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CA - CPT ICAI Model Test Paper - 8

200 Questions MCQ Test CA CPT - Mock Test Series and Previous Year Question Papers | CA - CPT ICAI Model Test Paper - 8

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This mock test of CA - CPT ICAI Model Test Paper - 8 for CA CPT helps you for every CA CPT entrance exam. This contains 200 Multiple Choice Questions for CA CPT CA - CPT ICAI Model Test Paper - 8 (mcq) to study with solutions a complete question bank. The solved questions answers in this CA - CPT ICAI Model Test Paper - 8 quiz give you a good mix of easy questions and tough questions. CA CPT students definitely take this CA - CPT ICAI Model Test Paper - 8 exercise for a better result in the exam. You can find other CA - CPT ICAI Model Test Paper - 8 extra questions, long questions & short questions for CA CPT on EduRev as well by searching above.

QUESTION: 1

It is generally assumed that the business will not liquidate in the near foreseeable future because of______________ concept.

A.
Periodicity
B.
Materiality
C.
Matching
D.
Going concern

Solution:

QUESTION: 2

Which of the following is correct?

A.
Capital is equal to assets plus liabilities
B.
Assets is equal to liabilities minus capital
C.
Liabilities is equal to capital plus assets
D.
Capital is equal to assets minus liabilities

Solution:

QUESTION: 3

Double column cash book records

A.
Only cash transactions
B.
All transactions
C.
Cash and bank transactions
D.
Cash purchase and cash sale transactions

Solution:

QUESTION: 4

Errors of commission do not permit

A.
Incorrect totaling of the trial balance
B.
Incorrect totaling of the Balance sheet
C.
Trial balance to agree
D.
None of the above

Solution:

QUESTION: 5

All of the following have debit balance except

A.
Wages account
B.
Trade receivables accounts
C.
Bills payable account
D.
Goodwill

Solution:

QUESTION: 6

The term depletion is used for

A.
Fixed assets
B.
Natural resources
C.
Intangible assets
D.
None of the three

Solution:

QUESTION: 7

A bill of exchange when drawn requires

A.
Noting
B.
Discounting
C.
Acceptance
D.
None of the above

Solution:

QUESTION: 8

According to the provisions of the Reserve Bank of India, a promissory note cannot be made payable to the

A.
Bank
B.
Endorser
C.
Bearer
D.
None of the above

Solution:

QUESTION: 9

Rs.5,000 spent to remove a worn out part and replace it with a new one is

A.
Capital expenditure
B.
Revenue expenditure
C.
Deferred revenue expenditure
D.
None of the above

Solution:

QUESTION: 10

Outstanding salary account is

A.
Real account
B.
Personal account
C.
Nominal account
D.
None of the above

Solution:

QUESTION: 11

Drawings are deducted from ________

A.
Sales
B.
Purchases
C.
Expenses
D.
Capital

Solution:

QUESTION: 12

The trial balance of Meghna shows the opening inventory of Rs. 10,000 which will be_____

A.
Debited to the trading account
B.
Credited to the trading account
C.
Deducted from closing inventory in the balance sheet
D.
Added to closing inventory in the balance sheet

Solution:

QUESTION: 13

Purchase returns appearing in the trial balance are deducted from ____

A.
Sales returns
B.
Capital
C.
Sales
D.
Purchases

Solution:

QUESTION: 14

_______ will generally show a debit balance

A.
Bank Loan
B.
Bad debts recovered
C.
Salary payable
D.
Drawings

Solution:

QUESTION: 15

Purchase of a fixed asset on credit basis is recorded in _____________

A.
Cash book
B.
Purchases book
C.
Journal proper
D.
None of the above

Solution:

When subsidiary books are prepared by a business then significant transactions of the business are entered in Journal Proper. If there is no special book for recording a transaction then it is recorded in journal proper.

QUESTION: 16

Accounting means recording of _________________

A.
Transactions
B.
Events
C.
Both (a) and (b)
D.
Neither (a) nor (b)

Solution:

QUESTION: 17

Unless given otherwise, the ratio of sacrifice is the same as________

A.
New profit sharing ratio
B.
Equal ratio
C.
Old profit sharing ratio
D.
None of the above

Solution:

QUESTION: 18

The ratio in which the continuing partners acquire the outgoing (retired or deceased) partner’s share is called ________

A.
Sacrificing ratio
B.
Gaining ratio
C.
New profit sharing ratio
D.
Old profit sharing ratio

Solution:

QUESTION: 19

A bill of exchange is called a ________ by one who is liable to pay it on the maturity date.

A.
Bill receivable
B.
Noted bill of exchange
C.
Bill payable
D.
None of the above

Solution:

QUESTION: 20

The amount of calls in arrear is deducted from_____________ to arrive at________.

A.
Issued capital, called up capital
B.
Called up capital, issued capital
C.
Paid up capital, called up capital
D.
Called up capital, paid up capital

Solution:

QUESTION: 21

Smita places an order to Priya for supply of certain goods yet to be manufactured. On receipt of order, Priya purchases raw materials, employs workers, produces the goods and delivers them to Smita. In this case, sale will be presumed to have been made at the time of

A.
Receipt of order
B.
Production of goods
C.
Delivery of goods
D.
Purchase of raw material

Solution:

QUESTION: 22

If a machinery is purchased for Rs. 1,00,000, the asset would be recorded in the books at Rs. 1,00,000 even if its market value at that time happens to be Rs. 1,40,000. In case, a year after, the market value of this asset comes down to Rs. 90,000, it will ordinarily continue to be shown at Rs. 1,00,000 and not at Rs. 90,000 due to

A.
Realization concept
B.
Present value concept
C.
Replacement concept
D.
Cost concept

Solution:

QUESTION: 23

Mr. Shyam deposited a cheque on 28^th March, 2012 for a sum of Rs.10,000. The cheque was collected on 4^th April, 2012. If the bank balance as per cash book on 31^st March, 2012 is Rs.1,00,000, balance as per pass book will be

