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AAO Practices Paper | Economics Governance Questions for SSC CGL(Part-4)

AAO Practices Paper

Economics Governance Questions AAO Paper-4

Q161. What is the tenure of the office of Comptroller and Auditor General of India (CAG)?

(a) 5 years or age of 60, whichever is lower

(b) 6 years or age of 65, whichever is lower

(c) 4 years or age of 65, whichever is lower

(d) Age of 60

Q162. Consider the following duties, roles and functions. Which of them is/are NOT belong to Comptroller and Auditor General of India (CAG)?

  1. Upholding the Constitution of India and laws of Parliament in terms of financial administration
  2. Auditing accounts related to Consolidated Fund of India
  3. Audits transactions of the Center and state governments related to debts
  4. Conduct audit of secret service expenditure

(a) Only 1 and 4

(b) Only 2 and 4

(c) Only 3 and 2

(d) Only 4

Q163. Which of the following corporations is fully audited by Comptroller and Auditor General of India (CAG)?

(a) Reserve Bank of India

(b) Life Insurance Corporation

(c) Air India

(d) State Bank of India

Q164. Which of the following corporations is NOT fully audited by Comptroller and Auditor General of India (CAG)?

(a) Air India

(b) Damodar Valley Corporation

(c) Food Corporation of India

(d) Oil and Natural Gas Commission

Q165. When was the Indian Audit and Accounts Department created?

(a) 1850

(b) 1948

(c) 1950

(d) 1753

Q166. Consider the following two statements

  1. The work of Which of the following corporations is fully audited by Comptroller and Auditor General of India (CAG) has more to do with auditing than being a comptroller, because many authorities and bodies can draw fund from the Consolidated Fund of India without having to require the permission of CAG
  2. In Britain, the CAG has complete authority of that of a Comptroller as well, and all executive bodies require permission of CAG to draw money from the public fund.

Which of the above statements is/are true?

(a) Only 1

(b) Only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

Q167. Which Article in the Indian Constitution provides for the Election Commission?

(a) Article 324

(b) Article 128

(c) Article 256

(d) Article 378

Q168. Who appoints the Chief Election Commissioner of Election Commission?

(a) Prime Minister

(b) Chief Justice of India

(c) President

(d) Lok Sabha

Q169. Currently, there are how many members in the Election Commission?

(a) 1

(b) 2

(c) 3

(d) 4

AAO Practices Paper
Q170. When was the Election Commission formed?

(a) 1947

(b) 1948

(c) 1949

(d) 1950

Q171. What is the tenure of office for the Chief Election Commissioner?

(a) 5 years or 65 years, whichever is earlier

(b) 6 years or 60 years, whichever is earlier

(c) 6 years or 65 years, whichever is earlier

(d) 5 years or 60 years, whichever is earlier

Q172. Where are the headquarters of the Election Commission of India situated?

(a) Mumbai

(b) New Delhi

(c) Bangalore

(d) Gurgaon

Q173. Who was the first woman to become a Chief Election Commissioner of India?

(a) V. S. Ramadevi

(b) G. D. Das

(c) S.K. Bedi

(d) R.M. Nikam

Q174. For the Election Commission, at the district level, who acts as the district returning officer?

(a)) District Collector

(b) Police Commissioner

(c) Tehsildars

(d) None of the above

Q175. Which among the following is NOT a Standing Committee?

(a) Public Accounts Committee

(b) Ethics Committee

(c) Railway Convention Committee

(d) Business Advisory Committee

Q176. Consider the following statements. Which among them is/are NOT true?

  1. A parliamentary committee is appointed or elected by either Lok Sabha or Rajya Sabha or nominated by the Speaker of Lok Sabha or Chairman of Rajya Sabha
  2. A parliamentary committee worker under the direction of the Speaker of Lok Sabha or the Chairman of Rajya Sabha
  3. A parliamentary committee is one which presents its report to either Lok Sabha or Rajya Sabha or either to the Speaker or Chairman
  4. A parliamentary committee has a secretariat provided by the Lok Sabha or Rajya Sabha

(a) Only 1 and 3

(b) Only 2 and 4

(c) Only 1, 2 and 3

(d) All are true

Q177. Consider the following statements. Which among them is/are NOT true?

  1. Standing Committees are the permanent committees that are constituted on a regular basis
  2. Ad hoc committees are temporary committees that are dissolved when the task is completed
  3. Committee of Privileges is an ad-hoc committee
  4. Joint Committee on Fertilizer pricing is a standing committee

(a) Only 3 and 4

(b) Only 1 and 2

(c) Only 1 and 3

(d) Only 2 and 4

Q178. What among the following is NOT true about the Public Accounts Committee?

  1. The committee was first set up in 1921
  2. It’s main function is to audit the annual reports of Comptroller and Auditor General of India (CAG)
  3. It consists of 15 Lok Sabha members and 7 Rajya Sabha members
  4. The term of the office of the Public Accounts Committee is one year

(a) Only 1

(b) Only 2

(c) Only 3

(d) All are true

Q179. Which among the following is NOT true about the Estimates Committee?

  1. The first Estimates Committee of the post-independence era was first set up in 1950
  2. Estimates Committee has a right to question the policies approved by the Parliament
  3. It consists of members that are both from Lok Sabha and Rajya Sabha
  4. Chairman of the Estimates Committee is always from the Opposition party

(a) Only 4

(b) Only 3

(c) Only 2 and 4

(d) Only 2, 3 and 4

Q180. Consider the following statements about the Public Undertakings Committee. Which among them is/are not true?

  1. Public Undertakings committee was first created in 1964
  2. It consists of 15 members from Lok Sabha and 7 members from Rajya Sabha
  3. It’s Chairman is strictly a member of the Lok Sabha
  4. The main function of the Public Undertakings Committee is to analyze the accounts of Public Undertakings and examine reports of CAG on public undertakings

(a) Only 1,2 and 3

(b) Only 2 and 4

(c) Only 3 and 4

(d) All are true

Q181. Which of the following is not a central problem of a society

(a) What to produce

(b) How to produce

(c) For whom to produce

(d) Where to produce

Q182. The paradox of Diamond is more costly than water is explained by

(a) Marginal utility concept

(b) Scarcity

(c) Relative cost of production

(d) All the three

Q183. Which of these is an economic activity

(a) A father teaching his son at home instead of sending to any coaching centre

(b) A hair dresser doing hair cut designing on payment

(c) A housewife mending her family cloths on her own

(d) A singer giving a show on his son’s wedding anniversary

Q184. The term “ Micro” is derived from the …….word which means……..

