14) Speculative risk (d)

15) Property risk (c)

16) Scattering of risk (d)

17) Avoiding risk (a)

18) Particular average loss (d)

19) Marine losses (a)

20) General average loss (b)

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UNIT IV



1) Insurance is based on the principle of _______.

a) Co-operation b) Democracy c) Equality d) Welfare

2) Fire insurance can be taken in respect of ________.

a) Movable properties only b) Immovable properties only

c) Both movable and immovable properties d) Persons only

3) The principle of indemnity is applicable to ________ only.

a) Life insurance b) Personal accident insurance

c) Proximate cause d) Property insurance

4) Expect life assurance the maximum term of other insurance is ________.

a) 12 months b) 24 months c) 6 months d) 36 months

5) The person whose risk is insured is called the ________.

a) Insured b) Assured c) Indemnity d) Both a) and b)

6) The person who agrees to compensate the lose arising from the risk is called the

________.

a) Insurer b) Assurer c) Underwriter d) All of the above

7) __________ policy matures on the assured’s death or on his attainment of a particular

age whichever occurs earlier.

a) Endowment policy b) Money back policy

c) Joint life policy d) Single premium policy

8) In marine insurance, insurable interest is enough at the time of _________.

a) Claim b) Loss c) Maturity d) Insurance

9) In fire insurance, insurable interest is enough at the time of ________.

a) Effecting the policy b) Loss c) Maturity d) Both a) and b)

10) ______ is an agreement where the insurer agrees to indemnify the insured against marine

Losses.

a) Life insurance b) Fire insurance c) Marine insurance d) Liability insurance

11) Maritime perils are also called ________.

a) Perils of the sea b) Moral hazards c) Avoidable risks d) Unavoidable risks

12) In _______ policy the limits of the risks are determined by the place of particular

voyage.

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a) Valued b) Time c) Voyage d) Unvalued

13) _______ policy covers all the risks during a particular voyage for a specified period.

a) Floating b) Wagering c) Valued d) Mixed

14) Which of the following contracts is not legally enforceable?

a) Contract of insurance b) Wagering contract

c) Contract of sale of goods d) Contract of business

15) Insurance is a contract approved by _______.

a) Indian contract act b) Indian factory act

c) Indian companies act d) Indian finance act

16) ________ is a document which provides evidence of the contract of insurance.

a) Proposal form b) Policy form c) Cover note d) Certificate of insurance

17) IRDA refers to _________.

a) Insurance Regulatory Development Authority

b) Indian Regulatory Development Authority

c) Insurance Regulatory Development Association

d) Indian Regulatory Development Association

18) ________ policy is granted only in respect of stock of inventories of the insured under

fire insurance business.

a) Floating b) Declaration c) Replacement d) Valued

19) Corpus fund is created with contribution from the Central Government and State

Government on ________.

a) 75:25 basis b) 50:50 basis c) 60:40 basis d) 70:30 basis

20) The constitution of the Insurance Regulatory Development Authority consists of not

more than _______.

a) 2 members b) 7 members c) 9 members d) 8 members



1) What is marine insurance? Explain its features.

2) Explain about the essential elements of marine insurance contract.

3) Write a note on double insurance in marine insurance.

4) Write a note on voyage policy.

5) What do you mean by open cover policy? Explain.

6) Explain about touch and stay clause in marine insurance policy.

7) What are the rights of insurer on payment in marine insurance?

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8) What are the fundamental principles of fire insurance? Explain.

9) Write a note on re-instatement fire policy.

10) Explain about average clause in fire policy.



1) Explain in detail about the origin of marine insurance.

2) What are the kinds of marine insurance policies?

3) Explain about the clauses in premium calculation relating to marine insurance.

4) Explain in detail about the types of marine losses.

5) How does settlement of claim take place with regard to marine insurance policies?

Explain.

6) Discuss on the progress on marine insurance in India.

7) Enumerate the features of fire insurance.

8) What are the kinds of fire insurance policies? Explain.

9) Explain in detail about surveys and inspection relating to fire insurance.

10) Write about the clauses relating to payment of claim in fire insurance.

Answers:



1) Co-operation (a)

2) Both movable and immovable

properties (c)

3) Property insurance (d)

4) 12 months (a)

5) Both a) and b) (d)

6) All of the above (d)

7) Endowment policy (a)

8) Loss (b)

9) Both a) and b) (d)

10) Marine insurance (c)

11) Perils of the sea (a)

12) Voyage (c)

13) Mixed (d)

14) Wagering contract (b)

15) Indian contract act (a)

16) Policy form (b)

17) Insurance Regulatory Development

Authority (a)

18) Declaration (b)

19) 50:50 basis (b)

20) 9 members (c)

UNIT V



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1) A certain presenter of the sum assured is paid periodically according to the terms of

