Commerce Capsule

MCQs on Capital Market

Q.1 The capital market in India is controlled by?

(a) RBI


(c) SEBI

(d) IRDA

Answer: c

Q2. SEBI was established in which year?

(a) 1990

(b) 1989

(c) 1992

(d) 1988

Answer: d

Q.3 How many companies are included in the BSE Sensex ?

(a) 25

(b) 30

(c) 50

(d) 111

Answer: b

Q4. Which among the following does not belong to the stock exchange?

(a) KPO

(b) IPO

(c) NSE

(d) NAV

Answer: a

Q5. Which among the following is not an objective of SEBI?

(a) To regulate securities market

(b) To protect interests of inventors

(c) To promote individual businesses

(d) To promote the development of the market

Answer: c

Q.6. Which of the following are responsible for the fluctuations in the Sensex?

(a) Monetary policy

(b) Political instability

(c) Rain

(d) None of the above

Answer: a

Q.7 Nifty was established in which year?

(a) 1952

(b) 1965

(c) 1996

(d) None of these

Answer: c

Q.8 Which of the following is a global stock market index?

(a) Sensex

(b) FTSE100

(c) OTCEI index

(d) Nifty

Answer: b

Q.9 The money market where debt and stocks are traded and maturity period is more than a year is known as

(a) Long-term market

(b) Counter market

(c) Capital market

(d) Shorter term market

Answer: c

Q10.The regulatory body for the securities market in India is

(a) Stock exchanges

(b) IRDA

(c) RBI

(d) SEBI

Answer: d

MCQs on Cooperative Society

Q1. Co-operative movement first started in

(a) England

(b) France

(c) Spain

(d) Germany

Answer: a

Q2. In India, the Co-operative Societies Act was passed in which year?

(a) 1919

(b) 1949

(c) 1904

(d) 1912

Answer: d

Q3. The members of a Co-operative Society have

(a) Unlimited liability

(b) Limited liability

(c) Joint and Several liability

(d) Joint liability

Answer: b

Q4. Co-operatives in India follow this type of organisation structure

(a) Centralized Structure

(b) Decentralized Structure

(c) Unitary Structure

(d) Federal Structure

Answer: d

Q5. Apex Society represents

(a) Village level

(b) District level

(c) State level

(d) National level

Answer: c

Q6. For Co-operative Credit Societies, the interest rate for deposits are fixed by:

(a) Registrar

(b) Government

(c) General Body

(d) RBI

Answer: a

Q7. In a Co-operative Society, admission of members and allocation of shares is done by

(a) Secretary

(b) Managing Committee

(c) President

(d) General Body

Answer: b

Q.8 The Urban Credit Cooperatives are also known as

(a) National Banks

(b) Urban Cooperative Banks

(c) Cooperative Banks

(d) None of the above

Answer: b

Q.9 Cooperative banks that fall under the banking regulation act of 1949 are controlled by.


(b) National Cooperative Union of India

(c) Reserve Bank of India

(d) None of the above

Answer: c

Q10. The principle followed in a co-operative society is

(a) No vote

(b) One man, one vote

(c) Multiple votes

(d) One share one vote

Answer: b

MCQs on Sole Proprietorship

1.What is a Sole Proprietorship?

A.Business owned by president

B.Business owned by several companies

C.Business owned by one person

D. Business owned by a company

Answer: C

2. Which of the following is owned by a single person

A.Private Company

B.Public Company

C.Joint Hindu Family

D.Sole Proprietorship

Answer: D

3. Sole proprietorship business can be started by

A. at least seven persons

B. any one person

C. at least two persons

D. at least three persons

Answer: B

4. A sole proprietor has a limit in which of the following ability




D.None of these

Answer: A

5. Sole Proprietorship is most suitable for

A. Medium scale concerns

B. Large scale concerns

C.Small scale concerns

D.None of the above

Answer: C

6. The life of sole proprietorship business is

A. Stable

B. Very short life

C. Unstable

D. Long life

Answer: C

7. In which form of business, there is no need to share profits.

A. Company

B. Sole proprietorship

C. Partnership

D.Joint Hindu family business

Answer: B

8. A Sole proprietor concern is free from regulation by.

A. Indian Contract Act


C. Private Indian

D.Indian Law

Answer: B

9. The reason for the end of the sole proprietorship can be



C. Death

D.All the above

Answer: D

10. Sole proprietorship business owner has

A. Restricted Liability

B.No Liability

C.Unlimited Liability

D.Limited Liability

Answer: C

MCQs on Joint Stock Company

1. A company is formed by

A. Government

B. Directors

C. Promoters


Answer: C

2. The word limited should appear after the name of

A. Partnership

B. Registered company

C. Statutory company

D. Chartered company

Answer: B

3. Deferred shares are generally issued to:



C.General Public

D.Managing agents

Answer: A

4. The minimum members in public limited company are:

A. 4

B. 2

C. 8

D. 7

Answer: D

5. Share premium is shown in the balance sheet as an:

A. Deducted from the asset side.

B. Liability

C. Deduction in paid up capital

D. Asset

Answer: B

6. Share premium money can be used for:

A.Issue of fully paid bonus shares

B.Payment of debentures

C.Payment of dividend

D. Writing of good will

Answer: A

7. Debenture can be issued at:

A. At discount

B.At premium

C. At par

D.All of the above

Answer: D

8. How many members have to sign a memorandum of association in case of a private company?

A. Five

B. Seven

C. Two

D. Ten

Answer: C

9.The official signature of a company is called:

A. Prospectus

B. Debentures

C. Shares

D. Common seal

Answer: D

10. The company is managed by the group of persons known as:

A.Board of directors

B.Group of member

C.Team of shareholders

D.None of the above

Answer: A

MCQs on International Trade and Finance

Q1. Trade between two countries can be useful if cost ratios of goods are:

A. Undetermined

B. Decreasing

C. Equal

D. Different

Answer: D

Q2. The term Euro Currency market refers to

A. The international foreign exchange market

B. The market where the borrowing and lending of currencies take place outside the country of issue

C. The countries which have adopted Euro as their currency

D. The market in which Euro is exchanged for other currencies

Answer: B

Q3. Which of the following theories suggests that firms seek to penetrate new markets over time?

A. Imperfect Market Theory

B. Product cycle theory

C. Theory of Comparative Advantage

D. None of the above

Answer: B

Q4.Dumping refers to:

A. Reducing tariffs

B. Sale of goods abroad at low a price, below their cost and price in home market

C. Buying goods at low prices abroad and selling at higher prices locally

D. Expensive goods selling for low prices

Answer: B

Q5. International trade and domestic trade differ because of:

A. Different government policies

B. Immobility of factors

C. Trade restrictions

D. All of the above

Answer: D

Q6. The margin for a currency future should be maintained with the clearing house by

A. The seller

B. The buyer

C. Either the buyer or the seller as per the agreement between them

D. Both the buyer and the seller

Answer: D

Q7.The following statement with respect to currency option is wrong

A. Foreign currency- Rupee option is available in India

B. An American option can be executed on any day during its currency

C. Put option gives the buyer the right to sell the foreign currency

D. Call option will be used by exporters

Answer: D

Q8. Govt. policy about exports and imports is called:

A. Commercial policy

B. Fiscal policy

C. Monetary policy

D. Finance policy

Answer: A

Q9.Which of the following is international trade:

A. Trade between countries

B. Trade between regions

C. Trade between provinces

D. Both (b) and (c)

Answer: A

Q10. Market in which currencies buy and sell and their prices settle on is called the

A. International bond market

B. International capital market

C. Foreign exchange market

D. Eurocurrency market

Answer: C

Indifference Curve MCQ’s

Q.1 Moving along an indifference curve the:

A. Consumers prefer some of the consumption points to others.

B. Marginal rate of substitution for a good increase as more of the good is consumed.

C. Marginal rate of substitution is constant.

D. Consumers do not prefer one consumption point to another.

Answer: D

Q.2 The slope of the indifference curve is equal to which of the following?

A. One

B. Marginal utility

C. Marginal rate of substitution

D. None of these

Answer: C

Q.3 Why is the indifference curve convex to origin?

A. Due to continuous decline of marginal rate of substitution

B. Due to law of diminishing marginal utility

C. Due to monotonic preferences

D. Both a and b

Answer: A

Q.4 Which of the following is not the property of indifference curves?

A. Higher the indifference curves, higher is the level of satisfaction.

B. Indifference curve is downward sloping.

C. Indifference curve is concave to origin.

D. Two indifference curves cannot intersect each other.

Answer: C

Q.5 Hicks and Allen believed that utility:

A. Can be measured in cardinal numbers

B. Can be measured in ordinal numbers

C. Cannot be measured

D. Cannot be expressed

Answer: B

Q.6 As we move down the indifference curve from left to right, the slope of the indifference curve tends to which of the following?

A. Unity

B. Zero

C. Decline

D. Rise

Answer: C

Q.7 In the indifference map, a higher IC indicates which of the following?

A. Lower level of satisfaction

B. Higher level of satisfaction

C. Same level of satisfaction

D. Either higher or same level of satisfaction

Answer: B

Q.8 Two indifference curves cannot cut each other because of which of the following?