A.
Rs.1,10,000
B.
Rs.90,000
C.
Rs.1,00,000
D.
None of the above

Solution:

QUESTION: 24

If cost of goods sold is Rs.1,00,000, sales is Rs.1,25,000, closing inventory is Rs.20,000, the gross profit will be

A.
Rs.45,000
B.
Rs. 5,000
C.
Rs. 25,000
D.
None of the three

Solution:

QUESTION: 25

X enters into a joint venture with Y. The goods were purchased by X and Y amounting Rs.20,000 and Rs.40,000 respectively. Y incurred the expenses of Rs.5,000. Goods were sold by X and Y amounting Rs.22,000 and Rs.39,000. Goods unsold were taken over by Y for Rs.2,000. The profit or loss on joint venture is

A.
Profit of Rs. 2,000
B.
Loss of Rs. 2,000
C.
Profit of Rs. 1,000
D.
Loss of Rs.1,000

Solution:

QUESTION: 26

On 1^st January, 2012, Mohan draws upon Sohan a bill of exchange for three months, of Rs.2,000 for mutual accommodation. On 4^th January, 2012 Mohan discounts the bill @ 6% per annum and sends half of the proceeds to Sohan. The amount of proceeds sent to Sohan will be

A.
Rs.1,000
B.
Rs.970
C.
Rs.985
D.
Rs.2,000

Solution:

QUESTION: 27

ABC Ltd. sells goods to its approved customers on sale or return basis at a profit of 20% on sales, treating as actual sales. On 26^th March, 2012 goods costing Rs.10,000 were sent to Annu Ltd. No confirmation has been received from Annu Ltd. till 31^st March, 2012.The amount of inventory with customers to be shown as closing inventory in the balance sheet of ABC Ltd. as on 31^st March, 2012 will be

A.
Rs. 12,500
B.
Rs. 8,000
C.
Rs. 10,000
D.
Nil

Solution:

QUESTION: 28

Somesh and Ramesh are equal partners. Their capitals are Rs.40,000 and Rs.80,000 respectively. The profits for the year before charging interest on capital was Rs.6,000. The accounts of the year were closed before providing interest @ 5% per annum as per partnership agreement. To rectify this mistake they decided to pass an adjustment entry between the partners. Therefore, Somesh’s account needs to be debited by

A.
Rs.2,000
B.
Nil
C.
Rs.1,000
D.
None of the above

Solution:

QUESTION: 29

A, B and C are partners in the ratio of 3:2:1. D is admitted in the firm for 1/6^th share in profits. C would retain his original share. The new profit sharing ratio between A, B, C and D will be

A.
12:8:5:5
B.
8:12:5:5
C.
5:5:12:8
D.
5:5:8:12

Solution:

QUESTION: 30

According to which concept, the owner of an enterprise pays the ‘interest on drawings’?

A.
Accrual concept
B.
Conservatism concept
C.
Dual aspect concept
D.
Entity concept

Solution:

QUESTION: 31

A firm earns profit of Rs.1,10,000. The normal rate of return in a similar type of business is 10%. The value of total assets (excluding goodwill) and total outside liabilities are Rs.11,00,000 and Rs.1,00,000 respectively. The value of goodwill by capitalisation method is

A.
Rs.1,00,000
B.
Rs.10,00,000
C.
Nil
D.
None of the above

Solution:

QUESTION: 32

The cost of inve nt or y as per physical verification of Bharat Ltd. on 10^th April, 2012 was Rs. 1,20,000. The following transactions took place between 1^st April, 2012 to 10^th April, 2012:

Cost of goods sold Rs. 10, 000
Cost of goods purchased Rs. 10,000
Purchase returns Rs. 1,000

The value of inventory as per books on 31^st March, 2012 will be

A.
Rs. 1,19,000
B.
Rs. 1,11,000
C.
Rs. 1,21,000
D.
Rs. 1,20,000

Solution:

QUESTION: 33

The following data has been provided by Omega Ltd.:

The value of inventory on item by item basis will be

A.
Rs. 40
B.
Rs.64
C.
Rs.66
D.
Rs.60

Solution:

QUESTION: 34

Sushila’s business disclosed the following profits for the last two years:
2010 Rs.40,000 (including an abnormal gain of Rs.5,000)
2011 Rs.50,000 (After charging an abnormal loss of Rs.10,000)

The value of goodwill on the basis of one year purchase of the average profit of last two years is

A.
Rs.45,000
B.
Rs.37,500
C.
Rs.47,500
D.
None of the three

Solution:

QUESTION: 35

Ram sells goods for Rs.1,00,000 to Hari on 1^st January, 2012 and on the same day draws a bill on Hari at three months for the amount. Hari accepts it and returns it to Ram, who discounts it on 4^th January, 2012 with his bank at 12% per annum. The discounting charges are

A.
Rs.12,000
B.
Rs.4,000
C.
Rs.3,000
D.
Nil

Solution:

QUESTION: 36

Nidhi started her business with capital of Rs.45,000 on 1^st January, 2011. Interest on drawings Rs.5,000 and interest on capital Rs.2,000 were appearing in the Profit and Loss A/c for the year ended 31^st December, 2011. Nidhi withdrew Rs.14,000 during the year and profit earned during the year amounted to Rs.15,000. Her capital on 31st December, 2011 is

A.
Rs. 67,000
B.
Rs. 47,000
C.
Rs.45,000
D.
Rs. 43,000

Solution:

QUESTION: 37

The accountant of M/s ABC & Bros. paid personal income tax for the proprietor amounting Rs.10,000. This income tax should be

A.
Added to capital
B.
Credited to Profit & Loss Account
C.
Debited to Trading Account
D.
Deducted from capital

Solution:

QUESTION: 38

Suresh’s Trial balance provides you the following information:

Bad debts Rs. 10, 000
Provision for doubtful debts Rs. 15 , 000

Suresh wants to make a provision of Rs.20,000 at the end of the year. The amount debited to the Profit & Loss Account is

A.
Rs. 45,000
B.
Rs. 5,000
C.
Rs. 15,000
D.
None of the above

Solution:

QUESTION: 39

Following are the extracts from the Trial Balance of a firm as at 31^st March, 2012:

Provide for employer’s share of P.F. equivalent to employee’s share to P.F. The amount at which salaries expense will be shown in the Profit and Loss A/c is

A.
Rs.15,000
B.
Rs.17,000
C.
Rs.16,000
D.
None of the above.

Solution:

QUESTION: 40

Dinesh Garments purchased a machine for Rs.50,000 and spent Rs.6,000 on its erection. On the date of purchase it was estimated that the effective life of the machine will be ten years and after ten years its scrap value will be Rs.6,000. The amount of depreciation for each year on straight line basis is

A.
Rs.5,000
B.
Rs. 5,600
C.
Rs.6,000
D.
None of the above

Solution:

QUESTION: 41

Xeta Ltd. was formed as a Public Limited Company with an authorized capital of Rs.20,00,000 divided into shares of Rs.10 each. Xeta Ltd. issued fully paid up shares of Rs.10 each at a premium of 20%, in consideration for acquiring assets worth Rs.3,64,800 from M/s Rahim Bros. To record this transaction, share capital need to be credited by

A.
Rs.3,80,000
B.
Rs.76,000
C.
Rs.2,00,000
D.
Rs.3,04,000

Solution:

QUESTION: 42

Mr. Rajiv was the holder of 200 shares of Rs.10 each in RPG Ltd. upon which Rs.5 per share had been called up but he had paid only Rs.2.5 per share thereon. The company forfeited his shares and afterwards sold them to Satbir, credited as Rs.5 per share paid for Rs.900.The amount to be transferred to capital reserve is

A.
Rs.300
B.
Rs.500
C.
Rs.400
D.
None of the above

Solution:

QUESTION: 43

A Ltd. forfeited 1,000 equity shares of Rs.10 each, issued at par, for non-payment of first call of Rs.2 and second call of Rs.3 per share. For recording this forfeiture, calls in arrear account will be credited by

A.
Rs. 4,000
B.
Rs. 1,000
C.
Rs. 5,000
D.
Rs. 10,000

Solution:

QUESTION: 44

A fire broke out on 30^th March, 2012 in the godown of Mahesh. Inventory of invoice value Rs.1,600 was destroyed. The goods were invoiced at 25% above cost. The insurance company admitted claim of 50% only. The insurance claim accepted was

A.
Rs. 640
B.
Rs. 600
C.
Rs. 800
D.
None of the above

Solution:

QUESTION: 45

Salary has been paid for 11 months from April 2011 to February, 2012 amounting Rs.22,000.The amount of outstanding salary shown in the balance sheet will be

A.
Rs.1833
B.
Rs.2,000
C.
Rs.1,000
D.
None of the above

Solution:

QUESTION: 46

On 1^st April, 2011, Raghu invested capital of Rs.2,00,000. He withdrew Rs.50,000 during the year. Interest on drawings is provided @ 10% per annum. The amount of interest on drawings deducted from capital is

A.
Rs. 5,000
B.
Rs. 15,000
C.
Rs. 2,500
D.
Rs.7,500

Solution:

QUESTION: 47

The Bank Account of Mukesh was balanced on 31st March, 2012. It showed an overdraft of Rs.50,000. It was observed that one cheque amounting Rs.20,000 deposited but not collected by bank till 31st March. Bank charges of Rs.500 were also charged by the bank during March but accounted in the book of Mukesh on April 4, 2012. The bank statement of Mukesh shows balance of

A.
Rs.70,500
B.
Rs.69,500
C.
Rs.70,000
D.
Rs.50,000

Solution:

QUESTION: 48

Rs.5,000 was spent by Saroj for addition to machinery in order to increase the production capacity. The amount is

A.
Revenue in nature
B.
Deferred revenue in nature
C.
Capital in nature
D.
Liability in nature

Solution:

QUESTION: 49

Prakash sells goods at 25% on sales. His sales were Rs.10,20,000 during the year. However, he sold damaged goods for Rs.20,000 costing Rs.30,000. This sale is included in Rs.10,20,000.The amount of gross profit is

A.
Rs. 1,90,000
B.
Rs.2,50,000
C.
Rs.2,40,000
D.
Rs.2,00,000

Solution:

QUESTION: 50

The total of the debit and credit side of a trial balance of Mr. Rajiv as on 31^st March, 2012 were Rs.20,000 and Rs.10,000 respectively. The difference was transferred to suspense account. On 4^th April, 2012, it was found that the total of purchase returns book was carry forward as Rs.1,500 instead of Rs.1,400. The balance of the suspense account after the rectification of this error will be

A.
Rs.10,000
B.
Rs. 9,900
C.
Rs. 11,500
D.
Rs.10,100

Solution:

QUESTION: 51

Capital introduced by Mr. A on 1.4.2011 Rs. 3,00,000; further capital introduced during the year was Rs. 50,000 in the mid of the year. Mr. A withdrew Rs. 2,000 per month and the profit earned during the year was Rs. 20,000. Capital as on 31.3.2012 will be

A.
Rs. 3,94,000
B.
Rs. 3,46,000
C.
Rs. 2,94,000
D.
None of the three

Solution:

QUESTION: 52

Goods costing Rs.10,000 sent out to consignee at Cost + 25% . Invoice value of the goods will be

A.
Rs.12,500
B.
Rs.12,000
C.
Rs.10,000
D.
None of the above

Solution:

QUESTION: 53

A, B and C are the partners sharing profits in the ratio 1:1:2. C died on 30^th June 2012 and profits for the accounting year ended on 31^st December, 2011 were Rs. 24,000. How much share in profits for the period 1^st January, 2012 to 30^th June, 2012 will be credited to C’s Account?

