Kerala PSC Accountant/Junior Accountant/Accounts Clerk etc Question Paper 041/2026

1. Match the following accounting concepts with their functional/utility description :

1. A) I – C, II – D, III – B and IV – A
2. B) I – D, II – C, III – B and IV – A
3. C) I – C, II – D, III – A and IV – B
4. D) I – D, II – C, III – A and IV – B

2. The following statements are related to provisions in partnership Act and Companies Act as to formation and functioning of Partnership Business. Which of the following are incorrect in respect of partnership business?

1. A) Only I & III
2. B) Only III & IV
3. C) Only I, III & IV
4. D) II & IV only

3. On admission of new partner, after revaluation of assets and liabilities, the balance in Profit or Loss in the Revaluation Account (Profit & loss adjustment account) is transferred to capital account of partners. Which among the following describe best the accounting treatment as to transfer of balance in Revaluation Account?

1. A) Capital Accounts of all partners in New Profit Sharing Ratio
2. B) Capital Accounts of Old Partners in Sacrificing Ratio
3. C) Capital Accounts of Old Partners in Old Profit-Sharing Ratio
4. D) Capital Accounts of Old partners in New Profit Sharing Ratio

4. From the following information books of Accounts of XYZ Bros, calculate gross profit to be transferred to profit and loss account?

1. A) Gross Profit Rs. 2,32,000
2. B) Gross Profit Rs. 2,35,000
3. C) Gross Profit Rs. 2,37,000
4. D) Gross Profit Rs. 2,27,000

5. Which of the following fact(s) are correct and complete in respect of accounting treatment on goods sent on sale or return basis in preparation of financial statements of a sole trader?

1. A) I Only
2. B) I and II Only
3. C) II and III Only
4. D) I, II and III

6. The following statements are related to preparation of cost sheet. You are required to identify the correct statement (s) on attributes or preparation of cost sheet.

1. A) Only I and IV are correct
2. B) Only II and IV are correct
3. C) Only II correct
4. D) Only I and III are correct

7. X, Y and Z are partners in a business, sharing profits and losses in the ratio of 2:2:1. Mr. Z retires by selling his share to the business for a sum of Rs. 600 which is paid by X and Y, Rs. 480 and 120 respectively. Find out new Profit-sharing ratio of X and Y.

1. A) 2:3
2. B) 4:1
3. C) 14:11
4. D) None of the above

8. You are given with facts related to Maximum Possible Loss method of distribution of cash during the dissolution of partnership. Which of the following is (are) incorrect?

1. A) I only
2. B) II Only
3. C) III Only
4. D) IV Only

9. While preparing financial statements of Joint stock companies, it shall disclose notes to accounts. Out of the following combination of classification of Assets or Liabilities, which one combination include an item being not part of Note to Accounts of financial statements of joint stock company? Classification of assets/liabilities as notes to accounts

1. A) Short Term Borrowings – Long Term Loans and Advances – Inventories – Trade Receivables
2. B) Current Investments – Short Term Provisions – Other Long-term Liabilities – Short Term Borrowings
3. C) Capital Reserves – Long Term Borrowings – Tangible Assets – Other Non-Current assets
4. D) Short Term Loans and Advance – Contingent Liabilities and Commitments – Current Investments

10. You are required to calculate the cost price of unsold stock in the consignment accounts.

1. A) Rs. 660
2. B) Rs. 650
3. C) Rs. 620
4. D) Rs. 610

11. X Ltd. Has issued 10,000 irredeemable debentures of Rs.100 each carrying an interest rate of 14%, at a discount of 5%. The cost of issue is 2%, and the applicable tax rate is 50%. What is the cost of’ debt before tax?

1. A) 15.05%
2. B) 12.25%
3. C) 10%
4. D) 7.52%

12. XY Ltd. Has issued 20,000 fully paid equity shares with a face value of Rs. 100 each. The current market price of each share is Rs. 160, and the company has declared a dividend of Rs. 8 per share. What is the cost of equity capital?

