Common Proficiency Test Model Paper 3

186. An employer recruits experienced and fresh workmen for his firm under the condition that he cannot employ more than 12 people. It can be related by the inequality (a) x + y = 12 (b) x + y < 12 (c) x + y > 12 (d) None of these 187. There are 5 bags of wheat weighing on an average 102 kgs and another 8 bags weighing 98 kgs on an average. What is combined mean of 13 bags. (a) 109.54 (b) 99.54 (c) 95.54 (d) None of these 188. The standard deviation of 25, 32, 43, 53, 62, 59, 48, 31, 24, 33 is ________ (a) 13.23 (b) 12.33 (c) 11.13 (d) None of these 189. A bag contains 5 white and 10 blackballs. Three balls are taken out at random. Find the probability that all three balls drawn are black (a) 16/91 (b) 42/91 (c) 24/91 (d) None of these 190. A card is drawn from a well shuffled pack of playing Cards. Find the probability that it is a king or a Queen: (a) 1/13 (b) 1/4 (c) 2/13 (d) 2/4 191. If x and y are related as 4x + 3y + 11 = 0 and mean deviation of x is 2.70. what is mean deviation of y? (a) 7.20 (b) 14.40 (c) 3.60 (d) None of these 192. ∫ x.eax dx is eax ⎛ 1⎞ eax (a) ⎜x− ⎟ (b) − a ⎝ a ⎠ a eax ⎛1 ⎞ (c) log x (d) ⎜ −x⎟ a ⎝a ⎠ d 193. logx dx 1 (a) (b) 2x. logx 2x logx Common Proficiency Test (CPT) Volume - I 343 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 12 1 1 (c) (d) logx x 4 ∫ (3x-2)2 dx 194. Evaluate 2 (a) 104 (b) 100 (c) 10 (d) None of these 195. In how many ways can 7 persons be seated at a round table if 2 particular persons sit together ________ (a) 420 (b) 1440 (c) 240 (d) None of these 196. Three numbers are in A.P. whose sum is 69 and the product of first two is 483. Numbers are ________ (a) 25, 23, 21 (b) 21, 23, 25 (c) 19, 22, 25 (d) None of these 197. The line joining (-1, 1) and (2, -2) and the line joining (1, 2) and (K, 3) are perpendicular to each other for the value of K. (a) 2 (b) 0 (c) – 2 (d) None 198. A machine for which the useful life is estimated to be 5 years cost Rs. 5000. rate of depreciation is 10% p.a. The scrap value at the end of its life is: (a) 2952.45 (b) 2500.00 (c) 3000.00 (d) 2559.50 199. The sum of series 8, 4, 0 …… to 50 terms is ________ (a) 18900 (b) 9000 (c) –4500 (d) None of these 200. The number of subset of set {2, 4, 6} is ________ (a) 12 (b) 8 (c) 6 (d) None of these (cid:2)(cid:2)(cid:2) 344 Common Proficiency Test (CPT) Volume - I © 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 – 13 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. SECTION – A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. Consignment account is a (a) Real account (b) Personal account (c) Nominal account (d) None of the above 2. Bank overdraft has a (a) Debit balance (b) Credit balance (c) Negative balance (d) None of the above 3. Who is the acceptor of Bills of Exchange? (a) Creditor (b) Seller (c) Debtor (d) None of the three 4. Journal Proper records (a) Bills receivables (b) Bills payables (c) Cash payments (d) Opening entry 5. Inventories should be out of godown in the sequence in which they arrive is based on (a) FIFO (b) LIFO (c) HIFO (d) Weighted average 6. When adjusted purchase is shown in the debit column of the trial balance then (a) Both opening and closing stock appear in trial balance (b) Opening stock is shown in trial balance and not the closing stock (c) Closing stock is shown in trial balance and not opening stock (d) Both opening and closing stock do not appear in trial balance Common Proficiency Test (CPT) Volume - I 345 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 13 7. “Business unit” is separate and distinct from the persons who supply capital to it is based on __________ (a) Money measurement concept (b) Going concern concept (c) Entity concept (d) Dual aspect concept 8. All the expenditures and receipts of revenue nature go to (a) Trading A/c (b) Profit and Loss A/c (c) Balance Sheet (d) Either to (a) or (b) 9. If two or more transactions of the same nature are journalized together having either the debit or the credit account common then that journal entry is known as (a) Compound journal entry (b) Separate journal entry (c) Posting (d) None of the above 10. Following is not an example of external users (a) Government (b) Management (c) Investors (d) Suppliers and other creditors 11. If effect of an error is cancelled by the effect of some other error, it is commonly known as _____________ (a) Error of principle (b) Compensating errors (c) Error of omission (d) Error of commission 12. General reserve at the time of retirement of a partner is transferred to_______ (a) Revaluation A/c (b) Memorandum Revaluation A/c (c) Partners’ capital accounts (d) Profit & Loss Adjustment account 13. Interest on Partner’s capital is _________ (a) An expenditure (b) An appropriation (c) A gain (d) None of the three 14. Noting charges are paid at the time of _____________ of the bill (a) Retirement (b) Dishonour (c) Renewal (d) None of the above 15. A ___________ is sent to a customer when he returns goods (a) Debit note (b) Credit note (c) Proforma Invoice (d) None of the above 16. In double entry book keeping system, every transaction affects at least ____account (a) One (b) Two (c) Three (d) Four 346 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 17. The left hand side of an account is known as _________ and the right hand side of an account is known as ________ (a) Debt side; Credit side (b) Credit side; Debit side (c) Liability; Asset (d) None of the three 18. A proforma invoice is sent by (a) Consignor to consignee (b) Debtor to consignor (c) Debtor to consignor (d) Debtor to consignee 19. Profit and loss of realization account is shared among the partners in _______ ratio (a) Old profit sharing ratio (b) New profit sharing ratio (c) Capital ratio (d) Equal ratio 20. Loss on issue of debentures is treated as (a) Intangible asset (b) Current asset (c) Current liability (d) Miscellaneous expenditure 21. According to which concept the owner of an enteprise pays “Interest on Drawings”? (a) Accrual concept (b) Conservatism concept (c) Entity concept (d) Dual aspect concept 22. A, B and C are partners in the firm sharing profits and losses in 5:3:2 ratio. The firm’s balance sheet as on 31.03.2010 shows the reserve balance of Rs. 25,000, profit of the last year Rs. 50,000, Joint life policy of Rs. 10,00,000 and fixed assets of Rs. 12,00,000. On 1st June, 2010 C died and on the same date assets were revalued. The executor of the deceased partner will get along with the capital of C (a) Share in the reserve account of the firm (b) Proportionate share of profit upto the date of death (c) Share in joint life policy (d) All of the above 23. A bill of exchange matures on 16th July. It is a public holiday. Bill will mature on (a) 17th July (b) 15th July (c) 16th July (d) 18th July 24. He, She and Me are partners in a firm sharing profits and losses in the ratio of 5:3:2. They took Joint Life Policy of Rs. 50,000, Rs.1,00,000 and Rs.1,50,000 for He, She and Me respectively. The share of She in the policy will be (a) Rs.1,50,000 (b) Rs.90,000 (c) Rs.60,000 (d) Rs.3,00,000 Common Proficiency Test (CPT) Volume - I 347 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 13 25. Trial Balance (Total method) Dr. Cr. S.No. Name of the account (Rs.) (Rs.) 1. Cash account 11045 7865 2. Capital account 10000 3. Bank account 7000 100 4. Purchases account 725 5. Sales account 950 6. Krishna 375 375 7 Salary 5 10 8. Rent Account 150 19300 19300 Amount of total balance according to balance method will be: (a) Rs.10,955 (b) Rs.10,900 (c) Rs.10,000 (d) Rs.10,500 26. A, B and C are partners in a partnership firm. During the financial year 2008-09 firm earned profit accounting to Rs. 18,000. They distributed the profit in the ratio of 2:2:1. But there is no partnership deed of the firm. Necessary adjustment will be: Rs. Rs. (a) P/L Adjustment A/c Dr. 18,000 To A 7,200 To B 7,200 To C 3,600 (b) P/L Adjustment A/c Dr. 18,000 To A 6,000 To B 6,000 To C 6,000 (c) P/L Adjustment A/c Dr. 18,000 To A 1,200 To B 1,200 To C 2,400 (d) None of the above 27. On Jan 1, 2001 the position of V. Mathur was as follows Stock in hand Rs. 2400; Bills payable Rs. 400; Cash at Bank Rs. 1800; Plant and machinery Rs. 1000; Owing by debtors Rs. 500; Owing to creditors Rs. 800; Investments 2000; Loan from Raja Ram Rs. 1500. V. Mathur’s capital on the above date will be (a) Rs. 5000 (b) Rs. 4000 (c) Rs. 6000 (d) None of the three 348 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 28. Goods worth Rs. 1000 taken by the proprietor for personal use should be credited to (a) Sales A/c (b) Purchase A/c (c) Expenses A/c (d) Proprietor’s personal A/c 29. The profit and loss account shows (a) The financial position of the concern (b) The degree of honesty with which accounting work has been done (c) The capital invested in business (d) Profit earned or loss suffered by the firm 30. The trial balance checks (a) Arithmetical accuracy of books (b) The honesty of the book keeper (c) The valuation of closing stock (d) None of the three 31. Unexpired insurance is (a) Real A/c (b) Personal A/c (c) Nominal A/c (d) None of the three 32. In the beginning of 2009 person has goods worth Rs. 4000 in his godown. During the year he purchased goods worth Rs. 20,000. His sales during the year were Rs. 30,000 and there were goods still lying in his godown worth Rs. 3000. Profit has been made (a) Rs. 9,000 (b) Rs. 8,000 (c) Rs. 10,000 (d) Rs. 9,500 33. Total sales during the year amounted to Rs. 70,000; Cash sales Rs. 10,000; Outstanding debtors at the end of the year Rs. 25,000. Cash received from debtors during the year will be (a) Rs. 35,000 (b) Rs. 30,000 (c) Rs. 37,000 (d) Rs. 32,000 34. Cost of goods sold Rs.15,00,000 Closing Stock Rs. 4,00,000 Opening Stock Rs. 6,00,000 Amount of Purchases will be (a) Rs. 12,00,000 (b) Rs. 13,00,000 (c) Rs. 10,00,000 (d) Rs. 14,00,000 35. Balance as per Pass Book is Rs. 2,430 Cheques paid but not yet credited Rs. 1,390 Bank Charges entered in pass book Rs. 260 Cheques issued but not presented for payment Rs. 1,710 Balance as per Cash Book will be (a) Rs. 2,370 (b) Rs. 2,500 (c) Rs. 2,300 (d) Rs. 2,380 Common Proficiency Test (CPT) Volume - I 349 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 13 36. Overdraft as per Cash Book Rs. 6,340 Cheque