Author name: Administrator

86. Contra-entries are passed only when

Double column cash book is prepared
Three column cash book is prepared
Simple cash book is prepared
None of the above
✅ The correct answer is A.
Contra-entries are passed only when Double column cash book is prepared. The reason for making two entries is to comply with the principle of double entry.

966. Long -term solvency is indicated by

Liquidity ratio
Debt-equity ratio
Return coverage ratio
Both a and b
✅ The correct answer is B.
Long -term solvency is indicated by Debt-equity ratio. The debt-to-equity (D/E) ratio is calculated by dividing a company’s total liabilities by its shareholder equity. These numbers are available on the balance sheet of a company’s financial statements.

971. Companies that help to set benchmarks are classified as

competitive companies
benchmark companies
analytical companies
return companies
✅ The correct answer is B.
Companies that help to set benchmarks are classified as benchmark companies. Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies.

956. Which among the following cannot form the basis for a valid consumer complaint?

Shopkeeper charging a price above the MRP for a product
Shopkeeper not advising the customer on the best product in a category
Allergy warning not provided on a drug bottle
Faulty products
✅ The correct answer is B.
Shopkeeper not advising the customer on the best product in a category cannot form the basis for a valid consumer complaint.

957. Which of the following statements in respect of riders is incorrect?

Rider means the basic death cover of a life insurance policy
A rider is a provision typically added through an endorsement
Riders refer to supplementary benefits in life insurance policies
Riders help customize individual’s preferences
✅ The correct answer is A.
A rider is an add-on cover to the base policy that provides additional benefits. Under this, if death of the policyholder occurs due to an accident then, apart from paying the life insurance benefit promised under the base policy, the policy will also pay an additional sum insured as specified in the rider.

959. Second factor in Fama French three factor model is the

size of industry
size of market
size of company
size of portfolio
✅ The correct answer is C.
Second factor in Fama French three factor model is the size of company. The Fama and French model has three factors: size of firms, book-to-market values and excess return on the market. In other words, the three factors used are SMB (small minus big), HML (high minus low) and the portfolio’s return less the risk free rate of return.
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