TS SET Paper 2 Mock Test - 9 (Commerce) - TS TET MCQ

The correct option is (i), (iii), (ii), (iv), (v)

Key Points Venture capital financing

• Venture capital financing refers to the type of funding that provides to early stage high potential and high-risk businesses or start-up businesses
• The process of venture capital financing involves mainly  five stages 

1)Deal orientation

2)Screening 

3)Due diligence

4)Deal structuring 

5)Exit plan

• Most start-up businesses is depending on such sources of finance and they are the more viable source and get funds in an easier way, and the young aspiring entrepreneurs who are ensuring minimal surety that business firms are getting more success.

Hence the correct answer is (i), (iii), (ii), (iv), (v)

Computation of Income under the head "Salaries"

Therefore, his income from salary for the A.Y. 2015-16 will be Rs. 3,73,860.

Longitudinal designs:

• A longitudinal design measures the characteristics of the same individuals on at least two, but ideally more, occasions over time.
• Its purpose is to address directly the series analysis of individual change or variations.
• It involves repeated observations of the same variables over a short or long period of time.
• For example, the longitudinal study design would account for cholesterol levels at the onset of a walking regime and as the walking behavior continued over time.
• There are three different types of longitudinal studies: cohort studies, panel studies, record linkage studies.
• These studies may be either prospective or retrospective in nature.

Therefore, the series analysis is a form of longitudinal designs.

Important Point

Serial designs, sectional designs, and latitudinal designs are made-up concepts.

The World Trade Organisation (WTO) is the only global international organisation dealing with the rules of trade between nations.

• At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments.
• The goal is to help producers of goods and services, exporters, and importers conduct their business.
• It officially commenced operations on 1 January 1995, pursuant to the 1994 Marrakesh Agreement, thus replacing the General Agreement on Tariffs and Trade (GATT) that had been established in 1948.

Correct arrangement:

The Gross Annual Value of a property is the value at which the property might reasonably be expected to be let from year to year. It is more like a notional rent that one could have earned in case property had been let out.

Key Points

Calculation Of Gross Annual Value: 

Therefore, the gross annual value of the asset will be ₹ 4,90,000.

Social accounting (also known as social accounting and auditing, social and environmental accounting, corporate social reporting, corporate social responsibility reporting, non-financial reporting or accounting) is the process of communicating the social and environmental effects of organizations' economic actions to particular interest groups within society and to society at large. It points to the fact that companies influence their external environment ( some times positively and many times negatively) through their actions and should therefore account for these effects as part of their standard accounting practices. Social accounting is in this sense closely related to the economic concept of externality. The main objectives of social accounting are to help society by providing different facilities by enterprise and to record them.

The risk associated with the use of fixed cost securities is called financial risk. Financial risk is the possibility of losing money on an investment or business venture. Some more common and distinct financial risks include credit risk, liquidity risk, and operational risk. Financial risk is a type of danger that can result in the loss of capital to interested parties.

The correct answer is All of the above

Key Points Modern Office Management:

• A key component of handling daily tasks like financial planning and the upkeep of employee and business records is modern office administration.
• The management of the contemporary office is in charge of acquiring and administrative successes through strategy.
• Designing, assessing, and executing work procedures used in offices and traditional office environments are all part of the office management duties.

Important PointsFunctions of a Modern office

1. Receiving Information: Both inside and outside the company may provide the information. Information considered to be received within the organisation is that which comes from various divisions and executives.

2. Recording Information​: The goal of maintaining records is to make information easily accessible to management at all times. The information obtained is transformed into a written record for this purpose. In a typical business office, records such as financial and cost accounts, orders, work in progress, staff hours, correspondence, etc. are preserved.

3. Arranging Information: The information obtained by an office is rarely presented in the form in which it is received; instead, facts must often be compiled from a variety of sources and may require computations, tabulations, etc.

4. Public Relations Function: An office must maintain friendly relationships with both the public and other departments inside the organisation. Therefore, it must also play a public relations function. The reputation and goodwill of the organisation are improved by effective public relations.

A ‘Holder in due course’ of a Negotiable Instrument can sue on the instrument in his own name.

Key PointsSection 9 of Negotiable Instrument Act 1881 defines holder in due course as:

• “Holder in due course” means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable to bearer, or the payee or endorsee thereof before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.

