PPSC Assistant Director Accounts / Audit Officer Past Paper 2023 Solved Solved MCQs

Correct Answer: Secondary market

A stock exchange is a secondary market where previously issued securities are traded among investors.

Correct Answer: Financial market

The money market is a segment of the financial market specifically dedicated to short-term borrowing and lending.

Correct Answer: Offered to the existing equity shareholders

Right shares are issued to existing shareholders in proportion to their current holdings, allowing them to maintain their ownership percentage.

Correct Answer: All of these

Profits kept within the company rather than paid as dividends can be classified as retained earnings, general reserves, or corporate savings.

Correct Answer: Profitability ratio

The net profit ratio measures the overall profitability of a business by comparing net profit to net sales.

Correct Answer: Acid test

The liquid ratio, also known as the acid-test or quick ratio, measures a company's ability to pay short-term obligations using its most liquid assets.

Correct Answer: Turnover ratio

The fixed asset turnover ratio evaluates how efficiently a company uses its fixed assets to generate sales, classifying it as an activity or turnover ratio.

Correct Answer: Operating profit ratio

The operating profit ratio compares operating earnings (EBIT) to net sales, revealing operational efficiency before tax and interest deductions.

Correct Answer: Arrangement of financial resources

Traditionally, a finance manager's primary role was primarily focused on the procurement or arrangement of funds for the organization.

Correct Answer: Treasury management

Treasury management oversees the firm's liquidity, investments, and risk, making it responsible for the control of financial planning.

Correct Answer: All of these

Financial management encompasses the strategic acquisition, financing, and management of assets to maximize shareholder value.

Correct Answer: Sales price

A credit policy deals with collection procedures, terms, and discounts for early payments, while the sales price itself is a pricing strategy component.

Correct Answer: Higher

Long-term bonds are more sensitive to changes in prevailing interest rates, leading to higher interest rate risk compared to short-term bonds.

Correct Answer: Decreases

As a discount bond approaches its maturity date, its price converges toward its par value, meaning the discount decreases.

Correct Answer: Deep discount bond

Zero coupon bonds pay no regular interest and are instead issued at a steep discount to their face value.

Correct Answer: Intangible assets

These are non-physical assets that provide long-term value to a business and are classified as intangible assets.

Correct Answer: Preliminary expenses

Preliminary expenses are fictitious assets or deferred revenue expenditures, not current assets, as they cannot be readily converted to cash.

Correct Answer: Contingent liability

A contingent liability is a potential loss that may occur depending on the outcome of an uncertain future event, like a pending lawsuit.

Correct Answer: Operating expense

Operating expenses encompass all the day-to-day costs incurred to run the core operations of a business.

Correct Answer: Unexpired cost

Under historical cost principles, fixed assets are recorded at their original cost less accumulated depreciation, representing their unexpired cost.

Correct Answer: Value of the asset at the end of its useful life

Residual value (or salvage value) is the estimated amount an entity can obtain from disposing of an asset at the end of its useful life.

Correct Answer: None of these

The options listed are capital reserves created out of capital profits. Revenue reserves are derived from routine operational profits.

Correct Answer: Current liability

A bank overdraft represents a short-term borrowing facility provided by a bank and is recorded as a current liability on the balance sheet.

Correct Answer: Wasting asset

Depletion is an accounting method used to allocate the cost of extracting natural resources, known as wasting assets.

Correct Answer: Marginal income

Contribution margin is the sales price minus variable costs, often referred to as marginal income because it contributes to covering fixed costs.

Correct Answer: Ascertain the cost of goods and services

The core purpose of cost accounting is to track, record, and analyze the costs associated with producing goods or providing services.

Correct Answer: Manufacturing overhead cost

Manufacturing overhead aggregates all indirect factory costs, encompassing both variable components (like indirect materials) and fixed components (like factory rent).

Correct Answer: Prime cost

Prime cost represents the total direct expenses of production, calculated by summing up direct materials, direct labor, and any direct production expenses.

Correct Answer: Profit and Volume

The P/V (Profit-Volume) ratio demonstrates the relationship between the contribution margin and sales volume, indicating profitability.

Correct Answer: Ordinary annuity

An ordinary annuity features regular, equal payments made at the end of each consecutive period.

Correct Answer: Vouching

Vouching is the practice of checking the documentary evidence (vouchers, invoices) to substantiate accounting entries.

Correct Answer: Substantive testing

Substantive testing involves performing specific audit procedures to detect material misstatements at the assertion level in financial statements.

Correct Answer: Balance sheet audit

A balance sheet audit focuses intensely on verifying the existence and valuation of assets, liabilities, and equity balances at year-end.

