CA CPT Mock Test - 1 (Session 1) - CA Foundation

When unapproved goods are existing on last day of the year, then it should be included in closing stock and valued at cost and market value whichever is lower.

Cost of remaining goods = 3500−800=2700

Market value of remaining goods (including 25% profit on sale)= (2700/(100−25))×100=3600

So Stock on approval will be shown at 2700 in balance sheet.

The forfeiture account will be credited by Rs. 60. Let's break down the details:

- B Ltd. issued shares of Rs. 10 each, so the total value of 30 shares purchased by Mr. C is 30 x 10 = Rs. 300.
- Mr. C paid Rs. 2 on application for each share, so the total amount paid on application is 30 x 2 = Rs. 60.
- He did not pay the allotment money of Rs. 3 and further call money.

When the company forfeits the shares, the forfeiture account is credited with the amount received by the company, which is the application money paid by Mr. C. So, in this case, the forfeiture account will be credited by Rs. 60.

C giving 2% discount (35, 000*2% = 700) to A.
Actual payment to C = 35, 000 -700 = 34, 300.
A endorse Rs. 30,000 frm B.
So, the balance of (34,300 - 30,000) Rs.4,300 has to be paid to C by A.

Cost of the goods sold = 45,000 × 2/3 × 9/10 = Rs. 27,000
Invoice value of the goods sold = 27,000 + 33.33% of 27,000 = 27,000 + 100/300 × 27,000 = 27,000 + 9,000 = Rs. 36,000
Sale price = 36,000 × 120/100 = Rs. 43,200

To calculate the rent paid as shown in the profit and loss account for the year ended 31st December 2016, we need to determine the rent expense for the period 1st January 2016 to 31st December 2016.

Here's the breakdown of the calculation:

Rent for the year 1st October 2015 to 30th September 2016:
- Total rent paid: Rs. 1,200
- Rent period: 12 months (October 2015 to September 2016)

Rent for the year 1st October 2016 to 30th September 2017:
- Total rent paid: Rs. 1,600
- Rent period: 12 months (October 2016 to September 2017)

Now, we need to find the rent expense for the period 1st January 2016 to 31st December 2016.

Rent expense for the period 1st January 2016 to 30th September 2016:
- Rent for 9 months (January 2016 to September 2016)
- Calculation: (Rs. 1,200 / 12 months) * 9 months = Rs. 900

Rent expense for the period 1st October 2016 to 31st December 2016:
- Rent for 3 months (October 2016 to December 2016)
- Calculation: (Rs. 1,600 / 12 months) * 3 months = Rs. 400

Adding both the rent expenses:
- Rent expense for the year ended 31st December 2016 = Rs. 900 (January to September) + Rs. 400 (October to December) = Rs. 1,300

Hence, the correct answer is Rs. 1,300.

The correct answer is (c) Rs. 30,000.

In accounting, expenses are the costs incurred during the normal course of business operations. The given costs can be categorized as follows:

1. Expensed items:
- Repair cost (Rs. 25,000)
- Whitewash expenses (Rs. 5,000)

2. Capitalized items (these are not expensed in the books, but rather added to the asset's cost):
- Cost of extension of building (Rs. 2,50,000)
- Cost of improvement in electrical wiring system (Rs. 19,000)

Now, let's calculate the amount to be expensed in the books:
- Repair cost: Rs. 25,000
- Whitewash expenses: Rs. 5,000
Total amount to be expensed = Repair cost + Whitewash expenses = Rs. 25,000 + Rs. 5,000 = Rs. 30,000

The correct answer is d. Rs. 18,000.

To understand the calculation, let's break down the information given:

- Number of forfeited shares: 1,000
- Par value of each share: Rs. 20
- Called-up value per share: Rs. 18
- Allotment money not paid: Rs. 8 per share

Now, let's calculate the amount debited to share capital on forfeiture:

1. Total called-up value = Number of forfeited shares x Called-up value per share
Total called-up value = 1,000 x 18
Total called-up value = Rs. 18,000

2. Total allotment money not paid = Number of forfeited shares x  Allotment money not paid
Total allotment money not paid = 1,000 x 8
Total allotment money not paid = Rs. 8,000

3. Amount debited to share capital = Total called-up value - Total allotment money not paid
Amount debited to share capital = Rs. 18,000 - Rs. 8,000
Amount debited to share capital = Rs. 10,000

However, in this case, we are only concerned with the amount debited to share capital on forfeiture. Since the called-up value per share is Rs. 18, the amount debited to share capital on forfeiture will be:

Amount debited to share capital = Number of forfeited shares x Called-up value per share
Amount debited to share capital = 1,000 x 18
Amount debited to share capital = Rs. 18,000

Therefore, the correct answer is d. Rs. 18,000.

The correct answer is d: All of the above - Transparency, Consistency, and Comparability. Accounting principles and policies are standardized for several reasons:

Transparency:
- Standardized accounting principles help businesses provide a clear and accurate picture of their financial position.
- They ensure that financial statements are prepared using a consistent set of rules and guidelines, making it easier for investors, creditors, and other stakeholders to understand and interpret the information presented.
- Transparent financial reporting builds trust and confidence in a company's financial health, which is essential for attracting investments and maintaining stakeholder relationships.

Consistency:
- Standardized accounting principles ensure that a company's financial statements are prepared consistently from year to year and across different reporting periods.
- This enables stakeholders to identify trends, assess financial performance, and make informed decisions about the company's future prospects.
- Consistency in accounting practices also helps reduce the risk of errors and misstatements, which can lead to financial scandals or regulatory penalties.

Comparability:
- By adhering to standardized accounting principles, companies can produce financial statements that are comparable with those of their peers and competitors.
- This is crucial for investors and other stakeholders who want to evaluate a company's performance relative to others in the same industry or sector.
- Comparability also facilitates benchmarking, which can help companies identify areas where they may be underperforming and make necessary improvements.

In summary, standardizing accounting principles and policies is essential for ensuring transparency, consistency, and comparability in financial reporting. This not only benefits the companies themselves but also helps protect the interests of investors and other stakeholders who rely on accurate and reliable financial information for decision-making purposes.

To determine the number of shares to be issued by G Ltd. to settle the purchase consideration of assets, we can follow these steps:

1. Calculate the total value of shares, including the premium:
- Given that the shares are issued at a premium of 25%, this means the total value per share is Rs. 100 + (25% of Rs. 100) = Rs. 125.

2. Determine the number of shares required to cover the value of assets:
- The total value of the assets acquired is Rs. 7,50,000.
- To find the number of shares needed to cover this value, we can divide the total value of assets by the value per share: 7,50,000 / 125 = 6,000 shares.

So, G Ltd. will issue 6,000 shares to settle the purchase consideration of assets.
The correct answer is: 6,000 shares

To calculate the amount of dividend payable for X Ltd., we need to consider the net called-up equity share capital, which is the called-up share capital minus calls in arrear plus calls in advance. Then, we can apply the rate of dividend to find the total dividend payable.

1. Calculate the net called-up equity share capital:
- Called-up equity share capital: Rs. 5,00,000
- Calls in arrear: Rs. 40,000
- Calls in advance: Rs. 25,000
Net called-up equity share capital = (Called-up equity share capital - Calls in arrear + Calls in advance)
= (5,00,000 - 40,000 + 25,000)
= Rs. 4,85,000

2. Calculate the dividend payable:
- Rate of dividend: 15%
Dividend payable = (Net called-up equity share capital * Rate of dividend) / 100
= (4,85,000 * 15) / 100
= Rs. 72,750

However, since there are calls in advance, we need to deduct the dividend paid on these shares:
Dividend paid on calls in advance = (Calls in advance * Rate of dividend) / 100
= (25,000 * 15) / 100
= Rs. 3,750

3. Calculate the final dividend payable:
Final dividend payable = Dividend payable - Dividend paid on calls in advance
= 72,750 - 3,750
= Rs. 69,000

So, the amount of dividend payable for X Ltd. is Rs. 69,000 (option d).

Here, total number shares issued is Rs 80,00,000/Rs 100 i.e. 80,000. Final call was paid on 77,500 which makes total shares on which call was not received to 80,000-77,500 i.e. 2,500. Calls in arrears were Rs 62,500, therefore final call here will be Rs 62,500/2500 i.e. Rs 25.

The problem states that Ram's acceptance to Dinesh for Rs. 8,000 is renewed for 3 months on the condition that Rs. 4,000 be paid in cash immediately, and the remaining amount will carry interest @ 12% p.a.

Let's break down the information:

- Initial amount: Rs. 8,000
- Amount paid in cash: Rs. 4,000
- Remaining amount: Rs. 8,000 - Rs. 4,000 = Rs. 4,000
- Interest rate: 12% p.a.
- Time period: 3 months (1/4 of a year)

Now, to calculate the interest on the remaining amount, we use the formula:
Interest = (Principal × Rate × Time) / 100

In this case:
- Principal = Remaining amount = Rs. 4,000
- Rate = 12% p.a.
- Time = 3 months = 1/4 year

Plugging in the values:
Interest = (4,000 × 12 × 1/4) / 100
Interest = (4,000 × 3) / 100
Interest = 12,000 / 100
Interest = Rs. 120

Therefore, the amount of interest will be Rs. 120. The correct answer is a.

Total Cost Price of Goods = Rs.2,00,000
S.P of 4/5th Goods = Rs.2,50,000
Therefore, Bal. Goods = Rs.40,000
Therefore, S.P of Bal. Goods = 40,000 - 20% = 32,000 Rs.
Total S.P = 2,50,000 + 32,000 = Rs. 2,82,000
Therefore, Profit = S.P - C.P
= 2,82,000 - 2,00,000 = Rs.82,000

Correct Answer :- a

Explanation : The total cost of the machinery purchased will be 120000 + 10000 expenses = 130000

Residual value = 5000

Time Period = 10 yrs

Annual Depreciation = (130000 - 5000)/10

= 12,500

Rs. 2,500 spent on the overhauling on purchase of second hand machinery to put it in working condition and to derive endurable long- term advantage is a capital expenditure.

The correct answer is (b) - Ascertain the cost of the manufactured goods.
Manufacturing account is a statement prepared by a manufacturing business to determine the cost of goods manufactured during a specific accounting period. The main purpose of preparing a manufacturing account is to ascertain the cost of the manufactured goods.

Here are the reasons why the other options are incorrect:

•  Ascertain the profit or loss on the goods produced: While the manufacturing account helps to ascertain the cost of goods manufactured, it does not directly show the profit or loss on the goods produced. The profit or loss is calculated in the trading and profit & loss account after considering the cost of goods sold and other incomes and expenses.
• Show the sale proceeds from the goods produced during the year: The manufacturing account does not show the sale proceeds from the goods produced during the year. The sale proceeds are recorded in the trading account, which is prepared separately.
• Both (b) and (c): As explained above, the manufacturing account does not show the sale proceeds from the goods produced during the year. Therefore, this option is incorrect.

