Commerce Job Interview Questions and Answers

1. What is commerce?
Commerce refers to and includes all those activities which are necessary to bring goods
and services from the place of their origin to the place of their consumption
2. Into how many departments are commerce mainly divided into? Which are they?
Into two. They are
 Trade
 Aids of trade
3. The trade is subdivided into two divisions, which are they?
Home trade and Foreign Trade.
4. Into how many divisions the Home Trade is divided?
Into two they are, Wholesale and retail
5. Which are the two divisions of Wholesale?
They are importing trade and export trade
6. When did the commerce begin to grow?
It is beginning to grow only after the division of labor and development of exchange.
Once it started growing, it spread its invisible thread throughout the length and breadth
of the world.
7. What is a company?
A company is an incorporated association which is an artificial person, having an
independent legal entity, with perpetual succession, a common seal, a common capital
comprised of transferable shares and carrying limited liability.
8. What is Audit?
An audit may be said to be such an examination of books, accounts, and vouchers of a
business, whether it is in a proper manner for the financial period.
9. What is the minimum number of directors in a Public Company?
At least two directors
10. What is the public sector?
 The central government,
 local authorities and
 the public corporations that run nationalized industries
11. What is Plant layout?
‘Plant layout’ means the arrangement and location of different departments and of the
machinery and equipment within a department
12. What is the Protocol?
The minutes or records of a diplomatic conference; especially a note of agreement on a
subsidiary matter which supplements a treaty
13. What is Mortgage?
It is a transaction by which land or any other property may be given as security for
repayment of a loan
14. What is Loan?
Something lent for the borrower’s temporary use, especially money lent with conditions
about repayment and the payment of interest
15. What is an account?
An account is a book-keeping device used in summarizing the increases and decreases
in each asset or equity item
16. What is a Balance Sheet?
It is the statement of account which is prepared at the end of every financial year. It
gives the total picture of the business at the point of time.
17. What is Business?
Business is the sum of activities comprising buying and selling goods, manufacturing
goods or providing services in order to make a profit.
18. What is Guarantor?
A person who promises that if a second fails to fulfill some obligation, then he will fulfill it
instead or pay money up to a specified limit to compensate for any loss caused by the
second person’s failure
19. What is the Quoted price?
It is the price of a shared commodity as stated in the official list of the stock exchange
commodity market.
20. What is Share?
A unit for reckoning investor’s interests in the contributed capital of a company
21. What is the other name for creditorship?
securities Debentures
22. Who is called an Arbitrator?
A person chosen by the parties to a dispute to suggest a way of settling the dispute
23. what is a Capital?
The tangible resources of a person or organization, including cash, machinery, land,
building, raw material, etc. are called capital
24. Who is sleeping, partner?
A partner who contributes capital but will not take part in business activities is called a
sleeping partner.
25. When did the government institute the Companies Amendment Act?
In February 1963.
26. What is Debit?
It is the term using in double-entry bookkeeping for an entry made on the left-hand side
of an account
27. Who is a Floor Trader?
A person, usually a member of the stock exchange entitled to trade on the floor of that
exchange is called floor Trader
28. What is Liquid Asset?
The asset of the business which comprises cash or item which can easily and quickly
be converted into cash within a period of one year
29. Name the brand mark which has legal restrictions:
Trade Mark
30. What is the Stock Market?
An organized market for securities. Also called a ‘stock exchange’
The tangible resources of a person or organization, including cash, machinery, land,
building, raw material, etc. are called capital
31. What is Tap?
A large quantity of securities held by someone who is able to sell to anyone who wants
to buy is called a tap.
32. What is Value Added Tax(V.A.T.)?
The principle of V.A.T. is that tax is levied at each stage of the production of goods or
services and on the value added at each stage of the production
33. What is Vital Statistics?
It is the statistics concerned with births, deaths, ages, health, marriages, diseases,
etc…
34. What is Gratuity?
A gift given especially of a small sum of money given in response to the service
received or anticipated
35. What is the Gross National Product (G.N.P)?
It is the total value of all goods and services that are produced by the people of a
specified country in a year
36. What is Wage?
It is the remuneration paid to the operative staff whose output can be directly in a year
37. What is By-product?
A commonly which can be sold, produced in the process of manufacturing the main
product.
38. Which is called a barometer of the financial health of a country?
Stock-Exchange
39. A document issued by a vendor giving credit to the debtor is called:
Credit note
40. What is the term used with reference to assurance policies?
Endowment
41. What is Petty Cash?
A small fund of cash held by an institution which is used to make small and urgent
payments
42. Who is entitled to take part in the control and management of a business in a company?
The board of directors elected by the shareholders
43. In a company who is responsible for considering the legal aspects of company activities?
The company secretary
44. What is a man hour?
It is a unit for measuring employment equivalent to the employment of one person for
one hour
45. Which audit is conducted only once in a while and that also when the client desires?
Occasional audit
46. The bailment of goods as security for payment of a debt is called:
Pledge
47. The selection of goods offered for salary a retailer is called:
Assortment
48. What is a person or party to whom an assignment is made called?
Assigned
49. What is Tenor?
A bill of exchange may be payable sometime in the future
50. Which value was measured in gold or equivalent in US dollars?
Par value
51. What is the name of entry which is used in Bank Column cash book to record the
money transaction?