A. They represent those combinations of two goods that give the same satisfaction.

B. The slope is downwards.

C. Each indifference curve represents a different level of satisfaction.

D. They are convex to origin.

Answer: C

Q.9 An indifference curve is related to which of the following?

A. Choices and preferences of consumer

B. Prices of goods X and Y

C. Consumer’s income

D. Total utility from goods X and Y

Answer: A

Q.10 An Indifference curve slope down towards right since more of one commodity and less of another result in which of the following?

A. Decreasing expenditure

B. Maximum satisfaction

C. Greater satisfaction

D. Same satisfaction

Answer: D

Business Environment MCQs

Q1. Liberalization means

A. Free determination of interest rates

B. Liberating the industry, trade and economy from unwanted restrictions

C. Opening up of economy to the world by attaining international competitiveness

D. Reducing number of reserved industries from 17 to 8

Answer: B

Q2. When a company taken over another one and clearly becomes the new owner, the action is called

A. Acquisition

B. Merger

C. Strategic Alliance

D. None of the above

Answer: A

Q3. By which act does the government check restrictive trade?


B. FEMA act

C. Industrial Policy Act 1991

D. None of these

Answer: A

Q4. Which among the following is not opened for private sector participation

A. Railways

B. Telecommunication sector

C. Education sector

D. Power sector

Answer: A

Q5. Which among these can be the condition for the success of privatisation?

A. Measurability of performance

B. Alternative institutional arrangements

C. Barriers to enter the market

D. All of the above

Answer: C

Q6. Which among these is monopolistic trade practice?

A. Manufacturing only one product

B. Selling only one product

C. Limiting technical Development

D. Unreasonably limiting competition

Answer: A

Q7. The Industrial policy resolution was passed first in

A. 1947

B. 1956

C. 1931

D. 1999

Answer: B

Q8. Globalisation is the term used to describe process of removal of restriction on

A. Investment

B. Foreign Trade

C. Both (A) and (B)

D. None of the above

Answer: C

Q9. Laissez Faire policy is adopted in

A. Socialist Economic system

B. Capitalist Economic system

C. Communist Economic System

D. Mixed Economic System

Answer: B

Q10. Which one is not the main objective of Fiscal Policy in India?

A. To promote employment opportunities

B. To minimize the inequalities of income and wealth

C. To promote price stability

D. To increase liquidity in economy

Answer: D

MCQs on Internal Trade

1. Purchasing goods from a foreign country is called

A. Import

B. Entrepot

C. Export

D. Re-Export

Answer: A

2. Goods imported for the purpose of export is known as

A.Home trade

B. Foreign trade

C. Entrepot

D. Trade

Answer: C

3. Agents are appointed by?

A. Manufacturer

B. Wholesaler



Answer: D

4. Who among these can check the price fluctuations in the market by holding back the goods when prices fall and releasing the goods when prices rise


B.Mercantile agent


D. Retailer

Answer: C

5. These are agents whose function is to bring the buyer and the seller into contact.

A.Commission agent

B. Selling agent



Answer: C

6. Who among the following appoints the agent

A. Principal

B. Retailer

C. Manufacturer


Answer: A

7. Which among the following is not concerned with Chambers of Commerce & Industry





Answer: C

8. Mobile traders who deal in low priced articles with no fixed place of business are called

A. Street stalls


C. Agents

D.Itinerant traders

9. One example of Small scale Fixed retailers among these is

A. Pedlars

B.General stores


D. Cheap Jacks

Answer: B

10. This retail business acts as a universal supplier of a wide variety of products.

A.Multiple shop

B.Mail order Business


D.Departmental store

Answer: D

Marketing Mix MCQs

1. Who suggested product, pricing, place, promotion all these in a company represents “Market Mix”?

(A) Neil Borden

(B) Neilsen

(C) Philip Kotler

(D) Stephen Morse

Answer: A

2. This P is not a part of the 7Ps of marketing mix?

(A) Promotion

(B) Price

(C) People

(D) Purpose

Answer: D

3. It serves as the most common source of leads generation for any company

(A) Yellow pages

(B) Green pages

(C) White pages

(D) Blue pages

Answer: A

4. Marketing of product and service in which the offer itself is not intended to make any monetary profit is called

(A) Profit marketing

(B) Virtual marketing

(C) Digital marketing

(D) Non profit marketing

Answer: D

5. USP is defined as

(A) Unique selling price

(B) Unique sales preposition

(C) Unique selling proposition

(D) Unique strategy promotion

Answer: C

6. The process of setting a low initial price for attracting a large number of buyers quickly to cover a large market share is known as

(A) Going-rate pricing

(B) Market penetration pricing

(C) Value based pricing

(D) Skimming pricing

Answer: B

7. A reduction in price on purchase during a stated period of time is known as.

(A) Sale

(B) Discount

(C) Allowance

(D) None of these

Answer: B

8. Sensitivity of demand to change in price is known as

(A) Cost-plus price

(B) Break-even price

(C) Price elasticity

(D) Inelastic

Answer: C

9. Which among these is concerned with pricing policies for late entrants to a market.

(A) Market penetration

(B) Marketing research

(C) Market skimming

(D) Marketing skills

Answer: A

10. Which among these is not the nature and characteristic of a service.

(A) Intangibility

(B) Durability

(C) Variability

(D) Perishability

Answer: B


Q.1 When did the World Trade Organization come into effect?

(a)) March 6, 1996

(b) April 8, 1994

(c) February 5, 1994

(d) January 1, 1995

Answer:  d

Q.2 How many members are present in the WTO?

(a)  207

(b) 195

(c) 160

(d) 164

Answer: d

Q.3 Where is the headquarters of the WTO located?

(a) Austria

(b) Geneva

(c) New York

(d) Washington DC

Answer: b

Q.4 Which of these institutions is not a part of the World Bank community?

(a) IFC

(b) IDA

(c) WTO

(d) IBRD

Answer: c

Q.5 Along with the World Bank and __________________, WTO is the third economic pillar of worldwide dimensions.

(a) International Economic Association (IEA)

(b) International Monetary Funds (IMF)

(c) International Development Bank (IDB)

(d) International Funding Organisation (IFO)

Answer: b

Q.6 Which of the following statements is false?

(a) India’s vote share in the International Monetary Fund is 10%.

(b) Both the IMF and the IBRD have headquarters in Washington.

(c) The IBRD is also known as the World Bank.

(d) Both the IMF and the World Bank are known as the Bretton Woods twins.

Answer: a

Q.7 Among the following options, which one is not the objective of the WTO?

(a) To protect environment

(b) To improve the balance of payment situation of the member countries

(c) To improve the standard of living of people of the member countries

(d) To enlarge production and trade of goods

Answer: b

Q.8 Who is the current Director-General of WTO?

(a) Pascal Lamy

(b) Mahmoud Riad

(c) Chedli Klibi

(d) Roberto Azevêdo

Answer: d

Q.9 TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement is administered by the _______ .

(a) World Bank (WB)

(b) United Nations Organization (UNO)

(c) World Trade Organization (WTO)

(d) United Nations Conference on Trade and Development (UNCTAD)

Answer: c

Q.10 Who is most recently appointed as the Ambassador and Permanent Representative of India to WTO?

(a) JS Deepak

(b) TS Deepak

(c) Anwar Hussain Shaik

(d) Brajendra Navnit

Answer: d

Accounting Multiple Choice Questions

Question 1

Accounting provides data or information on

A) Income and cost for the managers

B) Financial conditions of the institutions

C) Company’s tax liability for a particular year

D) All the above

Answer: D

Question 2

Long term assets without any physical existence but, possessing a value are called

A) Intangible assets

B) Fixed assets

C) Current assets

D) Investments

Answer: A

Question 3

The assets that can be easily converted into cash within a short period, i.e., 1 year or less are known as

A) Current assets

B) Fixed assets

C) Intangible assets

D) Investments

Answer: A

Question 4

Copyrights, Patents and Trademarks are examples of

A) Current assets

B) Fixed assets

C) Intangible assets

D) Investments

Answer: C

Question 5

The debts which are to be repaid within a short period (a year or less) are referred to as,

A) Current Liabilities

B) Fixed liabilities

C) Contingent liabilities

D) All the above

Answer: A

Question 6

Gross profit is

A) Cost of goods sold + Opening stock

B) Sales – cost of goods sold

C) Sales – Purchases

D) Net profit – expenses

Answer: B

Question 7

Net profit is calculated in which of the following account?

A) Profit and loss account

B) Balance sheet

C) Trial balance

D) Trading account

Answer: A

Question 8

In order to find out the value of the closing stock during the end of the financial year we,

A) do this by stocktaking

B) deduct the cost of goods sold from sales

C) deduct opening stock from the cost of goods sold

D) look in the stock account

Answer: A

Question 9

Which of these best explains fixed assets?