deposited but not credited Rs. 2,360 Cheques issued but not presented for payment Rs. 2,368 Overdraft as per Pass Book will be (a) Rs. 6,332 (b) Rs. 6,000 (c) Rs. 6,300 (d) Rs. 6,330 37. Following figures have been taken from the trial balance of a trader – Opening Stock Rs. 14,500 Purchases Rs. 75,995 Carriage Inward Rs. 1,700 Wages Rs. 825 Sales Rs. 93,750 Goods sent on Consignment Rs. 20,000 Amount of profit will be (a) Rs. 20730 (b) Rs. 20500 (c) Rs. 20200 (d) Rs. 21000 38. Jan. 2009 Balance of Provision for Doubtful debts Rs. 1,200 Bad debts during the year Rs. 1,000 Debtors at the end of the year Rs. 20,000 Make a provision for Bad Debts 5% on debtors Provision amount debited to P/L A/c will be (a) Rs. 1,000 (b) Rs. 800 (c) Rs. 700 (d) Rs. 600 39. A trader purchased furniture on Jan 1, 2007 for Rs. 5,200. Its scrap value is 200 and life 10 years. Depreciate furniture according to fixed instalment method. Balance of furniture a/c at the end of third year will be (a) Rs.3,500 (b) Rs.3,700 (c) Rs.4,000 (d) Rs.3,400 40. A seven years lease has been purchased for a sum of Rs. 60,000 and it is proposed to depreciate it under annuity method charging 4% interest. In reference to annuity table, Rs. 9996.55 should be charged to Depreciation A/c. Balance of Lease A/c at the end of the 1st year will be (a) Rs. 50,003.45 (b) Rs. 52,000 (c) Rs. 50,000 (d) None of the above 41. After preparing the trial balance the accountant find that the total of the credit side is short by Rs. 1500. This difference will be - (a) Credited to suspense account (b) Debited to suspense account (c) Adjusted to any of the debit balance a/c (d) Adjusted to any of the credit balance a/c 350 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 42. On 01.12.09, X draws a bill on Y for 30 days after sight. The date of acceptance is 08.12.09. The due date of the bill will be - (a) 8.01.09 (b) 10.01.09 (c) 11.01.09 (d) 09.10.09 43. Capital introduced in the beginning by Ram Rs. 16,080; further capital introduced during the year in the form of machinery Rs. 2000; personal expenses during the year – Drawings in cash Rs. 3,000 Life Insurance Premium Rs. 250 Closing capital Rs. 21,925 The amount of profit or loss for the year will be (a) Profit Rs. 7,095 (b) Profit Rs. 7,085 (c) Loss Rs. 5,000 (d) Loss Rs. 6,000 44. The total of debit and credit side of Mr. Raja Ram as on 31st March, 2010 were Rs. 20,000 and Rs. 10,000 respectively. The difference was transferred to suspense A/c. On 4th April 2010, it was found that the total of sales book was carried forward as 5,000 instead of 4,000. The balance of suspense A/c after rectification of this error will be - (a) Rs.11,000 (b) Rs. 10,000 (c) Rs. 9,000 (d) Rs. 12,000 45. The total of ‘Discount allowed’ column in the cash book for the month of September, 2009 amounting to Rs. 250 was not posted Rectifying entry for the same will be - (a) Suspense A/c Dr 250; To Discount A/c 250 (b) Discount A/c Dr. 250; To Suspense A/c 250 (c) Discount A/c Dr. 250; To Customer A/c 250 (d) None of the three 46. Closing entry for transfer of Net profit Rs. 6,300 to capital A/c will be (a) Capital A/c Dr. Rs. 6,300; To P/L A/c Rs. 6,300 (b) P/L A/c Dr. Rs. 6,300; To Capital A/c Rs. 6,300 (c) Trading A/c Dr. Rs. 6,300; to P/L A/c Rs. 6,300 (d) None of the three 47. Gross profit is the difference between (a) Sales and purchases (b) Sales and cost of sales (c) Sales and total expenses (d) None of the three 48. Credit balances in the ledger will be (a) A revenue or an asset (b) An expense or on asset (c) A revenue or a liability (d) None of the three Common Proficiency Test (CPT) Volume - I 351 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 13 49. Miss Rakhi consigned 1,000 Radio sets costing Rs. 900 each to Miss Gita, her agent on July 1, 2009. Miss Rakhi incurred the following expenses. Carriage Freight Insurance Rs. 650 Rs. 7,000 Rs. 3,250 Miss Gita received the delivery of 950 radio sets. 750 sets were sold for Rs. 9,00,000 and Miss Gita incurred total expenses Rs. 13,000. Agents commission 6% on sales. Insurance company admitted claim of Rs. 35,000. Consignment stock was valued Rs. 1,84,391. Consignment Profit will be - (a) 1,52,036 (b) 1,52,000 (c) 1,50,000 (d) None of the three 50. Amount spent on “Structural alterations” under pressure of law is a (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) Capital loss 51. Goodwill is to be calculated at one year’s purchase of the average of the last 3 years profit. The profit of the first year was Rs. 6,000, second year twice the profit of the first year and the third year one and half times of the profit of the second year goodwill amount will be - (a) Rs.10,000 (b) Rs.12,000 (c) Rs.11,000 (d) Rs.13,000 1 52. A, B and C share the profit losses in the ratio of 3:2:1. D is admitted. He gets in share 6 entirely from A. New ratio will be 1 1 1 1 (a) : : : (b) 3:1:1:1 3 3 6 6 (c) 2:2:2:1 (d) None of the three 53. A, B and C share profit and losses in the ratio of 3:2:1 upon admission of D. They agreed to share 5:4:2:1 sacrificing ratio will be (a) 1/12:NIL:NIL (b) NIL:1/12:NIL (c) NIL: NIL:1/12 (d) None of the three 54. A, B and C entered into a joint venture with equal risks contributing Rs. 20,000, Rs. 27,500 and Rs. 35,000 respectively. The amounts were banked in a joint account. Joint Transactions were as follows: Purchase of goods Rs. 66,600 Expenses on goods purchased Rs. 6,629 Total sales Rs. 89,000 352 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India C, who effected these transactions, was allowed 6% commission on sales. Profit on joint venture will be - (a) Rs. 10,431 (b) Rs. 10,000 (c) Rs. 11,000 (d) Rs. 12,000 55. Gopal was holding 100 shares of 10 each of a company on which he had paid Rs. 3 on application and Rs. 2 allotment, but could not pay Rs. 2 on first call. Forfeited shares a/c will be credited with (a) Rs. 500 (b) Rs. 400 (c) Rs. 600 (d) None of the three 56. A Ltd. makes an issue of 10,000 equity shares of Rs. 100 each, payable as follows– On application and allotment Rs. 50 On first call Rs. 25 On second and final call Rs. 25 Members holding 400 shares did not pay the second call and the shares are duly forfeited, 300 of which are reissued as fully paid at Rs. 80 per share. Amount transferred to capital reserve will be (a) Rs. 16,500 (b) Rs. 15,000 (c) Rs. 15,500 (d) None of the three 57. The following information pertains to X Ltd. (1) Equity share capital called up Rs. 10,00,000 (2) Calls in arrear Rs. 50,000 (3) Calls in advance Rs. 20,000 (4) Proposed dividend 10% The amount of proposed dividend payable is (a) Rs. 95,000 (b) Rs. 90,000 (c) Rs. 98,000 (d) Rs. 1,00,000 58. X Ltd. purchased the business of Y Ltd. for Rs. 90,000 payable in fully paid shares of 10 each; shares were issued at a premium of 25%. Number of shares issued against purchased consideration will be – (a) 6,000 shares (b) 7,200 shares (c) 8,000 shares (d) 7,000 shares 59. A company on non-receipt of First Call money of Rs.2 per share and Final Call money of Rs.3 per share from Rahul, debited Call-in-Arrears account by Rs. 2,000 and Rs.3,000 respectively. After due notice 1,000 shares of Rs.10 each were forfeited from Rahul. The amount to be credited to First Call Account at the time of entry for forfeiture will be (a) Rs.2,000 (b) Rs.3,000 (c) Nil (d) Rs.10,000 Common Proficiency Test (CPT) Volume - I 353 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 13 60. X Ltd. purchased assets of Y Ltd. as under – Plant and machinery of Rs. 20,00,000 at Rs. 18,00,000; Land and building of Rs. 30,00,000 at Rs. 42,00,000 for purchase consideration of Rs. 55,00,000 and paid Rs. 10,00,000 in cash and remaining by issue of 8% debentures of 100 each at a premium of 20%. No. of debentures issued to vendors will be (a) Rs. 37,000 (b) Rs. 37,500 (c) Rs. 35,500 (d) Rs. 38,000 SECTION – B : MERCANTILE LAWS (40 MARKS) 61. Contracts may be classified on the basis of their validity, formation or performance. Contracts classified on the basis of formation are of the following types: (a) Express contracts (b) Implied contracts (c) Quasi contracts (d) All of the above 62. Which of the following statement is false, Consideration: (a) Must move at the desire of the promisor (b) May move from any person (c) Must be illusory (d) Must be of some value 63. Generally, the following damages are not recoverable? (a) Ordinary damages (b) Special damages (c) Remote damages (d) Nominal damages 64. A contract is discharged by novation which means the (a) cancellation of the existing contract (b) change in one or more terms of the contract (c) Substitution of existing contract for a new one (d) None of these 65. One the valid performance of the contractual obligation by the parties, the contract (a) Is discharged (b) becomes enforceable (c) becomes void (d) None of these 66. An offer may lapse by: (a) Revocation (b) Counter offer (c) Rejection of offer by offeree (d) All of these 67. In case of illegal agreements, the collateral agreements are: (a) Valid (b) Void (c) Void able (d) Any of these 354 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 68. Which of the following is false? An acceptance: (a) Must be communicated (b) Must be absolute and unconditional (c) Must be accepted by a person having authority to accept (d) May be presumed from silence of offeree 69. Which of the following statements is not true about minor’s position in a firm? (a) He cannot become a partner in an existing firm (b) He can become a partner in an existing firm (c) He can be admitted only to the benefits of any existing a major (d) He can become partner on becoming a major 70. A contract for a sale of goods where property would pass to the buyer on payment of total price would be; (a) Sale (b) Agreement to sell (c) hire-purchase contract (d) Sale on approval 71. The Sale of Goods Act, 1930 deals with the (a) movable goods only (b) immovable goods only (c) both movable and immovable goods (d) All goods except ornaments 72. Selection of goods with the intention of using them in performance of the contract and with the mutual consent of the seller and the buyer is known as (a) Distribution (b) Appropriation (c) amortization (d) Storage 73. Mercantile Agent is having an authority to (a) sell and consign goods (b) raise money on the security of