Contra entry
52. The fixed cost of producing a quantity of a good divided by the quantity produced is :
Average fixed cost
53. Which is the basic document of a company?
Memorandum of association
54. The minimum number of persons who has to sign the Memorandum of association?
Seven persons in the presence of one witness
55. In the charter of the company while choosing a name which word should not be
included?
Co-operative
56. In the name of a company which word should be used at the end?
Limited
57. Which are the most important clauses of the memorandum?
The object clause
58. Which is a document containing rules and regulations for the internal management of
the company?
The article of association
59. What is the maximum number of partners in Banking business?
Ten
60. What is the minimum number of members in a public company?
Seven
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61. Which bank note gives the bearer the right to have its face value converted into gold or
some other commodity of value equivalent to the amount stated?
Convertible bank-note
62. In which form the co-operative society, distributes its surplus dividends to its members?
In the form of bonus
63. Which is the technique designed to create an artificial market to benefit a businessman?
Rigging the market
64. What is dead time?
Time lost through no fault of the employee and for which he is usually paid at the full
rate
65. What is a decision tree?
A diagram of a sequence of decisions, each of which involves choosing between a
known number of alternatives and depends on the resultants of the previous decisions
66. What is syndicate?
A group of people working together towards a common objective usually profit is called
a syndicate.
67. In the aspect of banking business, what is the term used of giving loans to companies on
a large scale?
Wholesale banking
68. The profit margin which a retailer of goods obtains from his supplier is called:
Trade discount
69. What is the main distinction between an Auditor and an Accountant?
It is the duty of the auditor to prepare the accounts, The accounts have to be prepared
by the accountant whereas the auditor is concerned with the detailed and critical
examination of the account book
70. What is the term used to indicate a statement of what is owned and what is owed?
Assets and Liability statements
71. How is an asset expressed?
Assets Liabilities = owner’s equity
72. What is a Subsidy?
It is a method adopted by the government or a company of supporting a price
73. In which organization, every subordinate must obey his superior, whether be like it or
not?
Formal organization
74. Which department is maintained in every modern business house to obtain the goodwill
of the people?
Public relations departments
75. What is Quasi-loan?
It is an arrangement between two persons under which one agrees to meet some of the
other’s financial obligations on the condition that the later reimburses him.
76. Which are the main principles in the allocation of office work?
They are specialization, correlation, and business connection
77. Who first suggested the separation of manual work from mental labor through the
establishment of two departments?
Taylor
78. Which are the two departments suggested by Taylor?
Planning and Operation
79. Which is a chief subsidiary object of auditing?
Detection of Frauds and errors
80. What is Freight?
The money paid to a shipowner for carrying goods by an exporter
81. Who is a journeyman?
A craftsman who, having finished his period of apprenticeship
82. What is Questionaire?
A document especially reproduced in large numbers containing a set of questions
intended to elicit useful information
83. Give another name for the parent company?
Holding company
84. What function of the computer ensures that the data are not distorted during
processing?
Parity check
85. What is the term used with particular reference to bills of exchange?
Endorsement
86. What is the price at which the supply curve for a good and its demand curve intersect
called?
Equilibrium price
87. What is similar to overdraft except that it is comparatively for a longer period?
Cash credit
88. What is the term Ad referendum means?
This term means that although the contract has been signed, certain matters have been
left over for consideration when they actually arise
89. What is S.A.Y.E.?
Save While You Earn
90. Who are plural executives?
A group of people (a committee or board) who were given responsibility to exercise
authority jointly over Specified activities of others.
91. What is Boomboggling?
It is the wasteful or uneconomic labor indulged in by a firm to boost the cost of
production.
92. What is Quid pro quo?
One thing in return for another consideration
93. What is paper gold?
The colloquial name for special drawing rights or similar suggested schemes
94. What is Kennedy Round?
Extensive negotiations of multilateral tariff agreements, within the limits set by the
General Agreement on Tariffs and Trade, investigated by the late American President
Kennedy.
95. What is Hot money?
It refers to funds that move quickly from one country to another in search of the highest
rate of interest.
96. What is a Garnishee order?
It is a court order attaching the funds of the judgment debtor in the hands of a third party
in favor of the judgment-creditor.
97. What is Dead Rent?
A minimum amount payable, for example, on the lease of mine.
98. What is a kite?
A cheque is drawn by someone who knows there is no money in the bank account he is
drawing on.
99. What is Future Market?
An organized market for buying and selling future contracts
100. What is Free Trade?
The unrestricted international trade either with no customs duties or with customs duties
which are used to create revenue.
101. What is the business cycle?
A recurring sequence of changes in business activity.
102. What is a Bank?
According to Prof: John pages “no one or nobody corporate or otherwise can be a
banker who does not open current accounts; pay cheques were drawn on himself and
collect cheques for customers”.
103. What is an exchange bank?
Exchange banks extent financial assistance to foreign trade and deal in foreign
exchange.