A) Are bought to be used in the business

B) Are expensive items bought for the business

C) Are items which will not wear out quickly

D) Are of long life and are not purchased specifically for resale

Answer: D

Question 10

The charges of placing commodities into a saleable condition should be charged to

A) Trading account

B) P & L a/c

C) Balance Sheet

D) None of the above

Answer: B

Question 11

Suppliers personal a/c are seen in the

A) Sales Ledger

B) Nominal ledger

C) Purchases Ledger

D) General Ledger

Answer: C

Question 12

If you want to ensure that your money will be secured if cheques sent are wasted in the post, you should

A) Always pay by cash

B) Cross your Cheques ‘Account Payee only, Not Negotiable.’

C) Always get the money in person

D) Not use the postal service in future

Answer: B

Question 13

Discounts received are

A) Buyer of goods granted discount by seller

B) Deducted when we receive cash

C) Given by us when we sell goods on credit

D) None of these

Answer: A

Question 14

Sales invoices are first entered in

A) The Cash Book

B) The Purchases Journal

C) The Sales Journal

D) The Sales Account

Answer: C

Question 15

Entered in the Purchases Journal are

A) Discounts received

B) Purchases invoices

C) Payments to suppliers

D) Trade discounts

Answer: B

Question 16

At the balance sheet date, the balance on the Accumulated Provision for Depreciation Account is

A) Simply deducted from the asset in the Balance Sheet

B) Transferred to Profit and Loss Account

C) Transferred to the Asset Account

D) Transferred to Depreciation Account

Answer: A

Question 17

If we take goods for own use we should

A) Debit Drawings Account, Credit Purchases Account

B) Debit Drawings Account: Credit Stock Account

C) Debit Sales Account: Credit Stock Account

D) Debit Purchases Account: Credit Drawings Account

Answer: A

Question 18

When a petty cash book is kept there will be

A) No entries made at all in the general ledger for items paid by petty cash

B) The same number of entries in the general ledger

C) Fewer entries made in the general ledger

D) More entries made in the general ledger

Answer: C

Question 19

If a trial balance totals do not agree, the difference must be entered in

A) The Profit and Loss Account

B) A Nominal Account

C) The Capital Account

D) A Suspense Account

Answer: D

Question 20

If it is required to maintain fixed capitals then the partners’ shares of profits must be

A) Credited to capital accounts

B) Debited to capital accounts

C) Debited to partners’ current accounts

D) Credited to partners’ current accounts

Answer: D

MCQs on Financial Management

Q1. Investment can be defined as

A) Person’s dedication to purchasing a house or flat

B) Use of capital on assets to receive returns

C) Usage of money on a production process of products and services

D) Net additions made to the nation’s capital stocks

Answer: B

Q2. The concept of Financial management is.

A) Profit maximization

B) All features of obtaining and using financial resources for company operations

C) Organization of funds

D) Effective Management of every company

Answer: B

Q3. What is the primary goal of financial management?

A) To minimise the risk

B) To maximise the owner’s wealth

C) To maximise the return

D) To raise profit

Answer: B

Q4. GST is a consumption of goods and service tax based on.

A) Development

B) Dividend

C) Duration

D) Destination

Answer: D

Q5. The finance manager is accountable for.

A) Earning capital assets of the company

B) Effective management of a fund

C) Arrangement of financial resources

D) Proper utilisation of funds

Answer: C

Q6. The market value of the shares is decided by

A) The investment market

B) The government

C) Shareholders

D) The respective companies

Answer: A

Q7. The capital budget is associated with.

A) Long terms and short terms assets

B) Fixed assets

C) Long terms assets

D) Short term assets

Answer: C

Q8. CAPM stands for.

A) Capital asset pricing model.

B) Capital amount printing model.

C) Capital amount pricing model.

D) Capital asset printing model.

Answer: A

Q9. What does financial leverage measure?

A) No change with EBIT and EPS

B) The sensibility of EBIT with % change with respect to output

C) The sensibility of EPS w.r.t % change in the EBIT level

D) % variation in the level of production

Answer: C

Q10. From the below-mentioned items which are financial assets?

A) Machines

B) Bonds

C) Stocks

D) B and C

Answer: D

MCQs on Admission of New Partner

1. In the case of admission of a partner, the entry for unrecorded investments will be

A) Debit Partner Capital A/cs and Credit Investment A/c

B) Debit Revaluation A/cs and Credit Investment A/c

C) Debit Investment A/cs and Credit Revaluation A/c

D) None of the above

Answer: C

2. Goodwill of a firm of A and B is valued at ₹30,000. It is appearing in the books at ₹12,000. C is admitted for 1/4share. What amount he is supposed to bring for goodwill?

A) ₹ 30,000

B) ₹ 4,500

C) ₹ 7,500

D) ₹ 10,500

Answer: C

3. Ramesh and Suresh are partners sharing profits in the ration of 2:1 respectively. Ramesh capital ₹ 1,02,000 and Suresh capital are ₹73,000. They admit Mahesh and agree to give him 1/5th share in future profit. Mahesh brings ₹14,000 as his share of goodwill. He agrees to contribute capital in the new profit-sharing ration. How much capital will be brought by Mahesh?

A) ₹ 43,750

B) ₹ 45,000

C) ₹ 47,250

D) ₹ 48,000

Answer: C

4. A and Bare in partnership, sharing profits in the ratio of 3:2. They take C as a new partner. Goodwill of the firm is valued at 33,00,000 and C brings ₹30,000 as his share of goodwill in cash which is entirely credited to the capital account of A. New profit sharing ratio will be

A) 3:2:1

B) 6:3:1

C) 5:4:1

D) 4:5:1

Answer: C

5. X and Y are partners sharing profits in the ratio of 4:3. Z is admitted for 1/5th share and he brings in ₹1,40,000 as his share of goodwill in cash of which ₹1,20,000 is credited to X remaining amount to Y. New profit sharing ratio will be

A) 4: 3: 5

B) 2: 2: 1

C) 1: 2: 2

D) 2: 1: 2

Answer: B

6. A, B, C, and D are partners. A and B share 2/3rd of profits equally and Cand D share remaining profits in the ratio of 3: 2. Find the profit sharing ratio of A, B. C, and D

A) 5: 5: 3: 2

B) 7: 7: 6: 4

C) 2.5: 2.5: 8: 6

D) 3: 9: 8: 3

Answer: A

7. Sacrificing ratio is used to distribute ……………..in case of admission of a partner

A) Reserves

B) Goodwill

C) Revaluation Profit

D) Balance in Profit and Loss Account

Answer: B

8. X and Y are partners in a company with a capital of ₹1,80,000 and ₹2,00,000. Z was admitted for 1/3rd share in profits and brings ₹3,40,000 as capital. Calculate the amount of goodwill.

A) ₹ 2,40,000

B) ₹ 1,00,000

C) ₹ 1,50,000

D) ₹ 3,00,000

Answer: D

9. A and B are partners sharing profits and losses in the ration of 5: 3. On admission, C brings ₹70,000 as cash and ₹43,000 against goodwill. The new profit ratio between A, B, and C is 7: 5: 4. The sacrifice ratio of A and B is

A) 3: 1

B) 1: 3

C) 4: 5

D) 5: 9

Answer: A

10. A, B, and C are partner sharing profits in ratio 3: 2: 1. They agree to admit D into the firm. A, B, and C agreed to give 1/3rd, 1/6th, 1/9th share of their profit. The share of profit of D will be

A) 1/10


C) 12/54

D) 13/54

Answer: D

Economics Multiple Choice Questions

Q1. What do you mean by the supply of goods?

a) Stock available for sale

b) Total stock in the warehouse

c) The actual production of the goods

d) Quantity of the goods offered for sale at a particular price per unit of time

Answer:- d

Q2. What do you mean by ‘under conditions of a perfect competition in the product market’?

a) MRP = VMP

b) MRP > VMP

c) VMP > MRP

d) None of the above

Answer:- a

Q3. Which of the following is the relation that the law of demand defines?

a) Income and price of a commodity

b) Price and quantity of a commodity

c) Income and quantity demanded

d) Quantity demanded and quantity supplied

Answer:- b

Q4. What do you mean by a mixed economy?

a) Modern and traditional industries

b) Public and private sectors

c) Foreign and domestic investments

d) Commercial and subsistence farming

Answer:- b

Q5. What do you mean by the demand of a commodity?

a) Desire for the commodity

b) Need for the commodity

c) Quantity demanded of that commodity

d) Quantity that consumers are able and willing to buy at various prices during any particular period of time

Answer:- d

Q6. Starting from the time of independence, why did India follow a planned economy?

1.India followed a five-year plan and required an outlook.

2.Directive Principles of Indian Constitution  indicated the planned vision of India.

3.There was no indication whatsoever from the five year plans regarding how much of each and every good and service is to be produced.

