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19 previous year questions for Commerce from 3 years. Practice with year-wise breakdown.
19
Questions
3
Years
2
Papers
Answer each of the following questions in about 150 words :
(a) Discuss the key points that an Auditor would take into consideration while auditing the books of accounts of an insurance company. [10M]
(b) What role does accounting play in a financial information system? What type of information can be derived from it? [10M]
(c) What is Cost Accounting? What are its objectives? How does it differ from Financial Accounting? [10M]
(d) Discuss the various variances in standard costing system. How are the material, labour and overhead variances different from one another? [10M]
(e) Distinguish between VAT and Service Tax. How do they apply to goods and services, and what are the administrative challenges in these taxes? [10M]
Answer each of the following questions in about 150 words :
(a) Relationship between quality work life (QWL) and organisational performance. [10M]
(b) Determinants of Personality [10M]
(c) Types of external-environment of organisation [10M]
(d) Types of Organisational Structure [10M]
(e) Neo-classical theory of organisation [10M]
From the following Trial Balance and other additional information furnished by AGN Ltd., prepare the Balance Sheet as at 31st March, 2025 as required by Schedule-III Division-I of the Companies Act, 2013 and show the Notes to Accounts below the Balance Sheet : (Addition of table and additional information as provided.) (b) It is observed that at a monthly sale of ₹ 1,20,000, a firm suffers an operating loss of ₹ 30,000. The management apprehends that any increase in sale will further rise the loss. However, the Accountant of the firm analyzed the situation based on cost, volume and profit, and showed that the firm may earn ₹ 30,000 operating profit by doubling the sale. Based on the above information, you are required to measure— (i) P/V ratio; (ii) monthly fixed costs; (iii) BEP; (iv) MOS for profit of ₹ 40,000; (v) profit for monthly sale of ₹ 3,00,000. (c) (i) Explain in brief the principles of inventory valuation based on AS 2. (ii) Describe in brief the permissible methods of depreciation based on the relevant Accounting Standard.
(a) Prepare the Balance Sheet (with Notes) of AGN Ltd. from the given Trial Balance and additional information as at 31st March, 2025 in accordance with Schedule-III Division-I of the Companies Act, 2013. [20M]
(b) Using the data supplied, compute (i) P/V ratio, (ii) monthly fixed costs, (iii) break-even sales, (iv) margin of safety sales for a profit of ₹ 40,000, and (v) profit at a monthly sales level of ₹ 3,00,000. [15M]
(c) (i) Explain briefly the principles of inventory valuation under AS 2. (ii) Describe briefly the acceptable methods of depreciation as per the relevant Accounting Standard. [15M]
(a) Explain in brief the deductions that are expressly allowed in computing the income from business under the Income-tax Act, 1961. (b) Harish sold jewellery on 15th June, 2023 for ₹ 10,10,000 (cost of jewellery to Harish on 25th May, 2002 was ₹ 94,500 and brokerage paid on the sale of jewellery was ₹ 10,000). On 15th December, 2023, he purchased a residential house for ₹ 5,00,000. On 15th June, 2023, he did not own any residential house. The cost inflation index for 2002-03 was 105 and for 2023-24 it was 348. Compute the amount of capital gains chargeable to tax for the Assessment Year 2024-25. (i) Assuming that Harish sells the new residential house before 15th December, 2026, what will be the taxable capital gains and for which year? (ii) Assuming that Harish purchases any other residential house before 15th June, 2025 or constructs any other residential house before 15th June, 2026, what will be the taxable capital gains and for which year? (c) Sky Ltd. invited application for issuing 2,00,000 Equity Shares of ₹ 10 each at a premium of ₹ 2 per share, payable as follows : ₹ 6 per share (including premium) on application and allotment, balance on the first and final call. Applications for 6,00,000 Equity Shares were received. Applications for 3,00,000 shares were rejected and money refunded. Shares were allotted on pro-rata basis to the remaining applicants. The first and final call was made and all the amount was received except on 2,000 shares, which were forfeited and re-issued at ₹ 7 per share. Pass necessary Journal Entries in the books of Sky Ltd.