Important Points

• A holder in due course of a negotiable instrument is a person who acquires the instrument in good faith, for value, and without notice of any defects or problems with the instrument.
• Such a holder has certain privileges and rights under the law, including the ability to sue on the instrument in their own name.
• This means that the holder can enforce the rights under the instrument without needing to involve the original parties to the instrument.
• The holder in due course is also protected from any defences or claims that may have been available against the original parties to the instrument.

The business entity concept states that the transactions associated with a business must be separately recorded from those of its owners or other businesses. Doing so requires the use of separate accounting records for the organization that completely exclude the assets and liabilities of any other entity or the owner.

Statement I: GST is the destination-based tax on the consumption of goods and services. GST is a destination-based tax and levied at a single point at the time of consumption of goods or services by the ultimate consumer. GST will be levied on all goods and services except on goods outside the ѕсоре of GST, exempted goods & services, and transactions below the threshold limit.

Statement II: 'I' stands for integrated in IGST. Integrated goods and services tax (IGST) would mean the tax levied under the IGST Act on the supply of any goods and/or services in the course of inter-state trade or commerce. Integrated GST shall also apply to the import of goods and services into India.

Thus, both statements are correct.

(a) - 2, (b) - 4, (c) - 1, (d) - 3 is correct.

• Mercantilism theory: David Hume Mercantilism is an economic theory that advocates government regulation of international trade to generate wealth and strengthen national power.
• Theory of absolute cost advantage:  Adam Smith Absolute advantage is when a producer can produce a good or service in greater quantity for the same cost, or the same quantity at a lower cost, than other producers.
• National competitive advantage theory: Michael Porter proposed the theory of competitive advantage in 1985.
• Factor endowment theory: Eli Heckscher A factor endowment represents how many resources a country has at its disposal to be utilized for manufacturing resources such as labor, land, money, and entrepreneurship.

Regression analysis is a measure of cause and effect relationship. In regression analysis, it's important to specify the relationship between the variables being used. The value of the dependent variable is assumed to be related to the value of the independent variables.

The correct answer is Motivation.

Key PointsCo-ordination - the functional organization of the various components of a complicated body or activity to allow them to cooperate.

Important PointsElement of Co-ordination are as follows -

Simplified Organization(Co-operation) -

• Overspecialization has a propensity to occur in large organisations.
• The organisation is split up into numerous units, each of which focuses only on its specific duty.
• Clear-cut Coordination will be ensured by an organization's structure and procedures that are well-known to all parties.
• All activities should be covered by organisational procedures, and it is important for everyone to know their responsibilities and how their work relates to that of others.

Effective Communication Techniques(Communication) -

• Effective communication leads to proper coordination and makes it easier for a corporate organization's members to cooperate.
• A constant flow of communication will make coordination and efficient operation of the business easier.

Special Coordinators(Mutual understanding)-

• Typically, special coordinators are appointed in large organisations. They typically serve as personnel to support the primary managers' activities.
• Another option is to establish a coordination cell.
• In order to coordinate interdepartmental work and relationships, the cell's primary duty is to gather pertinent information and distribute it to various heads of sections or departments.

Hence, Motivation is not an element of co-ordination

Additional Information

Harmonized Programs and Policies -

• Coordination is best implemented during the planning stage.
• It is important to double-check the plans created by various groups or individuals to make sure they all work together to form a cohesive whole.

Coordination by Committees -

• Conferences and meetings are used to coordinate management by committees.
• Occasionally, various committees, such as the purchase committee, production committee, sales committee, finance committee, etc., are chosen to oversee various managerial functions.
• These committees make decisions as a group by exchanging opinions and ideas, hence they have coordinating components.

Group Discussion -

• Group discussion is another technique for coordination.
• It provides opportunities for an open and unrestrained exchange of concepts, issues, suggestions, and solutions.

Capital budgeting is the process a business undertakes to evaluate potential major projects or investments. Construction of a new plant or a big investment in an outside venture are examples of projects that would require capital budgeting before they are approved or rejected.

