MH SET Paper 2 Mock Test - 6 (Commerce) - MAHA TET MCQ

The correct answer is "Product or services".

Key Points

Additional Information

• Distribution channel - A distribution channel is a chain of businesses or intermediaries through which a good or service passes until it reaches the final buyer or the end consumer. Distribution channels can include wholesalers, retailers, distributors, and even the internet.
• Market trend - It is the direction of movement of the financial market over time. An example of a market trend is a bull market which is an upward movement of the market while a bear market is a downward movement of the market.
• Production - The production Concept is a belief that states that the customers would always acquire products that are cheaper and more readily available (or widely available). The production concept advocates that the more products or production the more would be sales. In countries where labor is cheap and easily available, production can be maximized while minimizing costs, hence increasing production efficiency.

Key-Points

The Sale of Goods Act, 1930 defines an unpaid seller as a seller that has not been paid the full price of the goods that have been sold or that has received a bill of exchange or other negotiable instruments as conditional payment, and the condition on which it was received has not been fulfilled.

Therefore, the meaning of an unpaid seller is the person who has sold the goods and has not yet received the price.

Additional Information

Features of an unpaid seller:

• The seller must have sold the goods on a cash basis and must be unpaid.
• The seller must be unpaid either wholly or partly.
• The decided period of time has expired and the seller is still left unpaid.
• The seller must not refuse to accept the payment.
• The price is paid through a negotiable instrument i.e. bill of exchange, promissory note, cheque, etc. and the same has been dishonored.

The common assumptions made when doing a t-test include those regarding the scale of measurement, random sampling, normality of data distribution, adequacy of sample size and equality of variance in standard deviation.

1. Agency by estoppel:

• The concept of agency by estoppel arises where one person acts in such a way that the other believes that a third person is authorized to act on his behalf and enters into a transaction with the third person, the person whose act induced him to do so, is liable for that agreement as if the third person acting on his behalf.
• It is based on principles of natural justice and equity.

2. Agency by necessity

• It is a type of legal relationship in which one party can make essential decisions for another party.
• The courts recognize agency by necessity during an emergency or urgent situation under which the beneficiary is unable to provide explicit authorization.

3. Agency by Ratification:

• A confirmation by the principal of an act or contract performed or entered into on his or her behalf by another, who assumed, without authority, to act as his or her agent.

The first step in the Customer Experience Management Process is to develop ​customer experiences that lead to lasting relationships and referrals.

• Customer experience is defined as your customers’ perceptions – both conscious and subconscious – of their relationship with your brand resulting from all their interactions with your brand during the customer life cycle.
• Customer experience management is the practice of designing and reacting to customer interactions to meet or exceed customer expectations and, thus, increase customer satisfaction, loyalty, and advocacy.
• Customer experience management is about more than serving your customers.
• It’s about more than knowing where customers shop and what brand of dog food they buy.
• It's about knowing your customers so completely that you can create and deliver personalized experiences that will entice them to not only remain loyal to you but also to evangelize to others about you – and that’s the most valuable form of advertising there is.
• The crux of having a customer experience management process involved in business activity is to give customers such experiences that lead to lasting relationships and referrals.

The correct answer is 1 and 3 only.

Key Points

• GST Compensation:
  • According to the 101st Constitutional Amendment Act, 2016 –The Parliament shall, by law, on the recommendation of the Goods and Services Tax Council, provide for compensation to the states for the loss of revenue arising on account of implementation of the Goods and Services Tax (GST) for a period of five years. The Parliament enacted the Goods and Services Tax (Compensation to States) Act, 2017. Hence 1 statement is correct.
• The Preamble to the Act reads as follows:
  • The Parliament shall, by law, on the recommendation of the Goods and Services Tax Council, provide compensation to the states for the loss of revenue arising on account of implementation of the Goods and Services Tax (GST) for a period of five years.
  • The compensation is to be paid out of the non-lapsable GST Compensation Fund.
  • As per Section 10(1), the inflows to the Fund are from the GST Compensation Cess, levied under Section 8 of the Act and ―such other amounts as may be recommended by the Council.
  • There is no provision for any amount other than Cess to be credited, except based on the recommendations of the Council.
  • Section 10(2) provides that all compensation payable under Section 7 ―shall be paid out of the Fund. Thus, the centre is not obligated to provide compensation from the Consolidated Fund of India.  Hence, statement 2 is incorrect.
  • The compensation is provided assuming a 14% compound growth rate on the revenue of 2015-16 to the states. Hence, statement 3 is correct.

