8. Cash book is prepared by

A) Bank
B) Accountant of business
C) Manager of a company
D) Bank’s cashier
✅ ANSWER: B
Cash book is prepared by Accountant of business. A cash book is set up as a ledger in which all cash transactions are recorded according to date. It is a book of original entry and final entry.

44. Markets in which corporations raise capital for creating market transaction which are classified as

A) commercial markets
B) residential markets
C) primary markets
D) consumer credit loans
✅ ANSWER: C
Markets in which corporations raise capital for creating market transaction which are classified as primary markets. The primary market is where securities are created. It’s in this market that firms sell (float) new stocks and bonds to the public for the first time. An initial public offering, or IPO, is an example of a primary market.

40. As output increases, AC curve

A) Falls
B) Rises
C) Remains constant
D) All of the above
✅ ANSWER: D
The average cost is U-shaped because an increase in output increases the returns and reduces the total cost. As the curve continues to slope downwards, it enters a phase of constant returns where the returns and output are at their optimum level. After the constant level, continued increase in output stops yielding any further increments in the returns (diminishing returns) and the costs begin to rise, forcing the curve to start sloping upwards.

77. Which one of the following is the task of the Planning Commission?

A) Preparation of the plan
B) Implementation of the plan
C) Financing of the plan
D) None of the above
✅ ANSWER: A
Preparation of the plan is the task of the Planning Commission. The Planning Commission is charged with the responsibility of making assessment of all resources in the country, augmenting deficient resources, formulating plans for the most effective and balanced utilisation of resources and determining priorities.

71. Second step in developing operating budget is to

A) plan coordination
B) plan accounts
C) obtain information
D) coverage information
✅ ANSWER: C
Second step in developing operating budget is to obtain information. An operating budget is a forecast of the revenues and expenses expected for one or more future periods.

68. Which is not the product of general insurance?

A) Motor insurance
B) Personal accident insurance
C) Medical and health insurance
D) Life insurance
✅ ANSWER: D
Life insurance is not the product of general insurance. General Insurance is a contract of indemnity which promises to make good your losses. In Life Insurance, the sum assured along with benefits is paid either on the event of death of the policy holder or on maturity of the policy.

65. Risk of fall in income due to fall in interest rates in future is classified as

A) income risk
B) investment risk
C) reinvestment risk
D) mature risk
✅ ANSWER: C
Risk of fall in income due to fall in interest rates in future is classified as reinvestment risk. Reinvestment risk is the probability that an investor will be unable to reinvest cash flows (e.g., coupon payments) at a rate comparable to the current investment’s rate of return.

7. When capital is increased by an amount, it is recorded on the:

A) Left or credit side of the account
B) Right or debit side of the account
C) Right or credit side of the account
D) Left or debit side of the account
✅ ANSWER: C
When capital is increased by an amount, it is recorded on the Right or credit side of the account.