Choose the correct statements from the given options

     a) Only 2

     b) 2 and 3

    c) 1 and 3

    d) All of the above

Answer:- b

Q7. What do you mean by Gross National Product?

a) The total value of goods and services produced in the country

b) The total value of all the transactions in the country

c) The depreciation in the total value of goods and services produced in the country

d) The total value of goods and services produced in the country and the net factor income from abroad

Answer:- d

Q8. Which of the following is the reason for the decline in the child sex ratio in India? 

a) Low fertility rate.

b) Female foeticide

c) Incentives for a boy child from the government

d) None of the above

Answer:- b

Q9. What factors are taken into consideration while revising the poverty line periodically?

a) By conducting a survey every five years

b) Survey carried out by National Sample Survey Organisation

c) Both a and b

d) None of the above

Answer:- c

Q10. In India, which banks/institutions have the highest share in the disbursement of credit to agriculture and allied activities?

a) Cooperative banks

b) Regional Rural Banks

c) Commercial banks

d) Microfinance institutions

Answer:- c

Q11. Which of the following is/are linked with the financial sector of India and controlled by the Reserve Bank of India (RBI)?

a) Commercial bank

b) Money lenders

c) Stock exchange operations

d) All of the above

Answer:- c

Q12. When price floor is set above equilibrium price it will result in?

a) Shortage

b) Surpluses

c) Equilibrium

d) None of the above

Answer:- b

Q13. What is Gross Domestic Product?

a) The total value of goods and services manufactured in the country

b) The total value of all the transactions in the country

c) The reduction in the total value of goods and services produced in the country

d) The monetary value of all finished goods and services made within a country during a specific period.

Answer:- d

Q14. Why is the unemployment rate low in India statistically?

  1. Unemployment is calculated only from the age group of 15 years to 59 years.
  2. Unemployment survives only when an individual cannot find a job.
  3. People are not interested in working outside the domestic area.

Choose the correct option.

a) Only 3

b) 2 and 3

c) Only 2

d) All of the above

Answer:- c

Q15. What does the bowed-out shape of the production possibilities curve illustrate?

a) Law of increasing opportunity cost

b) The production is inefficient

c) The production is unattainable

d) The demand is relatively elastic

Answer:- a

Q16. What is the main economic problem faced by the society?

a) Unemployment

b) Inequality

c) Poverty

d) Scarcity

Answer:- d

Q17. What does “Capitalism” refer to?

a) The use of market

b) Government ownership of capital

c) Private ownership of capital goods

d) Private ownership of homes and& cars

Answer:- c

Q18. The goal of a pure market economy is to meet the desire of ______ .

a) Consumers

b) Companies

c) Workers

d) The government

Answer:- a

Q19. What does the law of demand mean?

a) As the quantity demanded rises, the price rises.

b) As the price rises, the quantity demanded rises.

c) As the price rises, the quantity demanded falls.

d) As the supply rises, the demand rises.

Answer:- c

Q20. Which of the following is an example of an agricultural price support program?

a) A price ceiling

b) A price floor

c) Equilibrium pricing

d) None of the above

Answer:- b

MCQ on Cost Concept

Q.1 What is the basic premise of cost concept?

A) Cost ascertainment

B) Tax compliance

C) Financial audit

D) Profit analysis

Answer: A

Q.2 For which kind of firm is process costing appropriate?

A) Bricklaying firms

B) Transport firms

C) Hospitals

D) Oil refining firms

Answer: D

Q.3 In how many ways can cost classification be done?

A) Three ways

B) Two ways

C) Four ways

D) Many ways

Answer: D

Q.4 Which cost is incurred even if the company is closed?

A) Sunk cost

B) Historical cost

C) Shut-down cost

D) Imputed cost

Answer: C

Q.5 What are direct expenses also known as?

A) Overhead expenses

B) Sundry expenses

C) Chargeable expenses

D) Major expenses

Answer: C

Q.6 Warehouse rent is a part of which cost?

A) Production cost

B) Distribution cost

C) Prime cost

D) Factory cost

Answer: B

Q.7 What is tender?

A) Estimation of cost

B) Estimation of profit

C) Estimation of units

D) Estimation of the selling price

Answer: D

Q.8 What is the total of all direct costs known as?

A) Cost of production

B) Cost of sales

C) Prime cost

D) Works cost

Answer: C

Q.9 What item is not included in cost accounting?

A) Product costing

B) Profit sharing

C) Planning

D) Controlling

Answer: B

Q.10 Which type of costing do toy-manufacturing companies use?

A) Multiple costing

B) Process costing

C) Unit costing

D) Batch costing

Answer: D

MCQs on Bills of Exchange

1. What is the Bill receivable account?

A) Personal Account

B) Machinery Account

C) Real Account

D) Nominal Account

Answer: A

2. A bill of exchange includes.

A) An order to pay

B) A request to pay

C) A promise to pay

D) All the above

Answer: A

3. Which bill is drawn and accepted in the same country?

A) Trade Bill

B) Foreign Bill

C) Inland Bill

D) Accommodation Bill

Answer: C

4. Who draws a bill of exchange?

A) Creditor

B) Debtor

C) Drawer

D) None of the above

Answer: C

5. What is the person known as who draws a bill of exchange

A) Drawer

B) Payee

C) Drawee

D) None of the above

Answer: A

6. What are the three additional days known as that a drawer gives to the drawee for payment

A) Conditional days

B) Additional days

C) Days of grace

D) Days of rebate

Answer: C

7. When the drawee signs the bill, it is considered as

A) Accepted

B) Retired

C) Renewed

D) Endorsed

Answer: A

8. What kind of acceptance is known as when the bill is accepted without any condition?

A) Qualified acceptance

B) Conditional acceptance

C) Blank acceptance

D) General acceptance

Answer: D

9. When the bill is noted from the notary public, it is known as?

A) Noting

B) Discounting

C) Accepting

D) None of the above

Answer: A

10. What is retiring a bill under rebate means?

A) Making a payment of the bill before the due date

B) Dishonoring of a bill

C) Making a payment of the bill after the due date

D) All of the above

Answer: A

Business Studies MCQs

1. Which of the following is not an economic activity?

  1. Production
  2. Social service
  3. Professional
  4. Trading in goods

Answer: B

2. Which option is not a business activity?

  1. Production of goods
  2. Transportation
  3. Exchange of goods
  4. Work in a factory for wages

Answer: D

3. Which of the following is the characteristic of a business?

  1. Production
  2. Exchange or sale
  3. Risk element
  4. All the above

Answer: D

4. Oil refinery and sugar mill are classified under which industries?

  1. Primary
  2. Secondary
  3. Tertiary
  4. None of the above

Answer: B

5. Identify the activity which does not support trade.

  1. Banking
  2. Warehousing
  3. Insurance
  4. Mining

Answer: D

6. In which occupation do people get salary or wages in return for their work?

  1. Employment
  2. Business
  3. Profession
  4. None of the above

Answer: A

7. Which item does not cause any business risk?

  1. Breakdown of machinery
  2. Efficient management
  3. Riot
  4. Changing government policy

Answer: D

8. In which business, the support service activities are categorized?

  1. Commercial industries
  2. Primary industries
  3. Secondary industries
  4. Tertiary industries

Answer: D

9. In business, why is it essential to make a profit?

  1. It provides a return to investors.
  2. It provides funds for future extension
  3. It increases the reputation of a company
  4. All the above

Answer: D

10. Which of the following is a false statement?

  1. The scope of commerce is narrower than business.
  2. Commerce includes trade and auxiliaries to trade.
  3. Foreign trade is purchase and sale by the traders of the same country.
  4. Traders serve as a link between producers and consumers.

Answer: C

11. Which of the following is not a management function?

  1. Planning
  2. Staffing
  3. Cooperating
  4. Controlling

Answer: C

12. Policy formulation comes under which role?

  1. Top-level managers
  2. Middle-level managers
  3. Operational management
  4. All of the above

Answer: A

13. Management is defined as?

  1. An art
  2. A science
  3. Both art and science
  4. None of the above

Answer: C

14. Which of the below-mentioned items does not follow the scalar chain?

  1. Functional structure
  2. Divisional structure
  3. Formal organisation
  4. Informal organisation

Answer: D

15. What is Centralisation?

  1. Retention of decision-making authority
  2. Dispersal of decision-making authority
  3. Creating division as a profit centre
  4. Opening the new centre of branches

Answer: A

16. To have an effective delegation is important to have a responsibility along with?

  1. Authority
  2. Manpower
  3. Incentives
  4. Promotion

Answer: A

17. Grouping of activities on the basis product lines is a part of.

  1. Delegated organization
  2. Divisional organization
  3. Functional organization
  4. Autonomous organization

Answer: B

18. Policy formulation is a task of?

  1. Top-level managers
  2. Middle-level managers
  3. Operational management
  4. All of the above

Answer: A

19. Which of the elements is not a part of the communication process?

  1. Decoding
  2. Communication
  3. Channel
  4. Receiver.

Answer: B

20. Name the process that converts a message into communication symbols.

  1. Media
  2. Encoding
  3. Feedback
  4. Decoding

Answer: B


Goods and Services Tax MCQs:

1. What is the full form of GST?

A) Goods and Supply Tax

B) Goods and Services Tax

C) General Sales Tax

D) Government Sales Tax

Answer: B

2. GST was implemented in India from

A) 1st January 2017

B) 1st April 2017

C) 1st March 2017

D) 1st July 2017

Answer: D

3. In India, the GST is based on the dual model GST adopted in:


B) Canada


D) Japan

Answer: B

4. GST is a consumption of goods and service tax based on

A) Development

B) Dividend

C) Destiny

D) Destination

Answer: D

5. The number of structures in India’s GST model is?

A) 6

B) 4

C) 3

D) 5

Answer: B

6. The maximum rate for CGST is?

A) 28

B) 12

C) 18

D) 20

Answer: D

7. The maximum rate applicable for SGST/UTGST is?

A) 28

B) 14

C) 20

D) 30

Answer: C

8. GST rates applicable on goods and services are:

A) 0% 5% 12% 18% 26%

B) 0% 6% 12% 18% 28%

C) 0% 5% 12% 18% 28%

D) 0% 5% 12% 16% 28%

Answer: C

9. Taxes that are levied on any Intra-State purchase are?





Answer : B

10. What does “I” in IGST stands stand for?

A) Internal

B) Integrated

C) Internal

D) Intra

Answer: B

MCQs On Balance Sheet

Balance Sheet MCQs

1. On balance sheet, accruals, notes payable, and account payable are listed under which category?

A) Current Liabilities

B) Accumulated Liabilities

C) Noncurrent Liabilities

D) Accrued Liabilities

Answer: A

2. Inventories, cash and equivalents, and accounts receivables are listed as

A) Earnings on Income Statement

B) Payments on Income Statement

C) Assets on the Balance Sheet

D) Liabilities on the Balance Sheet

Answer: C

3. Which of the following is not a current asset

A) Supplies

B) Land

C) Accounts Receivable

D) Prepaid Insurance

Answer: B

4. In the situation of bankruptcy, a stock which is recorded above common stock and below debt account is

A) Preferred Stock

B) Debt Liabilities

C) Common Liabilities

D) Hybrid Stock

Answer: A

5. A firm buys products but does not pay to suppliers instantly. This is recorded as

A) Account Receivable

B) Account Payable

C) Accumulated Liabilities

D) Current Liabilities

Answer: B

6. In a balance sheet, the total of common stock and retained earnings are denoted as

A) Common Equity

B) Due Equity

C) Preferred Equity

D) Common Perpetuity

Answer: A

7. The process of recording inventory that gives a lower cost of a commodity sold in an income statement is denoted as

A) First Out Receivable

B) Last in First Out

C) Last Out Receivable

D) First in First Out

Answer: D

8. Financial securities which can be changed into cash to their book value price are categorised as

A) Short-term Investments

B) Inventories

C) Long-term Investments

D) Cash Equivalents

Answer: D

9. Earnings that have a cumulative amount and are not paid to the stockholder as a dividend is known as

A) Common Earnings

B) Preferred Earnings

C) Non-paid Earnings

D) Retained Earnings

Answer: D

10. Information that is used by investors for expecting future earnings is recorded in

A) Annual Report

B) Five Years Report

C) Exchange Report

D) Stock Report

Answer: A

Cash Flow Statement MCQs:

1. Statement of cash flows includes

A) Financing Activities

B) Operating Activities

C) Investing Activities

D) All of the Above

Answer: D

2. In cash flows, when a company invests in fixed assets and short-term financial investments results in

A) Increased Equity

B) Increased Liabilities

C) Decreased Cash

D) Increased Cash

Answer: C

3. A company that issues stocks and bonds to raise funds results in

A) Decrease in Cash

B) Increase in Cash

C) Increase in  Equity

D) Increase in Liabilities

Answer: B

4. The purchase value of assets over its serviceable life is categorised as

A) Appreciated Liabilities

B) Appreciated Assets

C) Depreciation

D) Appreciation

Answer: C

5. The basic financial statements include

A) Statement of Cash Flows

B) Statement of Retained Earnings

C) Balance Sheet and Income Statement

D) All of the Above

Answer: D

6. The statement of cash flow clarifies cash flows according to

A) Operating and Non-operating Flows

B) Inflow and Outflow

C) Investing and Non-operating Flows

D) Operating, Investing, and Financing Activities

Answer: D

7. Cash flow example from a financing activity is

A) Payment of Dividends

B) Receipt of Dividend on Investment

C) Cash Received from Customers

D) Purchase of Fixed Asset

Answer: A

8. Cash flow example from an investing activity is

A) Issue of Debenture

B) Repayment of Long-term Loan

C) Purchase of Raw Materials for Cash

D) Sale of Investment by Non-Financial Enterprise

Answer: D

9. Cash flow example from an operating activity is

A) Purchase of Own Debenture

B) Sale of Fixed Assets

C) Interest Paid on Term-deposits by a Bank

D) Issue of Equity Share Capital

Answer: C

10. Which item comes under financial activities in cash flow?

A) Redemption of Preference Share

B) Issue of Preference Share

C) Interest Paid

D) All the above

Answer: D

MCQs on Goodwill

1. Goodwill is defined as

A) Intangible asset

B) Fictitious asset

C) Current asset

D) Liquid asset

Answer: A

2. Break-even indicates

A) Revenues are more than cost

B) Revenues and cost are equal

C) Costs are more than revenue

D) None of the Above

Answer: B

3. The excess amount which the firm can get on selling its assets over and above the saleable value of its assets is called

A) Surplus

B) Super Profit

C) Reserve

D) Goodwill

Answer: D

4. A firm’s goodwill is not affected by

A) Location of the firm

B) The reputation of the Firm

C) Better Customer Service

D) None of the Above

Answer: D

5. Weighted average method of calculating goodwill is used when

A) Profits are not equal

B) Profits show an increasing or decreasing trend

C) Profits are Fluctuating

D) None of the Above

Answer: B

6. Under the capitalisation method, the formula for calculating the goodwill is

A) Super profits multiplied by the rate of return

B) Average profits multiplied by the rate of return

C) Super profits divided by the rate of return

D) Average profits divided by the rate of return

Answer: C

7. The total capital employed in the company is ₹8,00,000 a reasonable rate of return is 15% and the profit of the year is 12,00,000. The value of goodwill of the company as per the capitalisation method will be

A) ₹ 82,00,000

B) ₹ 12,00,000

C) ₹ 72,00,000

D) ₹ 42,00,000

Answer: C

8. A firm earns ₹1,00,000. The normal rate of return is 10%. The assets of the company amounted to ₹11,00,000 and liabilities to ₹1,00,000. Value of goodwill by the capitalisation of average actual profit will be

A) ₹ 2,00,000

B) ₹ 10,000

C) ₹ 5,000

D) ₹ 1,00,000

Answer: D

9. When there is a change in the current partners’ association that results in ending the existing agreement and initiate a formation of a new agreement is known as

A) Revaluation of Partnership

B) Reconstitution of Partnership

C) Realisation of Partnership

D) None of the Above

Answer: B

10. X, Y, and Z are partners in a company sharing profits in the ratio 4:3: 2. Their balance sheet as at 31-3-2018 showed a debit balance of Profit and Loss A/c ₹1,80,000. From 1-4-2018 they will share profits equally. In the journal entry to give effect to the above arrangement when X, Y, and Z decide not to close the profit and loss account.

A) Dr X by ₹ 20,000, Cr Z by ₹20,000

B) Cr X by ₹ 20,000, Dr Z by ₹20,000

C) Dr X by ₹ 40,000, Cr Z by ₹40,000

D) Cr X by ₹ 20,000, Dr Z by ₹20,000

Answer: B

MCQ on Trial Balance

1. Trial balance is used to check the accuracy of

A) Balance sheet balances

B) Ledger accounts balances

C) Cash flow statement balances

D) Income statement balances

Answer: B

2. In the books of account if a transaction is completely deleted, will it affect the trial balance?

A) No

B) Yes

C) A transaction cannot be omitted

Answer: A

3. What is used in preparing trial balance?

A) Specialised Journals

B) Balance Sheet

C) Ledger Accounts

D) General Journal

Answer: C

4. What is the trial balance used for?

A) It is a financial statement

B) It records balances of a balance sheet

C) It doesn’t contribute to the accounting cycle

D) It records balances of accounts

Answer: D

5. When debit balance is equal to credit balance then the trial balance means

A) Account balances are correct

B) Mathematically Capital+Liabilities=Assets

C) No mistake in recording transactions

D) No mistake in posting entries to ledger accounts

Answer: B

6. When is trial balance prepared?

A) At the end of an accounting period

B) At the end of a year

C) Frequently during the year

D) At the end of a month

Answer: A

7. Which items influence the trial balance agreement?

A) Deposit in transit

B) Compensating errors

C) Complete omission of a transaction

D) Partial omission of a transaction

Answer: D

8. When credit balances = debit balances, the trial balance check and shows ____________ . It also indicates that there were no errors made during posting and recording and posting.

A) Understatements of Balances

B) Errors of Commission

C) Arithmetic Accuracy

D) Omissions of Economic Events

Answer: C

9. Which of the following account with normal balance is shown at the debit side of a trial balance?

A) Creditors account

B) Unearned income account

C) Rent income account

D) Cash account

Answer: D

10. In trial balance, which accounts with normal balance is recorded at the credit side?

A) Bank account

B) Equipment account

C) Cash account

D) Accrued expenses account

Answer: D

MCQ Partnership

Partnership MCQs

1. To start a partnership business, what should be the minimum number of partners?

A) 2

B) 10

C) 4

D) 20

Answer: A

2. What type of agreement is used to form a partnership business?

A) Written agreement

B) Oral agreement

C) Written or oral agreement

D) None of them

Answer: C

3. In partnership, partners liabilities are

A) Unlimited

B) Limited to the capital of the business

C) Limited

D) Both A and C

Answer: A

4. Is a partnership firm considered as a separate legal entity?

A) No

B) Yes

C) Partially Yes

Answer: A

5. What happens when interest on drawings is charged to partner?

A) Credited to partner’s current a/c

B) Not shown in current account

C) Debited to partner’s capital a/c

D) None of the above

Answer: C

6. What is the partnership written agreement known as?:

A) Partnership contract

B) Agreement

C) Partnership deed

D) Partnership Act

Answer: C

7. In absence of a partnership agreement, what will be the percentage of profit sharing ratio between the partners?

A) Unequal

B) Equal

C) It will depend on the experience of a partner

D) It will depend on a partner’s capital

Answer: B

8. Which is not a feature of a partnership business?

A) Ease of formation

B) Limited liability

C) Limited life

D) Mutual agency

Answer: B

9. In which kind of partnership one partner has unlimited liability and other partner have limited liability?

A) Partnership-at-will

B) Limited  liability partnership

C) General partnership

D) Particular partnership

Answer: B

10. Which types of partnership have no agreement in terms of the duration of partnership?

A) Partnership-at-will

B) Limited partnership

C) General partnership

D) Particular partnership

Answer: C

Statistics MCQs

Q.1 Which of the following values is used as a summary measure for a sample, such as a sample mean?

(A) Population parameter

(B) Sample parameter

(C) Sample statistic

(D) Population mean

Answer: C

Q.2 Which of the following is a branch of statistics?

(A) Descriptive statistics

(B) Inferential statistics

(C) Industry statistics

(D) Both A and B

Answer: D

Q.3 The control charts and procedures of descriptive statistics which are used to enhance a procedure can be classified into which of these categories?

(A) Behavioural tools

(B) Serial tools

(C) Industry statistics

(D) Statistical tools

Answer: D

Q.4 Which of the following can also be represented as sample statistics?

(A) Lowercase Greek letters

(B) Roman letters

(C) Associated Roman alphabets

(D) Uppercase Greek letters

Answer: B

Q.5 To which of the following options do individual respondents, focus groups, and panels of respondents belong?

A) Primary data sources

B) Secondary data sources

C) Itemised data sources

D) Pointed data sources

Answer: A

Q.6 What are the variables whose calculation is done according to the weight, height, and length known as?

(A) Flowchart variables

(B) Discrete variables

(C) Continuous variables

(D) Measuring variables

Answer: C

Q.7 Which method used to examine inflation rate anticipation, unemployment rate, and capacity utilisation to produce products?

(A) Data exporting technique

(B) Data importing technique

(C) Forecasting technique

(D) Data supplying technique

Answer: C

Q.8 Specialised processes such as graphical and numerical methods are utilised in which of the following?

(A) Education statistics

(B) Descriptive statistics

(C) Business statistics

(D) Social statistics

Answer: B

Q.9 What is the scale applied in statistics, which imparts a difference of magnitude and proportions, is considered as?

(A) Exponential scale

(B) Goodness scale

(C) Ratio scale

(D) Satisfactory scale

Answer: C

Q.10 Review of performance appraisal, labour turnover rates, planning of incentives, and training programs are the examples of which of the following?

(A) Statistics in production

(B) Statistics in marketing

(C) Statistics in finance

(D) Statistics in personnel management

Answer: D

MCQs on Sustainable Development

Sustainable Development MCQs

Q1. Any adulterated elements leak into the ground, filtration, and are carried into a groundwater reservoir is known as _____________ .

A) Land contamination

B) Noise pollution

C) Water pollution

D) Air pollution

Answer: C

Q.2 South Africa is a leading exporter of which mineral?

A) Copper

B) Diamond

C) Silver

D) Platinum

Answer: D

Q.3 Which of the following options is correct when we only accomplish two out of three pillars of sustainable development?

A) Economic + Environmental sustainability = Viable

B) Social + Environmental sustainability = Bearable

C) Social + Economic sustainability = Equitable

D) All of the above

Answer: D

Q.4 In which year did the word ‘sustainable development’ come into existence?

A) 1992

B) 1978

C) 1980

D) 1987

Answer: C

Q.5 In which year was the United Nations Commission on Sustainable Development (CSD) started by the UN General Assembly?

A) 1995

B) 1994

C) 1993

D) 1992

Answer: D

Q.6 After mining, the huge holes left behind are used for ________ .

A) Wastewater storage

B) Waste and water storage

C) Waste disposal

D) Waste storage

Answer: C

Q.7 Mercury and lead are toxic elements that cause ________________ .

A) Noise pollution

B) Air pollution

C) Water pollution

D) Land contamination

Answer: D

Q.8 What is the other word for landscaping?

A) Reduction

B) Restoration

C) Removing topsoil

D) Restore

Answer: B

Q.9 What does a firm seek for whenever the price of the mineral remains high?

A) New countries

B) Remains the same

C) New miners

D) New deposits

Answer: D

Q.10 Which of the following options is not incorporated as sustainable development parameters?

A) Gender disparity and diversity

B) Inter and intra-generational equity

C) Carrying capacity

D) None of the above

Answer: D

MCQs on Indian Economy

1.What option does the central government not include in the development expenditure?

A) Grants to states

B) Expenditure on social and community services

C) Expenditure on economic services

D) Defence expenditure

Answer: D

2. Which of the following defines depreciation?

A) Destruction of a plant in a fire accident

B) Loss of equipment over time due to wear and tear

C) Closure of a plant due to labour trouble

D) Closure of a plant due to lockout

Answer: B

3. Generally, deficit financing can create inflation. However, it can be checked if _________.

A) government expenditure increases the aggregate supply in the aggregate demand ratio.

B) all the investment is indicated as payment on national debt only.

C) only the aggregate demand is increased.

D) All of the above

Answer: D

4.With which of the following did the ARDC merged with on 12 July, 1982?


B) EXIM Bank


D) None of the above

Answer: A

5. What is the main cause of the export surplus?

A) The country’s stringent import policy

B) Developments in national and international markets

C) The country’s exports promotion value

D) None of the above

Answer: B

6. If RBI reduces the cash reserve ratio, what will happen to the credit creation?

A) There will be no impact.

B) It will decrease.

C) It will increase.

D) None of the above

Answer: C

7. Which option is not mentioned in a firm’s balance sheet?

A) Cash held at the bank

B) Revenue from sales of the company’s products

C) Total issued capital

D) Value of the stocks of raw materials held

Answer: B

8. Which of the following does the state financial corporation in the State Bank of India give special assistance to?

A) Medium and small-scale industries

B) Large-scale industries

C) Cottage industry

D) Agricultural farms

Answer: A

9. Which of the following are the central cooperative banks directly associated with?

A) Central government

B) Land development banks

C) State cooperative banks

D) Farmers

Answer: C

10. The first complete Indian Bank was established in which year?

A) 1794

B) 1894

C) 1896

D) 1902

Answer: B

MCQs on Rural Credit

Question 1

A small loan amount given to low-income households or groups is known as ________ .

(A) Cash credit

(B) Micro credit

(C) Rural credit

(D) Simple credit

Answer:  B

Question 2

Which microfinance institution is known as the Universal Bank?

(A) Bandhan Financial Services Private Ltd.

(B) Arohan Financial Services Private Ltd.

(C) Disha Microfinance Private Ltd.

(D) SKS Microfinance Private Ltd.

Answer: A

Question 3

The formal sources of credit do not comprise of __________ .

(A) Cooperatives

(B) Employers

(C) Banks

(D) None of the above

Answer: B

Question 4

The informal sector loans incorporate _______ .

(A) State Bank of India

(B) Moneylenders


(D) Both (A) and (B)

Answer: B

Question 5

Which option blocks the poor to get bank loans?

(A) Absence of collateral

(B) High rates of interest

(C) Complexity of procedure

(D) None of the above

Answer: A

Question 6

Which of the following takes the decisions regarding loans and savings in a self-help group (SHG)?

(A) Government

(B) Non-government organisation

(C) Bank

(D) Group members

Answer:  D

Question 7

In India, which of the following organisations takes care of the agriculture and rural development credit needs?





Answer: B

MCQs on Globalisation

MCQs on Globalisation

Question 1

What is the amalgamation and rapid unification between countries identified as?

A) Globalisation

B) Liberalisation

C) Socialisation

D) Privatisation

Answer: A

Question 2

Globalisation has improved the living structure of which of the following?

A) All the people

B) People living in developing countries

C) People living in developed countries

D) None of the above

Answer: B

Question 3

Which Indian industries have been hit by globalisation?

A) Cement

B) Jute

C) Toy making

D) Information technology (IT)

Answer: C

Question 4

Which of these organisations emphasises on the liberalisation of foreign investment and foreign trade?

A) International Monetary Fund

B) World Health Organisation

C) World Trade Organisation

D) International Labour Organisation

Answer: C

Question 5

Tax on imports is considered as an example of 

A) Collateral

B) Trade barriers

C) Foreign trade

D) Terms of trade

Answer: B

Question 6

Which of the following is the main reason behind the investments of MNCs?

A) To benefit foreign countries

B) To provide financial support to the country’s government

C) For the welfare of underprivileged people

D) To increase the assets and earn profits

Answer: D

Question 7

Which of these institutes supports investments and foreign trade in India?

A) International Monetary Fund (IMF)

B) World Trade Organisation (WTO)

C) World Bank

D) International Labour Organisation (ILO)

Answer: B

Question 8

When did the government remove the barriers for investment in India?

A) 1990

B) 1991

C) 1992

D) 1993

Answer: B

MCQs on Debentures

Question 1

Debenture holders are

A) Debtors of the Company

B) Creditors of the Company

C) External users

D) Owners of the Company

Answer B

Question 2

Debentures indicate the

A) Short-term Borrowings of a Company

B) Directors’ shares in a company

C) The Investment of Equity-Shareholders

D) Long-term Borrowings of a Company

Answer D

Question 3

In debenture, interest payable is

A) Transferred to general reserve

B) Transferred to falling fund investment account

C) Charged against the firm’s profits

D) Appropriation of the company’s profits

Answer C

Question 4

The owner of the debenture is qualified for

A) Fixed-rate interest

B) Company’s voting rights

C) Firm’s Profits share

D) Fixed dividend

Answer A

Question 5

When a company is liquidated, the debenture holders have a prior right for :

A) principal amount

B) interest

C) both (a)and (b)

D) none of these

Answer C

Question 6

Which of the below-mentioned statement is not true?

A) The issue price and redemption value of debentures cannot differ

B) Interest on debenture is a charge against profits

C) It is common to prefix debentures with the agreed interest rate

D) A debenture is a kind of public borrowing

Answer A

Question 7

Point out the false statements

A) A firm can buy its own debentures and shares.

B) A Company can issue convertible debentures.

C) A business can issue debentures with voting rights.

D) An organisation can issue redeemable debentures.

Answer C

Question 8

Of the following which one is not a characteristic of Bearer Debentures

A) They are transferable by mere delivery.

B) The interest on it is paid to the holder irrespective of identity.

C) They are treated as negotiable instruments.

D) Their transfer requires a deed of transfer

Answer D

Question 9

Debenture Application A/c is in the form of

A) Current Account

B) Nominal Account

C) Personal Account

D) Real Account

Answer C

Question 10

The form of a discount on issue of Debentures is in the nature of

A) Deferred Revenue Expenditure

B) Capital loss

C) Revenue loss

D) None of the above

Answer B

MCQs on Central Problems of an Economy

MCQs on Central Problems of an Economy

Question 1

Which of the following is true regarding the law of scarcity?

A) It states that the wants of a consumer will never be satisfied completely.

B) It indicates that the wants of a consumer will be satisfied in a socialistic system.

C) It is only for underdeveloped countries.

D) It is not for rich and developed countries.

Answer: A

Question 2

Which of the following does a person need to make a rational decision?

A) Choices that don’t have trade-offs

B) Choices that never change

C) Choices that are consistent with a similar goal every time

D) Logical choices without errors

Answer: C

Question 3

Which of the following is the central problem of an economy?

A) Assigning limited resources in a way that unlimited desires and needs of the society are satisfied

B) Ensuring a minimum income for each citizen

C) Assuring that production happens in the most effective way

D) Analysing the demand with market economies

Answer: A

Question 4

When does an economy succeed in producing resources efficiently?

A) When goods and services are produced without resources being wasted

B) When the total number of goods manufactured is high

C) When the resources employed are the best

D) When the resources are employed for highly valued uses

Answer: A

Question 5

Which option is a disadvantage for allocating resources that are utilising a market system?

A) Profits will be less

B) Impossible to stop the wastage of scarce resources

C) Notable unemployment may take place

D) Uneven distribution of income

Answer: D

Question 6

Which branch of economic theory is associated with the difficulty of resources allocation?

A) Econometrics

B) Microeconomic theory

C) Macroeconomic theory

D) None of the above

Answer: B

Question 7

The creation of choice is done by _________ .

A) Scarcity of resources

B) Less choices

C) The urgency of needs

D) Abundance of resources

Answer: A

MCQs on Investment

Question 1

If there is an increase in interest rates than the fixed interest rate of the corporate bond will

A) Return to the corporation

B) Decrease in value

C) Remain unchanged

D) Increase in value

Answer B

Question 2

Which one of the following is shown first when the assets are arranged in the order of their liquidity?

A) Investment

B) Cash in hand

C) Debtors

D) None of the above

Answer B

Question 3

An investor invests in assets known as a

A) Securities

B) Block of Assets

C) Portfolio

D) None of the above

Answer C

Question 4

Over the period, investors determine the compound growth rate of an investment by

A) Arithmetic median

B) Arithmetic mean

C) Calculus mean

D) Geometric mean

Answer D

Question 5

Investors agree to invest in high- risk investments if only

A) There are any true speculations

B) The predicted return is satisfactory for taking a risk

C) There are no safe options except for holding cash

D) The return is short

Answer B

Question 6

In Capital Market Line every investment is

A) Finitely divisible

B) Infinitely divisible

C) Both a & b

D) None of the above

Answer B

Question 7

Investments would score high only if there is a protection to

A) Real estate

B) Preferred stock

C) Government bonds

D) Common stock

Answer C

MCQs on Ledger

1. A ledger is called a book of.

(a) Primary entry

(b) Final entry

(c) Original entry

(d) None of the above

Answer: b

2. From which of the following is a ledger account prepared.

(a) Transactions

(b) Journal

(c) Events

(d) None of the above

Answer: b

3.The process of transferring of items from a journal to their respective ledger accounts is called as.

(a) Entry

(b) Arithmetic

(c) Balancing

(d) Posting

Answer: d

4. The ledger column that links the entry with the journal is called as.

(a) J.F column

(b) L.F column

(c) Credit column

(d) Debit column

Answer: a

5. The left hand side of the ledger account is referred to as.

(a) Footing

(b) Credit side

(c) Debit side

(d) Balance

Answer: c

6. Ledger is a principal book that contains.

(a) Real accounts only

(b) Personal accounts only

(c) All accounts

(d) Nominal accounts only

Answer: c

7. Accounts that have credit balance are closed by using the statement.

(a) By balance b/d

(b) By balance c/d

(c) To balance b/d

(d) To balance c/d

Answer: d

8. An account is having debit balance is established when.

(a) The last entry of the accounting period was posted on the debit side

(b) The amount of debit exceeds the amount of the credits

(c) There are more entries on the debit side than on the credit side

(d) None of above

Answer: b

9. Which of the following item will be appearing on the credit side of the ledger account?

(a) Discount received

(b) Cash received

(c) Rent Expenses

(d) Purchases

Answer: a

10. Among these, which item is used as the base for preparing trial balance?

(a) Cash account

(b) Balance sheet

(c) Journal

(d) Ledger account

Answer: d

MCQs on Management Accounting

Q1. The term management accounting was first coined in


b) 1945

c) 1955

d) 1960

Answer: A

Q.2 The purpose of management accounting is to

a). Help banks make decisions

b). Past orientation

c). Help investors make decision

d). Help managers make decisions

Answer: D

Q.3 The correct order of process of establishing the standards, is

a). Decision about types of standards to be used, Study of technical details, Study of existing costing system

b). Study of existing costing system, Study of technical details, Decision about types of standards to be used

c). Study of technical details, Study of existing costing system, Decision about types of standards to be used

d). None of the above

Answer: C

Q4. Management accounting assists the management

a) In planning, direction and control

b) Only in planning

c) Only in direction

d) Only in control

Answer: A

Q5. Which of the following are tools of management accounting?

A) Standard costing

B) Decision accounting

C) Human Resources Accounting

D) Budgetary control

a) A, C and D

b) A, B and D

c) A, B , C, D

d) A, B and C

Answer: b) A, B and D

Q6. The concept of management accounting was coined by?

a) R.N Anthony

b) J. Batty

c) James H. Bliss

d) American Accounting Association

Answer: C

Q.7 An accounting approach, in which the expected benefits exceed the expected cost is classified as

a) cost-benefit approach

b) benefit approach

c) cost approach

d) accounting approach

Answer: A

Q8. Management accounting deals with

a) Qualitative information

b) Quantitative information

c) None of the above

d) Both a and b

Answer: D

Q9. Decisions regarding usage of material, kind and changes in plant processing are a part of

a)help management

b) future management

c) cost management

d) past management

Answer: C

Q.10 In management accounting, an emphasis and focus must be

a) past oriented

b) future oriented

c) bank oriented

d) communication oriented

Answer: B

MCQs on Sampling Methods

Q1. Of the following sampling methods, which is a probability method?

a) Judgement

b) Quota

c) Simple random

d) Convenience

Answer: c

Q2.Which among the following is the benefit of using simple random sampling?

a) The results are always representative.

b) Interviewers can choose respondents freely.

c) Informants can refuse to participate.

d) We can calculate the accuracy of the results.