Lineation function is a process in human resources management that is concerned with providing a conducive work environment to the employees and nurturing them to make them feel committed and attached to the organization.

• PAN stands for Permanent Account Number. A PAN number is a ten-digit number in alphabets and numerical, or in 'alphanumeric' terms, that is allocated by the income tax department to all the taxpayers, and is unique with each individual.
• Form No. 16 is an acknowledgment which states your deducted tax has been deposited with the Income Tax department.
• Aadhar Card is an individual identification number issued by the Unique Identification Authority of India (UIDAI) on behalf of the Government of India to individuals for the purpose of establishing the unique identity of every single person.

The correct answer is All of the above

Key Points

• An auditor is a professional accountant who conducts an audit, which is an examination of financial records to assess whether the financial statements of an organization are accurate and compliant with applicable laws and regulations.
• Auditors are typically certified public accountants (CPAs) or chartered accountants (CAs).

Important Points

The Companies Act gives extensive rights to an auditor:

To take clarification:

• An auditor has the right to seek clarification and obtain explanations from management, employees, and other relevant parties regarding financial transactions, records, and other matters related to the audit.
• This right ensures that the auditor has access to the information necessary to properly understand and assess the organization's financial statements and related processes.

To accept remuneration:

• An auditor has the right to receive remuneration or fees for their professional services rendered.
• The remuneration is typically determined and agreed upon through a contractual arrangement between the auditor and the client or appointing authority.
• It is essential for the auditor's independence and objectivity that the remuneration is fair, reasonable, and does not compromise their professional judgment.

To conduct inspection:

• An auditor has the right to conduct inspections of the organization's financial records, documents, and other relevant information necessary to perform the audit.
• This right allows the auditor to gather evidence, assess controls, verify transactions, and ensure compliance with applicable laws and regulations.
• The auditor's access to inspection rights is vital for the completion of a thorough and effective audit.

• Most of the capital market reforms were introduced during 1996- 97, including primary and secondary markets, equity and debt, and foreign institutional investment.
• Primary market reforms aimed at imparting greater flexibility in the issue process and strengthening the criteria for accessing the securities market.
• Reforms in the secondary market aimed at improving market transparency, integrity and trading infrastructure.

Reason (R): Globalization integrates the domestic economy with the world economy

• Globalization is the process of interaction and integration among people, companies, and governments worldwide.
• The goal of globalization is to boost economies around the world by making markets more efficient.
• It is believed that global trade will lead to more competition, which will spread wealth more equally.

Goods and Services Tax (GST) is a proposed system of indirect taxation in India merging most of the existing taxes into a single system of taxation. It was introduced The Constitution (One Hundred and First Amendment) Act 2016. GST would be a comprehensive indirect tax on the manufacture, sale, and consumption of goods and services throughout India, to replace taxes levied by the central and state governments. Goods and Services Tax would be levied and collected at each stage of sale or purchase of goods or services based on the input tax credit method.

The correct answer is Trading and Equity.

Key Points The objective of operation management is to efficiently and effectively use resources to create goods and services that meet the needs of customers. The four objectives you mentioned are all important for operation management, but trading and equity is not.

• Improve product quality is important because it can help to increase customer satisfaction and loyalty.
• Reduce cost of production is important because it can help to increase profits.
• Material cost of control is important because it can help to reduce waste and inefficiency.
• Trading and equity is not an objective of operation management because it is not directly related to the production of goods and services. Trading and equity are more related to the financial aspects of a business.

Here are some other objectives of operation management:

• Meet customer demand
• Ensure compliance with regulations
• Minimize environmental impact
• Improve safety
• Increase employee satisfaction

Overall, the objective of operation management is to create value for customers and the organization by efficiently and effectively using resources.

