MODEL QUESTION PAPER FOUNDATION COURSE (ENTRY LEVEL) PART-I (OLD SYLLABUS)

PAPER 1 SECTION A ORGANISATION & MANAGEMENT FUNDAMENTALS

In each of the following cases one out of four answers is correct. Indicate the correct answer.

1. A. B. C. D. 2.

Which one of the following is NOT a feature of Functional Organisation Structure? Specialisation Over loading Better Control Higher efficiency In which of the following organization, conflicts often arise between line managers and staff specialists? Line and Staff organization Line Organization Functions Organization Project organization Which of the following Organisation Structure is most suitable for Aero-Space Industry? Functional Structure Projects Organization Matrix Organization Committee Which of the following is an essential and vital basic principle of a good organisation structure? Unity of Objective Span of Control neither too wide nor too narrow Scalar principle clear chain of command from top to bottom All of these Which of the following pattern cannot be used for grouping activities into departments? Departmentation by Salary of staff Departmentation by Products Departmentation by Territory Departmentation by Customer Which of the following Organisation Theory provides an incomplete explanation of human behaviour in organisation?

A. B. C. D. 3. A. B. C. D. 4.

A. B. C. D. 5. A. B. C. D. 6.

A. B. C. D. 7.

Classical Organisation theory Modern Organisation theory Contingency theory Behavioural theory It is multi-disciplinary as it draws concepts psychology, disciplines, e.g., economics, sociology, psychology, anthropology, engineering etc. This is an important contribution of which Organisation theory: Neo-classical theory Systems Organisation theory Contingency theory Classical Organisation theory Contingency theory means: Empirically derived principles Group Participation Environmental Scanning Conceptual Skills Organisational behaviour revolves around: The nature of man The nature of organisation Both (A) and (B) of the above options Neither (A) nor (B) of the above options Which of the following factor DOES NOT shape the personality of an individual: Biological Factors Family and Social Factors Cultural Factors None of the above In which theory of learning Response leads to the Reward ( R .....S). Operant Conditioning Classical Conditioning Cognitive learning Social learning According to Peter Drucker, which of the following is the key area in which objectives of Performance must be set if the firm is to survive and prosper: Productivity Profitability Physical and financial resources All of these Expansion of KSF is: 2

A. B. C. D. 8. A. B. C. D. 9. A. B. C. D. 10. A. B. C. D. 11. A. B. C. D. 12.

A. B. C. D. 13.

A. B. C. D. 14. A. B. C. D. 15.

Key Success Factors Known Success Factors Knowledge Success Factors Keen Success Factors According to Kelly, intra-group conflict may arise when: The group faces a novel problem New values are imported from the social environment A persons extra-group roles into conflict with intra-group role All of the above Which of the following condition is to be satisfied by a laid off workman to claim compensation: Laid off worker should not be a casual worker He must have completed not less than one year of continuous services He must present himself for work at the appointed time during normal working hours at least once a day All of these Separation of Planning and Doing is an important feature of Scientific Management propounded by: F.W. Taylor Frank Gilberth Lillian Gilberth Henry Fayol Who of the following has suggested that Gang Plank is to be used to prevent the scalar chain from bogging down action? F.W. Taylor Henry Fayol Peter Drucker Henry Gantt Which of the following consists of general principles for understanding the physical, mechanical, biological and social entities and the relationship among them? Behavioural approach General Systemstheory Contingency approach Fayols general principles of management Which of the following method is used to provide On-the-Job Training (OJT)? Coaching Job Rotation Committee Assignments All of these

A. B. C. D. 16.

A. B. C. D. 17. A. B. C. D. 18. A. B. C. D. 19. A. B. C. D.

20. A. B. C. D. 21.

System of remunerating labour in which payments made have direct relation with the out turn of the workers is known as: System of Payment by Results Time Rate System Both (A) and (B) of the above Neither (A) nor (B) of the above Which of the following approach to planning is not recognized in actual practice in various organisations? Top-down approach Bottom-up approach Team approach None of these Expansion of PERT is: Planning Education Research and Training Programs Evaluation Research and Training Programs Evaluation and Review Technique Planning Education and Review Technique According to L.S. Silk, which of the following techniques is commonly employed in business Forecasting? Deterministic Techniques Symptomatic Techniques Systematic Techniques All of the above Which of the following is a modern technique for making programmed Decisions? Network Techniques CPM and PERT Creative Techniques Participative Techniques Heuristic Techniques Who of the following has developed a theory of motivation on the basis of hypotheses relating to human behaviour? Alderfer Mc. Gregor Herzberg Stacy Adam Which of the following Technique of Control may be used as both Planning and Control? Direct Supervision and observation Budgetary Control MIS Break-even analysis 4

A. B. C. D. 22. A. B. C. D. 23.

A. B. C. D. 24. A. B. C. D. 25.

A. B. C. D. 26. A. B. C. D.

27.