In summary, the primary purpose of preparing a manufacturing account is to ascertain the cost of the manufactured goods during a specific accounting period. It helps the business to determine the cost of production, which is useful for pricing, inventory valuation, and cost management.

The correct answer is: Assets and liabilities expressed in monetary terms.

Financial statements are formal records of the financial activities and position of a business, person, or other entity. They provide an overview of a business's financial condition in both short and long-term aspects. Financial statements typically include the balance sheet, income statement, and cash flow statement.

Financial statements consider:
1. Assets expressed in monetary terms: These are the resources owned by a business that have a measurable monetary value. Examples include cash, accounts receivable, inventory, buildings, and equipment. These assets are recorded in the financial statements at their monetary value, either at their historical cost or fair market value, depending on the applicable accounting standards.

2. Liabilities expressed in monetary terms: These are the obligations of a business that also have a measurable monetary value. Examples include accounts payable, loans, and bonds payable. Like assets, liabilities are recorded in the financial statements at their monetary value.

Financial statements do not typically include:
Assets expressed in non-monetary terms: These are resources that cannot be easily quantified in monetary terms, such as human capital, intellectual property, or brand value. While these assets can contribute significantly to a company's success, they are not included in the financial statements because they do not have a clear, measurable monetary value.

To summarize, financial statements consider both assets and liabilities expressed in monetary terms, as they provide a clear and quantifiable measure of a business's financial position. Non-monetary assets, while potentially valuable, are not included in financial statements due to their lack of a clear, measurable monetary value.

To calculate the gross profit, we follow these steps:

Step 1: Calculate the Gross Profit
- Gross Profit = Sales Revenue - Cost of Goods Sold

Step 2: Subtract Expenses
- Net Profit = Gross Profit - Expenses

Now let's use the given values to calculate the Gross Profit:

- Sales Revenue = Rs. 4,00,000
- Cost of Goods Sold = Rs. 3,10,000
- Expenses = Rs. 60,000

Gross Profit Calculation:
- Gross Profit = 4,00,000 - 3,10,000
- Gross Profit = Rs. 90,000

So, the correct answer is (b) Rs. 90,000.

To find the sacrificing ratio among A and B, we need to compare their old ratio (before C's admission) and the new ratio (after C's admission). Let's break down the calculation into steps.

Old Ratio (A : B) = 5 : 3
New Ratio (A : B : C) = 7 : 5 : 4

Now, we need to find the ratio for A and B only from the new ratio. To do this, we need to make the sum of the new ratio equal to the sum of the old ratio.
Sum of old ratio = 5 + 3 = 8
Sum of new ratio = 7 + 5 + 4 = 16

Now, we need to make the sum of the new ratio equal to the sum of the old ratio. To do this, we can divide the new ratio by 2 (since 16 / 2 = 8).
Adjusted new ratio for A and B = (7 : 5 : 4) / 2 = 3.5 : 2.5 : 2

Now, we have the adjusted new ratio for A and B as 3.5 : 2.5. To find the sacrificing ratio, we need to compare this adjusted new ratio with the old ratio.
Sacrificing ratio (A : B) = Old Ratio - Adjusted New Ratio
Sacrificing ratio (A : B) = (5 : 3) - (3.5 : 2.5) = (5 - 3.5) : (3 - 2.5) = 1.5 : 0.5

Now, we can simplify the sacrificing ratio by dividing both parts by 0.5.
Simplified sacrificing ratio (A : B) = (1.5 : 0.5) / 0.5 = 3 : 1
Hence, the sacrificing ratio among A and B is 3:1. Therefore, the correct answer is (a) 3:1.

To calculate the gross profit, we need to follow these steps:

Calculate the cost of goods sold (COGS):
- Opening Stock
- Add Purchases
- Add Carriage on Purchases
- Subtract Closing Stock

Calculate the gross profit:
- Sales
- Subtract COGS

Let's calculate the gross profit based on the given data:

Calculate the cost of goods sold (COGS):
- Opening Stock: Rs. 20,000
- Add Purchases: Rs. 85,800
- Add Carriage on Purchases: Rs. 2,300
- Total before subtracting Closing Stock: Rs. 108,100
- Subtract Closing Stock: Rs. 18,000
- COGS: Rs. 90,100

Calculate the gross profit:
- Sales: Rs. 1,40,700
- Subtract COGS: Rs. 90,100
- Gross Profit: Rs. 50,600

So, the correct answer is (d) Rs. 50,600.

When the shares are issued at premium and the company has received that premium at the time of forfeiture the Premium A/c remains unchanged.

This all is because the company cannot demand the premium again on forfeiture of shares even when they have received the amount due on premium.

The correct answer is: Insurance Premium A/c Dr. 1,800. To Prepaid Insurance Premium 1,800.

The insurance premium paid on January 1, 2015, is Rs. 2,400. The financial year ends on March 31 every year, which means the premium covers 12 months (January to December). Since the opening entry is on April 1, 2015, three months (January, February, and March) of the insurance premium have already been used.

Here's a detailed breakdown of the calculation:

1. Determine the monthly premium:
- Total premium: Rs. 2,400
- Duration: 12 months
- Monthly premium: Rs. 2,400 / 12 = Rs. 200

2. Calculate the used and unused portions of the premium:
- Used portion (January to March): 3 months x Rs. 200 = Rs. 600
- Unused portion (April to December): 9 months x Rs. 200 = Rs. 1,800

3. Create the opening entry on April 1, 2015:
- Insurance Premium A/c Dr. 1,800
- To Prepaid Insurance Premium 1,800

This entry shows that the total insurance premium paid (Rs. 2,400) is divided into two parts: the used portion (Rs. 600) and the unused portion (Rs. 1,800). The opening entry on April 1, 2015, reflects the remaining unused portion of the insurance premium (Rs. 1,800) as a prepaid insurance premium, which will be used in the following nine months (April to December).

The need for rectifying accounting errors arises after the preparation of the trial balance. The trial balance is crucial for the identification of such errors before proceeding with its rectification.

The correct answer is d) Production units method.

Production Units Method:
The Production Units Method, also known as the Units of Production Method or Units of Activity Method, is a depreciation method where depreciation is charged based on the actual usage or output of the asset. In this method, depreciable cost is allocated in proportion to the annual output relative to the probable lifetime output.

The main features of the Production Units Method include:
- It takes into account the actual usage or output of the asset.
- Depreciation is higher when the asset is more productive and lower when it is less productive.
- It is suitable for assets whose productivity varies over time or depends on usage.

The Production Units Method is useful for assets that have variable productivity levels and provides a more accurate reflection of the asset's wear and tear over time than other methods, such as the straight-line or declining balance methods.

To calculate the provision for doubtful debts, we first need to subtract the bad debts from the total debtors. Then, we can calculate the provision for doubtful debts based on the given percentage.

Step 1: Calculate net debtors
Total debtors on 31st March 2016: Rs. 55,200
Bad debts: Rs. 200

Net Debtors = Total Debtors - Bad Debts
Net Debtors = Rs. 55,200 - Rs. 200
Net Debtors = Rs. 55,000

Step 2: Calculate provision for doubtful debts
Provision for doubtful debts = Net Debtors x Percentage of Provision for Doubtful Debts
Provision for doubtful debts = Rs. 55,000 x 5%
Provision for doubtful debts = Rs. 2,750

So, the amount of provision for doubtful debts is Rs. 2,750. The correct answer is (b) Rs. 2,750.

WDV = COST (1 - r)^n
WDV = 72900
72900 = cost (1 - 0.1)^3
72900 = cost (0.9)^3
cost = 72900/0.729
cost =100000

To find the cost of the asset, we can follow these steps:

1. Calculate the total depreciation over the asset's life:
- Depreciation per year: Rs. 2,500
- Estimated life of the asset: 10 years
- Total depreciation = Depreciation per year * Estimated life
- Total depreciation = Rs. 2,500 * 10 = Rs. 25,000

2. Add the estimated scrap value to the total depreciation:
- Estimated scrap value: Rs. 3,200
- Cost of the asset = Total depreciation + Estimated scrap value
- Cost of the asset = Rs. 25,000 + Rs. 3,200 = Rs. 28,200

So the cost of the asset is Rs. 28,200. The correct answer is option b.

To calculate the share in profits for D's account for the period 1st April 2016 to 30th June 2016, we need to follow these steps:

1. Calculate the total ratio:
The total ratio of R, J, and D is 7:5:4. We can add the ratios to find the total ratio.
Total ratio = 7 + 5 + 4 = 16

2. Calculate D's share in total profits:
D's share in total profits can be calculated by multiplying D's ratio (4) by the total profits (Rs. 24,000) and dividing by the total ratio (16).
D's share = (4/16) * Rs. 24,000

3. Calculate the number of months for which D was a partner:
D died on 30th June 2016, and we need to calculate the share for the period 1st April 2016 to 30th June 2016. So, D was a partner for 3 months (April, May, and June).

4. Calculate the total number of months in the accounting year:
The accounting year is from 1st April 2015 to 31st March 2016, which is 12 months.

5. Calculate D's share in profits for the period 1st April 2016 to 30th June 2016:
We can do this by multiplying D's share in total profits by the number of months D was a partner and then dividing by the total number of months in the accounting year.
D's share for 3 months = (D's share in total profits) * (3 months) / (12 months)

Now, let's calculate the values:

D's share = (4/16) * Rs. 24,000 = Rs. 6,000
D's share for 3 months = (Rs. 6,000) * (3 months) / (12 months) = Rs. 1,500

So, the share in profits for the period 1st April 2016 to 30th June 2016 that will be credited to D's account is Rs. 1,500. The correct answer is b.

The correct answer is c: Rs. 4,500.

Here's a detailed explanation:
- Interest on capital is calculated for the period from 1st July, 2016 to 31st December, 2016, which is a total of 6 months.
- Interest on capital is to be charged at 10% per annum.

Calculating interest on capital for Mr. A:
- Mr. A's capital contribution is Rs. 40,000.
- To calculate interest for 6 months, we need to divide the annual rate (10%) by 2, which gives us 5%.
- Interest for Mr. A = 5% of Rs. 40,000 = (5/100) * 40,000 = Rs. 2,000.

Calculating interest on capital for Mr. B:
- Mr. B's capital contribution is Rs. 50,000.
- Interest for Mr. B = 5% of Rs. 50,000 = (5/100) * 50,000 = Rs. 2,500.

