Common Proficiency Test Model Paper 3

169. In normal distribution, as the distance from ________ decreases, the curve goes far and far to the horizontal axis. (a) Median (b) Mode (c) Mean (d) None of these 170. The number of factors must be known are ___________ in determining the sample size for estimating a population mean. (a) 2 (b) 5 (c) 4 (d) 3 171. The compounded ratio of 4:9 and sub-duplicate ratio of 9:16 is (a) 1:4 (b) 1:3 (c) 3:1 (d) None of these 172. If x = 9 then 2x1/2 3x-1 is equal to (a) 2 (b) 3 (c) 4 (d) 0 173. If x = 2- 2- 2 … then it is equal to (a) –2 (b) 5 (c) 2 (d) 0 174. The equation of a straight line passing through (3, –2) and making equal intercepts on axis (a) x + y – 1 = 0 (b) x + y – 5 = 0 (c) 3x - 2y + 1 = 0 (d) None of these 175. If P+ P = 6/25, then value of P is equal to ∞ (a) 1/5 (b) 2/5 (c) 1/25 (d) 2/25 176. Rs. 80,000 is invested to earn a monthly interest of Rs. 12,00 at the rate of _______ p.a. simple interest. (a) 12% (b) 14% (c) 16% (d) 18% d 177. (xlogx) is equal to dx (a) (1 + log x ) (b) 1/log x (c) log x (d) x/log x Common Proficiency Test (CPT) Volume - I 393 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 14 3x -1 lim 178. is equal to x→0 1+x-1 (a) 3 log2 (b) 2 log3 e e (c) log6 (d) Does not exist e 179. If f’(x) = 3x2 – 2/x3 then f(x) = ? (a) x3 + 1/x2 + K (b) x2 + 1/x3 + K (c) x2 – 2/x3 + K (d) None of these 180. A person pays Rs. 975 in monthly instalment, each instalment is less than former by Rs. 5. The amount of first instalment is Rs. 100. In what time entire amount will be paid (a) 26 months (b) 16 months (c) 15 months (d) 20 months 181. How many three digit numbers are there, with distinct digits, with each digits odd (a) 120 (b) 60 (c) 30 (d) 15 182. The difference between Compound Interest and Simple Interest on a certain sum for 2 years at 6% p.a. is Rs. 13.50. Find the sum (a) Rs. 3,750 (b) Rs. 2,750 (c) Rs. 4,750 (d) None of these x+1 f(3) ,then is 183. If f(x) = x2 –1 and g(x) = 2 f(3)+g(3) (a) 5/4 (b) 4/5 (c) 3/5 (d) 5/3 184. The sum of two numbers is 16 and twice the square of larger part exceeds the square of smaller part by 164, the numbers are (a) 10 and 6 (b) 12 and 4 (c) 11 and 5 (d) None of these 185. If 3y – 2x = 4 and 4y – px = 2 are perpendicular to each other, the value of p is equal to (a) –6 (b) 6 (c) 2 (d) 1 186. The mean height of 8 student is 152 cm. Two more students of heights 143 cm and 156 cm join the group. New mean height is equal to (a) 153 (b) 152.5 (c) 155 (d) 151 394 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 187. Find the three numbers in G.P whose sum is 52 and the sum of their product in pairs is 624. (a) 4, 12, 36 (b) 10, 16, 26 (c) 5, 17, 30 (d) None of these 188. In how many ways can the letters of the word PENCIL be arranged so that N is always next to E (a) 60 (b) 40 (c) 720 (d) 120 189. If with rise of 10% in prices the wages are increased by 20%. Find the percentage of real wage increase (a) 109.29% (b) 9.09% (c) 9.29% (d) None of these 190. A sample of 100 gave a mean of 7.4 kg and a standard deviation of 1.2 kg. The standard error of mean will be (a) 0.12 (b) 0.001 (c) 0.0001 (d) 1 191. A letter lock has three rings each marked with 10 different letters. In how many ways it is possible to make an unsuccessful attempt to open the lock. (a) 1000 (b) 999 (c) 5040 (d) None of these 192. A candidate is selected for interview for 3 posts, for the first there are 3 candidates, for the second there are 4 and for the third there are 2. What are the chances of his getting at least one. (a) 3/4 (b) 2/3 (c) 1/10 (d) 1 193. Equations of two lines of regression are 4x + 3y + 7 = 0 and 3x + 4y + 8 = 0, the mean of x and y are (a) 5/7 and 6/7 (b) – 4/7 and –11/7 (c) 2 and 4 (d) None of these 194. If the first quartile is 104 and quartile deviation is 18, the third quartile will be (a) 140 (b) 116 (c) 20 (d) 0 195. What is the present value of Re. 1 to be received after 2 years compounded annually at 10%? (a) 0.56 (b) 0.78 (c) 0.99 (d) 0.83 Common Proficiency Test (CPT) Volume - I 395 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 14 1 ∫ x(1-x)ndx 196. The value of is equal to 0 (a) 0 (b) 1 1 (c) (n+1)(n+2) (d) (n+1)(n+2) 197. In a class of 30 students, 20 students like maths, 18 like science and 12 like both the subjects. Find the number of students who like no subject. (a) 4 (b) 5 (c) 8 (d) None of these d 198. e2logx is equal to dx (a) 2 (b) 2x (c) x2 (d) 0 199. If the quartile deviation of x is 6 and 4x + 8y = 20, what is the quartile deviation of y (a) 3 (b) 4 (c) 5 (d) 1 200. For a group of 8 students, the sum of square of differences in ranks for maths and Economics marks was found to be 50. What is the value of rank correlation coefficient? (a) 0.50 (b) 0.40 (c) 1.00 (d) –1.00 (cid:2)(cid:2)(cid:2) 396 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 – 15 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. SECTION – A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. 