A.
Rs. 12,000
B.
Rs. 6,000
C.
Nil
D.
Rs. 3,000

Solution:

QUESTION: 54

A purchased a car for Rs. 5,00,000, making a down payment of Rs. 1,00,000 and signing a bill payable of Rs. 4,00,000. As a result of this transaction

A.
Assets will increase by Rs. 5,00,000
B.
Liabilities will increase by Rs. 4,00,000
C.
Assets will increase by Rs. 4,00,000
D.
Both (b) and (c)

Solution:

QUESTION: 55

Rekha purchased a machinery for Rs. 50,000 on 1.4.2011. She paid electricity charges and salary amounting Rs. 1,000 and Rs. 2,000 respectively. Telephone bill amounting Rs. 200 was outstanding on 31.3.2012. The amount of expenses for the year ended 31^st March, 2012 will be

A.
Rs. 53,200
B.
Rs. 3,000
C.
Rs. 53,000
D.
Rs. 3,200

Solution:

QUESTION: 56

Goods costing Rs. 10,000 is supplied to Ram at an invoice price of 10% above cost and a trade discount of 5%. The amount of sales is

A.
Rs. 11,000
B.
Rs. 10,450
C.
. Rs. 10,500
D.
None of the above

Solution:

QUESTION: 57

Gauri paid Rs. 1,000 towards a debt of Rs. 1,050, which was written off as bad debt in the previous year. Gauri’s account should be credited with

A.
1,000
B.
1,050
C.
Nil
D.
None of the three

Solution:

QUESTION: 58

Ramesh, an employee gets salary Rs. 10,000 per month. He withdrew goods worth Rs. 1,500 for personal use and got salary of Rs. 9,000 in cash in the month of March, 2012. The excess payment of Rs. 500 should be debited to

A.
Salaries account
B.
Goods account
C.
Drawings account
D.
Salaries paid in advance account

Solution:

QUESTION: 59

An old furniture was purchased for Rs. 10,000, it was repaired for Rs. 100. The repairs account should be debited by

A.
Rs.10,000
B.
Rs.10,100
C.
Rs.100
D.
Nil

Solution:

QUESTION: 60

Rs.1,000 paid as rent to Krishna, the landlord, was debited to Krishna’s personal account. This error will

A.
Affect the trial balance
B.
Not affect the trial balance
C.
Affect the suspense account
D.
None of the three

Solution:

QUESTION: 61

A wager means:

A.
A promise to give money or money’s worth upon the determination or ascertainment of an uncertain future event.
B.
A promise to give money or money’s worth upon the determination or ascertainment of a certain future event.
C.
A promise to give money or money’s worth upon the happening of future event the outcome of which is predetermined.
D.
A promise to give money or money’s worth upon the non-happening of certain future events the outcome if which is predetermined.

Solution:

QUESTION: 62

Following conditions are implied in a contract of sale of goods unless the circumstances of the contract show a different intention:

A.
Condition as to wholesomeness.
B.
Sale by description as well as by sample.
C.
Condition as to quality or fitness.
D.
All of the above.

Solution:

QUESTION: 63

Jus in personam means:

A.
A right against or in respect of a thing.
B.
A right against or in respect of a person.
C.
Both (a) and (b).
D.
None of the above.

Solution:

QUESTION: 64

Which of the following is not correct:

A.
Partner of firm cannot enter into a contract with the partnership firm.
B.
A member of a company can enter into a contract with the company.
C.
Partner of a firm can enter into a contract with the partnership firm.
D.
All of the above.

Solution:

QUESTION: 65

Persons who do not fall under the category of persons of unsound mind

A.
Lunatics
B.
Alien
C.
Drunkard
D.
Idiot

Solution:

QUESTION: 66

Delivery of goods in case of transit made by handing over documents of title to goods is

A.
Actual Delivery.
B.
Constructive Delivery.
C.
Symbolic Delivery.
D.
All of the above.

Solution:

QUESTION: 67

Contracts may be classified on the basis of their validity, formation o r performance.Contracts classified on the basis of performance are of the following types:

A.
Executed Contracts.
B.
Executory Contracts.
C.
Partly Executed or Partly Executory Contracts.
D.
All of the above.

Solution:

QUESTION: 68

A partnership started for a particular adventure/undertaking:

A.
Particular partnership
B.
Partnership at will
C.
Fixed partnership
D.
All of the above

Solution:

QUESTION: 69

A subsequent sale made by the original buyer of the goods to a third party:

A.
Re-sale
B.
Agreement to sell
C.
Sub-sale
D.
Wholesale

Solution:

QUESTION: 70

Coercion involves :

A.
Physical force or threat.
B.
Mental pressure.
C.
Both (a) and (b).
D.
None of the above.

Solution:

QUESTION: 71

Implied authority of the partner does not empower him to

A.
Submit a dispute relating to the business of the firm to arbitration.
B.
Withdraw a suit or proceedings filed on behalf of the firm.
C.
Both (a) and (b).
D.
None of the above.

Solution:

QUESTION: 72

A proposal may be revoked in the following ways:

A.
By notice of revocation.
B.
By lapse of time.
C.
By death or insanity.
D.
All of the above.

Solution:

QUESTION: 73

Which of the following is correct?

A.
Recission must be communicated to the other party in the same manner as a proposal is communicated.
B.
Recission must be revoked in the same manner as a proposal is revoked.
C.
Communication of recission is optional.
D.
Both (a) and (b)

Solution:

QUESTION: 74

Which of the following statement is / are correct?

A.
The general rule is “unless otherwise agreed, the goods remain at the seller ’s risk until the property therein is transferred to the buyer, but when the property therein is transferred to the buyer, the goods are at the buyer’s risk whether delivery has been made or not”.
B.
Where the delivery of the goods has been delayed through the fault of either the buyer or the seller, the goods are at the risk of the party in fault as regards any loss which might not have occurred but for such fault.
C.
In ordinary circumstances, risk is borne by the buyer only when the property in the goods passes over to him. However, the parties may by special agreement stipulate that risk will pass sometime after or before the property has passed.
D.
All of the above.

Solution:

QUESTION: 75

A fraudulently informs B that A’s estate is free from incumbrance. B thereupon buys the estate. The estate is subject to mortgage. Now

A.
B may avoid the contract.
B.
B may insist upon its performance.
C.
B may get the mortgage debt redeemed.
D.
All of the above.