Unsatisfied needs motivate individuals - Which of the following theory of motivation emphasizes this principle? Maslows Theory Herzbergs Theory Mc. Gregors Theory Victor Vrooms Theory While dealing with functions of management, which of the following is treated as a separate function by the modern authorities: Planning Organizing Staffing Directing Which of the following is a sub-function of Planning? Delegation Decentralization Motivation Programming Which of the following is not a base or source of power? Coercive Power Reward Power Legitimate Power None of these Which of the following is the important characteristic of Responsibility? Responsibility is a derivative of authority Responsibility is absolute and cannot be delegated Responsibility flows upward All of these Which of the following is the ideal system of management as suggested by RensisLikert? Democratic Exploitative Autocratic Benevolent Autocratic Consultative Which of the following is the major drawback in the existing system of an organisation to achieve organisational objects? Narrow specialisation Unmanageable span of control Line staff conflict 5

A. B. C. D. 28.

A. B. C. D. 29. A. B. C. D. 30. A. B. C. D. 31. A. B. C. D. 32. A. B. C. D. 33.

A. B. C.

D. 34.

All of these Business managers will have to sharpen their perception of environmental trends, examine old assumptions and adjust business practices to new expectations Such an enlightened approach to management may be called: Management by Perception Management by Objectives Management by Forecasting Management by Organisational Development The Articles of a Company requires its Directors to hold a certain number of Qualification Shares. A Director has to hold a minimum qualifying amount of shares of: Rs.10,000 1% of Paid-up capital of the company Rs.1,00,000 Rs.5,000 Which of the following is a disqualification to become a Managing Director? Insolvency Convicted by a Court and sentenced to imprisonment for a period of not less than 6 months Working as a Managing Director in more than two companies at a time All of the above As per the Companies Act, a meeting of the Board of Directors must be held at least: once in every six months three meetings shall be held in a year once in every three months None of the above Which of the following is not a feature of Public Enterprises? State ownership State Control Financing by NGOs Primary motive is service Which of the following is not included in the category of Navaratnas: BHEL ONGC MTNL MarutiUdyog Ltd. Public Sector Undertakings are less efficiency and profitable than private sector undertakings because of: Heavy over-headedexpenses 6

A. B. C. D. 35.

A. B. C. D. 36. A. B. C. D. 37. A. B. C. D. 38. A. B. C. D. 39. A. B. C. D. 40.

A.

B. C. D.

Political Interference Lack of incentives and motivation All of these

SECTION B ACCOUNTING
In each of the following cases one out of four answers is correct. Indicate the correct answer. 41. A business activity which involves exchange of money or moneys worth between parties is termed as: A. B. C. D. 42. A. B. C. D. Asset Input Accounting Process Transaction Excess of Total Assets over Total Liabilities is technically called: Net worth Output Amount Receivable Profit

43. Revenues are recognized when they are earned - which of the following accounting concept is adopted in this principle? A. B. C. D. 44. A. B. C. D. The Matching Concept The Accrual Concept Dual Aspect Concept Concept of Consistency Owners Equity is classified as: Real Accounts Nominal Accounts Personal Accounts Contra Accounts

45. The Rule : Debit the expenses or losses; credit the incomes or gains is applicable to which of the following types of Account? A. B. C. D. 46. A. B. C. D. Real Account Personal Account Representative Personal Account Nominal Account Outstanding Salary is: Personal Account Nominal Account Real Account Representative Personal Account