(a) Explain in brief the deductions expressly allowable while computing income from business under the Income-tax Act, 1961. [15M]
(b) Compute the taxable capital gains for A.Y. 2024-25 in the given case of sale of jewellery and purchase of residential house, and answer the two alternative scenarios regarding subsequent sale or acquisition of another house. [15M]
(c) Pass the necessary Journal Entries in the books of Sky Ltd. for the issue of shares, pro-rata allotment, forfeiture and re-issue as per the details provided. [20M]
Answer each of the following questions in about 150 words :
(a) Explain the concept of optimal capital structure. How does a company decide on the right mix of debt and equity? [10M]
(b) Write about Miller and Orr model of cash management. [10M]
(c) Differentiate between capital market and money market in the context of Indian financial system. [10M]
(d) Explain the concept of dividend policy. Discuss the various types of dividend policies followed by the companies. [10M]
(e) Explain the concept of financial services. Discuss the concept of credit rating and its growing importance in Indian financial services. [10M]
Answer each of the following questions in about 150 words :
(a) Job evaluation and internal equity [10M]
(b) Impact of traditional job specifications [10M]
(c) Impact of absenteeism [10M]
(d) Factors influencing salary and wage administration [10M]
(e) Causes of Industrial Disputes [10M]
Answer the following questions in about 150 words each:
(a) Briefly explain the significance of Accounting Standard-7 (AS-7). [10M]
(b) Explain why the companies issue right shares. How are right shares different from bonus shares? [10M]
(c) Discuss the main aspects of audit of a banking company in India. [10M]
(d) Define fair rent and annual rent under income from house property as per Indian Income Tax Act, 1961. Explain it with an example. [10M]
(e) What is job costing? How is it different from process costing? Explain. [10M]
Answer each of the following questions in about 150 words:
(a) How does sensation differ from perception? [10M]
(b) Explain the major differences between transactional and transformational leaders. [10M]
(c) Why do we need to coordinate formal and informal organizations? [10M]
(d) What are the limitations of matrix organization? [10M]
(e) How does socialization help in maintaining organizational culture? [10M]
A Ltd. has acquired the business of B Ltd., whose Balance Sheet as at 31st March, 2024 is as under: I – Equity and Liabilities : 1. Shareholders’ Funds (a) Equity Share Capital (₹ 100 each) ............................................... 16,00,000 6% Preference Share Capital (₹ 100 each) .............................. 8,00,000 Sub-total 24,00,000 (b) Reserves and Surplus Capital Reserve ................................................................. 2,00,000 Profit and Loss Account ...................................................... 1,00,000 Workmen Compensation Reserve (expected liability ₹ 10,000) ............ 16,000 Sub-total 3,16,000 2. Non-Current Liabilities : 6% Debentures ....................................... 4,00,000 3. Current Liabilities : Trade Payables ................................................................. 2,40,000 Other Current Liabilities (Interest payable on debentures) ................. 24,000 Sub-total 2,64,000 Total Equity & Liabilities 33,80,000 II – Assets : 1. Non-Current Assets (a) Property, Plant and Equipment Land and Building ............................................................ 8,00,000 Plant and Machinery ........................................................ 12,00,000 Sub-total 20,00,000 (b) Intangible Assets Goodwill .................................................................. 4,80,000 Patents .................................................................... 1,00,000 Sub-total 5,80,000 2. Current Assets (a) Inventories ................................................................. 3,00,000 (b) Trade Receivables ............................................................ 3,60,000 (c) Cash and Cash Equivalents ................................................... 1,40,000 Sub-total 8,00,000 Total Assets 33,80,000 A Ltd. was to take over all assets (except cash) and liabilities (except for interest due on debentures) and to pay the following amounts : (i) ₹ 4,00,000, 7% Debentures (₹ 100 each) in A Ltd. for the existing debentures in B Ltd.; for the purpose, each debenture of A Ltd. is to be treated as worth ₹ 105. (ii) For each preference share in B Ltd., ₹ 10 in cash and 9% preference shares of ₹ 100 each in A Ltd. (iii) For each equity share in B Ltd., ₹ 20 in cash and one equity share in A Ltd. of ₹ 100 each having market value of ₹ 140. (iv) Expenses of liquidation of B Ltd. are to be reimbursed by A Ltd. to the extent of ₹ 20,000. Actual expenses amounted to ₹ 25,000. A Ltd. valued Land and Building at ₹ 11,00,000, Plant and Machinery at ₹ 13,00,000 and Patents at ₹ 40,000 of B Ltd. for the purpose of amalgamation. Pass necessary journal entries in the books of A Ltd. and B Ltd.