(a) Latin, small

(b) Greek, small

(c) English, tiny

(d) Roman, small

Q185. Which of the following issue relates to micro-economics

(a) Impact of crude price hike on inflation

(b) Impact of change in bank rate on bank saving and investment

(c) Impact of Information technology on economic growth

(d) Impact of shortage of wheat production on wheat prices

Q186. Economics modes are

(a) Based on some realistic assumptions

(b) Based on hypothetical assumptions

(c) Scientifically tested

(d) Based on necessity

Q187. The famous book “An enquiry into the nature and causes of wealth of Nation” was written by –

(a) Adam Smith

(b) Samulson

(c) Robertson

(d) JB Say

Q188. The famous book “An enquiry into the nature and causes of wealth of Nation” was published in-

(a) 1776

(b) 1750

(c) 1850

(d) 1886

AAO Practices Paper
Q189. The law of indifference is/are also know by-

(a) Law of substitution

(b) law of equimarginal utility

(c) Law of diminishing marginal utility

(d) All the three

Q190. Which of the following is not a central problem of a society

(a)What to produce

(b) How to produce

(c) For whom to produce

(d) What to eat

Q191. The central problem of how to produce is resolved by

(a) Demand and  supply of factor inputs

(b) Demand and supply of goods

(c) Relative prices and availability of factors of production

(d) Government intervention

Q192. In free economy the decision about investment, saving and consumption are decided by

(a) Price mechanism

(b) Central bank

(c) Planning Commission

(d) Finance budget

Q193. Which of these statement is true about production possibility curve (PPC/PPF)

(a) It shows various combinations of two goods which yield same level of satisfaction

(b) It shows various combination of two goods which an economy can produce with a given amount of resources

(c) It shows various combination of two goods which an economy can produce with a given budget

(d) It shows various combination of two goods which an economy can produce with a given time

Q194. If production possibility frontier is linear it implies

(a) Constant opportunity cost

(b) Economy is stagnant

(c) Underemployment of factor of production

(d) With the increase in production, opportunity cost also increases

Q195. The opportunity cost of consumption is

(a) Lack of capital formation for future

(b) Greater investment

(c) Full employment

(d) Deflation

Q196. The opportunity cost of capital investment is

(a) Sacrifice of current consumption

(b) More consumption on luxury items

(c) Lower capital growth in future

(d) Wastage of Resources

Q197. Any point beyond PPF is

(a) Attainable

(b) Unattainable

(c) Attainable with increase in production facilities

(d) None

Q198. As resources are shifted from one industry to another this can be shown by:

(a) An inward shift of the production possibility frontier

(b) A movement along the production possibility frontier

(c) An outward shift of the production possibility frontier

(d) A movement of the production possibility frontier towards the origin

Q199. In a free market the combination of products produced will be determined by:

(a) Market forces of supply and demand

(b) The government

(c) The law

(d) The public sector

Q200. If an economy moves from producing 10 units of A and 4 units of B to producing 7 As and 5Bs, the opportunity cost of the 5th B is:

(a) 7As

(b) 10As

(c) 3As

(d) 1A

 

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Finance Accounting Notes For SSC CGL Tier-2 (AAO)

Finance Accounting Notes For SSC CGL Tier-2 (AAO)

Q121. Which of the following cost flow assumption methods of inventory valuation uses unique identification codes?

(A) FIFO assumption

(B) LIFO assumption

(C) AVCO assumption

(D) Specific identification assumption

Q122. Which of the following cost flow assumption methods of inventory valuation assumes that the most recently purchased inventory in stores is sold first?

(A) FIFO assumption

(B) LIFO assumption

(C) AVCO assumption

(D) Any of the above as they all produce the same result

Q123. Which of the following cost flow assumption methods of inventory valuation assumes that the inventory being sold represents the average cost of the inventory in stores?

(A) FIFO assumption

(B) LIFO assumption

(C) AVCO assumption

(D) Any of the above as they all produce the same result

Q124. Under IAS 2 which of the following is regarded as the correct invoice amount to include as the purchase cost of inventory?

(A) Invoice price (excluding trade discount and excluding value added tax)

(B) Invoice price (including trade discount and including value added tax)

(C) Invoice amount (excluding trade discount but including value added tax)

(D) Invoice amount (including trade discount but excluding value added tax)

Q125.  Under which method of inventory costing a pre-determined cost is assigned to all items of inventory?

(A)  Replacement cost method

(B)  Standard cost method

(C)  AVCO method

(D)  FIFO method

Q126. Which of the following is generally considered as a non profit oriented organization?

(A)  Charitable organization

(B)  Corporation

(C)  Audit firms

(D)  Insurance companies

Q127. The receipts and payments account of a non-profit organization is a

(A)  Nominal account

(B)  Real account

(C)  Income statement account

(D)  Financial statement

Q128. Non-profit organizations prepare all of the following accounts except the

(A)  Receipts and payment accounts

(B)  Income and Expenditure accounts

(C)  Balance sheet

(D)  Income statement

Q129. Expenditures greater than incomes of a non-profit organization give rise to a

(A)  Loss

(B)  Profit

(C)  Surplus

(D)  Deficit

Q130. Rent expense of a non-profit organization paid in advance. Which of the following is the correct classification of rent?

(A)  Expense

(B)  Liability

(C)  Equity

(D)  Asset

Q131. In a manufacturing business, which of the following is not a fixed asset?

(A) Loose tools and equipment

(B) Delivery vans

(C) Assembly plant

(D) Finished products

Q132. What is prime cost?

(A) The total of all the direct materials costs and all of the direct labour costs

(B) The total cost of all the most important costs

(C) The total of all the direct costs and all of the manufacturing overhead

(D) The total of all the direct material costs, all of the direct labour costs and all other direct expenses

Q133. What are the double entry procedures for dealing with a manufacturing profit?

(A) Debit: profit and loss account Credit: manufacturing account

(B) Debit: manufacturing account Credit: profit and loss account

(C) Debit: trading account Credit: manufacturing account

(D) Debit: manufacturing account Credit: dividends account

Q134. What account would a social club be recommended to use for recording details of its incomes and payments for a particular financial year?

(A) Profit and loss

(B) Accumulated fund

(C) Income and expenditure

(D) Receipts and payments

Q135. Which of the following types of entities would not normally prepare a trading account?

(A) A golf club

(B) A government department

(C) A charity

(D) A firm of solicitors

Q136. Which of the following is correct: Where accounting records are maintained on accrual basis:

(A) Income and expenditure relating to the accounting period should be fully accounted for even if income is still to be received and expenditure is yet to be paid for.

(B) Income should be accounted for only when received

(C) Income should be accounted on accruals basis and expenditure on payments basis

(D) Expenditure should be accounted for only to the extent they have been paid for

Q137. An accrued expense amounting to £18,000 was overlooked when ascertaining the profit for the year. The effect of this error is that:

(A) Net profit as well as liability are understated

(B) Net profit as well as liability are overstated

(C) Net profit is overstated and liability understated

(D) Net profit is not affected but liability is understated

Q138. Expenses relevant to the accounting period which remain unpaid by period end should be:

(A) included in with expenses paid and shown as a liability at the period end

(B) ignored until they are paid for in the next period.

(C) included with expenses paid and shown as an asset at the period end

(D) deducted from amount already paid and shown as a liability at the period end

Q139. Staff salary remaining unpaid as at the year-end should be accounted for as:

(A) Debit Salary accrued account and credit Staff salary account

(B) Debit Staff salary account and credit Salary accrued account

(C) Debit Pre-paid Salary account and credit Staff salary account

(D) Debit Staff salary account and credit Cash account

Finance Accounting Notes
Q140. The year-end trial balance as at 31st March 2011 reports a debit balance of £9,800 in the Insurance account. This figure includes £6,000 paid on 1st January 2011 as insurance for the year ended 31st December 2011. Ascertain the amount to be charged in the Income Statement as insurance for the year ended 31st March 2011.

