Quick Review Questions
Quick Review Questions
Questions
For Newly Qualified
(VED JAIN)
President
III
Message
From Vice President
Message from Vice President
Interview is the most important part of any examination process. The
fact that any question in the Sun can be asked to test the personality
makes interview an interesting affair. Normally the questions are asked
based on C.V, personality, current affairs and subject matter of the
work. Sometimes, some irrational questions are also asked by some
Interview Boards to check your physiological structure. Therefore, one
should thoroughly prepare himself to enhance the chances of success
in the Interview Board.
V
Message
From Chairman (CMII)
Message from Chairman (CMII)
With the rapid growth in Indian economy, Chartered Accountants are the
preferred financial professional, the Industry opts for. A Chartered
Accountant during the course of his training has the right blend of
theoretical education and practical training. This equips a student with
knowledge, ability, skills and other qualities required of a professional
accountant.
The Committee for Members in Industry has come up with this booklet
covering Quick Review questions on General Knowledge &
Contemporary developments on the Economic & Business front. The
scope of General Knowledge is extremely vast and hence cannot be
covered exhaustively in a quick review mode. However, an attempt has
been made to cover a variety of questions on the subjects of history,
economics, finance, politics, accounting, taxation etc.
The booklet has been divided into two parts, Part A and Part B. Part A
dealing with the questions with one word answer and Part B with
questions with some detailed answers.
VII
I would take this privilege of thanking CA. Nitin Kumar Parekh,
CA. Shyam Agarwal, CA. Ram Manohor, CA. Pramood Boob,
CA. S. C. Jain and CA. Haridas Bhatt for their contribution. I would
also like to thank & compliment CA. Vijay Garg, Vice chairman of
the committee for leading this project. My thanks are also due to
all my fellow Committee Members, Dr. Surinder Pal, Secretary,
Committee for Members in Industry and the officials of the CMII
Secretariat for their contribution towards bringing this publication
in a short span of time.
I hope that this booklet would help the newly qualified members
to face the interviews with more confidence.
IX
COMMITTEE FOR MEMBERS IN INDUSTRY
The mission of the Committee for Member in Industry is to encourage and enhance close
links between the Institute and the Chartered Accountants working in industries in various
skills and assistance in individual career growth through the development of extensive and
MISSION
Ministries of the Central and State Government in such manner as to provide the
maximum possible exposures to the world of trade, commerce, industry and Governance,
opportunities.
OBJECTIVES
To organize campus interviews with participation of all possible employer organizations
for all the fresh Chartered Accountants seeking employment through the Institute
To consider the ways and means to enhance the participation of the members in
employment in the activities of the Institute
To develop a Data Bank Sector wise listings the leading members of the Institute.
CONTENTS
CONTENTS
Part - A............................................................................03
Part - B ............................................................................11
Recommendatory
Dress Code For
Recommendatory
Members
Dress Code For Of ICAI
Members Of ICAI
With a vie w to ensure dignity in shall apply in lieu of the dress
appearance and as a part of brand building mentionedabove.
of the profession, the Council of ICAI has
5. Similarly, in respect of members in
prescribedthefollowingdresscode:
employment the dress shall be
1. Male members may wear Indian governed by the rules, if any,
National dress (i.e. a long buttoned up prescribed by the concerned
coatondhotiorchuridarpyjama)orfull organisation, in lieu of the dress
sleevesshirtswithtrousersandshoes. mentionedabove.
02
PART - A PART - A
1. What is a statement of oath for use 7. Which country is called "The Dark
as evidence in legal proceedings ? Continent” ?
• AFFIDAVIT • AFRICA
2. What is an exclusive right of an 8. In India, which city is called "The
author in his works ? City of Palaces” ?
• COPYRIGHT • KOLKATA
3. What is an Agreement under seal 9. Where is the "Jagannath Temple"
between two or more persons situated in the country ?
called ? • PURI
• COVENANT 10. "Buland Darwaza" is located in
4. What is a directive from a court of which part of India ?
law ordering a person to appear • FATEHPUR SIKRI
before it at a specified date, time
and place ? 11. Which famous caves is situated in
Aurangabad, Maharashtra ?
• SUMMONS
• ELLORA
5. Which place in the world is called
"The Gift of Nile” ? 12. What is the condensed atmospheric
water vapours due to cooling of the
• EGYPT air called ?
