APSET Paper 2 Mock Test - 8 (Commerce) - AP TET MCQ

The correct answer is II, III & IV.

Key PointsFactors II, III, and IV (production policy, firm's goodwill, and supply conditions) can all influence the working capital requirement of a firm.

Market conditions (option I) can also influence working capital requirement, but it is not as directly correlated as the other three factors. For example, a firm may need to keep more inventory or accounts receivable during a recession, but it is also possible to reduce working capital requirement by streamlining operations or negotiating better terms with suppliers and customers.

Overall, the optimal working capital requirement for a firm will vary depending on its industry, size, and specific circumstances. However, understanding the factors that influence working capital requirement can help firms to better manage their cash flow and profitability.

Additional Information II. Production Policy: The firm's production policy can also affect its working capital requirement. For example, a firm that uses just-in-time inventory management will have a lower working capital requirement than a firm that uses a more traditional inventory management system.

III. Firm's Goodwill: A firm's goodwill can also affect its working capital requirement. A firm with good goodwill may be able to negotiate better terms with its suppliers and customers, which can lead to a lower working capital requirement.

IV. Supply Conditions: Supply conditions can also affect the firm's working capital requirement. If the supply of raw materials is tight, the firm may need to keep more inventory to ensure that it has enough materials to produce its products.

The gains from international trade depend upon the cost ratios of differences in comparative cost ratios in the two trading countries. The smaller the difference between the exchange rate and cost of production the smaller the gains from trade and vice versa.

Personal selling is the element of promotion mix which wholesalers primarily use. Businesses use personal selling by using a sales force to sell its products, after meeting face to face with customers.

The correct answer is 1926.

Key Points

Trade Union Act 1926:

• The Trade Union Act was passed in the year 1926 in India.
• The main objective of the Act was to provide legal recognition and protection to registered trade unions and their activities.
• The Act defined a trade union as "any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workmen and employers or between workmen and workmen, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more trade unions".
• The Act also laid down certain provisions related to the registration, rights, and liabilities of trade unions.

Vouching is said as essence of Auditing.

Verification, Valuation, and Internal Checks are all parts of auditing but Vouching is the essence or backbone of auditing because when performing an audit, an auditor must have proof of all transactions. Without the proof provided by vouching, the claims provided by the auditor are just that, only claims.

In most cases, hard to detect frauds can only be discovered through the use of vouching. This means that the auditor must conduct vouching with great importance.

The correct answer is Orders of commission on certain combination.

Key PointsCompany - The term is derived from the Latin word (“com” meaning “with” or “together”; “panis” that is “bread”) Section 2(20) of Companies Act 2013 states that a company means any association of person registered under the present or the previous companies act.

Important PointsSection 31 of the Competition Act, 2002 deals with Commission orders on specific combinations -

(1) The Commission shall, by order, approve any combination, including any combination with respect to which a notice has been given pursuant to subsection (2) of section 6, where the Commission is of the opinion that such combination does not, or is not likely to, have an appreciable adverse effect on competition.

(2) If the Commission believes that the combination will have a significant adverse impact on competition, it must order that the combination not go into effect.

(3) When the Commission believes a combination will have, or is likely to have, a significant detrimental effect on the competition but that effect can be mitigated by making appropriate changes to the combination, it may suggest the necessary modifications to the parties to the combination and the combination itself.

The OTC Exchange Of India (OTCEI), also known as the Over-the-Counter Exchange of India, is based in Mumbai, Maharashtra. It is India's first exchange for small companies, as well as the first screen-based nationwide stock exchange in India. OTCEI was set up to access high-technology enterprising promoters in raising finance for new product development in a cost-effective manner and to provide a transparent and efficient trading system to investors. It facilitates faster transactions, greater liquidity in the market, and transparency in transactions OTCEI is promoted by the Unit Trust of India, the Industrial Credit and Investment Corporation of India, the Industrial Development Bank of India, the Industrial Finance Corporation of India, and other institutions, and is a recognized stock exchange under the SCR Act.

