Paper 6 Laws and Ethics MCQ : Multiple Choice Questions and Answers

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CMA INTERMEDIATE EXAMINATION

Multiple Choice Questions and Answers

Paper 6 Laws and Ethics MCQ

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Paper 7 Direct Taxation MCQ

A. Choose the most appropriate alternative for the following  

1. Anu threaten to kidnap Binu’s daughter if she does not sell her house worth Rs. 90 Lakh to her for Rs. 20 Lakh. This Contract is void due to—

  1. inadequacy of Consideration.
  2. absence of Free Consent.
  3. incompetence of Parties.
  4. None of the above.

Answer :- absence of Free Consent.

2.  The Latin Maxim “Nemo Dat Quod non Habet” means

  1. no man can pass a better title than he has.
  2. let the Buyer beware.
  3. no consideration – No contract.
  4. ignorance of law is no excuse.

Answer :-no man can pass a better title than he has.

3. As per the RBI Act, which of the following negotiable Instruments can be payable to the bearer on demand?

  1. Cheque.
  2. Bank Draft.
  3. Promissory Note.
  4. None of These

Answer :- Cheque.

4.  When a partnership firm is continued even after the expiry of fixed term, it is called

  1. Partnership at Will.
  2. Perpetual Partnership.
  3. Fixed Partnership.
  4. Particular Partnership.

Answer :- Partnership at Will.

5. The amount of gratuity payable to an employee shall not exceed

  1. Ten months’ pay.
  2. Twelve months’ pay.
  3. Twenty months’ pay.
  4. Twenty-five months’ pay.

Answer :- Twenty months’ pay.

6.  No female child shall be allowed to work in any factory except between

  1. 8 AM to 7 PM.
  2. 6 AM to 6 PM.
  3. 6 AM to 7 PM.
  4. 10 AM to 5 PM.

Answer :- 8 AM to 7 PM.

7. In case of a private company, mention the number of members personally present to form the quorum of a meeting of the company.

  1. One member.
  2. Two members.
  3. Three members.
  4. Four members.

Answer :- Two members.

8. Which of the following is not a valid medium of sending notice to all shareholders?

  1. By registered post or speed post.
  2. Through public advertisement.
  3. Through registered email-id.
  4. Through courier service.

Answer :- Through public advertisement.

9.  If any default is made in filing refund of money, the company and every officer, who is in default shall be liable to a penalty maximum up to

  1. 50,000.
  2. 75,000.
  3. 1,00,000.
  4. 1,25,000.

Answer :- 1,00,000.

10. Value chain as a strategic framework for analysis of competitive advantaged was promoted by

  1. Peter Drucker.
  2. W. Taylor.
  3. Michael Porter.
  4. Tom Peters.

Answer :- Michael Porter.

B. Choose the most appropriate alternative for the following  

1. The main feature of e-contract is

  1. Cost and acceptability.
  2. Purity and clarity.
  3. Speed, accurate and reliable.
  4. Perfection and attractive.

Answer :- Speed, accurate and reliable.

2.  Which of the following is not an unpaid seller’s right against the goods?

  1. The right of retention.
  2. The right of stoppage in transit.
  3. The right of seeking claim for damage.
  4. The right of resale.

Answer :- The right of seeking claim for damage.

3. Where the endorser does not want that the endorsee or any other holder to incur any expense on his account is called

  1. Restrictive endorsement.
  2. Sans frais endorsement.
  3. Conditional endorsement.
  4. Unwanted endorsement.

Answer :- Sans frais endorsement.

4. The liability of the partners will continue for the acts done before the dissolution, even after the dissolution, until

  1. Public notice is given of the dissolution.
  2. Partners are getting the final payment.
  3. Claim is demanded by the creditors.
  4. The death of partners.

Answer :- Public notice is given of the dissolution.

5. Every employee shall be entitled to receive bonus from his employer in an accounting year if he has worked for not less than

  1. Ten working days.
  2. Twenty working days.
  3. Thirty working days.
  4. Forty working days.

Answer :- Thirty working days.

6. Under Employee’s State Insurance Act, 1948, the term of the office of the members of Medical Benefit Council shall be

  1. 2 Years.
  2. 4 Years.
  3. 5 Years.
  4. 10 Years.

Answer :- 4 Years.

7. Which one cannot be transacted through postal ballot?

  1. Appointment of auditor.
  2. Election of a Director.
  3. Buy back of shares by a company.
  4. Change in place of registered office outside the local limits of any city, town or village.

Answer :- Appointment of auditor.

8. The appointment of an independent director shall be approved by the

  1. Board meeting.
  2. General meeting.
  3. Registrar of Companies.
  4. Central Government.

Answer :- General meeting.

9. The sweat equity shares shall be locked in for a period of __________ years from the date of allotment.

  1. one
  2. two
  3. Three.
  4. four

Answer :- Three.

10.  The following is the disadvantage of business ethics:

  1. Through increasing morale and trust business can increase their market share.
  2. Publicity due to well and ethical performance.
  3. Acceptance of products of the company by the public.
  4. Diversity in achievements.

Answer :- Diversity in achievements.

C. Choose the most appropriate alternative for the following  

1. A proposal may be revoked at any time before

  1. the communication of acceptance.
  2. the payment of consideration.
  3. signing the agreement.
  4. execution of the proposal.

Answer :- the communication of acceptance.

2. Which of the following is not to be taken care while admitting a new partner?

  1. Computation of new profit sharing ratio and sacrifice ratio.
  2. Accounting treatment of goodwill.
  3. Professional qualification of admitting partner.
  4. Revaluation of assets and liabilities.

Answer :- Professional qualification of admitting partner.