Solution:

QUESTION: 76

Dissolution of a firm may take place in the following manner:

A.
Compulsory dissolution.
B.
Dissolution by agreement.
C.
By intervention of the court.
D.
All of the above.

Solution:

QUESTION: 77

Dissolution by agreement is:

A.
Dissolution by the adjudication of all the partners or of all the partners but one as insolvent.
B.
Dissolution as a result of any agreement between all the partners.
C.
Dissolution by the business of the firm becoming unlawful.
D.
All of the above.

Solution:

QUESTION: 78

Misrepresentation means and includes:

A.
The positive assertion, in a manner not warranted by the information of the person making it, of that which is not true, though he believes it to be true.
B.
Any breach of duty, which, without an intention to deceive, gains an advantage to the person committing it, or any one claiming under him, by misleading another to his prejudice or to the prejudice of any one claiming under him.
C.
Causing, however innocently, a party to an agreement to make a mistake as to the substance of the thing which is the subject of the agreement.
D.
All of the above.

Solution:

QUESTION: 79

A person may be admitted as a new partner:

A.
In accordance with a contract between the existing partners.
B.
In accordance with a contract between the existing partners or with the consent of all the existing partners subject to the provisions of Section 30 of the Indian Partnership Act, 1932.
C.
After obtaining specific approval of the Registrar of Firms & Societies, to this effect.
D.
By simply taking the consent of the new partner.

Solution:

QUESTION: 80

The Doctrine of Privity of Contract states that___________.

A.
A contract cannot confer any right on one who is not a party to the contract, even though the very object of the contract may have been to benefit him
B.
A contract can confer right on one who is not a party to the contract, if the contract benefits him
C.
A contract always confers right on one who is not a party to the contract
D.
A contract can confer rights on strangers

Solution:

QUESTION: 81

A proposes by letter, to sell a house to B at a certain price. A revokes his proposal by telegram.The revocation is complete as against B when ___________.

A.
A writes the telegram but the same has not been sent to B
B.
A dispatches the telegram
C.
B receives the telegram
D.
B responds to the telegram

Solution:

QUESTION: 82

The Indian Contract Act, 1872 came into operation on and from___________.

A.
1^st October, 1872
B.
1^st July, 1872
C.
15^th August, 1872
D.
1^st September, 1872

Solution:

QUESTION: 83

A person who has ceased to pay his debts in the ordinary course of business

A.
Mercantile Agents
B.
Selller
C.
Buyer
D.
Insolvent

Solution:

QUESTION: 84

In case of a sale the risk of loss resulting from the insolvency of the buyer is borne by___________.

A.
The seller
B.
The buyer
C.
Both of the above
D.
General Insurance Company of India

Solution:

QUESTION: 85

Agreement to sale is an ___________.

A.
Executed contract
B.
Executory contract
C.
Both of the above
D.
None of the above

Solution:

QUESTION: 86

Suit for specific performance and suit for injunction ___________.

A.
Are remedies which provide the same result
B.
Are different remedies and they provide different results
C.
Are not the correct way to act against the party committing the breach
D.
Are the only correct way to act against the party committing the breach

Solution:

QUESTION: 87

Contracting parties may not remain same in ___________.

A.
Remission
B.
Recission
C.
Novation
D.
Alteration

Solution:

QUESTION: 88

The liabilities of a minor when admitted to the benefits of the partnership ___________.

A.
Is confined to his share of the profits and property in the firm
B.
Is same as that of any other partner in the firm
C.
Is similar as that of any other partner in the firm
D.
Is unlimited

Solution:

QUESTION: 89

Recis s ion means ___________.

A.
Substituting a new contract for the old one
B.
Cancellation of the old contract
C.
Modifying or altering the terms of contract such that it has the effect of substituting a new contract for the old one
D.
Dispensing away the performance of the promise made by the other party

Solution:

QUESTION: 90

Registration of a partnership firm is___________.

A.
Compulsory from the beginning
B.
Not compulsory till first five years of beginning of the partnership
C.
Not compulsory at all
D.
Compulsory only if the Registrar of Firms, gives an order in this regard

Solution:

QUESTION: 91

Damag es awarded with the intention o f punis hing the defaulting party rather than compensating the aggrieved party:

A.
Restitution
B.
Exemplary Damages
C.
Special Damages
D.
Nominal Damages

Solution:

QUESTION: 92

Delivery by attornment is ___________.

A.
Actual Delivery
B.
Constructive Delivery
C.
Symbolic Delivery
D.
Physical Delivery

Solution:

QUESTION: 93

In case of an agreement to sell, the aggrieved party ___________.

A.
Can sue for price
B.
Can sue for damages
C.
Can sue the buyer for injunction
D.
None of the above

Solution:

QUESTION: 94

of goods is possible in case of __________.

A.
Sale
B.
Bailment
C.
Exchange
D.
None of the above

Solution:

QUESTION: 95

‘Buyer’ means a person who___________.

A.
Buys goods
B.
Agrees to buy goods
C.
Has bought goods
D.
Buys or agrees to buy goods

Solution:

QUESTION: 96

The appropriation must be made by___________.

A.
The seller with the assent of the buyer
B.
The buyer with the assent of the seller
C.
The buyer or the seller with or without the assent of the other
D.
Both (a) and (b)

Solution:

QUESTION: 97

Partner by holding out is also known as ___________.

A.
Active Partner
B.
Dormant Partner
C.
Partner by estoppel
D.
Partner by stoppage

Solution:

QUESTION: 98

Interest on capital subscribed by a partner may be provided for in the partnership deed is ___________.

A.
@ 6% per annum, provided it is payable only out of profits
B.
@ 8% per annum, provided it is payable only out of profits
C.
@ 8.5% per annum, provided it is payable only out of profits
D.
At any rate, provided it is payable only out of profits

Solution:

QUESTION: 99

A had offered B, a price of Rs.10, 00,000/- for B’s flat. But B was not ready to sell the flat at all. A says to B that “I shall kill you if you don’t agree to sell me your house for Rs.10,00,000/-”. B thereafter did all that was the desire of A in order to save his life.What is immediate answer?