104. What is Quantitative credit control?
Quantitative credit controls are used when it wants to control the total supply of money
105. What is Qualitative credit control?
Qualitative credit controls are used when it wants to control the use of funds made
available by the commercial banks to customers
106. What is Open market operation?
Open market operations imply the purchase and sale of government securities by the
Central Bank in the open market.
107. What is V.R.R.?
Variable Reserve Ration
108. Define Endorsement?
’Endorsement’ or ‘indorsement’ is the act of signing the name of the maker of the holder
of a negotiable instrument for the purposes of negotiation.
109. What is Sans Frais endorsement?
It is an endorsement where the endorser specifies that the endorsee or any subsequent
holder need not incur any expense on the instrument on his account.
110. What is facultative Endorsement?
In a facultative endorsement, the endorser waives some of his rights, like the right to
receive notice of dishonor.
111. Define Bill of Exchange?
The negotiable instruments act, 1881 defines a ‘bill of exchange’ as “an instrument in
writing containing an unconditional order, signed by the maker, directing a certain
person to pay a certain sum of money only to, or to the order of a certain person or to
the bearer of the instrument.
112. What is the maturity date?
A bill is said to be matured on the date which it falls due for payment. This date is called
the ‘due date’ or the ‘maturity date’ of the bill.
113. What are Days of Grace?
A bill falls due only on the third day after the day on which it is stated to be payable.
These extra days allowed for the payment of a bill is called the ‘Days of Grace’.
114. What is Inland Bill?
Bill drawn and made payable in India as well as bill drawn upon a person residing in
India is called an Inland Bill.
115. What is Foreign Bill?
A foreign bill is one which is drawn in India and made payable in a foreign country or
drawn on one who is a resident of a foreign country.
116. Define Promissory note?
Negotiable instrument act 1881 defines a promissory note as “an instrument in writing
containing an unconditional undertaking signed by the maker to pay a certain sum of
money only, to or to the order of a certain person”.
117. What is Insurance?
Insurance is a mechanism through which the sufferings of one man is minimized by
sharing it with many men.
 118. What is Causa Proxima (Proximate Cause)?
According to this doctrine when there are several causes, only the proximate or nearest
cause should be considered. The distant and remote cause shall be ignored.
119. What is Re-insurance?
Re-insurance means ensuring an already insured risk by the insurer. It is done mainly to
reduce the risk of the insurance company by sharing it with other companies.
120. What is Double Insurance?
It is entirely different from reinsurance. In this case, the insured ensures the same
subject matter with more than on insurance company.
121. What is the definition of Chambers of Commerce?
“Chambers of commerce is a voluntary association of merchants, financiers,
manufacturers and other engaged in business for the purpose of promoting and
protecting the interests of its members and of the trade of the country as a whole”.
122. Who is an agent?
An agent is a person who is employed by another to represent him in dealing with other
parties. The person why is so represented by an agent is called the principle.
123. Into how many types are the agent’s classifieds?
Into two
1. General
2. Special
124. Who is a general agent?
The general agent is one who is authorized to undertake work of a general nature. Eg.
Managing Director or General Manager of a company.
125. Who is a Special agent?
A special agent is one who is appointed to undertake some special work Eg. Agent
appointed to sell a car by its owner
126. Who is a Broker?
Brokers act as intermediaries between two parties, in trade contracts.
127. Who is a Produce Broker?
These brokers arrange for the sale and purchase of agricultural products such as
coffee, tea, etc..
128. Who is a Stock and Share broker?
They are engaged in the purchase and sale of shares and other securities, of
companies as well as Government securities on a stock exchange.
129. Who is a Shipping broker?
They are brokers who transact business connected with the ship. They arrange charter
parties, procure cargo, etc., on behalf of their principles.
130. Who is an insurance broker?
They arrange various types of insurance in connection with trade.
131. Who is a property broker?
They are mainly engaged in buying and selling fixed assets like land, buildings, etc.
132. What is Loco or Ex-factory?
This means the price quoted includes the cost of goods plus a nominal profit. The place
of delivery would be the supplier’s factory or godown. The cost of transport, insurance,
and other expenses should be met by the buyer.
133. What is F.O.R. (Free On Rail)?
This indicates that the price covers the cost of goods and all other expenses until the
goods are put into the railway wagon.
134. What is F.O.B (Free On Board)?
This includes the cost of the goods and all other expenses to be incurred in placing the
goods on board the ship.
135. What is F.A.S.(Free Along Side)?
This includes all expenses like packing charges, delivery of goods to the side of the
ship, etc. But it doesn’t include charges for putting them on board.
136.What is C & F (Cost & Freight)?
This includes the cost of goods plus the freight charges and other expenses for
delivering the goods at the importer’s port.
137. What is C.I.F. (Cost Insurance Freight)?
This includes the cost of goods, insurance, freight and all charges up to the port of
import.
138. What is Marine Insurance?
Marine insurance is the oldest kind of insurance. It is that branch of insurance which
relates to ships and their cargoes.
139. Which is the oldest stock exchange in India?
Bombay Stock Exchange which was set up in 1887.
140. What is the stock exchange functioning in Kerala called?
Kochi Stock Exchange