(A) £5,300

(B) £9,800

(C) £6,000

(D) £15,800

Q141. A Transporter’s trial balance at year end on 31 December 2010 reports the balance in Motor Vehicle Maintenance account as £216,500. This amount includes £27,000 paid on 1 August 2010 for servicing the fleet of vehicles over three years from that date. The amounts to be expensed in 2010 and reported as prepaid as at the year-end are:

(A) Expense: £239,750; Prepayment : £23,250.

(B) Expense: £216,500; Prepayment : £27,000.

(C) Expense: £193,250; Prepayment : £23,250.

(D) Expense: £189,500; Prepayment : £27,000.

Q142. If an accrual as at year-end of £1,500 was treated as a prepayment, the net profit for the year would be:

(A) overstated by £1,500.

(B) understated by £3,000.

(C) understated by £1,500.

(D) overstated by £3,000.

Q143. A loan of £30,000 at 6% interest per year, was given to a member of staff, in the previous year. No interest has been received during the year. The accounting entries for accruing interest income are:

(A) Debit Interest receivable account and credit Staff loan account

(B) Debit Staff Loan account and credit Interest earnings account

(C) Debit Cash account and credit Interest earning account

(D) Debit Interest receivable account and credit Interest earnings account

Q144. A retailer paid £75,000 as rent and treated the whole amount as expenditure for the year, overlooking the fact that the amount was for a five year period commencing from the beginning of that year. The effect of this error would be:

(A) Net profit and current assets are understated by £75,000.

(B) Net profit and current liabilities will be understated by £75,000.

(C) Net profit and current assets are understated by £60,000.

(D) Net profit and current assets are overstated by £60,000.

Q145. After reporting the profit for the year it is found that £13,200 of stationery reported as an asset by the year end has in fact been fully used. The effect of the correction of this error would be:

(A) The gross profit as well as net profit would both increase by £13,200.

(B) The gross profit would decrease by £13,200 but net profit would remain unchanged.

(C) The gross profit and net profit would both decrease by £13,200.

(D) The gross profit will remain unchanged but net profit will decrease by £13,200.

Q146. Your business may be vulnerable to significant and irretrievable losses

(A) If you fail to understand the rules of negotiable instruments

(B) If – although you understand the rules of negotiable instruments generally – you miss a technicality

(C) If you depend upon flexibility or openness in a court’s understanding of your interpretation of rights and defences associated with negotiable instrument rules

(D) All of these

Q147. A negotiable instrument

(A) Is a written document that passes title to the rights contained in the document

(B) Is a document which transfers title to a piece of property

(C) Is a document which transfers title to a building

(D) Is a document which permits someone to use a piece of property or building

Q148. The Bills of Exchange Act

(A) Is a federal statute

(B) Provides rules dealing with the use of cheques, bills of exchange and promissory notes

(C) Is applied uniformly throughout Canada & Was first introduced in 1890

(D) All of these

Q149. Bills of exchange are attractive because

(A) They reduce the risk of transporting money

(B) They may be used to create credit

(C) They are easy to negotiate

(D) All of these

Q150. If an assessment of the risk is undertaken between an assignment of a contractual right compared to a transfer of a negotiable instrument, it will be evident that

(A) The assignee acquires the same rights under a contract as the assignor had with the third party

(B) The transferee of a negotiable instrument acquires the same rights as the transferor of the bill had with a third party

(C) The transferee of a negotiable instrument will not acquire a better right to payment than the transferor of the bill had with a third party

(D) All of these

Q151. The Bills of Exchange Act requires the following in order for a bill to be valid

(A) The bill must be in writing

(B) The bill must be signed by the person giving it

(C) The bill must be addressed to a particular person & the bill must be for a fixed sum of money

(D) All of these

Q152. When a drawee accepts a bill of exchange

(A) He or she becomes liable to pay the bill at the date and place fixed for payment

(B) He or she bears all risk of loss

(C) He or she is only responsible for payment of the portion of the bill which he accepts

(D) He or she is not responsible for further payment or liability associated with the bill

Q153. Transferring entries from journal to ledger account is commonly known as

(A)  Recording

(B)  Transferring

(C)  Posting

(D)  Entry making

Q154. An account records the ___________ in the balance of an item

(A)  Increase

(B)  Decrease

(C)  Increase or decrease

(D)  Appreciation

Q155.If credit side of a bank account is greater than the debit side, it indicates which of the following?

(A)  Bank overdraft

(B)  Cash at bank

(C)  Bank balance

(D)  Current Asset

Q156. Which Article in the Constitution on India provides for the post of Comptroller and Auditor General of India (CAG)?

(a) Article 148

(b) Article 343

(c) Article 266

(d) Article 248

Finance Accounting Notes
Q157. Who was the first Comptroller and Auditor General of India (CAG)?

(a) V. Narahari Rao

(b) A.K. Chanda

(c) A.K. Roy

(d) S. Ranganathan

Q158. Who is the current Comptroller and Auditor General of India (CAG) – as of Jan 2015?

(a) Vinod Rai

(b) Shashi Kant Sharma

(c) A.K. Roy

(d) S. Ranganathan

Q159. Which Comptroller and Auditor General of India (CAG) came into limelight for his exposure of 2G scam, Commonwealth games, etc?

(a) Vinod Rai

(b) Shashi Kant Sharma

(c) A.K. Roy

(d) S. Ranganathan

Q160. Who appoints the Comptroller and Auditor General of India (CAG)?

(a) Prime Minister

(b) Chief Justice of India

(c) Vice-President

(d) President

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Financial Accounting SSC CGL Daily Test Paper 4: AAO

Financial Accounting SSC CGL Daily Test Paper 4: AAO

Q81. In the Bank reconciliation statement “Deposit in transit” is usually:

(A)  Subtracted from Bank balance

(B)  Added to bank balance

(C)  Added to cash balance

(D)  Subtracted from cash book balance


Q82. A cash deposit made by business appears on the bank statement as _______ balance:

(A) Debit

(B) Credit

(C) Expenses

(D)  Liabilities

Q83. Bank reconciliation statement is the comparison of a bank statement (sent by bank) with the _________ (prepared by business):

(A)  Cash receipt journal

(B)  Cash payment journal

(C)  Cash book

(D)  Financial Statements


Q84. A check returned by bank marked “NSF” means that:

(A)  Bank can’t identify your identity

(B)  There are not sufficient funds in your account

(C)  Check has been forged

(D)  Check can’t be cash being illegal

Q85. Favorable balance of cash book implies that:

(A) Credit balance of cash book

(B) Debit balance of cash book

(C) Bank Overdraft

(D) Adjusted balance of cash book

Q86. Bank reconciliation statement is prepared by:

(A) Accountant of the Business

(B) Manager of the business

(C)  Controller of the bank

(D) Accountant of the bank

Q87. Which of the following error results in unadjusted cash book balance?