Answer: d

Q3. Increasing the sample size has the following effect upon the sampling error?

a) It increases the sampling error

b) It reduces the sampling error

c) It has no effect on the sampling error

d) All of the above

Answer: b

Q4. Which of the following is not a type of non-probability sampling?

a) Quota sampling

b) Convenience sampling

c) Snowball sampling

d) Stratified random sampling

Answer: d

Q5. Sample is regarded as a subset of?

(a) Data

(b) Set

(c) Distribution

(d) Population

Answer: d

Q6. The difference between a statistic and the parameter is called:

(a) Non-random

(b) Probability

(c) Sampling error

(d) Random

Answer: c

Q7. The probability of selecting an item in probability sampling, from the population is known and is:

(a) Equal to one

(b) Equal to zero

(c) Non zero

(d) None of the above

Answer: c

Q8. The distribution that is formed by all possible values of a statistics is known as:

(a) Hypergeometric distribution

(b) Normal distribution

(c) Sampling distribution

(d) Binomial distribution

Answer: c

Q9. Among these, which sampling is based on equal probability?

(a) Simple random sampling

(b) Stratified random sampling

(c) Systematic sampling

(d) Probability sampling

Answer: a

Q10. The difference between the expected value of a statistic and the value of the parameter being estimated is called a:

(a) Standard error

(b) Bias

(c) Sampling error

(d) Non-sampling error

Answer: b

MCQs on Retained Earnings

Q.1 Retained earnings are:

(a) Not important at the time of determining dividends.

(b) Also known as cumulative earnings of the company after paying the dividends.

(c) Indication of a company’s liquidity position.

(d) Similar to cash in a bank.

Answer: b

Q.2 In a balance sheet, the sum of retained earnings and common stock are known as:

(a) Common perpetuity

(b) Common equity

(c) Due equity

(d) Preferred equity

Answer: b

Q.3 Which of the following is true?

(a) Retained Earnings are cheaper than External Equity

(b) Retained Earnings are costlier than External Equity

(c) Equity Retained earnings are cost free

(d) External Equity is cheaper than Internal Equity

Answer: a

Q.4 This is considered as the most expensive source of funds

(a) Retained Earnings

(b) New Debts

(c) New Preference Shares

(d) New Equity Shares

Answer: d

Q.5 The dividend-payout ratio is equal to

(a) Dividends per share divided by current price per share.

(b) Dividends per share divided by par value per share.

(c) Dividends per share divided by earnings per share.

(d) The dividend yield plus the capital gains yield.

Answer: c

Q.6 For a company making profits, which of the following statements is likely to be true?

a) Retained earnings at the year end will be greater than retained profits at the beginning of the year.

b) Retained earnings at the year end will be greater than shareholders’ equity.

c) The profit for the year will be greater than the gross profit.

d) The operating profit will be less than the profit for the year.

Answer: a

Q.7 A financial document indicating the success or failure of a business trading over a time period is known as?

(a) Retained earnings statement

(b) Income statement

(c) Bank statement

(d) Cash flow statement

Answer: b

Q.8 Decrease in retained earnings can be explained by which of the following factors?

(a) Investments by stockholders

(b) Dividends

(c) Net loss

(d) Net income

Answer: c

Q.9 The Retained Earnings account comprises:

(a) The earnings of the corporation for the current year.

(b) Cash reinvested in the business by shareholders.

(c) The cumulative earnings less dividends since the inception of the corporation.

(d) Cash retained in the business.

Answer: c

Q.10 Among the following options which one is false with regard to appropriations of retained earnings?

(a) They require setting aside a reserve of cash for the appropriations.

(b) They may be made at the discretion of the board of directors.

(c) They will restrict the amount of possible cash dividends.

(d) They may be required because of contractual obligations.

Answer: a

MCQs on Law of Demand

Q1. The law of demand states, with increase in price there is

a. decrease in quantity demanded

b. increase in quantity demanded

c. decreased demand

d. increased demand

Answer: a

Q2. The following would cause a change in the quantity demanded for a product?

a. changing prices of related products

b. changing consumer tastes

c. increasing consumer income

d. decreasing price of product

Answer: d

Q.3 Increase in demand can occur due to:

(a) Increase in income of the consumer

(b) Decrease in price of the complementary good

(c) Increase in price of the substitutes

(d) All of these

Answer: d

Q4. Violation of Law of demand occurs when:

(a) Negative income effect is greater than substitution effect

(b) Negative income effect is less than substitution effect

(c) Income effect is negative

(d) Substitution effect is negative

Answer: a

Q5. Movement along the demand curve illustrates

a.shift in quantity demanded

b.complement effect

c.change in quantity demanded

d.income effect

Answer: c

Q6. Increase in demand is shown by demand curve when

a.the curve shifts right

b.the curve shifts left

c.movement along the curve there is no change

d.movement along the curve

Answer: a

Q.7 The demand curve is always



c.upward sloping

d.downward sloping

Answer: d

Q.8 Which of the following is a complement product to peanut butter?





Answer: b

Q.9 The Law of Demand is measured from the perspective of

a. Consumer

b. Shopkeeper

c. Wholesaler

d. Manufacturer

Answer: a

Q.10 Goods for which demand goes down when income goes up are called

a.Public Goods

b.Inferior Goods

c.Normal Goods

d.Private Goods

Answer: b

MCQs on Function of Commercial Banks

Q1. The most widely used monetary policy tool among these is?

(A) Open market operations

(B) Issuing of notes

(C) Close market operations

(D) Discount rate

Answer: A

Q.2 Credit can be created by:


(B) Foreign banks

(C) Commercial banks

(D) Private banks

Answer: C

Q3. Repo Rate means?

(A) Rate offered by banks to their premium customers.

(B) Rate at which RBI offers loan facilities to commercial banks against government securities, with the condition that banks need to repurchase the securities in a short period.

(C) Banks having excess cash can buy securities from RBI with a condition of reselling securities to RBI on a prefixed day and price.

(D) Banks can discount bills of exchange and avail loan from RBI at times when cash is needed.

Answer: C

Q.4 Which of the following rules do not apply to banking companies?

(A) Companies Act

(B) Banking Regulation Act

(C) Reserve Bank of India Act

(D) All of the above

Answer: A

Q5. Increase in cash reserve ratio (CRR) by the RBI will result in:

(A) Initially increase the supply but later on decrease automatically.

(B) No impact on the supply of money in the economy

(C) Decrease the supply of money in the economy

(D) Increase the supply of money in the economy

Answer: C

Q6. Current CRR rate in India is (November 2020)

(A) 5

(B) 2

(C) 4

(D) 3

Answer: D

Q7. Which among these is not a monetary tool?


(B) Deficit financing

(C) Open market operations


Answer: B

Q8. HDFC bank is an example of?

(A) Foreign Bank

(B) Public Bank

(C) Private Bank

(D) None of these

Answer: C

Q.9 Rate of interest is increased by RBI at times of:

(A) Lower inflation

(B) Higher inflation

(C) From the pressure of commercial banks

(D) All of the above

Answer: A

Q10. This is not a function of the RBI?

(A) Printing of currency

(B) Controller of credit

(C) Issuance of coins

(D) Custodian of foreign currency

Answer: C

MCQs on Depreciation

Q1. The main objective of depreciation is

(a) To show the previous profit

(b) To calculate net profit

(c) To reduce tax

(d) To satisfy the tax department

Answer: B

Q2. Depreciation is generated due to

(a) Increase in the value of liability

(b) Decrease in capital

(c) Wear and tear

(d) Decrease in the value of assets

Answer: C

Q3 What is the purpose of making a provision for depreciation in the accounts?

(a) To charge the cost of fixed assets against profits

(b) To show the current market value of fixed asset

(c) To make cash available to replace fixed assets

(d) To make a provision for repairs

Answer: A

Q4. According to straight line method of providing depreciation, the depreciation

(a) Remains constant

(b) Increase each year.

(c) Decrease each year

(d) None of them.

Answer: A

Q5. Total amount of depreciation of an asset cannot exceed its

(a) Depreciable value

(b) Scrap value

(c) Market value

(d) None of these

Answer: A

Q6. According to fixed instalment method, the depreciation is calculated on

(a) Balance amount

(b) Original cost

(c) Scrap value

(d) None of them

Answer: B

Q.7 Salvage value means

(a) Definite sale price of the asset

(b) Cash to be received when life of the asset ends

(c) Cash to be paid when asset is disposed off

(d) Estimated disposal value

Answer: D

Q8. Depreciation is calculated under diminishing balance method, based on

(a) Original value

(b) Book value

(c) Scrap value

(d) None of them

Answer: B

Q9. Depreciation amount charged on a machinery will be debited to:

(a) Repair account

(b) Cash account

(c) Depreciation account

(d) Machinery account

Answer: C

Q10. In accounting, becoming out of date or obsolete is known as

(a) Amortization

(b) Obsolescence

(c) Depletion

(d) Physical deterioration

Answer: B

Full form of ESOP:Employee Stock Option Plan

Private Placement

Private placement refers to the process of raising capital that involves selling of securities to a selected group of investors.

The various methods of goodwill valuation are:

1. Average profit method

2. Super profit method

3. Capitalisation Method

4. Annuity method

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