PGT Commerce Level-3 (HTEТ), Exam 2023

Total Questions: 150

141. Ogives can be helpful in locating graphically the:

Correct Answer: C. Median
Solution:

Ogives are useful for locating the median graphically. An ogive is a graph that represents the cumulative frequency of a dataset. By finding the point where the ogive crosses half of the total frequency, you can determine the median value of the data set. This is particularly useful in statistics for understanding the distribution and central tendency of the data.

142. The number of subordinates manager can efficiently and effectively direct, is called:

Correct Answer: C. Span of control
Solution:

The term "span of control" refers to the number of subordinates a manager can efficiently and effectively direct. This concept is crucial in organizational design and affects decisionmaking, communication, and overall management effectiveness.
A wider span of control might lead to more autonomy for subordinates, while a narrower span might ensure closer supervision and more detailed guidance.

143. X Ltd. purchased a machine worth ₹ 2,88,000 and in lieu issued debentures of ₹ 100 at a discount of 4%. The number of debenture issued will be:

Correct Answer: B. 3000
Solution:

To calculate the number of debentures issued when purchasing a machine worth ₹ 2,88,000 with debentures of ₹ 100 each issued at a 4% discount:

• Each debenture is issued at ₹ 100 − 4% of ₹ 100 = ₹ 96.
• Therefore, the number of debentures
= Total cost / Price per debenture
= ₹ 2,88,000 / ₹ 96 = 3,000 debentures.

144. Which of the following transactions will result into Flow of Cash?

Correct Answer: B. Sale of furniture of the book value of ₹ 7,400 at a loss of ₹ 900.
Solution:

The sale of furniture where cash is involved results in a flow of cash. In this case, the furniture with a book value of ₹ 7,400 is sold at a loss of ₹ 900. The cash received from this sale (₹ 7,400 − ₹ 900 = ₹ 6,500) represents a cash inflow, which is a flow of cash activity in financial terms.

145. Nature of goodwill, whose value is the highest:

Correct Answer: B. Cat nature
Solution:

The term "Cat nature" refers to the type of goodwill that is personal to the owner and likely to disappear or diminish when the business changes hands.
This type of goodwill is tied closely to the individual characteristics of the current owner, such as personal relationships with customers, making it less likely to transfer upon the sale or alteration of business ownership.

146. Consider the following statements:

Assertion (A): In double account system, the final accounts of a company fail to disclose the true condition of its assets.
Reason (R): Because the assets of the company are shown at their cost price even when they are completely worn out.
Now select your answer according to the coding scheme given below:

Correct Answer: A. Both (A) and (R) are correct and (R) is the correct explanation of (A)
Solution:

Both the assertion (A) that in a double account system, the final accounts of a company fail to disclose the true condition of its assets, and the reason (R) that assets are shown at their cost price even when they are completely worn out, are correct.
The double account system typically used in utility companies and railways tends to show fixed assets at historical cost, which can lead to a discrepancy between book values and actual economic values if assets are significantly depreciated or obsolete.

147. When one party grants the right to use the asset to the other party in return for a periodic payment. It is known as:

Correct Answer: A. Lease financing
Solution:

Lease financing refers to an arrangement where one party grants another party the right to use an asset in return for periodic payments. This is commonly used in acquiring vehicles, machinery, and other equipment, where the lessee pays the lessor for the usage rights without acquiring ownership.

148. On retirement or death of a partner, assets and liabilities are to be shown at old values for which account to be opened is:

Correct Answer: C. Memorandum Revaluation Account
Solution:

On the retirement or death of a partner, the Memorandum Revaluation Account is used if assets and liabilities are to be shown at their old values but adjustments are needed to reflect any unrealized gains or losses.
This account is not part of the double-entry system but serves to note changes in asset values for internal purposes without affecting the main accounts until realized.

149. The total of the sales book is posted to the credit of the

Correct Answer: D. None of these
Solution:

The total of the sales book is posted to the credit of the Sales Account. The sales book records all credit sales transactions, and the total represents the total sales made on credit during a period.
This total is then credited to the Sales Account, which tracks all sales revenues. Therefore, the correct answer is "None of these" as "Sales Account" is not listed among the options.

150. A transaction involving a decrease in debt equity ratio and increase in current ratio is:

Correct Answer: B. Issue of equity shares for cash
Solution:

The issue of equity shares for cash involves an increase in equity (raising capital) and an increase in current assets (cash), which would decrease the debt-to-equity ratio and increase the current ratio. This strengthens the company's financial position both in terms of leverage and liquidity.