A.
A can enforce the contract.
B.
B can enforce the contract.
C.
A has applied coercion.
D.
The contract is unenforceable.

Solution:

QUESTION: 100

Every wagering agreement is of a ___________ nature.

A.
Quasi
B.
Warranty
C.
Guarantee
D.
Contingent

Solution:

QUESTION: 101

Which of the following statements is correct?

A.
In a two-good economy, the production possibilities frontier reflects the maximum amount of one good that can be produced when a given amount of the other good is produced.
B.
Microeconomics is the study of the behaviour of the economy as a whole.
C.
Positive economics focuses on welfare of the people of a society
D.
None of the above

Solution:

QUESTION: 102

Which of the following is incorrect?

A.
The cross elasticity of demand for two substitutes is positive
B.
The income elasticity of demand is the percentage change in quantity demanded of a good due to a change in the price of a substitute
C.
The cross elasticity of demand for two complements is negative
D.
The price elasticity of demand is always negative, except for Giffen goods

Solution:

QUESTION: 103

Which of the following situation does not lead to an increase in equilibrium price?

A.
An increase in demand, without a change in supply
B.
A decrease in supply accompanied by an increase in demand
C.
A decrease in supply without a change in demand
D.
An increase in supply accompanied by a decrease in demand

Solution:

QUESTION: 104

“I am making a loss, but with the rent I have to pay, I can’t afford to shut down at this point of time.” If this entrepreneur is attempting to maximize profits or minimize losses, his behaviour in the short run is:

A.
Rational, if the firm is covering its variable cost
B.
Rational, if the firm is covering its fixed cost
C.
Irrational, since plant closing is necessary to eliminate losses
D.
Irrational, since fixed costs are eliminated if a firm shuts down

Solution:

QUESTION: 105

An individual firm in a perfectly competitive market faces a demand curve which is:

A.
Downward sloping
B.
Relatively inelastic
C.
Perfectly elastic
D.
Upward sloping

Solution:

QUESTION: 106

A firm’s production function:

A.
Shows how much output and the level of input required for the firm to maximize profits
B.
Establishes the minimum level of output that can be produced using the available resources
C.
Shows the maximum output that can be produced with a given amount of inputs with available technology
D.
Shows labour force which is employed

Solution:

QUESTION: 107

The law of diminishing returns:

A.
States that beyond some level of a variable input, the average product of that variable input begins to increase steadily.
B.
Assumes that there is technological improvement over time.
C.
States that beyond some level of a variable input, the marginal product of that variable begins to decrease steadily.
D.
Informs a firm whether or not to use a factor input.

Solution:

QUESTION: 108

Which of the following is correct?

A.
If marginal revenue is positive and falling, total revenue will rise at a decreasing rate.
B.
Total revenue is equal to price times the quantity sold.
C.
Under perfect competition, total revenue is equal to marginal revenue times the quantity sold.
D.
All of the above.

Solution:

QUESTION: 109

You are given the following data:

The above data is an example of:

A.
Decreasing returns to scale.
B.
Constant returns to scale.
C.
Increasing returns to scale.
D.
Positive fixed cost.

Solution:

QUESTION: 110

Monopolies are allocatively inefficient because:

A.
They restrict the output to keep the price higher than under perfect competition.
B.
They charge a price higher than the marginal cost.
C.
Both (a) and (b) are correct.
D.
Both (a) and (b) are incorrect.

Solution:

QUESTION: 111

Which of the following statements is correct?

A.
Countries which are industrially well-developed generally have higher per capita income than countries which are not
B.
India is a capital surplus economy
C.
Agriculture sector need not depend upon industrial sector for its growth
D.
None of the above

Solution:

QUESTION: 112

When unemployment tends to be a long term feature of a country, it is called

A.
Seasonal Unemployment
B.
Cyclical Unemployment
C.
Chronic Unemployment
D.
Structural Unemployment

Solution:

QUESTION: 113

The effect of increase CRR will be reduced or nullified if:

A.
Bank rate is reduced
B.
Securities are sold in the open market
C.
SLR is increased
D.
People do not borrow from non-banking institutions

Solution:

QUESTION: 114

India can reap the benefit of Demographic dividend, as a great percentage of population is in the age group_____.

A.
0-15 years
B.
60 + years
C.
20-35 years
D.
15 - 64 years

Solution:

QUESTION: 115

What percent of the sick units in India are big units?

A.
More than 90 percent
B.
Less than 10 percent
C.
More than 30 percent
D.
More than 96 percent

Solution:

QUESTION: 116

Which among the following is an indirect tax?

A.
Income tax
B.
Wealth tax
C.
Custom duty
D.
Gift tax

Solution:

QUESTION: 117

At the time of Independence and a number of years thereafter cotton textiles, jute and tea accounted for more than __________% of our export earnings.

A.
50
B.
70
C.
80
D.
90

Solution:

QUESTION: 118

According to the latest available data, the bed-population ratio in India is __________ per thousand population.

A.
3.2
B.
1.03
C.
11.5
D.
20.3

Solution:

QUESTION: 119

According to the latest UNDP report, 2012 India’s relative global rating on HDI index is __________ among 187 countries.

A.
150
B.
177
C.
136
D.
5

Solution:

QUESTION: 120

A Gini Index of zero represents:

A.
Perfect inequality
B.
High level of inequality
C.
Perfect equality
D.
None of the above

Solution:

QUESTION: 121

Over a period of time, since GINI index has increased, it means:

A.
Inequalities have decreased
B.
Can’t say
C.
Inequalities have remained constant
D.
Inequalities have increased

Solution:

QUESTION: 122

As compared to the targeted growth rate of 10% per annum in industrial production, the actual growth rate was __________ % per annum during the Tenth Plan.