47. Mr. X bought a Motor Car worth Rs.5,75,000 from M/s. Excellent Motors by making a down payment of Rs.75,000 by cheque drawn on State Bank of India and the balances by taking a loan from Canara Bank. This will be entered in a Journal as A. Motor Car A/c Dr Rs.5,75,000 To State Bank of India A/c To Loan from Canara Bank A/c Cash A/c Dr Rs.75,000 Canara Bank A/c Dr Rs.5,00,000 To Motor Car A/c State Bank of India A/c Dr. Canara Bank A/c Dr To Motor Car A/c Motor Car A/c Dr To Cash A/c To Canara Bank A/c Rs. 75,000 Rs.5,00,000 Rs.5,75,000 Rs.5,75,000 Rs. 75,000 Rs.5,00,000

Rs. 75,000 Rs.5,00,000

B.

Rs.5,75,000

C.

D.

48.

Return of Goods back to suppliers due to defects will be entered in which of the following Subsidiary Book? Purchase Return Book Sales Return Book Purchase Ledger Sales Book Which type of the following Accounts will always show Debit Balance? All Liability Accounts All Asset Accounts Capital Accounts Incomes or Gain Accounts

A. B. C. D. 49. A. B. C. D.

50. A purchase of Machine has been passed through the Purchases Book. What type of error is involved in this transaction? A. Error of Casting B. Error of Recording C. Error of Principle D. Error of Posting 51. Rectifying Entry when Suspense A/C is used, for the error : Sales Return Overcast by Rs.5,000 will be: A. B. C. Sales Return A/c Dr To Sales A/c Sales Return A/c Dr To Suspense A/c Suspense A/c Dr To Sales Return A/c 5,000 5,000 5,000 5,000 10,000 10,000 9

D.

Suspense A/c Dr To Sales Return A/c

5,000 5,000

52. A. B. C. D. 53.

Which of the following is the reason for differences between Cash Book and Pass Book? Items appear in Cash Book but they do not appear in Pass Book Items appear in Pass Book but they do not appear in Cash Book Both (A) and (B) of the above options None of the above The item Closing stock of Work-In-Progress (WIP) is to be shown in which of the following component of P &L A/c? Trading A/c P &L A/c Manufacturing A/c None of these Provision for Doubtful Debts Rs.5,000 the correct Adjusting Entry is: P &L A/c Dr 5,000 To Bad Debts A/c P &L A/c Dr 5,000 To Provision for Doubtful Debts A/c Provision for Doubtful Debts Dr 5,000 To P &L A/c None of these Gross Profit is transferred to: P &L A/c Balance Sheet Both (A) and (B) of the above None of these On 1st May 2013, Sunil draws a Bill on Seth for three months, its due date is: 1st August 2013 31st July 2013 4th August 2013 None of the above

A. B. C. D. 54. A. B. C. D. 55. A. B. C. D. 56. A. B. C. D.

5,000 5,000 5,000

57. When Goods sent on Consignment A/c is closed in a Manufacturing concern, Journal Entry in the Books of Consignor will be: A. B. C. Purchase A/c Dr To Goods sent on Consignment A/c Goods sent on Consignment A/c Dr To Purchase A/c Trading A/c Dr To Goods sent on Consignment A/c 10

D.

Goods sent on Consignment A/c To Trading A/c

Dr

58.

Smith & Co. consigned 2,000 kg. Of vegetables costing Rs.80,000. Expenses incurred were Rs.9,100. Loss due to natural deterioration in quality is 20 kg. 1,620 kg. of vegetables were sold. Value of stock at the end will be: Rs.16,200 Rs.16,720 Rs.17,000 Rs.15,800 Relationship between Co-venturers is that of: Consignor-consignee Principal agent Buyer-seller Partners For profit on Joint Venture, when separate set of books are maintained, it will be debited to: Co-venturers Capital A/c Joint Venture A/c Joint Bank A/c P & L A/c Net Sales Gross Profit = ? Net Profit Net Loss Stock Cost of Goods Sold

A. B. C. D. 59. A. B. C. D. 60. A. B. C. D. 61. A. B. C. D. 62.

Capital in the beginning Profit made during the year Capital at the end Drawing Additional capital A. B. C. D. 63. A. B. C. D. Rs.18,000 Rs.30,000 Rs.20,000 Rs.24,000

Rs.15,000 Rs.6,000 Rs.39,000 Nil ?