A probability sampling method is any method of sampling that utilizes some form of random selection. To have a random selection method, you must set up some process or procedure that assures that the different units in your population have equal probabilities of being chosen.

β (Beta) is the probability of Type II error in any hypothesis test–incorrectly failing to reject the null hypothesis.

A structured questionnaire is a document that consists of a set of standardized questions with a fixed scheme, which specifies the exact wording and order of the questions, for gathering information from respondents.

T-tests are a type of parametric method which can be used when the samples satisfy the conditions of normality, equal variance, and independence.

Hence, the correct option (D).

The correct answer is the Working capital sales ratio.

Key Points

• Working Capital Sales ratio/Working Capital/W.C. turnover ratio: It is calculated by dividing "net annual sales" by the "average amount of working capital"—current assets minus current liabilities—during the same 12-month period.
  • It measures how well a company is utilizing its working capital to support a given level of sales.
  • A high turnover ratio indicates that management is being extremely efficient in using a firm's short-term assets and liabilities to support sales.
  • Conversely, a low ratio indicates that a business is investing in too many accounts receivable and inventory assets to support its sales, which could eventually lead to an excessive amount of bad debts and obsolete inventory write-offs.

Additional Information

• The profitability ratio is used to evaluate the company’s ability to generate income as compared to its expenses and other cost associated with the generation of income during a particular period. This ratio represents the final result of the company.
• A liquidity ratio is a financial ratio that indicates whether a company's current assets will be sufficient to meet the company's obligations when they become due.

• Copyright refers to the legal right of the owner of intellectual property. In simpler terms, copyright is the right to copy. This means that the original creators of products and anyone they give authorization to are the only ones with the exclusive right to reproduce the work.
• A trademark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others. A service mark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of a service rather than goods.
• Industrial design (ID) is the professional service of creating and developing concepts and specifications that optimize the function, value, and appearance of products and systems for the mutual benefit of both user and manufacturer.

The correct answer is The provisions of the Act are applicable to the sale of both movable properties and immovable properties.

Key PointsPrimer to The Sale of Goods Act, 1930:

• The sale of goods is one of the specific forms of contracts recognized and regulated by law in India.
• It is an Act to define and amend the laws relating to the sale of goods.
• It came into force on 1st July 1930.
• The provisions of the Act are applicable to the sale of ONLY movable properties and the Act is not applicable to immovable properties.
• It extends to the whole of India.

Below is the explanation of the right answer.

Therefore, Option 2 is the right answer.

The Prudence principle is the rule of becoming careful. In accounting, we can become careful about future losses. For facing the losses without tension, it is very easy to separate of profit's some part for this. Every type of loss will increase our liability. As per the prudence principle, we should make and record all estimated future losses and forget all estimated future gains. By doing this, we have to make the provisions for future losses. For example, there is a risk of defaulting some debtors. For tolerating this loss, it is good, if we make the provision for doubtful debt. This reserve will deduct our total profit. If this loss will happen, we can easily buy new stock through this provision. This provision is also called the principle of conservatism because this rule is not new. Every time, a businessman wants to play his investment on the safe side. He also wants to control every type of risk by making reserve. At that time of the making of the reserve, he should estimate the future loss correctly, otherwise, it will become a secrete reserve and it is against the principle of full disclosure.

The correct answer is Amount spent on activities which only benefit the employees of the company

Key PointsActivities that doesn't qualify as CSR Expenditure:

• CSR projects or programs or activities that benefit only the employees of the company and their families
• One-off events such as marathons/ awards/ charitable contributions/advertisements/sponsorships of TV programs etc. 
• Expenses incurred by companies for the fulfilment of any Act/ Statute of regulations (such as Labour Laws, Land Acquisition Act, etc.)
• Contribution of any amount directly or indirectly to any political party
• Activities undertaken by the company in pursuance of its normal course of business.

Firstly, the aggrieved employee shall convey his grievance verbally in person to the officer designated by the management for this purpose. The officer has to answer within 48 hours of the presentation of the complaint.

Hence, the correct option (C).