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 2. Carriage outward is debited to (a) Trading Account (b) Profit and loss account (c) Profit and loss appropriation account (d) Balance sheet 3. Amount spent, for the construction of temporary huts, which were necessary for construction of the cinema house and demolished when the cinema house was ready is a (a) Revenue expenditure (b) Capital expenditure (c) Deferred revenue expenditure (d) None of the above 4. Material costing Rs. 700 in the erection of the machinery and wages paid for it amounting to Rs. 400 should be debited to (a) Material account (b) Wages account (c) Purchases account (d) Machinery account 5. Difference of totals of both debit and credit side of the trial balance is transferred to (a) Trading account (b) Miscellaneous account (c) Difference account (d) Suspense account Common Proficiency Test (CPT) Volume - I 397 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 15 6. Which of the following is correct (a) Capital is equal to assets minus liabilities (b) Capital is equal to assets plus liabilities (c) Assets are equal to liabilities minus capital (d) Liabilities is equal to capital plus assets 7. All of the following have debit balance except one. That account is (a) Wages outstanding account (b) Loan to contractor (c) Debtors Account (d) Goodwill 8. In the absence of any provision in the partnership agreement, profits and losses are shared (a) In the ratio of capitals (b) In the ratio of loans given by them to the partnership firm (c) Equally (d) None of the above 9. Which of following statement is not true (a) Book keeping is mainly concerned with recording of financial data (b) Goods given as sample should be credited to purchase A/c (c) The balance of petty cash is an asset (d) In case of a debt becoming bad the amount should be credited to bad debts A/c 10. Fundamental accounting assumptions are (a) Going concern (b) Accrual (c) Consistency (d) All of the three. 11. The purpose of accommodation bill is (a) To finance actual purchase or sale of goods (b) To facilitate trade transmission (c) When both parties are in need of funds (d) None of the three 12. Municipal tax Rs. 50,000 under dispute is a (a) Current liability (b) Contingent liability (c) Revenue loss (d) None of the above. 13. If del-credere commission is allowed for bad debt, consignee will debit the bad debt amount to (a) Commission earned account (b) Consignor A/c (c) Debtors A/c (d) General trading a/c 398 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 14. As per section 37 of the Indian Partnership Act, 1932, the executors would be entitled at their choice to the interest calculated from the date of death till the date of payment on the final amount due to the dead partner at ______ percent per annum (a) 7 (b) 4 (c) 6 (d) 12 15. Dividends are usually paid as a percentage of _____ (a) Authorised share capital (b) Net Profit (c) Paid up capital (d) Called up capital 16. Writing of transaction in the ledger is called (a) Posting (b) Journalizing (c) Balancing (d) Casting 17. Commission provided by the consignor to the consignee to promote credit sale is known as (a) Ordinary commission (b) Del- Credere commission (c) Over riding commission (d) Special commission 18. Memorandum Joint venture account is a (a) Personal a/c (b) Real a/c (c) Nominal a/c (d) None of the above 19. In the ledger there are _______ columns (a) 4 (b) 6 (c) 8 (d) 10 20. Carriage charges paid for a new plant purchased if debited to carriage a/c would effect _ (a) Plant account (b) carriage account (c) Plant and Carriage account (d) None of the above 21. If a machinery is purchased for Rs. 1,00,000 the asset would be recorded in the books at Rs. 1,00,000 even if its market value at that time happens to be Rs. 1,40,000. In case a year after, the market value of the asset comes down to Rs. 90,000 it will ordinarily continue to be shown at Rs. 1,00,000 and not Rs. 90,000 due to (a) Realisation concept (b) Present value concept (c) Replacement concept (d) Cost concept 22. A businessman purchased goods for Rs. 25,00,000 and sold 70% of such goods during the accounting year ended 31st March 2009. The market value of the remaining goods was Rs. 5,00,000. He valued the closing stock at Rs. 5,00,000 and not Rs. 7,50,000 due to (a) Money measurement (b) Conservatism (c) Cost (d) Periodicity Common Proficiency Test (CPT) Volume - I 399 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 15 23. Sharma of Allahabad sends goods costing Rs. 1,00,000 at an invoice price of the Rs. 1,20,000 to Kalapil of Katak. Sharma incurs the following expenditure in relation to such consignment: 1. Packing and loading Rs. 5000 2. Transportation Rs. 10000 3. Insurance Rs. 5000 1/10th of the consignment is damaged in transit. Amount of abnormal loss will be (a) Rs. 14,000 (b) Rs. 10,000 (c) Rs. 12,000 (d) None of the above. 24. Suresh of Delhi consigned 600 fans to Naresh of Agra to be sold on his account and at his risk. The cost of each fan is Rs. 300 Suresh paid Rs. 6000 as freight and insurance Naresh paid Rs. 1500 as octroi and cartage. Rs. 2000 as rent; and Rs. 1500 as insurance. 