(A)  Outstanding Checks

(B) Unpresented Checks

(C) Deposit in transit

(D) Omission of bank charges


Q88. Bank charges amounting to $5000 was not entered in the cash book. Identify the correct adjustment in cash book:

(A)  Bank charges will be debited in cash book

(B)  Bank charges will be added to cash book balance

(C)  Bank charges will be credited in cash book

(D)  Bank charges need no adjustment in cash book


Q89. Unpresented checks also referred as:

(A) Uncollected checks

(B) Uncredited checks

(C)  Outstanding checks

(D)  Bounced checks

Financial Accounting
Q90. ________ are checks that are issued by the business but not yet presented to bank:

(A)  Uncollected checks

(B)  Uncredited checks

(C) Outstanding checks

(D) Bounced checks

Q91. Which of the following is non-profit organization:

(A) Sole Proprietorship

(B) Partnership

(C) Limited Company

(D) Trust

Q92. Commercial Accounting is based on:

(A) Single entry book keeping

(B) Double entry book keeping

(C) Both single and double entry book keeping

(D) Cash basis of book keeping

Q93. An Asset that is NOT physical in nature is called:

(A)  Intangible asset

(B) Liquid asset

(C) Current asset

(D)  Fixed asset



Q94. In cost of goods sold statement, the ‘cost of material consumed’ is equal to: 

(A) Opening  raw material stock +Purchases – Ending raw material stock

(B) Opening  raw material stock -Purchases + Ending raw material stock

(C)  Ending raw material stock + Opening stock – Purchases

(D)  Ending raw material stock + Opening stock + Purchases

Q95. What would be the value of total factory cost, if the cost of material consumed during the month is $6,000, labor cost incurred is $2,000 and the factory over head cost is $2,500:

(A)  $10,500

(B)  $6,000

(C)  $8,000

(D)  $45,00


Q96. In cost of goods sold statement the ‘cost of goods manufactured’ is equal to: 

(A) Total factory cost + Opening work in process – Ending work in process

(B)  Total factory cost + Opening work in process + Ending work in process

(C) Total factory cost – Opening work in process + Ending work in process

(D)  Ending work in process + total factory cost – Opening work in process


Q97. Which of the following entry is passed to record discount allowed in control account:

(A) Discount Allowed (Dr) and Debtor A/c Control (Cr)

(B) Discount Allowed (Dr) and Debtor A/c (Cr)

(C)  Debtor Control (Dr) and Discount Allowed (Cr)

(D) Debtor A/c (Dr) and Discount Allowed (Cr)


Q98. Which of the following entry will be recorded, if a cheque deposited is dishonored by bank:

(A) Bank Account (Dr.) and Debtor Account (Cr.)

(B) Debtor Account (Dr.) and Bank Account (Cr.)

(C)  Creditor Account (Dr.) and Bank Account (Cr.)

(D) Creditor Account (Dr.) and Bank Account (Cr.)


Q99. In which of the following auditor’s remuneration payable is shown:

(A)  In balance sheet under the head of Current Liability

(B) In Income statement under the head of Administrative Expense

(C) In the statement of changes in equity

(D) In cash flow statement under investing activities

Q100. Companies not disclosing an immanent bankruptcy would violate the:

(A) Business Entity Concept

(B) Going Concern Concept

(C) Monetary Unit Assumption

(D) Periodicity Assumption

Financial Accounting
Q101. The assumption that states that businesses can divide up their activities into artificial time periods:

(A) Business Entity Concept

(B) Going Concern Concept

(C) Monetary Unit Assumption

(D) Periodicity Assumption

Q102. In a manual book keeping system, transactions are first recorded in a_____

(A) Cash book

(B) Journal

(C) Ledger

(D) None of these

Q103. A journal_____ includes the date, accounts and amounts:

(A) Entry

(B) Number

(C) Voucher

(D) Book

Q104. A cheque payment that is recorded in the cash book but is not in the bank statement is called:

(A) An Unrecorded Cheque

(B) An unpresented cheque

(C) A direct debit

(D) A bounced cheque

Q105. Which document is issued by a supplier when a customer return goods:

(A) Credit note

(B) Debit note

(C) Invoice

(D) Statement

Q106. Which of the following facts regarding the statement of financial position would not be true?

(A) It is unnecessary to make any estimates or judgements when preparing a statement of financial position.

(B) The statement of financial position reveals how a business is funded.

(C) Intangible assets are often missing from the statement of financial position.

(D) The statement of financial position separately identifies long-term and short-term assets and liabilities.

Q107. For an asset owned for more than one year, the depreciation charge for the year, calculated using the reducing-balance basis at the rate of 35%, would be arrived at as follows:

(A) 35% x cost of the asset.

(B) 35% x (cost of the asset – accumulated depreciation).

(C) 35% x accumulated depreciation.

(D)  35% x (cost of the asset + accumulated depreciation).

Q108. Misha bought a machine for £39,000, which she expects to have a useful life of four years and a residual value of £4,000 at the end of that time. If depreciation is to be provided on the straight-line basis, the net book value after two years will be:

(A)  £17,500.

(B) £19,500.

(C) £21,500.

(D) £30,250.

Q109.  buys two motor vans costing £41,000 in total. They are depreciated on the reducing-balance basis at the rate of 40% per annum. Which of the following statements is true?

(A) The NBV of the vans after one year will be £24,600 and the depreciation charge for year 2 will be £16,400.

(B) The NBV of the vans after two years will be £14,760 and the depreciation charge for year 2 will be £9,840

(C) The NBV of the vans after one year will be £14,760 and the depreciation charge for year 2 will be £16,400.

(D) The NBV of the vans after two years will be £24,600 and the depreciation charge for year 2 will be £9,840

Q110. Matt bought a delivery van for £14,000 on 1 July 2016. It is expected to have a useful life of 4 years and a value at the end of that time of £3,000. If depreciation is to be provided at 30% on the reducing-balance basis, the depreciation charge for the year ended 30 June 2017 will be:

(A) £2,940.

(B) £1,260.

(C) £4,200.

(D) £2,310.

Q111. Which of the following interpretations of the prudence concept is not true:

(A) The prudence concept requires preparers of accounts to anticipate all income.

(B) The prudence concept requires preparers of accounts to anticipate all costs.

(C) The prudence concept requires preparers of accounts to take a cautious approach to accounts preparation.

(D) The prudence concept underpins the need for businesses to create a provision for doubtful debts.

Q112. Dilip’s account balances at the business year end show a figure for trade receivables of £103,100. Included in this figure is an amount of £6,500 owed by Reece, which will not be received. Dilip usually creates a provision for doubtful debts of 2% of trade receivables.

The figure for trade receivables on the statement of financial position at the year end should be:

(A) £94,538.

(B) £101,038.

(C) £107,408.

(D) £94,668.

Q113. If the trial balance at Laurie’s year end shows trade receivables of £19,900 and bad debts of £600 written off during the year, which of the following statements is true?

(A) The statement of profit or loss should include a bad debt expense of £600 and trade receivables of £19,300 should be included on the statement of financial position.

(B) The statement of profit or loss should include no bad debt expense and trade receivables of £19,900 should be included on the statement of financial position.

(C) The statement of profit or loss should include no bad debt expense and trade receivables of £19,300 should be included on the statement of financial position.

(D) The statement of profit or loss should include a bad debt expense of £600 and trade receivables of £19,900 should be included on the statement of financial position.