1. A) 8%
2. B) 7%
3. C) 10%
4. D) 5%

13. ABC Company reports sales of Rs. 25,00,000, with variable costs of Rs. 15,00,000 and fixed costs of Rs. 5,00,000. The company also has debt amounting to Rs. 12,50,000, carrying an interest rate of 8%. What is the value of the combined leverage?

1. A) 1.5
2. B) 2.5
3. C) 3
4. D) 4.5

14. A Ltd. Earns Rs. 10 per share. The company has a capitalization rate of 20% and earns a return on investment of 25%. Using Walter’s Model, calculate the price per share.

1. A) Rs. 62.50
2. B) Rs. 34.25
3. C) Rs. 27.00
4. D) Rs. 85.00

15. Which of the following is not an assumption underlying the Modigliani-Miller (MM) capital structure theory?

1. A) The entire earnings are paid out as dividends and there are no corporate taxes
2. B) All firms are classified into homogeneous risk categories
3. C) Investors share homogeneous expectations
4. D) Capital markets are imperfect

16. Determine the Economic Order Quantity (EOQ) using the following data:

1. A) 4,000 kg
2. B) 2,000 kg
3. C) 2,500 kg
4. D) 7,500 kg

17. Which inventory management technique categorizes items based on their annual consumption value?

1. A) LIFO
2. B) FIFO
3. C) ABC analysis
4. D) JIT

18. Which of the following is considered a dividend irrelevance theory?

1. A) Walter Model
2. B) Gordon Model
3. C) M.M. Hypothesis
4. D) Lintner’s Model

19. In the Miller-Orr Model of cash management :

1. A) The lower limit, upper limit and return point of cash balances are established
2. B) Only the upper limit and return point are set
3. C) Only the lower limit and return point are set
4. D) None of these parameters are determined

20. Financial leverage refers to :

1. A) Utilization of fixed operating costs in production
2. B) Use of debt to finance the firm’s capital structure
3. C) Reliance on retained earnings for funding
4. D) Dependence on short-term borrowings for operations

21. Which of the following best describes the main purpose of cost accounting?

1. A) To report financial performance to shareholders
2. B) To determine selling prices based on market conditions
3. C) To calculate income tax liability
4. D) To ascertain the cost of production and assist in cost control

22. From the following, identify the one that is not a method of pricing material issues.

1. A) EOQ
2. B) LIFO
3. C) FIFO
4. D) Weighted Average Cost

23. Match the following wage systems with their features :

1. A) (i) – b, (ii) – d, (iii) – a, (iv) – c
2. B) (i) – a, (ii) – c, (iii) – d, (iv) – b
3. C) (i) – b, (ii) – c, (iii) – d, (iv) – a
4. D) (i) – d, (ii) – b, (iii) – a, (iv) – c

24. Consider the following statements regarding overhead absorption and choose the correct statement.

1. A) Under-absorption of overheads occurs when absorbed overheads are more than the actual overheads.
2. B) Over-absorption of overheads occurs when actual overheads are less than absorbed overheads.
3. C) Labour Hour Rate is suitable when production is capital-intensive.
4. D) Machine Hour Rate is suitable when production is labour-intensive.

25. From the following statements, identify the correct statement/s about Marginal Costing :

1. A) Only I and II
2. B) Only II and III
3. C) Only III
4. D) All of the Above

26. A company has a fixed cost of Rs. 1,00,000, variable cost per unit Rs. 20 and selling price per unit Rs. 40. What is the breakeven point in units?