500 fans were sold by Naresh for Rs. 1,80,000 Naresh was entitled to a commission of 4% on sale @ Rs. 350 per fan and 20% of any surplus price realized. Consignment profit will be (a) Rs. 12,250 (b) Rs. 12,000 (c) Rs. 10,000 (d) Rs. 13,000 25. Original cost = Rs. 1,26,000 Salvage Value = Rs. 6000 Use Life = 6 years Annual depreciation under SLM will be (a) Rs. 21000 (b) Rs. 20000 (c) Rs. 15000 (d) Rs. 14000 26. At the end of the accounting period the provision is made for the amount outstanding for the electricity that has been consumed during the said period. This statement is based on (a) Accrual concept (b) Matching (c) Realisation (d) Money measurement 27. Under the diminishing balance method, depreciation (a) Increases every year (b) Decreases every year (c) Is constant every year (d) None of the above 28. Which inventory valuation method best matches the cost of goods sold with current replacement cost? (a) LIFO (b) FIFO (c) Weighted average method (d) Specific identification method. 29. Which financial statement represents the accounting equation, Assets = Liabilities + Owners equity (a) Income statement (b) Balance sheet (c) Statement of cash flow (d) None of the three 400 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 30. The total of the purchase day book is posted periodically to the debit of (a) Purchases account (b) Cash book (c) Journal proper (d) None of the above 31. Legal expenses incurred in defending a suit for breach of contract to supply goods is a (a) Revenue expenditure (b) Capital expenditure (c) Deferred revenue expenditure (d) None of the three 32. A running business was purchased by Ram with following assets and liabilities Cash in hand 1,000 Cash at Bank 5000 Stock 20000 Land and building 100000 Plant and machinery 50000 Owing from Mr. X 12500 Prepaid Insurance 500 Owing to Z Ltd. 3750 Interest received in advance 250 Ram’s capital will be (a) Rs.1,85,000 (b) Rs.1,80,000 (c) Rs.1,75,000 (d) None of the above 33. Following are the sales return of Jindal & Co. a saree dealer Date Credit Note 05.01.2006 201 Goyal & Co. Rampur returned 2 Polyster sarees @ 125 10.01.2006 202 Accepted return of goods (which were sold for cash) from Garf & Co. Bhiwani, 2 Kota Sarees @ Rs. 50 17.01.2006 203 Mittal & Co. Hissar returned 2 silk sarees @ Rs. 325 31.01.2006 Mohan returned one old type writer @ Rs. 500 Total of sales return book will be (a) Rs. 900 (b) Rs. 800 (c) Rs. 1000 (d) None of the three Common Proficiency Test (CPT) Volume - I 401 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 15 34. Following is an incorrect trial balance Dr. Balance (Rs.) Cr Balance (Rs.) Sen Gupta’s Capital - 1556 Sen Gupta’s Drawings 564 - Leasehold premises 750 - Sales - 2.750 Dues from customers 530 Purchases 1259 Purchases return 264 Loan from Bank 256 Creditors 528 Trade expenses 700 Cash at Bank 226 Bills payable 100 Salaries and wages 600 Opening stock - 264 Rent and taxes 463 Sales return 98 Total of corrected trial balance will be (a) Rs. 5454 (b) Rs. 5400 (c) Rs. 5600 (d) Rs. 5000 35. Ankush Ltd. had issued 10,000, 10% Redeemable Preference Shares of Rs.100 each, fully paid up. The company decided to redeem these preference shares at par, by issue of sufficient number of equity shares of Rs. 10 each at a premium of Rs.2 per share as fully paid up. The amount to be transferred to capital redemption reserve account will be (a) Rs. 10,00,000. (b) Rs. 12,00,000. (c) Rs. 8,00,000. (d) Nil. 36. Bill of Rs.10,000 accepted by Rajesh was endorsed by Ritesh to Dinesh on account of final settlement of Rs.10,500. The benefit of Rs.500 earned by Ritesh was: (a) Credited to discount allowed account by Rs. 500. (b) Credited to discount received account by Rs.500. (c) Credited to rebate account by Rs.500. (d) Not shown in the books of Ritesh at all. 37. No journal entry is required to be passed when there is (a) Normal loss (b) Abnormal Loss (c) Loss of bad debts (d) Loss by theft 402 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 38. A stock worth Rs. 10,00,000 is insured for Rs. 6,00,000. It is completely destroyed by fire. The loss to be admitted by the insurance company will be (a) Rs. 10,00,000 (b) Rs. 6,00,000 (c) Rs. 8,00,000 (d) None of the three 39. Cost of goods sold 80,700, opening stock 5,800 and closing stock 6,000 then amount of purchases will be (a) Rs. 80,500 (b) Rs. 74,900 (c) Rs. 74,700 (d) Rs. 80,900 40. Rs. Opening stock 8500 Purchases 30,700 Direct expenses 4800 Indirect expenses 52000 Closing Stock 9000 Cost of goods sold will be (a) Rs. 35,000 (b) Rs. 30,000 (c) Rs. 40,000 (d) None of the three 41. Cost of goods sold Rs. 70,800 Sales Rs. 1,30,200 Gross Profit will be (a) Rs. 59,400 (b) Rs. 59,000 (c) Rs. 60,000 (d) None of the above 42. Stock at start 2400 Carriage inward 524 Purchases 15205 Manufacturing wages 2800 Sales 20860 Manufacturing wages outstanding 96 Closing stock 3840 Loss due to fire 1000 Return outward 185 Indirect expenses 200 Return Inward 860 On the basis of the above information, Gross Profit will be (a) Rs. 4,000 (b) Rs. 5,000 (c) Rs. 6,000 (d) None of the three Common Proficiency Test (CPT) Volume - I 403 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 15 Rs. Rs. 43. Accounts payable 68,000 Long Term Loan 30,000 Capital 2,00,000 Wages payable 1,20,000 Cash in hand 1,24,000 Investments 2,000 Prepaid expenses 2,000 Net Profit 96,000 Cash at Bank 2,90,000 Bills receivable 80,000 Inventories 16,000 Total of Balance Sheet will be (a) Rs. 5,14,000 (b) Rs. 6,00,000 (c) Rs. 6,80,000 (d) None of the three. 