3. Where goods are delivered to the buyer and he refuses to accept them, the buyer is not bound to

  1. retain them with him.
  2. look-after the goods.
  3. return them to the seller.
  4. store them in his godown.

Answer :- return them to the seller.

4. No child shall be allowed to work in a factory unless he has completed his

  1. 12th year.
  2. 14th year.
  3. 16th year.
  4. 18th year.

Answer :- 14th year.

5. Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than

  1. three years.
  2. five years.
  3. seven years.
  4. ten years.

Answer :- five years.

6.  The Employees’ State Insurance Corporation is

  1. Hindu Undivided Family.
  2. Local Authority.
  3. Charitable Institution.
  4. Body Corporate.

Answer :- Body Corporate.

7. The annual return of an OPC shall be signed by the company secretary or where there is no company secretary, by the

  1. Senior executive of the company.
  2. Auditor of the company.
  3. Director of the company.
  4. Advocate of the company.

Answer :- Director of the company.

8. If there is any mis-statement in the prospectus then it would attract the liability on

  1. The printer.
  2. The issuer.
  3. The publisher.
  4. The proof-reader.

Answer :- The issuer.

9. Every company limited by shares shall keep and maintain the Register of Members in Form No.

  1. MGT-1.
  2. MGT-3.
  3. MGT-7.
  4. MGT-12.

Answer :- MGT-1.

10. Ethics are the set of moral principles that guide a person’s

  1. Behaviour.
  2. Philosophy.
  3. Religion.
  4. Profession

Answer :- Profession

D. Choose the most appropriate alternative for the following  

1. Which one of the following is not the discharge by operation of law?

  1. By merger.
  2. By insolvency.
  3. By breach of contract.
  4. By the unauthorized alteration of items of a written document.

Answer :- By breach of contract.

2. Which of the following is a method of discharge from liability?

  1. By endorsement.
  2. By promising.
  3. By cancellation.
  4. By registration.

Answer :- By cancellation.

3. A partner may contribute to the LLP

  1. tangible or intangible property.
  2. moveable or immoveable property.
  3. money, promissory note etc.
  4. Any of the above.

Answer :- Any of the above.

4. Gratuity is payable to an employee after he has rendered continuous service for not less than five years on his

  1. transfer.
  2. daughter’s marriage.
  3. re-employment.
  4. resignation.

Answer :- resignation.

5. Who will not be considered as an employee?

  1. Canteen workers.
  2. Casual workers.
  3. Partners.
  4. Part time employee.

Answer :- Partners.

6.  “Individual pension account” means an account of subscriber, executed by a contract setting out the terms and conditions under the

  1. Provident fund scheme.
  2. National pension system.
  3. Citizen welfare system.
  4. Minimum wage payment scheme.

Answer :- National pension system.

7. Which of the following is not a category of company?

  1. Inactive company.
  2. Assistant company.
  3. Dormant company.
  4. Producer company.

Answer :- Assistant company.

8. Section 92 of the Companies Act, 2013 requires a company to prepare and file annual return in form no.

  1. MGT-12.
  2. INC-23.
  3. MGT-7.
  4. SH-10.

Answer :- MGT-7.

9.  An instrument of the proxy shall be deposited with the registered office of the company within ________ before the conduct of the meeting.

  1. 7 hours.
  2. 21 hours.
  3. 48 hours.
  4. 60 hours.

Answer :- 48 hours.

10. A proper foundation of ethics requires a standard of _______ to which all goals and actions can be compared to.

  1. value.
  2. living.
  3.  life.
  4.  speech.

Answer :- value.

E. Choose the most appropriate alternative for the following 

1. The term ‘sub-agent’ in the business of agency is defined as a person employed by, and acting under the control of the

  1. Principal.
  2. Original agent.
  3. Lawyer.
  4. Third person.

Answer :- Original agent.

2. The first endorsement of an instrument can be made by the

  1. Banker.
  2. Payee.
  3. Holder in due course.
  4. Agent.

Answer :- Payee.

3. Which of the following is not the mode of dissolution of a firm under voluntary dissolution?

  1. Dissolution by agreement.
  2. Dissolution on the happenings of certain contingencies.
  3. Dissolution on becoming a partner of unsound mind.
  4. Compulsory dissolution.

Answer :- Dissolution on becoming a partner of unsound mind.

4. White wash or color wash should be carried out at least once in every period of

  1. 14 months.
  2. 24 months.
  3. 48 months.
  4. 60 months.

Answer :- 14 months.

5. The term ‘family’ as defined in ESI Act, 1948 does not include

  1. a spouse.
  2. a minor adopted child.
  3. a dependent unmarried daughter.
  4. an independent married sister.

Answer :- an independent married sister.

6. Which one of the following amounts to safety measure?

  1. Ventilation.
  2. Fencing of factory.
  3. First aid appliances.
  4. Fencing of Machinery.

Answer :- Fencing of Machinery

7. If a company does not have a common seal, the share certificate shall be signed by

  1. Two Directors.
  2. One Director and Company Secretary.
  3. Two Directors and Company Secretary.
  4. Company Secretary.

Answer :- Two Directors.

8. In case of e-voting, notice shall be sent as attachment in

  1. PDF file.
  2. Word file.
  3. Excel file.
  4. Access file.

Answer :- PDF file.

9. A Director may be elected by small shareholders upon a notice by

  1. not less than 1000 small shareholders.
  2. one tenth of the total number of shareholders.
  3. not less than 1000 small shareholders or one tenth of such shareholders, whichever is lower.
  4. one tenth of 1000 small shareholders.

Answer :- not less than 1000 small shareholders or one tenth of such shareholders, whichever is lower.

10. Meta ethics deal with the nature of ___________ .

  1. external influences.
  2. moral judgement.
  3. material facts.
  4. animal rights.

Answer :- moral judgement.

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