1. A) 4,000
2. B) 2,500
3. C) 6,000
4. D) 5,000

27. Which of the following are causes of material usage variance?

1. A) Only (i), (ii) and (iii)
2. B) Only (i), (iii) and (iv)
3. C) Only (i) and (iv)
4. D) All of the above

28. Which of the following is not true as regards a Bin Card?

1. A) It is a record of stores kept in the storehouse
2. B) Contains only the quantity of materials
3. C) Prepared by the Cost Accounting Department
4. D) Prepared for each item of material separately

29. Consider the following statements :

1. A) Only (i) and (ii)
2. B) Only (iii)
3. C) Only (ii) and (iv)
4. D) Only (iii) and (iv)

30. You are given the following data :

1. A) Rs. 6,000
2. B) Rs. 15,000
3. C) Rs. 10,000
4. D) Rs. 5,000

31. In which style of leadership, the leaders does not believe in the use of power unless it is absolutely essential?

1. A) Democratic style
2. B) Autocratic style
3. C) Laissez faire style
4. D) Authoritarian style

32. A company is in need of a detailed plan for its new project ‘construction of a shopping Mall’ what type of plan is it?

1. A) Policy
2. B) Programme
3. C) Schedule
4. D) None of these

33. The type of organizational structure which promotes flexibility and initiative:

1. A) Divisional structure
2. B) Functional structure
3. C) Administrative structure
4. D) All of the above

34. The test which is conducted to measure existing skills of an individual:

1. A) Aptitude test
2. B) Pre-test
3. C) Skill-test
4. D) Trade test

35. One among the following is not a feature of directing :

1. A) It initiates action
2. B) It is a one time activity
3. C) It takes place at every level of management
4. D) It is a continuous process

36. The need for coordination arises due to :

1. A) Division of work
2. B) Unity of command
3. C) Centralisation
4. D) Less number of employees

37. An example of non verbal communication :

1. A) Email
2. B) Facial expression
3. C) Phone call
4. D) Video conferencing

38. The classical school of management thought emphasises :

1. A) Human relations and motivation
2. B) Informal organisation
3. C) Behavioural psychology
4. D) Scientific analysis of work

39. According to Herzberg, which of the following is a hygiene factor?

1. A) Achievement
2. B) Recognition
3. C) Working conditions
4. D) Personal growth

40. Which among the following best describes the essence of management?

1. A) Planning for profits
2. B) Organising capital
3. C) Achieving coordination among resources
4. D) Recruiting employees

41. The percentage change in the quantity demanded of tea to the percentage change in the price of coffee is termed as :

1. A) Price elasticity of demand
2. B) Income elasticity of demand
3. C) Cross elasticity of demand
4. D) Advertisement elasticity of demand

42. The demand for Giffen goods will increase with :

1. A) Decrease in price
2. B) Increase in price
3. C) Increase in the price of substitute goods
4. D) None of the above

43. Short-run production function is explained by:

1. A) Law of demand
2. B) Law of returns to scale
3. C) Elasticity of demand
4. D) Law of variable proportion

44. The term ‘Isoquant’ in production theory refers to :

1. A) A curve that shows the minimum cost of producing a given level of output
2. B) A curve that shows the maximum output that can be produced with a given level of input
3. C) A curve that shows the relationship between input prices and output
4. D) A curve which represents the different combinations of inputs producing a particular quantity of output

45. The mathematical form of Cobb-Douglas production function is Y = A K^α L^(1−α). What do L & K represent?

1. A) Land and capital
2. B) Labour and knowledge
3. C) Labour and capital
4. D) Land and knowledge

46. If demand increases without any corresponding increase in supply, then:

1. A) There will be increase in equilibrium price
2. B) There will be decrease in equilibrium price
3. C) No change in equilibrium price
4. D) None of the above

47. Variables that change after real output changes are called :

1. A) Leading indicators
2. B) Lagging indicators
3. C) Co-incident indicators
4. D) None of the above

48. Which of the following policies might a government implement to counteract a recession?

1. A) Increase taxes
2. B) Decrease taxes
3. C) Increase interest rates
4. D) Decrease interest rates

49. Returns to scale refers to the relationship between:

1. A) Input prices and output prices
2. B) The scale of input usage and the resulting level of output
3. C) The scale of output and the cost of production
4. D) Variable inputs and fixed inputs