goods (c) sell or buy goods (d) any of the above 74. Which of the following is not a form of delivery? (a) constructive delivery (b) structured delivery (c) actual delivery (d) symbolic delivery 75. Under Sale of goods Act, 1930 the terms “goods” means every kind of the movable property and it includes (a) Stock and share (b) Growing crops, grass (c) Both (a) and (b) (d) None of the above Common Proficiency Test (CPT) Volume - I 355 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 13 76. Which of the following is correct: (a) Liability of a partner in a partnership firm is unlimited (b) Liability of a member of a HUF is unlimited (c) Both the above (d) None of the above 77. Which of the following is not the right of a partner i.e, which he cannot claim as a matter of right? (a) Right to take part in business (b) Right to have access to account books (c) Right to share profits (d) Right to receive remuneration 78. On which of the following grounds, a partner may apply to the court for dissolution of the firm? (a) Insanity of a partner (b) Misconduct of a partner (c) Perpetual losses in business (d) All of the above 79. Which of the following is not disability of an unregistered firm? (a) It can not file a suit against third parties (b) Its partners cannot file a suit against a firm (c) It can claim a set-off exceeding Rs. 100 (d) It can be sued by a third party 80. A Hindu widow borrowed money from a lender for the purpose of filling a suit for maintenance. The lender advanced money at 100 percent rate of interest. The act of the money lender is induced by (a) coercion (b) Undue Influence (c) Fraud (d) Misrepresentation 81. A mistake as to a law not in force in India has the same effect as ________ (a) Mistake of fact (b) Mistake of India law (c) fraud (d) misrepresentation 82. A stipulation in a contract of sale of goods whose violation by seller gives a right of rescission to buyer, is called ________ (a) Guarantee (b) warranty (c) condition (d) term 83. The communication of an acceptance is complete as against acceptor ________ (a) When it is put in course of transmission to him so as to be out of reach of the acceptor (b) When it comes to the knowledge of the proposer (c) When both the proposer and acceptor declare the acceptance (d) When the acceptor accepts his acceptance in court of law 356 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 84. Every person attains majority an completion of ________ years of age (a) 21 years (b) 18 years (c) 16 years (d) 20 years 85. Doctrine of Caveat Emptor means ________ (a) let the seller beware (b) let the buyer beware (c) let the creditor beware (d) None of the above 86. The essence of a right of lien is to ________ (a) deliver the goods (b) retain the possession (c) regain the possession (d) none of the above 87. Discharge by mutual agreement may involve ________ (a) Novation (b) Recission (c) Alteration (d) All of the above 88. Where the goods are delivered to a carrier or wharfinger for the purpose of transmission to the buyer, the delivery is ________ (a) Invalid and ineffective (b) Valid and effective (c) Conditional (d) None of these 89. ________ consideration is no consideration in England. (a) Past (b) Present (c) Future (d) Past and present 90. The relationship of principal and agent may arise by ________ (a) Express or implied agreement (b) Ratification (c) Operation of law (d) All of the above 91. A contract for the sale of “future goods” is ________ (a) Sale (b) Agreement to sell (c) Void (d) Hire-purchase contract 92. Right of an unpaid seller include ________ (a) Right against the law (b) Right in stoppage in transit (c) Right of re-sale (d) All of the above 93. A stipulation in a contract of sale of goods whose violation by seller gives a right of rescission to buyer, is called ________ (a) Guarantee (b) Warranty (c) Condition (d) Term Common Proficiency Test (CPT) Volume - I 357 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 13 94. Total substitution of new contract in place of the old contract takes place in case of ________ (a) Remission (b) Recission (c) Novation (d) Alteration 95. Non-registration of a partnership firm ________ (a) Is a criminal offence (b) Renders the partnership illegal (c) Is compulsory to activate the partnership (d) Is not compulsory but desirable 96. A partner may be expelled from the firm on the fulfillment of the condition that the expulsion power is exercised - ________ (a) As given by express contract (b) By majority of partners (c) In absolute good faith (d) All of the above 97. Right of lien is to ________ (a) Retain possession (b) Regain possession (c) Remove possession (d) Recharge possession 98. Partner by holding out is also known as ________ (a) Active Partner (b) Dormant partner (c) Partner by estoppel (d) Partner by stoppage 99. Under which circumstances the unpaid seller can exercise right of re-sale (a) when the goods are of perishable nature (b) when he gives notice to the buyer (c) When he gives notice to the buyer of his intention to re-sale and the buyer does not within reasonable time pay the price (d) Both (a) and (b) 100. A timber merchant agreed to supply best teak at a certain agreed price to a builder. Later the merchant supplied timber, which was identified as ordinary class of timber and demanded the payment from the builder which of the following statements is/are true? (a) Builder can reject the goods can claim damages (b) Builder has accept the goods (c) Builder has to pay the price by taking delivery of teak wood (d) Timber merchant cannot plead the doctrine of caveat emptor SECTION – C : GENERAL ECONOMICS (50 MARKS) 101. Which of the following is not an essential condition of pure competition? (a) Large number of buyers and sellers (b) Homogeneous product (c) Freedom of entry (d) Absence of transport cost 358 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 102. Which of the following is not a characteristic of a “Price taker”? (a) TR = P x Q (b) AR = Price (c) Negatively – sloped demand curve (d) Marginal Revenue = Price 103. Which of the following is not a condition of perfect competition ? (a) A large number of firms (b) Perfect mobility of factors (c) Informative advertising to ensure that consumers have good information (d) Freedom of entry and exit into and out of the market 104. All of the following are characteristics of a monopoly except (a) there is a single firm (b) the firm is a price taker (c) the firm produces a unique product (d) the existence of some advertising 105. A monopolist is able to maximize his profits when: (a) his output is maximum (b) he charges a high price (c) his average cost is minimum (d) his marginal cost is equal to marginal revenue. 106. Which is the other name that is given to the long run average cost curve? (a) profit curve (b) planning curve (c) demand curve (d) indifference curve 107. Price discrimination will be profitable only if the elasticity of demand in different market in which the total market has been divided is: (a) uniform (b) different (c) less (d) zero 108. The kinked demand curve model of oligopoly assumes that: (a) response to a price increase is less than the response to a price decrease (b) response to a price increase is more than the response to a price decrease (c) elasticity of demand is constant regardless of whether price increases or decreases (d) elasticity of demand is perfectly elastic if price increases and perfectly inelastic if price decreases 109. Agricultural goods markets depict characteristics close to: (a) Perfect competition (b) Oligopoly (c) Monopoly (d) Monopolistic competition Common Proficiency Test (CPT) Volume - I 359 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 13 110. Which of the statements is correct? (a) The tertiary sector contributes the maximum to the GDP (b) India is a basically a socialist economy (c) The distribution of income and wealth in India is quite equitable (d) None of the above 111. NABARD is the apex bank for ___________ credit in India. (a) real estate (b) small scale industries (c) agriculture (d) none of the above 112. The share of agriculture in India’s national income has __________ over the years. (a) remained constant (b) decreased (c) increased (d) first decreased and then increased 113. Which is of the following is incorrect? (a) Special schemes have been started to promote agro-products (b) India has been a big importer of food grains especially since 1990s (c) High yielding varieties programme has resulted in improvement in production and productivity of food grains in India (d) None of the above 114. Agriculture sector faces the problem of: (a) slow and uneven growth (b) inadequate and incomplete land reforms (c) inadequate finance (d) all of the above 115. The Eleventh plan aims at achieving a growth rate of ________ in the industrial sector. (a) 5 per cent (b) 8 per cent (c) 10 per cent (d) 6 per cent 116. Which of the following statements is correct? (a) The industrial pattern on the eve of independence was quite balanced (b) During the planning period the structure of Indian industry has shifted in favour of basic and capital goods and intermediate goods (c) Most of the big industrial units in India are sick (d) None of the above 117. Over the planning period the share of industrial sector in the GDP of India has __________ (a) increased (b) decreased (c) remained constant (d) remained above 50 per cent 118. India has the _____________ largest scientific and technical manpower in the world (a) Fifth (b) Tenth (c) Eighth (d) Second 360 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 119. Demand for final consumption arises in: (a) household sector only (b) government sector only (c) both household and government sectors (d) neither household nor government sectors 120. Which of the following is an economic activity ? (a) Playing friendly cricket match (b) Teaching one’s own daughter at home (c) Manufacturing chairs at subsidised rate (d) A housewife doing household duties 121. Per capita national income means (a) NNP / population (b) Total capital / population (c) Population / NNP (d) None of the above 122. India’s rank in world Population comes after _____ (a) U.S.A. (b) China (c) Australia (d) Canada 123. In which state is the sex ratio most favourable to