44 Depreciation on motor car, whose cost is Rs. 58,000 with an accumulated depreciation reserve of Rs.11,600, at 20% p.a. on diminishing balance will be (a) Rs. 9000 (b) Rs. 9280 (c) Rs. 10000 (d) None of the three. 45. Balance of Provision for bad debts on Jan 1, 2009 Rs. 1250; Bad debts during the year Rs. 300; Provision for bad debts is 5% on Debtors of Rs. 10,000. Provision credited to Profit and Loss account will be (a) Rs. 400 (b) Rs. 500 (c) Rs. 450 (d) None of the three 46. Depreciable amount of the machinery is Rs.11,00,000. The machine is expected to produce 30 lakhs units in its 10 year life and expected distribution of production units is as follows: 1-3 year 5 lacs units each year 4-6 year 3 lacs units each year 7-10 year 1.5 lacs units each year. Annual depreciation for 1-3 year, using production units method will be (a) Rs.1,10,000. (b) Rs.55,000. (c) Rs. 65,000. (d) Rs. 1,83,333. 47. A and B enter into a joint venture in timber trading. A pays for purchase of timber Rs. 2,00,000 and expenses Rs. 2,000. He draws a bill of exchange on B for Rs.1,00,000 and discounts it with Bank for Rs. 95,000. B sells the timber for Rs. 2,50,000 and pays expenses Rs. 3,000 B is entitled to get a commission of 10% on sale A is entitled to get an interest of Rs. 12,000 on his capital. Profit on venture will be (a) Rs. 3000 (b) Rs. 4000 (c) Rs. 5000 (d) None of the three. 404 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 48. Received final dividend of Rs. 500 from Ajit, whose account had already been written off as bad debt was credited to a newly opened account and was included in the list of creditors rectifying entry will be - (a) Ajit Dr. 500 To Bad Debts recovered 500 (b) Bank Dr. 500 To bad debts 500 (c) Debtors Dr. 500 To Bad debts recovered 500 (d) None of the three. 49. When balance as per cash book is the starting point, and cheques issued for payment Rs. 400 was wrongly credit by Bank as Rs.900 then in the bank reconciliation statement cash balance will be (a) Added by Rs. 1300 (b) Subtracted by Rs. 1,300 (c) Added Rs. 900 (d) Subtracted by Rs. 400 50. Overdraft as per pass book is given Rs. 10,000 (i) Cheques deposited in the Bank but not recorded in Cash Book Rs. 100 (ii) Cheques drawn but not presented for payment Rs. 6,000 (iii) Bank charges recorded twice in cash book Rs. 30 Overdraft as per Cash Book will be (a) Rs. 16,000 (b) Rs. 16,130 (c) Rs. 15,000 (d) None of the three. 51. Ratan and Karan entered into partnership on April 1, 2009. They invested capital Rs.15,000 and Rs.10,000 respectively. It was agreed that 8% p.a. interest will be calculated both on capital and drawings. Drawings were made as follows Ratan Karan June 30 600 800 Sept. 30 500 700 Dec. 31 400 600 Karan was entitled to a salary of Rs. 250 p.m. Profit before adjusting interest and salary was Rs. 8848. Divisible profit will be (a) Rs. 4,000 (b) Rs. 3,000 (c) Rs. 5,000 (d) None of the three. 52. X and Y have been sharing profit and losses in the ratio of 5:3; C is admitted as a partner. He acquires his 1/8th share only from B. New ratio will be (a) 5:2:1 (b) 4:2:1 (c) 2:2:1 (d) None of the three Common Proficiency Test (CPT) Volume - I 405 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 15 53. A and B are equal partners in a firm their capital shows credit balance of Rs. 18,000 and Rs.12,000 respectively. A new partner C is admitted with 1/5th share in profits. He brings Rs. 14,000 for his capital. Value of hidden goodwill at the time of C’s admission will be (a) Rs. 26,000 (b) Rs. 25,000 (c) Rs. 20,000 (d) None of the three. 54. A, B and C are partners, sharing profits in the ratio of 4:3:2. D is admitted for 2/9th share of profits and brings Rs. 30,000 as his capital and 10,000 for his share of goodwill. The new profit sharing ratio between partners will be 3:2:2:2 goodwill amount will be credited in the capital accounts of: (a) A only (b) A, B and C (Equally) (c) A and B (Equally) (d) A and C (Equally) 55. X, Y and Z were partners sharing profits in proportion to 5:3:2. Goodwill does not appear in the books, but it is agreed to be worth Rs. 1,00,000. X retires from the firm and Y and Z decide to share future profits equally. X’s share of goodwill will be debited to Y’s and Z’s capital A/cs in the ratio. (a) 1:1 (b) 2:3 (c) 3:2 (d) None of the three. 56. X Ltd. invited applications for 1,00,000 shares of Rs. 10 each at a discount of 6%. Discount per share will be - (a) Rs. 1.00 (b) 0.80 Paisa (c) 0.60 paisa (d) None of the three. 57. A company makes an issue of 5000 equity shares of Rs. 100 each at 10% discount allowed at the time of allotment. The net amount is payable as follows: Rs. On application and allotment 40 On first call 25 On final call 25 A shareholder holding 100 shares did not pay final call money. His shares were forfeited. Amount credited to Discount on issue of shares A/c will be (a) Rs. 1,000 (b) Rs. 500 (c) Rs. 1,500 (d) None of the three. 58. 1,000 shares of Rs.100 each were issued to a promoter of the company for their legal services, rendered in the formation of the company. For this, company credited Share Capital Account and debited (a) Goodwill account by Rs. 1,00,000. (b) Legal services account by Rs.1,00,000. (c) Promoter’s account by Rs.1,00,000. (d) Formation expenses account by Rs.1,00,000. 