Q114. If an asset cost £27,000 and the annual depreciation charge calculated using the straight-line method is £6,750 per annum, then depreciation is being charged at the rate of:

(A) 67.5%.

(B) 25%.

(C) 6.75%.

(D) 40%.

Q115. Eva has purchased a machine for £300,000. She will depreciate it either at 20% on the straight-line basis or at 30% on the reducing-balance basis.

Which method will lead to the highest combined profits in the first two years that the machine is owned?

(A) The straight-line basis will lead to the highest combined profits.

(B) The reducing-balance basis will lead to the highest combined profits.

(C) The choice of depreciation method does not affect the combined profit figures.

(D) Both the straight-line basis at 20% per annum and the reducing-balance basis at 30% per annum will lead to the same combined profit figure for the first two years.


Q116. The main object of providing depreciation is:

(A) To calculate true profit.

(B) To show true financial position.

(C) To reduce tax.

(D) To provide funds for replacement.

Q117. Depreciation arises because of:

(A) Fall in the market value of an asst.

(B) Physical wear and tear.

(C) Fall in the value of money.

(D) None of them.

Q118. Depreciation is a process of:

(A) Valuation

(B) Allocation

(C) Both valuation and allocation

(D) None of them.

Q119. Under the straight line method of providing depreciation it:

(A) Increase every year.

(B) Remain constant every year.

(C) Decreases every year

(D) None of them.

Q120. Under the diminishing balance method depreciation it:

(A) Increases every year.

(B) Decreases every year.

(C) Remain constant every year.

(D) None of them.

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Finance Question SSC CGL Daily Test Paper 4: AAO

Finance Question SSC CGL Daily Test Paper 4: AAO 

Q41. Creditors of a business may want to use the financial statements to:

(a) Be sure of an increasing share of the market

(b) Check that the business is making a profit

(c) Be sure that after-sales service will continue

(d) Check that they are likely to be paid when due

Q42. A company manufacturing cars is preparing its profit and loss account for inclusion in its published annual report. Under what heading would it most likely include production labour costs?

(a) Cost of sales

(b) Distribution costs

(c) Administrative expenses

(d) Interest payable and similar charges

Q43. Which of the following is false?

(a) Directors account to shareholders

(b) Shareholders elect auditors

(c) Shareholders elect directors

(d) Directors elect auditors

Q44. Why is it a requirement that the published financial statements of a company should include data for the previous year?

(a) To show that the company has been trading for at least two years

(b) Because financial statements have to be published only every other year

(c) Because some data relates to the previous year

(d) To assess and to compare the company’s performance one year with another.

Q45. Profit for the year is arrived at after deducting from operating profit:

(a) Interest payable, tax and dividends paid

(b) Interest payable and tax only

(c) Cost of sales and tax only

(d) Tax only

Q46. What is included in a limited company’s balance sheet under ‘equity’?

(a) Reserves

(b) Cash at bank

(c) Authorized share capital not yet issued

(d) Dividends paid to shareholders

Q47. Does a clean audit report mean that?

(a) The company is a safe one in which to invest

(b) The company is engaged only in ethical activities

(c) The financial statements give a true and fair picture of how the company is doing

(d) The financial statements are correct

Q48. Which of the following must a company normally produce by law?

(a) Profit and loss account, balance sheet and cash flow statement

(b) Profit and loss account and cash flow statement

(c) Profit and loss account, balance sheet, cash flow statement and notes to the accounts

(d) Profit and loss account, balance sheet and notes to the accounts

Q49. The accounting policies adopted by a company are usually detailed in:

(a) The accountant’s report

(b) The auditor’s report

(c) The notes to the accounts

(d) The directors’ report

Q50. Which of the following is not deducted from revenue in arriving at profit before tax?

(a) Administrative expenses

(b) Other operating income

(c) Distribution costs

(d) Cost of sales

Q51. Which Article in the Indian Constitution provides for the Finance Commission?

(a) Article 323

(b) Article 280

(c) Article 256

(d) Article 378

Q52. What is the constitution of the Finance Commission?

(a) Chairman and nine elected (by Lok Sabha) members

(b) Chairman, Vice-chairman and eight nominated members

(c) Chairman, and four other members appointed by the President

(d) Ten elected members of the Lok Sabha

The Parliament has thus decided that the criteria for the persons should be:

  1. Chairman should have wide experience in public affairs
  2. There should be a judge of the high court or someone who is qualified to be a judge
  3. There should be a person with a specialized knowledge of finance and accounts of the government
  4. There should be a person with a wide experience of Financial matters and of administration
  5. There should be a person with a special knowledge in economics

Q53. Which of the following roles/functions/responsibilities are NOT under the purview of the Financial commission?

  1. Sharing of net proceeds of taxes between the Center and States
  2. Recommending principles for governing the grants-in-aid to the states by the Center
  3. Recommendations on matters referred to it by the President for the interest of sound finance
  4. Preparation and periodical revision of electoral rolls

(a) Only 1

(b) Only 2

(c) Only 3 and 4

(d) Only 4

Q54. In which year did the Finance Commission of India came into existence?

(a) 1947

(b) 1948

(c) 1951

(d) 1961

Q55. Who was the Chairman of the First Finance Commission of India that was appointed in 1951?

(a) K.C. Neogy

(b) K.Santhanam

(c) Y.V. Reddy

(d) K.C. Pant

Q56. Who is the Chairman of the 14th and current Financial Commission of India that was appointed in 2013?

(a) K.C. Neogy

(b) K.Santhanam

(c) Y.V. Reddy

(d) K.C. Pant

Q57. The 13th Finance Commission of India, whose Chairman was Vijay Kelkar, had allocated what percentage of central tax revenues were shared by the Center with the states?

(a) 56%

(b) 50%

(c) 70%

(d) 32%

Q58. Who was the Chairman of the 13th Finance Commission of India?

(a)  K.C. Neogy

(b) K.Santhanam

(c) Vijay Kelkar

(d) K.C. Pant

Q59. In which year was the Central Bureau of Investigation (CBI) set up?

(a) 1947

(b) 1950

(c) 1963

(d) 1965

Q60. Who was the first director of the Central Bureau of Investigation (CBI)?

(a) D. P. Kohli

(b) F.V. Arul

(c) D. Sen

(d) Anil Sinha

Q61. Who is the current director of the Central Bureau of Investigation (CBI)?

(a) D. P. Kohli

(b) F.V. Arul

(c) D. Sen

(d) Anil Sinha

Q62. In which city is the Central Bureau of Investigation (CBI) Academy located?

(a) New Delhi

(b) Darjeeling

(c) Mumbai

(d) Ghaziabad

Q63. What is the motto of Central Bureau of Investigation (CBI)?

(a) Integrity, Excellence, Perfection

(b) Industry, Impartiality, and Integrity

(c) Command, Control, Vigilance

(d) None of the above

Q64. The Central Bureau of Investigation (CBI) comes under the administrative control of:

(a) Department of Personnel and Training (DoPT) of the Ministry of Personnel

(b) Ministry of Home Affairs

(c) Ministry of Defense

(d) None of the above

Q65. Consider the following two statements:

  1. The Central Bureau of Investigation (CBI) is exempt from the Right to Information (RTI) Act
  2. Central Bureau of Investigation (CBI) is a part of the Union subject, and not State or Concurrent subjects

Which of the above is/are true?

