Commerce Test

_1. ___________ is a systematic examination of the books and records or a business?

A. Auditing
B. Vouching
C. Verification
D. Checking

2.The term ‘Audit’ is derived from a Latin word “audire” which means___________?

A. To inspect
B. To examine
C. To hear
D. To investigate

3. The main object of an audit is _____________?

A. Expression of opinion
B. Detection and Prevention of fraud and error
C. Both (A) and (B)
D. Depends on the type of audit.

4. An auditor is like a_______________?

A. Blood haunt
B. Watch dog
C. May both according to situation
D. None of these

5. Process of verifying the documentary evidences of transactions are known

as___________?

A. Auditing
B. Testing
C. Vouching
D. Verification

6. Auditing is compulsory for____________?

A. Small scale business

B. Partnership firms
C. Joint stock Companies
D. Proprietary Concerns

7. Concealment of shortage by delaying the recording of cash receipts is known

as_____________?
A. Embezzlement
B. Misappropriation
C. Lapping
D. None of these

8. The fundamental objective of the audit of a company is to_____________?

A. Protect the interests of the minority shareholders

B. Detect and prevent errors and fraud
C. Assess the effectiveness of the company’s performance
D. Attest to the credibility of the company’s accounts

9. The concept of stewardship means that a company’s directors________________?

A. Are responsible for ensuring that the company complies with the law
B. Are responsible for ensuring that the company pays its tax by the due date
C. Safeguard the company’s assets and manage them on behalf of the shareholders
D. Report suspected fraud and money laundering to the authorities

10. Why do auditors concentrate their efforts on material items in accounts?

A. Because they are easier to audit

B. Because it reduces the audit time
C. Because the risk to the accounts of their being incorrectly stated is greater
D. Because the directors have asked for it

11.Which of the following is NOT the responsibility of a company’s directors?

A. Reporting to the shareholders on the accuracy of the accounts

B. Establishment of internal controls
C. Keeping proper accounting records
D. Supplying information and explanations to the auditor

12. International auditing standards are issued by the______________?

A. International Accounting Standards Board

B. Financial Accounting Standards Board
C. International Standards Board
D. Auditing Practices Board

13.Which of the following is not true about opinion on financial statements?

A. The auditor should express an opinion on financial statements.

B. His opinion is no guarantee to future viability of business
C. He is responsible for detection and prevention of frauds and errors in financial
statements
D. He should examine whether recognised accounting principle have been consistently
14.A sale of Rs. 50.000 to A was entered as a sale to B. This is an example of____________?

A. Error of omission
B. Error of commission
C. Compensating error
D. Error of principle

15. When an auditor is proposed for removal from office, which one of the following is he
NOT permitted to do?

A. Circulate representations to members

B. Apply to the court to have the proposal removed
C. Speak at the AGM/EGM where the removal is proposed
D. Receive notification of the AGM/EGM where the removal is proposed

16. Which one of the following is NOT a duty of the auditor?

A. Duty to report to the company’s bankers

B. Duty to report to the members
C. Duty to sign the audit report
D. Duty to report on any violation of law

17. Assuming that it is not the first appointment of the auditor, who is responsible for the
appointment of the auditor?

A. The shareholders in a general meeting

B. The managing director
C. The board of directors in a board meeting
D. The audit committee

18. The independent auditor’s primary responsibility is to______________?

A. the directors
B. the company’s creditors (payables)
C. the company’s bank
D. the shareholders

19. How long is the auditor’s term of office?

A. Until the audit is complete

B. Until the financial statements are complete
C. Until the next AGM (Annual General Meeting)
D. Until the directors remove them

20.Which of the following is correct in relation to materiality?

A. A matter is material only if it changes the audit report

B. A matter is material if the auditor and the directors both decide that further work needs to be
done in the area under question
C. A matter is material only if it affects directors’ emoluments
D. A matter is material if its omission or misstatement would reasonably influence the
decisions of an addressee of the auditors’ report

21 Marketing is both an “art” and a “science” there is constant tension between the
creative side of marketing and the ________ side.

A. Selling side
B. Formulated side
C. Management side
D. Forecasting side

22Good marketing is no accident, but a result of careful planning and __________?

A. Execution
C. Strategies
D. Tactics
e. Research

23 The most formal definition of marketing is ____________?

A. Meeting needs profitably

B. Identifying and meeting human and social needs
C. The 4Ps (Product, Price, Place, Promotion)
D. an organizational function and a set of processes for creating, communicating, and
delivering, value to customers, and for managing customer relationships in ways that
benefit the organization and its stake holders.
E. improving the quality of life for consumers

24 Marketing management is ____________?

A. Managing the marketing process

B. Monitoring the profitability of the companies products and services
C. Developing marketing strategies to move the company forward
D. The art and science of choosing target markets and getting, keeping, and growing
customers through creating, delivering, and communicating superior customer value,

25 A transaction involves ____________?

A. at least two parties

C. each party is capable of communication and delivery
D. each party is free to accept or reject the exchange offer
E. all of the above

26 __________ goods constitute the bulk of most countries’ production and marketing
efforts.
A. Durable
B. Impulse
C. Physical
D. Service e. Event

27 Information can be produced and marketed as a ___________?

A. Product
b. Show
C. Reality
D. Service

28 Charles Revson of Revlon observed: “In the factory, we make cosmetics; in the store,
_________.

A. we sell quality
B. we challenge competitors
C. we implement ads
D. we sell hope

29A Marketer is someone seeking a response from another party, called the __________.