50. ‘Monetary Policy’ is :

1. A) Government measures to influence the economy through spending and taxation
2. B) The central bank’s actions to control the money supply and interest rates
3. C) The strategies used by firms to increase market share
4. D) None of the above

51. ‘A company can sue and be sued’ means :

1. A) The company and its owners are considered the same for all legal purpose
2. B) The company’s liabilities are always the personal responsibility of its owners
3. C) A Company has Perpetual succession
4. D) A Company has separate legal entity

52. Who is the primary monitoring authority of Companies Act in India?

1. A) Institute of Chartered Accounts of India
2. B) Ministry of Corporate Affairs
3. C) Reserve Bank of India
4. D) Institute of Company Secretaries of India

53. Which of the following is not a feature of One Person Company (OPC)?

1. A) The owner’s liability is unlimited
2. B) It can be formed either as a company limited by shares or a company limited by guarantee; or an unlimited liability company.
3. C) A nominee must be appointed to succeed the Owner
4. D) It should have minimum one director

54. DIN in Company Law stands for :

1. A) Designated Identification Number
2. B) Director Investor Number
3. C) Designated Investor Number
4. D) Director Identification Number

55. In a general meeting of ABC Ltd, a matter has to be passed by special resolution. Out of 50 members present, 10 hesitate to vote, 10 vote against resolution and 30 in favour of the resolution. As the Chairman of the meeting what you to do?

1. A) Can pass the special resolution
2. B) Can’t pass the special resolution
3. C) Postpone the matter to the next meeting
4. D) None of the above

56. Which of the following statements relating to the disclosure of the financial statements of listed Companies is correct?

1. A) Financial statements will be available to the shareholders on request.
2. B) Financial statements should be kept confidential.
3. C) Financial statements are only required to be submitted at the time of liquidation.
4. D) Financial statements must be filed with the Registrar of Companies and made available on the company’s website.

57. Which of the following statements are correct in case of winding up of Company by national Company Law Tribunal?

1. A) (i),(ii) & (iii)
2. B) (ii),(iii) & (iv)
3. C) (i),(ii),(iii) & (iv)
4. D) (i),(iii) & (iv)

58. How many Board of Directors meeting should be held in the year of incorporation, if the Company is incorporated in the month of January?

1. A) 1
2. B) 2
3. C) 3
4. D) 4

59. According to the Companies Act, 2013, what is the minimum number of directors required to form an Audit Committee in a listed company?

1. A) 2 Directors
2. B) 3 Directors
3. C) 4 Directors
4. D) 5 Directors

60. Under Companies Act 2013, dormant Company means :

1. A) A company that is currently active but has a pending litigation.
2. B) A company registered under the Act, for a future project and has no significant accounting transaction.
3. C) A Company registered under the Act which has no active members.
4. D) None of the above.

61. Identify the major Function of Primary Market :

1. A) Provide market for existing share holders
2. B) Ensure liquidity for investors
3. C) None of these
4. D) Helps the companies to raise capital

62. Type of investors NOT permitted to invest in Indian Capital Market :

1. A) Foreign Portfolio Investors (FPI’s)
2. B) Minors through Guardian
3. C) Person of Indian Origin (PIO)
4. D) None of these

63. Which of the following is NOT a method of floatation of Capital?

1. A) Public Issue through Prospectus
2. B) Private Placements
3. C) Acquisition of shares of other companies
4. D) Follow on public offer

64. The regulatory authority while listing of Securities in Indian Stock Market :

1. A) Stock Exchanges
2. B) SEBI
3. C) RBI
4. D) Ministry of Corporate Affairs

65. What is Price Band in book building process?

1. A) Minimum and maximum price of the issue
2. B) The price range within which investor can bid
3. C) The price range within which shares will be listed in the Stock Exchanges
4. D) The average price of the issue