Opening Stock + Purchases + Direct Expenses Closing Stock = Net Purchases Stock consumed Cost of Goods sold Gross Profit 11

64. A. B. C. D. 65.

Depreciation is to be computed in general: Only on the Assets purchased during the year On Assets which were used throughout the year Both (A) and (B) of the above Options None of the above Sports material at the beginning of an accounting year is Rs.15,000. Purchased during the year Rs.9,000. Stock of sports material at the end of the year is Rs.4,000. Value of sports material to be entered in Income and Expenditure Account will be: Rs. 12,000 Rs. 6,000 Rs.20,000 Rs.28,000

A. B C. D. 66.

December, 31, 2011

December, 31, 2012 Rs. Rs.

Outstanding Locker Rent 800 1,200 Locker Rent paid in Advance 750 900 Locker Rent received during the year 2012 : Rs.4,800 The amount to be included in Income and Expenditure A/c under the Head : Rent is: A. B. C. D. 67. A. B. C. D. 68. A. B. C. D. 69. A. B. C. D. Rs.3,250 Rs.2,700 Rs.5,800 Rs.5,050 Cost control refers to: Evaluating the most ideal level of cost for a given activity and keeping costs within predetermined level Remedial measures by purchase department Suitable action by production department None of the above In which of the following business Composite Cost Unit is adopted? Fertilizer Power (Electricity) Telemarketing Railways Cost objects are Costing systems Costing methods Cost unit and cost centre Cost estimates 12

70. A. B. C. D. 71. A. B. C. D. 72.

Direct material is: directly identifiable with the product directly identifiable with the stores department directly associated with the purchase department All of the above Bin Card shows: the arrival of each labour the quantity of specified materials available the total quantity of products produced the materials required for a job Normal Consumption Maximum Consumption per day Minimum Consumption per day Lead time Reorder quantity Minimum stock level 13,800 kg 7,800 kg 6,300 kg 10,050 kg Opening Stock of materials Closing Stock of materials Purchases Material Turnover Ratio 8 Times 7 Times 6 Times 10 Times Accounting Treatment for the loss on account of Abnormal Idle Time is: Directly charged to the P &L A/c in cost and financial books is booked on the respective job through W.I.P. A/c is taken as Factory Overheads is booked as Administration or Selling Overheads Time and Motion Study are conducted by: Time-office Personnel Department Accounting Department Engineering Department Time rate and Piece rate are combined in: 13 : : : ? Rs.25,000 Rs.15,000 Rs.1,90,000 : 800 kg 200 kg : : : 500 kg

: :

10 to 16 days 3,000 kg ?

A. B. C. D. 73.

A. B. C. D. 74. A. B. C. D. 75. A. B. C. D. 76.

A. B. C. D. 77. A. B. C. D. 78.

Halsey-Wier System Emersons System Gantt System Bedaux System Costs which change in direct proportion to be changes in the output are called: Fixed Overheads Semi-fixed Overheads Semi-variable Overheads Variable Overheads Which of the following is the source document from which Indirect Labour Costs are collected? Pay Roll Sheets, Time Sheets Purchase Voucher Goods Received cum Inspection Note (GRIN) Bin Card Which of the following is the basis for Secondary Distribution with respect to Quality Control? No. of workers No. of inspections done No. of labour hours Quantity of material used The works overheads of a department Rs.2,00,000: Direct Wages : Rs.4,00,000 Direct materials cost : Rs.6,00,000 The prime cost percentage of works cost is: 50% 20% 30%

A. B. C. D. 79.

A. B. C. D. 80.

A. B. C. D.

81. A. B. C. D. 82. A. B.

Insurance Premium paid for office equipment represents: Production Overhead Selling Overhead Distribution Overhead Administration Overhead Conversion cost includes: direct wages and factory overheads direct expenses and factory overheads 14