Therefore, an opinion leader is a person who offers informal advice or information about a specific product or product category.

The correct answer is Variable cost.

Key PointsVariable costs are those costs of items that vary in total amount proportionally and directly with quantity.

Important Points

A production expense known as a variable cost can increase or decrease in response to shifts in a company's manufacturing activities.

For example, the raw materials required to make a product's components are variable costs since they frequently change depending on the volume of units produced.

Examples of variable costs are as follows:

1. Direct material
2. Packing material
3. Piece rate labour
4. Freight out
5. Wages etc.

Additional Information

1. Sunk Cost: A sunk cost is money that has already been spent and cannot be recovered. In business, the axiom that one has to "spend money to make money" is reflected in the phenomenon of the sunk cost.
2. Volume Cost: When a company allocates factory overhead costs to a single cost pool (for example, factory overhead), it then employs volume-based cost drivers to allocate those costs to specific goods or services. This method is known as volume based costing, also referred to as traditional costing. The company employs unit-based cost drivers that are based on the volume of units produced. Labor hours, machine hours, and labour costs are common cost bases (or drivers).
3. Fixed Cost: Fixed costs are expenses that a business must cover regardless of any particular business operations. These costs are fixed throughout a predetermined time frame and are unaffected by production levels.

Sampling is done because it is not possible for a researcher to take a survey of the whole population of respondents, so they choose a random sample of individuals that represent the whole population, and those individuals are considered as the sample size of the research. 

Key-Points

Convenience sampling:

• When a sample is drawn randomly from a readily available list according to the convenience of the researcher.
• It is the most commonly used method as it is an economical, prompt, and uncomplicated technique. 
• This method is also known as Chunk Sampling.
• A chunk refers to that fraction of the population being investigated neither by probability nor by judgment but on the basis of convenience only.

Therefore, Chunk Sampling is also known as Convenience sampling.

Additional Information

Quota Sampling:

• Quota sampling is a non-probability method of sampling used to create a sample involving people that represent a homogenous population.
• A quota sample allows researching a subgroup that shares great interests with the topic of research.
• If a study aims to investigate the characteristics of a certain subgroup, then this technique is considered an ideal one.

Judgment Sampling:

• It is a non-probability sampling technique used where a sample is based on the previous knowledge or judgemental experience of the researcher.
• It is also known as judgemental sampling, purposive sampling, or authoritative sampling.
• This is contrary to probability sampling techniques where units are drawn with some probability from the population.

Cluster Sampling:

• Cluster sampling is defined as a sampling method where the researcher creates multiple clusters of people from a population where they are indicative of homogeneous characteristics and have an equal chance of being a part of the sample.
• This sampling technique is used in an area or geographical cluster sampling for market research.
• A broad geographic area can be expensive to survey in comparison to surveys that are sent to clusters that are divided based on region.

The correct answer is Both A and R are false.

Key Points

As per the passage:

• "Unlike tangible products, services involve intangible elements, thus the marketing strategies applied for services vastly differ."

  • This sentence directly contradicts with the assertion (A) and approves the reasoning (R) that services involve intangible aspects and therefore need different marketing approaches.

The correct answer is Both A and R are true, and R is the right explanation of A.

Key Points

As per the passage: 

• "In addition, the emphasis has shifted from providing a mere transactional service to offering an experiential one. Thus, customer-centricity and exceptional after-sales services have become paramount..."
  • These sentences provide the basis for the assertion (A) about the importance of offering an experiential service and the reasoning (R) that explains it.

Planning begins with the determination of objectives. It highlights the purposes for which various activities are to be undertaken. In fact, it makes objectives more clear and specific. Planning helps in focusing the attention of employees on the objectives or goals of the enterprise. Planning compels the manager to prepare a blueprint of the courses of action to be followed for the accomplishment of objectives. Therefore, planning brings order and rationality into the organization. Planning minimizes uncertainties. There are risks of various types due to uncertainties. Planning helps in reducing uncertainties of the future as it involves anticipation of future events. Although the future cannot be predicted with cent percent accuracy planning helps management to anticipate the future and prepare for risks by necessary provisions to meet the unexpected turn of events.