66. Which of the following is NOT a function of the Stock Exchange?

1. A) Determining the pricing of the issue
2. B) Transparent and fair trading environment
3. C) Clearing and Settlement
4. D) Fixing daily upper and lower price limit of the equity shares

67. Which of the following is NOT a Capital Market Instrument?

1. A) Equity Shares
2. B) ETF
3. C) Repurchase Agreement
4. D) Derivatives

68. Which of the following statement rightly explain FPO?

1. A) Issue of shares to the public for the first time
2. B) An existing company issuing shares to the public
3. C) A listed company issuing shares to the public for the first time
4. D) A listed company issuing shares to the existing or new investors after IPO.

69. Which of the following is NOT true in relation to IPO?

1. A) A private company after issuing IPO becomes a Public Company
2. B) A Government company cannot go for IPO
3. C) It dilutes the existing shareholder’s rights
4. D) After IPO company will be listed in atleast one Stock Exchange

70. Government securities are issued by :

1. A) Central Government
2. B) Central Government and State Government after getting permission from Central Government
3. C) Stock Exchanges
4. D) RBI

71. Which of the following statements is/are correct Income Tax in India?

1. A) All are correct
2. B) Only (i) & (iii)
3. C) Only (ii) & (iv)
4. D) Only (i) & (ii)

72. Identify the previous year in the following case. An assessee was appointed on 1st July 2024 as lecturer in a college on probation. He was confirmed on 30th June 2025 :

1. A) The previous year shall be from 1st April 2024 to 31st March 2025.
2. B) The previous year shall be from 1st April 2025 to 30th June 2025
3. C) The previous year shall be from 1st July 2024 to 31st March 2025
4. D) No previous year applicable to the case.

73. Which of the following income is/are assessed to tax in the same year in which the Income is earned?

1. A) All are correct
2. B) All except (ii) are correct
3. C) Only (i) & (iii) are correct
4. D) All except (iii) are correct

74. Which of the following is/are basic conditions for an individual is said to be a resident in any previous year?

1. A) Only (iii) & (iv)
2. B) Only (i) & (iii)
3. C) Only (iii)
4. D) Only (i) & (ii)

75. Compute residential status in the following case. Mr. Mohan. An Indian citizen, serving in a company in New York comes to India every year for five months.

1. A) Ordinarily resident
2. B) Not ordinarily resident
3. C) Non- resident
4. D) Cannot be determined

76. Which of the following income is/are totally exempted from computation of Income Tax?

1. A) All are exempted
2. B) Only (i), (ii) & (iv)
3. C) Only (i), (iii) & (iv)
4. D) None are exempted

77. Which of the following statements is/are correct to the computation of taxable Income under the salaries of an individual?

1. A) Only (i) & (iii)
2. B) Only (ii), (iii) & (iv)
3. C) Only (iii) & (iv)
4. D) Only (i), (ii) & (iv)

78. What will be the annual value of house property in the following case?

1. A) Rs. 81,000
2. B) Rs. 71,000
3. C) Rs. 80,000
4. D) Rs. 99,000

79. Which of the following statements is / are correct to the Goods and Services Tax?

1. A) Only (ii), (iii) & (iv)
2. B) Only (i), (ii) & (iv)
3. C) Only (iii) & (iv)
4. D) Only (i), (ii) & (iii)

80. Match the following :

1. A) 1 – (i), 2 – (ii), 3 – (v), 4 – (iii)
2. B) 1 – (iv), 2 – (v), 3 – (i), 4 – (ii)
3. C) 1 – (iv), 2 – (ii), 3 – (v), 4 – (iii)
4. D) 1 – (i), 2 – (iv), 3 – (ii), 4 – (iii)

