TS SET Paper 2 Mock Test - 8 (Commerce) - TS TET MCQ

Both the statements are true, but (R) is not the explanation of (A). The explanation should be based on the specific reason to manage the operating cycle but the reason given is related to the ascertainment of cash requirement. Operating cycle management is essential to run the business smoothly and ascertainment of efficiency of operations of the business.

The correct answer is Void.

Important Points

Therefore under Section 20 of the Indian Contract Act, 1872, a contract is said to be void when both the parties to the agreement are under a mistake as to a matter of fact.

Key Points

TIN is issued by the federal government. TAN is to be obtained by all persons who are responsible for deducting tax at source (TDS) or who are required to collect tax at source (TCS).

Below is the explanation of the right answer.

Therefore, Option 2 is the right answer.

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

Regulation of combination falls under the Competition Act, not under the MRTP Act.

Regulation of combination: Prohibits the formation of combinations that are likely to have an appreciable adverse effect on competition in the relevant market in India and further declares that such combinations should be deemed void.

Vouching is said as essence of Auditing.

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

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

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

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

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

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

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

Hence, the correct option (D).

Method of Mean Deviation does not give accurate results.  The reason is that the mean deviation gives the best results when deviations are taken from the median. But the median is not a satisfactory measure when the degree of variability in a series is very high. And if we compute mean deviation from mean that is also not desirable because the sum of the deviations from the mean (ignoring signs) is greater than the sum of the deviations from the median (ignoring signs). If the mean deviation is computed from a mode that is also not scientific because the value of mode cannot always be determined. Thus, statement (a) is correct.

In a symmetrical distribution, the mean deviation equals 4/5 of standard deviation. Thus, statement (c) is correct.

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

The correct answer is Managers area rational and objective and suppress the voicing of feeling by others

Key Points The feature that is not covered in Model I is double-loop learning.

Model I is a theory of action that describes how people typically behave in organizations. It is characterized by a number of features, including:

• Control: Model I seeks to control others and the environment.
• Independence: Model I emphasizes independence and self-protection.
• Advocacy: Model I advocates for one's own position, even if it means disregarding the views of others.
• Evaluative inquiry: Model I uses evaluative inquiry, which is a process of gathering information to support one's own position.
• Closed communication: Model I communication is closed and defensive.
• Double-loop learning is a process of learning that goes beyond simply changing one's behavior. It involves questioning the underlying assumptions and values that guide one's behavior. Model I does not explicitly address double-loop learning.

In contrast, Model II is a theory of action that describes how people can behave in organizations to promote double-loop learning. Model II is characterized by a number of features, including:

• Clarifying: Model II clarifies one's own values and assumptions.
• Empathizing: Model II empathizes with the values and assumptions of others.
• Testing for understanding: Model II tests for understanding by asking for feedback from others.
• Joint problem-solving: Model II engages in joint problem-solving with others.
• Open communication: Model II communication is open and collaborative.

Model II is a more effective way of behaving in organizations because it promotes double-loop learning. Double-loop learning allows people to change their behavior in a way that is aligned with their values and assumptions. This can lead to more effective and sustainable change in organizations.

The correct answer is 10,000

Key PointsSection 80CCC of Income Tax Act, 1961.

Important Points Deduction can be claimed only in the year the amount has been paid.

Section 10AA – Special provisions in respect of newly established Units in Special Economic Zones.

The benefit in respect of newly established Industrial Undertaking in SEZ is Available to all Assessees on Export of Certain Articles or things or software.

Subject to the following Conditions:

1. Begin its production, etc. on or after 01-04-2006 relevant to AY 2006-07 but before 01.04.2021.
2. Should not be formed by splitting up or reconstruction of the unit already in existence.
3. Should not be formed by transferring machinery or plant previously used. In certain conditions as specified in the Act second-hand machinery is allowed.
4. The report in Form No.56Fv.

The correct answer is The errors in the value of y are identical in successive observations.

Key Points

Linear regression is an analysis that examines whether one or more predictor variables explain the dependent variable (criterion).

Linearity: The relationship between X and the mean of Y is linear.

Homoscedasticity: the variance of the residuals is the same for each value of X.

Independence: The observations are independent of each other.
Normality: For any fixed value of X, Y is normally distributed

The set of expected values of the dependent variable y for given values of the independent variable x is normally distributed.

The standard deviation and variance of the expected values of the dependent variable around the regression line are constant for all values of the independent variable x for the set of observations in a sample.

The dependent variable y is a continuous random variable.

Important Points

Simple linear regression is used to estimate the relationship between two quantitative variables like (heights of girls and boys, and runs of two different players). We can use simple linear regression if you want to know something like how strong the relationship is between two variables (e.g., the relationship between precipitation and soil erosion).
The value of the dependent variable gives a certain value of the independent variable (e.g., the amount of soil erosion given a certain amount of precipitation).

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

Key PointsActivities that doesn't qualify as CSR Expenditure:

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

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

Hence, the correct option (C).

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

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

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

Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The most well-known types are copyrights, patents, trademarks, and trade secrets.