Correct Answer: Semi-strong efficiency

Semi-strong form efficiency implies that all publicly available information is rapidly and fully reflected in current stock prices.

Correct Answer: Global firm

A global firm operates and views the world as one unified market, maintaining extensive international operations.

Correct Answer: All of these

A feasibility study is a comprehensive evaluation covering operational, financial, technical, and market factors of a proposed project.

Correct Answer: Interbank market

The interbank market is a network where banks exchange short-term financial instruments and loans among themselves.

Correct Answer: Industrial policy

Industrial policy refers to the strategic governmental interventions designed to shape the growth and structure of a country's industrial sector.

Correct Answer: Human resources

Human resources provide the creative intelligence, innovation, and active labor necessary to optimize other passive factors of production.

Correct Answer: Technological

The rapid advancement of IT and digital innovation makes the technological environment the fastest-changing external factor for organizations.

Correct Answer: Shareholders

Agency theory highlights the conflict of interest that can arise between corporate managers (agents) and the company's owners or shareholders (principals).

Correct Answer: Board of Directors

A joint stock company is managed by a Board of Directors, who are elected by the shareholders to oversee operations and strategic decisions.

Correct Answer: Both are correct

Agency conflicts can be mitigated through structural financial constraints (like debt) and aligning interests via performance-based managerial remuneration.

Correct Answer: Operating cycle

The operating cycle is the sum of the inventory conversion period and the receivables collection period, representing the time it takes to convert inventory back into cash.

Correct Answer: Wage

According to the fundamental laws of supply and demand, an excess supply of labor leads to downward pressure on wages.

Correct Answer: The financial position at particular date

A balance sheet is a snapshot that details a company's assets, liabilities, and equity at a specific point in time.

Correct Answer: Statement of earnings

The income statement is alternatively called the statement of earnings, profit and loss statement, or statement of operations.

Correct Answer: Cash flow statement

The cash flow statement specifically tracks the inflows and outflows of cash within a business over a given accounting period.

Correct Answer: All of these

Financing activities in a cash flow statement include transactions related to borrowing, debt repayment, and equity issuance/redemption.

Correct Answer: Operating, Investing, and Financing Activities

Under standard accounting principles, cash flows are divided into three standard categories: operating, investing, and financing activities.

Correct Answer: All of these

A complete set of basic financial statements comprises the Income Statement, Balance Sheet, Statement of Cash Flows, and Statement of Retained Earnings (or Equity).

Correct Answer: Monopolistic competition, firms can differentiate their products

Unlike perfect competition where products are identical, monopolistic competition is characterized by firms selling similar but slightly differentiated products.

Correct Answer: Clearing house

An automated clearing house (ACH) network facilitates the processing and settlement of electronic credit and debit transfers across participating institutions.

Correct Answer: Bank statement

A bank passbook acts as a physical record of transactions, functioning similarly to a modern bank statement issued by the financial institution.

Correct Answer: Nominal capital

Nominal capital, or authorized capital, is the maximum share capital a company is legally permitted to issue as stated in its corporate charter.

Correct Answer: Payback period

The payback period calculates the exact amount of time required to recover the initial cash outlay of an investment.

Correct Answer: Calculated by discounting all cash flows to present value and subtracting outflows from inflows

Net Present Value (NPV) evaluates profitability by discounting future cash flows to their current value and netting them against initial investment costs.

Correct Answer: Letter of credit

A Letter of Credit (LC) is a financial document issued by a bank guaranteeing the buyer's payment to the seller for imported goods.

Correct Answer: Opportunity cost

Implicit costs represent the opportunity costs of utilizing resources owned by the firm, for which no actual cash outlay occurs.

Correct Answer: All of these

A cash budget forecasts all expected cash inflows and outflows, covering operational expenses, dividends, and capital transactions.

Correct Answer: Conservative

Conservative financial planning ensures that ample long-term funds and reserves are maintained to cover predictable seasonal volatility and distant obligations.

Correct Answer: All of these

The control process universally involves setting standards, evaluating current performance against them, and taking corrective actions.

Correct Answer: The process of quantifying action

Performance measurement translates actions and outcomes into quantifiable metrics, allowing organizations to track and assess effectiveness.

Correct Answer: Price theory

Microeconomics heavily focuses on the determination of prices for goods and services in individual markets, earning it the moniker 'price theory'.

Correct Answer: Co-ventures

Individuals or entities that formally enter into a joint venture agreement together are known as co-venturers.

Correct Answer: Exempted from tax

Under standard taxation laws, income generated by properties held wholly for religious or charitable trusts is typically exempt from income tax.

Correct Answer: Capital

The fundamental accounting equation dictates that Assets minus Liabilities equals Capital (or Owner's Equity).