A. Customer
B. Fund raiser, contributor
C. Voter
D. Prospect

30 In latent demand, consumers may share a strong need that cannot be satisfied by
a/an____________?

A. Future Product
B. Expected Product
C. Latent Product
D. Existing Product

31 Two components of business

A. Industry and trade
B. Profit and loss
C. Commerce and industry
D. Trade and commerce
32. Literal meanings of trade are
A. To exchange
B. Buying and selling
C. To remove hindrance of time
D. Business
33. The most important part of a letter is

A. Subject
 B. Letter heading
C. Body of the letter
D. Salutation
34. Calculating machine is
A. Punching machine
B. Calculator
C. Photo stat machine
D. Stapler machine
35. Basic objective of business is
A. Exchange of goods
B. To earn profit
C. Service to society
D. To earn foreign exchange for government
36. Through advertisement, new goods are
A. Produced
B. Sold
C. Introduced
D. Spoiled
37. Maximum number of partners in banking business
A. 40
B. 30
C. 20
D. 10
38. The method of Card Board Filing System is
A. Old
B. New
C. Safe
D. Famous
39. Maximum number of shareholders in private company
A. 100
B. 50
C. 20
D. 10
40. Co-operative society is formed under Act
A. 1925
B. 1932
C. 1935
D. 1984
41. Industry relates to
A. Production of goods
B. Exchange of goods
C. Trade
D. Purchasing and selling of goods
42. Sole proprietorship is suitable for
A. Large scale business
B. Medium scale business
C. Small scale business
D. For all of these
43. Wholesaler purchases in
 A. Suitable quantities
B. Bulk quantities
C. Small quantities
D. Not buying and selling
44. By economic activities means
A. Business
B. Business and profession
C. Business, profession and employment
D. Commerce
45. Development of National Trade solve the problem of
A. Water
B. Unemployment
C. Illiteracy
D. All of these
46. Foreign trade is
A. Wholesaler and retailer
B. To purchase foreign goods
C. To sale foreign goods
D. To important and export goods
47. In order to obtain loan from the public, company issues
A. Shares
B. Debentures
C. Dividend
D. All of three
48. The objective of advertisement is
A. Introduce the things
B. To save the things
C. To reach the things to consumer
D. All of these
49. Responsibility of sole proprietor in sole proprietorship
A. Unlimited
B. Limited
C. On Govt.
D. None of three
50. Most important document of the company is
A. Memorandum of association
B. Articles of association
C. Prospectus of the company
D. Accounts of the company
51. In partnership, the age of minor partner is
A. 20 yrs
B. 18 yrs
C. 22 yrs
D. Below 18 yrs
52. The new latest machine of calculating is
A. Calculator
B. Computer
C. Posting machine
D. Invoicing machine
53. Retailer sells goods to
A. Consumers
B. Hawkers
C. Industrialist
D. Wholesaler
54. Tell about like and dislike of
A. Retailer
B. Trader
C. Wholesaler
D. Mill owner
55. In sole-proprietorship, the capital is
A. Limited
B. Unlimited
C. Depends upon sources of the owner
D. None of these
56. The important function of an office is
To provide information
To sell the goods
To purchase the goods
To improve the efficiency of the management
57. Minimum number of Directors in Public Limited Company
Three
Five
Seven
All of these
58. The persons who form the joint stock company
Shareholders
Promoters
Mangers
Auditors
59. The kinds of human activities are
Three
Four
Two
Five
60. In Public Limited Company the minimum numbers of shareholders are
2
7
10
20

61 Bank is responsible for country’s economic and monetary progress

(A) Central
(B) Commercial
(C) Agricultural
(D) Co-operative
62 Qualitative methods of monetary policy do not include
(A) Direct actions
(B) Publicity
(C) Bank rate policy
(D) Moral persuasion

63 What are the objectives of monetary policy?

(A) Stability in price
(B) Exchange stability
(C) Stability in capital market
(D) All these

64State Bank of Pakistan was inaugurated by

(A) Laiquat Ali Khan
(B) Miss Fatima Jinnah
(C) Quaid-e-Azam Muhammad Ali Jinnah (RA)
(D) Ayub Khan