Total interest on capital for both partners:
- Total interest = Interest for Mr. A + Interest for Mr. B
- Total interest = Rs. 2,000 + Rs. 2,500 = Rs. 4,500.

Therefore, the interest on capital for both partners is Rs. 4,500.

Cost of computer=10,000 + 1000 + 500 = 11,500

20% of selling price = 25% on cost price
selling price=11500 + 11500* 25%
=11500 + 2875
=14375

The correct answer is d) Employees.

Employees are considered internal users of financial statements because they have a direct interest in the company's financial health and stability. Employees depend on the company's financial performance for job security, promotions, salary increases, and other benefits. As a result, they need to have access to the company's financial statements to make informed decisions about their employment and career growth.

The correct answer is (c) Errors.

Errors in accounting refer to unintentional omission or commission of amounts and accounts in the process of recording transactions. These errors can lead to inaccurate financial statements and misrepresentation of an organization's financial position. It is important to identify and correct these errors to maintain the accuracy and reliability of financial information.

There are several types of accounting errors:
1. Errors of omission: These errors occur when a transaction is completely omitted from the accounting records. For example, if a purchase invoice is not recorded in the books, it will result in an understatement of expenses and an overstatement of net income.

2. Errors of commission: These errors happen when a transaction is recorded, but with incorrect amounts or in the wrong accounts. For example, if a payment to a supplier is recorded as revenue instead of an expense, it will result in an overstatement of income and an understatement of liabilities.

3. Errors of principle: These errors involve recording transactions in violation of accounting principles. For example, if an expense is recorded as an asset, it will result in an overstatement of assets and an understatement of expenses.

4. Compensating errors: These errors occur when two or more errors offset each other. For example, if a revenue is understated by $100 and an expense is also understated by $100, the net income will remain accurate despite the errors.

5. Errors of duplication: These errors occur when a transaction is recorded more than once. For example, if a sales invoice is mistakenly recorded twice, it will result in an overstatement of revenue and an understatement of accounts receivable.

To detect and correct accounting errors, organizations should implement strong internal controls, such as segregation of duties, regular reconciliations, and periodic reviews of financial records. In addition, proper staff training and the use of accounting software can help minimize the occurrence of errors.

Correct answer: Old partners in old profit/loss sharing ratio

When a new partner is admitted into the partnership, the value of goodwill is often revalued and brought into the books. The treatment for this goodwill depends on the partnership agreement and the method chosen for accounting for goodwill. In general, goodwill is written back by the old partners in their old profit/loss sharing ratio.

Here is the detailed explanation of the process:
1. Calculation of Goodwill: At the time of the admission of a new partner, the value of goodwill is calculated based on the agreed method, such as the average profit method, capitalization method, or super profit method.

2. Credit to Old Partners' Capital Accounts: The value of goodwill is then credited to the old partners' capital accounts in their old profit/loss sharing ratio. This means that the old partners are compensated for the future benefits that they have given up to the new partner.

3. Debit to New Partner's Capital Account: The new partner will bring in their share of goodwill in cash or in any other agreed form. This amount is debited to the new partner's capital account, effectively paying for their share of the future benefits provided by the goodwill.

4. Writing Back of Goodwill: After the above entries, goodwill is written back by the old partners in their old profit/loss sharing ratio. This is done to remove the value of goodwill that was temporarily recorded in the books during the admission process.

In summary, during the admission of a new partner, the value of goodwill is written back by the old partners in their old profit/loss sharing ratio. This ensures that the old partners are fairly compensated for the future benefits they have given up, and the new partner contributes their share of goodwill to the partnership.

In this case, the old bill of Rs. 20,000 will be considered as Cancelled. 

Explanation:
- Mohit, the acceptor of the bill, was supposed to pay the amount on 31st March 2016. However, he was unable to do so due to a financial crisis.
- Mohit approaches Rohit on 20th March 2016 for an extension of the bill for an additional 3 months.
- Rohit agrees to extend the credit period by drawing a new bill for Rs. 20,500, which includes the original amount of Rs. 20,000 and the interest of Rs. 500. Additionally, Mohit has to pay Rs. 1,000 in cash as interest for the extension.

Since the new bill of Rs. 20,500 has been drawn and the old bill of Rs. 20,000 is no longer valid, the old bill is considered as Cancelled. The new bill takes the place of the old bill, and Mohit is now obligated to pay the new amount on the extended due date.

The correct option is B - 300 shares; Rs. 240

No. of shares allotted to F
= 420 x 10,000/14,000
= 300

The amount carried forward for adjustment against allotment money due from F will be
= (420 - 300) x 2
= 120 x 2
= Rs 240

To find out the amount to be received from Ritesh, we need to consider the following points:
1. The face value of the bill: Rs. 10,000
2. The amount for which the bill was discounted by Hitesh: Rs. 9,600
3. The bank notification charges when the bill was dishonoured: Rs. 200

Now, let's calculate the amount to be received from Ritesh:
- Since the bill was dishonoured, Ritesh needs to pay back the discounted amount of Rs. 9,600 to Hitesh.
- In addition to the discounted amount, Ritesh also needs to pay the bank notification charges of Rs. 200.

So, the total amount to be received from Ritesh would be:
Rs. 9,600 (discounted amount) + Rs. 200 (bank notification charges) = Rs. 10,200

Hence, the correct answer is (c) Rs. 10,200.

We can calculate the amount of the final call by looking at the total value of the shares and subtracting the amounts received through application, allotment, and the first call.

Given information:
- Total number of shares issued: 60,000
- Value of each share: Rs. 9
- Application money: Rs. 2
- Allotment money: Rs. 4
- First call: Re. 1

Calculations:
1. Total value of shares:
- 60,000 shares * Rs. 9 per share = Rs. 540,000

2. Amount received through application, allotment, and first call:
- Application money: 60,000 shares * Rs. 2 = Rs. 120,000
- Allotment money: 60,000 shares * Rs. 4 = Rs. 240,000
- First call: 60,000 shares * Re. 1 = Rs. 60,000
- Total amount received: Rs. 120,000 + Rs. 240,000 + Rs. 60,000 = Rs. 420,000

3. Amount of final call:
- Total value of shares - Amount received through application, allotment, and first call
- Rs. 540,000 - Rs. 420,000 = Rs. 120,000

4. Final call per share:
- Rs. 120,000 / 60,000 shares = Rs. 2
So, the amount of the final call will be Rs. 2 per share. The correct answer is (b) Rs. 2.

Bank A/c   Dr.(2000*9)    18,000
Share forfeiture A/c Dr.     2000
         To Share Capital A/c (2000*10)     20,000
(Being forfeited shares re-issued)

Share Forfeiture A/c Dr.  1000
     To Capital Reserve                 1000
(balance in share forfeiture account transferred to capital reserve)

In the bank reconciliation statement, when the balance as per the cash book is taken as the starting point, direct deposits from the customer of Rs. 2,500 in the bank will be Added.

Explanation:

• A bank reconciliation statement is a statement prepared to reconcile the difference between the cash book balance and the bank statement balance.
• When the balance as per the cash book is taken as the starting point, adjustments are made for transactions that have been recorded in the bank statement but not in the cash book.
• Direct deposits from the customer (Rs. 2,500 in this case) are transactions where the customer directly deposits the money into the bank account without informing the business. Since the business is not aware of this transaction, it is not recorded in the cash book.
• Therefore, to reconcile the cash book balance with the bank statement balance, the direct deposit amount of Rs. 2,500 needs to be added to the cash book balance.
• This adjustment ensures that the cash book balance accurately reflects the bank statement balance, taking into account all transactions, including those not initially recorded in the cash book.

The correct answer is b. The trial balance would show the credit side to be Rs. 3,000 more than the debit side.

Explanation:
When the sales return of Rs. 1,500 has been wrongly posted to the credit of the purchase returns account, the following errors occur:
- The sales return account is not credited with Rs. 1,500, so the credit side is understated by Rs. 1,500.
- The purchase returns account is wrongly credited with Rs. 1,500, so the credit side is overstated by Rs. 1,500.
These errors lead to a net effect of the credit side being Rs. 3,000 more than the debit side in the trial balance.

To summarize:
- The sales return account should have been credited with Rs. 1,500, but it was not. This leads to an understatement of the credit side by Rs. 1,500.
- The purchase returns account was wrongly credited with Rs. 1,500, which leads to an overstatement of the credit side by Rs. 1,500.
- The net effect of these errors is that the credit side of the trial balance is Rs. 3,000 more than the debit side.

Gross margin = 100% + 33.33% = 133.33%.
Cost price of the goods sold = Rs.13,00,000 X 100/133.33 = Rs.9,75,000.
Cost price of the goods available for sale = Rs.12,00,000.
Closing inventory = Cost price of the goods available for sale - cost price of the goods sold = Rs.(12,00,000 - 9,75,000) = Rs.2,25,000.
Hence, the correct option is C.

To find the amount to be paid by Suraj without any discount, let's follow these steps:

1. Calculate the amount paid after availing discounts:
- On 30th June 2016, Suraj paid Rs. 1,800 after availing a 10% cash discount. To find the original amount before the discount, we can calculate as follows:
Original amount = Amount paid / (1 - Discount rate)
Original amount = 1,800 / (1 - 0.10) = 1,800 / 0.90 = Rs. 2,000

- On 30th September 2016, Suraj paid Rs. 2,850 after availing a 5% cash discount. To find the original amount before the discount, we can calculate as follows:
Original amount = Amount paid / (1 - Discount rate)
Original amount = 2,850 / (1 - 0.05) = 2,850 / 0.95 = Rs. 3,000

2. Calculate the total amount paid so far:
Total amount paid = Amount paid on 30th June + Amount paid on 30th September
Total amount paid = Rs. 2,000 + Rs. 3,000 = Rs. 5,000

3. Calculate the remaining amount to be paid:
Remaining amount = Total credit purchase - Total amount paid
Remaining amount = Rs. 7,000 - Rs. 5,000 = Rs. 2,000

So, the amount to be paid by Suraj without any discount on account of final settlement is Rs. 2,000 

The correct answer is (d): An employee dismissed from the job.