(a) Pass necessary journal entries in the books of A Ltd. and B Ltd., taking into account the balance sheet, consideration payable and re-valuation information given above. [20M]
Answer the following questions in about 150 words each:
(a) Define corporate restructuring. Differentiate between mergers and acquisitions. Also give suitable examples. [10M]
(a_hindi) निगमित पुनर्गठन को परिभाषित कीजिए। विलय और अधिग्रहण के बीच अंतर स्पष्ट कीजिए तथा उपयुक्त उदाहरण दीजिए। [10M]
(b) Distinguish between money market and capital market. Explain the present state of RBI policy for the money market. [10M]
(b_hindi) मुद्रा बाजार एवं पूँजी बाजार के मध्य अंतर स्पष्ट कीजिए। मुद्रा बाजार हेतु आरबीआई नीति की वर्तमान स्थिति समझाइए। [10M]
(c) Discuss the objectives of financial management. Why is wealth-maximisation the preferred objective? [10M]
(c_hindi) वित्तीय प्रबंधन के उद्देश्यों की विवेचना कीजिए। धन-अधिवृद्धि को पसंदीदा उद्देश्य क्यों माना जाता है? [10M]
Answer each of the following questions in about 150 words:
(a) Discuss the problems faced in human resource planning. [10M]
(b) Elaborate the merits and limitations of 360° feedback. [10M]
(c) Why is collective bargaining not effective in India? Explain its reasons. [10M]
(d) How is voluntary separation different from involuntary separation? [10M]
(e) Explain the productivity implications of labour turnover. [10M]
Answer the following questions in about 150 words each: (a) What is meant by buyback of shares by companies? Explain the reasons and sources of buyback of shares. (b) "Cost Accounting is becoming more and more relevant in the emerging economic scenario in India." Comment. (c) Explain the major points to be considered by an auditor while auditing the accounts of a non-profit organization. (d) Briefly explain the accounting treatment of Government Grants as per AS–12. (e) "An assessee is not only liable in respect of his own incomes for tax purposes but his liability may extend to some other incomes also." Explain.
(a) What is meant by buyback of shares by companies? Explain the reasons and sources of buyback of shares. [10M]
(b) "Cost Accounting is becoming more and more relevant in the emerging economic scenario in India." Comment. [10M]
(c) Explain the major points to be considered by an auditor while auditing the accounts of a non-profit organization. [10M]
(d) Briefly explain the accounting treatment of Government Grants as per AS–12. [10M]
(e) "An assessee is not only liable in respect of his own incomes for tax purposes but his liability may extend to some other incomes also." Explain. [10M]
Answer each of the following in about 150 words:
(a) What are the external environmental factors that are essential to an organisation? [10M]
(b) Describe the main propositions of the neo-classical organisational theory. [10M]
(c) Describe the relationship between organisational culture and climate. [10M]
(d) "How does the policy of ‘Flexitime’ affect organisational functioning?" Explain. [10M]
(e) Explain the three forms of intra-personal conflict. [10M]
(a) The Balance Sheet of AB Ltd. as on March 31, 2022 is as under: ₹ I. Equity and Liabilities 1. Shareholders’ Funds : (a) Share Capital : 16000 Equity Shares of ₹ 100 each fully paid 16,00,000 (b) Reserves and Surplus (–) 21,40,000 2. Non-Current Liabilities : 8% Debentures 28,00,000 Accrued Interest 1,40,000 3. Current Liabilities : Sundry Creditors 9,00,000 Income Tax Liability 20,000 Total 33,20,000 II. Assets 1. Non-Current Assets : Land, Building and Machinery 28,00,000 2. Current Assets : Stock 2,00,000 Sundry Debtors 80,000 Investments 30,000 Cash at Bank 2,06,000 Cash in Hand 4,000 Total 33,20,000 The fixed assets are heavily overvalued. A scheme of reorganization was prepared and passed. The salient points of the scheme are the following : (i) Each share shall be sub-divided into ten fully paid Equity Shares of ₹ 10 each. (ii) After such sub-division, each shareholder shall surrender to the company 90% of his holding, for the purpose of re-issue to debenture holders and creditors so far as required and otherwise for cancellation. (iii) Of those surrendered, 100000 Equity Shares of ₹ 10 each shall be converted into 8% Preference Shares of ₹ 10 each fully paid for debenture holders. (iv) The debenture holders’ total claim shall be reduced to ₹ 10,00,000. This will be satisfied by the issue of 100000 Preference Shares of ₹ 10 each fully paid. (v) The claim of sundry creditors shall be reduced by 80% and the balance shall be satisfied by allotting them Equity Shares of ₹ 10 each fully paid from the shares surrendered. (vi) Shares surrendered and not re-issued shall be cancelled. Assuming that the scheme is duly approved by all parties interested and by the Court, draft necessary Journal Entries and Balance Sheet of the company after the scheme has been carried into effect. (b) A newly setup manufacturing company is planning to produce a product that will be sold for ₹ 150 per unit. The demand of the product is estimated at 10000 units per year. The company has the choice of two machines (i.e., Machines A and B), each of which has a capacity of producing 10000 units per year. Machine A would have fixed costs of ₹ 4,00,000 per year and would yield a profit of ₹ 5,00,000 per year on sale of 10000 units. Machine B would have fixed costs of ₹ 2,80,000 per year and would yield profit of ₹ 3,20,000 per year on sale of 10000 units. Variable costs behave linearly for both machines. Calculate the volume of sales at which the costs of two machines will be indifferent. (c) What is the relevance of residential status as per the Indian Income-tax Act, 1961? Discuss in detail how the residential status of an individual is determined for income-tax purposes.