The correct match is given below:

Unity of Command means getting orders/ command from only one supervisor. Fayol has stated “As soon as two superiors impose their authority over the same person or department, uneasiness makes itself felt. Dual command is a perpetual source of conflict.”

The German sociologist Max Weber argued that bureaucracy constitutes the most efficient and rational way in which human activity can be organized and that systematic processes and organized hierarchies are necessary to maintain order, maximize efficiency, and eliminate favouritism.

Taylor's philosophy focused on the belief that making people work as hard as they could was not as efficient as optimizing the way the work was done. In 1909, Taylor published "The Principles of Scientific Management." In this, he proposed that by optimizing and simplifying jobs, productivity would increase.

The correct answer is Robert H. Waterman and Tom Peters.

Key Points The seven-S model was developed by Tom Peters, Robert Waterman, Julien Philips, Richard Pascale, and Anthony G. Athos in the early 1980s. It is a framework for understanding and managing organizations. The model consists of seven elements that are interrelated and interdependent:

• Strategy: The organization's long-term goals and objectives.
• Structure: The organization's formal hierarchy and reporting relationships.
• Systems: The organization's processes and procedures for getting things done.
• Shared values: The organization's core beliefs and principles.
• Skills: The knowledge, abilities, and competencies of the organization's workforce.
• Style: The organization's leadership and management style.
• Staff: The organization's employees and their roles and responsibilities.

The seven-S model can be used to assess the health and effectiveness of an organization. It can also be used to identify areas for improvement and to develop strategies for change.

Additional Information The seven-S model is a popular framework for organizational analysis and change. It is a comprehensive model that takes into account all aspects of an organization, from its strategy to its culture. The model is also flexible and can be adapted to different types of organizations.

Here are some of the benefits of using the seven-S model:

• It can help organizations to identify areas for improvement.
• It can help organizations to develop strategies for change.
• It can help organizations to align their different elements for greater effectiveness.
• It can help organizations to create a more cohesive and productive culture.
• It can help organizations to become more competitive.

In psychological research, we seek to determine the relationship between two variables for forecasting purposes.

The correlation r measures the strength of the linear relationship between two quantitative variables. 

Pearson

r is always a number between -1 and 1. So, 1.20 does not lie in this range. r > 0 indicates a positive association. r < 0 indicates a negative association. Values of r near 0 indicate a very weak linear relationship. The strength of the linear relationship increases as r moves away from 0 toward -1 or 1. The extreme values r = -1 and r = 1 occur only in the case of a perfect linear relationship.

Since -0.98 is close to -1 as compared between 0.90 and 1 therefore, -0.98 coefficients of correlation indicate the strongest relationship between two sets of variables.

It provides management with data and decision stands incorrect with respect to the nature of management accounting.

Management accounting is a specialized branch of accounting that helps management in decision-making by supplying relevant accounting information.

This is an accounting branch that records various financial and statistical data and presents this data in form of reports to the internal management for better decision making. This is a form of the service function.

The correct answer is It is not dependent on both the change of scale and change of origin.

Key Points

• Analysis of the co-variation between two or more variables is known as correlation.
• If a change in one variable causes a corresponding change in the other, then the two variables are said to be correlated with each other.
• Coefficient o0f correlation helps in establishing a relation between two values, i.e. one is predicted value and other one is actual value.
• The value of coefficient of correlation always lies between - 1 to +1.
• There are mainly two most famous coefficient of correlation, i.e. Spearman's technique of correlation and Pearson's technique of correlation.
• We choose the spearman technique at the time of calculating the correlation coefficient for ordinal data.
• We choose Pearson's technique when calculating the correlation coefficient for interval data or ratio type data.
• Karl Pearson's coefficient of correlation is also known as Pearsonian coefficient of correlation.

Properties of Correlation Coefficient are as follows:

• The coefficient of correlation is independent of both change in origin as well as change in scale.
• There is symmetric degree of relationship between two variables, i.e. rxy = ryx.
• Value of coefficient of correlation lies between minus 1 to plus 1, not more than that.
• Correlation coefficient is a geometric mean of two regression coefficient.