406 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 59. In the trial balance of a joint stock company, the following balances are given Dr. Cr. Rs. Rs. (i) 10% Mortgage Debentures 1,00,000 (Payable after five years) (ii) Discount allowed on issue of debentures 2000 Amount of discount written off per year will be (a) Rs. 500 (b) Rs. 800 (c) Rs. 400 (d) None of the three. 60. Called up share capital (46,000 shares 10 each) Rs. 4,60,000 Calls in arrear Rs. 7,500 Proposed dividend 5% Amount of proposed dividend will be (a) Rs. 22625 (b) Rs. 25000 (c) Rs. 23000 (d) None of the three. SECTION – B : MERCANTILE LAWS (40 MARKS) 61. Which of the following is correct? (a) A wagering agreement is void (b) A contingent contract is valid (c) A wagering agreement is void while a contingent contract is valid (d) None of the above 62. The following are the essential elements which need to co-exist in order to make a valid contract: (a) Offer & Acceptance. (b) Intention to create legal acceptance (c) Capacity of parties -Competency (d) All of the above 63. The rights of a principal are the following (a) Right to recover damages (b) Right to obtain an account of secret profits and recover them and resist a claim for remuneration (c) Right to resist agent’s claim for indemnity against incurred liability (d) All of the above 64. An offer may be made to the following (a) A particular person (b) A particular group or body of person (c) The public at large i.e the whole world (d) All of the above Common Proficiency Test (CPT) Volume - I 407 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 15 65. 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 66. Delivery of goods in case of transit made by handing over documents of title to goods is (a) Actual delivery (b) Constructive delivery (c) Symbolic delivery (d) All of the above 67. A void contract is a contract without any legal effect and cannot be enforced in a court of law. The following are instances of void contracts: (a) Agreements entered under mistake of fact (b) Agreements by way of wager. (c) Agreements made consideration. (d) All of the above 68. Necessary condition for existing goods is (a) They should be in existence at the contract of sale (b) They should be owned or possessed by the seller (c) Both of the above (d) None of the above 69. When the consent of a party is not free the contract is (a) Void (b) Voidable (c) Valid (d) Illegal 70. A voidable contract is one which (a) Can be enforced at the option of both aggrieved party (b) Can be enforced at the option of both the parties (c) Cannot be enforced in a court of law (d) Court prohibits. 71. When the consent of a party is obtained by fraud, the contract is (a) Valid (b) Void (c) Illega (d) Voidable 72. The Sale of Goods Act, 1930 came into force on (a) 1st March, 1930 (b) 1st October, 1932 (c) 1st April, 1932 (d) 1st June, 1932 73. 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 buyer. 408 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India (c) When he gives notice to the buyer of his intention to re-sale and the buyer does not within a reasonable time pay the price. (d) Both (a) and (b) 74. If the buyer rejects the whole quantity of goods due to short delivery or excess delivery, the contract is treated as (a) subsisting (b) Cancelled (c) Void (d) invalid 75. Legally, a contract of sale includes (a) sale (b) Agreement to sell (c) barte (d) Both (a) and (b) 76. State whether the following statements are false or true (a) Every partner cannot participate in the conduct of business (b) Every partner is bound to attend diligently to his duties in the conduct of the business (c) Every partner can have access to inspect and take a copy of the books of accounts of the firm (d) Even in the absence of any contract between the partners a partner is entitled to receive remuneration for taking part in the business. 77. State which of the following statements are not correct? (a) An unregistered firm can enforce by suit its dues from a Third party (b) A partner of an unregistered firm cannot sue for his dues from the firm or from other partners. (c) Neither the firm nor the partners when sued can claim a set-off (d) Non registration of a firm does not affect the right of an Official Assignee Receiver or Court to realize the property of an insolvent partner. 78. A new partner can be admitted in the firm with the consent of (a) All the partners (b) Simple majority of partners (c) Special majority of partners (d) New partner only 79. 