A.
9.4
B.
8.7
C.
6.5
D.
7.5

Solution:

QUESTION: 123

The value added by the industrial sector in the GDP 2013-14 (constant price) is _________.

A.
about 26%
B.
about 80%
C.
about 60%
D.
about 50%

Solution:

QUESTION: 124

The MSME sector in India employs nearly __________ million people in 2011-12.

A.
50
B.
23
C.
101
D.
100

Solution:

QUESTION: 125

GDP at factor cost is equal to GDP at market price minus indirect taxes plus __________.

A.
Depreciation
B.
Direct taxes
C.
Foreign investments
D.
Subsidies

Solution:

QUESTION: 126

Net domestic expenditure is consumption expenditure plus __________.

A.
Net foreign investment
B.
Net foreign investment plus net domestic investment
C.
Net domestic investment
D.
Replacement expenditure

Solution:

QUESTION: 127

Custom duties are levied on __________.

A.
Incomes of the individual
B.
Production of goods
C.
Export and import of goods
D.
Incomes of the corporate

Solution:

QUESTION: 128

Demand for final consumption arises in __________.

A.
Household sector only
B.
Government sector only
C.
Both household and government sectors
D.
Neither household nor government sector

Solution:

QUESTION: 129

The share of direct taxes in the gross tax revenue (Centre and States combined) was __________ % in 2012-12

A.
66
B.
38.5
C.
25
D.
75

Solution:

QUESTION: 130

According to census 2011 the sex ratio (number of females per 1,000 males) in India is __________.

A.
943
B.
980
C.
927
D.
930

Solution:

QUESTION: 131

If as a result of 20 percent fall in the ticket fares the demand for ‘watching movie’ in the cinema hall increases by 10 percent, then __________.

A.
Zero
B.
Greater than zero but less than one
C.
One
D.
Greater than one

Solution:

QUESTION: 132

If out of 1000 population, 500 persons are in the labour force, 450 are employed, what is the unemployment rate?

A.
55%
B.
10%
C.
12.5%
D.
5%

Solution:

QUESTION: 133

Questions 133 to 137 are based on the demand and supply diagrams in Figure 1.

D₁ and S₁ are the original demand and supply curves. D₂, D₃, S₂ and S₃ are possible new demand and supply curves. Starting from initial equilibrium point (1) what point on the graph is most likely to result from each change?

If Figure 1 represents the market for Mars Bars, the initial equilibrium is at the intersection of S₁ and D₁. The new equilibrium if there is an increase in cocoa prices will be:

A.
Point 3
B.
Point 9
C.
Point 4
D.
Point 2.

Solution:

QUESTION: 134

In Figure 1 (which represents the market for Mars Bars), the initial equilibrium is at the intersection of S₁ and D₁. The new equilibrium if there is rapid economic growth and the government also imposes a tax on Mars Bars is

A.
Point 3.
B.
Point 9.
C.
Point 2.
D.
Point 6.

Solution:

QUESTION: 135

In Figure 1 (which represents the market for Mars Bars), the initial equilibrium is at the intersection of S₁ and D₁. The new equilibrium if there is a health scare about the effect Mars Bars may have is:

A.
Point 2.
B.
Point 9.
C.
Point 3.
D.
Point 6.

Solution:

QUESTION: 136

In Figure 1 (which represents the market for Mars Bars), the initial equilibrium is at the intersection of S₁ and D_1. Assuming that mars bars are an inferior good, the new equilibrium if there is a recession and wages of workers producing them fall is:

A.
Point 2
B.
Point 7
C.
Point 3
D.
Point 6

Solution:

QUESTION: 137

In Figure 1(which represents the market for Mars Bars), the initial equilibrium is at the intersection of S₁ and D₁. Assume that the income of the consumers rises and at the same time there is an increase in the productivity in the production of Mars Bars. The new equilibrium will be:

A.
Point 2
B.
Point 7
C.
Point 3
D.
Point 6

Solution:

QUESTION: 138

A book seller estimates that if she increases the price of a book from Rs.60 to Rs.67, the quantity of books demanded will decrease from 2,035 to 1,946. The book’s price elasticity of demand is approximately

A.
0.4
B.
0.8
C.
1.0
D.
2.5

Solution:

QUESTION: 139

Concerned about the poor state of the economy, a car dealer estimates that if income decreases by 4 per cent, car sales will fall from 352 to 335. Consequently, the income elasticity of demand for cars is approximately

A.
–1.2
B.
0.01
C.
0.4
D.
1.2

Solution:

QUESTION: 140

Use Table 2 to answer questions 140-144.

A competitive firm sells as much as of its product as it chooses at a market price of Rs. 200 per unit. Its fixed cost is Rs. 600 and its variable costs (in rupees) for different levels of production are shown in the following table.

When production is 40 units, the average total cost is

A.
Rs. 8.80
B.
Rs. 15
C.
Rs. 170
D.
Rs. 185

Solution:

QUESTION: 141

In the table marginal cost per unit that corresponds to 40 units of production is

A.
Rs. 44
B.
Rs. 170
C.
Rs. 352
D.
Rs. 1760

Solution:

QUESTION: 142

To maximize profit, the firm should produce

A.
15 units
B.
30 units
C.
35 units
D.
50 units

Solution:

QUESTION: 143

If the market price drops from Rs. 200 to Rs. 112, the firm’s short run response should be

A.
Shut down
B.
Produce 5 units
C.
Produce 20 units
D.
Continue to produce the same number of units as before the drop in price.

Solution:

QUESTION: 144

If the market price rises from Rs. 200 to Rs. 352, the firm’s short run response should be

A.
Shut down
B.
Produce 40 units
C.
Produce 20 units
D.
Continue to produce the same number of units as before the increase in price.

Solution:

QUESTION: 145

Suppose a shopkeeper buys inputs worth Rs. 2, 00, 000 and his sales are worth Rs. 4,00,000 in a month. The input tax rate is 4% and output tax rate is 10%. What is Value added tax here after set off of input tax credit?