__________.

a) Term policy b) Endowment life policy

c) Money back policy d) Group insurance policy

2) The principle of indemnity does not apply to _______.

a) Burglary insurance b) Fire insurance c) Marine insurance d) Life insurance

3) Transfer of rights and remedies of the insured to the insurer after indemnity has been

effected is called ________.

a) Insurable interest b) Subrogation c) Proximate cause d) Money back policy

4) Guarantee for employer for the loss out of employee’s dishonesty is _______.

a) Burglary insurance b) Fidelity insurance

c) Third party insurance d) Medical insurance

5) Motor insurance has its beginning in the ________.

a) USA b) USSR c) UK d) UAE

6) Fidelity guarantee insurance does not guarantee ________.

a) The death of the employer b) The death of the employee

c) The employee’s honesty d) The employer’s honesty

7) This policy covers all risks to the ship and it cargo while the ship is at a particular port

__________.

a) Voyage policy b) Floating policy c) Time policy d) Port risk policy

8) _________ provides evidence of insurance to the police and registration authorities under

Motor vehicle act.

a) Cover note b) Endorsement c) Certificate of insurance d) Policy form

9) General Insurance Business is nationalized under _________.

a) General Insurance Business Nationalized Act 1971

b) General Insurance Business Nationalized Act 1972

c) General Insurance Business Nationalized Act 1973

d) General Insurance Business Nationalized Act 1974

10) The Head office of New India Assurance and Co. ltd is in ________.

a) New Delhi b) Kolkata c) Chennai d) Mumbai

11) New Delhi is the head office of ________.

a) New India Assurance and Co. ltd b) United India Assurance and Co. ltd

c) Oriental Insurance Co. ltd d) National Insurance Co. ltd

12) The subscribed capital of GIC contributed by the Central government is ________.

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a) 5 crores b) 10 crores c) 15 crores d) 20 crores

13) The head office of National Insurance Co. ltd is in _______.

a) Mumbai b) Kolkata c) Bangalore d) Hyderabad

14) The head office of United Insurance Co. ltd is in _______.

a) Chennai b) Bangalore c) New Delhi d) Mumbai

15) Under Fire insurance, loss of profit policy is called ________.

a) Average policy b) Consequential loss policy

c) Specific policy d) Adjustable policy

16) Rashtriya Krishi Yojana of Crop Insurance Scheme was introduced in India during

_______.

a) 1999 b) 1888 c) 1988 d) 1977

17) Motor vehicle insurance is compulsory under motor vehicle act of _________.

a) 1988 b) 1998 c) 1939 d) 1978

18) ________ is the process of adding expenses to net premium.

a) Loading b) Adding c) Claiming d) Linking

19) The organizational structure of LIC refers to _______.

a) Two-tier structure b) Three-tier structure

c) Four-tier structure d) Five-tier structure

20) _______ arises out of the pecuniary relationship that exists between the policy holder

and the life assured.

a) Insurable interest b) Warranties c) Proximate cause d) Utmost good faith



1) Write a note on cattle insurance.

2) Explain about Fidelity guarantee insurance.

3) What are the types of burglary insurance?

4) Write about the settlement of claims under motor vehicle insurance.

5) Write a note on Indian crop insurance.

6) Write about mediclaim policy.

7) Discuss on the challenges in promoting health insurance in India .

8) What are the essentials of contract to be considered in the case of aviation insurance?

9) Write about the initiative taken by the government in promoting health insurance among

general public.

10) Mention about the importance of rural insurance in India.

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1) Explain in detail about miscellaneous insurance policies.

2) What is crop insurance? Explain the features of crop insurance.

3) How does agricultural insurance uplift the rural economy? Explain.

4) Explain about property insurance with special mention about burglary insurance.

5) Discuss on the importance of motor insurance in India.

6) Explain the procedures to be followed in motor vehicle insurance.

7) What are the kinds of policies under motor vehicle insurance? Explain.

8) Elaborate and explain about the features of personal accident insurance.

9) Explain in detail about aviation insurance.

10) Highlight the benefits of bank assurance policy.

Answers:



1) Money back policy (c)

2) Life insurance (d)

3) Subrogation (b)

4) Fidelity insurance (b)

5) UK (c)

6) The employee’s honesty (c)

7) Port risk policy (d)

8) Certificate of insurance (c)

9) General Insurance Business

Nationalized Act 1972 (b)

10) Mumbai (d)

11) Oriental Insurance Co. ltd (c)

12) 5 crores (a)

13) Kolkata (b)

14) Chennai (a)

15) Consequential loss policy (b)

16) 1999 (a)

17) 1939 (c)

18) Loading (a)

19) Four-tier structure (c)

20) Insurable interest (a)

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KASC-Commerce (PG) - Kongunadu Arts and Science College

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Transcript of KASC-Commerce (PG) - Kongunadu Arts and Science College