6. Which city in India is called "The • DEW
City of Golden Temple” ?
• AMRITSAR
03
13. What is it called when the Noble Prize in the year 1998 ?
atmospheric moisture touches cold • AMARTYA SEN
earth and Condenses on dust
particles ? 22. Where is the Head Quarters of the
Central Railway Zone situated ?
• FOG
• MUMBAI
14. What is a part of desert where water
and vegetation are found ? 23. Which is a Deepest port in the India
situated in the Eastern Coast ?
• OASIS
• VISAKHAPATNAM
15. What is the Land covered with Natural
grass called ? 24. Which is India's oldest & biggest
Nuclear Power Station ?
• SAVANNA
• TARAPUR
16. What is Anand city in Gujarat
famous for ? 25. Which country in the world has the
highest Life Expectancy ?
• AMUL
• JAPAN
17. What is any disobedience of the court
verdict ? 26. What is a technical device designed
to find instantaneous solutions of
• CONTEMPT OF COURT huge and complex calculation based
18. Where is Vijay Ghat situated ? on the information already fed ?
• NEW DELHI • COMPUTER
19. Where is Bhabha Atomic Research 27. What has been made as a single
Center situated ? identity card for all securities/
• MUMBAI stocks/MFs related transactions ?
04
29. What are financial instruments whose brought within the municipal limits of
price and value derive from the value a town called ?
of assets underlying them called ? • OCTROI
• DERIVATIVES 36. What is a form of market in which
30. Decisions relating to working capital there are few sellers of a commodity
and short term financing are called ? who control it's pricing and marketing
• WORKING CAPITAL called ?
MANAGEMENT • OLIGOPOLY
31. A potential negative impact to an 37. Which type of discount is given by a
asset or some characteristic of value manufacturer to its dealer or by a
that may arise from some present higher grade dealer to a lower grade
process or future event is called ? dealer called ?
• RISK • TRADE
32. What is the borrowing by a country 38. What's the term that applies to the
from foreign countries to meet the most reliable industrial shares of
expenditure when domestic resources reputed companies which have a
fall short called ? stable growth and least risk involved
• NATIONAL DEBT in investment in such companies by
the public ?
33. What is a command from a superior
officer or a judge to a subordinate; • BLUE CHIP
right given to a person to act in the 39. What is the profit called when an asset
name of another called ? is sold for more than the price at
• MANDATE which it was bought ?
05
41. What is the planning process used 46. Who is the first lady President of
to determine a firm's long term India ?
investments such as new machinery, • Mrs. PRATIBHA DEVI SINGH
replacement machinery, new plants, PATIL
new products, and research &
development projects called ? 47. What is it called when an asset is
either in cash or in form of a deposit
• CAPITAL BUDGETING in the current account of the
42. What is a fungible, negotiable commercial bank ?
instrument representing financial • LIQUID
value broadly categorized into debt
and equity such as bonds and 48. What is a guarantee given to an
common stocks, respectively ? exporter by the importer of his goods
that he will pay immediately for the
• SECURITY goods ordered by him ?
43. Non-monetary assets that cannot be • LETTER OF CREDIT
seen, touched or physically measured
and which are created through time 49. What is the tax levied on certain
and/ or effort are called ? commodities produced and
consumed in the country and on
• INTANGIBLE licenses of certain trades ?
44. What is the standard framework of • EXCISE DUTY
guidelines for financial accounting ?
It includes the standards, 50. What is a term used for those
conventions, and rules accountants countries in Africa, Asia & Latin
follow in recording and summarizing America which are undergoing
transactions, and in the preparation complex process of modernization ?
of financial statements. • DEVELOPING COUNTRIES
• GENERALLY ACCEPTED 51. What is a Bank Account from which
ACCOUNTING PRINCIPLES withdrawals are allowed without any
(GAAP) restriction on frequency or amount so
45. What is the fall in the value of an long as there is a credit limit ?
asset called ? • CURRENT ACCOUNT
• DEPRECIATION
06
52. What is a written acknowled-gement 58. What in financial means merger of
of debt issued as security by a either one or more companies with
company on its property called ? another company or merger of two or
• DEBENTURE more companies to form one
company called ?
