Kerala SET Paper 2 Mock Test - 3 (Commerce) - KTET MCQ

The correct answer is By enterprise function.

Key Points

• By enterprise function, departmentation facilitates tight control on top.
• Departmentation by enterprise function is to group the activities being performed by different units along the lines of the function of the organisation.
  • Every enterprises aim at creating or producing something that is desirable by others.
  • It follows the principles of occupational specialization.
  • It also simplifies training.
• The basic enterprise functions are-
  • Production
  • Selling
  • Financing

Additional Information

• Departmentation refers to the formal structure of the organisation, composed of various departments and managerial positions and their relationships to each other.
  • It refers to the horizontal differentiation in an organization.
  • It refers to the grouping of operating duties into jobs, the combining of jobs and mixing of companies into divisions called 'Departments'. 
  • This way, it becomes easier and efficient for the top management to have control on various units.

A transferable letter of credit is a type of financial guarantee, known as a letter of credit, that additionally allows the first beneficiary to transfer some or all of the credit to another party, which creates a secondary beneficiary. The party that initially accepts the transferable letter of credit from the bank is referred to as the first, or primary beneficiary.

Modern marketing concepts emphasize customer relationships. If customers are satisfied with the producer's products, then the market image of the producer will be good. This will lead to more profits and growth. Modern marketing is about customer experience at every touchpoint, building relationships with customers, adapting continuously to the new digital landscapes, and marketing across multiple channels to reach different consumers.

Financial management is concerned with the procurement of funds and their effective utilisation so that unnecessary usage of funds can be avoided. Financial management optimises the output from the given input of funds and attempts to use the funds in the most productive manner.

The act that provides the legal framework for e-Governance in India is the IT Act 2000.

An Act to provide legal recognition for transactions carried out by means of electronic data interchange and other means of electronic communication, commonly referred to as "electronic commerce", which involve the use of alternatives to paper-based methods of communication and storage of information.

Important Points

Ind AS 1 — Presentation of Financial Statements:

• This Standard prescribes the basis for the presentation of general-purpose financial statements to ensure comparability both with the entity’s financial statements of previous periods and with the financial statements of other entities.
• It sets out overall requirements for the presentation of financial statements, guidelines for their structure, and minimum requirements for their content.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors:

• This Standard's goal is to specify the standards for choosing and altering accounting policies, as well as the accounting treatment and disclosure of such modifications as adjustments to accounting estimates and error corrections.
• The objective of the Standard is to improve the financial statements of a business in terms of their relevance, dependability, and comparability through time and with those of other entities.
• Disclosure requirements for accounting policies, except those for changes in accounting
  policies are set out in Ind AS 1, Presentation of Financial Statements.

Ind AS 28 - Investments in Associates and Joint Ventures:

• The purpose of this Standard is to establish the requirements for applying the equity method for accounting for investments in associates and joint ventures, as well as to regulate the accounting for investments in associates.
• This Standard shall be applied by all entities that are investors with joint control of, or significant influence over, an investee.

Ind AS 34 - Interim Financial Reporting:

• This Standard's goals are to establish the minimum requirements for an interim financial report's content as well as the rules for asset recognition and cost accounting in full or consolidated financial statements for interim periods.
• Investors, creditors, and other parties are better able to comprehend an entity's capability to create earnings and cash flows as well as its financial situation and liquidity when interim financial reports are timely and accurate.
• This Standard does not mandate which entities should be required to publish interim financial reports, how frequently, or how soon after the end of an interim period. However, governments, securities regulators, stock exchanges, and accountancy bodies
• Often require entities whose debt or equity securities are publicly traded to publish interim financial reports.

The correct answer is Competitive Pricing

Key Points Competitive Pricing

• Competitive pricing or competition-based pricing is a pricing strategy where you take into account the prices of your competitors when setting your products’ prices.
• This pricing method is usually used for homogenous products in highly competitive markets and can be also referred to as market-oriented pricing.

Additional Information 1. Value-based Pricing

• Value-based pricing is a strategy of setting prices primarily based on a consumer's perceived value of the product or service in question.
• Value pricing is customer-focused pricing, meaning companies base their pricing on how much the customer believes a product is worth.
• Companies that offer unique or highly valuable products and features are better positioned to take advantage of the value pricing model than companies that chiefly sell commoditized items.