81. Which are the elements of consumer’s black box for response to marketing stimuli are concerned?

1. A) (i) only
2. B) (i) & (ii) only
3. C) (ii) & (iii) only
4. D) (iv) only

82. Integrating ethnic themes and cross-cultural perspectives within a brand’s main stream marketing, appealing to consumer similarities across sub cultural segments rather than differences is known as :

1. A) (ii) only
2. B) (i) only
3. C) (iv) only
4. D) (iii) only

83. Which of the following statement is/are correct for Complex buying behaviour?

1. A) (ii) only
2. B) (i) only
3. C) (iv) only
4. D) (iii) only

84. The stage of consumer buying decision making process in which consumer takes further action after purchase, based on their satisfaction or dissatisfaction is known as :

1. A) (i) & (ii) only
2. B) (iii) only
3. C) (iii) & (iv) only
4. D) (iv) only

85. Among the following what are the Key aspects of Product of Positioning?

1. A) (i) & (ii) only
2. B) (ii) & (iii) only
3. C) (iii) & (iv) only
4. D) All the above

86. Forming segments of consumers who have similar needs and buying behaviours even though they are located in different countries.

1. A) (ii) only
2. B) (iv) only
3. C) (i) only
4. D) (iii) only

87. A consumer product that the consumer in the process of selecting and purchasing usually compares on such attributes as suitability, quality, price and style is known as:

1. A) (iii) only
2. B) (ii) & (iii) only
3. C) (ii) only
4. D) (iv) only

88. Which of the following statements is/are correct for Product portfolio?

1. A) (iii) only
2. B) (ii) only
3. C) (iv) only
4. D) (i) & (ii) only

89. A review of the sales, cost and profit projections for a new product to find out whether these factors satisfy the company’s objectives is known as :

1. A) (i) & (ii) only
2. B) (ii) & (iii) only
3. C) (iii) only
4. D) (iv) only

90. A temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity is known as :

1. A) (ii) only
2. B) (i) only
3. C) (iii) only
4. D) (iv) only

91. Which of the following statements are correct about internal check?

1. A) (i), (ii) and (iii)
2. B) (i), (ii) and (iv)
3. C) (i) (iii) and (iv)
4. D) All the above

92. Which of the following statements is/are not correct about internal audit?

1. A) Only (i) and (iv)
2. B) Only (ii) and (iii)
3. C) Only (iv)
4. D) Only (ii) and (iv)

93. Which of the following statements are true about audit programme?

1. A) Only (i) and (ii)
2. B) (i), (ii) and (iii)
3. C) (i), (iii) and (iv)
4. D) All the statements

94. Which of the following statements are true regarding audit control?

1. A) Only (i) and (ii)
2. B) Only (i) and (iii)
3. C) Only (ii) and (iv)
4. D) Only (ii) and (iii)

95. Which among the following statements are correct regarding audit note book?

1. A) (i), (ii) and (iii)
2. B) (i), (ii) and (iv)
3. C) (i), (iii) and (iv)
4. D) All the statements

96. Which among the following statements are correct regarding vouching?

1. A) All the statements
2. B) (i), (ii) and (iii)
3. C) (i), (ii) and (iv)
4. D) Only (i) and (ii)

97. Which among the following statements is/are wrong regarding the objects of internal check?

1. A) (ii) and (iii)
2. B) (ii), (iii) and (iv)
3. C) Only (iii)
4. D) Only (iv)

98. Which among the following statements is/are wrong?

1. A) (i)
2. B) (ii)
3. C) (iii)
4. D) All the statements

99. Which among the following statements is/are true regarding the purpose/s served by audit working papers?

1. A) (i), (ii) and (iv)
2. B) (ii), (iii) and (iv)
3. C) (iii) only
4. D) All the statements

100. Which among the following is the most appropriate word to denote the practice of not entering cash received immediately in the cash book and entering it only when a similar amount is received from another debtor?

1. A) Misappropriation
2. B) Teeming and Lading
3. C) Misuse
4. D) None of these