53. What is a stock which is built up
of some commodity to meet • AMALGAMATION
requirements in emergencies, i.e. 59. A condition or situation the ultimate
when scarcity occurs called ? outcome of which will be known or
• BUFFER determined only on the occurrence or
non-occurrence of uncertain future
54. What are the ports which are event/s called ?
exempted from payment of custom
duty on articles of commerce, • CONTINGENCY
primarily to encourage tourism 60. Any bank appointed by the Reserve
called ? Bank of India as its agent under the
• FREE PORT provisions of sub- section (1) of
section 45 of the Reserve Bank of
55. What is the gap between the value of India Act, 1934 (2 of 1934) called ?
visible and tangible exports and
visible imports are called ? • AUTHORISED BANK
07
63. What is the risk involved when an 69. What refers to various schemes of
auditor gives inappropriate audit offering an equity stake by a
opinion on an materially misstated Company to its employees ?
financial statement called ? • ESOPs
• AUDIT RISK 70. Legal Phrase for English meaning
64. A method that represents the value of "from the beginning” ?
the business with reference to the • AB INITIO
asset base of the entity and the
attached liabilities on the valuation 71. Legal Phrase for English meaning
date called ? "existing condition” ?
65. A derivative instrument whose pay- 72. Legal Phrase for English meaning "as
offs depends on the prevalent interest a matter of grace or favour” ?
rates over a period of time. What is • EX GRATIA
the underlying variable in such 73. Legal Phrase for English meaning
instrument called ? "mode of operating; the way in which
• RATE OF INTEREST a thing, cause etc. operates” ?
66. In Corporate Governance which • MODUS OPERANDI
Section provides for appointment of a 74. In India, we are in which 5 Year
person as a Director in a maximum of Commission Plan ?
15 companies ? th
• 11
• Section 275
75. Who is the Finance Minister of India ?
67. What is a process by which shares are
offered at a price which is based on the • Mr. P CHIDAMBARAM
Bids received by the company called ? 76. Who is the Prime Minister of India ?
• BOOK BUILDING • Mr. MANMOHAN SINGH
68. A person appointed by the testator to 77. Who was the first Prime Minister of
executethe Will as per the provisions India ?
of the Will is called ?
• Mr. JAWAHARLAL NEHRU
• EXECUTOR
08
78. Who was the first President of India ? 89. Who presents budget in the
• Dr. RAJENDRA PRASAD Parliament ?
09
97. In which year the GOI enact 102. An option which give the buyer a right
securitization and reconstruction of not an obligation to sell specified
financial assets and enforcement of quantity of stock on or before the
security interest act to enable Banks to expiry date of the strike price.
realize their dues without intervening • PUT OPTION
of Courts and Tribunals.
103. An option which gives the buyer or
• 2002 holder a right but not obligation to
98. How many stock exchanges have so buy a specified quantity of a stock on
far been recognized by GOI under or before the expiry date at the strike
the Securities Contract Regulation price.
Act 1956. • CALL OPTION
• 23 104. Process used for marketing a public
99. The presumption that intermediate offer by collection of bids from
cash inflows will be reinvested at the investors based on an indicative price
same rate. range.
• IRR ( Internal rate of return) • BOOK BUILDING
100. When intermediate cash flow are 105. Which Bank has become the first
presumed to be reinvested at cut off Public Sector Bank to touch a market
rate then it is capitalization of Rs 1 lac Crores
• NPV ( Net present value) • SBI
101. When the trader holds a position either 106. Who is empowered to enhance the
long or short and wants to restrict his time limit for filing the return of
down side, he would place an order income?
specifying rate at which the deal could • CBDT
close out. What is that order
• STOP LOSS ORDER
10
PART - B
PART - B
1. What is PIL ? Who can file the same or without giving any
same ? opportunity to be heard in the
PIL is an abbreviated term for Public matter is called 'Ex-Parte' order.
Interest Litigation. Any citizen can 4. What is Right of First Refusal ?
file case in the court of law for It is the right available with any
matters of general public interest party to the agreement, wherein
when it is felt that the public at large the seller of the assets is first
is affected. This is called Public supposed to check with the holder
Interest Litigation. of such right before selling his
2. What power Court has for assets. Normally this is stipulated in
taking up matters of general shareholders' agreements for sale
public interest ? of shares.
