Commerce-Mock Test

Success in the Sindh Public Service Commission (SPSC) examinations for commerce-related roles requires more than just rote memorization; it demands a rigorous analytical grasp of core financial principles, accounting standards, and economic theory. This Commerce Mock Test is meticulously curated to bridge the gap between theoretical knowledge and the high-pressure environment of competitive testing. By simulating the actual SPSC examination pattern, we provide a strategic diagnostic tool that exposes your conceptual blind spots before they become liabilities on exam day. In the landscape of Pakistani competitive exams—including HEC-based assessments and professional entry tests—the Commerce section serves as a primary filter for high-caliber candidates. Achieving mastery here requires a shift from passive reading to active recall. Our pedagogical approach focuses on the "why" behind the figures, ensuring you can navigate complex auditing, taxation, and business management scenarios with precision. To maximize your performance, treat this assessment as a professional audit of your own preparation. Focus your revision on the interplay between standard accounting practices and current regulatory frameworks, as these are frequently tested to gauge professional maturity. Do not simply aim for the correct answer; analyze the distractors to understand the common pitfalls designed by examiners. By engaging with this high-value content, you are not merely practicing; you are refining the critical thinking skills necessary to secure your position in the merit list. Proceed with focus and academic discipline.

Practice questions

  1. Accounting equation is:
    • Assets = Liabilities – Capital
    • Assets = Capital + Liabilities
    • Capital = Assets + Liabilities
    • Assets = Revenue – Expenses
  2. Journal is:
    • Book of final accounts
    • Book of original entry
    • Cash book
    • Ledger
  3. Ledger is used to:
    • Record transactions chronologically
    • Classify accounts
    • Prepare vouchers
    • Record cash only
  4. Trial balance is prepared to:
    • Find profit
    • Check arithmetical accuracy
    • Find errors of principle
    • Record transactions
  5. Depreciation means:
    • Increase in asset value
    • Decrease in asset value
    • Increase in liability
    • Decrease in capital
  6. Working capital is:
    • Fixed assets
    • Current assets minus current liabilities
    • Total assets
    • Total liabilities
  7. Current ratio measures:
    • Profitability
    • Liquidity
    • Efficiency
    • Solvency
  8. Quick ratio excludes:
    • Cash
    • Debtors
    • Inventory
    • Bank balance
  9. Debt-equity ratio measures:
    • Liquidity
    • Capital structure
    • Profitability
    • Efficiency
  10. ROI measures:
    • Liquidity
    • Profitability
    • Solvency
    • Efficiency
  11. Capital structure refers to:
    • Asset structure
    • Mix of debt and equity
    • Cash flow
    • Profit ratio
  12. Dividend is:
    • Expense
    • Distribution of profit
    • Liability
    • Asset
  13. Share capital refers to:
    • Loan capital
    • Owners’ contribution
    • Debentures
    • Reserves
  14. Debenture holders are:
    • Owners
    • Creditors
    • Employees
    • Managers
  15. Preference shareholders get:
    • No dividend
    • Fixed dividend
    • Variable dividend only
    • No profit
  16. Equity shareholders are:
    • Creditors
    • Owners
    • Debtors
    • Suppliers
  17. Gross profit equals:
    • Sales – Expenses
    • Sales – Cost of goods sold
    • Profit – Expenses
    • Revenue – Liabilities
  18. Net profit equals:
    • Gross profit – Operating expenses
    • Sales – Fixed cost
    • Total assets – Liabilities
    • Revenue – Cost of goods sold
  19. Capital employed equals:
    • Current assets – Current liabilities
    • Fixed assets + Working capital
    • Total liabilities – Current assets
    • Cash + Bank
  20. Net working capital equals:
    • Current assets + Current liabilities
    • Current assets – Current liabilities
    • Fixed assets – Liabilities
    • Assets – Capital
  21. FIFO method assumes inventory sold is:
    • Last purchased first
    • First purchased first
    • Average cost
    • Highest cost first
  22. LIFO method assumes inventory sold is:
    • First purchased first
    • Last purchased first
    • Average cost
    • Lowest cost first
  23. Average cost method calculates cost based on:
    • Latest price
    • Average price
    • Oldest price
    • Market price
  24. Minimum stock level prevents:
    • Overstocking
    • Stock-out
    • High profit
    • Low demand
  25. Maximum stock level prevents:
    • Shortage
    • Overstocking
    • Low production
    • Low demand
  26. Reorder level indicates:
    • Maximum stock
    • Minimum stock
    • Level at which new order is placed
    • Average stock
  27. Economic order quantity (EOQ) minimizes:
    • Purchase cost
    • Ordering and holding cost
    • Production cost
    • Selling cost
  28. Inventory turnover ratio measures:
    • Profitability
    • Efficiency of inventory management
    • Liquidity
    • Solvency
  29. Contribution =
    • Sales – Variable cost
    • Sales – Fixed cost
    • Fixed cost – Sales
    • Profit – Cost
  30. Break-even point (units) =
    • Fixed cost / Contribution per unit
    • Sales / Fixed cost
    • Profit / Contribution
    • Fixed cost / Sales
  31. Marginal cost =
    • Total cost / Output
    • Additional cost of one extra unit
    • Average cost
    • Fixed cost
  32. Average cost =
    • Total cost / Output
    • Total cost / Fixed cost
    • Variable cost / Output
    • Fixed cost / Output
  33. Operating leverage affects:
    • EPS
    • EBIT
    • Sales price
    • Dividend
  34. Financial leverage affects:
    • EBIT
    • EPS
    • Sales
    • Cost
  35. ROI measures:
    • Liquidity
    • Profitability
    • Solvency
    • Efficiency
  36. Current ratio formula:
    • Current assets / Current liabilities
    • Current liabilities / Current assets
    • Total assets / Liabilities
    • Profit / Assets
  37. Quick ratio formula:
    • (Current assets – Inventory) / Current liabilities
    • Current assets / Current liabilities
    • Cash / Current liabilities
    • Total assets / Liabilities
  38. Cash ratio =
    • Cash / Current liabilities
    • Cash + Bank / Current liabilities
    • Current assets / Current liabilities
    • Cash – Inventory / Current liabilities
  39. Debt-equity ratio =
    • Debt / Equity
    • Equity / Debt
    • Total assets / Debt
    • Debt / Total assets
  40. Interest coverage ratio =
    • EBIT / Interest
    • Net profit / Interest
    • EBIT / Sales
    • Net profit / EBIT
  41. Capital budgeting decisions relate to:
    • Short-term assets
    • Long-term investments
    • Daily cash payments
    • Expenses only
  42. NPV is acceptable when:
    • NPV < 0
    • NPV = 0
    • NPV > 0
    • NPV = Cost
  43. IRR method accepts project if IRR:
    • < Cost of capital
    • = 0
    • > Cost of capital
    • < 0
  44. WACC stands for:
    • Weighted average accounting cost
    • Weighted average cost of capital
    • Weighted asset cost calculation
    • Working asset capital cost
  45. Capital gearing =
    • Fixed assets / Working capital
    • Debt / Equity
    • Sales / Profit
    • Assets / Equity
  46. Retained earnings =
    • Distributed profit
    • Undistributed profit
    • Capital
    • Liability
  47. Economic profit =
    • Total revenue – Explicit cost
    • Total revenue – Implicit cost
    • Total revenue – Total cost
    • Sales – Variable cost
  48. Accounting profit =
    • Total revenue – Explicit cost
    • Total revenue – Implicit cost
    • Total cost – Revenue
    • Sales – Fixed cost
  49. Perfect competition firm earns abnormal profit in:
    • Short run only
    • Long run only
    • Both short and long run
    • Never
  50. Long run profit in perfect competition =
    • Abnormal profit
    • Loss
    • Normal profit
    • Maximum profit
  51. Monopoly firm maximizes profit where:
    • MR = MC
    • MR = AR
    • MC = AR
    • Profit = Sales
  52. Price discrimination is possible in:
    • Perfect competition
    • Monopoly
    • Perfect market
    • Duopoly only
  53. Monopolistic competition is characterized by:
    • Homogeneous product
    • Differentiated product
    • Single seller
    • No competition
  54. Oligopoly firms are:
    • Independent completely
    • Interdependent
    • Isolated
    • Government controlled
  55. Price elasticity of demand measures:
    • Quantity response to price change
    • Price response to quantity change
    • Profit change
    • Supply change
  56. Cross elasticity of demand measures:
    • Price change effect on same good
    • Price change effect on related goods
    • Income change effect
    • Supply change
  57. Income elasticity of demand measures:
    • Price change effect
    • Income change effect on demand
    • Supply change
    • Cost change
  58. Law of diminishing marginal utility states:
    • Utility increases always
    • Utility decreases with additional units
    • Utility remains constant
    • Utility becomes zero immediately
  59. Indifference curve is:
    • Upward sloping
    • Downward sloping
    • Horizontal
    • Vertical
  60. Budget line shows:
    • Utility combinations
    • Income and price combinations
    • Cost only
    • Profit only
  61. Isoquant curve represents:
    • Equal profit
    • Equal output
    • Equal cost
    • Equal revenue
  62. Isocost line represents:
    • Equal output
    • Equal cost
    • Equal profit
    • Equal utility
  63. Inflation reduces:
    • Purchasing power
    • Production
    • Sales
    • Profit
  64. Deflation benefits:
    • Debtors
    • Creditors
    • Borrowers
    • Producers only
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