The correct answer is Olaf Helmer and Norman Dalkey.

Key Points

•  The Delphi method was invented by Olaf Helmer and Norman Dalkey of the RAND Corporation in the 1950s. It is a forecasting method that uses a panel of experts to reach a consensus on a particular issue. The Delphi method is based on the idea that experts can provide better forecasts if they are isolated from each other and allowed to interact anonymously.
• The Delphi method works in a series of rounds. In the first round, the experts are asked to provide their individual forecasts on the issue at hand. In the second round, the experts are given the results of the first round and are asked to revise their forecasts based on the feedback from the other experts. This process continues until the experts reach a consensus on the issue.
• The Delphi method has been used to forecast a wide range of events, including technological developments, economic trends, and political events. It is a valuable tool for forecasting because it allows experts to provide their input without being influenced by the opinions of others.

Here are some of the benefits of using the Delphi method:

• It can be used to forecast a wide range of events.
• It is anonymous, which allows experts to provide their input without being influenced by the opinions of others.
• It is iterative, which allows experts to revise their forecasts based on the feedback from the other experts.
• It is a relatively inexpensive method to use.

Here are some of the drawbacks of using the Delphi method:

• It can be time-consuming.
• It can be difficult to get a quorum of experts.
• The experts may not be representative of the population as a whole.
• The experts may not be willing to participate in the Delphi process.

The correct answer is 

 Delhi Stock Exchange.

Key Points

• Delhi Stock Exchange (DSE) was located in New Delhi and was allowed to exit the business by SEBI in January 2017.
• It was incorporated on 25 June 1947.
• It is India's fifth exchange. The exchange is one of the premier stock exchanges in India.
• The Delhi Stock Exchange is well connected to 50 cities with terminals in North India. 
• The exchange has over 3,000 listed companies.
• It has received the market regulator's permission from BSE and has become a member.
• Now it facilitates the DSE members to trade on the BSE terminals. The exchange is also considered the same from NSE.

Additional Information

• The Securities and Exchange Board of India (SEBI) is the regulator for the securities market in India.
• It was established in 1988 and given statutory powers on 30 January 1992 through the SEBI Act, 1992. 

The correct answer is Prospectus.

Key Points Company - As per Section 2(20) of the Companies Act, 2013, the term “Company has been defined as a company incorporated under this Act or under any previous company law.”

Important PointsProspectus - Section 2(36) in The Companies Act, 1956 , prospectus means  any document described or issued as a prospectus and includes any notice, circular, advertisement or other document  inviting deposits from the public or inviting offers from the public for the subscription or purchase of any shares in, or debentures of, a body corporate.

Admission of Partner:

• Whenever a firm requires additional capital or managerial help or both for the expansion of its business, a new partner may be admitted to supplement its existing resources.
• According to the Partnership Act 1932, a new partner can be admitted into the firm only with the consent of all the existing partners, unless otherwise agreed upon.
• The profit-sharing ratio among the old partners will change, keeping in view their respective contribution to the profit-sharing ratio of the incoming partner.

Solution:

C's share = 1/4

Remaining share = 1 - (1/4) = 3/4

A's share = 2/3 of 3/4 = 6/12

B's share = 1/3 of 3/4 = 3/12

New C's share = 1/4 of 3/3 = 3/12

• It has been assumed that the new partner acquired his share from old partners in the old ratio.
• Thus, the new profit share ratio will be 6 : 3 : 3 i.e. 2 : 1 : 1.
• If C invests a capital of Rs.12,000, so the adjusted capital of other partners according to the profit share ratio will be:
  • Adjusted capital of A = A's share ratio, i.e. 2 * 12,000 = Rs. 24,000.
  • Adjusted capital of B = B's share ratio i.e. 1 * 12,000 = Rs. 12,000.

Therefore, the adjusted capital of B will be Rs. 12,000.