A transaction is an event or action that involves the exchange of goods, services, or assets, and has a measurable impact on a company's financial position. In accounting terms, a transaction is an event that is recorded in the financial statements. Let's examine each option:

a) Goods are purchased on cash basis for Rs. 1,000.
- This is a transaction because there is an exchange of goods and cash, which impacts the company's financial position. The company's inventory increases by the value of the goods, and the cash balance decreases by Rs. 1,000.

b) Salaries paid for the month of May, 2016.
- This is a transaction because the company is paying salaries (an expense) to its employees, which affects the company's financial position. The total expenses increase, and the cash balance decreases by the amount of the salaries paid.

c) Land is purchased for Rs. 10 lakhs.
- This is a transaction because the company is buying an asset (land) by paying cash, which affects the company's financial position. The company's assets increase by the value of the land, and the cash balance decreases by Rs. 10 lakhs.

d) An employee dismissed from the job.
- This is not a transaction because there is no exchange of goods, services, or assets, and it does not have a measurable impact on the company's financial position. While the dismissal of an employee could lead to changes in the company's expenses or productivity, the act of dismissing the employee itself does not constitute a transaction.

To calculate the profit, we need to first find the net purchases and net sales.

Net Purchases:
- Purchases: Rs. 30,000
- Purchase Returns: Rs. 5,000
- Net Purchases = Purchases - Purchase Returns = Rs. 30,000 - Rs. 5,000 = Rs. 25,000

Net Sales:
- Sales: Rs. 40,000
- Sales Returns: Rs. 5,000
- Net Sales = Sales - Sales Returns = Rs. 40,000 - Rs. 5,000 = Rs. 35,000

Now, we can find the profit:
Profit = Net Sales - Net Purchases = Rs. 35,000 - Rs. 25,000 = Rs. 10,000
So, the correct answer is: Rs. 10,000.

The correct answer is option C: Seeta’s Capital a/c will be credited by Rs. 36,000 with corresponding debit to Radha and Laxmi in their gaining ratio.

1. Calculation of Gaining Ratio:
- The given profit-sharing ratio of Radha, Seeta, and Laxmi is 2:3:5.
- Since Seeta is retiring, the new profit-sharing ratio of Radha and Laxmi will be 2:5.
- The gaining ratio is calculated as the difference between the new and old ratios for the remaining partners. In this case, the gaining ratio of Radha and Laxmi is (2:5 - 2:5:5) = (2:5).

2. Calculating Seeta's share in Goodwill:
- Seeta's share in the Goodwill of the firm is calculated based on the old profit-sharing ratio.
- Seeta's share in the Goodwill = (3/10) * Rs. 1,20,000 = Rs. 36,000.

3. Treatment for Goodwill:
- Seeta's Capital a/c will be credited by Rs. 36,000 (Seeta's share in the Goodwill) to record her withdrawal from the business.
- Radha and Laxmi's Capital a/c will be debited with their respective share in the Goodwill based on the gaining ratio.
- Radha's share in the Goodwill = (2/7) * Rs. 36,000 = Rs. 10,286 (approx.).
- Laxmi's share in the Goodwill = (5/7) * Rs. 36,000 = Rs. 25,714 (approx.).
- The journal entry for this transaction will be:

Radha's Capital a/c Dr. Rs. 10,286
Laxmi's Capital a/c Dr. Rs. 25,714
To Seeta's Capital a/c Rs. 36,000

This entry records the payment of Goodwill to Seeta by Radha and Laxmi in their gaining ratio.

The correct answer is 11th October, 2016.

According to the Negotiable Instruments Act, if the date of maturity of a bill falls on a public holiday, the bill will mature on the next succeeding business day. In this case, since 10th October, 2016 was declared as a holiday under the Negotiable Instruments Act, the bill will mature on the next business day, which is 11th October, 2016.

Here's a summary of the key points:
- The original date of maturity was 10th October, 2016.
- The Government of India declared 10th October, 2016 as a holiday under the Negotiable Instruments Act.
- According to the Act, if the date of maturity falls on a public holiday, the bill will mature on the next succeeding business day.
- Therefore, the bill will mature on 11th October, 2016.

To calculate the depreciation for the year ended 31st March, 2016, we need to consider the following:

1. The cost of the machine is Rs. 10,000 and the depreciation rate is 10% per annum.
2. The cost of the furniture is Rs. 20,000 and the depreciation rate is 5% per annum.
3. The period is from 1st January 2016 to 31st March 2016, which is 3 months (1/4 of a year).

Now, let's calculate the depreciation for each asset:
Depreciation for the machine:
- Annual depreciation = 10% of Rs. 10,000 = Rs. 1,000
- Depreciation for 3 months = (1,000 * 3) / 12 = Rs. 250

Depreciation for the furniture:
- Annual depreciation = 5% of Rs. 20,000 = Rs. 1,000
- Depreciation for 3 months = (1,000 * 3) / 12 = Rs. 250

Now, let's find the total depreciation for the year ended 31st March, 2016:
Total depreciation = Depreciation for the machine + Depreciation for the furniture
Total depreciation = Rs. 250 + Rs. 250 = Rs. 500

So, the correct answer is (c) Rs. 500.

Let's break down the commission calculation for Mr. B as follows:

1. Total units sold:
- 150 units @ Rs. 14,200 per unit (on credit)
- 75 units @ Rs. 14,000 per unit (for cash)
- Total = 150 + 75 = 225 units

2. Commission per unit:
- Rs. 500 per unit

3. Calculation of total commission:
- Total units sold = 225 units
- Commission per unit = Rs. 500
- Total commission = 225 units * Rs. 500 = Rs. 1,12,500

So, the correct answer is (c) Rs. 1,12,500.

Answer: The correct answer is d, Rs. 10,00,000.

Explanation:
- Gama Ltd. issued 10,000 debentures at a face value of Rs. 100 each: 10,000 x Rs. 100 = Rs. 10,00,000.
- The debentures are issued at a discount of 10%, which means the debentures will be sold for 90% of their face value.
- The company received applications for 12,000 debentures, but they can only issue 10,000 debentures. So, the allotment of debentures will be done for 10,000 debentures only.
- The amount credited to the debentures account will be the amount received for the 10,000 debentures issued.
- Since the debentures are issued at a discount of 10%, the amount received for each debenture is 90% of Rs. 100: 0.9 x Rs. 100 = Rs. 90.
- The total amount credited to the debentures account will be: 10,000 debentures x Rs. 90 per debenture = Rs. 9,00,000.
- However, the debentures account should be credited with the face value of the debentures issued, which is Rs. 10,00,000.

So, on 10th October 2016, the amount that should be credited to the debentures account is Rs. 10,00,000.

The total cost of machinery can be calculated by adding all the expenses related to the purchase and installation of the machinery. Let's break down the costs:

- Cost of second-hand machinery: Rs. 50,000
- Shipping and forwarding charges: Rs. 2,000
- Import duty: Rs. 1,000
- Carriage inwards: Rs. 1,000
- Repair charges: Rs. 500
- Installation charges: Rs. 200
- Brokerage of the middleman: Rs. 400
- Cost of iron pad: Rs. 100

Now, let's add all these expenses to find the total cost of the machinery:
Total cost = 50,000 + 2,000 + 1,000 + 1,000 + 500 + 200 + 400 + 100
Total cost = Rs. 55,200
Total cost of machinery: Rs. 55,200

The correct answer is: Adjusted cash book

When finalizing the accounts, the balance considered is from the adjusted cash book, and here's why:
1. Reconciliation of differences: There might be differences between the cash book and the passbook (bank statement) for various reasons, such as timing differences, bank charges, interest, or errors. The adjusted cash book considers these differences and reconciles the balances.

2. Accurate representation of transactions: The adjusted cash book provides an accurate representation of all transactions that have taken place, including those that have not been recorded in the cash book or passbook. This ensures that the financial statements are based on complete and accurate information.

3. Error detection and correction: The process of preparing the adjusted cash book helps identify errors and discrepancies in the cash book or passbook. By rectifying these errors, the adjusted cash book provides a more reliable balance for finalizing the accounts.

4. Compliance with accounting principles: Using the adjusted cash book balance ensures that the final accounts are prepared in accordance with generally accepted accounting principles (GAAP), which emphasize the importance of accurate and consistent financial reporting.

In summary, the adjusted cash book balance is considered for finalizing the accounts because it reconciles differences between the cash book and passbook, provides an accurate representation of transactions, aids in error detection and correction, and ensures compliance with accounting principles.

As 5000/3000 ×1800 = 3000 -1800 = 1200
i.e. per share forfeiture amt is 5000/3000
Then for 1800 share is 5000/3000 × 1800 = 3000then shares r reissue at 9 per share means loss of rupees 1 per share i.e. 1800 rupees which will be recovered from forfeiture account 3000-1800 = 1200
Means 1200 will be transferred to capital reserve account.

To find the share of Me in the life policy, we need to follow these steps:

1. Calculate the total amount of life policies for all partners.
2. Calculate the share of each partner in the life policies based on the given profit-sharing ratio.

Step 1: Calculate the total amount of life policies for all partners
- Life policy for He = Rs. 50,000
- Life policy for She = Rs. 1,00,000
- Life policy for Me = Rs. 1,50,000
Total life policies = Rs. 50,000 + Rs. 1,00,000 + Rs. 1,50,000 = Rs. 3,00,000

Step 2: Calculate the share of each partner in the life policies based on the given profit-sharing ratio
The profit-sharing ratio is given as 5:3:2 for He, She, and Me respectively.
- Total ratio = 5 + 3 + 2 = 10
- Share of He = (5/10) * Total life policies
- Share of She = (3/10) * Total life policies
- Share of Me = (2/10) * Total life policies

Let's calculate the share of Me in the life policies:
Share of Me = (2/10) * Rs. 3,00,000 = Rs. 60,000
So, Me's share in the policy is Rs. 60,000.

To calculate the annual depreciation for 1-3 years using the production units method, we first need to determine the depreciation per unit and then multiply it by the number of units produced in each year.

1. Calculate depreciation per unit:
Depreciable amount = Rs. 11,00,000
Total expected production units = 30 lakhs units

Depreciation per unit = Depreciable amount / Total expected production units
Depreciation per unit = Rs. 11,00,000 / 30,00,000 = Rs. 0.3667 (approx.)

2. Calculate annual depreciation for 1-3 years:
According to the given distribution of production units, in the first three years, 5 lakh units are produced each year.

Annual depreciation = Depreciation per unit × Units produced per year
Annual depreciation = Rs. 0.3667 × 5,00,000 = Rs. 1,83,333.33 (approx.)

So, the annual depreciation for 1-3 years using the production units method is:
Rs. 1,83,333

To calculate the amount of interest outstanding in the final accounts, we need to first find out the total interest earned during the period and then compare it with the interest received.

Given:
Investment amount = Rs. 1,00,000
Rate of interest = 18%
Interest received on investment = Rs. 15,000

Step 1: Calculate the total interest earned during the period:
Total interest earned = Investment amount × Rate of interest
Total interest earned = Rs. 1,00,000 × 18%
Total interest earned = Rs. 18,000

Step 2: Calculate the interest outstanding:
Interest outstanding = Total interest earned - Interest received on investment
Interest outstanding = Rs. 18,000 - Rs. 15,000
Interest outstanding = Rs. 3,000

Hence, the amount of interest outstanding in the final accounts is Rs. 3,000 (Option C).