The Courts in India enjoy suo moto 5. What is the meaning of
powers to take up matters of Fundamental Rights ?
general public interest without Fundamental Rights are certain
anybody filing a case for the same. basic rights given by the
3. What is the name of the court Constitution of India. Such rights
order passed without presence include normal citizen rights like
of party ? right of speech and express
The order passed by the court in the oneself, right to follow any religion,
absence of the party affected by the right to do business etc.
11
6. What is the role of ARCIL ? companies in its fold.
ARCIL or the Asset Reconstruction 10. What is Purchase method of
Company of India Limited accounting for merger ?
aggregates the secured debts in In this method of accounting, the
the form of non performing assets assets and liabilities are taken at
(NPA) from banks and financial their market values and not at book
institutions for its faster resolution values as in pooling of interest
and/or settlement. method. Accounting Standard-14
7. What is the meaning of governs the accounting treatment.
Arbitrator ? 11. What is the meaning of terminal
An Arbitrator is a person appointed value of cash flows ?
by the parties to any dispute to The cash flows during the project
resolve the disputes and give his period or specified period are
judgment called 'Award’. compounded at a particular rate
8. What is the meaning of vertical and the resultant value at the end
merger ? of the project period or any other
Vertical merger is a combination of specified period is called the
two or companies which have terminal value.
backward or forward linkages in 12. Why it is said that cost of equity
terms of production or marketing. is the highest compared to
For example merger of yarn other sources of finance ?
manufacturing company with The cost of equity is highest
fabric manufacturing company compared to other sources of
would be considered as vertical finance for two main reasons: (1)
merger as yarn is a raw material the return on equity in the form of
for fabrics. dividend is not tax deductible like
9. What is absorption type of interest on debt. (2) The risk
merger ? element for certainty of return is
It is a merger of two or more entities highest for equity, which increases
wherein one entity retains its legal the expectations of the equity
existence and absorbs other shareholders.
12
13. What is weighted average cost With a view to increase or decrease
of capital ? the liquidity in the market. The RBI
It is weighted average cost of debt either buys or sells government
and equity. securities. This is called open
market operations of RBI.
14. What is the meaning of CSR ?
18. Who presents Budget and who
CSR is a short form of Corporate presents Monetary policy ?
Social Responsibility. The same
includes corporate governance, The Annual Finance Budget is
environment protection, social presented by the Hon'ble Finance
responsibility etc. Minister, whereas the Monetary
policy is announced by the
15. What do you understand by all Governor of RBI.
costs are variable in long run ?
19. What is the meaning of REIT ?
The fixed costs are fixed for a given
level of activity because the REIT stands for Real Estate
decisions on the size of the business Investment Trust. SEBI has
are not taken on short term basis. formulated draft guidelines for the
However in the long time frame the same and the same waits
business may decide to discontinue clearance from the government.
the business or increase the 20. Why exporters suffer when
capacity. In the former case the fixed rupee gets strengthened ?
costs would go down and in the With rupee getting strengthened
latter case the fixed costs would go via-a-vis foreign currency for
up. Thus it is said that all costs are the same unit of foreign currency,
variable in the long run. the exporters get lower rupee
16. What is Murphy's law ? realisation. Hence, the exporters
The Murphy's Law suggests that suffer when rupee gets strengthened.
when something goes wrong at 21. What is the principle of VAT ?
one place, many things go wrong The principle says that the tax
at the same time at other place. should be collected on the amount
17. W h a t a r e o p e n market of value added at each stage of
operations of RBI ? production or sale.
13
22. What is the cascading effect in 25. What is duopoly ?
indirect taxes ? A market situation with only two
In indirect taxes, certain taxes are competitors is called duopoly.
levied not only the value of the 26. How do you explain Charitable
goods but even on the taxes at the purpose for claiming exemption
previous stage. This is called of income by an Institution ?
cascading effect.
. Charitable purpose includes relief of
23. What is the meaning of the poor, education, medical relief
devaluation of rupee ? and the advancement of any other
It is down gradation of local object of general public utility.
currency vis-a-vis a foreign 27. Is a trust established for
currency by government actions to Charitable purposes in India is
bring economic parity. required to get itself registered
24. What is the meaning of with the jurisdictional
Stagflation ? Commissioner of Income Tax ?
It is a situation of inflation in the Yes, the Trust is required to be
face of stagnation of economy. registered as per Section 12AA.
14
Glimpses of a few programmes organized by
the Committee for Members in Industry