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 80. Minor’s estates are liable to reimburse the supplier, who supplies him with ______ (a) Necessaries (b) luxuries (c) Necessities (d) All the things Common Proficiency Test (CPT) Volume - I 409 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 15 81. A contracts to pay B Rs.100000 if the latter’s house is burnt to ashes. This is an example of ______ (a) Contingent (b) Quasi-contract (c) Guarantee (d) bailment 82. Profits of a partnership firm must be distributed among the partners as per the partnership deed while the profits of a company ______ (a) Must be distributed to its shareholders (b) Mayor may not be distributed to its shareholder (c) Mayor may not be distributed to its board of directors, shareholders and other stakeholders (d) Are not distributable at all 83. An offer made to the public in general which anyone can accept and do the desired act is ______ (a) General offer (b) Special offer (c) Cross offer (d) Counter offer 84. A agrees to sell his car to B at a price which B may be able to pay .This agreement is ______ (a) void (b) valid (c) voidable (d) contingent 85. Quasi contracts arise ______ (a) Where obligations are created without a contract (b) Where obligations are created under a contract (c) Out of natural causes (d) Out of man-made causes 86. Consideration must move at the desire of the ______ (a) Promisor (b) promisee (c) Any person (d) Promisee or promissory or any other person 87. Agreement for the creation of monopolies ______ (a) Is allowed in the interest of economy (b) Is oppose to public policy and hence void (c) Is not detrimental to any nation (d) Is Impossible because of perfect competition in today’s scenario 88. Implied contract, even if not in writing or express words is perfectly- ______ if other conditions are satisfied (a) void (b) valid (c) voidable (d) illegal 410 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 89. 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 90. There can be stranger to a consideration but not 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 91. In case of sale the position of a buyer is that of ______ (a) Owner of the goods (b) Bailee of the goods (c) Hirer of the goods (d) None of the above 92. In India the age majority is regulated by ______ (a) The Indian Majority Act, 1875 (b) The Indian Minority Act, 1875 (c) The Indian Contract Act, 1872 (d) The Constitution of India 93. A new partner is held liable for all acts of the firm done (a) Before he become a partner (b) After he become a partner (c) Any time after even he ceases to be a partner and up to his death (d) Before or after he became a partner 94. A partner may retire with the consent of ______ (a) Any partner (b) Some of the partner (c) None of the partner (d) All of the other partner 95. A person can be introduced as a partner in a firm with the consent of ______ (a) All of the partner (b) Any partner (c) None of the partner (d) Some of the partner 96. Death of a partner has the effect of ______ (a) Dissolving the firm (b) Result in continuance of the business of the firm (c) His heirs joining the firm (d) Computation of profits upto the date of death 97. If a minor elects to becomes partner after attaining majority, he will be liable for the debts of the firm _____ (a) From the date of admission as a minor partner (b) from the date of attaining majority (c) from the date of his notice to the public that he elects to become partner (d) As decided by all other partner Common Proficiency Test (CPT) Volume - I 411 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 15 98. Death of partner has the effect of ______ (a) Dissolving the firm (b) Result in continuance of the business of the firm (c) His heirs joining the firm (d) Computation of profits upto the date of death 99 A & B are the only two partner in a firm B was murdered by C who wanted to become a partner of the firm but B has raised objection to it A now wants to take D as a partner in the said firm D is father of C light of the situation answer which of the following is correct? (a) The original partnership is dissolved. (b) The original partnership is not dissolved and A&D can continue. (c) A &D has to enter into fresh agreement and create a new partnership (d) Both (a) and (c) 100. A B tyre Co.Ltd sold tyres to a dealer C, who sold those to A, a sub-dealer on the condition that those tyres would not be sold at a price lower than the list price fixed by A B tyre Co. Ltd and if the tyres were sold at a price lower than the list price a penalty of Rs. 2 for every tyre sold below the list price would be recovered as damages. A sold five tyres below the list price A B tyre Co. Ltd filed a suit against C Is AB tyre Co. Ltd. entitled to maintain the suit (a) No since A B tyre Co. Ltd was not a party to the contract (b) No since only 5 tyres are involved and the amount is insignificant. (c) Yes as A B tyre Co. Ltd is the producer of the tyres (d) Yes as A B tyre Co. Ltd sold the tyre to C who in turn sold to A SECTION – C : GENERAL ECONOMICS (50 MARKS) 101. Which of the following statements is correct? (a) Employment and economic growth are studied in micro economics. (b) Micro economics deals with balance of trade (c) Economic condition of a section of the people is studied in Micro Economics (d) External value of money is dealt with in micro-economics 102. Identify the correct statement : (a) In capitalist economy people are not free to spend their income as they like (b) In socialist economy the right to work is guaranteed but the choice of occupation gets restricted (c) In socialist economy a relative inequality in income is an important feature. (d) In today’s world only U.S.A. is a purely socialist country 103. When quantity demanded changes by larger percentage than does price, elasticity is termed as: (a) inelastic (b) perfectly elastic (c) elastic (d) perfectly inelastic 412 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 104. Which of the following statement is not correct? (a) GDP at market price = GNP at market price – Net income from abroad (b) GDP at factor cost = GDP at market price – net indirect taxes (c) NDP at factor cost = NDP at market price – net indirect taxes (d) NNP at factor cost = NNP at market price – net income from abroad 105. Identify the item which is not a factor payment : (a) Free uniform to defence personnel (b) Salaries to the members of Parliament (c) Imputed rent of an owner occupied building (d) Scholarships given to scheduled caste students. 