65 When the State Bank of Pakistan came into existence

(A) 1947
(B) 1948
(C) 1955
(D) 1972

66 Schedule Bank is registered under State Bank of Pakistan Act

(A) 1965
(B) 1956
(C) 1950
(D) None of these

67 The bank formed under Royal Charter is

(A) Bank of Venice
(B) Bank of Spain
(C) State Bank of Pakistan
(D) Chartered Bank of England

68 Which Bank was formed under the Royal order

(A) Bank of Venice
(B) State Bank of Pakistan
(C) Bank of Barcelona
(D)Chartered Bank of England

69 Which bank does discount the bill of public

(A) Commercial bank
(B) Agriculture bank
(C) Industrial bank
(D) All of these
70 Which Bank protects costly things of public?
(A) Commercial Bank
(B) Central Bank
(C) Industrial Bank
(D) Agricultural Bank

71 Stock certificate is a document issued by

(A) Commercial bank
(B) Central bank
(C) Limited companies
(D) Stock market

72 Who was the foUnder of commercial bank

(A) Goldsmiths A
(B) Merchants
(C) Money lenders
(D) All of these

73 Credit money in the country is controlled by

(A) Central bank
(B) Commercial bank
(C) Industrial bank
(D) Agricultural bank

74 Commercial banks create following money

(A) Metallic
(B) Credit
(C) Paper
(D) All of these

75 The Commercial Banks may be

(A) Scheduled
(B) Non-scheduled
(C) Foreign
(D) All of these

76 A Commercial Bank keeps less cash reserve if

(A) Cheque is used in most of the transactions
(B) Clearing House facility is available
(C) Rediscounting facility is available
(D) All these

77 Commercial Bank can be regarded by nature as

(A) Depository Bank
(B) Central Bank
(C) Investment Bank
(D) None of these

78 The primary objective of Commercial Bank is

(A) To earn profit
(B) To help the govt.
(C) To help the poor
(D) To issue notes

79 In Pakistan Clearing House is

(A) Commercial Bank
(B) Scheduled Bank
(C) Central Bank
(D) none of these

80 Commercial bank advises its customers on

(A) Household matters
(B) Financial matters
(C) Political matters
(D) All of these

81 Commercial bank is economic advisor of

(A) Customers
(B) Government
(C) Local government
(D) Public
82 Which is the guardian of credit money?
(A) Central Bank
(B) Commercial Bank
(C) Saving Bank
(D) Scheduled Bank

83 The rate at which the Central Bank and Commercial Banks purchases and sell
foreign currency is called
(A) Spot rate
(B) Inter bank rate
(C) Forward rate
(D) Market rate

84 Cash reserve of a Commercial Bank may consist of

(A) Cash in hand
(B) Cash kept with Central Bank
(C) Cash kept with other Banks
(D) All of above

85 Which has monopoly to issue currency notes?

(A) Commercial Bank
(B) Government
(C) Central Bank
(D) All of these

86. Commercial banks normally advance loan for

(A) Long-term period
(B) Medium-term period
(C) Short-term period
(D) For progress of trade

87 Basic objective of commercial bank is

(A) Welfare of people
(B) Help of government
(C) To earth profit
(D) Arrangement of foreign exchange

88 An account holder does not need to write a cheque to withdraw money from
following account
(A) Saving account
(B) Fixed deposit account
(C) Current account
(D) None of these

89 Crossing makes the cheque

(A) Un-safe
(B) Un-acceptable
(C) Safe
(D) Acceptable

90 Cheque is always crossed by

(A) Drawer
(B) Drawee
(C) Holder
(D) All of these
91. If drawer of cheque is a payee himself then what word is written after the word pay
(A) Order
(B) Bearer
(C) Self
(D) None of these
92. For which cheque bank pays money ar its counter?
(A) Bearer cheque
(B) Order cheque
(C) Crossed cheque
(D) Both A and B

93 Each leaf of the Cheque Book contains customer’s

(A) Father’s name
(B) Address
(C) Telephone number
(D) Account number

94 Cheque is an un-conditional order

(A) From customer
(B) From Bank
(C) From government
(D) None of them
95. A cheque which can be cashed by its holder
(A) Bearer cheque
(B) Order cheque
(C) Cross cheque
(D) All these

96 The parties of cheque are

(A) Two
(B) Three
(C) Four
(D) Five

97 The cheque which cannot be encashed at bank counter is called

(A) Bearer cheque
(B) Order cheque
(C) Cross cheque
(D) Blank cheque

98 In which account, cheque book is not issued?

(A) Current a/c
(B) Saving a/c
(C) Foreign currency a/c
(D) Fixed deposit a/c

99 Acceptable credit instruments are

(A) Written
(B) Oral
(C) Foreign
(D) Domestic

100 An “I OWE YOU” is written instrument drawn by

(A) Trader
(B) Debtor
(C) Creditor
(D) All of these