women? (a) Andhra Pradesh (b) Uttar Pradesh (c) Kerala (d) Karnataka 124. India’s present population is: (a) more than that of China (b) less than that of China (c) less than that of Pakistan (d) less than that of England 125. NTPC stands for: (a) National Thermal Power Corporation (b) National Tidal Power Corporation (c) National Theological Power Corporation (d) National Talent and Potential Corporation 126. Which of the following is correct in relation to banks in the post reform period? (a) Bank rate has been increased to 10 per cent (b) CRR has been increased to 8 per cent (c) SLR has been kept at 25%. (d) Public sector banks have been asked to raise their funds from their private resources only 127. _______________ refers to disposal of public sector’s units in equity in the market. (a) Globalisation (b) Privatisation (c) Disinvestment (d) Liberalisation Common Proficiency Test (CPT) Volume - I 361 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 13 128. Population per bank in India is : (a) around 5000 (b) around 20000 (c) around 15000 (d) around 45000 129. Commercial banks suffer from : (a) regional imbalances (b) increasing overdues (c) lower inefficiency (d) all the above 130. Money includes (a) currencies and demand deposits (b) bonds, government securities (c) equity shares (d) all of the above 131. M1 in the money stock in India refers to: (a) post office saving deposits (b) total post office deposits (c) currency plus demand deposits plus other deposits with RBI (d) time deposits with banks 132. Which of the following is not a characteristic of land? (a) Its supply for the economy is limited (b) It is immobile (c) Its usefullness depends on human efforts (d) It is produced by our forefathers 133. Which of the following statements is true ? (a) Accumulation of capital depends solely on income (b) Savings can also be affected by the state (c) External economies go with size and internal economies with location (d) The supply curve of labour is an upward slopping curve 134. The marginal product of a variable input is best described as: (a) total product divided by the number of units of variable input (b) the additional output resulting from a one unit increase in the variable input (c) The additional output resulting from a one unit increase in both the variable and fixed inputs (d) The ratio of the amount of the variable input that is being used to the amount of the fixed input that is being used 135. Diminishing marginal returns imply (a) decreasing average variable costs (b) decreasing marginal costs (c) increasing marginal costs (d) decreasing average fixed costs 362 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 136. To economists, the main difference between the short run and the long run is that: (a) in the short run all inputs are fixed, while in the long run all inputs are variable (b) in the short run the firm varies all of its inputs to find the least cost combination of inputs (c) in the short-run, at least one of the firm’s input levels is fixed (d) in the long run, the firm is making a constrained decision about how to use existing plant and equipment efficiently 137. Which cost increases continuously with the increase in production? (a) Average cost (b) Marginal cost (c) Fixed cost (d) Variable cost 138. In the short run, when the output of firm increases, its average fixed cost: (a) increases (b) decreases (c) remains constant (d) first declines and then rises 139. Which of the following is an example of an “explicit cost”? (a) The wages a proprietor could have made by working as an employee of a large firm (b) The income that could have been earned in alternative uses by the resources owned by the firm (c) The payment of wages by the firm (d) The normal profit earned by a firm 140. Marginal cost is defined as : (a) the change in total cost due to one unit change in output (b) total cost divided by output (c) the change in output due to a one unit change in an input (d) total product divided by the quantity of input 141. Which of the following is not a determinant of the firm’s cost function? (a) The production function (b) The price of labour (c) Taxes (d) The price of the firm’s output 142. A firm’s average total cost is Rs. 300 at 5 units of output and Rs. 320 at 6 units of output the marginal cost of producing the 6th unit is: (a) Rs. 20 (b) Rs. 120 (c) Rs. 320 (d) Rs. 420 143. Which of the following is a function of an entrepreneur? (a) Initiating a business enterprise (b) Risk bearing (c) Innovating (d) All of the above 144. The law of scarcity (a) does not apply to rich developed countries (b) applies only to the less developed countries Common Proficiency Test (CPT) Volume - I 363 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 13 (c) implies that consumers wants will be satisfied in a socialistic system (d) implies that consumers wants will never be completely satisfied 145. Who expressed the view that “economics is neutral between end”? (a) Robbins (b) Marshall (c) Pigou (d) Adam Smith 146. An example of positive economic analysis would be: (a) an analysis of the relationship between the price of food and the quantity purchased (b) determining how much income each person should be granted (c) determining the fair price for food (d) deciding how to distribute the output of the economy 147. Which of the following does not suggest a macro approach for India ? (a) Determining the GNP of India (b) Identifying the causes of inflation in India (c) Finding the causes of failure of X and Co. (d) Analyse the causes of failure of industry in providing large scale employment 148 What is one of the future consequences of an increase in the current level of consumption in the India? (a) Slower economic growth in the future (b) Greater economic growth in the future (c) No change in our economic growth rate (d) Greater capital accumulation in the future 149. Capital intensive technique would get chosen in a : (a) labour surplus economy (b) capital surplus economy (c) developed economy (d) developing economy 150. Consider the following and decide which if any economy is without scarcity: (a) The pre-independent Indian Economy, where most people were farmers (b) A mythical economy where everybody is a billionaire (c) Any economy where income is distributed equally among its people (d) None of the above SECTION – D : QUANTITATIVE APTITUDE (50 MARKS) 151. Representation of data is done by (a) Diagrams (b) Pictures (c) Charts (d) All these 364 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 152. Ogive is a (a) Line diagram (b) Bar diagram (c) Both (d) None of these 153. Which result is true? (a) H.M. < G.M. < A.M. (b) H.M. > G.M. > A.M. (c) H.M. < G.M. < A.M. (d) G.M. > A.M. > H.M. 154. The range of 12, 15, 17, 9, 21, 25 (a) 3 (b) 16 (c) 25 (d) 12 155. Median is affected by extreme valves (a) True (b) False (c) Both (d) None of these 156. In a Scatter diagram, if the plotted points lie on a single line, then the correlation is: (a) Perfect positive (b) Perfect negative (c) Both (a) and (b) (d) Either (a) or (b) 157. For any two events A and B (a) P (A∩B) < P (A) + P (B) (b) P (A∩B) > P(A) + P (B) (c) P (A∩B) < P(A) + P (B) (d) P (A∩B) > P(A) + P (B) 158. The mode and mean of a normal distribution (a) May be equal (b) May be different (c) Are always equal (d) (a) or (b) 159. A statistic is described as (a) A function of sample observation (b) A function of population units (c) A characteristic of a population (d) A part of population 160. The index number is not a special type of average (a) False (b) True (c) Both (d) None of these 161. Fisher’s ideal formula does not satisfy _______ test. (a) Unit test (b) Circular test (c) Time reversal test (d) None of these 162. Under Algebric method we get _____ Linear equations (a) Two (b) Three (c) One (d) (d) None of these Common Proficiency Test (CPT) Volume - I 365 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 13 163. 24, 32, ___________,. 40 are in proportion. (a) 25 (b) 20 (c) 30 (d) None of these 164. log log 27 is equal to _______ 3 3 (a) 0 (b) -1 (c) 3 (d) 1 165. If _______________, the roots are imaginary . (a) b2 – 4 ac = 0 (b) b2 – 4 ac > 0 (c) b2 – 4 ac < 0 (d) b2 – 4 ac > 0 166. The letters of the words ALLAHABAD and INDIA are arranged in all possible ways. The ratio of the number of these arrangement is _________________ (a) 9 : 5 (b) 126:1 (c) 1:1 (d) 2:5 167. The 13th term of series 93, 90, 87 ….. nth term is ________ (a) 57 (b) – 54 (c) 50 (d) 54 168. Rs. 3,52,000 will produce Rs. 28,600 interest in ___________ years at 2.5% p.a. simple interest. (a) 2 years 2 months (b) 3 years 3 months (c) 4 years 4 months (d) 5 years 5 months 169. The mean of binomial distribution with parameters n and p is ________ (a) n(1-p) (b) np(1-p) (c) np (d) np(1− p) 170. If P(A) = 6/9 then the odds against the event is ________ (a) 3/9 (b) 6/3 (c) 3/6 (d) 3/15 x2 -9 3-x -1 lim 171. is equal to x→2 x -3 2-x (a) ½ (b) 2 (c) 0 (d) does not exist 172. The derivative of y = log xx is (a) 1/x (b) log x (c) 1/x. log x (d) 1 + log x 366 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India dx ∫ 173. is equal to ex+1 (a) – log (1+e –x) + K (b) (ex+1)–2 + K 1 +K (c) 1+ex (d) None 174. If f(x) = 2x + 3 then f(2x) – 2f(x) + 3 is equal to (a) 1 (b) 0 (c) –1 (d) None of these 1 1 175. Which term of series 3, 3, 1, …... nth term is ? 3 243 (a) 13 (b) 14 (c) 15 (d) 12 176. Fisher’s ideal idex no. is equal to (a) Laspeyse’s index × Pasche’s Index (b) Lasperyre's Index×Pasche's Index ∑ P q 0 1 (c) ∑ (d) None of these P q 1 1 177. A sample of 100 gave a mean of 7.4 kg and a standard deviation of 1.2 kg. Find 95% confidence limits for population mean. (a) 7.164 and 7.635 (b) 5.164 and 5.635 (c) 4.001 and 5.001 (d) None of these 178. A dice is tossed thrice, if getting a four is considered a success, find the variance of probability distribution of number of success. (a) 1/2 (b) 1/4 (c) 5/12 (d) 7/12 179. A pair of dice is rolled. If the sum on the dice is 9. Find the probability that one of dice showed 3. (a) 1/9 (b) 1/4 (c) 1/2 (d) 1 180. The two regression lines obtained from certain data were y = x + 5 and 16 x = 9y – 94. Find the variance of x if variance of y is 16. (a) 4/16 (b) 9 (c) 1 (d) 5/16 Common Proficiency Test (CPT) Volume - I 367 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 13 181. If nP :n+1P = 3:4 then value of n is 13 12 (a) 15 (b) 14 (c) 13 (d) 12 182. In a group of 23 children 10 drink tea but not coffee and 15 like tea. The number of children drinking coffee but not tea is (a) 6 (b) 7 (c) 8 (d) 9 183. In a G.P. series the product of first three term is 729/ 8. The middle term is (a) 3/2 (b) 9/2 (c) 2/9 (d) None of these 184. In how many ways 5 physics, 3 chemistry and 3 maths books be arranged keeping the books of the same subject together. (a) 5! X 3! X 3! (b) 5 P3 (c) 5! X 3! (d) 5! X 3! X 3! X 3! 