Hence, the correct answer is It is not dependent on both the change of scale and change of origin.

The correct answer is option 1.

Concept:

​Copyright Infringement:

The unauthorized use of someone else's copyrighted work is called copyright infringement. As a result, it is the unauthorized use of another person's copyrighted work, infringing on the copyright holder's rights to reproduce, distribute, exhibit, or perform the protected work.

Explanation:

Consider the following real-life example. 

If a person uses someone’s song as background music in his/her music video then could be an act a person is an example of copyright infringement. 

• Copyright infringement occurs when a third party infringes on the copyright holder's rights, such as the exclusive use of a work for a specified period of time.
• Music and movies are two of the most well-known kinds of entertainment that are subjected to substantial copyright violations. Infringement lawsuits may result in contingent liabilities, or funds set aside in the event of a lawsuit.

Hence the correct answer is Copyright Infringement.

Additional Information

• Hacking is the act of unauthorized access to a computer, computer network, or any digital system. Hackers usually have the technical expertise in hardware and software.
• Identity thieves increasingly use personal information stolen from computers or computer networks, to commit fraud by using the data gained unlawfully.
• Cyberbullying is bullying with the use of digital technologies. It can take place on social media, messaging platforms, gaming platforms, and mobile phones.

The correct answer is Both Assertion and Reasoning are true, and Reasoning is the correct explanation of Assertion.

Key Points

• In the passage, "Psychographic segmentation is crucial for tailoring marketing strategies. It helps marketers connect with specific consumer segments based on their preferences and values."
• The passage directly supports both the Assertion and the Reasoning.
• Psychographic segmentation is deemed crucial for tailoring marketing strategies, and the reasoning correctly explains that it facilitates connecting with specific consumer segments based on preferences and values.

Additional InformationThe other options (2. Both Assertion and Reasoning are true, but Reasoning is not the correct explanation of Assertion, 3. Assertion is true, but Reasoning is false, 4 Both Assertion and Reasoning are false) are ruled out based on the accurate alignment of the Assertion and Reasoning with the passage.

Correct match:

The correct answer is Both Assertion and Reasoning are correct and Reasoning is the correct explanation for Assertion.

Key Points

As per the passage:

The sentence, "AI-driven automation could potentially replace repetitive and manual roles, leading to job displacement," demonstrates that automating repetitive and manual tasks using AI like Chat GPT could indeed displace jobs, making both the assertion and the reasoning correct.

The correct answer is Option 1

Key Points

• The cartel is defined u/s 2(c) of the Competition Act, 2002. 
• Cartel is defined in section 2, clause (c) of the Act: “Cartel” includes an association of producers, sellers, distributors, traders or service providers who, by agreement. amongst themselves, limit, control or attempt to control the. production, distribution, sale or price of, or, trade in goods or.

Important Points

•  Section 2(f) in the Competition Act, 2002 defines 'Consumer'
• Section 2(h) in the Competition Act, 2002 defines 'Enterprise'
• Section 2(i) in the Competition Act, 2002 defines 'Person'

When there is evidence of a linear relationship between two variables, it may not always mean an independent dependent relationship between the two variables is true.

(iii), (i), (iv) and (ii) sequence is correct.

1. SIDBI provides financial assistance in the following forms:

1. SIDBI refinances loans extended by the primary lending institutions to small scale industrial units and also provides resources support to them.
2. SIDBI discounts and rediscounts bills arising from the sale of machinery to or manufactured by industrial units in the small scale sector.
3. To expand the channels for marketing the products of Small Scale Industries (SSI) sector in domestic and international markets.
4. It provides services like leasing, factoring, etc. to industrial concerns in the small-scale sector.
5. To promote employment-oriented industries especially in semi-urban areas to create more employment opportunities and thereby checking the migration of people to urban areas.
6. To initiate steps for technological up-gradation and modernization of existing units.
7. SIDBI facilitates a timely flow of credit for both term loans and working capital to SSI in collaboration with commercial banks.

Hence, the correct option (C).