CA CPT

Practice Series-2 / June 2011

Note:
This Practice Series-2 covers 200 questions in all the four subjects. Answer ke s are !rovi"e" at the en".

Section-A : Accounts Q1. Purpose of an accounting system include all the following except (a) Interpret and record the effects of business transaction. (b) Classify the effects of transactions to facilitate the preparation of reports. (c) Summari e and communicate information to decision ma!ers. (d) Specifies the types of business transactions that enterprises may engage in. Q". #Conser$atism Concept% recommends the following& (a) Pro$ision for doubtful debts and discount on debtors should be made on the basis of actual bad debts and discount. (b) 'he stoc!(in(trade should be $alued at mar!et price or cost price whiche$er is less. (c) Small capital items) li!e croc!ery should be charged to re$enue. (d) *ll of the abo$e. Current assets are (a) *ssets from which long term benefits are to be deri$ed. (b) ,ong(term and short(term assets. (c) Cash(in(hand and short(term assets which can be con$erted into cash within one year. (d) *ssets which are currently used in the business. Sale of goods to .ohan for cash should be debited to (a) .ohan/s *ccount (b) Cash *ccount (c) Sales *ccount (d) 0one of these 2 ,td. has 3s.-)144 account recei$able from .r. *. 5n .arch 11) .r. 6 ma!es a partial payment of 3s.")144 on behalf of .r. * to 2 ,td. 'he 7ournal entry made on .arch 11 by 2 ,td. to record this transaction includes8 (a) * credit to the *ccounts recei$able account of 3s.")144. (b) * credit to the cash recei$ed account of 3s.")144. (c) * debit to the cash account of 3s.l)-44. (d) * debit to the *ccounts recei$able account of 3s.l)-44. .r. 2 has assets of 3s.:)44)444 and liabilities of 3s.;4)444. 5wner/s e<uity in this case is8 (a) 3s. :) ;4)444. (b) 3s. :) 44)444. (c) 3s. 9) "4)444. (d) 3s. ;4)444. In which boo! of original entry will you record) a bills recei$able of 3s. +)444) which was recei$ed from a debtor in full settlement of his claim of 3s. +)144) is dishonoured& (a) Purchase 6oo! (b) Cash 6oo! (c) =ournal Proper (d) Sales 6oo!

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>hen the debit balance as per cash boo! is the starting point) che<ues issued but not presented to ban! will be8
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(a) (b) (c) (d) Q?.

*dded Subtracted 0either of the two 0ot re<uired to be ad7usted

>hen the o$erdraft balance of the pass boo! is the starting point) che<ues deposited but not cleared will be8 (a) *dded (b) Subtracted (c) 0either of the two (d) 0ot re<uired to be ad7usted >hen fa$ourable balance as per cash boo! is the starting point) expenses directly paid by ban! will be @@@@@ to get the balance as per the Cash 6oo!8 (a) *dded (b) Subtracted (c) 0either of the two (d) 0ot re<uired to be ad7usted Aaluation of in$entory is dealt with in (a) *S(1 (b) *S(" (c) *S(+ (d) *S(Cost of in$entories includes (a) Birect .aterial C Birect Dxpenses (b) Birect ,abour C 'rade Dxpenses (c) *ll costs of purchase) cost of con$ersion and other costs incurred in bringing the in$entories to their present location and condition. (d) Birect material only. >hen prices are falling which of the following method of in$entory $aluation will gi$e conser$ati$e figure of Eross profit& (a) ,IF5 (b) FIF5 (c) >eighted a$erage (d) Specific identification method Bepreciation fund method is designed to8 (a) 5nly pro$ide for depreciation of an asset (b) Pro$ide for depreciation as also to accumulate the amount for its replacement (c) 5nly to sa$e tax. (d) 'o accumulate the amount of itGs replacement * ,td. Company ac<uired furniture for 3s. -4)444 with an expected useful life of fi$e years and 3s. ")444 expected residual $alue. Straight line method of depreciation was used. 'he e<uipment was sold at the end of fourth year for 3s. 11)444. 'he gain or loss on sale will be (a) 3s. 1+)444 (loss) (b) 3s. :)944 (gain) (c) 3s. 1)-44 (gain) (d) 0one of the abo$e * machinery was purchased for 3s. 14)444. 'he machinery was depreciated H "4I p.a. on >BA basis for + years. If the machinery is sold at a $alue of 3s. "1)444) the profit and loss account will be debitedJ credited by (a) 3s) 944 (Credit) (b) 3s. 1)444 (Credit) (c) 3s. 1)444 (Bebit)
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(d) Q1:.

3s.944 (Credit)

Cost of a machinery purchased on 1 st*pril) "44; is 3s.14)444.Bepreciation is to be pro$ided at the rate of 11I p.a. on S,. .'he machinery was sold on +1 st Becember) "44; for 3s.+1)444.>hich of the statement gi$en below is correct& (a) ,oss on sale of machinery is 3s.?)-14 (b) ,oss on sale of machinery is 3s.?)+:1 (c) Bepreciation to be pro$ided for the year "44;(4? is 3s.1)9"1. (d) 6oth (b) K (c) #Salary to factory wor!ers% will come in8 (a) Profit K loss account (b) 'rading account (c) .anufacturing account (d) 6oth (b) and (c) 'he importance of preparing a balance sheet is all of the following except& (a) 'o ascertain sources and uses of funds (b) 'o ascertain proprietary ratio (c) 'o ascertain net distributable profit (d) 'o ascertain the financial position of an enterprise 'he gain on sale of old machinery is credited to8 (a) 5ld machinery account (b) 'rading account (c) Profit and loss account (d) 6oth (a) and (c) 'he balance of goods sent out on consignment will be transferred to8 (a) Eeneral profit and loss account (b) Eeneral trading account (c) Brawings account (d) 0one of the abo$e

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Q"". Eoods costing 3s.")44)444 sent out to consignee to show a profit of "4I on In$oice price. In$oice price of the goods will be8 (a) 3s.+):1)444 (b) 3s.+)44)444 (c) 3s.")14)444 (d) 3s.+)-1)444 Q"+. . send out goods costing 3s.14)444 to 0 at cost C ++ 1J+ I.1J14th of the goods were lost in transit. "J+rd of the goods are sold at "4I abo$e IP. L of the sales are on credit. 'he amount of credit sales will be8 (a) 3s. +9)444 (b) 3s. :")444 (c) 3s. :4)444 (d) 3s. :1)444 'he profits of the last fi$e years are 3s."4)444M 3s."4)444M 3s."4)444M 3s.-9)444M 3s.+9)444. Find out the goodwill of - years purchase. (a) 3s.9)";)444 (b) 3s.1)1+)944 (c) 3s.1)94)444 (d) 3s.1)9-)444 >hen the incoming partner brings his share of goodwill in cash) it is ad7usted by crediting to8
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(a) (b) (c) (d) Q"9.

Nis Capitol account Eoodwill account 5ld partnerGs capital accounts Premium *ccounts

If interest on capital is to be allowed as per the agreement) then interest on capital must be calculated with reference to time and it must be calculated on@@@@@@@@@@@ (a) Capital in the beginning (b) Capital at the end (c) *$erage capital employed (d) 0one of the abo$e 'he excess price recei$ed o$er the face $alue of shares should be credited to8 (a) Calls(in(ad$ance account. (b) *d$ance capital account. (c) Share premium account. (d) D<uity share capital account. #*ccrued interest on in$estments% will appear in the balance sheet under which of the following head8 (a) Current liabilities (b) Secured loans (c) In$estments (d) Current assetsM loans and ad$ances Partly paid up preference shares cannot be redeemed. (a) 'rue (b) False (c) Partly true (d) Partly false ,isted company is the company (a) >hose shares and securities are not listed in the recogni ed stoc! exchange& (b) >hose shares and securities are listed in the recogni ed stoc! exchange. (c) >hose shareholders ha$e unlimited liability. (d) >hose shareholders are ha$ing fixed di$idend right. *s per the #Cost Concept%) which of the following should be recorded in the boo! of accounts of a firm& (a) Quantitati$e transactions. (b) S!ills and !nowledge of the *ccounts .anager. (c) Qualitati$e transactions. (d) *n asset at its historical cost. @@@@@@@@ refer to the general agreement on the usage and practices in social or economic life. (a) *ccounting transactions (b) *cct. con$entions (c) *ccounting *ssumptions (d) Principles Financial Statements ha$e two primary <ualitati$e characteristics (a) 3ele$ance and reliability. (b) Onderstandability and materiality. (c) 3ele$ance and understandability. (d) .ateriality and reliability

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>hich of the following statement is false in context to cash discount&

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(a) Cash discount is recorded in the boo!s of accounts. (b) Cash discount is an allowance. (c) Cash discount is an allowance in addition to the trade discount. (d) 'he main purpose of cash discount is to increase the sales $olume. Q+1. 5$erhaul expenses of second hand machinery purchased 3s.14)444 is8 (a) 3e$enue expenditure. (b) Beferred re$enue expenditure. (c) Capital expenditure. (d) 0one of the abo$e *n expenditure is re$enue in nature) when8 (a) It benefits the future period (b) It benefits the current period (c) It belongs to the pre$ious period (d) 6oth (a) and (c) 'he purchases day boo! records only8 (a) *mount of credit purchases of goods. (b) Quantity of credit purchases of goods. (c) *mount and <uantity of credit purchases of goods. (d) 0one of the abo$e. >hen a fa$ourable balance as per cash boo! is the starting point) income (e.g interest on in$estments) directly recei$ed by ban! will be8 (a) *dded (b) Subtracted (c) 0either of the two (d) 0ot re<uired to be ad7usted >hen fa$orable balance as per Pass boo! is the starting Point) 6an! Charges le$ied by ban! will be8 (a) *dded (b) Subtracted (c) 0either of the two (d) 0ot re<uired to be ad7usted >hen the fa$orable balance as per Pass boo! is the starting Point) Income directly recei$ed by ban! will be8 (a) *dded (b) Subtracted (c) 0either of the two (d) 0ot re<uired to be ad7usted From the following details what is the $alue of closing stoc!& 5pening stoc! 3s. "4)444) Purchases 3s. 1-4)444) Sales 3s. 114)444) Eross profit margin "4I of sales (a) 3s."4)444 (b) 3s. +4)444 (c) 3s. 14)444 (d) 3s.-4)444 In$entory $aluation affects (a) 0et income (b) Cash now (c) 'ax liability (d) 6oth (a) K (c)

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In$entories are assets8

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(a) (b) (c) (d) Q--.

Neld for sale in the ordinary course of business In the production process for such sale In the form of materials or supplies to be consumed in the production process or in the rendering of ser$ice *ll of the abo$e

Ei$en that the $alue of furniture on 1.1."44- is 3s. ;4)444) furniture purchased during the year is 3s. -4)444) sale of furniture on no loss no profit basis is 3s. "4)444 and the furniture is $alued at 3s. :4)444 on) +1.1"."44?) the depreciation for the year "44- will be (a) 3s. "4)444 (b) 3s. +4)444 (c) 3s. 14)444 (d) 3s. -4)444 For charging depreciation the depletion method is adopted for (a) Plant K machinery (c) Eoodwill (b) ,and K building. (d) >asting assets li!e mines and <uarries Ei$en that the $alue of furniture on 1.1."44+ is 3s. ?4)444) furniture purchased during the year is 3s. +4)444) sale of furniture on no loss no profit basis is 3s. 14)444 and the furniture is $alued at 3s. :4)444 on) +1.1"."44;) the depreciation for the year "44+ will be (a) 3s. "4)444 (b) 3s. +4)444 (c) 3s. 14)444 (d) 3s. -4)444 'he pro$ision for discount on debtors is calculated on the amount of debtors8 (a) 6efore deducting actual bad debts. (b) 6efore deducting pro$ision for bad and doubtful debts. (c) 6efore deducting Sales returns and actual bad debts. (d) ,eft after deducting the pro$ision on bad and doubtful debts. >hat will be the treatment of additional bad debts if ad7ustment of it is appearing outside the trial balance& (a) Sundry debtors account will be debited and bad debts account will be credited. (b) 6ad debts account will be debited and sundry debtors account will be credited. (c) 6ad debts account will be only be debited to profit and loss account. (d) 0o effect is to be gi$en in account boo!s. 3e$enues of an enterprise are normally measured by the exchange $alues of the assets or liabilities in$ol$ed. *ny re$enue is not recogni ed until8 (a) 'he re$enue is earned and recorded. (b) 'he re$enue is recogni ed and its reali ation is assured. (c) 'he re$enue is reali ed and earned. (d) 0one of the abo$e Sales are e<ual to8 (a) Cost of goods sold C gross profit. (b) Cost of goods sold P gross profit. (c) Cost of goods sold P net profit. (d) Cost of goods sold C net profit.

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Section-B : Mercanti e !a" Q1. >hich of the following statement is not suited to the concept of acceptance& (a) It must be communicated. (b) It must be absolute and unconditional. (c) It must be accepted by a person ha$ing capacity to contract. (d) .ay be presumed from silence of offeree. Q". >here the consent of both the parties is gi$en by mista!e) the contract is (a) Aoid (b) Aalid (c) Aoidable (B) 0one of the abo$e Can a person who is usually of unsound) but occasionally of sound mind) ma!e a contract& (a) Qes) he can always ma!e a contract. (b) Qes) but only when he is of sound mind. (c) Qes) but only when he is of unsound mind.. (d) 0o) he cannot ma!e a contract Factor affecting free consent is (a) Fraud (b) Coercion (c) Ondue influence (d) *ll of abo$e. 2) by a letter dated "1th Becember "44:) offers to sell his house to /Q/ for 3s. 14 la!hs) 'he letter reaches Q on ":th Becember "44:) who posts his acceptance on ";th Becember)"44: which reaches 2 on +4th Becember "44:. In this case) the communication of offer is complete on (a) "1th Becember) "44: (b) ":th Becember) "44: (c) ";th Becember) "44: (d) +4th Becember) "44:. *n agreement by a newspaper proprietor not to comment on the conduct of a particular person is (a) 5pposed to public policy. (b) 0ot opposed to public policy. (c) Aalid. (d) Aoidable. 3escission of a $oidable contract shall be communicated or re$o!ed in the same manner as the communication or re$ocation of8 (a) Proposal (b) 6reach (c) *cceptance (d) Impossibility 'he intention for fixing penalty is8 (a) 3eco$ery of damages that might arise due to breach (b) 'o ensure performance of the contract (c) Dither (a) or (b) (d) 0either (a) nor (b) 2 agreed to decorate QGs flat for a lump sum of 3s. 1)44)444. 2 did the wor! but Q complained of faulty wor!manship. It cost Q 3s. 14)444 to remedy the defects. In this situation) 2 could reco$er) from Q 3s. 14)444) i.e.) 3s. 1)44)444 less 3s. 14)4448 (a) 'rue (b) Partly true
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(c) (d) Q14.

False 0one of the abo$e

* contract stands discharged by breach of contract8 (a) 'rue (b) False (c) Partly true (d) 0one of the abo$e. >hich of the following is not correct (a) =oint Nindu family is go$erned by ,aw relating to the registration of the agreement (b) =oint Nindu family is go$erned by ci$il procedure court (c) 6oth a K b (d) 0one of the abo$e Sharing of profit of a business is conclusi$e e$idence of Partnership. (a) 'rue (b) Partly 'rue (c) False (d) 0one of the abo$e * partnership is created8 (a) 6y agreement as well as statusM (b) 6y agreement) express or implied) onlyM (c) 6y status onlyM (d) 6y express agreement only. Intimation to registrar) of a change in constitution of registered firms) may be gi$en by8 (a) *ll the partners or their agents (b) .a7ority of the partners or their agents (c) *ll wor!ing partners or their agents (d) *nyone partner or their agent 'he court may dissol$e a firm if a suit is brought that a partner has become of unsound mind8 (a) 'rue (b) False (c) Partly true (d) 0one of the abo$e >here a partner in a firm is ad7udicated as insol$ent) he ceases to be a partner from the P (a) Bay on which the order or ad7udication is made (b) First day of the financial year in which the order of ad7udication is made (c) Bay on which the firms comes to !now of his insol$ency (d) Bay as decided by the registrar of the firms *n expelled partner continues to be liable for acts of the firm done P (a) Op to the date of the admission of a new partner (b) Op to the date of gi$ing public notice of expulsion (c) Op to the close of the financial year in which he is expelled (d) 0one of the abo$e * partner can be expelled from the firm) if such expulsion is (a) In good faith (b) *s gi$en in the contract (c) Dxercise by ma7ority of the partners (d) *ll of the abo$e
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Q1?.

D$ery partner is bound to attend ............ to his duties) in the conduct of the business. (a) Systematically (b) Sincerely (c) Biligently (d) Dffecti$ely 'he Partnership *ct) 1?+" deals with (a) 6usiness Collaboration (b) Partnership in Eeneral (c) =oint Aenture (d) Partnership between indi$iduals * contract of sale is made by an (a) 5ffer to buy only (b) 5ffer to sell only (c) 5ffer to buy or sell (d) 0one of these. 6uyer not only includes the person who buys but also includes a person who (a) *grees to buy (b) Show his consent to buy (c) Promise to buy (d) *ll the abo$e 'he attribute of <uality of goods includes a (a) State (b) Condition (c) Price (d) (*) and (6) * sold a stolen car to 6 which was subse<uently reco$ered by the police from 6/s possession and 6 was forced to return the same to the true owner. Nere) there is breach of implied condition as to (a) .erchantability (b) Fitness for buyer/s purpose (c) 'itle (d) 0one of these. 'he term /possession of goods/ means (a) 5wnership of goods (b) Custody of goods (c) 6oth (a) and (b) (d) 0one of these >hich of the following statement is incorrect in relation to /sale on appro$al/& (a) 'he seller cannot as! for the return of the goods sold. (b) 'he seller cannot reco$er the price if the goods are not returned within a reasonable time. (c) 'he seller can reco$er the price if the goods are not returned within a reasonable time. (d) 'he ownership of goods is transferred to the buyer if he fails to return the goods within fixed time or reasonable time. In which of the following cases) an unpaid seller of goods) is entitled to retain the possession until the entire price is paid& (a) >here the goods ha$e been sold without any stipulation as to credit. (b) >here the goods ha$e been sold on credit) but the term of credit has expired. (c) >here the buyer becomes insol$ent. (d) *ll of these.
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>hat is 7us in rem& (a) 3ight of buyer to en7oy the goods as against the world at large including the seller (b) 3ight of the buyer against the seller to sue for damages. (c) 3ight of the buyer to en7oy the goods only against the seller. (d) 0one of these Fault means (a) >rongly act (b) Befault (c) 6oth of the abo$e (d) 0one of the abo$e >hich one of the following is not true& (a) Bocument showing title is different from document of title. (b) 6ill of lading is a document of title to goods. (c) Specific goods can be identified and agreed upon at the time of the contract of Sale) (d) 0one of the abo$e Implied contract) e$en if not in writing or express words) is perfectly.......... if other conditions are satisfied. (a) Aoid (b) Aalid (c) Aoidable (d) Illegal. Bischarge of the Contract means that the parties are not further bound by the contract. (a) 'rue (b) Partly true (c) False (d) 0one of the abo$e * contingent agreement based on an impossible e$ent8 (a) Is $oid till the impossibility is !nown. (b) 6ecomes $oid on the !nowledge of impossibility. (c) Is $oid. (d) *ll of the abo$e. >hich of the following is the legal re<uirement of a $alid offer& (a) It should be definite and clear. (b) It must be capable of creating legal relationship. (c) It must be communicated to the other party. (d) *ll of the abo$e. * owned two cars one .aruti ;44 and the other one is 0ano. Ne offered to sell one car to 6. >hile ma!ing offer) * had .aruti in mind. 6 accepted the offer thin!ing that it was made for 0ano. In this case) no agreement came into existence as there is no (a) Free consent. (b) Consensus ad idem. (c) =us in personam. (d) Competency to contract. 3a$i a popular singer enters into a contract with the manager of a theatre) to sing at the theatre two e$enings a wee! for the next two months and the manager of the theatre agrees to pay him at the rate of 3s. 1)444 for each performance. From the sixth e$ening onwards) 3a$i absents himself from the theatre. In this context) which of the following remedies isJare a$ailable to the manager of the theatre against 3a$i& (a) Ne is at liberty to put an end to the contract. (b) Ne is entitled to compensation for the damages sustained by him through 3a$i on his failure to sing from the sixth e$ening onwards.
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(c) (d) Q+:.

Ne cannot put an end to the contract. 6oth (a) and (b) abo$e.

'he consideration of an agreement is considered unlawful) if it is (a) Forbidden by law (b) Fraudulent (c) Immoral (-) *ll of the abo$e >hen the performance of a contract become impossible then the contract become8 (a) Aoid (b) Aoidable (c) Aalid (d) Onlawful >hich of the following statement is false& (a) * threat to commit suicide amounts to coercion. (b) Ondue influence in$ol$es use of moral pressure. (c) Ignorance of law is no excuse. (d) Silence always amounts to fraud. If .r. 2 obtained the consent of .r. Q by Coercion) the agreement is $oidable at the option of (a) Dither party to the agreement (b) *t the option of Q (c) *t the option of 2 (d) 0one of these. If any term is not defined in the Partnership *ct) reference shall be to8( (a) D$idence *ct (b) Sale of Eoods act (c) 0egotiable Instrument *ct (d) Indian Contract *ct D$ery partner has a right to ta!e part in the conduct of business (a) 'rue (b) 'rue sub7ect to the contract between parties (c) False (d) 0one of the abo$e 3etiring partner continues to be liable for the acts of firm done P (a) Op to the date of admission of a new partner (b) Op to the close of the financial year in which he retires (c) Op to the date of gi$ing public notice of retirement (d) 0one of the abo$e >hich of the following words can be used as a part of the firmGs name& (a) Crown (b) Sterling (c) Queen (d) 3oyal In deciding whether or not a partner is guilty of conduct which is li!ely to affect the carrying on of business of firm pre7udicially) regard being had to the nature of the firmGs business (a) 'rue (b) False (c) Partly true (d) 0one of the abo$e
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Q-9.

>hich one of the following is not permissible in a firmGs name& (a) K Co. (b) K 6rothers (c) Corporation (d) *ssociates >hich one of the following is not applicable for unregistered firms (a) 3ight of partners to sue the firm for enforcing a right arising out of a contract (b) 3ight of partners to sue for dissolution of the firm (c) 3ight of partners to sue for settlement of accounts of a dissol$ed firm. (d) 3ight of partners to sue for realising the property of a dissol$ed firm. *n unregistered firm suffers from the following disabilities8 (a) 0o suit between the partners and firmM (b) 0o suit by a firm against a thirds party (c) 0o claim of set off (d) *ll of the abo$e * ma7or and a minor can create a partnership (a) 'rue (b) Partly true (c) False (d) 0one of the abo$e >here a Partner in a firm is ad7udicated as insol$ent P (a) 'he firm is automatically dissol$ed (b) 'he Firm is also deemed insol$ent (c) 'he firm becomes an illegal association (d) 0one of the abo$e

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Section-C : Econo'ics Q1. >hich one of the following statement is correct& (a) In deducti$e method logic comes before the fact. (b) .icro and .acro(Dconomics are interdependent. (c) 'he economic problems are sol$ed by Planning Commission. (d) Nigher the prices lower is the <uantity demanded of a product is a normati$e statement. Q". Capital intensi$e techni<ue would get chosen in a @@@@@@@@@@@ . (a) ,abour surplus economy. (b) Capital surplus economy (c) Be$eloped economy (d) Be$eloping economy 'he slope of production possibility cur$e is determined by the law of (a) Increasing marginal opportunity cost. (b) Increasing marginal utility. (c) Increasing marginal cost. (d) Increasing marginal returns.

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'he following statement is an example of normati$e statement #'he cost of fruits and $egetables should be subsidi ed by the go$ernment to encourage healthy eating%.
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(a) (b) (c) (d) Q1.

'rue False Partly 'rue CanGt Say

5ther things remaining constant) the law of demand states that8 (a) Bemand for a commodity is in$ersely related to its price. (b) *s demand rises) price rises. (c) Price is not related to demand. (d) 'he demand for a commodity depends upon price of related goods. 'he second glass of water gi$es lesser satisfaction to a thirsty boy. 'his is a clear case of (a) ,aw of demand. (b) ,aw of diminishing returns. (c) ,aw of diminishing utility. (d) ,aw of supply. * decrease in the demand can be due to8 (a) *n increase in mar!et price. (b) *n decrease in income. (c) *n increase in the price of substitutes. (d) *n increase in the price of complements. 'here is increase in demand when (a) ,ess is demanded at the same price (b) .ore is demanded at a higher price (c) ,ess is demanded at higher price (d) 0one of the abo$e Onder which period #,aw of returns to scale% apply& (a) In a $ery short period. (b) In a short period. (c) In a long period. (d) Aery long period. 'he introduction of new product with an additional feature is called (a) Production function. (b) Plant inno$ation. (c) Product inno$ation. (d) Process inno$ation. Bemand for the production factors is !nown as (a) Industry demand. (b) Beri$ed demand. (c) *utonomous demand. (d) 0one of the abo$e. If marginal re$enue is ero) then total re$enue will be the (a) ,owest (b) 0egati$e (c) Nighest (d) Rero

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In economic theory) it is assumed that (a) Becision ma!ing within the firm is usually underta!en by managers) but ne$er by the owners.
Page No. // 13 //

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(b) (c) (d) Q1-.

'he ultimate goal of the firm is to maximise profits) regardless of firm si e or type of business organi ation. *s the firm si e increases) so does its goal. 'he basic decision ma!ing unit of any firm is its owners.

Supply of a product in @@@@@@@ is relati$ely inelastic. (a) Short period (b) ,ong period (c) Aery short period (d) 0one of the abo$e. Product differentiation is the feature of (a) Perfect competition. (b) .onopoly. (c) 5ligopoly. (d) .onopolistic competition. >hich is the apex ban! for agriculture credit in India& (a) 36I (b) SIB6I (c) 0*6*3B (d) ICICI >hich for the following e<uation is correct& (a) 0BP S EBP P Beprecation (b) 0BP S EBP C Beprecation (c) 0BP S EBP P Beprecation C Subsidy (d) 0BP S EBP P Beprecation P Subsidy >hich of the following statement is incorrect& (a) Indian tax structure relies on a $ery narrow population base (b) Birect tax are differential) indirect tax are progressi$e in nature (c) 'he ratio of Birect taxes to indirect taxes has decreased (d) 'he total tax re$enue is highly in sufficient to meet the expenditure re<uirement of the economy India/s share in the world total ser$ices export in "44- was @@@@@@@ I. (a) 1." (b) 1.? (c) ;." (d) +.1 India is passing through which stage of Bemographic transition& (a) First (b) Second (c) Fourth (d) Fifth 0on factor inputs are !nown as (a) Past consumption (b) Present consumption (c) Future consumption (d) Intermediate consumption

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>hich of the following is the measuring rod for measuring the operational efficiency of a thermal plant& (a) Power load factor
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(b) (c) (d) Q"+.

Power lea!age factor Plant load factor Plant lea!age factor

*s per 6udget "44;(4? the exemption limit for small scale industries has been raised to (a) 3s. 144 la!hs (b) 3s. 1"1 la!hs (c) 3s. 114 la!hs (d) 3s. 1:4 la!hs ICSIB stands for (a) International Center for Settlement of In$estment Bisputes (b) International Center for Settlement of Income Bisputes (c) International Council for Settlement of In$estment Bisputes (d) International Center for Settlement of Industrial Bisputes BFDC stands for (a) Buty Free Dxchange Credit (b) Buty Free Dxport Credit (c) Birect Finance Dxchange Control (d) Birect Foreign Dxchange Control 'here is financing @@@@@@@@ I of imports (a) ;4 (b) :4 (c) 14 (d) 94 'he most li<uid asset is (a) Eo$ernment bond. (b) Currency with the public. (c) Shares of the companies. (d) 0one of the abo$e. 'he general function of commercial ban! is (a) Issue of letter of credit. (b) Supplying trade information and statistic. (c) 6oth (a) and (b). (d) 0one of the abo$e. >hich of the following institution can issue currency notes& (a) 3eser$e ban! of India. (b) State ban! of India. (c) Industrial Be$elopment 6an! of India. (d) Industrial Credit In$estment Corporation of India. >hich of the following is generally referred to as a narrow concept of money supply& (a) .1 (b) ." (c) .+ (d) .-

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In which type of economy does consumers and producers ma!e their choices based on the mar!et forces of demand and supply&
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(a) (b) (c) (d) Q+".

5pen economy Controlled economy Command economy .ar!et economy.

Periods of high unemployment in an economy corresponds to (a) Points that lie on the production possibility cur$e. (b) Points that lie outside the production possibility cur$e. (c) Points that lie with in the production possibility cur$e. (d) 0one of the abo$e. ,aw of demand is constructed by (a) Inducti$e .ethod (b) 3educti$e .ethod (c) Aerbal .ethod (d) Eeometrical .ethod 'he term economics is deri$ed from two Eree! words) @@@@@ and @@@@@@ . (a) 5i!ou ) 0omos (b) Tiyo) 0imas (c) 5i!ou) 0imas (d) 0one of the abo$e Onder marginal utility analysis) higher the utility deri$ed out of a commodity (a) Nigher will be the price offered for the commodity (b) ,ower will be the price paid for the commodity (c) Price is paid irrespecti$e of utility (d) 0one of the abo$e * consumer is in e<uilibrium at the points of tangency of his indifference cur$e and the price line because (a) Ne does not want to go beyond it. (b) Ne cannot go beyond it. (c) Ne cannot go below it. (d) Ne is confused. Inferior goods ha$e (a) Rero income elasticity of demand (b) 0egati$e cross elasticity of demand (c) 0egati$e elasticity of supply (d) 0egati$e income elasticity of demand If the price of gasoline (a normal good) decreases) other things constant) (a) 'he demand for gasoline increases (b) 'he demand for gasoline decreases (c) 'he <uantity demanded of gasoline increases (d) 'he <uantity demanded of gasoline decreases Implicit costs are the costs (a) >hich are not incurred by the firm and may accrue to the firm. (b) 5f resources owned by the firm. (c) 5f resources supplied by the household. (d) 5f the ser$ices of managers.

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Biminishing returns occurs when the8 (a) Onits of a $ariable input are added to a fixed input and total product falls.
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(b) (c) (d) Q-1.

Onits of a $ariable input are added to a fixed input and marginal product falls. Si e of the plant is increased in the long run. Quantity of the fixed input is increased and returns to the $ariable input falls.

*nother name of #,aw of $ariable proportion% is (a) ,aw of increasing return. (b) ,aw of diminishing return. (c) ,aw of negati$e return. (d) 0one of the abo$e. >hich of the following is the property of iso<uant& (a) Iso<uant is downward sloping. (b) Nigher iso<uant represents higher le$el of output. (c) Iso<uant can ne$er intersect each other. (d) *ll of the abo$e. 'he short run supply cur$e of the perfectly competiti$e firm is gi$en by (a) 'he rising position of its marginal cost o$er and abo$e the shut down point. (b) 'he rising position of its marginal cost o$er and abo$e the brea! e$en point. (c) 'he rising position of its marginal cost o$er and abo$e the a$erage cost cur$e. (d) 'he rising position of its marginal cost cur$e. *n entrepreneur will stay in business in the short run as well as in the long run) if he meets (a) Nis domestic expenditure. (b) *ll costs of production. (c) Fixed costs of production. (d) Aariable costs of production. Dntry of the new firm is (a) *bsolutely free under monopolistic competition. (b) 0ot possible under monopoly. (c) Free under monopoly (d) 3estricted under perfect competition. In perfect competition) which of the following cur$e is a straight line& (a) 'otal re$enue. (b) .arginal re$enue. (c) 'otal cost. (d) .arginal cost. '3QSD. is a programme of (a) 3ural de$elopment (b) Industrial de$elopment (c) Orban de$elopment (d) Befence preparedness 'he $alue added by the industrial sector in the EBP ("449(4:) is (a) "9I) (b) 1"I. (c) 1?I. (d) +"I

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6P5 Stands for (a) 6harat Petro 5rgani ation

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(b) 6usiness Process 5utsourcing (c) 6ig Portfolio 5utsourcing (d) 6usiness Partners 5rgani ation

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In Inflation (a) Person lending the money gains (b) Person borrowing the money loses (c) 0o gain on profit to person borrowing and person lending (d) 6oth (a) and (b)

Section-( : )uantitati*e A+titu,e Q1. 'he triplicate ratio of + 8 " is (a) ": 8 ; (b) 98? (c) +8" (d) 0one of these 'he simultaneous e<uations :x P +y S +1) ?x P 1y S -1 ha$e solution gi$en by (a) ((-) (1) (b) ((1) -) (c) (-) (1) (d) (+) :) 'he solution set of the ine<ualities xC"U 9 and x (+ V1 is (a) "UxU(b) -UxU" (c) ("UxU((d) 0one of these 'he simple interest on 3s. 1)144 for 1 years at 11 per cent per annum is8 (a) +)411 (b) +)4"1 (c) +)4-1 (d) +)4:1 'he number of proper of di$isors of "1"4 is (a) -9 (b) 1" (c) 9(d) 0one of these If a)b)c be the pth) <th and rth term of an *.P. then a(<(r)Cb(r(p)Cc(p(<) e<uals (a) a (b) 4 (c) 6 (d) C * ball is dropped from a height of -; ft. and rebounds two third of the distance it falls) if it continues to fall and rebound in this way) how far will it tra$el before coming to rest& (a) "44 m (b) "-4 m (c) 1;4 m (d) 1-4 m
Page No. // 1$ //

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,et f 8 3 to 3 be such that f(x) S "x then f(xCy) e<uals (a) f(x)Cf(y) (b) f(x).f(y) (c) f(x)Jf(y) (d) 0one of these If lim (a) (b) (c) (d)

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log(+ + x) log(+ x) = k ) the $alue of ! is x4 x

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'he slope of the tangent to the cur$e y S (a) P1 (b) 1 (c) 4 (d) 0one of these

- x " at the point where the ordinate and the abscissa are e<ual is

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* club consists of members whose ages are in *.P.) the common difference being + months. 'he youngest member of the club is 7ust : years old and the sum of the ages of all members is "14 years. 'he number of members in the club is (a) 11 (b) "4 (c) "1 (d) +4 *nshul in$ested 3s.+)444 at simple interest for + years and recei$ed 3s.-)1:4. Find the rate of interest. (a) 1+I (b) 1-I (c) 11I (d) 0one of these 'he gradient of the cur$e y S "x + ( 1x " ( +x at x S 4 is (e) + (f) P+ (g) (h)

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'he slope of the tangent to the cur$e y S x " ( x at the point where the line y S " cuts the cur$e in the first <uadrant is (a) " (b) + (c) P+ (d) 0one of these 'he $alue of the integral (a) (b) (c) (d) P" 4 " Page No. // 1% //

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Q19.

Statistics is defined in terms of numerical data in the (a) Singular sense (b) Plural sense (c) 6oth (a) and (b) (d) 0either (a) nor (b) .ultiple line charts are applied for (a) Showing multiple charts (b) 'wo or more related time series when the $ariables are expresses in the same unit (c) 'wo or more related time series when the $ariables are expresses in different unit (d) .ultiple $ariations in the time series * man tra$els at a speed of "4 !mJhr and then returns at a speed of +4 !mJhr. Nis a$erage speed of the whole 7ourney is (a) "1 !mJhr (b) "-.1 !mJhr (c) "- !mJhr (d) 0one of these For a set of 144 obser$ations) ta!ing assumed mean as -) the sum of the de$iations is P 11 cm) and the sum of the s<uares of these de$iations is ":1 cm". 'he coefficient of $ariation is (a) -1.1+I (b) -".1+I (c) -4.1+I (d) 0one of these 3an! correlation is useful when we study the relationship between characteristics8 (a) Quantitati$e (b) Qualitati$e (c) 6oth (a) and (b) (d) 0one of the abo$e If the cur$e plotted on a Scatter Biagram is a straight line) it is called the8 (a) ,ine of correlation (b) ,ine of scatter diagram (c) ,ine of regression (d) 6oth (a) and (c) * box contains -44 bolts of which "4 are defecti$e. Find the probability that a bolt chosen at random from the box is not defecti$e. (a) +;J-4 (b) 1?J"4 (c) ?J"4 (d) 6oth (a) and (b) * candidate is selected for inter$iews for three posts) for the first post there were + candidates) for the second and for the third ". >hat is the probability that the candidate is selected for at least one post& (a) +J(b) 1J(c) 1J" (d) "J+

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Probability distribution may be (a) Continuous

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(b) (c) (d) Q"1.

Biscrete Finite (a) and (b)

>hen x is a binomial $ariable with parameters n and p) then x can assume (a) *ny number between 4 and infinity (b) *ny $alue between 4 and n (c) *ny $alue between 4 and n) both inclusi$e (d) *ny whole number between 4 and n) both inclusi$e If the population standard de$iation is !nown to be 1 for a population containing ;4 units) then the standard error of sample mean for a sample of si e "1 without replacement is (a) 1 (b) 4."4 (c) 1 (d) 4.;1 * firm wishes to estimate with an error of not more than 4.4+ and a le$el of confidence of ?;I) the proportion of consumers that prefers its brand of household detergent. Sales reports indicate that about 4."4 of all consumers prefer the firmGs brand. >hat is the re<uisite sample si e& (a) ?91 (b) ?:1 (c) ?;1 (d) ??1 Buring a certain period the cost of li$ing index number goes up from 114 to "44. 'he salary of a wor!er is also raised from 3s.+"1 to 3s.144. Boes the wor!er really gain K if so) by how much in real income& (a) Qes) 3eal wages increase by ?1.41 (b) 0o) 3eal wage decreases by ?1.41 (c) 0o) 3eal wage decreases by ;1.19 (d) 0one of the abo$e >hen the cost of $egetables was increased by 14I) a household ) who maintained its former scale of consumption) said that the price had increased their cost of li$ing by 1I.>hat percentage of their cost of li$ing was due to buying $egetables before the change in price& (a) 1"I (b) 14I (c) 1+I (d) 1I @@@@@@@@@ play a $ery important part in the construction of index no. (a) Dstimates (b) >eights (c) Classes (d) 0one of the abo$e 3s. "-+4 has been di$ided among *) 6) C in such a way that if their shares are diminished by 3s. 1) 3s. 14 and 3s. 11 respecti$ely) the remainders are in the ratio + 8 - 8 1. 'hen *Gs share is (a) 3s. ;44 (b) 3s. 944 (c) 3s. 1?1 (d) 3s. 941

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'wo e<ual glasses filled with alcohol and water in the proportion "81 and +8" are emptied in to a third glass. 'he proportion of alcohol and water in the third glass will be
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(a) 1+81: (b) 1?8: (c) 1+811 (d) 1?811 Q++. 'he expression log1" is (a) *n integer (b) * rational (c) *n irrational (d) * prime number 'he integer $alues of x satisfying the simultaneous ine<uality 9U("(+x)U1- are (a) (+)")1 (b) (+)(")(1 (c) (9)(1)((d) 0one of these * sum of money doubles itself in 14 years. 'he number of years it would triple itself is (a) "1 years (b) 11 years (c) "4 years (d) 0one of these .r. 2 borrowed 3s.1)1"4 at 1" L I p.a. compound interest at the end of + years) the money was repaid along with the interest accrued. 'he amount of interest paid by him is (a) 3s.")144 (b) 3s.")1:4 (c) 3s.")444 (d) 0one of these *ll the letters of the word D*.CD' are arranged in all possible ways. 'he number of such arrangements in which two $owels are not ad7acent to each other is (a) +94 (b) 11(c) :" (d) 1Find the three numbers in E.P. whose sum is 1? and product is "19. (a) -)9)? (b) ")+)+ (c) -)1)9 (d) 0one of these 'he number of subsets of the sets W9);)11X is (a) ? (b) 9 (c) ; (d) 0one of these If * has +" elements ) 6 has -" elements and *6 has 9" elements) the number of elements in *6 is (e) 1" (f) :(g) 14 (h) 0one of these *t x S +J" the function f(x) S (1"x P +1) J ("x P +) is (a) continuous
Page No. // 22 //

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(b) (c) (d)

discontinuous limit does not exist none of these

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1 x + x" " For all real x) the minimum $alue of 1 + x + x is

(a) (b) (c) (d) 4 1J+ 1 +

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'he word /Statistics/ comes from8 (a) ,atin word /Statistic!/ (b) Eerman word /Statics/ (c) 0one of these (d) Stratum Primary data is ( (a) Dstimate of personal income from 36I 6ulletin. (b) Financial data of companies ta!en from *nnual 3eports (c) Bata collected by 0ational Sample Sur$ey (d) 'abulation from .ailed Questionnaires responded 'he a$erage has rele$ance for (a) Nomogeneous population (b) Neterogeneous population (c) 6oth (a) and (b) (d) 0one of these

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'he sum of the s<uares of de$iations of a set of obser$ations has the smallest ta!en from their (a) *... (b) N... (c) E... (d) 0one of these

$alue) when the de$iations are

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3egression *nalysis means8 (a) Dstablish a mathematical relationship between two $ariables (b) Calculating the $alue of dependent $ariable for a gi$en $alue of independent $ariable (c) 6oth (a) and (b) (d) 0one of the abo$e

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Page No. // 24 //