UGC NET Paper 2 Commerce Mock Test - 10 - UGC NET MCQ

The correct answer is option 3

Key Points The correct match is given below:

Important PointsR. A. Fisher - Anova

• Developed by Ronald Fisher, ANOVA stands for Analysis of Variance. 
• The statistical approach of analysis of variance, or ANOVA, divides observed variance data into multiple components for use in additional tests.
• For three or more groups of data, a one-way ANOVA is used to learn more about the relationship between the dependent and independent variables.
• If there is no real variance between the groups, the F-ratio of the ANOVA should be near to 1.

Karl Pearson - Correlation

• The Pearson's product-moment correlation coefficient (abbreviated as r or rxy) is a measure of the strength of a linear link between two variables (x and y being the two variables involved).

Formula for Karl Pearson - Correlation is 

Spearman - Rank Correlation

• Spearman’s correlation coefficient is a statistical measure of the strength of a monotonic relationship between paired data
• Spearman's Rank correlation coefficient is a technique which can be used to summarise the strength and direction (negative or positive) of a relationship between two variables.​
• The result will always be between 1 and minus 1.

Formula for Spearman - Rank Correlation is

Gosset - Student’s t distribution

• The t test tells you how significant the differences between groups are; In other words, it lets you know if those differences (measured in means) could have happened by chance.
• The t score is a proportion of the difference between two groups divided by the difference between groups.
• The greater the t score, the greater the difference between groups. The smaller the t score, the closer the groups are related.

The Correct Answer is 26

Key PointsSteps to calculate missing frequency 

• Step 1 - Determine class in which mode lies - As mode given in the question is 48.6, the class in which mode lies is 40-55.
• Step 2 - Find the value of Z,l,h,f₀,f₁,f₂  -
• Z is the value of mode i.e. 48.6
• l is the lower class limit of modal class 40-55 i.e. 40
• h is the class interval of modal class. Class interval = Upper class limit - Lower class limit i.e. 55-40 = 15
• f₀ is the frequency preceding the modal class i.e. 20
• f₁ is the frequency of the modal class i.e. 44
• f2 is the frequency succeeding the modal class i.e. x.
• Step 3 - Put the data of step 2 in the formula of mode -
• Formula of Mode

Z =  

Important Points

Solution:

Z =  ​ 

48.6 = 

48.6 - 40 = 

8.6(68 - ) = 15 x 24

584.8 - 8.6 = 360

8.6 = 224.8

= 26.1

So the value of missing frequency f₂ is 26 (approx.)

The correct answer is Median.

Key PointsAn ogive graph is a type of statistical diagram that displays cumulative frequencies. It enables us to easily calculate the proportion of observations that are either less than or equal to a certain value.

Important Points

• The median of the given collection of data is determined using the Ogive graph or cumulative frequency graphs.
• We can quickly determine the median value if the cumulative frequency curves for less than and larger than are both plotted on the same graph.
• The median value is determined by the intersection of both curves at the x-axis.
• Ogives are employed in computing the percentiles of the data set values in addition to determining the medians.​​

Additional InformationArithmetic Mean: The ratio of the sum of all observations to the total number of observations is known as the Arithmetic Mean (AM) or average in statistics.

Mode: In statistics, the value that consistently appears in a particular set is referred to as the mode. Additionally, we can refer to the value or number in a data collection that occurs more frequently as the mode or modal value.

Median: In statistics, the median is the value that, when placed in order, falls in the middle of the supplied collection of data. Either ascending or descending order can be used to organise the data or observations.

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.

The correct answer is Facilitating credit flow for the promotion and development of agriculture.

• The full form of NABARD is National Bank for Agriculture and Rural Development.
• NABARD was established on 12th July 1982.
• NABARD provides and regulates credit and other facilities for the development and promotion of agriculture, small-scale industries, village industries, handicrafts, cottage industries, etc.
• The Head office of NABARD is in Mumbai.
• The following are the important functions of NABARD:
  • Promotion and development of rural areas.
  • Financing and refinancing of agriculture.
  • Monitoring coordination with various institutions and agencies and credit planning.
  • Direct lending to producer's organization and cooperatives.
  •  Facilitating credit flow for the promotion and development of agriculture.

Image of NABARD Logo:

Intellectual Property Rights (IPRs) protect the use of information and ideas that are of Commercial Value.
Important Point

The four types of intellectual property rights include:

1. Trade Secrets
2. Trademarks
3. Copyrights, and 
4. Patents

Key Points

The Economic and Commercial Value of Intellectual Property Rights (IPRs): IPRs as a Means of Protecting Business Interests, Encouraging Innovation and Technology Transfer and Promoting Trade and Investment. 

•  The valuation of IP is therefore essential in the framework of commercial transactions. Unfortunately, this aspect is often overlooked by businesses not experienced with these types of deals resulting in transactions that are either overvalued or undervalued and therefore unprofitable or sometimes disastrous situations leading to bankruptcy
• It is therefore essential to analyze and assess the value of the intellectual property during the negotiation process, before the conclusion of the commercial transaction
• A brand is generally subject to trademark protection. 
• Technology can be subject to patent, industrial design, and/or copyright protection
• Other types of intellectual property may also exist 

According to the Indian Companies Act, 1956 Section 229, an audit report must be signed by a company auditor.

Key PointsSection 229 of Indian Companies Act, 1956 - Right to Signature on Audit Report:

• The auditor's report, as well as any other document of the company required by law to be signed or certified by the auditor, may be signed only by the company's designated auditor, or in the event of a partnership, only by a partner in the firm practicing in India.

Additional Information

1. Audit Report - An audit report is a written assessment of a company's financial statements by an auditor. The report is formatted in accordance with widely acknowledged auditing standards (GAAS). GAAS mandates or allows various deviations in the report depending on the conditions of the audit work in which the auditor engages.
2. Board of Directors - The Board of Directors (BOD) is an elected corporate body that represents the interests of a company's stockholders. The board of directors sits at the top of the organization and is in charge of ensuring that the company achieves its goals in a timely manner.
3. Company Auditor - An auditor is a person who has the authority to review and verify financial papers for accuracy, as well as to ensure that organizations comply with tax laws. They protect companies from fraud, point up anomalies in accounting methods, and, on rare occasions, act as consultants, assisting companies in identifying ways to increase operational efficiency.
4. Company Secretary - The board of directors selects the corporate secretary. In most cases, the person is a member of the board of directors. Corporate secretaries are in charge of ensuring that their company is properly managed. They make certain that the company complies with all legal and regulatory requirements, as well as that the board's decisions are carried out.

MSS account liquidity can be used for normal government expenditure of capital nature is NOT true regarding the Market Stabilization Scheme (MSS).

Key-Points

Market Stabilization Scheme (MSS):

1. The MSS was launched by the RBI in April 2004.
2. There was a certain background due to which the MSS was introduced.
3. While intervening in the foreign exchange market, the RBI had been releasing rupees for buying dollars.
4. The rupees so released added to liquidity in the system raising inflationary pressures.
5. To mop up this excess liquidity, the RBI used its huge stock of government securities.
6. But over a period of time, this stock of securities held with RBI came down substantially.
7. It was in this context that the MSS was launched as an additional channel to reduce liquidity.
8. Under the MSS, the government issues T-Bills (treasury bills) in addition to its normal borrowing requirements.
9. The amounts raised under the MSS will be held in a separately identifiable cash account entitled Market Stabilization Scheme Account.
10. The MSS is thus basically a monetary management tool.
11. The MSS will curb short-term volatility in the forex market.
12. It is also expected to fine-tune the structural balance in the money market and enable the RBI to maintain a grip over the short-term interest rate. 

Therefore, MSS account liquidity cannot be used for normal government expenditure of a capital nature.

The correct answer is Both Statement l and Statement II are correct

Important PointsStatement l: Patents are defined as monopoly rights which one granted by the government, for full disclosure of invention for a limited period of time, that is for 20 years

Explanation:

• A patent is an exclusive right awarded for an invention is a product or a technique that, in general, gives a new way of doing something or provides a new technical solution to a problem.
• The protection is granted for a limited period, generally 20 years from the filing date of the application.
• Hence, Statement I is true.

Statement II: The purpose of granting patents is to encourage inventions by promoting their protection and utilization so as to contribute to the development of Industries.

Explanation:

• The purpose of granting patents itself is to not only encourage innovation but also ensure that the inventions are worked in India and are made available to the public in sufficient quantity at reasonable prices.
• Hence, Statement II is true.

The correct answer is Positioning the product in the marketplace.

Key Points

As per the passage, ''Positioning'...is achieved by developing a unique selling proposition (USP) that differentiates the product in the marketplace and highlights its unique value to customers."

The correct answer is Shop disciplinarian.

Key Points

Shop disciplinarian

• In a functional organization, the shop disciplinarian is responsible for handling cases of breach of discipline and absenteeism.
• This role is typically assigned to an individual who ensures that employees adhere to the organization's rules and regulations, maintains discipline in the workplace, and takes appropriate action in case of misconduct or absenteeism.
• The shop disciplinarian may investigate complaints, issue warnings or disciplinary actions, and work closely with supervisors and managers to maintain a harmonious and productive work environment.
• Their primary focus is to enforce discipline and address any behavioural or performance issues within the organization.
• A shop disciplinarian typically falls under the category of front-line or first-line management.
• Front-line managers are responsible for overseeing the day-to-day operations of a specific work unit or department within an organization. They directly supervise and manage the employees who carry out the operational tasks, ensuring that work is performed efficiently, productivity targets are met, and discipline is maintained.
  

Additional Information

Instruction card clerk:

• The instruction card clerk is responsible for maintaining and organizing the instruction cards or job orders in a functional organization.
• They ensure that the required instructions or procedures for different tasks are documented accurately and are readily available to the employees.

Time and Cost clerk:

• The time and cost clerk is responsible for tracking and recording the time spent by employees on various tasks or projects, as well as calculating the associated costs.
• They play a role in monitoring productivity and cost control.
• While they may be involved in gathering data related to attendance and working hours, their primary focus is on time and cost management rather than dealing with disciplinary issues.

Route Clerk:

• The route clerk is responsible for planning and organizing the routes for deliveries or transportation in a functional organization.
• They ensure that goods or services are efficiently routed to their intended destinations.

The correct answer is the market price

Key Points

• Commodity valuation is the process of deriving the intrinsic value (actual worth of an asset) of a commodity under favorable market conditions.
• Commodity valuation follows the classical economic principle of arriving at a price by studying the intersection of the demand and supply curves of a good, which is also called the break-even point.
• Therefore, all goods and services are valued at market price, inclusive of all taxes, at least in principle.
• Since commodity markets rely largely on demand and supply patterns, anticipating future price movements of said commodities is the only way an investor can profit off of speculation.

The correct answer is Social functions.

Key Points Functions performed by a financial system:

Mobilizing savings: The financial system helps to mobilize savings from individuals and institutions and channel them into productive investments. This enables businesses to access the capital they need to grow and create jobs.

Allocating capital: The financial system also plays a critical role in allocating capital to its most efficient uses. This means directing capital towards the most productive projects and businesses, which can result in higher economic growth.

Facilitating payments: The financial system enables individuals and businesses to make and receive payments for goods and services. This includes electronic transactions, checks, and credit and debit card payments.

Managing risk: The financial system provides tools for managing risk, such as insurance, hedging, and diversification. This helps to reduce the impact of unforeseen events, such as natural disasters or economic downturns.

Providing liquidity: The financial system provides a market for buying and selling financial assets, which provides liquidity to investors. This enables investors to quickly and easily sell assets if they need to raise cash.

Facilitating foreign exchange: The financial system enables individuals and businesses to exchange currencies when conducting international trade. This helps to facilitate global commerce and supports economic growth.

Promoting financial stability: The financial system helps to promote stability in the economy by ensuring that banks and other financial institutions are adequately capitalized, and by providing oversight and regulation to prevent excessive risk-taking.

Hence, the correct answer is Social functions.

The explicit cost is the discount rate, which equates the present value of cash inflows with the present value of cash outflows.

Cost of Capital refers to required returns mandatory to make a capital budgeting project. It is a minimum rate of return that an organization must earn before generating value.

There are 5 types of Cost of Capital:

1. Explicit Cost of Capital
2. Implicit Cost of Capital
3. Specific Cost of Capital
4. Weighted Average Cost of Capital
5. Marginal Cost of Capital

Hence, the correct option (B).

The stock exchange is an organization that interferes between company and investor to raise funds for the benefit of the company as well as an investor. India consists of 22 stock exchanges overall under government regulation. Most Prominent stock exchange is the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) as most of the trading is done in this exchange. BSE is the oldest stock exchange in Asia established in 1875 while NSE is established in the mid-1990s. The index is the benchmark of both stock exchanges for tracking market status or checking upward or downward movement of stock. It consists of a basket of stocks of companies that are listed under exchange under the regulation of SEBI. Sensex is an index for BSE which comprises 30 constituents while Nifty is an index for NSE which comprises 50 constituents.

Human Resource Accounting is an expected solution over the limitations of the Money measurement concept.

• The money measurement concept underlines the fact that in accounting and economics generally, every recorded event or transaction is measured in terms of money, the local currency monetary unit of measure.
• Using this principle, a fact or a happening or event which cannot be expressed in terms of money is not recorded in the accounting books.
• Thus, it is not acceptable to record such non-quantifiable items as employee skill levels or the quality of great customer service.
• Flamhoitz defines Human Resource Accounting as ‘accounting for people as an organizational resource. It involves mea­suring the costs incurred by organizations to recruit, select, hire, train, and develop human assets. It also involves measuring the economic value of people to the organization’.
• HRA is the measurement and quantification of human organiza­tional inputs such as recruiting, training, experience, and commitment.

Thus, Human Resource Accounting is an expected solution over the limitations of the Money Measurement Concept as it helps to quantify various elements of the workforce in monetary terms.

Marginal costing is useful in profit planning, it is helpful to determine profitability at a different level of production and sale.

Marginal costing is useful in decision making about fixation of the selling price, export decision, and make or buy decision.

Break-even analysis and P/V ratio are useful techniques of marginal costing.

Markup pricing refers to a pricing method in which the fixed amount or the percentage of the cost of the product is added to the product’s price to get the selling price of the product. Markup pricing is more common in retailing in which a retailer sells the product to earn a profit.

P = ATC + (m × ATC) is the expression.

According to the given passage,

Many centuries ago people were already paying taxes. Six-thousand-year-old clay tablets were found, in what is now modern day Iraq, containing the earliest known tax records.

Thus, we can conclude that, 6000 years long have taxes been in existence.

The concept of MBO originally came from Peter F. Drucker in 1954. Management by Objectives is a personnel management technique where managers and employees work together to set, record and monitor goals for a specific period of time. Organisational goals and planning flow top-down through the organisation and are translated into personal goals for organisational members.

Statement I: On every point on the straight-line demand curve, the point elasticities are all equal.

Statement II: On every point on the rectangular hyperbola shaped demand curve, the point elasticities are not equal.

Elasticity and demand slope: The slope of a straight-line demand curve, one with a constant slope, has constantly changing elasticity. It includes all five elasticity alternatives--perfectly elastic, relatively elastic, unit elastic, relatively inelastic, and perfectly inelastic. No two points on a straight-line demand curve have the same elasticity.

Rectangular hyperbola is a curve under which all rectangular areas are equal. When the elasticity of demand is equal to unity (ed = 1) at all points of the demand curve, then the demand curve is a rectangular hyperbola.

The Indian Contract Act, 1872:

The Indian Contract Act, 1872 defines the term Contract under its section 2(h) as "An agreement enforceable by law". This Act is based upon the principles of English Common Law.

All agreements are contracts if they are made by the free consent of parties that are involved in the contract, for a lawful consideration with a lawful object, and are not hereby expressed to be void. 

The contract has four essential elements and is formed in the following sequence:

An offer is made by one party to another to enter into a contract.

The next step is acceptance of that offer by the other party involved.

The special word “consideration” in contract law refers to something that has value in the eyes of the law. Consideration is an essential element to make a contract. must be provided for a contract to be legally binding.

Every promise and every set of promises, forming the consideration for each other, is an agreement.

Therefore, the correct sequence in the formation of a contract is offer, acceptance, consideration, agreement.

The correct answer is Both Assertion (A) and Reasoning (R) are true, and Reasoning (R) is the correct explanation for Assertion (A).

Key Points Both the assertion (A) and the reasoning (R) are correct.

Assertion (A): The implementation of a Vendor-Managed Inventory (VMI) system indeed shifts the responsibility of inventory management from the buyer to the supplier. In a VMI system, the supplier takes on the responsibility of monitoring the buyer's inventory levels and ensuring that the right amount of products is available at the right time. This shift in responsibility can lead to more efficient inventory management practices for both parties.

Reasoning (R): The reasoning is accurate. VMI systems allow suppliers to monitor stock levels at the buyer's site through various data-sharing methods such as electronic data interchange (EDI) or real-time monitoring systems. The supplier can then proactively replenish products as needed, based on actual demand or pre-agreed-upon inventory levels, ensuring seamless supply to the buyer. This helps in reducing stockouts, optimizing inventory carrying costs, and improving overall supply chain efficiency.

Therefore, both the assertion and reasoning are correct, and the reasoning provides a valid explanation for the assertion.

Scalability refers to the ability of a CRM application to handle a large amount of customer data in an efficient manner.

• Scalability is an application’s ability to accommodate rising resource demand gracefully, without a noticeable loss in quality of service (QoS).
• One of the first steps in migrating to a new solution is to know the scalability of the proposed application.
• In short, scalability is the ability of software to accommodate the data of a large number of consumers.​
• Flexibility and Elasticity refer to the ability of CRM applications to adapt themselves to changes in consumer data. For example, CRM users outgrow in numbers from x to y over a period of t years. If the existing CRM system does not have a provision for adding y users, it would fail.
• Usability refers to the ease in terms of the use of the CRM application. An unnecessarily complex application will confuse the seller, as well as the consumer and, might lead to a long gestation period.

There are 4 types of responsibility accounting: Cost, revenue, profit, and investment center.

There are seven kinds of income tax return (ITR) forms, which are used by different categories of taxpayers.

They are as follows:

• ITR Form 1, called ‘Sahaj’, is for small and medium taxpayers.
• ​Sahaj forms can be filed by individuals who have an income up to Rs 50 lakh, with earnings from salary, one house property/ other sources (interest etc).
  
• ITR-2 is filed by people with income from residential property.
  
• ITR-3 is intended for people who have income as profits from business/ profession.
  
• ITR-4 (Sugam) is, like ITR-1 (Sahaj), a simple form, and can be filed by individuals, Hindu Undivided Families (HUFs) and firms with total income up to Rs 50 lakh from businesses and professions.
  
• ITR-5 and 6 are for limited liability partnerships (LLPs) and businesses respectively.
  
• ITR-7 is filed by trusts and non-profit organisations.
  

Correct match:

Firms in the perfect competition have no control over prices. Firms in the monopolistic competition have some control over prices. Firms in oligopolies practically have some control. Firms in a monopoly have usual control over prices.