(a) Only 1

(b) Both 1 and 2

(c) Only 2

(d) Neither one nor two

Q66. Where are the headquarters of Central Bureau of Investigation (CBI) located?

(a) New Delhi

(b) Darjeeling

(c) Mumbai

(d) Ghaziabad

Q67. Which is the oldest known system designed for the redressal of citizen’s grievance?

(a) Ombudsman System

(b) Lokpal

(c) Lokayukta

(d) None of the above

Q68. Which was the first Commonwealth country in the world to adopt the Ombudsman system?

(a) India

(b) Sweden

(c) New Zealand

(d) United Kingdom

Q69. The ‘Procurator system’ is still running in which of the following countries:

(a) India

(b) Sweden

(c) New Zealand

(d) Russia

Q70. Consider the following 3 statements:

  1. The judiciary is within the purview of Lokpal/Lokayukta in India
  2. In New Zealand, the judiciary is NOT within the purview of the Parliamentary Commissioner for Investigation
  3. In Sweden, the judiciary is NOT within the purview of the Ombudsman system

Which of the above statement/s is/are true?

(a) Only 1 and 3

(b) Only 2 and 3

(c) Only 2

(d) All are true

Q71. Which was the first Indian state to establish the institution of Lokayukta?

(a) Bihar

(b) Uttar Pradesh

(c) Andhra Pradesh

(d) Maharashtra

Q72. Which state’s Lokayukta’s office is considered to be the strongest in terms of power and scope?

(a) Bihar

(b) Karnataka

(c) Andhra Pradesh

(d) Maharashtra

Q73. When did The Lokpal and Lokayuktas Act, 2013 came into force?

(a) January 2013

(b) May 2013

(c) December 2013

(d) January 2013

Q74. Who appoints the Lokayukta and Upalokayukta?

(a) Governor

(b) Chief Minister

(c) Speaker of Lok Sabha

(d) Judge of High Court

Q75. The elections for Lok Sabha are held every:

(a) 3 years
(b) 4 years
(c) 5 years
(d) 6 years

Q76. Micro economics theory deals with

(a) Economic behavior of individual economic decision making units

(b) Economy as a whole

(c) Trade relations

(d)  Economic growth of the society

Q77. Which of the following is a central problem of every economy

(a) Abundance of resources

(b) Scarcity of economic resources

(c) Poverty

(d) Moral and ethical values

Q78. Equilibrium relates to which of these

(a) Market condition which oscillate

(b) Market state of falling price

(c) Market condition of rising price

(d) Market conditions which once achieved tends to persist

Q79. General equilibrium analysis refers to

(a)  Behavior of individual economic decision making units and individual markets in isolation

(b)  Behavior of all the individual decision making units and market viewed in totality

(c)  Both a and b

(d)  None

Q80. Normative economic theory deals with

(a) What is or how the economic problem facing the society are solved

(b) How the problem should be solved

(c)  What to Produce

(d)  How to produce

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SSC CGL Tier 2 Paper 4 (General Study Accounts & Finance)

SSC CGL Tier 2 Paper 4 (General Study Accounts & Finance)

Q1. Listed in random order below are the balance sheet figures of Qalam Ltd as at 31 March 2006:

Trade receivables € 50,000

Trade payables € 30,000

Building € 90,000

Share capital € 100,000

Bank loan € 40,000

Inventories € 10,000

Cash and cash equivalents € 20,000

Reserves € 50,000

Intangible assets € 30,000

Treasury shares € 20,000

Equipment € 40,000

Retained earnings € 40,000

The owners’ equity is:

(a) € 150,000

(b) € 170,000

(c) € 210,000

(d) € 120,000

Q2. Statement of financial position produced from incomplete accounting record is commonly known as?

(a) Balance sheet

(b) Cash flow statement

(c) Statement of affairs

(d) Statement of financial operations

Q3. Which of the following businesses usually maintain incomplete accounting record of the business activities?

(a)  Large businesses

(b) Companies

(c) Big partnership firms

(d) Small businesses

Q4. In which of the following systems of recording the financial statements reflect true and fair view of an entity and accounting records are considered to be more accurate?

(a)  Single entry system

(b) Double entry system

(c) Cash based system

(d) Credit based system

SSC CGL Tier 2: Paper 4
Q5. Identify the correct formula used to ascertain the closing balance of capital:

(a) Opening capital + Net income – Drawing – Assets = Closing capital

(b) Closing capital = Opening Capital + Net loss – Drawings

(c) Closing Capital = Opening capital + Assets + Incomes – Expenses

(d) Closing capital = Opening capital + Net income – Drawings

Q6. Which of the following formulas is used to calculated the net income for an accounting period?

(a)  Net income = opening capital + Drawings + Ending capital

(b) Net income = – Opening capital + Drawings – Ending capital

(c) Net income = – Opening capital + Drawings + Ending capital

(d) Net income = Opening capital – Total assets

Q7. Which of the following statement is correct:

(a)  The main purpose of any business is to earn profit

(b) If expenses exceed revenue then business is running loss

(c) Both (a) and (b)

(d) None of the above

Q8. Which of the following statement is correct:

(a) Dual aspect assume an indefinite life of the entity

(b) In accounting, accrual basis is used for recording transactions

(c) Both (a) and (b)

(d) None of the above

Q9. Which one of the following accounts is supposed to be used to get the figure of credit purchases made during the current accounting period?

(a)  Debtor account

(b) Revenue account

(c) Creditors account

(d) Expenses account

Q10. To obtain the amount of credit sales made during an accounting period, which account is generally used in single entry and incomplete records?

(a)  A/c payable account

(b) Total revenue account

(c) Debtors account

(d) Stock account

Q11. Which of the following is used to work out the balance of cash drawings for an accounting period?

(a)  Debtor account

(b) Credit account

(c) Cash payments journal

(d) Cash book

Q12. Closing balance of cash can be obtained by drawing up a:

(a)  Balance sheet

(b) Statement of affairs

(c) Income statement

(d) Cash account

Q13. A method wherein omitted information is determined in the first place and by using this information net income or loss is ascertained is known as?

(a) Nominal method

(b) Cash method

(c) Conversion method

(d) Net profit method

Q14. Which of the following is not a subsidiary book?

(a)  Purchases

(b)  Bills receivable book

(c) Sales book

(d) Assets book

Q15. Accounting concepts are based on:

(a) Certain assumption

(b) Certain facts and figures

(c) Certain accounting records

(d) Government guidelines

Q16. Net profit + operating expenses =?

(a) Cost of goods sold

(b) Amount of sales

(c) Net sales

(d) Gross profit

Q17. Which of the following accounting equation is not correct?

(a) Assets – Liabilities =  Equity

(b) Assets – Equity = Liability

(c) Assets + Liabilities = Equity

(d) Liabilities + Equity = Assets

Q18. Double Entry System is a?

(a) Reporting system

(b) Financial Statement preparation system

(c) Recording system

(d) Debit and Credit determining system

SSC CGL Tier 2 Paper 4
Q19. The features of Double Entry System are?