A.
Rs. 32,000
B.
Rs. 8,000
C.
Rs. 40,000
D.
Rs. 20,000

Solution:

QUESTION: 146

If the quantity of blankets demanded increases from 4600 to 5700 in response to a decrease in their price from Rs. 220 to Rs. 190, the price elasticity of demand for blankets is

A.
0.69
B.
1.0
C.
1.46
D.
2.66

Solution:

QUESTION: 147

The cross elasticity of monthly demand for gel pen when the price of refills increases by 20% and demand for gel pens falls by 30% is equal to:

A.
- 0.71
B.
+ 0.25
C.
- 0.19
D.
-1.5

Solution:

QUESTION: 148

The cross elasticity of monthly demand for ink pen when the price of gel pen increases by 25% and demand for ink pen increases by 50% is equal to:

A.
+ 2.00
B.
- 2.00
C.
-2.09
D.
+ 2.09

Solution:

QUESTION: 149

Read the following table and answer question number 149 -150.

What is marginal utility when consumption increases from 4 units to 5 units?

A.
3000
B.
1200
C.
2000
D.
1500

Solution:

QUESTION: 150

What is marginal utility when consumption increases from 8 units to 9 units?

A.
3000
B.
400
C.
2000
D.
1500

Solution:

QUESTION: 151

This method presents data with the help of a paragraph or a number of paragraphs.

A.
Tabular presentation.
B.
Textual presentation.
C.
Diagrammatic representation.
D.
None of these.

Solution:

QUESTION: 152

If two events A and B are independent, the probability that they will both occur is given by

A.
P(A) + P(B)
B.
P(A) X P(B)
C.
P(A) – P(B)
D.
P(A)/P(B)

Solution:

QUESTION: 153

The normal curve is

A.
Positively skewed.
B.
Negatively skewed.
C.
Symmetrical.
D.
All of these.

Solution:

QUESTION: 154

If x denotes height of a group of students expressed in cm. and y denotes their weight expressed in kg. , then the correlation coefficient between height and weight

A.
Would be shown in kg.
B.
Would be shown in cm.
C.
Would be shown in kg. and cm.
D.
Would be free from any unit.

Solution:

QUESTION: 155

The base of log₆13 into the common logarithmic base is

A.
B.
C.
D.
None of these.

Solution:

QUESTION: 156

Data collected on minority from the census reports are

A.
Primary data.
B.
Secondary data.
C.
Discrete data.
D.
Continuous data.

Solution:

QUESTION: 157

The nationality of a person is an example of

A.
A variable.
B.
A discrete variable.
C.
A continuous variable.
D.
An attribute.

Solution:

QUESTION: 158

The total sum of the values of a given year divided by the sum of the values of the base year is a

A.
Price index.
B.
Quantity index.
C.
Value index.
D.
None of these.

Solution:

QUESTION: 159

Find the first derivative of y = log_e x

A.
B.
e log x
C.
D.
None of these.

Solution:

QUESTION: 160

Fisher’s ideal index is

A.
Arithmetic mean of Laspeyre’s and Paasche’s index.
B.
Median of Laspeyre’s and Paasche’s index.
C.
Geometric mean of Laspeyre’s and Paasche’s index.
D.
None of these.

Solution:

QUESTION: 161

_________ is the upper part of the table, describing the columns and sub columns.

A.
Box head
B.
Stub
C.
Caption
D.
Body

Solution:

QUESTION: 162

The correlation between sale of cold drinks and day temperature is _________.

A.
Zero
B.
Positive
C.
Negative
D.
None of these

Solution:

QUESTION: 163

In case of a _________, plotted points on a scatter diagram lie from lower left corner to upper right corner.

A.
Zero correlation
B.
Negative correlation
C.
Positive correlation
D.
Simple correlation

Solution:

QUESTION: 164

The _________ the size of the sample more reliable is the result.

A.
Medium
B.
Smaller
C.
Larger
D.
None of these

Solution:

QUESTION: 165

_________ are the values dividing a given set of observations into ten equal parts.

A.
Quartiles
B.
Deciles
C.
Centiles
D.
None of these

Solution:

QUESTION: 166

Variance of a binomial distribution is always _________ its mean.

A.
Equal to
B.
More than
C.
Less than
D.
None of these

Solution:

QUESTION: 167

If in binomial distribution mean is 10 and S.D. is 2, q will be _________.

A.
0
B.
0.2
C.
0.8
D.
0.4

Solution:

QUESTION: 168

The sum of the following is _________.
1+ 3 - 5 + 7 + 9 - 11, + 13............................ 3n terms

A.
2n² + 3
B.
5n² + 2
C.
3n² – 4n
D.
3n²

Solution:

QUESTION: 169

If ⁿP₃ = 60 then value of n is _________.

A.
5
B.
2
C.
1
D.
3

Solution:

QUESTION: 170

If one root of the equation x² + 7x+ p = 0 be reciprocal of the other then the value of p is_________.

A.
1
B.
–1
C.
7
D.
–7

Solution:

QUESTION: 171

A person borrowed Rs. 4,000 and after 6 months the amount paid was Rs. 4,050, find the rate of interest.

A.
5%
B.
25%
C.
2.5%
D.
20%

Solution:

QUESTION: 172

The value of

A.
4x^–3/5
B.
4x^5/3
C.
4x^–5/3
D.
None of these.

Solution:

QUESTION: 173

Solution:

QUESTION: 174

Find the value of x if

A.
15/2
B.
9/10
C.
3/4
D.
None of these.

Solution:

QUESTION: 175

The fourth proportional to 2/3, 3/7, 4/9,........ is

A.
2/7
B.
14/8
C.
7/2
D.
None of these.

Solution:

QUESTION: 176

The solution set of equations 3x+ 4y = 7 and 4x – y = 3, is

A.
1, 1
B.
–1, 1
C.
2, 1
D.
–1, 2

Solution:

QUESTION: 177

A dealer has only Rs. 5,760 to invest in fans (x) and sewing machines (y). The cost per unit of fan and sewing machine is Rs. 360 and Rs. 240 respectively. This can be shown by: