2Common Proficiency Test Model Paper 2

183. Let L be the lower class boundary of a class in a frequency distribution and m be the mid point of the class. Which one of the following is the higher class boundary of the class? m+2 m+L (a) m+ (b) L+ 2 2 (c) 2m – L (d) m – 2L 184. The mean of the values of 1, 2, 3 …………, n with respective frequencies x, 2x, 3x, ……… nx is n+1 n (a) (b) 2 2 2n+1 2n+1 (c) (d) 3 6 185. The mean of four observations is 10 and when a constant a is added to each observation, the mean becomes 13. The value of a is (a) 2 (b) –3 (c) 3 (d) None of these 186. For the bivariate data [(x, y)] = [(20,5), (21,4), (22,3)], the correlation coefficient between x and y is (a) 0 (b) 1 (c) –1 (d) 0.5 187. For a (m×n) classification of bivariate data, the maximum number of conditional distributions is (a) q (b) p+q (c) pq (d) p 188. The regression of y on x is 2y + 3x = 4 and the correlation coefficient between x and y is 0.8. This statement is (a) True (b) False (c) Cannot say (d) None of these 189. The correlation coefficient of 3x and –2y is the same as the correlation coefficient Of x and y. This statement is (a) True (b) False (c) Cannot say (d) None of these 190. When the correlation coefficient r = ± 1, then the two repression lines are (a) Perpendicular to each other (b) Coincide (c) Parallel to each other (d) Do not exist Common Proficiency Test (CPT) Volume - II 159 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 6 191. In a binomial distribution with 6 independent trials, the probability of 3 and 4 successes is found to be 0.2457 and 0.0819 respectively. Find the parameters p and q of the binomial distribution. 2 1 4 9 (a) , (b) , 13 13 13 13 5 2 (c) , (d) None of these 13 13 192. E (x.y) = E(x). E(y), where x and y are independent random variables. This is (a) True (b) False (c) Either (a) or (b) (d) None of these 193. Probability distribution is known as theoretical distribution. This is (a) False (b) True (c) Either (a) or (b) (d) None of these 194. Mean of the probability distribution of random variable x is (a) E(x) (b) E(x2) (c) E(x)2 (d) None of these 195. An attempt to produce a particular outcome which is neither certain nor impossible is called. (a) Event (b) Trial (c) Sample Space (d) None of these 196. Which measure of dispersion has some desirable mathematical properties? (a) Standard Deviation (b) Mean Deviation (c) Q.D. (d) None of these dy 197. If x 1+y+y 1+x=0; then (1+x)2 is equal to dx (a) 0 (b) 11 (c) –1 (d) None of these ( ) dy 198. If y = x x2 +1+log x+ x2 +1 then is equal to dx (a) x2 +1 (b) 2 x+1 (c) 2 x2 +1 (d) None of these 160 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India d2y 199. If y = aemx + be–mx then is dx2 (a) my (b) m2y2 (c) m2y (d) None of these of these 200. If 12C + 2 12C + 12C = 14C then the value of x is: 5 4 3 x (a) 5 (b) 9 (c) 5 or 9 (d) None of these ❖❖❖ Common Proficiency Test (CPT) Volume - II 161 © The Institute of Chartered Accountants of India © The Institute of Chartered Accountants of India BOARD OF STUDIES THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA COMMON PROFICIENCY TEST Model Test Paper – BOS/CPT – 7 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. Questions 1 to 200 have only one correct answer and carry + 1 mark for each correct answer and – 0.25 mark for each wrong answer. SECTION – A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. Consignment Account is (a) Personal A/c (b) Real A/c (c) Nominal A/c (d) Both (a) & (b) 2. Bills receivable is…. (a) Personal A/c (b) Real A/c (c) Nominal A/c (d) Both (a) and (b) 3. Return Inwards books records……. (a) Purchase returns (b) Credit sales returns (c) Cash Sales returns (d) Both (a) and (c) 4. Parties to Bills of exchange are (a) Drawer (b) Drawee (c) Payee (d) All of the above. 5. Contra entries are passed only when (a) Single column Cash Book is prepared (b) Double column Cash Book is prepared (c) Three column Cash Book is prepared (d) Petty Cash Book is prepared Common Proficiency Test (CPT) Volume - II 163 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 7 6. Sale or return day book is a (a) Personal A/c (b) Suspense A/c (c) Memorandum A/c (d) Nominal A/c 7. Goodwill is a (a) Current Asset (b) Intangible asset (c) Personal asset (d) Tangible Asset 8. Prepaid insurance is…. (a) Nominal A/c (b) Real A/c (c) Personal A/c (d) None of the above 9. Cash column in Cash Book always has (a) Credit Balance (b) Both (a) and (c) (c) Debit Balance (d) None of the above 10. Total of the sales day book is posted periodically to the credit of (a) Sales Books (b) Purchases Books (c) Cash Book (d) None of the above 11. Outstanding Salaries given in the trial balance is recorded in (a) Profit & Loss A/c (b) Balance Sheet (c) Trading A/c (d) P & L appropriation 12. Which reserve is not shown in the balance sheet? (a) Secret Reserve (b) General Reserve (c) Capital Reserve (d) All the above 13. Which Liability is not included in the total of Balance Sheet? (a) Current Liability (b) Contingent Liability (c) Fixed Liability (d) All of the above 14. Errors are (a) Undetected mistakes (b) Intentional mistakes (c) Frauds (d) Unintentional mistakes 15. Revenue expenditures are recorded in the (a) Manufacturing A/c. (b) Trading A/c. (c) P & L A/c. (d) All the above 164 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 16. Goods purchased from Mohan for Rs. 4,000 passed through the Sales books. The rectification of this error will result in (a) Increase in debtors (b) Increase in gross profit (c) Decrease in gross profit (d) None of the above. 17. In case of opening Credit Balance the word …..are written on the Credit side. (a) By balance b/d (b) To balance b/d (c) By balance c/d (d) To balance c/d 18. Preliminary expenses are treated as (a) Fixed Assets (b) Current Assets (c) Intangible Assets (d) Miscellaneous expenditure 19. Account payable normally has (a) Credit balance (b) Debit balance (c) Unfavourable balance (d) Either (a) or (b) 20. Proposed dividend are debited to (a) Balance Sheet (b) P & L Appropriation A/c (c) Trading A/c (d) P & L A/c 21. Narang purchased goods for Rs. 3,00,000 and sold 4/5 of goods amounting Rs. 5,00,000 and paid expenses amounting Rs. 1,10,000 for the year 2009. Besides that he paid Rs. 7,000 for an electricity bill of March 2008 and advance salaries amounting Rs. 10,000 was paid for the month of April 2010. He calculated net profit Rs. 1,50,000. The profit calculated by him is correct according to (a) Conservatism concept (b) Matching concept (c) Cost concept (d) Entity concept 22. A trader purchased goods for Rs. 5,00,000 and sold 55% of such goods during the accounting year ended 31st Dec. 2009. The market value of the remaining goods was Rs. 1,00,000. He valued the closing stock at cost. He violated the concept of (a) Cost (b) Conservatism (c) Periodicity (d) Money measurement 23. Stock worth Rs. 20,000 (cost price Rs.15,000) taken by Naresh who is a clerk in the office. The same is to be deducted from his salary in the subsequent month. Journal entry will be (a) Dr. Salary A/c Rs.15,000 and Cr. Purchases A/c Rs. 15,000 (b) Dr. Naresh Rs.15,000 and Cr. Purchases A/c Rs. 20,000 (c) Dr. Salary A/c Rs.15,000 and Cr. Purchases A/c Rs. 20,000 (d) None of the above Common Proficiency Test (CPT) Volume - II 165 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 7 24. Cost of goods sold Rs. 20,000 Closing stock Rs. 8,000 Opening Stock Rs. 6,000 Amount of purchases will be (a) Rs. 24,000 (b) Rs. 18,000 (c) Rs. 22,000 (d) Rs. 34,000 25. Opening debtors Rs.15,000 Bad debts during the year Rs.14,000 Cash received from customers Rs.1,60,000 Closing Debtors Rs.7,000 Cash sales Rs.20,000 Total sales will be - (a) Rs. 1,50,000 (b) Rs. 1,60,000 (c) Rs. 1,51,000 (d) Rs. 1,86,000 26. Bank overdraft as per Cash book is Rs. 15,000 Cheque deposited but not cleared Rs. 4,000 Cheque issued but not cashed Rs. 6,000 Bank overdraft as per Bank statement will be (a) Rs. 13,000 (b) Rs. 5,000 (c) Rs. 25,000 (d) Rs. 17,000 27. Bank balance as per pass book Rs 20,000 Cheque issued but not presented Rs 7,000 Cheque deposited but not cleared Rs 5,000 Bank balance as per cash book will be -: (a) Rs. 22,000 (b) Rs. 32,000 (c) Rs. 18,000 (d) Rs. 8,000 28. A company can issue redeemable preference shares (a) At discount (b) At par (c) At premium (d) All of the three 29. According to the Table A of the Companies Act, 1956, interest on call in arrears is charged (a) 4% (b) 6% (c) 5% (d) 7% 166 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 30. Credit purchases of goods worth Rs. 30,000 by a dealer will be recorded in (a) Cash book (b) Journal Proper (c) Sales Book (d) Purchases book 31. Pooja and Pratibha are partners sharing profits and losses in the ratio of 3:2. Pallavi is admitted for 1/5th share and brings Rs. 10,000 as capital and necessary amount for his share of goodwill. The goodwill of the entire firm is value at Rs. 40,000. Goodwill brought by Pallavi is (a) Rs. 5,000 (b) Rs. 8,000 (c) Rs. 10,000 (d) Rs. 6,000 32. Debentures issued as collateral security is …. (a) Added in the total liability of the company (b) Deducted in the liability of the company (c) Added in the assets of the company (d) Both (a) and (c) 33. Debenture holders are (a) Owners of the company (b) Creditors of the company (c) Debtors of the company (d) Trustee of the company 34. Cost of goods sold Rs. 15,000 were sold at 25% profit on selling price. The amount of sales will be (a) Rs. 20,000 (b) Rs. 11,250 (c) Rs. 18,750 (d) Rs. 15,000 35. The securities premium account may be applied by the company (a) In writing off the preliminary expenses of the company. (b) In writing off the expenses of or the commission paid or discount allowed on, any issue of shares or debentures of the company. (c) In paying up un-issued shares of the company to be issued to members of the company as fully paid bonus shares. (d) All of the above. 36. Bill is drawn on 20 January 2010 for 2 months. After sight date of acceptance is 29 January 2010. The maturity date of the bill will be (a) 1 April 2010 (b) 23 March, 2010 (c) 20 March, 2010 (d) 29 March, 2010 37. Returns of Cash Sales is recorded in (a) Purchase book (b) Sales book (c) Cash Book (d) Sales Returns book Common Proficiency Test (CPT) Volume - II 167 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 7 38. Security premium is recorded in ….. (a) Trading A/c (b) P & L A/c (c) P & L appropriation A/c (d) Balance Sheet 39. MND & Company employs a team of 15 workers who were paid Rs. 2,000 each in the year ending March 31, 2009. At the start of the year April 2009, company raised salaries by 25%. The amount of salary for the year ended 31st March, 2010 will be (a) Rs. 30,000 (b) Rs. 37,500 (c) Rs. 22,500 (d) Rs. 35,000 40. Machinery costing Rs. 50,000 was purchased on 1st January 2009. The installation charges amounting Rs. 5,000 were incurred. The depreciation at 25% p.a. by written down value method for the year ended 31st Dec. 2009 will be (a) Rs. 68,750 (b) Rs. 13,750 (c) Rs. 41,250 (d) Rs. 12,500 41. Original cost Rs. 1,50,000, Salvage value Nil, Useful Life - 5 years Depreciation for the 3rd year under sum of digits method will be (a) Rs. 20,000 (b) Rs. 35,000 (c) Rs. 25,000 (d) Rs. 30,000 42. A company issued Rs. 50,000 10% debentures at a discount of 5% redeemable after 5 year at a premium of 5%. Loss on issue of debentures will be (a) Rs. 2,500 (b) Rs. 6,000 (c) Rs. 5,000 (d) Rs. 7,000 43. Ramesh Ltd. purchases furniture for Rs. 20,000 payable as to Rs. 6,500 in cash and the balance by an issue of 6% debentures of Rs. 100 each at a discount of 10%. Discount amount will be (a) Rs.1,350 (b) Rs.2,000 (c) Rs. 650 (d) Rs.1,500 44. Opening debtors - Rs. 1,50,000 Total sales - Rs. 50,000 Cash received from debtors – Rs. 30,000 Cash sales – Rs. 15,000 Sales Returns – Rs. 3,000 Bad debts – Rs. 7,000 Bills received from customers – Rs. 15,000 Debtors at the end will be (a) Rs. 1,40,000 (b) Rs. 1,30,000 (c) Rs. 1,20,000 (d) Rs. 1,50,000 168 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 45. Goods costing Rs. 3,00,000 sent out to consignee at cost plus 25%. Invoice value of goods will be (a) Rs. 3,75,000 (b) Rs. 3,50,000 (c) Rs. 2,25,000 (d) Rs. 2,50,000 46. A manager gets 10% commission on sales. Cost price of goods sold is Rs.80,000 which he sold at a margin 20% on sale. Amount of commission will be (a) Rs. 16,000 (b) Rs. 9,600 (c) Rs. 10,000 (d) Rs. 6,000 47. Adjustment entry for interest earned but not received will be (a) Dr. Cash A/c and Cr. Interest A/c (b) Dr. Accrued Interest A/c and Cr. Customer A/c (c) Dr. Accrued Interest A/c and Cr. Interest A/c (d) None of the above 48. General Manager gets 10% commission on net profit after charging such commission. Gross profit Rs. 70,000 and General expenses other than manager commission are Rs. 12,000. Commission amount will be (a) Rs. 5272.72 (b) Rs. 6072.72 (c) Rs. 5372.72 (d) Rs. 5172.72 49. Goods sold Rs. 25,000 on approval or return basis were included in Sales Book. The profit included in the sales was at 25% on cost. At the year end, closing stock will increase by (a) Rs. 5,000 (b) Rs. 20,000 (c) Rs. 15,000 (d) Rs. 45,000 50. Balance as per Pass Book Rs. 27,400 (i) Cheque issued but not presented Rs. 73,000 (ii) Cheque deposited but not yet recorded by bank Rs. 47,700 Balance as per cash book will be (a) Rs. 52,700 (b) Rs. 93,300 (c) Rs. 2100 (d) None of the above 51. Overdraft as per pass book Rs. 450 1. Cheque drawn but not presented for payment Rs. 105 2. Cheque sent for collection but not credited by bank Rs. 300 (a) Rs. 645 (b) Rs. 255 (c) Rs. 855 (d) Rs. 45 52. If sales Rs. 70,000 and Cost of goods sold is Rs. 24,000. The gross profit is (a) Rs. 56,000 (b) Rs. 94,000 (c) Rs. 46,000 (d) None of these Common Proficiency Test (CPT) Volume - II 169 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 7 53. Calculate amount of proposed dividend on the basis of following informations : 1. 50,000 equity share of Rs.100 each fully called up 2. Calls in arrears Rs. 50,000 3. Proposed dividend 20% (a) Rs. 10,00,000 (b) Rs. 9,84,000 (c) Rs. 9,90,000 (d) Rs. 9,80,000 54. Rs. 30,000 claim for workman compensation under dispute is a (a) Fixed assets (b) Current liability (c) Current asset (d) Contingent liability 55. 12% loan Rs.17,000 Interest on loan Rs. 700 Outstanding interest on loan will be (a) Rs. 2,040 (b) Rs. 1,340 (c) Rs. 2,740 (d) None of the above 56. Trial balance shows the following balance Capital - Rs.30,000 (Cr.) Payment of advance income tax - Rs. 1,500 Income tax paid - Rs. 4,000 Capital A/c balance at the end of the year will be (a) Rs. 24,400 (b) Rs. 24,500 (c) Rs. 27,500 (d) None of the above 57. Ashish’s acceptance to Mohit for Rs. 10,000 discharged by a cash payment of Rs. 2,000 and a new bill for the balance plus Rs. 300 for interest. The amount of new bill will be (a) Rs. 8,000 (b) Rs.10,300 (c) Rs. 12,300 (d) Rs. 8,300 58. On 1st April, 2010 Ram Ltd. issued Rs. 5,00,000 14% debentures at a discount of 10% repayable at the end of 5 years. Amount of discount to be written off every year will be (a) Rs. 10,000 (b) Rs. 5,000 (c) Rs. 50,000 (d) None of the above 59. Sohan Ltd. forfeited 1000 shares of Rs. 10 each fully called up for non payment of final call of Rs. 4 per share. All of these shares were reissued as fully paid for Rs. 6 per share. Amount transferred to capital reserve will be (a) Rs. 6,000 (b) Rs. 4,000 (c) Rs. 2,000 (d) NIL 60. A company cannot issue redeemable preference shares for the period exceeding (a) 10 years (b) 20 years (c) 30 years (d) 15 years 170 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India SECTION – B : MERCANTILE LAWS (40 MARKS) 61. Only those agreements, which are valid are (a) Contract (b) Proposal (c) Offer (d) None of the above 62. Contractual rights and duties are created by (a) State (b) Statute (c) Parties (d) Custom 63. An agreement enforceable by law under the Indian Contract Act, 1872 may be (a) In writing (b) Oral (c) Both (a) and (b) (d) Either (a) or (b) 64. A voidable contract is one which (a) Can be enforced at the option of aggrieved party (b) Can be enforced at the option of both the parties (c) Cannot be enforced in court of law (d) Courts prohibit 65. Which of the following is not the legal requirement of a valid acceptance? (a) It must be communicable (b) It must be absolute and unconditional (c) It must be presumed (d)I It must be accepted by a person who has the authority to accept 66. Which are of the following is an essential element of a valid contract? (a) Free consent (b) Consideration (c) Competent parties (d) All of the above 67. A contract to perform a promise could arise by (a) Standard form of contracts by promise (b) Agreement and contract (c) Promissory Estoppel (d) All of the above 68. Contract which ceases to be enforceable by law becomes a (a) Valid contract (b) Void agreement (c) Void contract (d) Voidable contract 69. An agreement without consideration is (a) Valid (b) Void (c) Unenforceable (d) None of the above Common Proficiency Test (CPT) Volume - II 171 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 7 70. The consideration must be at the desire of the (a) Promisor (b) Promisee (c) Third party (d) None of the above 71. Contract will be valid, if the consideration is (a) Inadequate (b) Real (c) Illusory (d) Illegal 72. Which of the following statement is true? (a) Consideration may be past (b) Consideration may be present (c) Consideration may be future (d) All of the above 73. A wrong representation when made without any intention to decline the other party amounts to (a) Fraud (b) Undue Influence (c) Misrepresentation (d) Coercion 74. A contract with the minor, which is beneficial for him is (a) Void ab initio (b) Voidable (c) Valid (d) Illegal 75. Where the consent of both the parties is given by mistake the contract is (a) Valid (b) Void (c) Voidable (d) Illegal 76. To make a contract voidable coercion must have been exercised against (a) Only the promisor (b) Any other person (c) (a) or (b) (d) (a) and (b) 77. Under the Indian Contract Act, 1872 consent means agreeing on the same thing (a) At the same time (b) In the same sense (c) At different time (d) All of the above 78. Consideration and object of an agreement is unlawful if it (a) Is fraudulent (b) is forbidden by law (c) Would defeat the provision of any law (d) All of the above 79. Which of the following agreements will not be declared expressly void? (a) If parties to it have no contractual capacity (b) If it is done by mutual mistake (c) If it is for lawful consideration (d) If its consent is not free 172 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 80. A ___________ agreement is one, which is enforceable at the option of one party. (a) Voidable (b) Void (c) Valid (d) Illegal 81. A contract can be discharged ____________. (a) By mutual Agreement (b) By impossibility of performance (c) By breach of contract (d) By all the above 82. __________ signifies that the parties are not further bound under the contract. (a) Discharge of contract (b) Breach of contract (c) Waiver of contract (d) Recession of a contract 83. A contract can be discharged by performance in the ways of _____________. (a) Offer to perform (b) Actual performance (c) (a) or (b) (d) (a) and (b) 84. A contract dependent on the happening or non happening of future uncertain event, is a _____________. (a) Uncertain contract (b) Void Contract (c) Contingent contract (d) Voidable contract 85. A contingent contract dependant on the happening of future uncertain event can be enforced when the event __________. (a) Happens (b) Becomes impossible (c) Does not happen (d) Either of these 86. The term “goods” for the purpose of Sale of Goods Act, 1930 does not include__________. (a) Money (b) Actionable claim (c) Immovable property (d) All of these 87. Under the Sale of Goods Act, 1930 existing goods are classified as ________. (a) Specific goods (b) Ascertained goods (c) Unascertained goods (d) All of the above 88. __________ may or may not pass between bailee and bailer. (a) Consideration (b) Ownership (c) Both (a) and (b) (d) None of the above 89. When a breach of condition is treated as a breach of warranty, the buyer can _________. (a) Claim damages (b) Repudiate the contract (c) Reject the goods (d) None of the above Common Proficiency Test (CPT) Volume - II 173 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 7 90. In case of sale of goods by sample as well as by description, the goods should correspond with________. (a) The sample (b) The description (c) Either (a) or (b) (d) Both (a) and (b) 91. The unpaid seller can exercise the right to resell the goods when______. (a) The goods are not of perishable nature (b) The seller has not given notice of resale to the buyer (c) The buyer has not paid the price within a reasonable time (d) All of the above. 92. Each partner is ______ of every other partner in every matter connected with the partnership business. (a) Bailor (b) Agent (c) Principal (d) Pledgor 93. The right of lien is available to the unpaid seller, only when __________. (a) Seller is not in possession of goods (b) Seller is in possession of the goods (c) Seller delivered the goods to the carrier (d) Seller has delivered the goods to the buyer 94. In a partnership firm, the decisions can be made by rule of majority when decisions relates to __________. (a) Policy decisions (b) Fundamental decisions (c) Ordinary routine matters (d) Buying and selling of property 95. If the seller makes use of pretended bidding to raise the price, the sale is voidable at the option of the (a) Seller (b) Buyer (c) Court (d) Any of the above 96. “Price” means ___________ consideration for sale of goods (a) Unlawful (b) Lawful (c) Non-monetary (d) Monetary 97. The registration of firm may be effected __________. (a) At any time during life of partnership firm (b) At anytime after filing a suit (c) After dissolution of a firm (d) Either (b) or (c) 174 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 98. ___________is a bargain between the buyer and the seller (a) Purchase (b) Sale (c) Production (d) Manufacture 99. A enters with a contract with B to sell him 100 bales of cotton and afterwards discovers that “B’ was acting as agent for “C’. Decide. (a) A may sue B only (b) A may sue C only (c) A may sue either ‘B’ or C (d) A may sue either ‘B’ or ‘C’ or both for the price of cotton 100. Anticipatory breach comes under_____ (a) Law of Contractual relationship (b) Law of Mutual consent (c) Law of Mutaul agency (d) Law of Limitation SECTION – C : GENERAL ECONOMICS (50 MARKS) 101 We mainly study the following in micro economics: (a) Location of a Industry (b) Study of firms (c) Factor pricing (d) All of the above 102 When we study why saving rates are high or low, we are studying: (a) Macro Economics (b) Micro Economics (c) Econometrics (d) Both (a) and (b) 103 Which of the following is not a central problem of the economy? (a) How to produce? (b) When to produce? (c) What to produce? (d) For whom to produce? 104 Effective Demand depends on: (a) Desire (b) Means to purchase (c) Willingness to use those means for that purchase (d) All of above 105 Quantity demanded is a: (a) Flow Concept (b) Stock Concept (c) Both (a) and (b) (d) None of the above Common Proficiency Test (CPT) Volume - II 175 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 7 106 Inferior goods have: (a) Positive Income elasticity (b) Negative Income elasticity (c) Zero (d) Both (a) and (b) 107 If two goods are substitutes like tea and coffee, then the cross elasticity is: (a) Negative (b) Zero (c) Positive (d) Less than one 108 If the price of Banana rises from Rs 30 per dozen to Rs. 40 per dozen and the supply increases from 240 dozen to 300 dozens elasticity of supply is: (a) .7 (b) -.67 (c) .65 (d) .77 109 If as a result of 90 percent increase in all inputs, the output increase by 75 percent this is a case of (a) Increasing return to a factor (b) Decreasing return to a factor (c) Diminishing returns to scale (d) None of the above 110 Under which market structure, average revenue of a firm is equal to its marginal revenue (a) Monopoly (b) Monopolistic competition (c) Oligopoly (d) None of the above 111 Special Drawing Rights has link with: (a) World Bank (b) WTO (c) IMF (d) ADB 112 Banking Regulation Act, of India pertains to the year: (a) 1945 (b) 1949 (c) 1943 (d) 1934 113 ______________ refers to that portion of total deposits which a commercial is required to keep with itself in the form of liquid Assets. (a) CRR (b) SLR (c) Both (a) and (b) (d) Margin Requirements 114 The present membership of IMF is: (a) 148 (b) 177 (c) 186 (d) 149 115 The WTO came into existence on: (a) 1st January, 1995 (b) 1st January, 1991 (c) 1st January, 2001 (d) 1st January, 1996 176 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 116 Which of the following is not the function of IMF? (a) It functions as a short term credit institution. (b) It functions as a long term credit institution. (c) It is a reservoir of the currencies of all the member nations. (d) It grants loan for financing current transactions. 117 MTA stands for (a) Mutual Trade Agreements (b) Multiple Trade Agreements (c) Mutilated Trade Union Agreements (d) Multilateral Trade Agreements 118 The predecessor of WTO was: (a) IMF (b) GATT (c) IBRD (d) None of the above 119 NDP does not include: (a) Payment made for direct taxes (b) Depreciation allowance (c) Undistributed profits (d) Corporate dividend tax 120 Which of the following would not be included in GNP? (a) Mohan purchases a shirt to wear (b) Sai Ram purchases a new Mercedes – Benz of S-class (c) Yes bank purchases new computers for its shares business (d) Aditi grows Tulsi plant in her home 121 Full employment is the level at which there is: (a) Normal rate of unemployment (b) Zero unemployment (c) Least supply of labour (d) None of the above 122 In which sector of the Indian Economy will we find a high rate of disguised unemployment? (a) Transport Sector (b) Agricultural Sector (c) Service Sector (d) Mining 123 Balance of payments is a broader term than: (a) Balance of Trade (b) Balance of Current Account (c) Balance of capital Account (d) All of the above 124 In the Balance of payment statement, current account includes: (a) Goods and invisible items (b) Government Loans from abroad (c) Foreign Direct Investment (d) None of the above Common Proficiency Test (CPT) Volume - II 177 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 7 125 Service Tax is an instrument of: (a) Fiscal policy (b) Monetary policy (c) Revenue policy (d) None of the above 126 Transfer payments are: (a) Payments made to factors of production (b) Payments made by one sector to another (c) Payments made for no return service (d) Repayment of loan 127 In terms of overseas shipping tonnage, India ranks __________ (a) 20th (b) 10th (c) 15th (d) 27th 128 Which of the following statements is incorrect? (a) The Indian Road network is one of the longest in the world (b) The village road network connects around 65 percent of all weather roads (c) The National highways carry more than 40 percent of the total road traffic (d) Most of the State Electricity Boards are running on profits 129 Electricity generated from radio active elements is called: (a) Thermal electricity (b) Hyder Electricity (c) Tidal Energy (d) Atomic energy 130 According to the latest data, PLF is lowest in: (a) South eastern region (b) North eastern region (c) West eastern region (d) Eastern region 131 Plant load factor measures (a) Operational efficiency of Hydel plant (b) Operational efficiency of Atomic plant (c) Operational efficiency of Thermal plant (d) Operational efficiency of Tidal plant 132 In the theory of demographic transaction in the first stage: (a) Birth rate falls and death rate falls (b) Birth rate falls and death rate rises (c) Birth rate is high and death rate is high (d) Birth rate rises, death rate falls 133 Indian accomodates _____________ percent of world population. (a) 10 (b) 50 (c) 17 (d) 18 178 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 134 At shut down point: (a) Price is equal to AVC (b) Total revenue is equal to TVC (c) Total loss of the firm is equal to TFC (d) All of the above 135 The indifference curve approach does not assume: (a) Rationality on the parts of consumers (b) Ordinal measurement of satisfaction (c) Cardinal measurement of satisfaction (d) Consistent consumption pattern behavior of consumer 136 Which one of the following agencies in India is responsible for computation of National income? (a) NCAER (b) CSO (c) NSS (d) RBI 137 Suppose the total cost of production of commodity x is Rs. 1,25,000. Out of this implicit cost is Rs. 35,000 and normal profit is Rs. 25,000. What will be explicit cost of commodity x ? (a) Rs. 90,000 (b) Rs. 60,000 (c) Rs. 65,000 (d) Rs. 1,00,000 138 Over the planning period, the relative share of area under food grains in gross cropped area in India has: (a) Decreased (b) Increased (c) Remained the same (d) Increased initially and then decreased 139 The LAC curve (a) Falls when the LMC curve falls (b) Rises when the LMC curve rises (c) Goes through the lowest point of the LMC curve (d) Falls when LMC < LAC and rises when LMC > LAC 140 Over the planning period the share of industrial sector in the GDP of the India has: (a) Increased (b) Decreased (c) Remained Constant (d) Remained above 40% 141 Which bank among the following is responsible for issuing currency notes in India? (a) SBI (b) RBI (c) UTI (d) World Bank Common Proficiency Test (CPT) Volume - II 179 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 7 142 Human Development Index is a composite index: (a) Health, Literacy and employment (b) National Income, size of population and general price level (c) National Income, per capita Income and per capita consumption (d) Physical resource, monetary resource and population size 143 Excess Capacity is the essential characteristic of the firm in the market form of: (a) Monopoly (b) Perfect competition (c) Monopolistic competition (d) Oligopoly 144 Which of the following is not including in the primary sector? (a) Fishery (b) Forestry (c) Animal Husbandry (d) None of the above 145 Which of the following is not a commercial crop? (a) Sugar (b) Cotton (c) Oilseeds (d) None of the above 146 Which of the following was not prevailing in the country at the time of Independence? (a) Zamindari System (b) Ryotwari system (c) Mahalwari system (d) None of the above 147 Agriculture provides employment to ______% of people living in the country (2008-09) (a) 52 (b) 60 (c) 50 (d) 55 148 UNDP stands for (a) Unlimited National Developed Programme (b) United Nation Development Programme (c) United Nation Development Project (d) United National Development Programme 149 Which one is a direct tax among the following? (a) Wealth Tax (b) Excise Duty (c) Service Tax (d) None of the above 150 The other name of Budget line is: (a) Demand line (b) Price line (c) Supply line (d) None of the above 180 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India SECTION – D : QUANTITATIVE APTITUDE (50 MARKS) 151. One third of a number is greater than one fourth of its successor by 1. Find the number (a) 17 (b) 16 (c) 15 (d) None of these 16 152. A student on being asked to multiply of a certain fraction made the mistake of dividing 17 16 33 the fraction by and so got an answer which exceeded the correct answer by Find 17 340 the correct answer. 64 46 (a) (b) 85 58 64 (c) (d) None of these 58 5 4 2 4 153. of of a number is 8 more than of of the same number. What is half of that 7 15 5 9 number? (a) 630 (b) 210 (c) 105 (d) None of these 154. The sum of two numbers is 14 and their difference is 10. Find the product of the two numbers. (a) 24 (b) 30 (c) 36 (d) None of these 1 155. The difference of two numbers is 11 and th of their sum is 9. The numbers are: 5 (a) 31, 20 (b) 30, 19 (c) 29, 18 (d) 28, 17 156. The sub duplicate ratio of 16:49 is (a) 4:7 (b) 256:2401 (c) 4:9 (d) None of these 157. Duplicate ratio of 4:5 is (a) 16:25 (b) 2: 5 (c) 64:125 (d) None of these Common Proficiency Test (CPT) Volume - II 181 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 7 158. Triplicate ratio of 3:5 is (a) 27:125 (b) 9:25 1 1 (c) 33:53 (d) 125:27 159. The sub–triplicate ratio 8:125 is (a) 2:6 (b) 2:5 (c) 5:2 (d) None of these 160. The 4th proportion of 6, 8 and 15 is – (a) 40 (b) 30 (c) 20 (d) None of these 161. The ratio of two numbers is 4:1. If 5 is added to both the numbers, the ratio of the new numbers obtained becomes 3:1. Then the numbers are (a) 30, 20 (b) 40, 10 (c) 20, 10 (d) None of these 162. The ratio of the money with A and B is 3:4 and that with B and C is 4:5. If A has Rs. 300, how much money does C have? (a) 400 (b) 300 (c) 500 (d) None of these 163. Two numbers are in the Ratio 5:6. If 5 is subtracted from each number, the ratio becomes 4:5. Then the number are: (a) 20, 30 (b) 20, 25 (c) 25, 30 (d) None of these 164. If 1 add 1 to each of the two given numbers their ratio is 1:2. If 1 subtract 5 from each the ratio is 5:11. Then the numbers are (a) 71, 25 (b) 35, 71 (c) 35, 51 (d) None of these 165. What must be subtracted from each term of the ratio 27:43 to make it equal to 7:15? (a) 13 (b) 15 (c) 17 (d) None of these 166. Seven times a two digit number is equal to four time the number obtained by reversing the order of digits, and the sum of the digits of number is 3. then the number is: (a) 13 (b) 15 (c) 12 (d) None of these 182 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 167. There are 7 man and 3 ladies. Find the numbers of ways in which a committee of 6 can be formed of them if the committee is to include atleast two ladies. (a) 140 (b) 130 (c) 105 (d) None of these 168. If 28C : 24C = 225:11, then the value of r is 2r 2r–4 (a) 10 (b) 7 (c) 5 (d) None of these 169. A two digit number is obtained by either multiplying sum of the digits by 8 and adding 1 or by multiplying the difference of the digits by 13 and adding 3. Then the number is: (a) 82 (b) 41 (c) 47 (d) None of these 170. A committee is to be formed of 3 persons out of 12. Find the number of ways of forming such a committee. (a) 210 (b) 230 (c) 220 (d) None of these 171. A gentlemen invites 6 of his friends to a party. In how many different arrangements they along with the wife of the gentleman can sit at a round table for a dinner if the host and his wife always sit side by side? (a) 1440 (b) 144 (c) 1445 (e) None of these x −3 lim 172. Evaluate x→9 x−9 1 1 (a) (b) 6 3 2 (c) (d) None of these 3 x+a − 2a lim 173. Evaluate x→a x−a 1 1 (a) (b) 2 a 2 2a 1 (c) (d) None of these 3 2a Common Proficiency Test (CPT) Volume - II 183 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 7 6 + 5x2 lim 174. Find x→∞ 4x +15x2 1 1 (a) (b) 2 4 1 (c) (d) None of these 3 − a bx lim 175. Evaluate x→ ∞ x 2 (a) 0 (b) 1 (c) 2 (d) None of these dy ex-e-x ;ify= 176. Evaluate dx ex+e-x −4 4 ( ) ( ) (a) ex+e−x 2 (b) ex+e−x 2 1 ( ) (c) ex+e−x 2 (d) None of these dy x ;if y= 177. Find dx ( 1+x )2 1+ x 1− x (a) ( 1− x )3 (b) ( 1+ x )3 1− x (c) ( 1+ x )4 (d) None of these 184 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India dy 178. Find ;if y= x+ x dx 2 x+1 2 x−1 (a) (b) 4− x x+ x 4 x x− x 2 x+1 (c) (d) None of these 2 x−1 dy 179. Evaluate ;if y=7x 2+2 dx (a) (2x+1).7x 2+2 x .log7 (b) 2(x+1).7x 2+2 x .log7 (c) 7x 2+2x log7 (d) None of these dy 180. If y = log(x+ x2+a2 then find dx 1 −1 (a) x2+a2 (b) x2+a2 x (c) x2+a2 (d) None of these x dy 181. If (x–y) = a; then y +xis e x-y dx (a) 2 (b) –2y (c) 2y (d) None of these 182. If the demand law is x= 10-p2 then the elasticity of demand at point p = 2 (a) 2/3 (b) 3/2 (c) 2/5 (d) None of these Common Proficiency Test (CPT) Volume - II 185 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 7 x3 ∫ dx 183. Evaluate : x+1 (a) x + log (x+1) + c (b) x3 – log (x+1) + c x3 x2 (c) − +x−log(x+1)+c (d) None of these 3 2 e4x+e2x ∫ 184. Evaluate dx e3x 1 1 (a) e2x − +c (b) ex − e−x c 2 4e4x 1 (c) e2x − +c (d) None of these e4x x4+1 ∫ dx 185. Evaluate x2+1 x2 (a) +x−2log(x2 +1)+c (b) x2+x+2log(x2+1)+c 2 x3 (c) − x + 2 tan−1 x + c (d) None of these 3 ∫ 186. Evaluate log(x+1)dx (a) x log (x+1) – x + log (x+1) + c (b) x2log (x+1) - x2 + log (x2 +1) + c (c) x log (x+1) - x2 + log (x+1) + c (d) None of these dx ∫ 187. Evaluate x+ 1+x { } { } (a) 2 (1+x) 2 3 −x 2 3 +c (b) 2 (1+x) 3 2 −x 3 2 +c 3 3 { } (d) 2 (1+x) 2 3 −x 2 3 +c (d) None of these 3 186 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India x2-x+2 ∫ dx 188. Evaluate x3+ x2+2x (a) –log x + 3/2 log (x–1) + 4/3 log (x2 + 2) + log c (b) –log x + 2/3 log (x2–1) + 3/4 log (x2 +2) + log c (c) –log x + 2/3 log (x–1) + 4/3 log (x + 2) + log c (d) None of these 1 ∫ dx 189. Evaluate 3x2+13x-10 1 ⎛ 3x2−2 ⎞ 1 ⎛ 3x −2 ⎞ log⎜ ⎟+c log⎜ ⎟+c (a) 17 ⎝3x2+15 ⎠ (b) 17 ⎝3x2+15 ⎠ 1 ⎛ 3x +15 ⎞ log⎜ ⎟+c (c) 17 ⎝ 3x −2 ⎠ (d) None of these 190. Evaluate: ∫ ex { f(x)+f'(x) } dx (a) ex f(x) + c (b) -ex f(x) + c (c) ex f’(x) + c (d) None of these b logx ∫ dx 191. Evaluate: x a 1 ⎛b⎞ ⎛ b ⎞ (a) log(ba).log⎜ ⎟ (b) log(ba).log⎜ ⎟ 2 ⎝a ⎠ ⎝ a ⎠ ⎛a⎞ (c) log(b+a).log⎜ ⎟ (d) None of these ⎝b⎠ ∫ 192. Evaluate: [f(x)+f(-x)][g(x)-g(-x)]dx (a) 0 (b) 1 (c) –1 (d) None of these Common Proficiency Test (CPT) Volume - II 187 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 7 b dx ∫ 193. Evaluate: 2 (a+b-x)3 a ⎛ 1 1⎞ 1 1 3⎜b3 −a3⎟ (a) b3 −a3 (b) ⎝ ⎠ ⎛ 1 1⎞ 3⎜b3 +a3⎟ (c) (d) None of these ⎝ ⎠ 2 x ∫ dx 194. Evaluate: x+ 2-x 0 (a) 1 (b) 0 (c) –1 (d) None of these 1 ⎛1 ⎞ ∫ log⎜ −x⎟dx 195. Evaluate: ⎝x ⎠ 0 (a) 1 (b) –1 (c) 0 (d) None of these 196. In how many ways can 7 departments be distributed among 3 ministers, if every ministers gets at least one but not more than 3 departments? (a) 1050 (b) 1000 (c) 1200 (d) None of these 197. Find the number of words of three letters that can be formed with the letters of the word “CALCUTTA”. (a) 90 (b) 96 (d) 98 (d) None of these 198. How many number of numbers three digits can be made from the digits of the number 1,2,3,4,3,2? (a) 40 (b) 42 (c) 45 (d) None of these 188 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 199. If S be the sum of n terms of an A.P.; the value of S – 2S + S is n n n–1 n–2 (a) d (b) d2 (c) cannot calculated (d) None of these 200. There are n ARITHMETIC MEANs between 3 and 31 such that the ratio of 3rd mean to (n–1)th mean is 1:3, then the value of n is (a) 12 (b) 15 (c) 13 (d) None of these ❖❖❖ Common Proficiency Test (CPT) Volume - II 189 © The Institute of Chartered Accountants of India © The Institute of Chartered Accountants of India BOARD OF STUDIES THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA COMMON PROFICIENCY TEST Model Test Paper – BOS/CPT – 8 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. Questions 1 to 200 have only one correct answer and carry + 1 mark for each correct answer and – 0.25 mark for each wrong answer. SECTION – A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. Financial statements are part of (a) Book keeping (b) Accounting (c) Management (d) None of the above 2. The following error affect the trial balance (a) Error of partial omission (b) Error of principal (c) Error of complete omission (d) All of the above 3. In which area different accounting policies are adopted (a) Valuation of inventories (b) Valuation of investment (c) Depreciation (d) All of the above 4. Income includes (a) Income earned (b) Income received (c) Income receivable (d) All of the above 5. Cash Account is….. (a) Personal A/c (b) Real A/c (c) Nominal A/c (d) None of the above Common Proficiency Test (CPT) Volume - II 191 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 8 6. Total of Sales book is posted periodically to credit of (a) Journal proper (b) Purchase Book (c) Sales Account (d) Cash Book 7. Advance received from Debtors is not taken as Sale is based on (a) Conservatism concept (b) Accrual Concept (c) Money measurement concept (d) None of the above 8. Ram Motors will debit purchases of Motor in (a) Motor A/c (b) Purchase A/c (c) General expenses (d) None of the above 9. General Manager attended a meeting held abroad to develop market; meeting was successful. This expenses is in the nature of (a) Deferred revenue expenditure (b) Capital expenditure (c) Revenue expenditure (d) None of the above 10. Wages Rs. 1,000 payable to labour will be credited (a) Cash A/c (b) Labour A/c (c) Salary A/c (d) None of the above 11. Heavy amount spent for the advertisement of new company product is (a) Revenue expenditure (b) Deferred Revenue expenditure (c) Capital expenditure (d) Either (a) or (c) 12. Rs. 40,000 spent on repairs of newly purchased old machinery is debited to (a) Repairs A/c (b) Cash A/c (c) General expenses A/c (d) Machinery A/c 13. Cost of goods sold can be calculated by (a) Balance Sheet (b) Profit & Loss A/c (c) Trading A/c (d) P & L Appropriation A/c 14. Liability for bill discounted is a (a) Contingent Liability (b) Fixed Liability (c) Current Liability (d) None of the above 15. Interest on debentures is calculated on (a) Purchase value of debentures (b) Market value of debentures (c) Face value of debentures (d) All of the above 192 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 16. Income tax in case of a sole trader is treated as (a) Personal expenses (b) Debtors expenses (c) Business expenses (d) None of the above 17. The parties to joint venture are called (a) Friends (b) Principal and agent (c) Partner (d) Co-venturers 18. Dividend is usually paid as a percentage of (a) Paid up capital (b) Called up capital (c) Authorized share capital (d) Net Profit 19. Goodwill is (a) An Investment (b) A Current Assets (c) An Intangible fixed assets (d) A Tangible fixed assets 20. Unexpired rent given in trial balance is recorded in (a) Balance Sheet (b) Trading A/c (c) Profit & Loss A/c (d) Either (b) or (c) 21. Mohan purchased a Motor Car costing Rs. 60,000 on 1st January 2009 transportation and repairing charge were incurred amounting Rs. 5,000 and 200 respectively. Dismentaling charge of old motor car in place of which new motor car was purchased amounted to Rs. 20,000. Marked value of motor car was estimated at Rs. 70,000 on 31st Dec., 2009 while finalizing the annual accounts. Mohan values the motor car at Rs. 70,000 in his book. Which of the following concepts was violated by the Mohan? (a) Matching concept (b) Realisation concept (c) Cost Concept (d) Periodicity concept 22. AB Ltd. issued 50,000 equity shares of Rs. 100 each at a premium of Rs. 10 payable at Rs. 30 on application, Rs. 30 on allotment and balance in the first call. Application received for 1,00,000 equity shares but the company issued to them only 50,000 shares. Excess money was refunded to them after adjustment for further calls. Last call on 1,000 shares were not received and were forfeited after due notice. The above is the case of (a) Over subscription (b) Pro-rata allotment (c) Forfeiture of shares (d) All of the above 23. If purchases Rs. 30,000; Closing stock Rs. 5,000; Opening Stock Rs. 10,000; then cost of goods sold will be (a) Rs. 25,000 (b) Rs. 30,000 (c) Rs. 35,000 (d) Rs. 45,000 Common Proficiency Test (CPT) Volume - II 193 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 8 24. Total actual cost of machinery Rs. 50,000; salvage value Rs. 5,000; Useful life 9 years; then annual depreciation under Straight line Method will be (a) Rs. 5,000 (b) Rs. 6,111 (c) Rs. 5,555 (d) Rs. 4,500 25. Rent Rs. 10,000; Provision for bad debts (old) Rs. 10,000 Salaries Rs. 8,000 Apprentice Premium (credit) Rs. 12,000 Gross profit Rs. 70,000 Net profit of the firm will be (a) Rs. 74,000 (b) Rs. 64,000 (c) Rs. 54,000 (d) Rs. 52,000 26. When preparing a Bank Reconciliation Statement if you start with balance as per pass book then payments made by bank Rs. 4,000 recorded twice in pass book Rs. 4,000 will be (a) Not required to be adjusted (b) Added (c) Deducted (d) None of the above 27. If Goods purchased for Rs. 2,00,000; Sales Rs. 1,60,000; Margin 20% on sales, then closing stock is (a) Rs. 72,000 (b) Rs. 40,000 (c) Rs. 70,000 (d) Rs. 75,000 28. Ram paid Rs. 1,000 towards a debit of Rs. 3,000 which was written off as bad debt in the previous year. Ram’s account will be credited with (a) Rs. 1,000 (b) Rs. 3,000 (c) Rs. 2,500 (d) NIL 29. Income tax liability of the owner Rs. 2,000 was paid out of petty cash. Journal entry will be (a) Dr. Income tax A/c Rs.2,000 and Cr. Cash A/c Rs. 2,000 (b) Dr. Drawings Rs.2,000 and Cr. Cash A/c Rs. 2,000 (c) Dr. Drawings Rs.2,000 and Cr. Petty Cash A/c Rs. 2,000 (d) None of the above 30. An old motor car was purchased for Rs. 1,00,000. It was repaired for Rs. 10,000 and Rs. 15,000 spent on its painting. Machinery repairs A/c will be debited by (a) Rs. 25,000 (b) Rs. 10,000 (c) Rs. 15,000 (d) NIL 31. Shyam started business on 1.4.09 with a capital of Rs. 2,00,000 for which he borrowed Rs. 30,000 from a friend. He earned a profit of Rs. 1,00,000 during the year and withdrew cash Rs. 50,000 for private use. What is his capital at the end of the year? (a) Rs. 2,80,000 (b) Rs. 2,50,000 (c) Rs. 3,00,000 (d) Rs. 3,80,000 194 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 32. X & Y purchased a building of Rs. 1,00,000 and sold it for Rs. 1,20,000. X had contributed for Rs.60,000 and Rs. 40,000. They decided to share profits in the ratio of their capital contribution. The profit on venture will be (a) Rs. 12,500 & Rs. 7,500 (b) Rs. 8,000 & Rs. 12,000 (c) Rs. 75,000 & Rs. 12,500 (d) Rs. 12,000 & Rs. 8,000 33. Goods costing Rs. 20,000 was sold to Mohan at the invoice price of 20% above cost with a trade discount of 10%. The amount of sales will be (a) Rs. 22,000 (b) Rs. 24,000 (c) Rs. 21,600 (d) Rs. 22,600 34. Z & Co. issued Rs. 10,000 10% Debentures at 5% discount redeemable at 5% premium after 10 years loss on issue of debentures will be (a) Rs. 1,000 (b) Rs. 1,500 (c) Rs. 500 (d) Rs. 2,000 35. X & Y are partners in a business sharing profits and losses in the ratio of 7:3. They admit Z as a partner. X sacrificed 1/7th of his share and Y sacrifice 1/3rd of his share in favour of Z. New profit sharing ratio will be (a) 2:2:1 (b) 3:1:1 (c) 2:1:1 (d) None of the above 36. On 1st Jan., 2010 goods costing Rs. 40,000 were consigned by A to his agent B at a proforma price which was cost plus one fifth of profit on invoice price. Invoice price of goods will be (a) Rs. 48,000 (b) Rs. 35,000 (c) Rs. 50,000 (d) Rs. 45,000 37. Ram of Mumbai sends out certain goods at cost plus 25%. Invoice value of goods sends out Rs. 20,000. 4/5th of the goods were sold by consignee at Rs. 17,600. Commission 2% upto invoice value and 10% on any surplus above invoice value commission amount will be (a) Rs. 320 (b) Rs. 400 (c) Rs. 520 (d) Rs. 480 38. Opening Stock – Rs.40,000 Purchase – Rs.1,00,000 Closing stock –Rs.30,000 Carriage inwards – Rs.5,000 Carriage outwards – Rs.3,000 Office rent – Rs.4,000 Sales –Rs.2,00,000 Gross profit will be (a) Rs. 85,000 (b) Rs. 75,000 (c) Rs. 95,000 (d) Rs. 65,000 Common Proficiency Test (CPT) Volume - II 195 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 8 39. Mohan sells goods at cost plus 50%; total sales were 2,00,000. Cost price of the goods will be (a) Rs. 1,22,222 (b) Rs. 1,11,111 (c) Rs. 1,33,333 (d) Rs. 1,44,444 40. A seller sells goods at a profit of 25% on sales. In a particular month, he sold goods costing 45,000. Sales price of goods will be (a) Rs. 56,250 (b) Rs. 65,000 (c) Rs. 55,000 (d) Rs. 60,000 41. Opening balance of capital – Rs.15,000 Income tax – Rs. 2,500 Net profit – Rs.1,500 Drawings – Rs.1,000 Interest on capital – Rs.750 Interest on drawings – Rs.300 Capital at the end will be (a) Rs. 13,500 (b) Rs. 13,450 (c) Rs. 13,350 (d) Rs. 13,300 42. Cost of goods sold – Rs.1,50,000 Opening stock – Rs.20,000 Closing stock – Rs.40,000 Purchases amount will be (a) Rs. 1,80,000 (b) Rs. 1,30,000 (c) Rs. 1,70,000 (d) Rs. 1,75,000 43. Mohan and Sohan are partners sharing profits and losses in the ratio of 5:3. They admit Shyam with 1/5th share in profit which he acquires equally from both 1/10 from Mohan and 1/10 from Sohan. New profit sharing ratio will be (a) 15:10:5 (b) 20:10:4 (c) 21:11:8 (d) None of those 44. Share capital 50,000 shares of Rs. 15 each Rs. 10 called up - Rs. 5,00,000 Calls in arrears - Rs. 20,000 Call in advance - Rs. 30,000 Board of directors decide to provide 15% for dividend on share capital. Amount of proposed dividend will be (a) Rs. 65,000 (b) Rs. 70,000 (c) Rs. 75,000 (d) Rs. 72,000 196 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 45. Under diminishing balance method, depreciation (a) Is constant every year (b) Increases every year (c) Decreases every year (d) None of the above 46. The total of the purchases day book is posted periodically to the debit of (a) Sales book (b) Purchases Account (c) Cash book (d) Journal 47. Which stock valuation method best matches the cost of goods sold with current replacement cost (a) Specific identification method (b) Weighted average method (c) LIFO (d) FIFO 48. Actual total cost of plant - Rs 1,50,000 Salvage value - Rs. 20,000 Useful Life - 10 years Annual depreciation under Straight line method will be (a) Rs. 13,000 (b) Rs. 15,000 (c) Rs. 12,000 (d) Rs. 17,000 49. Legal expenses incurred on a suit for breach of contract to supply goods is a (a) Capital expenditure (b) Deferred expenditure (c) Revenue expenditure (d) Both (a) and (c) 50. No journal entry is required to be passed when there is (a) Loss by theft (b) Normal loss (c) Loss of bad debts (d) Abnormal loss 51. A plant & machinery worth Rs. 1,00,000 is insured for Rs. 60,000. It is completely destroyed by fire. The loss to be admitted by the insurance company will be (a) Rs. 1,00,000 (b) Rs. 1,60,000 (c) Rs. 40,000 (d) Rs. 60,000 52. There must be a gap of atleast _______ month between two calls. (a) 3 (b) 6 (c) 1 (d) 2 53. Cost of goods sold Rs. 8,000. Closing stock Rs. 3,000 opening stock Rs. 2,500. Wages Rs. 1,000 purchases will be (a) Rs. 8,500 (b) Rs. 7,500 (c) Rs. 6,500 (d) Rs. 9,500 Common Proficiency Test (CPT) Volume - II 197 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 8 54. Cost of goods sold - Rs. 80,000 Sales - Rs. 1,60,000 Closing stock - Rs. 30,000 Gross profit will be (a) Rs. 1,00,000 (b) Rs. 1,10,000 (c) Rs. 80,000 (d) Rs. 1,20,000 55. Bill of Rs. 15,000 accepted by A was endorsed by B to C on account of final settlement of Rs. 18,000. The benefit of Rs. 3,000 earn by B was (a) Credited to discount received A/c by Rs. 3,000 (b) Credited to rebate account by Rs. 3,000 (c) Credited to discount allowed A/c Rs. 3,000 (d) Not shown in the books of B at all 56. Depreciation on plant and machinery whose cost is Rs. 80,000 with an accumulated depreciation reserve of Rs. 12,000 at 30% p.a. on written down value will be (a) Rs. 12,000 (b) Rs. 20,000 (c) Rs. 24,000 (d) Rs. 20,400 57. Ram and Rahim have been sharing profit and losses in the ratio of 4:3 Rahman is admitted as a partner. He acquires his 1/7 share only from Rahim. New ratio will be (a) 3:2:1 (b) 4:2:1 (c) 5:2:1 (d) 2:2:1 58. Narain Ltd. invited application for 50,000 shares of Rs. 100 each at a discount of 8%. Discount per share will be (a) Rs. 8.00 (b) Rs. 0.08 paise (c) 0.80 paise (d) Rs. 80.00 59. Salary has been paid for 9 months from April to December 2009 amounting Rs. 72,000. The amount of outstanding salary shown in the balance sheet will be (a) Rs. 48,000 (b) Rs. 8,000 (c) Rs. 24,000 (d) Rs. 72,000 60. Forfeited shares can be re-issued at discount (a) When the market value of the forfeited share is less than is nominal value (b) When the forfeited shares were originally issued at discount (c) When board of directors seems to issue it at discount (d) When the forfeited shares were originally issued at premiuim 198 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India SECTION – B : MERCANTILE LAWS (40 MARKS) 61. The sources of Mercantile law include (a) English common law (b) Mercantile Usages (c) Principles of Equity & justice (d) All of the above 62. Every contract is an agreement but every agreement is not contract. This statement is (a) Correct (b) Correct subject to certain exception (c) Partially correct (d) Wrong 63. An agreement enforceable by law amounts to (a) Offer (b) Promise (c) Contract (d) Obligation 64. Auction sale is an example of (a) An executed contract (b) A tacit contract (c) An executory contract (d) An implied contract 65. A proposal when accepted becomes a (a) Offer (b) Acceptance (c) Contract (d) Lawful promise 66. Consent should be given (a) By the person to whom offer is made (b) Without a Condition (c) In clear terms either oral or written (d) All of the above 67. Under the Sale of Goods Act, 1930 the subject matter of goods (a) Is existing goods only (b) Is future goods only (c) May be existing or future goods (d) None of the above 68. Which one of the following statements is not correct? (a) Oral acceptance is a valid acceptance (b) Acceptance must be in writing (c) Acceptance must be communicated (d) Acceptance must be in prescribed manner 69. Which one of the following falls into the category of offer? (a) Newspaper advertisement regarding sale (b) Display of goods by a shopkeeper in his window with prices marked on them (c) An advertisement for a concert (d) Announcement of reward to the public Common Proficiency Test (CPT) Volume - II 199 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 8 70. A counter offer is (a) A rejection of the original offer (b) An acceptance of the offer (c) A bargain (d) An invitation to treat 71. When a person without expressing his final willingness, proposes certain terms on which he is willing to negotiate, he makes (a) Counter offer (b) Standing offer (c) Offer (d) Invitation to offer 72. A notice in the newspapers inviting tenders is (a) Proposal (b) An invitation to proposal (c) A promise (d) An invitation for negotiation 73. When goods are displayed in a shop window with price tags attached to them, the offer comes from (a) Shop public (b) Shop owner (c) Customer (d) Officer 74. Acceptance in ignorance of the offer is (a) Valid (b) Invalid (c) Void (d) Voidable 75. An agreement without consideration is (a) Valid (b) Void (c) Unenforceable (d) None of the above 76. Agreement by competent parties is (a) Valid (b) Void (c) Illegal (d) Unlawful 77. The consideration may move from (a) The promisor or any other person (b) The promisee or any other person (c) The promisee only (d) The promisor only 78. Inadequacy of consideration does not make a contract (a) Void (b) Voidable (c) Unenforceable (d) None of the above 79. Consideration is unlawful when (a) It is fraudulent (b) Immoral or opposed to public policy (c) It is forbidden by law (d) All of the above 200 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 80. Due to change in law, if the performance of a promise becomes impossible, then the contract become (a) Illegal (b) Unlawful (c) Void (d) Valid 81. Agreement which are in the nature of bets and gambling are called__________. (a) Invalid agreements (b) Voidable contracts (c) Contingent contract (d) Wagering agreements 82. Illegality renders a contract________. (a) Illegal (b) Punishable (c) Void (d) Voidable 83. An agreement to share the benefits of a public offer is ____________. (a) Valid (b) Voidable (c) Void (d) None of the above 84. Recession of a contract means_________. (a) The renewal of original contract (b) Cancellation of contract (c) Substitution of new contract (d) Alteration of contract 85. Novation means _______________. (a) Frustration due to change of circumstances (b) Impossibility of contract sending it void (c) No frustration of executed contracts (d) Substitution of an existing contract with a new one 86. Injuction may be ___________. (a) Temporary (b) Perpetual (c) (a) or (b) (d) None of the above 87. Caveat emptor means _________. (a) Let the buyer aware (b) A jus in personam (c) A jus in rem (d) None of the above 88. In case of anticipatory breach the agreed party may treat the contract __________. (a) As operative and wait till the time for performance arrives (b) As discharged and bring an immediate action for damages (c) Exercise option either (a) or (b) (d) Only option (a) is available Common Proficiency Test (CPT) Volume - II 201 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 8 89. Misrepresentation as to fact renders a contract (a) Voidable (b) Void (c) Valid (d) Illegal 90. According to Sale of Goods Act, 1930, seller means a person ____________. (a) Who sells or agrees to sell goods (b) Who only sells goods (c) Who only agrees to sell the goods (d) None of these 91. According to the Sale of Goods Act, 1930, Buyer is a person who ________. (a) Buys or agrees to buy goods (b) Buys goods (c) Agrees to buy goods (d) None of the above 92. Things attached to land, which are agreed to be severed before sale constitute ________. (a) Movable property (b) Immovable property (c) Goods (d) Crops, Gross and other things 93. The term goods includes ________. (a) Shares (b) Growing crops (c) Old coins (d) All the above 94. In a contract of sale, price of goods may be paid __________. (a) In cash (b) Other than cash (c) Partly in cash and partly in goods valued in terms of money (d) (a) and (c) 95. The general rule of law is that the risk follows _________ of goods. (a) Possession (b) Delivery (c) Ownership (d) Contract of sale 96. Where the goods are perishable in nature, unpaid seller can ___________. (a) Resale the goods (b) Not resale the goods (c) Ask again the buyer (d) Take possession and mark goods as bad 97. When there is no reserve price, the auctioneer is ____________. (a) not bound to accept the highest bid (b) bound to accept the highest bid (c) Can accept any price (d) None of the above 202 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 98. Partnership property vest in the ____________. (a) Firm (b) Partner of the firm (c) Continuing partner of the firm (d) Retiring partners of the firm 99. ‘A’ borrows Rs. 500 from ‘B’ to pay to ‘C’, to whom ‘B’ has lost a bet. Contract between ‘A’ and ‘B’ is (a) Valid (b) Voidable (c) Void (d) None of these 100. A purchase a refrigerator on hire purchase from B and pledged with C. D purchased the refrigerator from C in good faith, on knowing the facts B wants to recover the refrigerator from D. Which of the following statements is/are correct? (a) B can recover the refrigerator from D (b) B can recover the refrigerator from A only (c) B cannot recover the refrigerator from D (d) D will get good title for the refrigerator as he bought it in good faith SECTION – C : GENERAL ECONOMICS (50 MARKS) 101 When we are studying how a producer fixes the prices of his products we are studying. (a) Macro Economics (b) Micro Economics (c) Both Micro and Macro Economics (d) None of the above 102 Macro economics doesn’t include one example from the following: (a) National Income and output (b) Study of firms (c) General Price Level (d) Saving and Investment 103 If distribution of income is more equal, then the propensity to consumer of the country is (a) Relatively High (b) Relatively Low (c) Unaffected (d) None of the above 104 Normal goods have: (a) Positive income elasticity (b) Negative income elasticity (c) Fluctuating income elasticity (d) Zero income elasticity 105 If the goods are complementary like car and petrol, their cross elasticity is: (a) Negative (b) Positive (c) Zero (d) Infinite Common Proficiency Test (CPT) Volume - II 203 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 8 106 If demand for a good is elastic, an increase in its price will cause total expenditure of the consumers of the good to: (a) Increase (b) Decrease (c) Remain the same (d) None of the above 107 If a good is priced at Rs 180 p.u. and its price is increased to Rs. 240 p.u. Now suppose quantity demanded previously was 100 units and as a result of price increase, the quantity demanded fell to 80 units. What is the price elasticity? (a) .777 (b) 1.4 (c) 1 (d) .8 108 Monetary policy is given by: (a) Commercial banks (b) Central bank (c) Both (a) and (b) (d) Ministry of Finance 109 Fiscal policy is the policy of the Government related to: (a) Public Revenue (b) Public Expenditure (c) Both Public Revenue and Public Expenditure (d) Public welfare 110 Which of the following is not the objective of Monetary Policy? (a) To regulate monetary growth (b) To ensure adequate expansion in credit to assist economic growth (c) To introduce measures for strengthening the banking system (d) To increase Public Revenue 111 FEMA stands for (a) Fiscal Exchange Management Act (b) Foreign Exchange Monetary Act (c) Foreign Exchange Management Act (d) Foreign Exchange Money Act 112 __________________ refers to that portion of total deposits which a commercial bank has to keep with the RBI (a) CRR (b) SLR (c) Bank Rate (d) Margin Requirement 113 Which is the central bank of India? (a) SBI (b) Indian Bank (c) NABARD (d) RBI 204 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 114 Which of the following is a commercial bank in India? (a) SBI (b) Citi Bank (c) ABN Amro Bank (d) All of the above 115 The initial membership of IMF in the year 1947 was________. (a) 31 (b) 51 (c) 91 (d) 101 116 Macro economics is the study of: (a) Inflation (b) Unemployment (c) Growth (d) All of the above 117 Net Factor Income from abroad is equal to: (a) NDP at market price – Net Indirect Taxes (b) NNP at factor cost – NDP at factor cost (c) NDP (+) Deprecation FC (d) None of the above 118 Balance of Trade is: (a) Difference between current and capital Account (b) Difference between export and import of goods (c) Difference between export and import of goods and services (d) Balance of current account 119 Which of the following is not included in the computation of GDP? (a) Spending on guns and tanks (b) Purchase of Limca by a family (c) Services of a teacher (d) Price paid for a stolen car 120 In terms of capacity of power generation, the highest capacity is of: (a) Thermal (b) Hydel (c) Nuclear (d) Others 121 The highest user of commercial energy is (a) Railways (b) Industry (c) Households (d) Agriculture 122 According to NSSO survey (latest): (a) Unemployment rates on the basis of current daily status were same as those on the basis of usual status (b) Unemployment rates on the basis of current daily status were higher than those of the basis of usual status Common Proficiency Test (CPT) Volume - II 205 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 8 (c) Unemployment rates of the basis of current daily status were lower than those on the basis of usual status (d) None of the above 123 Indian ranked _______ among top 15 debtor countries of the world according to the World Bank. (2008) (a) 10th (b) 9th (c) 6th (d) 7th 124 India’s external debt stood at more than __________crore March 2008. (a) 9,00, 000 (b) 12,00,000 (c) 20,00,000 (d) 18,00,000 125 Balance of payment consists of: (a) Balance of current account and capital account (b) Only Capital account (c) Only Current Account (d) Only trade account. 126 Budget Deficit means: (a) Total Receipts and total expenditure (b) Revenue receipts and revenue expenditure (c) Fiscal deficit – Interest (d) Total Budgetary receipts – revenue expenditure 127 The aim of FRBM bill is to reduce gross fiscal deficit by_____________ % of GDP. (a) 2.5% (b) .5% (c) 1% (d) .25% 128 Non-plan revenue expenditure consists of : (a) Defence (b) Interest Payment (c) Food and Fertilizer subsidy (d) All of the above 129 The Government now taps 91 days treasury bills from the market and shows them as part of: (a) Revenue Receipt (b) Loan Receipt (c) Capital Receipt (d) None of the above 130 Which of the following statements is correct? (a) In India, we mainly use the concept of relative poverty for measuring poverty (b) Gini coefficients are used to measure absolute poverty (c) Gini coefficients are often used for measuring poverty in relative sense (d) When poverty is related to the distribution of income or consumption expenditure, it is absolute poverty 206 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India 131 According to ______________measure, a person is said to be employed for the week even if he is employed only for a day during that week (a) Current Weekly Status (b) Usual Status (c) Current Daily Status (d) Current Yearly Status 132 The green revolution is also known as: (a) Rice revolution (b) Wheat revolution (c) Bajra revolution (d) All of the above 133 Which of the following statements is correct? (a) Tax on agriculture is a state subject (b) Under zamindari system, farmers directly paid land revenue to the state (c) Cooperative banks are giving loans to agricultural sector at zero interest rates (d) India has been a big importer of food grain especially since 1995 134 Agriculture sector faces the problem of: (a) Slow and unplanned growth (b) Inadequate finance (c) Inadequate reforms (d) All of the above 135 Increasing returns imply: (a) Constant average cost (b) Diminishing cost per unit of output (c) Optimum use of capital and labour (d) None of the above 136 _____________ is an implicit cost of production (a) Wages of the labour (b) Charges for electricity (c) Interest on owned money capital (d) Payment for raw material 137 All of the following are U-shaped curves except the: (a) AVC curve (b) AFC curve (c) AC curve (d) MC curve 138 Suppose that a sole proprietor is earning total revenue of Rs. 1,20,000 and is incurring explicit cost of Rs. 90,000. If the owner could work for another company for Rs. 50,000 a year, we would conclude that: (a) The firm is incurring an economic profit (b) The firm is incurring an economic loss (c) Total economic cost is Rs 2,10,000 (d) The firm is earning economic profit of Rs. 30,000 Common Proficiency Test (CPT) Volume - II 207 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 8 Use following table to answers questions 139-140 Hour of labour Total output Marginal product 0 0 0 1 300 300 2 - 240 3 720 - 139 What is the total output when 2 hours of labour are employed? (a) 160 (b) 200 (c) 360 (d) 540 140 What is the marginal product of the third hour of labour? (a) 120 (b) 160 (c) 200 (d) 180 Use the following data to answer questions 141-143 Output Total Cost 0 240 1 330 2 410 3 480 4 540 5 610 6 690 141. The Average fixed cost of 2 units of output is: (a) Rs. 80 (b) Rs. 85 (c) Rs 120 (d) Rs. 205 142 The marginal cost of the sixth unit of output is: (a) Rs. 133 (b) Rs. 75 (c) Rs. 80 (d) Rs. 450 143 Diminishing marginal returns start to occur between units: (a) 2 and 3 (b) 3 and 4 (c) 4 and 5 (d) 5 and 6 208 Common Proficiency Test (CPT) Volume - II © The Institute of Chartered Accountants of India