185. If a loan of Rs. 50,000 is paid back in equal instalments for 20 years and 10% interest on balance loan. What will be equal instalment . (a) 5872.98 (b) 5000.00 (c) 4999.98 (d) None of these 186. The lines x – y – 3 = 0, 3x – 2y – 5 = 0 and 4x – 3y – 20 = 0 are (a) concurrent (b) Not concurrent (c) Parallel to each other (d) Perpendicular to each other 187. Solving equation 3x2 – 2x – 16 = 0 we get root as (a) – 2, 8/3 (b) 2, 3/8 (c) ± 2 (d) None of these 188. If a number of which the half is greater than 1/10th of number by 20 then the number is (a) 50 (b) 40 (c) 80 (d) None of these 189. Sum of three numbers in A.P. is 12 and the sum of their cube is 408. The numbers are (a) 3, 4, 5 (b) 1, 4, 7 (c) 2, 4, 6 (d) None of these 190. The number of subset of a set containing n element is: (a) 2n (b) 2n (c) 2-n (d) None of these 368 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 191. Wages of 8 workers expressed in Rs. as follows 80, 96, 51, 72, 67, 50, 70, find Coefficient of range? (a) 30.5 (b) 35.3 (c) 31.00 (d) 31.51 192. ∫ epxdx is equal to epx +c (a) ex + c (b) p (c) log x + c (d) None of these 3 ∫ (x3+x)dx 193. Evaluate -3 (a) 0 (b) 3 (c) –3 (d) 1 194 If Arithmetic Mean and coefficient of variation of x are 5 and 20 respectively. What is the variance of (15-2x)? (a) 16 (b) 2 (c) 64 (d) 32 dy 195. If y = ex – e-x then - y2+4 is equal to dx (a) 1 (b) -1 (c) 0 (d) None of these 196. 6 seats of articled clerks are vacant in a ‘Chartered Accountant firm’. How many different batches of candidates can be chosen out of 10 candidates if one candidate is always selected. (a) 124 (b) 125 (c) 126 (d) None of these 197. The A.M. between two numbers is 34 and their G.M. is 16, the numbers are ? (a) 4, 64 (b) 4, 32 (c) 32, 64 (d) None of these 198. For a group of 8 students the sum of squares of differences in ranks for Accounts and Economics marks was found to be 50. What is the rank correlation coefficient. (a) 0.50 (b) 0.40 (c) 0.30 (d) 0.20 Common Proficiency Test (CPT) Volume - I 369 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 13 199. A sum of money triples itself in 20 years. Using Simple Interest calculate number of years it would double itself. (a) 25 years (b) 15 years (c) 10 years (d) None of these 200. The value of (log a × logb × log c)5 is equal to b c a (a) 5 (b) 0 (c) 1 (d) None of these (cid:2)(cid:2)(cid:2) 370 Common Proficiency Test (CPT) Volume - I © 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 – 14 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. SECTION – A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. Commission received in advance account has a (a) Credit balance (b) Debit balance (c) Negative balance (d) None of the above 2. Insurance unexpired account is a (a) Personal account (b) Real account (c) Nominal account (d) None of the above 3. On March 31, 2010 Narain Enterprises purchased a loader from Laxmi Motors for Rs. 1,75,000 which is shown in the balance sheet as on 31st March, 2010. This is - (a) An event (b) A transaction (c) A transaction as well as an event (d) Neither a transaction under an event 4. A sum of Rs. 1,10,000 was spent on painting the new factory. It is a (a) Capital expenditure (b) Deferred revenue expenditure (c) Revenue expenditure (d) None of the above. 5. What is the order in which the accounting transactions and events are recorded in the books: (a) Journal, subsidiary books, P/L A/c and Ledger (b) Ledger, Journal, Balance Sheet and Profit and Loss A/c (c) Journal, Ledger P/L A/c and Balance Sheet (d) P/L A/c, Ledger and Balance Sheet 6. Cash discount allowed to a debtor should be credited to (a) Discount account (b) Customers account (c) Sales account (d) None of the above Common Proficiency Test (CPT) Volume - I 371 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 14 7. B/R is a (a) Current asset (b) Fixed asset (c) Fictitious asset (d) Intangible asset 8. Which of the following account will have debit balance? (a) Reserve for doubtful debts account (b) Outstanding wages (c) Capital account (Machinery brought in business) (d) Loan to contractor 9. Which of the following error is an error of principle? (a) Wages paid to Ram has been debited to his account (b) The total of purchase journal has not been posted to purchase A/c (c) Sales to X Rs. 20, posted to his A/c as Rs. 2 (d) Furniture purchased on credit from Nigam for Rs. 300 posted to Machinery Account 10. A bill has been drawn on 26.02.2010 payable after 90 days. The maturity date of the bill will be - (a) 30.05.2010 (b) 29.05.2010 (c) 28.05.2010 (d) 27.05.2010 11. Balance of goods sent on consignment account is transferred to - (a) Profit and Loss Account (b) Trading account (c) P/L appropriation account (d) None of the three 12. Memorandum joint venture account is prepared (a) When separate set of joint venture books is prepared (b) When each co-venture keeps records of all the joint venture transactions himself (c) When each co-venture keeps records of their own joint venture transactions (d) None of the above 13. In case if Del credere Commission is provided by consignor to consignee, bad debt is a loss of (a) Consignee (b) Consignor (c) Both consignor and consignee (d) Neither of the two 14. The party who sends the goods for sale on fixed commission basis is (a) Consignee (b) Consignor (c) Drawee (d) Drawer 15. If the incoming partner brings any additional amount in cash other than his capital contribution, then it is termed as (a) Capital (b) Reserves (c) Goodwill (d) Premium for goodwill 372 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 16. Discounting, endorsement and collection of bills of exchange is made by (a) Drawer (b) Drawee (c) Bank (d) Creditor 17. Sales returns appearing in the trial balance are deducted from (a) Capital (b) Sales (c) Purchases (d) None of the three 18. Drawings are deducted from (a) Sales (b) Purchases (c) Expenses (d) Capital 19. The trial balance of M/s Narain Manufacturers shows closing stock of Rs. 30,000. It will be recorded in (a) Trading account (b) Profit and Loss Account (c) Profit and Loss appropriation A/c (d) Balance Sheet 20. Purchase of fixed assets on credit basis is recorded in (a) Purchase Book (b) Cash Book (c) Journal Proper (d) None of the above 21. A company issued 25,000 equity shares of Rs. 100 each at a premium of Rs. 15 each payable as Rs. 25 on application. Rs. 40 on allotment and balance in the first call. The applications were received for 75,000 equity shares but the company issued to them only 25,000 shares on pro-rata basis. Excess money was refunded to them. The last call on 500 shares were not received and were forfeited after due notice. Above is the case of (a) Over subscription (b) Pro-rata allotment (c) Forfeiture of shares (d) All of the above 22. A places an order to B for supply of certain goods yet to be manufactured. On receipt of order B purchases raw material, employs workers, produces the goods and delivers them to A. In this case, sale will be presumed to have been made at the time of (a) Receipt of order (b) Production of goods (c) Delivery of goods (d) Purchase of raw material 23. Ramesh drew a 45 days bill on Komal on 25th Jan., 2007. The bill falls due on (a) March 14 (b) Feb. 28 (c) March 10 (d) None of the three Common Proficiency Test (CPT) Volume - I 373 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 14 24. Birbal drew a three month bill on Satyapal for Rs. 5,000. On due date Satyapal approached Birbal to renew the bill for another month @ 12% p.a. Amount of the new bill will be (a) Rs. 5,000 (b) Rs. 5,050 (c) Rs. 4,050 (d) None of the three 25. Preet accepted a 90 days bill of Rs. 10,000 drawn by Jeet on 05.02.2010. On 13.03.2010, Preet wished to retire the bill. Jeet offered rebate @ 12% p.a. Considering the year of 360 days, rebate amount will be - (a) Rs. 150 (b) Rs. 180 (c) Rs. 184 (d) None of the three 26. Consignment Account To Goods sent on consignment 1,00,000 By Consignee A/c (Sales) 1,50,000 (at invoice price) To Consignee’s A/c 40,000 By Stock at Invoice price 10,000 (indirect expenses) To Profit 20,000 1,60,000 1,60,000 Consignor charged 25% profit on cost while sending the goods on consignment. Rectify the above A/c. Correct profit on consignment will be (a) Rs. 38,000 (b) Rs. 35,000 (c) Rs. 30,000 (d) Rs. 40,000 27. X consigned 100 packets of cosmetics each costing Rs. 300 to his agent at Bareilly. He paid Rs. 500 towards freight and insurance. 15 packets were destroyed in the way. Consignee took delivery of the remaining packets and spent Rs. 700 as godown rent, Rs. 1,000 as clearing charges and Rs. 300 as carriage inwards. Cost of damage will be (a) Rs. 4,500 (b) Rs. 4,575 (c) Rs. 4,000 (d) None of the three 28. X consigned 100 packets of cosmetics each costing Rs. 300 to his agent at Bareilly. He paid Rs. 500 towards freight and insurance. 15 packets were destroyed in the way. Consignee took delivery of the remaining packets and spent Rs. 700 as godown rent, Rs. 1,000 as clearing charges and Rs. 300 as carriage inwards. The agent sells away 70 packets. Stock amount will be (a) Rs. 4,500 (b) Rs. 4,751 (c) Rs. 4,651 (d) None of the above 374 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 29. ELDER and LARGE enter into a joint venture sharing profits and losses equally. ELDER supplied goods to the value of Rs. 2,500 and incurred expenses of Rs. 200. LARGE supplied goods to the value of Rs. 2,000 and his expenses amounted to Rs. 150. LARGE sold the entire lot of goods on behalf of the joint venture and realized Rs. 6,000. LARGE was entitled to a commission of 5% on sales. Profit on the venture (a) Rs. 850 (b) Rs. 800 (c) Rs. 900 (d) Rs. 1,000 30. Hardcore Computers Ltd. issued to public 15,000 shares of Rs. 10 each at a premium of Rs. 2. Applications were received for 10,000 shares. The amount payable was as follows: On application Rs. 3 per share On allotment Rs. 4 per share (including premium) On first and final call Rs. 5 per share All sums were duly received by the company except the following: Mr. Perfect holder of 100 shares did not pay allotment and call money. Mr. Right holder of 200 shares did not pay call money. The company forfeited all the shares of Mr. Perfect. Share Capital a/c will be debited by - (a) Rs. 1,000 (b) Rs. 900 (c) Rs. 800 (d) None of the three 31. A and B are doing business separately as building contractors. They undertook jointly to construct a building for a newly started joint stock company for a contract price of Rs. 2,00,000. A Bank A/c is opened in their joint names; A depositing Rs. 50,000 and B Rs. 30,000. They will share profits and losses in ratio of 2/3 and 1/3 respectively. Their transactions were as follows: Paid wages Rs. 60,000 Brought materials Rs. 1,62,000 Contract was completed and the price was duly received. B took stock of materials for the Rs. 6,000. Profit or loss on joint venture will be (a) Profit Rs. 8,000 (b) Loss Rs. 16,000 (c) Profit Rs. 10,000 (d) Loss Rs.15,000 ¼ 32. J and R are equal partners U is admitted as a partner for share of profits but is unable to contribute premium for goodwill in cash amounting to Rs. 8,000 and so it is decided to raise a loan A/c in the name of U. Journal entry will be (a) U’s loan A/c Dr. 8,000 To J 8,000 (b) U’s loan A/c Dr. 8,000 To R 4,000 (c) U’s Loan A/c Dr. 8,000 To J 4,000 To R 4,000 (d) None of the three Common Proficiency Test (CPT) Volume - I 375 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 14 33. Amit, Rohit and Sumit are partners sharing profits and losses in the ratio of 5:4:3. Sumit retires and if Amit and Rohit shares profits of Sumit in 4:3, then new profit sharing ratio will be (a) 4:3 (b) 47:37 (c) 5:4 (d) 5:3 34. Rachna and Sapna are partners sharing profits equally. They admitted Ashana for 1/3rd share in the firm. The new profit sharing ratio will be (a) 3:2:1 (b) 2:2:1 (c) 1:1:1 (d) Cannot be calculated 35. Find the goodwill of the firm using capitalization method from the following information: Total capital employed in the firm Rs. 80,00,000 Reasonable rate of return 15% Profits for the year Rs. 12,00,000 (a) Rs. 68,00,000 (b) Rs. 12,00,000 (c) Rs. 11,88,000 (d) Nil 36. Following figures have been taken from the trial balance of a trader Cost of goods sold Rs. 30,000 Sales Rs. 40,000 Closing Stock Rs. 5,000 The amount of profit will be (a) Rs. 10,000 (b) Rs. 15,000 (c) Rs. 12,000 (d) None of the above 37. Bank overdraft as per Cash Book Rs. 13,500 Cheque deposited but not credited Rs. 3,000 Cheque issued by not presented Rs. 6,000 Overdraft as per bank statement will be (a) Rs. 10,500 (b) Rs. 10,000 (c) Rs. 11,000 (d) None of the three 38. Sundry creditors for goods amounting to Rs. 50,000 are not responding during the last five years and payment for the same may not be made by the concern. Journal entry will be (a) Sundry Creditors A/c Dr. 50,000 To P/L A/c 50,000 (b) P/L A/c Dr. 50,000 To Sundry Creditors 50,000 (c) Sundry Creditors A/c Dr. 50,000 To Cash A/c 50,000 (d) None of the three 376 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 39. Net salary paid to employees Rs. 45,000 in cash after deducting income tax Rs. 1,000, professional tax Rs. 200, employees provident fund Rs. 2,000, staff welfare fund Rs. 100 and recovery of loan Rs. 1,700. Salary A/c will be debited with - (a) Rs. 50,000 (b) Rs. 45,000 (c) Rs. 48,000 (d) None of the three 40. Dividend received (net) Rs. 9200 for which tax deducted at source is Rs. 800. Dividend A/c will be credited with - (a) Rs. 10,000 (b) Rs. 9,200 (c) Rs. 9,000 (d) None of the three 41. Good purchased on credit during last year worth Rs. 60,000 were not recorded in the books of a partnership firm namely ABC and Co. whose profit is shared equally by A, B and C, but the said amount was included in last year’s closing stock figure. Adjusting entry will be (a) S. Creditors A/c Dr. 60,000 To A 60,000 (b) Sundry Creditors A/c Dr. 60,000 To A 30,000 To B 30,000 (c) A’s Capital Dr. 20,000 B’s Capital Dr. 20,000 C’s Capital Dr. 20,000 To Sundry Creditors 60,000 (d) None of the three 42. Dismantling and demolition charges is a _______ (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None of the three 43. There was an error in the trial balance. Difference was put to Suspense A/c. Later on, it was found that the opening stock of Rs. 1,080 was brought into the books as Rs. 1,800. Rectifying entry will be (a) Suspense A/c Dr. 720 To Opening Stock 720 (b) Opening Stock A/c Dr. 720 To Suspense A/c 720 (c) Trading A/c Dr. 720 To Opening stock 720 (d) None of three Common Proficiency Test (CPT) Volume - I 377 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 14 44. The profits for the last four years are given as follows Year Rs. 2006 40,000 2007 50,000 2008 60,000 2009 50,000 The value of goodwill on the basis of 3 years purchase of average profits based on the last four years will be (a) Rs. 1,00,000 (b) Rs. 1,50,000 (c) Rs. 2,00,000 (d) None of the three 45. G. Ltd. acquired assets worth Rs. 1,50,000 from AB Ltd. by issue of shares of Rs. 10 each at a premium of Rs. 5. The number of shares to be issued by G. Ltd. to settle the purchase consideration will be (a) 10,000 shares (b) 12,000 shares (c) 9,000 shares (d) None of the three. 46. In Jan., 2006 a trader purchased furniture for Rs. 10,000 Depreciation is charged @ 25% Diminishing balance. At the end of the third year it was sold for Rs. 1,000. Profit or loss as sale will be _______ (a) Profit Rs. 2,400 (b) Profit Rs. 2,300 (c) Loss Rs. 2,406 (d) Loss Rs. 3,219 47. The plant and machinery account of a firm had a debit balance of Rs. 1,47,390 as on 31st December, 2009. On 1st Jan., 2006 Co. started business and has been following the practice of charging full year’s depreciation every year on Diminishing balance method @ 15%. Cost of machinery on 01.01.2006 will be (a) Rs. 2,40,000 (b) Rs. 2,00,000 (c) Rs. 2,50,000 (d) None of the three 48. Net Profit before charging manager commission is Rs. 22,000 and the manager is to be allowed a commission of 10% on the profit after charging such commission. Commission amount will be (a) Rs. 2,000 (b) Rs. 18,000 (c) Rs. 2,200 (d) None of the three 49. X Co. Ltd. issued 1,00,000 debentures of Rs. 100 each at a discount of 4% redeemable after 5 years at a premium of 6%. Loss on issue of debentures will be (a) Rs. 10,00,000 (b) Rs. 6,00,000 (c) Rs. 16,00,000 (d) Rs. 4,00,000 378 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 50. Rishi is a partner in a firm. He withdrew the following amounts during the year ended on 31st December, 2009. February 1 Rs. 12,000 April 30 Rs. 6,000 June 30 Rs. 9,000 August 31 Rs. 12,000 October 1 Rs. 8,000 December 31 Rs. 7,000 Interest on drawings @ 9% p.a. will be (a) Rs. 2,295 (b) Rs. 2,000 (c) Rs. 2,200 (d) None of the above 51. Interest on capital at 6% p.a. is to be allowed. Capital in the beginning was Rs. 3,00,000. Interest amount will be (a) Rs. 18,000 (b) Rs. 15,000 (c) Rs. 16,000 (d) None of the three 52. Depreciation as 5% on office furniture of Rs. 8,000; at 10% on plant and machinery of Rs. 80,000; at 5% on factory building of Rs. 2,00,000 have been charged by the entrepreneur during the year. Total amount of depreciation will be (a) Rs. 18,400 (b) Rs. 18,000 (c) Rs. 15,000 (d) None of the three 53. Gaining ratio may be applied when (a) A partner is admitted (b) A partner retires (c) A business is sold out (d) A partner is insolvent 54. A limited company forfeited 100 equity shares of the face value of Rs. 10 each, for non payment of first call of Rs. 2 per share. The forfeited shares were subsequently reissued as fully paid @ 7 each. Amount transferred to capital reserve will be (a) Rs. 500 (b) Rs. 200 (c) Rs. 300 (d) None of the three 55. Z Ltd. purchased plant and machinery for Rs. 2,00,000 payable as Rs. 65,000 in cash and the balance by an issue of 6% debentures of Rs. 1,000 each at a discount of 10%. Discount on issue of debentures will be (a) Rs. 15,000 (b) Rs. 14,000 (c) Rs. 10,000 (d) None of the three Common Proficiency Test (CPT) Volume - I 379 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 14 56. A firm had an unrecorded investment of worth Rs. 5,000. Entry in the firms journal on admission of a partner will be (a) Unrecorded Investment A/c Dr. 5,000 To Revaluation A/c 5,000 (b) Revaluation A/c Dr. 5,000 To Unrecorded Investment 5,000 (c) Partner Capital a/c Dr. 5,000 To Unrecorded Investment 5,000 (d) None of the three 57. A company issued debentures of the face value of Rs. 1,00,000 at a discount of 6% on Jan. 1, 2009. These debentures are redeemable by annual drawings of Rs. 20,000 made on 31st Dec. each year. The directors decided to write off discount based on the debentures outstanding each year. Amount of discount to be written off in the 5th year will be (a) Rs. 400 (b) Rs. 600 (c) Rs. 800 (d) None of the three 58. Alok Ltd. forfeited 300 shares of Rs. 10 each fully called up held by Ram for non payment of allotment money of Rs. 3 per share and final call money of Rs. 4 per share. Out of these shares 250 were reissued to Sohan for a total payment of Rs. 2,000. Amount transferred to capital reserve account will be (a) Rs. 250 (b) Rs. 900 (c) Rs. 600 (d) None of the three 59. A company issued Rs. 2,00,000 15% debentures at a discount of 5% redeemable after 10 years at a premium of 10%. Loss on issue of debentures will be (a) Rs. 30,000 (b) Rs. 15,000 (c) Rs. 20,000 (d) None of the three 60. The following information pertains to Suraj Ltd. 1. Equity share capital called up Rs. 5,00,000 2. Calls in arrears Rs. 40,000 3. Calls in advance Rs. 25,000 4. Proposed dividend 15% Amount of dividend payable is (a) Rs. 69,000 (b) Rs. 75,000 (c) Rs. 70,000 (d) None of the three SECTION – B : MERCANTILE LAWS (40 MARKS) 61. An agreement made without consideration is valid under the Indian Contract Act, 1872 if (a) The agreement is expressed in writing (b) The agreement is made on account of natural love and affection of the parties to the agreement stand in a near relation to each other 380 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India (c) The document is registered under the law for the time being in force for registration of such document (d) All of the above 62. As per the Indian Contract Act, 1872 every person is competent to contract provided he: (a) Is of the age of majority according to law to which he is subject (b) Is of sound mind (c) Is not disqualified from contracting by any law to which he is subject (d) All of the above 63. A person employed to do any act for another or to represent and another in dealings with the third parties is: (a) Principal (b) Agent (c) Servant (d) Bailee 64. When the consent of a party is not free, the contract is (a) Void (b) Voidable (c) Valid (d) Illegal 65. Moral pressure is involved in the case of (a) Coercion (b) Undue Influence (c) Misrepresentation (d) Fraud 66. A agrees to pay Rs. 1,000 to B if it rains, and B promises to pay a like amount to A, if it does not rain, this agreement is called (a) Quasi Contract (b) Contingent Contract (c) Wagering agreement (d) Voidable Contract 67. When offer is made to a definite person, it is known as (a) General Offer (b) Cross Offer (c) Counter Offer (d) Special Offer 68. An agreement to pay money’s worth on the happening or non-happening of a specified uncertain event, is a (a) Wagering agreement (b) Contingent contract (c) Quasi contract (d) Uncertain agreement 69. A contingent contract dependent on the happening of specified uncertain event within fixed time can be enforced if the event (a) Does not happen within fixed time (b) Becomes impossible before the expiry of fixed time (c) Happened within the fixed time (d) Both (a) and (b) Common Proficiency Test (CPT) Volume - I 381 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 14 70. Essentials of Contract of Sale are (a) At least 2 parties (b) Subject matter must be goods (c) None of the above (d) Both (a) and (b) 71. The heir of the deceased partner (a) Has a right to become a partner in the firm of the deceased partner (b) Does not have a right to become a partner in the firm of the deceased partner (c) Can becomes a partner in the firm of the deceased partner only if the surviving partners give their consent in this regard (d) Both (b) and (c) 72. Valid contract: (a) In case of this collateral agreement are void (b) Not enforceable in a court of law (c) An agreement enforceable by law at the option of one or more of the parties thereon but not at the option of the other or others (d) Enforceable at the option of the parties 73. A person to whom money has been paid, or anything delivered under coercion (a) Becomes the owner of such money or those goods (b) Is allowed to sell the goods and retain the money realized from such sale (c) Has no obligation to return the money, he may do so only a good gesture (d) Must repay the money or return those goods 74. Following conditions are implied in a Contract of Sale of Goods unless the circumstances of the contract show a different intention: (a) Condition as to title (b) Sale by description (c) Sale by sample (d) All of the above 75. A minor may be: (a) A partner of a firm (b) Representative of the firm (c) Entitled to carry on the business of the firm (d) Admitted to the benefits of the partnership 76. A partnership firm is compulsorily dissolved where (a) All partners have become insolvent (b) Firm’s business has become unlawful (c) The fixed term has expired (d) In cases (a) and (b) only 77. A partnership may be registered with (a) Registrar of companies (b) Registrar of partners (c) Registrar of firms (d) District court 382 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 78. Dissolution by agreement is: (a) Dissolution by the adjudication of all the partner or of all the partner but one as insolvent (b) Dissolution as a result of any agreement between all the partners (c) Dissolution by the business of the firm becoming unlawful (d) All of the above 79. Types of partner includes (a) Active partner (b) Sleeping partner (c) Nominal partner (d) All of the above 80. There can be a stranger to a consideration but a stranger to a contract signifies that a consideration may move from _______ (a) Promisee or any other person (b) Promisee (c) Promisor (d) An independent person 81. Coercion involves _______ (a) Physical force (b) Mental pressure (c) Moral pressure (d) Threat 82. _______ does not exist (a) Liability for special damages (b) Liability for exemplary damages (c) Liability for nominal damages (d) Liability for disciplinary damages 83. Recission means _______ (a) Substituting a new contract for the old one (b) Cancellation of the old contract (c) Modifying or altering the terms of contract so that it has the effect of substituting a new contract for the old one (d) Dispensing away the performance of the promise made by the other party 84. A _______ agreement is one, which is enforceable at the option of one party (a) Voidable (b) Void (c) Valid (d) Illegal 85. The position of stranger to a contract and that of stranger to consideration is _______ (a) Partially different (b) Partially same (c) Entirely different (d) Same 86. Agreement to share profits _______ (a) Implies an agreement to share losses (b) Does not necessarily mean an agreement to share losses (c) Must be coupled with an agreement to share losses (d) Is same as agreement to share losses Common Proficiency Test (CPT) Volume - I 383 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 14 87. A person who is mentally deranged due to same mental strain or other personal experience and suffers from intermittent intervals of sanity and insanity is _______ (a) Idiot person (b) Lunatic person (c) Intoxicated person (d) All of the above 88. The relationship of principal and agent may arise by _______ (a) Express or implied agreement (b) Ratification (c) Operation of law (d) All of the above 89. Goods are said to be in a deliverable state when _______ (a) The buyer may take delivery of them (b) The buyer would, under contract, be bound to take delivery of them (c) The seller is in a position to deliver them (d) All of the above 90. A contract to pay B Rs. 2,00,000/- if B’s house is destroyed by fire. It is _______ (a) A wagering contract (b) A contingent contract (c) A wagering contract plus a contingent contract (d) Neither a contingent contract nor a wagering contract 91. Rights of an unpaid seller include _______ (a) Right against the goods (b) Right of stoppage in transit (c) Right of re-sale (d) All of the above 92. Seller means a person who _______ (a) Sells goods (b) Agrees to sell goods (c) Sells or agree to sell goods (d) Has sold goods 93. Where in an auction sale, the seller appoints more than one bidder, the sale is _______ (a) Void (b) Illegal (c) Conditional (d) Voidable 94. Goods are said to be in a deliverable state when _______ (a) The buyer may take delivery of them (b) The buyer would, under contract be bound to take delivery of them (c) The seller is in a position to deliver them (d) All of the above 95. A person who finds goods belonging to another and takes them into his custody _______ (a) Becomes the owner of those goods thereafter (b) Is subject to the same responsibility as a bailee (c) Is allows to sell them and retain the money realized from such sale (d) Has no obligation to return those goods, he may do so only as a good gesture 384 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 96. Each of the partner is _______ (a) Principals as well agents (b) Only agents of the firm (c) Only representatives of the firm (d) Only co-partners of the firm 97. True test of partnership is (a) Sharing of profits (b) Sharing of profits and losses (c) Mutual agency (d) Existence of an agreement to share profits of the business 98. Registration of firm is _______ (a) Compulsory (b) Optional (c) Occasional (d) None of the above 99. A contracted with Housing Corporation for construction of number of houses. In calculating his price for the houses, A by mistake deducted a particular sum twice over. The Corporation affixed its seal to the contract, which correctly represented its intention. (a) The contract is now binding (b) The contract can be avoided by A (c) There is no contract at all since there is no consensus ad idem (d) The contract is not binding 100. A had offered B, a price of Rs. 10,000/- for B’s flat but B was not ready to sell the flat at all. A says to B that “I shall kill you if you do not agree to sell me your house for Rs.10,000/-”. B thereafter did all that was the desire of A in order to save his life. What is immediate answer? (a) A can enforce the contract (b) B can enforce the contract (c) A has applied coercion (d) The contract is unenforceable SECTION – C : GENERAL ECONOMICS (50 MARKS) 101. Which of the following is the best general definition of the study of Economics? (a) Inflation and unemployment in a growing economy (b) Business decision making under foreign competition (c) Individual and social choice in the face of scarcity (d) The best way to invest in the stock market 102. Labour intensive technique would get chosen in a : (a) Labour surplus economy (b) Capital surplus economy (c) Developed economy (d) Developing economy 103. Which of the following is not one of the four central questions that the study of economics is supposed to answer? (a) Who produces what? (b) When are goods produced? (c) Who consumes what? (d) How are goods produced? Common Proficiency Test (CPT) Volume - I 385 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 14 104. The various combinations of goods that can be produced in any economy when it uses its available sources and technology efficiently are depicted by: (a) Demand curve (b) Production curve (c) Supply Curve (d) Production possibilities curve 105. Rational decision making requires that: (a) One’s choices be arrived at logically and without errors (b) One’s choices be consistent with one’s goals (c) One’s choices never vary (d) One’s makes choices that do not involve trade offs 106. Contraction of demand is the result of: (a) Decrease in the number of consumers (b) Increase in the price of the good concerned (c) Increase in the prices of other goods (d) Decrease in the income of purchasers 107. In the case of a straight line demand curve meeting the two axes the price– elasticity of demand at the mid-point of the line would be: (a) 0 (b) 1 (c) 1.5 (d) 2 108. If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to: (a) Remain the same (b) Increase (c) Decrease (d) Any of these 109. All of the following are determinants of demand except (a) tastes and preferences (b) quantity supplied (c) income (d) price of related goods 110. The price of hot dogs increases by 22% and the quantity of hot dog demanded falls by 25% this indicates that demand for hot dog is - (a) elastic (b) inelastic (c) unitarily elastic (d) perfectly elastic. 