2. Product Pricing

• Product pricing is an essential element in determining the success of your product or service, yet eCommerce entrepreneurs and businesses often only consider pricing as an afterthought. They settle and use the first price that comes to mind, copy competitors, or (even worse) guess.
• Before setting a price for your product, you have to know the costs of running your business. If the price for your product or service doesn't cover costs, your cash flow will be cumulatively negative, you'll exhaust your financial resources, and your business will ultimately fail.

3. Premium Pricing

• Premium pricing is a strategy that involves tactically pricing your company’s product higher than your immediate competition.
• The purpose of pricing your product at a premium is to cultivate a sense in the market of your product being just that bit higher in quality than the rest.

The correct option is both uninsurable risk and due to uncertainty.

• The Knight’s Theory of Profit was proposed by Frank. H. Knight believed profit was a reward for uncertainty-bearing, not risk-bearing.
• Simply, profit is the residual return to the entrepreneur for bearing the uncertainty in business.
• Knight made his reputation with his book Risk, Uncertainty, and Profit

Important Points

•  Knight regards profit as the reward for bearing non-insurable risks and uncertainties.
• He distinguishes between insurable and non-insurable risks. Certain risks are measurable, and the probability of their occurrence can be statistically calculated.
• The risks of fire, theft, flood, and death by accidents are insurable

Hence, Knight's principle of profit is based on uninsurable risk, and due to uncertainty.

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).

The Correct option is 1 i.e. Subscribed and Fully paid

Important Points

The shares on which the company has called the entire nominal value and also the shareholders paid the entire called up amount. Under these circumstances it is shown under subscribed capital as Subscribed and Fully paid up. Subscribed capital is the part of the issued capital which is subscribed by the public.

A breach of contract can happen in both a written and an oral contract. The parties involved in a breach of contract may resolve the issue among themselves, or in a court of law. There are different types of contract breaches, including a minor or material breach and an actual or anticipatory breach.

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.

The correct answer is 2021.

​Key Points

• WTO(World Trade Organisation) members agreed to hold a workshop in spring 2021 on the Information Technology Agreement(ITA).
• In the workshop, WTO members will engage with the private sector on the latest developments in information and communications technology (ICT) and to review the implementation of the ITA.
• The workshop will examine how ICT can lead to economic benefits, create opportunities and pose challenges, particularly in terms of the digitalization of the global economy.

​Important Points

• The Information Technology Agreement (ITA) was concluded by 14 participants at the Singapore Ministerial Conference in December 1996.
• Since 1996, the number of participants has grown to 53, representing 82 WTO members which account for 97% of world trade in IT products
• The participants are committed to eliminating tariffs on IT products covered by the Agreement.
• The ITA covers a large number of high-technology products, including computers, telecommunication equipment, semiconductors, semiconductor manufacturing and testing equipment, software and scientific instruments as well as most of the parts and accessories of these products.

Additional Information

• The present membership of the WTO is 164.
• The last member to join was Afghanistan(March 2016).
• Ministerial Conferences are the highest decision-making body of the WTO which meet at least every two years.
• WTO headquarters is in Geneva(Switzerland).

According to the passage, "In my view, successful start-ups require passionate and persuasive founders, great vision, innovative technology, strong team, patient capital, good market timing and a little bit of luck."

So, 'Luck is not at all important for the success of start-ups' is not correct.

According to the passage, "Then, start-ups need early stage investment from venture capitalists and corporate investors, ranging from $10 million to US$100 million through multiple rounds of equity financing."

Corporate investors and Venture capitalists provide financial assistance to start-ups in the early stage of a company.

The Sale of Goods Act, 1930 herein referred to as the Act, is the law that governs the sale of goods in all parts of India. It doesn’t apply to the state of Jammu & Kashmir.

Implied conditions according to the Sale of Goods Act.

(i) Seller’s title to goods is valid

(ii) Goods comply with description & sample

(iii) Quality or fitness of goods for the purpose specified by Buyer

(iv) Wholesomeness of eatables

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).

