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IPCC - Business Laws, Ethics and Communication

Question Paper
50Marks
MCQs contain 1 Mark each and rest carry 5Marks per question
1. Which of the following statements is not correct as per the Payment of Bonus Act, 1965?
(a) It is applicable to construction industry.
(b) It does not apply to employees in Life Insurance Corporation of India.
(c) Allocable surplus means 67% of the available surplus.
(d) Employee means any person including apprentice.
2. The ceiling on wage or salary for calculation of Bonus under the Payment of Bonus Act
1965 is
(a) Rs. 2,500
(b) Rs. 3,500
(c) Rs. 6,500
(d) None of the above

3. The Payment of Bonus Act, 1965 is applicable to an employee who draws wage or salary
of
(a) Rs. 3500 in case of apprentice
(b) Rs. 5000 in case of apprentice and employee
(c) Rs. 7500 in case of employee only
(d) Rs. 21,000 in case of employee only

4. Payment of Bonus Act 1965 is applicable to every factory and to every other
establishment where ---------- workmen are employed on any day during an accounting year
(a) 20 or more
(b) 10 or more
(c) 50 or more
(d) 30 or more

5. Every employee receiving salary or wages upto RS. 21,000 p.m. and engaged in any
kind of work whether skilled, unskilled, managerial, supervisory etc. is entitled to bonus for
every accounting year if he has worked for at least ---------- days in that year.
(a) 15 working days
(b) 30 working days
(c) 60 working days
(d) 90 working days

6. The bonus should be paid in cash within ----------- months from the close of the
accounting year
(a) 8 months
(b) 6 months
(c) 12 months
(d) 3 months

7. An employer has the following rights:


1.
Right to forfeit bonus of an employee, who has been dismissed from service for
fraud, riotous or violent behaviour, or theft, misappropriation or sabotage of any property of
the establishment.
2.
Right to make permissible deductions from the bonus payable to an employee, such
as, festival/interim bonus paid and financial loss caused by misconduct of the employee.
3.
Right to refer any disputes relating to application or interpretation of any provision of
the Act, to the Court or Tribunal.
(a) 1 & 2
(b) 1, 2 & 3
(c) 2 & 3
(d) 1 & 2
8. The contravention of the provisions of the Act or rules may attracts the punishment of
(a) imprisonment upto 3 months, or fine up to Rs.500, or both
(b) imprisonment upto 2 months, or fine up to Rs.1000, or both
(c) imprisonment upto 6 months, or fine up to Rs.10000, or both
(d) imprisonment upto 6 months, or fine up to Rs.1000, or both

9. Excess allocable surplus remain after paying the maximum bonus of 20% on the wage or
salary of the employee, should be carried forward to the next following year for utilizing

the payment of bonus in case of the shortage of the allocable surplus or losses occur. This
is called as
(a) Set-On
(b) Set-Off
(c) Take-On
(d) Set-Off

10.When there are no profits or the amount falls short or deficiency for payment of minimum
bonus to employees, such deficiency amount should be adjusted to the current accounting
year from the Set-On amount which was carried forward in case of excess allocable surplus
in the previous year. This is called as .
(a) Set-On
(b) Set-Off
(c) Take -On
(d) Take Off
11. Under the Payment of Gratuity Act, 1972 the maximum gratuity payable is
(a) Rs. 10 lakhs
(b) Rs. 8 lakhs
(c) Rs. 5 lakhs
(d) Rs. 3.5 lakhs

12. What is the qualifying service to claim gratuity?


(a) 15 years
(b) 10 years
(c) 5 years
(d) No such prescription

13. Payment of Gratuity Act, 1972 is applicable to every shop or establishment within the
meaning of any law for the time being in force in relation to shops and establishment in a
State, in which --------- persons are or were employed on any day in the preceding 12
months.
(a) 10 or more persons
(b) 10
(c) 10 or more persons
(d) 20

14.For every completed year of service or part thereof in excess of six months, the
employer shall pay gratuity to an employee at the rate of -------- days wages based on the
rate of wages last drawn by the employee concerned

(a) 25 days
(b) 15 days
(c) 30 days
(d) 7 days

15. In the case of an employee who is employed in a seasonal establishment and who is
not so employed throughout the year, the employer shall pay the gratuity at the rate of
--------days wages for each season.
(a) 14 days
(b) 15 days
(c) 10 days
(d) 7 days

16. The employer shall arrange to pay the amount of gratuity within --------- days from the
date it becomes payable.
(a) 30 days
(b) 15 days
(c) 60 days
(d) 75 days

17.The formula for calculating gratuity is


(a) Gratuity = (Monthly Salary/25) X 15 X No. of years of service
(b) Gratuity = (Monthly Salary/30) X 15 X No. of years of service
(c) Gratuity = (Monthly Salary/26) X 15 X No. of years of service
(d) Gratuity = (Monthly Salary/15) X 15 X No. of years of service
18. Which of the following is wrong statement
(a)No gratuity payable under the Act shall be liable to attachment in execution of any decree
or order of any civil, revenue or criminal court.
(b)The Payment of Gratuity (Amendment) Act, 1987 has prescribed provisions for
compulsory insurance for employers liability for payment towards the gratuity under the Act
from the Life Insurance Corporation of India or any other prescribed Insurer.
(c)Once the Payment of Gratuity Act becomes applicable to the establishment, a notice in
Form A has to be given by the employer to the controlling authority within 30 days. Notice
in Form B is to be given to the controlling authority within 30 days of any change in name,
address, employer or nature of business. If an employer proposes to close down the
business, he shall submit a notice in Form C to the Controlling Authority at least 60 days
before the intended closure.

(d) This act is not applicable to public charitable and religious trusts

19.Continous service of 5 years is not mandatory in which case


(a) Retirement
(b) Superannuation
(c) Death or Disablement
(d) Both 1 & 2

20. While computing the days on which the employee has actually worked following days
shall be included when :(a) In the case of a female, she has been on maternity leave for not more than 12Weeks
(b) In the case of a female, she has been on maternity leave for not more than 12months
(c) In the case of a female, she has been on maternity leave for not more than 12days
(d) In the case of a female, she has been on maternity leave for not more than 12Hours

21. What is the present wage limit to be eligible to be covered under the Employees
Provident Funds and Miscellaneous Provisions Act, 1952?
(A) Rs. 6,000
(B) Rs. 6,500
(C) Rs. 15,000
(D) Rs. 12,500
22. What are the emoluments earned by the employees which are not not come under the
definition of 'Basic Wages' in Employees Provident Funds and Miscellaneous Provisions
Act, 1952,
(i) All emoluments which are earned by an employee while on duty or on leave or on
holidays with wages in either case in accordance with the terms of the contract of
employment and which are paid or payable in cash to him
(ii)The cash value of any food concession
(iii) Any dearness allowance, house-rent allowance, overtime allowance, bonus, commission
or other similar allowance payable to the employee in respect of his employment or of work
done in such employment;
(iv) Any presents made by the employer;

(a) i & iii


(b) ii & iv
(c) i, ii & iii
(d) ii, iii & iv

23. The chairman and members of Central Board constituted under Employees Provident
Fund are appointed by
(a) Central Government
(b) State Government
(c) Supreme Court
(d) None of the above

24. Under this act, how many members are appointed by the Central Government in Central
Board representing employees in the establishments to which the Scheme applies
(a) 15
(b) 10
(c) 12
(d) 20

25. The accounts of the Central Board is audited annually by


(a) Central Provident Fund Commissioner
(b) Any auditor appointed by Central Government
(c) Agency appointed by Comptroller and Auditor-General of India
(d) Any auditor appointed by the Chairman of Central Board

26. Solar Industried limited sold its unit to Mars industries limited and contributed 30%
contribution in the pension scheme. The transferee company refused to bear the balance
70% contribution in the pension scheme. Decide, under the employees provident fund and
miscellaneous provisions act, 1952, the liability of remaining contribution.
27. Explain the provisions of the EPF & Misc provisions act, regarding the following:
(1) Rate of Interest on amount due from the employer under the Act.
(2) Maximum limit of interest rate
(3) The period for which the employer is liable to pay the said interest

28. An Inspector appointed under the EPF & Misc Provisions Act, 1952 makes an inspection
at 10 p.m. (Five hours after factory timings) and seeks to take copies of the Shareholders
Register:. How far under the Act is his action reasonable?
29. What are the orders that can be passed by the Employees provident fund appellate
tribunal on appeals against the orders passed by the Central Government or authorized
officers?
30. When an employee becomes disabled due to any accident or disease and is unable to
do the same work and re-employed on the reduced wages, how the gratuity of such
employee shall be, computed under the provisions of the Payment of Gratuity Act, 1972?

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