Key-Points

1. As part of capital budgeting, a company might assess a prospective project's lifetime cash inflows and outflows to determine whether the potential returns that would be generated meet a sufficient target benchmark. The capital budgeting process is also known as investment appraisal.
2. The original decision to undertake an investment in a particular foreign country may be determined by a mix of strategic, behavioral, and economic decisions.'
3. The specific project, as well as reinvestment decisions – should be justified by traditional financial analysis.
4. Multinational capital budgeting, like traditional domestic capital budgeting, focuses on the cash inflows and outflows associated with prospective long-term investment projects.
5. Multinational capital budgeting is capital budgeting for a foreign project using the same theoretical framework as domestic capital budgeting.

Important Points

1. Political risk management comes in the ambit of Multinational capital budgeting.
2. For each project, political risk must be evaluated, because the cash flows can be severely affected by the changes in the political environment.
3. The changes in the government would change the political philosophy thereby leading to a new economic environment.
4. An extreme form of risk is the ‘risk of expropriation’ and repatriation. In the case of expropriation, the projects and the parent’s cash flows tend to change drastically because in this case the funds are blocked in the country of the project.
5. The political stability of a country directly impacts borrowing costs, taxes, and regulation for businesses.
6. Kickbacks and other forms of corruption have serious repercussions for MNCs. For example, Turkey has experienced a number of economic and political setbacks that raised the cost of borrowing for the national government. Corruption allegations, tight lending conditions, and financial volatility within the country made it more challenging for corporate entities to operate there effectively.

Thus, option 4 is the correct answer.

The correct option is WhatsApp Business.Key Points  As per the passage  "UPI, coupled with applications like Paytm, PhonePe, and Google Pay, have revolutionized peer-to-peer and peer-to-business transactions."

 The correct answer is 800 USD Million.

Key Points Star status is a recognition given to exporters by the Government of India under the Foreign Trade Policy (FTP). It is awarded to exporters who have consistently met export targets and have made significant contributions to India's foreign trade. There are five levels of star status:

• One-star export house 
• Two-star export house
• Three-star export house
• Four-star export house
• Five-star export house

Important Points Export performance threshold for Star Status (in million USD):

For the purpose of extending rural banking and agro finance, the NABARD Refinances the banks extending rural finance. NABARD's refinance is available to State Co-operative Agriculture and Rural Development Banks (SCARDBs), State Co-operative Banks (SCBs), Regional Rural Banks (RRBs), Commercial Banks (CBS), and other financial institutions approved by RBI. While the ultimate beneficiaries of investment credit can be individuals, partnership concerns, companies, State-owned corporations, or co-operative societies, production credit is generally given to individuals.

The negative list for imports consists of:

• The list of canalized goods can be found in the ITC (HS). Goods in this category can be imported only through canalizing agencies. The main canalized items are currently petroleum products, bulk agricultural products, such as grains and vegetable oils, and some pharmaceutical products.
• Prohibited Goods/ banned items narcotic drugs and psychotropic substances. Pornographic and obscene material. Counterfeit and pirated goods and goods infringing any of the legally enforceable intellectual property rights. Antiquities.
• Restricted means that special licenses or permits are required from a federal agency before the item is allowed to enter the United States. Examples of restricted items include firearms, certain fruits and vegetables, animal products, animal by-products, and some animals.

The rate of consumer price inflation is 5.2% for the first half of the current fiscal year.

According to the passage, "It also raised its projection for consumer price inflation a bit to 5.2 percent for the first half of the current fiscal year."

The minimum amount of securities purchases through GSAP in the first quarter of the current fiscal year is Rs. 1 lakh crore.

According to the passage, "The RBI announced a government securities acquisition programme (GSAP), essentially a calendar of its bond-buying programme, starting with Rs. 1 lakh crore of securities purchases in the first quarter of the current fiscal year."

The correct answer is C. K. Prahlad.

Key Points "The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits" has been written by C.K. Prahalad. The book, published in 2004, explores the idea that the world's poor can be considered as a lucrative market for businesses, and by addressing their needs and creating products and services tailored for them, both social and economic goals can be achieved. Prahalad suggests that businesses can play a crucial role in poverty alleviation while also generating profits by engaging with the large and untapped market represented by the world's poor.

Additional Information

"The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits" is a book written by C.K. Prahalad, an influential management thinker and professor of corporate strategy. The book, first published in 2004, introduces the concept of the "Bottom of the Pyramid" (BoP) as a significant yet underserved market segment comprising the world's poor.