SUGAM is also known as ITR-4.
Key Points

Explanation:

1. Income Tax Return Form 4, which also called SUGAM, is filed by the taxpayers who have opted for presumptive taxation scheme under section 44AD, section 44Dand section 44AE of the Income Tax Act, 1961.
2. ITR 4 can be filed by individuals, HUF as well as a partnership firm. However, if the annual turnover of business registered under presumptive taxation scheme exceeds Rs. 2 crores, the taxpayer is required to file ITR-3.

In statistics, probable error defines the half-range of an interval about a central point for the distribution, such that half of the values from the distribution will lie within the interval and half outside. 

Probable Error of Correlation Coefficient helps in determining the accuracy and reliability of the value of the coefficient that in so far depends on the random sampling. 

In other words, the probable error (P.E.) is the value that is added or subtracted from the coefficient of correlation (r) to get the upper limit and the lower limit respectively, within which the value of the correlation expectedly lies.
Key-Points

The probable error of the correlation coefficient can be obtained by applying the following formula: Probable Error = 

Here, r = correlation coefficient of ‘n’ pairs of observations for any random sample and N = Total number of observations.

Thus, option 2 is the correct answer.

In terms of Section 22 of the Act, Reserve Bank has the sole right to issue banknotes in India.

• The Reserve Bank, in consultation with the Central Government and other stakeholders, estimates the number of banknotes that are likely to be needed denomination-wise in a year and places indents with the various currency printing presses for the supply of banknotes.
• The Reserve Bank in terms of its clean note policy provides good quality banknotes to the members of the public.
• In respect of coins, the role of RBI is limited to the distribution of coins that are supplied by the Government of India.
• The Government of India is responsible for the designing and minting of coins in various denominations as per the Coinage Act, 2011.

Important Points

• Under Section 22 of the Reserve Bank of India Act, RBI has sole right to issue currency notes of various denominations except one rupee note.
• The One Rupee note is issued by the Ministry of Finance and it bears the signatures of the Finance Secretary, while other notes bear the signature of Governor RBI. 

Thus, option 1 is the correct answer.

The gains from international trade depend upon the cost ratios of differences in comparative cost ratios in the two trading countries. The smaller the difference between the exchange rate and cost of production the smaller the gains from trade and vice versa.

Devaluated assets is not a category of non-performing assets.

Debt is classified as NPA when payment due is not paid within 90 days. NPAs are classified into 3 categories:

• Loss assets
• doubtful debts
• Substandard assets

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.

NBFC is defined as a company registered under the Companies Act, 2013 and also under the RBI act 1934 under section 45-IA. These type of companies provides banking services without holding any banking license.

NBFCs lend and make investments and hence their activities are akin to that of banks; however, there are a few differences as given below:

i. NBFC cannot accept demand deposits;

ii. NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on themselves;

iii. the deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in the case of banks.

Correct combination is a - 3, b - 1, c - 4, d - 2.

Bank rate, also known as the discount rate in American English, is the rate of interest which a central bank charges on its loans and advances to a commercial bank. Whenever a bank has a shortage of funds, they can typically borrow from the central bank based on the monetary policy of the country.

Credit rationing is the limiting by lenders of the supply of additional credit to borrowers who demand funds, even if the latter are willing to pay higher interest rates. It is an example of market imperfection, or market failure, as the price mechanism fails to bring about equilibrium in the market.

The variable reserve ratio device springs from the fact that the central bank, in its capacity as Bankers Bank, must hold a part of the cash reserves of commercial banks. The minimum balances to be maintained by the member banks with the central bank are fixed by law and statutory powers have been conferred on the central bank to alter the quantum of these minimum reserves.

Open market operations (OMO) refers to a central bank buying or selling short-term Treasuries in the open market in order to influence the money supply, thus influencing short term interest rates.

Our first responsibility is to our customers are the ethics code.

For any kind of business their intent clearly in the opening line: "our first responsibility is to our customers". Our customer services team not only embodies this culture but, more specifically, takes responsibility for line six of the credo: "your orders will be serviced promptly and accurately". To ensure we are meeting these commitments, a number of measures have been put in place.