Let CP = 100
SP = 100 + 25% of 100 = 125
Profit = 25
% of Profit on SP = (25 * 100)/125 = 20%

The correct answer is (b) There can be a stranger to a consideration.

A contract involves an agreement between two or more parties, where each party promises to do or not do something in exchange for something of value, known as consideration. In a contract, all involved parties must have a clear understanding of the terms and conditions. However, the concept of "stranger to a contract" suggests that someone who is not a party to the contract cannot enforce it or be bound by its terms.

On the other hand, a "stranger to consideration" refers to a situation where a person who is not a party to the contract still benefits from the contract. This concept is based on the legal principle of "privity of consideration," which means that a person can enforce the terms of a contract if they have provided valuable consideration.

Let's break it down further:

• Stranger to a contract: A person who is not a party to the contract and cannot enforce its terms or be bound by them.
• Stranger to a consideration: A person who is not a party to the contract but still benefits from it due to the legal principle of privity of consideration.

So, the statement "There can be a stranger to a consideration" is true because it is possible for someone who is not a party to the contract to still benefit from it if they have provided valuable consideration. This concept is important in situations where a third party may have a legitimate interest in the performance of a contract, even though they are not directly involved in the agreement.

The correct answer is c, fall of the hammer. 
An auction sale is a public sale of goods or property to the highest bidder, conducted by an auctioneer. The auction process has several important elements, and the completion of an auction sale is determined by the fall of the hammer. Here's why:

Delivery of goods
- While the delivery of goods is an important part of completing the transaction, the auction sale is considered complete as soon as the auctioneer announces the highest bidder and brings down the hammer.
- The delivery of goods may take place later, after the payment is made, and is not the event that signifies the completion of the auction sale.

Payment of price
- The payment of the price is another crucial aspect of an auction sale but is not the event marking its completion.
- The auctioneer may require immediate payment or allow the buyer to pay within a specified time after the auction. However, the auction sale is complete once the hammer falls, even before the payment is made.

Fall of the hammer
- The fall of the hammer is the key event that marks the completion of an auction sale.
- When the auctioneer brings down the hammer, it signifies the acceptance of the highest bid and the conclusion of the auction for that particular item.
- At this point, a legally binding contract is formed between the seller and the highest bidder, with the winner agreeing to purchase the item at the bid price.

In conclusion, the completion of an auction sale is marked by the fall of the hammer, as it indicates the auctioneer's acceptance of the highest bid and the formation of a legally binding contract between the seller and the buyer. The delivery of goods and payment of price, although essential to the overall transaction, are not the events that signify the completion of the auction sale.

A minor is entitled to the benefits of the firm. This means that a minor can be admitted to the benefits of a partnership firm, but they cannot be a full-fledged partner. Here's a detailed explanation of the various aspects related to minors in a partnership firm:

Rights of a Minor in a Partnership Firm:
- A minor has a right to receive their share of profits from the partnership firm.
- They can have access to the accounts and other records of the partnership firm.
- A minor is entitled to exercise their rights and privileges during the period of their minority.

Limitations of a Minor in a Partnership Firm:
- A minor cannot be held personally liable for the debts and obligations of the partnership firm. Their liability is limited to their share of profits or the property invested in the firm.
- A minor cannot participate in the day-to-day management of the partnership firm. They cannot make decisions or bind the firm through their actions.
- A minor does not have the right to transfer their share in the partnership firm to any other person.

Upon Attaining Majority:
- When a minor partner attains the age of majority, they have the option to become a full-fledged partner of the firm within a specified period.
- If they decide to become a partner, they must give public notice of their intention to do so. Failure to give such notice will result in the minor continuing to be treated as a minor for the purposes of the partnership.
- Upon becoming a partner, the person will be liable for all the obligations of the firm from the date they were admitted to the benefits of the partnership.

In conclusion, a minor can only be entitled to the benefits of a partnership firm and cannot be a full partner or representative of the firm. Their rights and liabilities are limited, and they cannot actively participate in the management or decision-making process of the firm.

A contract is discharged by novation, which means the substitution of an existing contract for a new one. This occurs when all parties involved in the original contract agree to replace it with a new contract. The process of novation effectively discharges the original contract and replaces it with a new one. This can happen for various reasons, such as a change in circumstances or a desire to alter the terms of the agreement.

Key aspects of novation include:

Mutual agreement: All parties to the original contract must agree to the novation for it to be valid. This typically involves the consent of the original parties and any new parties involved in the new contract.

Discharge of the original contract: The existing contract is discharged, meaning that the parties are no longer bound by its terms and conditions. This is a crucial aspect of novation, as it distinguishes it from other methods of altering a contract, such as amendment or variation.

Creation of a new contract: A new contract is formed to replace the original one, with the same or different parties, and with new terms and conditions. This new contract binds the parties and governs their relationship going forward.

Transfer of rights and obligations: In a novation, the rights and obligations of the original contract are transferred to the new contract. This means that the parties to the new contract will have the same rights and obligations as they would have had under the original contract.

In summary, a contract is discharged by novation when an existing contract is substituted with a new one, following the mutual agreement of all parties involved. This process discharges the original contract, creates a new contract, and transfers the rights and obligations from the original contract to the new one.

When the promisor refuses altogether to perform his promise and signifies his unwillingness even before the time of performance has arrived,it is his Anticipatory Breach. A promisee, instead of putting an end to the contract forthwith may keep the contract alive upto the time when the contract is to be executed and some event happens discharging the promisor from his liability.Hence, in case of anticipatory breach, the aggrieved party may treat the the contract by either discharging and bringing an immediate action for damages or wait till the time of the performance arrives.

Thus, option c is correct answer.

The correct answer is c) Remote damages.

Remote damages, also known as consequential damages, are not generally recoverable because they are not a direct result of the breach of contract or wrongful act. Instead, they are indirect or unforeseeable consequences that might arise from the breach.

The communication of offer is complete on 27th December, 2008.

Here's a detailed explanation:

- Offer: A makes an offer to sell his house to B for Rs. 10 lakhs on 25th December, 2008. The offer is made in a letter, which is a valid form of communication for an offer.
- Dispatch of Offer: The letter containing the offer is dated 25th December, 2008. This is the date when A dispatched the offer.
- Receipt of Offer: The letter containing the offer reaches B on 27th December, 2008. This is the date when B receives the offer.

According to the Indian Contract Act, 1872, the communication of an offer is deemed to be complete when it comes to the knowledge of the person to whom it is made. In this case, the communication of offer is complete when B receives the letter containing the offer, which is on 27th December, 2008.
Therefore, the correct answer is 27th December, 2008.

When the consent of a party is obtained by misrepresentation, the contract is considered voidable. Here is a detailed explanation:

Misrepresentation: Misrepresentation refers to a false statement of fact made by one party to another, which induces the other party to enter into a contract. It is important to note that misrepresentation must be about a material fact and not just an opinion or a future promise.

 Voidable contract: A voidable contract is a valid contract that can be enforced by either party. However, one party has the option to rescind or avoid the contract due to certain circumstances such as misrepresentation, fraud, undue influence, or coercion. In the case of misrepresentation, the innocent party has the right to rescind the contract and claim damages if they have suffered any loss.

The following points further clarify the concept:

1. Right to rescind: The innocent party, upon discovering the misrepresentation, has the right to rescind the contract. This means they can choose to end the contract and return to the position they were in before entering into it. However, if they continue with the contract after becoming aware of the misrepresentation, they may lose the right to rescind it.

2. Claim for damages: In some cases, the innocent party may also claim damages for any loss suffered due to the misrepresentation. The purpose of damages is to compensate the innocent party for their losses and put them in the position they would have been in had the misrepresentation not occurred.

3. Affirmation of the contract: If the innocent party decides to continue with the contract after discovering the misrepresentation, they are said to have affirmed the contract. In this case, they lose the right to rescind it but may still be able to claim damages for any loss suffered.

In summary, when consent is obtained by misrepresentation, the contract is considered voidable. The innocent party has the option to rescind the contract and may also be entitled to claim damages for any loss suffered as a result of the misrepresentation.

The correct answer is "a. the buyer becomes insolvent."

According to the unpaid seller's right section 46, if in case the unpaid seller finds out the insolvency of the buyer, the seller has the right to stop the goods in transit.
Insolvent means that the person is not able to pay the money he owes.

The correct answer is (b) existing goods.

Existing goods are the goods that are already in existence at the time when the contract of sale is made. They can be physically present and identifiable at the time of the agreement. The classification of goods in a contract of sale is important as it helps determine the rights and obligations of the parties involved in the transaction.

Let's understand this concept in more detail:
Existing goods: These are the goods that are owned and possessed by the seller at the time of the contract of sale. They can be further classified into two types:
Present goods: This term is not a standard classification in the context of the contract of sale. It can be considered as a synonym for existing goods, but it is less commonly used.
None of the above: This option is incorrect as the correct answer is existing goods.

In summary, existing goods are goods that are in existence at the time of the contract of sale. They help determine the rights and obligations of the parties involved in the transaction, and can be further classified into specific goods and unascertained goods.

The correct answer is (d) all of the above.

Caveat Emptor, which means "let the buyer beware," is a legal principle that places the responsibility on the buyer to ensure that the goods they are purchasing meet their expectations. However, there are certain situations where the doctrine of Caveat Emptor does not apply. These include when:

1. The goods are bought by sample:
- When a buyer purchases goods based on a sample provided by the seller, the buyer has the right to expect that the goods delivered will match the quality and characteristics of the sample. If the goods do not match the sample, the buyer may have remedies against the seller for breach of contract or misrepresentation.

2. The goods are bought by sample as well as description:
- In this case, the buyer is purchasing goods based on both a sample and a description provided by the seller. The doctrine of Caveat Emptor does not apply because the buyer has the right to expect that the goods delivered will match both the sample and the description. If the goods do not meet these expectations, the buyer may have remedies against the seller.

3. The goods are purchased under its brand name:
- When a buyer purchases goods under a specific brand name, they have the right to expect that the goods will have the quality and characteristics associated with that brand. If the goods do not meet the expectations associated with the brand, the buyer may have remedies against the seller for breach of contract or misrepresentation.

In conclusion, the doctrine of Caveat Emptor does not apply in situations where the goods are bought by sample, bought by sample as well as description, or purchased under a specific brand name. In these cases, the buyer has the right to expect that the goods will meet certain expectations, and if they do not, the buyer may have remedies against the seller.

The correct answer is: valid and effective

When goods are delivered to a carrier or wharfinger for the purpose of transmission to the buyer, the delivery is considered valid and effective. This is because the seller has taken the necessary steps to ensure the goods are on their way to the buyer. Here are some reasons why this type of delivery is considered valid and effective:

1. Transfer of risk: When goods are delivered to a carrier or wharfinger, the risk associated with the goods (such as damage or loss during transit) is transferred from the seller to the buyer. This is in accordance with the principle of "delivery at the seller's expense and risk."

2. Compliance with the contract: By delivering the goods to a carrier or wharfinger, the seller is fulfilling their obligation under the contract to make the goods available for the buyer. This is an essential requirement for the contract to be considered complete and legally binding.

3. Legal recognition: Most jurisdictions recognize this type of delivery as valid and effective, as it is considered an acceptable practice in commercial transactions. This makes it easier for parties to enforce their rights and seek remedies in case of a dispute.

4. Convenience: Delivering goods to a carrier or wharfinger allows the seller to rely on the expertise and infrastructure of the carrier to ensure the safe and timely delivery of the goods. This can save time and resources for both the seller and the buyer.

In summary, delivering goods to a carrier or wharfinger for the purpose of transmission to the buyer is considered a valid and effective form of delivery, as it transfers the risk, complies with the contract, is legally recognized, and provides convenience to both parties involved in the transaction.

A partner can retire from a partnership firm in various ways, but the most appropriate and legally binding method is in accordance with the Partnership Deed. A Partnership Deed is a legal document that outlines the rights, responsibilities, and obligations of each partner in a partnership firm. The Deed provides a framework for the smooth functioning of the partnership and helps avoid potential disputes among partners.

In accordance with the Partnership Deed:

• The Partnership Deed typically contains a clause or provision for the retirement of a partner, specifying the conditions and procedures for retirement.
• The retirement clause in the Deed might mention the age at which a partner can retire, or it may allow a partner to retire at any time by giving a specific notice to the other partners.
• The Deed may also outline the procedure for the valuation of the retiring partner's share in the partnership and the method of payment for the same.
• A partner's retirement might also be linked to certain events or conditions, such as the attainment of a specific business goal or the occurrence of a specified event.
• If the Partnership Deed does not contain any specific provision for the retirement of a partner, the partners can still agree to amend the Deed to include such a provision, subject to the mutual consent of all the partners.

It is important to note that other options mentioned in the question, such as reaching the age of superannuation, the balance in the capital account reaching a certain amount, or the condition of a nominee becoming a partner, can be considered valid reasons for a partner's retirement only if they are explicitly mentioned in the Partnership Deed.

In conclusion, while partners can retire from a partnership firm for various reasons, the most appropriate and legally binding method is in accordance with the provisions of the Partnership Deed. It is always advisable to have a well-drafted Partnership Deed in place to ensure a smooth and hassle-free retirement process for partners.

The correct answer is (b) Undue Influence. 

Undue Influence
Undue influence refers to a situation where one party in a contractual agreement exerts moral pressure on the other party to enter into the contract, causing an imbalance in power and potentially leading to an unfair agreement. It occurs when:

- One party has a superior position or dominant influence over the other, such as a fiduciary relationship, family relationship, or a relationship of trust and confidence.
- That dominant party takes advantage of their position to unduly influence the other party to enter into a contract.
- The contract is significantly unfair or one-sided as a result of the undue influence.

In these cases, the weaker party may argue that they were not acting of their own free will when they entered the contract, and therefore the contract should be voidable or rescinded.

Let briefly discuss the other options mentioned:
Coercion
- Coercion occurs when one party uses physical or psychological force or threats to compel another party to enter into a contract.
- In this case, there is no moral pressure involved, but rather a direct threat or intimidation.

Misrepresentation
- Misrepresentation occurs when one party provides false or misleading information to the other party, which induces them to enter into a contract.
- It does not involve moral pressure, but rather deception or false statements.

Fraud
- Fraud is a deliberate act of deception, dishonesty, or misrepresentation by one party to induce another party to enter into a contract.
- While fraud may involve some element of moral pressure, it primarily involves deceit and intentional wrongdoing.

In summary, undue influence is the correct answer because it specifically involves moral pressure in a contractual situation, leading to an unfair agreement.

The death of a partner has the effect of dissolving the firm. This is because a partnership is based on the mutual agreement and trust among the partners. When one partner dies, that mutual agreement and trust is affected, and the firm cannot continue to function as it was.

Dissolving the firm:
- The remaining partners can decide to continue the business as a new firm, but the original partnership is considered dissolved.
- The assets and liabilities of the firm need to be settled, and the deceased partner's share in the assets and liabilities will be determined.
- The partnership agreement may include provisions for the continuation of the business after the death of a partner, but the firm will still technically be considered dissolved and a new agreement will need to be made.

The correct answer is Voidable.

When the consent of a party is not free in a contract, it becomes a voidable contract.

Voidable Contract
- A voidable contract is an agreement that is valid and legally binding on both parties, but one party has the option to void the contract if they choose to do so.
- In a voidable contract, the party whose consent was not free can either accept the contract (ratify it) or reject it (rescind it).
- Examples of situations where consent may not be free include misrepresentation, undue influence, coercion, or mistake.

Comparison with other types of contracts:

1. Void Contract
- A void contract is an agreement that is not legally enforceable from the very beginning due to some inherent defect or illegality.
- It has no legal effect and cannot be enforced by either party.
- Examples of void contracts include agreements to commit a crime or contracts with an illegal object.

2. Valid Contract
- A valid contract is an agreement that meets all the essential elements required by law, such as offer, acceptance, consideration, and free consent of the parties.
- It is legally binding and enforceable by the courts.
- If the consent of a party is not free, the contract cannot be considered valid.

3. Illegal Contract
- An illegal contract is an agreement that is forbidden by law due to the nature of the subject matter, the parties involved, or the consideration exchanged.
- Such contracts are not enforceable by either party, and the courts will not assist in resolving disputes arising from them.

In conclusion, when the consent of a party is not free, the contract is considered voidable. This means that the affected party has the option to either accept or reject the contract, depending on the circumstances.

The correct answer is c: To enter into partnership on behalf of the firm.

Implied authority of a partner refers to the powers and actions that a partner can take on behalf of the partnership without needing explicit approval from the other partners. These actions are generally considered necessary to carry out the ordinary course of the partnership's business.

Explanation:
To buy or sell goods on accounts of partners: This is part of the implied authority of a partner, as it is necessary for the daily operations of the partnership, such as purchasing inventory or selling products.

To borrow money for the purposes of the firm: This is also part of the implied authority of a partner, as borrowing money might be necessary for the partnership to finance its operations, such as buying equipment or expanding the business.

To enter into partnership on behalf of the firm: This is not part of the implied authority of a partner because entering into a partnership significantly affects the structure, legal obligations, and profit-sharing arrangements of the existing partnership. Such decisions require explicit consent and agreement from all existing partners.

To engage a lawyer to defend actions against the firm: This is part of the implied authority of a partner, as defending the partnership against legal actions is necessary to protect the partnership's interests and maintain its ongoing operations.

In summary, while a partner has implied authority to carry out actions necessary for the ordinary course of the partnership's business, entering into a partnership on behalf of the firm is not included in the implied authority, as it involves significant changes to the legal and financial structure of the existing partnership.

The following are the cases where an offer lapses:

• By revocation- An offer is revoked when it is retracted back by the offeror. An offer may be revoked, at any time before acceptance, by the communication of notice of revocation by the offeror to the other party [Sec. 6(1)].
• By rejection- An offer lapses if it has been rejected by the offeree. The rejection may be express i.e., by words spoken or written, or implied. Implied rejection is one: (a) where either the offeree makes a counteroffer or (b) where the offeree gives a conditional acceptance.
• By counter offer- Sometimes a counteroffer is made by the offeree. In such a case, the original offer automatically comes to an end as the counter offer amounts to a rejection of the original offer.

The correct answer is: All the partners

A new partner can be admitted into a partnership firm with the consent of all the existing partners. This is because a partnership is based on mutual trust, understanding, and agreement between the partners. When a new partner is introduced, it may alter the existing dynamics, profit-sharing ratio, and decision-making process within the firm. Therefore, it is essential to obtain the consent of all the existing partners to ensure that the new partner is accepted and welcomed by everyone in the firm.

A void agreement is defined as an agreement that is not legally binding or enforceable in a court of law. This means that the parties involved cannot seek any legal remedy if the terms of the agreement are breached. The correct answer is (d) Not enforceable in a court of law.

Reasons for void agreements:
1. Lack of essential elements: A valid contract must have specific essential elements such as offer, acceptance, consideration, and intention to create legal relations. If any of these elements is missing, the agreement becomes void.

2. Illegal subject matter: If the subject matter of the agreement is illegal, such as an agreement to commit a crime, the agreement is void.

3. Incapacity of parties: If one or both parties are incapable of entering into a contract (e.g., minors, persons of unsound mind, or intoxicated persons), the agreement is void.

4. Mistake of fact: If both parties are under a mistake of fact essential to the agreement, the agreement is void. For example, if both parties believe they are contracting for the sale of a specific car, but the car has already been destroyed, the agreement is void.

5. Fraud, misrepresentation, or undue influence: If a party enters into an agreement due to fraud, misrepresentation, or undue influence by the other party, the agreement is void.

6. Impossibility of performance: If the performance of the agreement becomes impossible due to unforeseen events or circumstances, the agreement is void. For example, if the contract is for the delivery of goods and the goods are destroyed before delivery, the agreement becomes void.

7. Violation of public policy: If the agreement is contrary to public policy or the law, it is void. For instance, an agreement to restrain trade or restrict personal freedom is void.

In summary, a void agreement is not legally enforceable, and the parties involved cannot seek legal remedies in case of a breach. This is mainly due to the lack of essential elements, illegality, incapacity, mistake, fraud, impossibility, or violation of public policy.

The correct answer is (b) Is against only minor's property.

The liability of a minor for necessaries supplied to him or her arises only against the minor's property. This means that the person who supplied the necessaries can only claim the payment from the minor's property and not from the minor personally. This is because a minor is considered to be incapable of entering into a legally binding contract due to their age and lack of capacity to understand the consequences of their actions. The law seeks to protect minors from being taken advantage of by unscrupulous individuals.

Minor's Liability for Necessaries:

• Necessaries are goods or services that are considered essential for a person's survival, health, and well-being. Examples of necessaries include food, clothing, shelter, and medical care.
• The liability of a minor for necessaries arises only against their property, which includes any assets or wealth that the minor possesses. The supplier of the necessaries has the right to claim payment from the minor's property, but cannot hold the minor personally liable for the debt.
• This protection ensures that minors are not taken advantage of or held personally responsible for debts they may not fully understand or have the capacity to pay off.
• It is important to note that the liability arises only if the minor does not already have sufficient necessaries at the time of the transaction. If the minor already has enough resources to cover their needs, the supplier cannot claim payment from the minor's property.

In conclusion, a minor's liability for necessaries supplied to him or her arises only against the minor's property. The law seeks to protect minors from being held personally liable for debts they may not fully understand or have the capacity to pay off, while ensuring that suppliers of necessaries are able to recover their costs from the minor's assets.

The correct answer is d: Right to receive remuneration.

In a partnership, certain rights are granted to all partners as a matter of right. These rights include:

• Right to take part in the business: All partners have the right to participate in the management and operation of the partnership business. They can make decisions and contribute to the overall running of the business.
• Right to have access to account books: All partners have the right to access and inspect the partnership's account books, financial statements, and other records. This helps maintain transparency and ensures that all partners are aware of the financial standing of the partnership.
• Right to share profits: All partners have the right to share the profits earned by the partnership. The profit-sharing ratio is usually determined and agreed upon when the partnership agreement is made. Each partner's share of the profits is based on their contribution to the partnership, which can include capital, effort, or expertise.

However, the right to receive remuneration is not a right that partners can claim as a matter of course. Remuneration refers to the payment or compensation a partner receives for their work and services provided to the partnership. In general, partners do not have the right to receive remuneration unless it is specifically agreed upon in the partnership agreement.

- In some cases, partners may agree to receive a salary or other form of remuneration for their work in managing the partnership business. This agreement should be clearly stated in the partnership agreement to avoid disputes or misunderstandings.
- If there is no provision for remuneration in the partnership agreement, partners are expected to rely on their share of the profits as their compensation for their work and involvement in the partnership.

In conclusion, the right to receive remuneration is not a right that partners can claim as a matter of course. It must be explicitly agreed upon in the partnership agreement, and without such an agreement, partners are not entitled to receive compensation for their work beyond their share of the partnership profits.

In the case of illegal agreements, the collateral agreements can be classified as void. 
Void Collateral Agreements

• An illegal agreement is one that involves activities that are against the law or public policy.
• Collateral agreements are agreements that are related to, but separate from, the main agreement.
• When the main agreement is illegal, any collateral agreements are considered void.
• A void agreement is one that has no legal force or effect and cannot be enforced by either party.
• In such cases, neither party has any legal rights or obligations arising from the void collateral agreement.
• This is because the law does not recognize or support agreements that are based on illegal activities or purposes.

It is important to note that not all collateral agreements are void when the main agreement is illegal. The collateral agreement may still be valid if it can be separated from the illegal main agreement and does not involve any illegal activities itself. However, in general, collateral agreements related to illegal main agreements are considered void.

The correct answer is (b) not responsible for the bad selection of goods by the buyer.

Caveat Emptor, which is Latin for "let the buyer beware," is a legal principle that places the responsibility of evaluating and selecting goods and services on the buyer. Under this doctrine, the seller is generally not held responsible for the bad selection of goods by the buyer, as it is assumed that the buyer has taken reasonable steps to inspect and examine the goods before making the purchase.

To elaborate further:
1. Buyer's Responsibility: Caveat Emptor signifies that the buyer should be cautious and diligent while purchasing any goods or services. It is the buyer's responsibility to thoroughly examine the product, ask questions, and gather necessary information before making the purchase.
2. Seller's Disclosure: The seller is not obligated to disclose all defects or issues related to the product under the doctrine of Caveat Emptor. However, the seller should not make any false claims or misrepresent the product, as that would constitute fraud.
3. Exception: There are some exceptions to the Caveat Emptor principle, such as in cases where the seller has intentionally concealed defects or has provided misleading information about the product. In such cases, the seller may be held liable for the bad selection of goods by the buyer.
4. Warranties and Guarantees: Some goods and services come with warranties or guarantees, which provide the buyer with additional protection against defects or malfunctions. These warranties and guarantees can be seen as a deviation from the Caveat Emptor principle, as they place some responsibility on the seller.

In conclusion, under the doctrine of Caveat Emptor, the seller is not responsible for the bad selection of goods by the buyer. It is the buyer's responsibility to conduct a thorough inspection and gather all necessary information before making a purchase.

The correct answer is d: All of these. Each of these persons can perform the contract in different situations. 

Promisor alone:
- In most cases, the person who originally made the promise (the promisor) is responsible for performing the contract.
- The promisor is the one who has agreed to fulfill the terms of the contract, and thus, is generally the one to perform the obligations.

Legal representatives of promisor:
- In some situations, the legal representative of the promisor may be responsible for performing the contract.
- This typically occurs when the promisor becomes incapacitated, passes away, or is otherwise unable to perform the contract.
- In such cases, the legal representative (such as an executor of an estate, or a guardian) steps in to fulfill the obligations of the contract on behalf of the promisor.

Agent of the promisor:
- An agent of the promisor is someone who has been authorized by the promisor to act on their behalf in performing the contract.
- This can occur in various situations, such as when the promisor hires an employee or contractor to complete a specific task related to the contract.
- The agent, acting with the authority of the promisor, can perform the contract and bind the promisor to the results of their actions.

In conclusion, all of these persons (promisor alone, legal representatives of promisor, and agent of the promisor) can perform the contract depending on the specific circumstances and the nature of the contractual obligations. It is essential to understand the context and the terms of the contract to determine who is responsible for its performance.

The correct answer is (d) All of the above. In order to expel a partner from a firm, certain conditions must be fulfilled. These conditions ensure that the expulsion is carried out fairly and according to the agreed-upon terms of the partnership. The conditions are as follows:

1. Express Contract: The partnership agreement or contract must have a clause that allows for the expulsion of a partner. This means that the partners have explicitly agreed upon the terms and conditions under which a partner may be expelled from the firm. This can be in writing or agreed upon verbally, depending on the terms of the partnership agreement.

2. Majority of Partners: The decision to expel a partner must be made by a majority of the partners. This ensures that the decision is not taken lightly and that it is supported by most of the partners in the firm. The required majority may be specified in the partnership agreement or follow the default rules set forth by the applicable partnership law in the jurisdiction.

3. Absolute Good Faith: The expulsion must be carried out in absolute good faith. This means that the decision to expel a partner should be based on legitimate reasons and not be arbitrary or malicious. The partners must exercise their expulsion power fairly and honestly, taking into consideration the best interests of the firm and the other partners.

In summary, a partner may be expelled from a firm if the expulsion power is exercised in accordance with the express contract, by a majority of partners, and in absolute good faith. These conditions help to ensure that the expulsion is carried out fairly and in the best interests of the firm and its partners.

The correct answer is (d) all of the above. Each of the mentioned documents serves as a title to goods, representing a claim to the ownership and possession of goods in different contexts.

Here is a detailed explanation of each:
1. Railway Receipt:
- A railway receipt is a document issued by the railway authorities when they accept goods for transportation.
- It serves as evidence that the railway authority has received the goods for transportation and is responsible for their safe delivery to the consignee.
- The consignee or the end receiver of the goods can claim the ownership and possession of the goods upon presenting the railway receipt at the destination station.

2. Wharfinger's Certificate:
- A wharfinger's certificate is a document issued by the wharfinger, who is a person responsible for the management and operation of a wharf, dock, or port.
- This document is issued when the wharfinger receives goods for storage or shipment at the wharf or dock.
- The wharfinger's certificate serves as evidence of the goods being in the custody of the wharfinger and can be used by the owner of the goods to claim possession and transfer ownership of the goods.

3. Warehouse Keeper's Certificate:
- A warehouse keeper's certificate is a document issued by the warehouse keeper when they receive goods for storage in their warehouse.
- This document serves as evidence that the warehouse keeper has taken custody of the goods and is responsible for their safekeeping.
- The warehouse keeper's certificate can be used by the owner of the goods to claim possession, transfer ownership, or even obtain credit using the goods as collateral.

In summary, all of the mentioned documents - railway receipt, wharfinger's certificate, and warehouse keeper's certificate - serve as documents of title to goods, representing the claim to the ownership and possession of goods in different contexts.

A partner may apply to the court for dissolution of the firm on various grounds, as mentioned in the Indian Partnership Act, 1932. Some of these grounds include:

1. Insanity of a partner: If a partner becomes mentally unstable or insane, it becomes difficult for the other partners to continue the business with such a partner. In this case, the remaining partners may apply to the court for dissolution of the firm.

2. Misconduct of a partner: If a partner is involved in any misconduct that harms the interests and reputation of the firm, the other partners may apply for the dissolution of the firm. Misconduct may include illegal activities, dishonesty, or any other action that goes against the principles of the partnership.

3. Perpetual losses in business: If the business is continuously incurring losses and there is no reasonable hope of improvement, the partners may decide to dissolve the firm. Perpetual losses can damage the financial condition of the partners and make it difficult for them to carry on the business.

Considering these factors, the correct answer is option D All of the above.

A partner may apply to the court for dissolution of the firm on any of these grounds, as each of them can make it difficult for the partners to carry on the business effectively and harmoniously. It is essential for the partners to protect their interests and the interests of the firm, and in cases where it becomes impossible to do so, dissolution may be the best course of action.

The correct answer is (d) - any of the above. A Mercantile Agent is a person who is appointed to perform various tasks related to the buying and selling of goods, as well as raising money on the security of goods. These tasks can include:

1. Sell or consign goods: A Mercantile Agent may be responsible for selling goods on behalf of the principal (the person or company that appointed the agent). This can involve finding buyers, negotiating prices, and ensuring the delivery of the goods. In some cases, the agent may also be responsible for consigning goods to another party, such as a distributor or retailer.

2. Raise money on the security of goods: A Mercantile Agent may also be given the authority to raise money on the security of goods. This means that the agent can obtain loans or other forms of financing using the goods as collateral. This can be useful for businesses that need short-term funding to purchase inventory or cover other expenses.

3. Sell or buy goods: A Mercantile Agent may also be responsible for buying goods on behalf of the principal. In this case, the agent would be responsible for finding suppliers, negotiating prices, and ensuring the delivery of the goods. Additionally, the agent may also be responsible for selling goods, either directly to customers or through other channels, such as wholesalers and retailers.

In summary, a Mercantile Agent can perform various tasks related to the buying and selling of goods, as well as raising money on the security of goods. This makes them a valuable resource for businesses that need assistance with these tasks.

The correct answer is (d) any of the above.

Acceptance of delivery of goods can occur in various ways. Here are the scenarios mentioned in the options:
1. Intimation to the Seller:
- If the buyer communicates to the seller that they have accepted the goods, it is considered acceptance of delivery.
- This could be in the form of a written or verbal confirmation, or electronic communication like email or text message.

2. Inconsistent Act with Seller's Ownership:
- If the buyer performs any act on the goods that is inconsistent with the ownership of the seller, it is deemed acceptance of delivery.
- Examples of such acts include using, altering, or selling the goods.

3. Retention After Reasonable Time:
- If the buyer rejects the goods but retains them for a reasonable amount of time without informing the seller, it can be considered acceptance of delivery.
- A reasonable amount of time may vary depending on the type of goods and the specific circumstances.

In conclusion, acceptance of delivery of goods can be deemed to take place in any of these situations. It is essential for both buyers and sellers to clearly communicate and understand the terms and conditions of a transaction to avoid any potential disputes.

The correct answer is (b) right of stoppage in transit. 

Right of Stoppage in Transit
- The right of stoppage in transit is a powerful remedy available to an unpaid seller when the buyer has become insolvent.
- This right allows the unpaid seller to regain possession of the goods while they are still in transit, and before they reach the buyer.
- The main purpose of this right is to protect the unpaid seller from the risk of non-payment due to the buyer's insolvency.

The right of stoppage in transit is based on the following conditions:
- The seller must be unpaid for the goods.
- The goods must still be in transit, which means they have not yet reached the buyer or their destination.
- The buyer must have become insolvent.

How to Exercise the Right of Stoppage in Transit
- The unpaid seller can exercise this right by sending a notice to the carrier, informing them of their intention to stop the goods in transit.
- The carrier must then hold the goods until the seller takes possession of them.
- It is essential for the unpaid seller to act quickly, as the right of stoppage in transit can only be exercised while the goods are still in transit.

Comparison with Other Rights
- The right of lien allows the seller to retain possession of the goods until payment is made, but this right can only be exercised while the goods are still in the seller's possession.
- The right of resale allows the seller to resell the goods, but this right can only be exercised once the goods have been returned to the seller or when the contract contains an express provision for resale.

In summary, the right of stoppage in transit is a powerful remedy available to an unpaid seller when the buyer becomes insolvent. It enables the seller to regain possession of the goods while they are still in transit, thereby protecting them from the risk of non-payment due to the buyer's insolvency.

The correct answer is: subsisting

When the buyer rejects the whole quantity of goods due to short delivery or excess delivery, the contract is treated as subsisting. This means that the contract still exists and has not been terminated or cancelled. Here are the reasons why:
 

1. Continued obligations: The contract remains valid, and both parties still have obligations to fulfill. The buyer still needs the goods, and the seller still needs to provide them in the correct quantity as per the contract.
2. Opportunity to rectify the issue: Since the contract is subsisting, the seller has the opportunity to correct the mistake by delivering the correct quantity of goods as agreed in the contract. This allows the parties to continue with their business relationship.
3. Legal remedies: If the seller fails to rectify the issue or if the buyer still refuses to accept the goods after the problem has been resolved, the contract remains subsisting, and legal remedies may be sought by either party. This can include seeking damages for breach of contract or specific performance, where the seller is legally compelled to deliver the correct quantity of goods.
4. Protection of both parties' interests: Treating the contract as subsisting ensures that both parties' interests are protected. The buyer is entitled to receive the correct quantity of goods, and the seller gets the chance to rectify their mistake and deliver what was initially agreed upon.

In summary, when the buyer rejects the whole quantity of goods due to short delivery or excess delivery, the contract remains subsisting. This allows the seller to rectify the issue and provides both parties with the opportunity to fulfill their contractual obligations. If the issue cannot be resolved through mutual agreement, legal remedies may be sought to protect both parties' interests.

The correct answer is (b) Set off. 

Explanation:
Set on:
- Set on is not applicable in this context. The term "set on" usually refers to initiating or starting something, such as a project, but it is not relevant to the context of unregistered firms.

Set off:
- Set off refers to the legal right of a debtor to reduce the amount payable to a creditor by deducting the amount the creditor owes to the debtor.
- In the context of an unregistered firm, it cannot claim set off because it is not legally recognized. This means that the firm does not have the legal capacity to enter into a contract or enforce its rights, including the right to set off.

Set on and set off:
- This option combines the two terms explained above, but as mentioned earlier, the term "set on" is not applicable in this context.

None of the above:
- This option would imply that an unregistered firm can claim something other than set on or set off. However, the correct answer is set off, as unregistered firms cannot claim set off due to their lack of legal recognition.

In conclusion, an unregistered firm cannot claim set off, which is the correct answer (b), because it does not have the legal capacity to enforce its rights or enter into contracts.

Compensation for involuntary services is not an example to the rule "No consideration No contract."
According to Section 25(2) of the Indian Contract Act 1872,the person who is to be compensated has already done something voluntarily or has done some thing which the promisor was legally bound to do.

An active partner is an individual who plays an integral role in the management, decision-making, and overall functioning of a business or partnership. This type of partner is different from a silent or limited partner, who may only provide financial support but does not participate in the day-to-day operations of the business. Here are some key aspects of an active partner:

Participation in the Business of the Firm:
- An active partner is responsible for making decisions related to the management and operation of the business.
- They may be involved in setting strategic goals, creating business plans, and overseeing various aspects of the company, such as marketing, sales, and finance.
- Active partners are accountable for the success and growth of the business and may be held legally responsible for its actions and debts.

Active Involvement in Co-curricular Activities:
- While this may not be directly related to the business, active partners may also participate in activities that promote the growth and development of the partnership.
- This can include attending industry conferences, networking events, or engaging in professional development opportunities to stay informed about trends and best practices within their respective fields.

Sharing of Profits:
- As an active partner, they are entitled to a share of the profits generated by the business.
- The specific percentage or amount of profit-sharing may be determined by a partnership agreement, which outlines the rights and responsibilities of each partner within the business.

Authority and Decision-making:
- Active partners have the authority to make decisions on behalf of the partnership.
- This may include entering into contracts, hiring employees, or making financial decisions that impact the company's operations.
- An active partner's authority may be limited by the partnership agreement or by the consensus of the other partners.

In summary, an active partner is a crucial member of a business partnership who participates in the management, decision-making, and overall functioning of the business. They are responsible for the success and growth of the company, share in the profits, and have the authority to make decisions on behalf of the partnership.

The correct answer is: May be presumed from silence of offeree

An acceptance is an essential element in the formation of a contract. In order for an acceptance to be valid, it must meet certain criteria. The criteria for a valid acceptance are:

Must be communicated:
- An acceptance should be communicated to the offeror, either in writing, verbally, or through conduct.
- The offeror must be aware of the acceptance for it to be valid.

Must be absolute and unconditional:
- The acceptance must correspond to the terms of the offer without any conditions or modifications.
- If the offeree introduces new terms or conditions, it is considered a counteroffer and not an acceptance.

Must be accepted by a person having authority to accept:
- The acceptance must be made by the person to whom the offer is made or their authorized agent.
- If someone without the authority to accept does so, the acceptance may not be valid.

May be presumed from silence of offeree:
- This statement is false. In general, silence does not constitute acceptance.
- The offeree must communicate their acceptance, and the offeror cannot assume that silence means acceptance.
- There are some exceptions, such as when the parties have a prior course of dealing or an established relationship where silence has previously been treated as acceptance. However, these situations are rare and specific to the circumstances.

The Sale of Goods Act, 1930, governs the sale and purchase of goods in India. According to Section 2(7) of the Act, "goods" mean every kind of movable property other than actionable claims and money. It includes stock and shares, growing crops, grass, and things attached to or forming part of the land which is agreed to be severed before sale or under the contract of sale.

The term "goods" under the Sale of Goods Act, 1930 does not include:
1. Goodwill
- Goodwill is an intangible asset representing the reputation and brand value of a business. It is not considered a movable property and, therefore, not included in the definition of goods under the Sale of Goods Act, 1930.

2. Actionable claims
- An actionable claim is any claim to an unsecured debt or any beneficial interest in movable property, which is not in the possession of the claimant. Actionable claims are not considered goods under the Sale of Goods Act, 1930 because they are not a form of tangible movable property. Some examples of actionable claims are insurance claims, book debts, and lottery tickets.

3. Stocks and shares
- Although stocks and shares are considered goods under the Act, they are specifically mentioned as an exception in the question. Stocks and shares represent ownership interests in a company and can be bought and sold, making them a form of movable property.

4. Harvested crops
- Harvested crops are considered goods under the Sale of Goods Act, 1930, as they are movable property that can be bought and sold. The Act specifically includes growing crops and things attached to or forming part of the land, which are agreed to be severed before sale or under the contract of sale.

In summary, the correct answer is (b) actionable claims, as they are specifically excluded from the definition of goods under the Sale of Goods Act, 1930.

The correct answer is valid.

A contract with a minor can be valid, voidable, or void ab initio depending on the circumstances:
Valid: A contract with a minor is considered valid if it is for his/her benefit. These types of contracts are typically necessary contracts, such as those involving the supply of necessities (food, clothing, shelter, education, and medical care) or contracts related to the minor's employment or apprenticeship. In these cases, the minor is bound by the contract, and it can be enforced against him/her.
Voidable: A contract with a minor is voidable at the minor's option if it is not for his/her benefit (i.e., not a necessary contract). This means that the minor has the right to either accept or reject the contract upon reaching the age of majority. If the minor chooses to void the contract, it will be as if the contract never existed.
Void ab initio: A contract with a minor is void ab initio (i.e., void from the beginning) if it is illegal or if the minor is deemed incapable of understanding the nature and consequences of the contract. In these cases, the contract cannot be enforced against the minor or any other party.

In summary, a contract with a minor that is beneficial for him/her is considered valid and can be enforced against the minor.

Implied Warrants:

1.Warranty as to undisturbed possession [Section 14(b)]:An implied warranty that the buyer shall have and enjoy quiet possession of the goods. That is to say, if the buyer having got possession of the goods, is later on disturbed in his possession, he is entitled to sue the seller for the breach of the warranty.

2.Warranty as to non-existence of encumbrances [Section 14(c)]:An implied warranty that the goods shall be free from any charge or encumbrance in favour of any third party not declared or known to the buyer before or at the time the contract is entered into.

3.Warranty as to quality or fitness by usage of trade [Section 16(3)].An implied warranty as to quality or fitness for a particular purpose may be annexed by the usage of trade.

4.Warranty to disclose dangerous nature of goods:Where a person sells goods, knowing that the goods are inherently dangerous or they are likely to be dangerous to the buyer and that the buyer is ignorant of the danger, he must warn the buyer of the probable danger, otherwisehe will be liable in damages.