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

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.

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.

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.

The correct answer is 60,000 crore.

Key Points

• An allocation of Rs 60,000 crore has been made to cover 3.8 crore households in 2022-23 under Har Ghar, Nal Se Jal Scheme.
• Finance Minister said that the current coverage of Har Ghar, Nal Se Jal is 8.7 crores.
  • Out of which 5.5 crore households were provided tap water in the last 2 years itself.
• Nirmala Sitharaman also announced an allocation of Rs 48,000 crore for the completion of 80 lakh houses.
  • ​For the identified eligible beneficiaries of PM Awas Yojana, both Rural and Urban, in 2022-23.
• The Central Government will work with the state governments to reduce of time required for all land and construction-related approvals.
• It will also work for promoting affordable housing for the middle class and Economically Weaker Sections (EWS) in urban areas.

Additional Information

• Jal Jeevan Mission (Har Ghar Nal se Jal)
  • Launched in 2019.
  • Aim: To provide every single rural household with functional household tap connections (FHTC) ‘Har Ghar Nal Se Jal’ by 2024.
  • A decentralized approach is implemented at national, state, district levels for specific needs and purposes (Targeted Area approach).
  • The major role played by Paani Samitis and women in mobilizing the population.
  • The Jal Jeevan Mission will be based on a community approach to water and will include extensive Information, Education and communication as a key component of the mission
• Objectives:
  1. Piped water supply
  2. Augmenting existing drinking water resources.
  3. Using technology to treat water and make them portable and safe for drinking.
  4. Greywater treatment and management.
  5. Integration with other water resource management programs like Atal Bhujal Yojana, Swajal Scheme, Swachh Bharat Mission, for better and overall management and conservation of water.

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.

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

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.

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 The provisions of the Act are applicable to the sale of both movable properties and immovable properties.

Key PointsPrimer to The Sale of Goods Act, 1930:

• The sale of goods is one of the specific forms of contracts recognized and regulated by law in India.
• It is an Act to define and amend the laws relating to the sale of goods.
• It came into force on 1st July 1930.
• The provisions of the Act are applicable to the sale of ONLY movable properties and the Act is not applicable to immovable properties.
• It extends to the whole of India.

Key Points Long term Capital Gains:

• Long-term capital gains refer to the profit made on the sale of an asset that has been held for more than one year.
• The tax rate for long-term capital gains is usually lower than the tax rate for short-term capital gains.
• Long-term capital gains can be realized from the sale of various assets, such as stocks, bonds, real estate, and mutual funds.

Important Points Calculation of Long-Term Capital gain

Long term Capital Gain tax = Taxable long-term capital gains × Applicable long-term capital gains tax rate

Hence, the correct sequence is (A), (C), (D), (B), (E).

Additional Information The formula to calculate indexed cost of acquisition is:

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.

The correct answer is (B), (C), (D) (E)only.

Key Points The design of a questionnaire will depend on whether the researcher wishes to collect exploratory information (i.e. qualitative information for the purposes of better understanding or the generation of hypotheses on a subject) or quantitative information (to test specific hypotheses that have previously been generated).

•  A well-designed questionnaire should meet the research objectives. This may seem obvious, but many research surveys omit important aspects due to inadequate preparatory work, and do not adequately probe particular issues due to poor understanding.
• To a certain degree some of this is inevitable. Every survey is bound to leave some questions unanswered and provide a need for further research but the objective of good questionnaire design is to 'minimise' these problems.
•  It should obtain the most complete and accurate information possible. The questionnaire designer needs to ensure that respondents fully understand the questions and are not likely to refuse to answer, lie to the interviewer or try to conceal their attitudes.
• A good questionnaire is organised and worded to encourage respondents to provide accurate, unbiased and complete information.
• A well-designed questionnaire should make it easy for respondents to give the necessary information and for the interviewer to record the answer, and it should be arranged so that sound analysis and interpretation are possible.
• It would keep the interview brief and to the point and be so arranged that the respondent(s) remain interested throughout the interview.

Hence, the correct answer is (B), (C), (D). (E) only.

The Union Cabinet has approved a new Consumer Protection Bill 2015 that seeks to replace a 29-years old law and proposes to set up a regulatory authority which will have powers to recall products and initiate a class suit against defaulting companies, including e-tailers (a retailer selling goods via electronic transactions on the Internet). The new bill provides for a comprehensive framework for the protection of consumer interest and will replace the Consumer Protection Act, 1986. The decision comes against the backdrop of emergence of complex products and services in the era of growing e-commerce business in India that has rendered consumers vulnerable to new forms of unfair trade and unethical business practices. The key features of the new bill include the establishment of an executive agency 'Central Consumer Protection Authority' (CCPA) which will protect and enforce the rights of consumers. The authority will intervene when necessary to prevent consumer detriment arising from unfair trade practices and to initiate class-action including enforcing recall, refund, and return of products. That apart, the bill has provisions for "product liability" if product/services cause personal injury, death, or property damage and will take action against defaulting manufacturers or service providers.

Refer to, “The government must not disown its biggest reform attempt or try to sidestep parliamentary scrutiny of the outcomes of demonetisation. Instead, it could focus on fixing the problems that people still face — transactions with Rs 2,000 notes in the absence of Rs1,000 notes are difficult as it is a departure from the currency denomination principle.”

It is clear that the government should not disown its mistake in implementing demonetization in the country so that it can take the corrective measures to address the issues that the public still faces in the country with the new currency notes.

Among the given options, only option A can be considered as the correct since it correctly explains the correct course of action that should be followed by the government. Other options are out of context as per the information given in the passage and hence they can be eliminated.