Key points and details from the book include:

• Bottom of the Pyramid (BoP):

Prahalad argues that the traditional view of the world's poor as passive recipients of aid should be reconsidered. Instead, he sees them as an untapped market, constituting a potential source of innovation, growth, and profits for businesses.

• Market Potential:

Prahalad contends that there is a vast market opportunity at the bottom of the economic pyramid. Despite their low individual purchasing power, when aggregated, the purchasing power of the poor is substantial. He advocates for businesses to develop products and services that are affordable, accessible, and sustainable for this market.

• Role of Business in Poverty Alleviation:

The book challenges businesses to go beyond traditional corporate social responsibility (CSR) initiatives and philanthropy. Prahalad argues that by addressing the needs of the poor and integrating them into the market, businesses can contribute to poverty alleviation while simultaneously creating value for themselves.

• Innovative Business Models:

Prahalad highlights examples of companies that have successfully implemented innovative business models to serve the BoP market. These include products such as affordable healthcare, telecommunications, and financial services designed to meet the unique needs of low-income consumers.

• Co-Creation and Partnerships:

Prahalad emphasizes the importance of involving the poor as active participants in the design and development of products and services. Co-creation and collaboration with local communities are seen as key elements for success.

• Sustainability and Inclusivity:

The book argues that sustainable business practices and inclusive growth strategies are essential for long-term success. It promotes the idea that businesses can achieve economic prosperity while contributing to the well-being of society.

Budgets may be classified on the basis of:

(A) Functions

(B) Conditions

(C) Periods (time)

The correct answer is 234B and 234C.

Key Points

• Under the Income-tax Act, different types of interests are levied for various kinds of delays/defaults.
• Section 234B and 234C deals with non-payment or short payment of advance tax; and non-payment or short payment of individual instalment or instalments of advance tax (i.e., deferment of advance tax) respectively.

Important PointsSection 234B : Interest for default in payment of advance

• Interest under section 234B is levied in following two cases: When the taxpayer due advance tax but hasn't paid it, or
• When the amount of advance tax paid by the taxpayer is less than 90% of the assessed tax (meaning of assessed tax is discussed later).
• Rate of Interest: Interest rates Section 234B imposes interest of 1% per month or portion thereof for failure to pay advance tax. Simple interest is the nature of interest. To put it another way, the taxpayer is responsible for paying simple interest at a rate of 1% per month or fraction thereof for failure to pay advance tax. 
• Amount liable for interest: The amount of unpaid advance tax is subject to interest under section 234B. Interest is charged on the amount by which advance tax is underpaid if there is a shortfall in payment. The following formula is used to calculate the unpaid/short paid advance tax:

Amount of unpaid/short paid advance tax= Assessed Tax - Advance tax(if any)

Section 234C:  Interest for default in payment of instalment(s) of advance tax

• Rate of Interest: Interest is charged under section 234C at 1% per month or fraction thereof for failure to pay any instalments of advance tax. Simple interest is the nature of interest. In other words, if an individual advance tax instalment is not paid in full or is paid late, the taxpayer is responsible for simple interest at the rate of 1% per month or fraction thereof.
• Period of levy of interest Interest: Under section 234C is levied for a period of 3 months, in case of short fall in payment of 1st, 2nd and 3rd instalment and for 1 month, in case of short fall in payment of last instalment.
• Amount liable for interest Interest:  Under section 234C is levied on the short paid amount of instalment(s) of advance tax.

The nature of Realization account is a Nominal Account. The purpose of preparing a Realization account is to close the dissolved firm's books of accounts and determine profit or loss on the Realization of assets and payment of liabilities. It is put together by:

• Transferring all assets, except cash and bank accounts, to the account's debit side.
• Transferring all liabilities to the credit side of the account except the Partner's Loan Account and the Partners' Capital Accounts.
• Crediting the asset sale receipt to the account.
• Debiting the account for the payment of liabilities.
• Deducting the firm's dissolution expenses.
• The account balance can be either profit or loss. This balance is transferred to the Partners' Capital Accounts in their profit-sharing ratio.
• The partner's capital account on the assets side of a balance sheet is transferred to the Debit of Partner’s Capital Account.

Diversification is the process of a company enlarging or varying its range of products or field of operation.

Quality is finding new products in the same line.

Variety refers to the production of one or more products.

Packing is the preservation of the product.