Common University Entrance Test (UG)
Question : How are the following items presented in the financial statement of a Non-profit organisation: Subscriptions due at the end?
Option 1: assets side of the Balance Sheet
Option 2: liabilities side of the Balance Sheet
Option 3: Both 1 and 2
Option 4: None of the above
Correct Answer: assets side of the Balance Sheet
Solution : Subscriptions due at the end will be represented on the asset side of the Balance Sheet. Hence, the correct option is 1.
Question : X, Y and Z are partners sharing profits in the ratio of 5: 3: 7. X retired from the firm. Y and Z decided to share future profits in the ratio of 2: 3. The adjusted Capital Accounts of Y and Z showed a balance of Rs. 49,500 and Rs. 1,05,750 respectively. The total amount to be paid to X is Rs .1,35,750. This amount is to be paid by Y and Z in a manner that their capital becomes proportionate to their new profit-sharing ratio. The amount to be brought or to be paid to partners will be
Option 1: Y bring Rs 66,000 and Z bring Rs 68,000
Option 2: Y bring Rs 66,900 and Z bring Rs 68,850
Option 3: Y withdrew Rs 66,900 and Z bring Rs 68,850
Option 4: Y bring Rs 66,900 and Z withdrew Rs 68,850
Correct Answer: Y bring Rs 66,900 and Z bring Rs 68,850
Solution : Answer = Y bring Rs 66,900 and Z bring Rs 68,850
Adjusted Capital of Y = 49500
Adjusted Capital of Z = 105750
Amount Paid to X = 1,35,750
Total Capital of the New Firm = 2,91,000
Y's share = $2,91,000\times\frac{2}{5} = 1,16400$
Z's share = $2,91,000\times\frac{3}{5} = 1,74,600$
Bank A/c Dr 66900
To Y's Capital A/c 66900
Bank A/c Dr 68850
To Z's Capital A/c 68850 Hence, the correct option is 2.
Question : ________ implies that resource extraction is not above the rate of regeneration of resources and the Wastes generated are within the assimilating capacity of the environment.
Option 1: Absorptive capacity
Option 2: Subsistence capacity
Option 3: Carrying capacity
Option 4: Exhaustive capacity
Correct Answer: Subsistence capacity
Solution : Carrying capacity implies that resource extraction is not above the rate of regeneration of resources and the best generated are within the assimilating capacity of the environment.
Question : An example of physiological stress is:
Option 1: Job promotion
Option 2: Public speaking
Option 3: Illness or injury
Option 4: Moving to a new city
Correct Answer: Illness or injury
Solution : Illness or injury is an example of physiological stress, as it involves a physical response to a stressor that affects the body's functioning.
Question : Case Study: XYZ Electronics Pvt. Ltd.
XYZ Electronics Pvt. Ltd. is a growing company specializing in the manufacturing of electronic gadgets. The management believes in effective directing to ensure smooth operations. Consider the following scenario to answer the questions.
Question:
The supervisor at XYZ Electronics plays a crucial role in:
Option 1: Encouraging autocratic decision-making
Option 2: Fostering employee isolation
Option 3: Enhancing communication and coordination
Option 4: Promoting conflicts within the team
Correct Answer: Enhancing communication and coordination
Solution : The correct answer is (c) Enhancing communication and coordination.
Enhancing communication and coordination is a crucial role for a supervisor. Effective supervisors facilitate clear communication within the team, ensuring that everyone is informed about goals, expectations, and procedures. Additionally, they coordinate efforts to ensure tasks are performed efficiently and aligned with organizational objectives.
Overall, enhancing communication and coordination is a key role of a supervisor that contributes to a more productive and harmonious work environment at XYZ Electronics.
Question : The process of creating credit money by commercial banks is known as ___________.
Option 1: Credit creation
Option 2: Credit control
Option 3: Credit extension
Option 4: Credit allocation
Correct Answer: Credit creation
Solution : The correct answer is (a) Credit creation.