`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.

Refer to, “Even as these issues are sorted out, the larger lesson must be heeded: sudden shocks to the economy don’t always yield intended policy objectives.“

The summary of the passage is that the government may think that any sudden decision may yield intended policy objectives but it is not always true and it may also be the case that such policy decisions will affect the health of the economy more than contributing to its growth.

Among the given options, option (D) is the correct choice since it perfectly captures the essence of the passage and other options are not relevant as per the information given in the passage.

According to the passage, the move of the government regarding demonetization was a complete failure since the stated objective could not be met at the end of the day and actually most of the cash came back to the system. It was a total failure for the move intended to flush out black money from the country.

Among the given options, option (A) is not correct since it is not something that follows from the passage whereas the same can be said regarding options (B) and (C). Coming to option (D), it may sound true but there is no such reference in the passage that the author feels proper homework should be done by the government before launching any scheme of the magnitude of demonetization program.

The correct answer is Author's royalty income.

Key Points

• Section 80QQB: The Income Tax Act of 1961 contains provisions relating to Royalty Income under Section 80QQB.
• Authors' royalties are included as deductions in this section.
• The royalty income is subject to taxation under the same heading as other sources of profit and gains.

Important PointsEligible income available as a deduction under section 80QQB

• Any income earned by an author in the exercise of his profession.
• Any income earned as a lump sum consideration for the assignment or grant of any of his interest in the copyright of any book being the work of artistic or literary or scientific nature or royalty or copyright in respect of author’s book.
• Any income received as non-refundable advance payment of royalties or copyright fees.

Conditions to be fulfilled for availing deduction under section 80QQB

• The individual assessee who is claiming the deduction must either be an Indian resident or an Indian resident who is not ordinarily an Indian resident.
• The assessee should have authored (with others) a book that discusses a piece of either literary, artistic, or scientific work.
• Payment for the total should be made in lump sum. However, income (before permitting expenses) that is in excess of 15% of the value of books sold throughout the year should be disregarded if the money is not paid in lump sum payment.
• When income is earned outside of India, section 80QQB's deduction is only applicable to that portion of the revenue that is brought back to India in convertible foreign currency within six months (or within an extended length of time) after the end of the previous year in which the income was earned.
• The assessee who is requesting the deduction must obliquely provide a certificate in Form No. 10CCD. The person in charge of paying the income shall properly verify such a certificate in Form No. 10CCD. When submitting an income tax return, the certificate must be included.
• After the deduction for income under section 80QQB has been taken, no additional deduction for that income under any other provisions of the Act may be claimed in any assessment year.

Maximum amount of allowable deduction

• The total amount of royalty income;
• or INR 3 Lakhs.

Hence, it can be concluded that Section 80QQB of the Income Tax Act, 1961 deals with Author's royalty income.

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 correct answer is 14.2%.

Important Points

• Rf = 7%, β = 1.20, Rm - Rf = 6%.
• Expected Return = Rf + β (Rm - Rf)
• = 7% + 1.20 (6%)
• = 7% + 7.20
• = 14.2%

Key Points

Formula for Computing Expected Return under CAPM:

• E(Rp) = Rf + (Rm - Rf)Beta.
  • Where E(RP) = Expected Return on Portfolio
  • RF = Risk Free Rate of Interest/ Return
  • Beta = Portfolio Beta
  • RM = Expected Return on Market Portfolio

Public Relations

• Public relations deals with how people perceive your company.
• The process of maintaining a positive image and developing healthy relationships between a company and the external parties it serves is known as public relations.

Important Points Aims of Public Relations

• Create and build the reputation of the company in the market. 
• Make people aware of the brand or service.
• Maintain positive relations with those who influence the target audience.
• Build goodwill and retain the same.

Common PR Tools and Techniques:

Attendance at public events: In order to attract public attention and keep it engaged with a particular organisation or an individual, PR specialists take an advantage of every public event and the opportunity to speak publicly.

Press releases: Advertisements have a far smaller impact than information that is conveyed as part of a regular TV or radio programme, newspaper, magazine, or other form of mainstream media. Press release is therefore one of the oldest and most effective PR tools.

Newsletters: Another popular strategy to build and keep a solid relationship with the public is to send newsletters directly to the target audience with pertinent information about the organisation or/and its products/services.

Blogging: PR experts employ digital versions of press releases and newsletters as well as a range of other media, like blogging and, more recently, microblogging, to reach an online audience. It enables them to establish two-way communication with the target audience and build and sustain relationships with them.

Social media marketing: It is utilised mostly by the marketing sector, as its name would imply. However, an increasing number of PR professionals are also using social media platforms to build direct relationships with the general public, customers, investors, and other target audiences.

All activities are performed by public relations officers mainly to create a positive image or build the reputation of the company. 

Hence, Public Relations as a part of promotion in marketing refers to management of reputation of the company.

The correct answer is Both Statement l and Statement II are correct

Important PointsStatement l: Patents are defined as monopoly rights which one granted by the government, for full disclosure of invention for a limited period of time, that is for 20 years

Explanation:

• A patent is an exclusive right awarded for an invention is a product or a technique that, in general, gives a new way of doing something or provides a new technical solution to a problem.
• The protection is granted for a limited period, generally 20 years from the filing date of the application.
• Hence, Statement I is true.

Statement II: The purpose of granting patents is to encourage inventions by promoting their protection and utilization so as to contribute to the development of Industries.

Explanation:

• The purpose of granting patents itself is to not only encourage innovation but also ensure that the inventions are worked in India and are made available to the public in sufficient quantity at reasonable prices.
• Hence, Statement II is true.

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.