Tax-shield on depreciation and interest is an important variable both for the lessor and the lessee: 

• Lessor and lessee enjoy various benefits under leasing agreement in India such as Income tax benefits, sales tax benefits, modernization through lease finance, etc. 
• The lessor can claim depreciation and thereby get some concessions under the Income Tax Act.
• Sales tax will be paid by the lessor as the equipment is bought by him.
• But later on, under the financial lease, he can claim a part of the sales tax from the lessee when the equipment is transferred to the lessee.
• The lessee will be paying the sales tax on a lesser amount.
• The lessee gets certain benefits in the payment of rent, maintenance of the equipment, and other promotional expenditure incurred by him in keeping the equipment operational.
• For all these expenses, the lessee will be claiming tax benefits under the Indian Income Tax Act. Thus, the statement I is correct.

(a) Power function

(b) Constant returns to scale

(c) The elasticity of substitution as unity

The Banking Ombudsman Scheme was implemented by the RBI to redress the complaints of customers on certain types of banking services provided by banks and to facilitate the settlement of those complaints.

Key Points

1. The Banking Ombudsman Scheme is an expeditious and inexpensive forum for bank customers for resolution of complaints relating to certain services rendered by banks.
2. The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.

​Important Point

• Later it was legally refined and modified through the introduction of regulations under Banking Ombudsman Scheme 2006. The latest revision was made in 2017.

A) Fair Value = Rs. 36,000

B) Municipal Value = Rs. 36,000

C) Higher Of A and B = Rs. 36,000

D) Standard Rent = Rs. 40,000

E) Expected Rent (Lower Of C and D) = Rs. 36,000

F) Actual Rent = Rs. 32,000

The correct answer is This is the principle of ‘Union is Strength’.

Key Points Esprit de corps is a French phrase that literally means "spirit of the body." It is a term used to describe the sense of unity, camaraderie, and shared purpose that exists within a group. Esprit de corps is often seen as a positive force that can help a group to achieve its goals.

There are many factors that can contribute to esprit de corps, such as:

• Shared goals and values: When members of a group share common goals and values, they are more likely to feel a sense of unity and purpose.
• Strong leadership: Effective leadership can help to create a sense of cohesion and motivation within a group.
• Positive work environment: A positive work environment where employees feel valued and respected can help to foster esprit de corps.
• Esprit de corps can be beneficial for both individuals and organizations. For individuals, it can lead to increased job satisfaction, motivation, and productivity. For organizations, it can lead to improved performance, innovation, and customer satisfaction.

Additional Information Here are some examples of esprit de corps:

• A sports team that is united in its goal of winning a championship.
• A military unit that is committed to its mission and its fellow soldiers.
• A company that has a strong sense of community among its employees.
• Esprit de corps is a valuable asset for any group. It can help to create a more productive, positive, and successful environment.

Key Points
CRM Business Cycle Components:

• The CRM business/revenue cycle depends upon the factors that help in generating income for the business.
• In order to run a business successfully, there must be revenues, and ultimately the customer comes first.
• Integrating requirements from this cycle into the CRM processes speed a business to its profitability.

• The components of the CRM Business Cycle are mentioned below:
• Interact and Deliver:
  • The first component of the business cycle includes the interaction and delivery of promises with the customers.
  • Here, the business tries to contact and communicate with customers who might be interested in purchasing the products they are offering.
• Acquisition and Retaining:
  • Businesses try to acquire and reach new customers that will result in the conversion of sales.
  • After acquiring customers, their retention is ensured so that the customers stay loyal to the organization for a long period of time.
• Understand and Differentiate:
  • There is a need to understand the customers so that the business can deliver them what they exactly need, and it can be done with the help of CRM.
  • Customers are differentiated according to their needs and demands based on various factors, and as such their needs are met.
• Develop and Customize:
  • Developing a sales strategy based on CRM key performance indicators, demographics, and metrics will improve the predictability of revenue forecasts.
  • So that the more predictable the revenue forecast is, the more accurate the results will be.
• Cross-sell and Upsell:
  • CRM customer data and lead generation data are the perfect basis for upselling and cross-selling.
  • Approximately 30% of all e-commerce website visitors will purchase a product; the remainder will browse, but not purchase.
  • Utilizing the CRM processes to offer additional sales or similar products at a better value maximizes revenues for the 30% who are buyers.

Therefore, Generate and Eliminate is not a component in the CRM Business cycle.