111. If electricity demand is inelastic, and electric rates increase, which of the following is likely to occur? (a) Quantity demanded will fall by a relatively large amount (b) Quantity demanded will fall by a relatively small amount (c) Quantity demanded will rise in the short run, but fall in the long run (d) Quantity demanded will fall in the short run, but rise in the long run 386 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 112. An indifference curve slopes down towards right since more of one commodity and less of another results in : (a) same satisfaction (b) greater satisfaction (c) maximum satisfaction (d) decreasing expenditure 113. A vertical supply curve parallel to Y axis implies that the elasticity of supply is: (a) zero (b) infinity (c) equal to one (d) greater than zero but less than infinity 114. Which of the following cost curves in never ‘U’ shaped? (a) Average cost curve (b) Marginal cost curve (c) Average variable cost curve (d) Average fixed cost curve 115. Which of the following statements is true of the relationship among the average cost functions? (a) ATC = AFC = AVC (b) AVC = AFC + ATC (c) AFC = ATC + AVC (d) AFC = ATC – AVC 116. A firm’s average fixed cost is Rs. 20 at 6 units of output. What will it be at 4 units of output? (a) Rs. 60 (b) Rs. 30 (c) Rs. 40 (d) Rs. 20 117. In describing a given production technology, the short run is best described as lasting: (a) Up to six month from now (b) Up to five years from now (c) As long as all inputs are fixed (d) As long as at least one input is fixed 118. What is the shape of the demand curve faced by a firm under perfect competition? (a) Horizontal (b) Vertical (c) Positively sloped (d) Negatively sloped 119. Which is the first order condition for the profit of a firm to be maximum? (a) AC = MR (b) MC = MR (c) MR = AR (d) AC = AR 120. In which form of the market structure is the degree of control over the price of its product by a firm very large? (a) Monopoly (b) Imperfect competition (c) Oligopoly (d) Perfect competition 121. The kinked demand hypothesis is designed to explain in the context of oligopoly (a) Price and output determination (b) Price rigidity (c) Price leadership (d) Collusion among rivals Common Proficiency Test (CPT) Volume - I 387 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 14 122. The structure of the tooth paste industry in India is best described as: (a) Perfectly competitive (b) Monopolistic (c) Monopolistically competitive (d) Oligopolistic 123. When ____________ we know that the firm are earning just normal profits: (a) AC = AR (b) MC = MR (c) MC = AC (d) AR = MR 124. The green revolution is also known as : (a) Wheat revolution (b) Rice revolution (c) Maize revolution (d) Forest revolution 125. The area under irrigation has over the years in India (a) Remained constant (b) Decreased (c) Increased (d) First increased and then decreased 126. Abolition of Intermediaries and tenancy reforms are both part of : (a) Industrial reforms in India (b) External sector reforms in India (c) Land reforms in India (d) Banking reforms in India 127. In absolute terms, the number of people engaged in agricultural activities over the planning period has (a) Remained constant (b) Increased (c) Decreased (d) First increased and then decreased 128. Which of the following has been specifically established to meet the requirements of credit of the farmers and villagers? (a) ICICI Bank (b) Regional Rural Banks (c) State Bank of India (d) EXIM Bank 129. Mahalanobis model stressed upon the establishment of: (a) Consumer goods industries (b) Export oriented industries (c) Agro-based industries (d) Capital and basic goods industries 130. About ______________ per cent of the sick units in India are small units. (a) 10 per cent (b) 4 per cent (c) 30 per cent (d) 96 per cent 131. Oil and Natural Gas Corporation, Indian Oil Corporation, Steel Authority of India, and Bharat Heavy Electricals are all examples of: (a) Small scale units (b) Private sector units (c) Public sector units (d) Sick units 388 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 132. The service sector in India now accounts for: (a) More than 80 per cent of GDP (b) More than 70 per cent of GDP (c) More than 50 per cent of GDP (d) More than 90 per cent of GDP 133. BPO stands for: (a) Bharat Petro Organisation (b) Business Process Outsourcing (c) Big Portfolio Outsourcing (d) Business Partners Organization 134. National income differs from net national product at market price by the amount of: (a) Current transforms from the rest of the world (b) Net indirect taxes (c) National debt interest (d) It does not differ 135. Demand for intermediate consumption arises in: (a) Consumer household (b) Government enterprises only (c) Corporate enterprises only (d) All producing sector of an economy 136. Net value added is equal to: (a) Payments accruing to factors of production (b) Compensation to employees (c) Wages plus rent plus rent (d) Value of output minus depreciation 137. Find the tax which is direct tax among the following: (a) Personal income tax (b) Excise duty (c) Sales tax (d) Service tax 138. Which of the following statements is correct? (a) Income tax was abolished in India in 1991 (b) Gift tax was abolished in India in 1998 (c) All the states have adopted VAT system of indirect taxation (d) Estate duty was abolished in 1995 139. The annual addition to India’s population is almost equal to the total population of: (a) Bangladesh (b) Australia (c) Japan (d) China 140. Which year is known as ‘year of great divide’ for India’s population? (a) 1991 (b) 2001 (c) 1981 (d) 1921 Common Proficiency Test (CPT) Volume - I 389 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 14 141. India passing through ___________ stage of demographic transition. (a) Fourth (b) Third (c) First (d) Second 142. India accommodates nearly _______percent of world’s population (a) 10 (b) 50 (c) 17 (d) 45 143. EAS stand for (a) Easy Assistance Scheme (b) Endless Assistance Scheme (c) Employment Assurance Scheme (d) Employment Assessment Scheme 144. Every ____________ person in the world is an Indian (a) Second (b) Third (c) Sixth (d) Tenth 145. According to the latest data (2008-09) Plant Load Factor (PLF) is lowest in: (a) Southern region (b) Northern region (c) Western region (d) North eastern region 146. ____________ measures the operational efficiency of a thermal plant. (a) Power load factor (b) Power leakage factor (c) Plant load factor (d) Plant leakage factor 147. Who is regulatory authority for telecom in India? (a) SEBI (b) TRAI (c) MTNL (d) BSNL 148. Which of the following statements is correct with regard to external sector in the pre-reform period? (a) The foreign trade policy was very liberal, it allowed import of all types of goods (b) Import of foodgrains was strictly prohibited (c) The balance of payments situation was quite comfortable (d) None of the above 149. The pre-condition for privatization to be successful requires: (a) Liberalization and de-regulation of the economy (b) Capital markets should be sufficiently developed (c) None of the above (d) Both of the above (a) and (b) 390 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 150. Privatisation in India has taken place in all of the cases except: (a) CMC (b) BALCO (c) VSNL (d) None of the above SECTION – D : QUANTITATIVE APTITUDE (50 MARKS) 151. Pie diagram is used for (a) Comparing different components and their relation to the total (b) Representing qualitative data in a circle (c) Representing quantitative data in a circle (d) (b) or (c) 152. Which of the following measures of central tendency is based on only 50% of the central values? (a) Mean (b) Mode (c) Median (d) Both (a) and (b) 153. If all the observations are divided by 3, then (a) New Standard Deviation would also be divided by 3 (b) New Standard Deviation would be multiplied by 3 (c) New Standard Deviation will increase by 3 (d) New Standard Deviation will decrease by 3 154. More laborious numerical calculations are involved in A.M. than G.M. (a) True (b) False (c) Both (d) None of these 155. To find the median graphically we use ________. (a) Ogive (b) Frequency Polygon (c) Histogram (d) None of these 156. Which measures of dispersion is the quickest to compute (a) Standard deviation (b) Mean deviation (c) Quartile deviation (d) Range 157. 2nd decile is greater than 1st decile (a) True (b) False (c) Both (d) None of these 158. Correlation coefficient is not a pure number (a) True (b) False (c) Both (d) None of these Common Proficiency Test (CPT) Volume - I 391 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 14 159. Probability of throwing an even number with an ordinary six faced dice is (a) 1 (b) –1/2 (c) 1/2 (d) 0 160. In audit test statistical methods are not used (a) True (b) False (c) Both (d) None of these 161. Fisher’s Ideal formula does not satisfy_________ test (a) Circular test (b) Unit test (c) Time Reversal test (d) None of these 162. We use t-distribution when the sample size is ________ (a) Big (b) Small (c) Moderate (d) None of these 163. The mean of binomial distribution with parameters n and p is _______ (a) n (1–p) (b) np (1–p) (c) np (d) np(1−p) 164. P (B/A) is defined only if ___________ (a) A is pure event (b) B is a sure event (c) B is an impossible event (d) A is not an impossible event 165. AUA is equal to (a) A (b) φ (c) 2A (d) None of these 166. The sum of m terms of A.P. is n and the sum of n terms of A.P. is m. The sum of m+n terms is ______ (a) –(m+n) (b) (m+n) (c) (m–n)2 (d) m2–n2 167. The null set is given by (a) 0 (b) {φ} (c) φ (d) {0} 168. If P is a set of natural number then P∩P’ is (a) φ (b) Sample Space (c) 0 (d) (P∪P’)’ 392 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India