Key-Points

Copyright refers to the legal right of the owner of intellectual property. In simpler terms, copyright is the right to copy. This means that the original creators of products and anyone they give authorization to are the only ones with the exclusive right to reproduce the work.

A trademark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others. A service mark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of a service rather than goods.

Industrial design (ID) is the professional service of creating and developing concepts and specifications that optimize the function, value, and appearance of products and systems for the mutual benefit of both user and manufacturer.

Key-Points

A layout-design of an integrated circuit refers essentially to the three-dimensional character of the elements and interconnections of an integrated circuit. An integrated circuit (IC) is an electronic circuit in which the elements of the circuit are integrated into a medium, and which functions as a unit.

The correct option is Tax revenues.

Key Points As per the passage:

• "The revenue budget details the projections of revenue from various sectors and facets including taxation, fees, and fines."
• This shows that tax revenues are a primary source of income for the government, as outlined in the revenue budget.

The correct option is 2 Both (A) and (R) are correct and (R) is NOT the correct explanation of (A)

Key Points

• Capital structure refers to the specific mix of debt and equity used to finance a company's assets and operations.
• Equity represents a more expensive, permanent source of capital with greater financial flexibility.
• Analysts use the D/E ratio to compare capital structure. It is calculated by dividing total liabilities by total equity.
• A company with too much debt can be seen as a credit risk.
• Debt represents a cheaper, finite-to-maturity capital source that legally obligates a company to make promised cash outflows on a fixed schedule with the need to refinance at some future date at an unknown cost.
• In reality, many practical considerations affect the capital structure and the use of leverage by companies, leading to wide variation in capital structures even among otherwise-similar companies.

Important PointsTypes of Capital

• Equity: Equity is the money that belongs to the shareholders or owners.
• Debt: Debt is money borrowed and used in the business.
• Retained earnings: part of a company's profit.

`Option (A) is correct since it is mentioned in the passage that around 99.3% currency has come back into the banking system after the demonetization. This proves that the demonetization drive has failed completely in India. Refer to, “The Reserve Bank of India’s annual report for 2017-18 reveals that 99.3% of currency notes that were demonetised at midnight on November 8, 2016 have returned to the banking system. This is only marginally higher than its provisional estimate last year that over 99% — or Rs 15.28 lakh crore worth of the old Rs 500 and Rs 1,000 notes — out of the Rs 15.44 lakh crore that were in circulation at the time had been deposited by June 30, 2017.”

Option (B) is also correct since the RBI is now facing the same issue of counterfeiting the currencies of Rs 500 and Rs 2000 newly launched by the RBI. This has been reported in the annual report of the RBI. Refer to, “Nevertheless, the RBI report, which points to a spurt in counterfeiting of the new Rs 500 and Rs 2,000 notes, raises the old question all over again.”

Option (C) is not correct since there is no reference in the passage that the law and order implementing agencies are too excited regarding arresting the offenders. This is completely irrelevant in the context of the information given in the passage.

Negotiable Instruments Act, 1881 governs the transactions through cheques.

The entire processing of cheques and their payment are all governed under the covenants of the Negotiable Instruments Act, 1881, which necessitate that these instruments are in writing and have to be physically presented for payment in due course.

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

The financial break-even point is the level of EBIT where the EPS is zero for a particular given financial plan. Indifference point is the point where the EPS will be the same for the given financial plans irrespective of the debt-equity mix. If the expected level of EBIT exceeds the indifference point, then it would be beneficial to use the fixed charge source of funds to increase the EPS i.e. use of levered funds.

Statement I: If the value of , of a distribution gives the value more than 3, its curve is platykurtic.

Explanation:

1. Leptokurtic Curve - Value of β₂ is greater than 3.
2. Mesokurtic Curve - Value of β₂ is equal to 3.
3. Platykurtic Curve - Value of β2 is less than 3.

Thus, Statement I is incorrect.

Statement II: In a moderately asymmetrical distribution, the standard deviation is 1.25 times of mean deviation.

Explanation:

In a moderately asymmetrical distribution (variable occurs at the irregular frequency), the standard deviation is 1.25 times of mean deviation.

This statement is correct.

Therefore, Statement II is correct, but I is incorrect.

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

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

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

Correct combination is a - (iv), b - (i), c - (ii), d - (iii).

Liberalization leads to increased competition. This competition can be related to product and service cost and price, target market, technological adaptation, quick response, quick production by companies etc. When a company produces with less cost and sells cheaper, it is able to increase its market share.

IT-enabled service, also called Business Process Outsourcing, include functions like call centres, accounting, payroll, employee benefits, tax preparation, radiology analysis, films and cartoons production, and even research and development. Outsourcing location can be onshore, nearshore, offshore or far shore.The SFIO is mandated to conduct Multi-disciplinary investigations of major corporate frauds. It is a multi-disciplinary organization having experts from the financial sector, capital market, accountancy, forensic audit, taxation, law, information technology, company law, customs and investigation.

Macro-economic stabilization reforms (along with structural economic reforms) were launched in June 1991.So to increase the GDP growth rate, agriculture GDP, industrial production, service sector GDP, saving rate, gross domestic investment and to decrease the fiscal deficit a ‘’Second generation reform’’ Is needed.