(a) It has two parties; Receiver and Giver

(b) Total amount of Debit will be equal to total amount of Credit

(c) Receiver is Debit and Giver is Credit.

Which one is correct?

(a) i & ii

(b] ii & iii

[c] i & iii

[d] i, ii & iii

Q20. Generally, what type of accounts is not kept in Single entry system?

i) Asset

ii) Income

iii) Expense

Which one is correct of the following?

(a) i

(b) i & ii

(c) ii & iii

(d) i & iii

Q21. Which one is correct?

(a) Opening capital = opening total assets – closing total assets

(b) Closing capital = opening total liabilities + closing total liabilities

(c) Opening capital = opening total assets – opening total liabilities

(d) Closing capital = opening total assets + closing total assets

Q22. Which one is used a rough working for financial statement?

(a) Trial balance

(b) Adjusting entries

(c) Closing entries

(d) Works sheet

Q23. Which one is the principle of Double Entry System?

(a) Purchase increases Debit, income decreases Credit

(b) Expense increases Debit, Income decreases Credit

(c) Receiver is Debit and Giver is Credit

(d) Receiver is Credit and Giver is Debit

Q24. Now-a-day’s base of accounting is?

i) Cost accounting system

ii) Single entry system

iii) Double entry system

Which one is correct of the following-?

(a) i

(b) ii

(c) iii

(d) i & iii

Q25. The term financial asset includes all of the following except:

(a) Technical knowledge

(b) Bank loan

(c) Lease obligations

(d) Shares, bonds and debentures

Q26. The financial statement that shows the financial position of an enterprise at a particular point in

time is the:

(a) Income statement

(b)  Explanatory notes to the financial statements

(c) Balance sheet

(d) Statement of changes in equity

Q27. The accounting equation may not be expressed as:

(a) Assets = Liabilities + Equity

(b) Equity = Liabilities – Assets

(c) Non-current assets + Net current assets = Non-current liabilities + Equity

(d) Liabilities = Assets – Equity

Q28. A balance sheet does not:

(a) Show the financial status of an enterprise

(b) Have two counterbalancing sections

(c) Present revenues and expenses of an enterprise

(d) Report the assets and claims of an enterprise at a specified moment in time

 Q29. Which of the following transactions would increase Cash and cash equivalents and increase Non-

current liabilities?

(a) A bank loan

(b) Payment from a customer

(c) Purchasing goods on credit

(d) None of the above

Q30. Sabrina Migliaccio owns and runs a general store. State which of the following business transactions do not have any impact on the accounting equation:

(a) Sabrina reduces the price of milk to match the price offered by a competitor

(b) Sabrina pays a high school student for cleaning the driveway at the back of the store

(c) Sabrina pays interest to herself on a loan she made three years ago to the enterprise

(d) Sabrina fills her son’s car with gasoline in payment for his help with the vending machines and the snack food shelves

(a) Only (C)

(b) (C) and (D)

(c) (B), (C) and (D)

(d) (A) and (D)

 Q31. Which one of the following accounts is a current asset?

(a) Inventories

(b) Trader’s equity

(c) PPE

(d) Retained earnings

Q32. Which one of the following accounts is a non-current asset?

(a) Reserves

(b) Machinery

(c) Shareholders’ equity

(d) Trade receivable

Q33. Which one of the following accounts is a current liability?

(a) Trade receivables

(b) Reserves

(c) Shareholder’s equity

(d) Trade payables

Q34. Which of the following accounts is a non-current liability?

(a) Retained earnings

(b) Trade payables

(c) Share capital

(d) Bank loan

Q35. In financial accounting, a record is made only of information that can be expressed in monetary terms. This is known as:

(a) Business entity convention

(b) Money measurement convention

(c) Dual-aspect concept

(d) Going concern convention

Q36. In single entry system of accounting:

(a) Dual aspects of a transaction is recorded

(b) Single aspect of a transaction is recorded

(c) Important transactions are recorded

(d) All of them

 Q37. Listed in random order below are the balance sheet figures of Qalam Ltd as at 31 March 2006:

Trade receivables € 50,000

Trade payables € 30,000

Building € 90,000

Share capital € 100,000

Bank loan € 40,000

Inventories € 10,000

Cash and cash equivalents € 20,000

Reserves € 50,000

Intangible assets € 30,000

Treasury shares € 20,000

Equipment € 40,000

Retained earnings € 40,000

qualm’s capital employed is:

(a) € 170,000

(b) € 160,000

(c) € 240,000

(d) € 210,000

 Q38. Listed in random order below are the balance sheet figures of Qalam Ltd as at 31 March 2006:

Trade receivables € 50,000

Trade payables € 30,000

Building € 90,000

Share capital € 100,000

Bank loan € 40,000

Inventories € 10,000

Cash and cash equivalents € 20,000

Reserves € 50,000

Intangible assets € 30,000

Treasury shares € 20,000

Equipment € 40,000

Retained earnings € 40,000

qalam’s working capital is:

(a) € 170,000

(b) € 20,000

(c) € 50,000

(d) € 80,000

Q39. Listed in random order below are the balance sheet figures of Qalam Ltd as at 31 March 2006:

Trade receivables € 50,000

Trade payables € 30,000

Building € 90,000

Share capital € 100,000

Bank loan € 40,000

Inventories € 10,000

Cash and cash equivalents € 20,000

Reserves € 50,000

Intangible assets € 30,000

Treasury shares € 20,000

Equipment € 40,000

Retained earnings € 40,000

qalam’s current ratio is:

(a) 2.33

(b) 4

(c) 1.14

(d) 2.67

Q40. Listed in random order below are the balance sheet figures of Qalam Ltd as at 31 March 2006:

Trade receivables € 50,000

Trade payables € 30,000

Building € 90,000

Share capital € 100,000

Bank loan € 40,000

Inventories € 10,000

Cash and cash equivalents € 20,000

Reserves € 50,000

Intangible assets € 30,000

Treasury shares € 20,000

Equipment € 40,000

Retained earnings € 40,000

qalam’s quick ratio is:

(a) 2.33

(b) 1.14

(c) 2.67

(d) None of the above

 

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SSC CGL Paper 4 ( Assistant Audit Officer) Questions | Tier 2

SSC CGL Paper 4 ( Assistant Audit Officer) Questions | Tier 2

Dear Aspirants,

Assistant Audit Officer (AAO) in CAG through SSC CGL Exam is one of the most sought after posts advertised from 2016 onward. This is the only gazetted post so it is in demand very much. Since this is a gazetted post, it requires some specialized knowledge and skill of Accounts & Finance. In this Article we are sharing questions based on SSC CGL paper 4  to boost your preparation

We wish you good luck for the upcoming SSC Exams.

 

Q1. What is the importance of globalization for multinational firms?