C. D. 83. A. B. C. D. 84.

direct materials and factory overheads direct wages and direct materials Cost of production is: Factory cost + Prime cost Factory cost + Administration Overhead Prime cost + Factory cost Prime cost + factory Overheads Factory expenses Office expenses : Selling expenses Materials consumed Works cost Rs.4,000 Rs.6,000 Rs.10,000 Rs.13,000 Direct materials : Rs.16,000 Direct labour : Rs.4,000 Direct expenses : Rs.1,500 Factory expenses : Rs.4,500 Administrative expenses: Rs.4,000 Selling expenses : Rs. 500 Sales : Rs.35,500 Cost of Sales : ? Rs.21,500 Rs.26,000 Rs.30,000 Rs.30,500 Same figure as in Question no. 85. What will be profit or loss? Profit Rs.5,000 Loss Rs.5,000 Profit Rs.4,000 Loss Rs.4,000 Materials consumed Wages Paid Works cost : Office cost : Selling cost : Profit : Total cost : Rs.30,420 15 : Rs.6,000 : Rs.9,000 50% on wages 20% on works cost 10% on works cost 20 % on cost ? : Rs.3,000 Rs.1,000 : Rs.2,000 : Rs.7,000 : ?

A. B. C. D. 85.

A. B. C. D. 86. A. B. C. D. 87.

A.

B. C. D. 88.

Rs.25,350 Rs.30,000 Rs.25,000 In 365 days a factory follows - 3 Diwali holidays, 20 days for Holi, 2 days for Christmas and alll Sundays and Weekly offs. It works for 8 hours a day for 5 days and 4 hours on Saturday. The machine room works on a 90% capacity and the normal maintenance time is assumed to be 10%. Calculate the net hours available per machine. 2016 1814 2240 2032 No. of employees at the beginning of the year No. of employees at the end of the year No. of employees left during the year No. of employees joined during the year Labour Turnover Ratio under Flux Method = 9.03% 7.24% 17.11% 18.07 Which one of the following is a salient feature of Operating Costing? Unique nature of work Work undertaken is of long duration Classification of costs into fixed and variable All of these The cost unit in (Bus) transport industry is: Tonne/km Quintal/Km Passenger/Km Kilometer Variable cost per unit is Rs.30 Fixed Cost : Rs.60,000 Present volume of production : 200 units If the production is reduced by 1 unit, the total cost will be: : : : 2100 2350 : 250

A. B. C. D. 89.

152

A. B. C. D. 90. A. B. C. D. 91. A. B. C. D. 92.

A. B. C. D. 93.

Reduced by Rs.30 Increased by Rs.30 Increased by Rs.6,000 Decreased by Rs.6,000 Under Marginal Costing Technique, there will be: 16

A. B. C. D. 94. A. B. C. D. 95. A. B. C. D. 96.

Over absorption of overheads Under absorption of overheads Either (A) or (B) of the above options Neither (A) nor (B) of the above options Sales (Variable Cost + Fixed Cost) = ? Profit Loss Contribution P/V Ratio At Break Even Point (BEP), Contribution = ? (will be equal to) Variable cost Fixed cost Total cost Profit Sales Value Sales Volume Break Even Sales Margin of Safety Rs.17,50,000 Rs.30,00,000 Rs.12,50,000 None of these In which of the following method of costing, Fixed-Production overheads are included in the cost per unit? Marginal costing Absorption costing Both (A) and (B) Neither (A) nor (B) Direct materials : Direct labour 5,000 hours @ Rs.3 Overhead Cost : Variable : Re.1 per hour Fixed: Rs.1.50 per hour Rs.1,00,000 : Rs.15,000 : : : : Rs.30,00,000 30,000 units Rs.17,50,000 ?

A. B. C. D. 97.

A. B. C. D. 98.

The company is working below the normal capacity due to recession. What will be the floor Price i.e., the absolute minimum prices to be charged? A. B. C. D. Rs.1,50,000 Rs.1,27,000 Rs.1,20,000 Rs.1,00,000 17

99.

A company manufactures lap-top. The break-up of cost of manufacturing one component is as follows: Materials : Rs.20.00 each Labour : Rs.17.50 each Variable Overheads : Rs.7.50 each Depreciation + Other fixed costs: Rs.15.00 each The same component is available in the market at Rs.50 each. Which of the following is advisable?

A. B. C. D. 100.

Manufacture the component by the Company itself Buy the component in the market Shut down the company None of the above A product is sold at a price of Rs.100 per unit. Its variable cost is Rs.80 per unit. The fixed expenses of the business are Rs.10,000 per year. Sales to be made to earn a profit of Rs.10,000 will be: Rs.1,10,000 Rs. 80,000 Rs. 90,000 Rs.1,00,000

A. B. C. D.

18