(a) Draft the necessary Journal Entries and the Balance Sheet of the company after giving effect to the reorganisation scheme described. [20M]
(b) Calculate the volume of sales at which the costs of the two alternative machines will be indifferent. [15M]
(c) Explain the relevance of residential status under the Indian Income-tax Act, 1961 and the detailed criteria for determining an individual’s residential status for tax purposes. [15M]
(a) From the following information, prepare Process Accounts and calculate the actual profits earned by X Ltd. for the month of April 2022: Particulars (₹) Processes Finished A B C Stock Opening Stock 8,000 9,600 6,400 24,000 Direct Material 16,000 16,800 24,000 – Direct Wages 12,000 12,000 12,800 – Overheads 11,200 4,800 32,000 – Closing Stock 4,000 4,800 3,200 12,000 Profit on Cost (%) 33⅓ 25 25 – Inter-process Profit for Opening Stock – 1,600 1,600 8,800 Stocks in process are valued at prime cost and finished stock has been valued at the price at which it was received from Process C. Sales during the period were ₹ 2,80,000.
(a) Prepare Process A/cs and compute the actual inter-process and overall profit for April 2022. [20M]
Answer the following questions in about 150 words each.
(a) Explain the 'Financial Indifference Point' in the context of EBIT-EPS analysis by giving suitable example. [10M]
(b) What is meant by capital structure? Discuss the major determinants of capital structure. [10M]
(c) Explain the objectives of monetary policy of the RBI. [10M]
(d) What is capital market? Discuss the role of capital market in the economic development of a country. [10M]
(e) What is merger? Explain various types of merger. [10M]
Answer each of the following in about 150 words:
(a) “A good job-description leads to improved employee satisfaction.” Explain. [10M]
(b) Explain the purpose of employee orientation. [10M]
(c) Why is controlling absenteeism necessary for organisations? Explain. [10M]
(d) Write a note on ‘Collective Bargaining’. [10M]
(e) “Competition among industries often leads to labour turnover.” Do you agree with the statement? Justify your answer. [10M]
Answer the following:
(a) Particulars – II. Assets 1. Non-Current Assets : Fixed Assets : (a) Tangible Assets : Plant & Machinery ₹2,80,000; Land & Building ₹2,00,000; Furniture & Fittings ₹1,56,000 – Total ₹6,36,000. Less : Provision for Depreciation ₹1,48,000 – Net ₹4,88,000. (b) Intangible Assets : Goodwill ₹80,000; Investments ₹3,00,000. 2. Current Assets : Current Assets ₹4,40,000; Pre-paid Rent ₹4,000; Un-amortized Preliminary Expenses ₹20,000. Total ₹13,32,000. From the given Balance Sheet, calculate the following : (i) Debt-equity Ratio (ii) Proprietary Ratio (iii) Solvency Ratio (iv) Fixed Capital Ratio from Proprietary Capital (v) Capital Gearing Ratio. [20M]
(b) What is the importance of Funds Flow Statement to the management? How is it different from a Cash Flow Statement? [15M]
(c) What is credit rating? Discuss its objectives, functions and limitations. [15M]
Answer the following:
(a) X Limited has its present annual sales amounting to ₹60 lakhs at ₹24 per unit. Variable costs are ₹16 per unit and fixed costs amount to ₹5 lakhs per annum. Its present credit period of one month is proposed to be extended to either two or three months, whichever appears to be more profitable. The following estimates are made for the purpose : Credit Policy 1 month 2 months 3 months Increase in sales (%) – 8 30 Percent of bad debt to sales 1 2 6 Fixed costs will increase by ₹1,00,000 annually after an increase in sales above 25 % over the present level. The company requires a pre-tax return on investment of at least 20 % for the level of risk involved. What will be the most rewarding credit policy in case of X Limited under the above circumstances? [20M]
(b) Details regarding three companies are given below : A Limited B Limited C Limited r = 15 % r = 10 % r = 8 % k = 10 % k = 10 % k = 10 % E = ₹10 E = ₹10 E = ₹10 Using Walter’s model, you are required to calculate the value of an Equity Share of each of these companies when dividend payout ratio is (i) 20 %, (ii) 50 % and (iii) 0 %. [15M]
(c) What is venture capital? Explain the functions of venture capital for the development of economy. Also discuss the various stages of venture capital financing. [15M]
We have 19 UPSC Mains Commerce optional subject questions spanning 3 years (2023–2025).
Commerce has 2 papers in UPSC Mains: Commerce-I, Commerce-II. Each paper carries 250 marks.