Correct Answer: Supportive model

The supportive model emphasizes leadership and managerial support over financial incentives or authoritarian control to motivate employees.

Correct Answer: The country is a net lender to the rest of the world

A current account surplus indicates a nation's exports exceed its imports, effectively making it a net supplier of capital to the global economy.

Correct Answer: Cumulative preferred stock

Cumulative preferred stock guarantees that any missed or unpaid dividends accumulate and must be paid out before common shareholders receive dividends.

Correct Answer: Real interest rate

The real interest rate is adjusted to remove the effects of inflation, representing the actual increase in purchasing power.

Correct Answer: North American Free Trade Agreement

NAFTA was an agreement signed by Canada, Mexico, and the United States that created a trilateral trade bloc in North America.

Correct Answer: Agricultural income purposes

Historically, land revenue in the Jagirdari system was primarily based on and used for agricultural income assessment.

Correct Answer: State Bank of Pakistan

The State Bank of Pakistan (SBP) acts as the central bank and holds the authority to formulate and execute the country's monetary policy.

Correct Answer: F. D Roosevelt

US President Franklin D. Roosevelt coined the term "United Nations" during World War II, which was first officially used in the 1942 Declaration by United Nations.

Correct Answer: 1945

World War II officially concluded in 1945 following the surrender of Germany in May and Japan in September.

Correct Answer: Hockey

Sami Ullah Khan, known as the 'Flying Horse', is a legendary former field hockey player who represented Pakistan internationally.

Correct Answer: Consistency of scores

Reliability in research and testing signifies the degree of consistency and stability a measurement yields over multiple applications.

Correct Answer: Extempore

An extempore is a spontaneous speech delivered on the spot without prior structured preparation.

Correct Answer: Attach

To "wean" means to detach or gradually withdraw from a habit or dependency. Therefore, "attach" is a fitting antonym.

Correct Answer: 1948

Pakistan made its first appearance as an independent nation at the Summer Olympics held in London in 1948.

Correct Answer: Lubna Saleem

Justice Lubna Saleem Pervez became the first female judge of the Islamabad High Court upon her appointment in 2019.

Correct Answer: None of these

None of the given options accurately define electronic magnified information, as the terms relate to business models rather than data magnification.

Correct Answer: No outline

In MS Office applications, shapes have outlines. Selecting "No Outline" removes the visible border around the object.

Correct Answer: Normal view

Normal view allows users to edit current slides and efficiently insert new ones directly into the desired sequence via the thumbnail pane.

Correct Answer: All of these

In PowerPoint, Action Buttons can be configured to hyperlink to other slides, run embedded macros, or play sounds when clicked.

Correct Answer: A new slide is inserted as third slide in presentation

PowerPoint inserts a new slide immediately after the last currently selected slide, so selecting slides 1 and 2 places the new one as slide 3.

Correct Answer: Title slide

The Title Slide is traditionally the opening slide of a presentation, displaying the main topic and establishing the presentation's theme.

Correct Answer: Word Art

Word Art is accessed via the Insert ribbon/menu, not as a standalone pane within the general Task Pane interface.

Correct Answer: Shift+Enter

Shift+Enter creates a soft return or manual line break, moving text to the next line without starting a new paragraph.

Correct Answer: 5 rows 2 columns

When specifying table dimensions conventionally, the format is often rows by columns.

Correct Answer: Both parallel and sequentially

Modern computer architectures use multi-threading and multicore setups, allowing instructions to execute both sequentially within threads and parallel across cores.

Correct Answer: Non-Volatile memory

Non-volatile memory, such as ROM or Flash storage, preserves its data securely without requiring a continuous power supply.

Correct Answer: Motherboard

RAM (Random Access Memory) modules are securely slotted directly into dedicated memory banks on the computer's motherboard.

Correct Answer: Pencil work

Spreadsheet software features active cells, menus, and workbooks, whereas 'pencil work' is a physical, non-digital task.

Correct Answer: $A$1

In Excel, an absolute cell reference uses dollar signs ($) to lock the column and row coordinates so they do not change when copied.

Correct Answer: The data in the cell is changed or deleted

Smart tags respond to specific data types; altering or deleting the core data in the cell removes the contextual trigger for the tag.

Correct Answer: To make the most efficient use of the computer hardware

An OS acts as a vital resource manager, optimizing the usage and allocation of CPU, memory, and peripheral hardware.

Correct Answer: All of these

The Paste Special menu allows granular control, enabling users to paste just formats, values, formulas, or validation rules independently.

Correct Answer: ARPANET

ARPANET (Advanced Research Projects Agency Network) was the first operational packet switching network and the progenitor of the global Internet.