The process of creating credit money by commercial banks is known as credit creation. Commercial banks have the ability to create credit by extending loans and making advances to borrowers. When a bank grants a loan, it creates a deposit in the borrower's account, effectively increasing the money supply in the economy. This process is based on the fractional reserve banking system, where banks are required to hold only a fraction of the deposits they receive as reserves, allowing them to lend out the rest. Through this process of credit creation, banks contribute to the expansion of the money supply and facilitate economic activities. Credit control, credit extension, and credit allocation are related terms but do not specifically refer to the process of creating credit money by commercial banks.
Question : Which of the following statements is correct?
Option 1: Loan to Partner Account and Loan by Partner Account may be transferred to his Executor’s Account
Option 2: Loan to Partner Account and Loan by Partner Account may be transferred to his capital account
Correct Answer: Loan to Partner Account and Loan by Partner Account may be transferred to his capital account
Solution : Answer = Loan to Partner Account and Loan by Partner Account may be transferred to his capital account
When a partner's loan account is settled, the amount can be transferred to their capital account, reflecting the conversion of the loan into equity in the partnership. This aligns with the principles of partnership accounting. Hence, the correct option is 2.
Question : Case Study 1: Meet the Entrepreneur
Mr. Ravi, a young and dynamic individual, decided to start his own business. He established a small manufacturing unit that produces eco-friendly and sustainable packaging materials. His business has grown steadily, and he now employs several local workers. Mr. Ravi's venture has not only created job opportunities but also contributed to reducing plastic waste in the environment. Question:
What impact has Mr. Ravi's business had on the environment?
Option 1: Increased plastic waste
Option 2: Reduced plastic waste
Option 3: Increased pollution
Option 4: Decreased job opportunities
Correct Answer: Reduced plastic waste
Solution : The correct answer is (b) Reduced plastic waste
Mr. Ravi's business produces eco-friendly and sustainable packaging materials, contributing to a reduction in plastic waste in the environment. Therefore, the correct option is b) Reduced plastic waste.
Question : Assertion-Reason Questions: Chapter - Sources of Business Finance
Questions : Different Sources of Finance
Assertion: Equity shares carry a fixed dividend obligation for the company.
Reason: Equity shareholders have a preferential right to receive dividends.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Both assertion and reason are false.
Correct Answer: Both assertion and reason are false.
Solution : The correct answer is (d) Both assertion and reason are false.
The assertion is false. Equity shares do not have a fixed dividend obligation. Dividends for equity shareholders are usually decided by the company's board of directors and can vary based on the company's profitability and other factors. Unlike preferred shares, there is no fixed dividend payment associated with equity shares.
The reason is false. Equity shareholders do not have a preferential right to receive dividends. If the company declares dividends, it is usually distributed to all equity shareholders based on their shareholding and the company's dividend policy. There is no preference given to any specific equity shareholder based on their ownership.
Question : Case Study 83: Innovate Tech
Innovate Tech is facing challenges in implementing delegation effectively due to a lack of clear communication channels. What could be a potential consequence of inadequate communication in delegation?
Option 1: Enhanced accountability among employees
Option 2: Increased employee motivation
Option 3: Misunderstandings and errors in decision-making
Option 4: Reduced centralization of authority
Correct Answer: Misunderstandings and errors in decision-making
Solution : The correct answer is (c) Misunderstandings and errors in decision-making
Inadequate communication in delegation can lead to misunderstandings regarding tasks, responsibilities, expectations, and authority. This lack of clarity can result in errors in decision-making, as individuals may not fully grasp their roles and responsibilities. Misinterpretation of instructions and objectives can lead to suboptimal decisions and actions, potentially impacting organizational efficiency and outcomes. It may hinder effective delegation, impairing the intended benefits and goals. It does not lead to enhanced accountability, increased employee motivation, or reduced centralization of authority but rather to confusion and potential errors.
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