(a)Home demand, home factor conditions and domestic rivalry are no longer important to multinational firms

(b)A multinational firm can gain a competitive advantage in a foreign country

(c)The home base is no longer important to multinational firms

(d)Regions are no longer important in global competition

Q2. The new economic policy has components:

(a)Liberalization

(b)Privatization

(c)Globalization

(d)All of these

Q3. The popular route of privatization of public enterprises in India has been

(a)Disinvestment

(b)Initial public offer

(c)Outright sale

(d)Sale of strategic partner

Q4. With reference to deficit financing, monetized deficit is the part that is financed through

(a)borrowings from public sector scheduled commercial banks

(b)external commercial borrowings

(c)borrowings from RBI

(d)none of the above

SSC CGL Paper 4 ( Assistant Audit Officer) Questions | Tier 2
Q5. The Economic Survey is complied by:

(a)Office of economic advisor.

(b)Central Statistical office ( CSO )

(c)National Sample Survey Organization (NSSO)

(d)Department of economic affairs.

Q6. Consider the following statements and identify the right ones.

  1. While calculating GDP, income generated by foreigners in a country is taken into consideration
  2. While calculating GDP, income generated by nationals of a country outside the country is taken into account

(a)i only

(b)ii only

(c)both

(d)none

Q7. Which of the following is added to national income while calculating personal income?

(a)Transfer payments to individuals

(b)Social security contributions

(c)Corporate taxes

(d)Undistributed profits

Q8. The value of NNP at consumer point is

(a)NNP at factor cost

(b)NNP at market price

(c)GNP at market price

(d)GNP at factor cost

Q9. The value of national income adjusted for inflation is called

(a)Per capita income

(b)Disposable income

(c)Inflation rate

(d)Real national income

SSC CGL Paper 4 ( Assistant Audit Officer) Questions | Tier 2

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Q10. The standard of living is often measured by:

(a)Real GDP Per capita

(b)Real GDP

(c)Real GDP * population

(d)Real GDP plus depreciation

For Remaining Questions and other Tier 2 AAO Paper,

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SSC CGL ( Paper 4 ) AAO |Important Questions/Solution| Tier 2

SSC CGL ( Paper 4 ) AAO |Important Questions/Solution| Tier 2

Dear Aspirants,

Paper-4 will be those Candidates who have applied for the post of Assistant Audit Officer (AAO) in SSC CGL Tier 2. In this post we are sharing some important questions of Paper 4  to boost your preparation.You can attempt our Online Test Series and learn effectively. You can also join our JobAssure Tier 2 Program, a scientifically designed day wise program, to achieve your dream job in SSC CGL 2017.

We wish you good luck for the upcoming SSC Exams.

Q1. Misha bought a machine for £39,000, which she expects to have a useful life of four years and a residual value of £4,000 at the end of that time. If depreciation is to be provided on the straight-line basis, the net book value after two years will be:

(a)£17,500.

(b)£19,500.

(c)£21,500.

(d)£30,250.

Q2. Which of the following interpretations of the prudence concept is not true:

(a)The prudence concept requires preparers of accounts to anticipate all income.

(b)The prudence concept requires preparers of accounts to anticipate all costs.

(c)The prudence concept requires preparers of accounts to take a cautious approach to accounts preparation.

(d)The prudence concept underpins the need for businesses to create a provision for doubtful debts.

Q3. The main object of providing depreciation is:

(a)To calculate true profit.

(b)To show true financial position.

(c)To reduce tax.

(d)To provide funds for replacement.

Q4. Which of the following cost flow assumption methods of inventory valuation uses unique identification codes?

(a)FIFO assumption

(b)LIFO assumption

(c)AVCO assumption

(d)Specific identification assumption

SSC CGL ( Paper 4 ) AAO |Important Questions/Solution| Tier 2
Q5. Under IAS 2 which of the following is regarded as the correct invoice amount to include as the purchase cost of inventory?

(a)Invoice price (excluding trade discount and excluding value added tax)

(b)Invoice price (including trade discount and including value added tax)

(c)Invoice amount (excluding trade discount but including value added tax)

(d)Invoice amount (including trade discount but excluding value added tax)

Q6. Which of the following is generally considered as a non profit oriented organization?

(a)Charitable organization

(b)Corporation

(c)Audit firms

(d)Insurance companies

Q7. The receipts and payments account of a non-profit organization is a

(a)Nominal account

(b)Real account

(c)Income statement account

(d)Financial statement

Q8. Which Article in the Constitution on India provides for the post of Comptroller and Auditor General of India (CAG)?

(a)Article 148

(b)Article 343

(c)Article 266

(d)Article 248

Q9. Favorable balance of cash book implies that:

(a)Credit balance of cash book

(b)Debit balance of cash book

(c)Bank Overdraft

(d)Adjusted balance of cash book

SSC CGL ( Paper 4 ) AAO |Important Questions/Solution| Tier 2

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Q10. A check returned by bank marked “NSF” means that:

(a)Bank can’t identify your identity

(b)There are not sufficient funds in your account

(c)Check has been forged

(d)Check can’t be cash being illegal

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SSC CGL Tier 2 |Paper 4 | AAO Questions with Explanation

SSC CGL Tier 2 |Paper 4 | AAO Questions with Explanation

Q1. In single entry system of accounting:

(a)Dual aspects of a transaction is recorded

(b)Single aspect of a transaction is recorded

(c)Important transactions are recorded

(d)All of them

Q2. Statement of financial position produced from incomplete accounting record is commonly known as?

(a)Balance sheet

(b)Cash flow statement

(c)Statement of affairs

(d)Statement of financial operations

Q3. Which of the following businesses usually maintain incomplete accounting record of the business activities?

(a)Large businesses

(b)Companies

(c)Big partnership firms

(d)Small businesses

Q4. In which of the following systems of recording the financial statements reflect true and fair view of an entity and accounting records are considered to be more accurate?

(a)Single entry system

(b)Double entry system

(c)Cash based system

(d)Credit based system

SSC CGL Tier 2 |Paper 4 | AAO Questions with Explanation
Q5. Identify the correct formula used to ascertain the closing balance of capital:

(a)Opening capital + Net income – Drawing – Assets = Closing capital

(b)Closing capital = Opening Capital + Net loss – Drawings

(c)Closing Capital = Opening capital + Assets + Incomes – Expenses

(d)Closing capital = Opening capital + Net income – Drawings

Q6. Which of the following formulas is used to calculated the net income for an accounting period?

(a)Net income = opening capital + Drawings + Ending capital

(b)Net income = – Opening capital + Drawings – Ending capital

(c)Net income = – Opening capital + Drawings + Ending capital

(d)Net income = Opening capital – Total assets

Q7. Which of the following statement is correct:

(a)The main purpose of any business is to earn profit

(b)If expenses exceed revenue then business is running loss

(c)Both a and b

(d)None of the above

Q8. Which of the following statement is correct:

(a)Dual aspect assume an indefinite life of the entity

(b)In accounting, accrual basis is used for recording transactions

(c)Both a and b

(d)None of the above

Q9. Which one of the following accounts is supposed to be used to get the figure of credit purchases made during the current accounting period?

(a)Debtor account

(b)Revenue account

(c)Creditors account

(d)Expenses account

SSC CGL Tier 2 |Paper 4 | AAO Questions with Explanation
Q10. To obtain the amount of credit sales made during an accounting period, which account is generally used in single entry and incomplete records?

(a)A/c payable account

(b)Total revenue account

(c)Debtors account

(d)Stock account

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