106. Money in dynamic sense: (a) Serves as encouragement to division of labour (b) Serves as smooth transformer of saving into investments (c) Serves as both (a) and (b) of the above (d) Serves neither as (a) or (b) of the above. 107. Which of the following is not a quantitative measure of credit control? (a) Bank Rate Policy (b) Open Market Operation (c) Consumer Credit Regulation (d) Variable Reserve Requirement 108. Integration of the domestic economy with the world economy is called: (a) disinvestment (b) privatization (c) liberalisation (d) globalisation 109. Which of the following is not an indirect tax reform: (a) reducing the peak rate of custom duties (b) rectifying anomalies like inverted duty structure (c) the tax rate on foreign companies has also been reduced from 55% to 40% (d) introduction of value added tax for achieving harmonized taxation regime 110. Which of the following statements is against Privatization? (a) Privatization will help reducing the burden on exchequer (b) It will help the profit making public sector units to modernize and diversity their business. (c) It will help in making public sector units more competitive (d) None of the above 111. Which of the following statements is incorrect: (a) Workers employed in Sugar Mills face seasonal unemployment (b) Due to introduction of new machinery, labour saving device etc. some workers tend to be replaced by machine is termed as structural unemployment Common Proficiency Test (CPT) Volume - I 413 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 15 (c) Frictional unemployment is temporary phenomenon (d) Disguised unemployment refers to a situation where removal of some workers will not affect the volume of total output 112. If the price of good A increases relative to the price of substitute B and C, the demand for: (a) B will increase (b) C will increase (c) B and C will increase (d) B and C will decrease 113. If income elasticity for the household for good A is 2 then it is a: (a) necessity item (b) inferior goods (c) luxurious item (d) comfortable item 114. FRBM Act Stands for : (a) Foreign responsibility and Business Management (b) Foreign Responsibility and Budget Management (c) Fiscal Revenue and Budget Management (d) Fiscal Responsibility and Budget Management 115. Which of the following statements is incorrect? (a) Most of the big industrial units in India are sick (b) The industrial pattern on the eve of independence was not balanced (c) During the planning period, Indian Industrial structure has shifted in favour of basic and capital goods and intermediate sector. (d) None of the above 116. If the elasticity of supply is zero then supply curve will be. (a) Horizontal (b) Downward Sloping (c) Upward sloping to the right (d) Vertical 117. It is _____________ that deals with the problem of allocation of resources (a) statistics (b) macro-economic theory (c) econometrics (d) micro-economic theory 118. Lesser production of ___________ would lead to lesser production in future (a) Public goods (b) Consumer goods (c) Capital goods (d) Agriculture goods 119. _____________ viewed economics as a science of dynamic growth and development (a) Robbins (b) Adam Smith (c) Paul A. Samuelson (d) Pigou 120. At present, Bank rate is __________ per (June 2010). (a) 6.0 (b) 7.0 (c) 6.5 (d) 7.5 414 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 121. RBI makes advances to the Central and State Government repayable within ___________ from the date of advance. (a) 60 days (b) 45 days (c) 90 days (d) 75 days 122. At present there are _____________ Nationalised Banks in India (a) 14 (b) 6 (c) 21 (d) 19 123. In ___________________ we remove tariff, subsidies on the flow of goods and services between countries. (a) globalisation (b) liberalisation (c) privatisation (d) disinvestment 124. In Fiscal deficit we add borrowings and other liabilities to the _______________ (a) Primary deficit (b) Capital deficit (c) Budget deficit (d) Money deficit 125. When more money chases relatively too less quantity of goods, the resulting situation is called___________ (a) Stagnation (b) Cost-Push Inflation (c) Deflation (d) Demand pull inflation 126. TRAI is regulatory authority for _____________ in India (a) tourism (b) technical Education (c) transport (d) telecom 127. When contribution to the production is almost zero/nil is called _________ unemployment (a) disguised (b) cyclical (c) chronic (d) structural 128. NABARD is the apex bank for _____________ credit in India (a) combined sector (b) industrial sector (c) agriculture sector (d) tertiary sector 129. International Monetary Fund commenced its operation in ______________ (a) April 1947 (b) March 1946 (c) April 1946 (d) March 1947 130. In perfect competition the firm’s _________ above AVC has the identical shape of the firm’s supply curve (a) Marginal revenue curve (b) Marginal cost curve (c) Average cost curve (d) None of the above Common Proficiency Test (CPT) Volume - I 415 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 15 131. When _____________, we know that the firms must be producing at the minimum point of average cost curve and so there will be productive efficiency (a) MC = MR (b) MC = AC (c) AC = AR (d) AR = MR 132. According to the Planning Commission, using Mixed Recall period (MRP) ________ % people were below poverty line in 2004-2005. (a) 21.8 (b) 25.2 (c) 26.2 (d) 27.8 The following data gives the production possibilities frontier of an economy that produces two types of goods, guns and bread. Read the following table and answer questions 133–135. Table 1 : Production Possibilities Production possibilities A B C D E F G H Guns 0 10 20 30 40 50 60 30 Bread 105 100 90 75 55 30 0 45 133. According to table 1, the opportunity cost of increasing gun’s production from 20 to 30 units is equal to (a) 10 units of bread (b) 15 units of bread (c) 25 units of bread (d) 24 units of bread 134. Given the data in table 1, one moves successively from point A to point B, C, D, E and F, the opportunity cost of guns: (a) Increases as more of guns are produced (b) Decreases as more of guns are produced (c) Remains constant as more of guns are produced (d) Nothing can be said 135. Point D is efficient while point H (30 guns and 45 loaves of bread) is inefficient. Why? (a) Point D is outside the PPF while point H is on the PPF (b) Point D is inside the PPF while point H is on the PPF (c) Point D is on the PPF while point H is inside the PPF (d) Nothing can be said 136. What is Disinvestment? (a) It refers to the disposal of Public Sectors equity in the market (b) It refers to the transfer of assets from private to public ownership (c) It means integrating the domestic economy with the world economy (d) None of the above 416 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 137. Which of the following statements is incorrect regarding Disinvestment ? (a) Government has not failed to raise the budget disinvestments in the capital market (b) The procedure adopted for disinvestment has suffered from adhocism in the absence of a long term policy (c) It means selling of Govt. Share in the PSU to other PSU or Private Sector or Banks (d) It has been too insignificant to affect either the structure of management or the working environment of the PSU in India A competitive firm sells his product at market price of Rs. 51 per unit. The fixed cost is Rs. 300 and variable cost for different level of production are shown in the following table 2. Use table No.2 to answer questions 138 – 141. Table 2 Quantity Variable Fixed cost Total Cost AVC ATC MC cost 0 0 10 470 20 980 30 1850 40 3400 50 5950 138. When production is 30 units, the average variable cost is: (a) 70.6 (b) 60.6 (c) 61.6 (d) 71.6 139. When production is 50 units, marginal cost is: (a) 265 (b) 255 (c) 245 (d) 275 140. To maximize profit, the firm should produce (a) 30 units (b) 10 units (c) 20 units (d) 40 units 141. If the market price drops from Rs. 51 to Rs. 47, the firm should (a) Close down (b) produce 10 units (c) Produce 30 units (d) Produce 20 units Common Proficiency Test (CPT) Volume - I 417 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 15 Read the following data and answer Questions 142-147 X, Y and Z are three commodities where X and Y are complementary goods whereas X and Z are substitutes. A shop keeper sells commodity X at Rs. 20 per piece. At this price he is able to sell 100 pieces of X per month. After some time, he decreases the price of X to Rs. 10 per piece. Following the price decrease. He is able to sell 150 pieces of X per month. The demand for Y increases from 25 units to 50 units. The demand for commodity Z decreases from 75 units to 50 units. 142. The price elasticity of demand when price of X decreases from Rs. 20 per piece to Rs. 10 per piece will be equal to: (a) 0.6 (b) 1.6 (c) 0.5 (d) 1.5 143. The cross elasticity of demand for commodity Y when the price of X decreases from Rs. 20 per piece to Rs. 10 per piece will be equal to: (a) –1.5 (b) +1.5 (c) +1 (d) –1 144. The cross elasticity of commodity Z when the price of X decreases from Rs. 20 per piece to Rs. 10 per piece will be equal to: (a) + 1.66 (b) + 0.6 (c) – 1.66 (d) – 0.6 145. What can be said about the price elasticity of demand for commodity X? (a) Demand is unit elastic (b) Demand is highly elastic (c) Demand is inelastic (d) Demand is perfectly elastic 146. Suppose income of the consumers increases by 50% and the demand for commodity X increases by 20% what will be the income elasticity of demand for commodity X? (a) .04 (b) 0.4 (c) 4.00 (d) -4.00 147. We can say that commodity X in economic sense is a / an (a) Inferior foods (b) Giffen Goods (c) Normal Goods (d) Luxury Goods. 148. Suppose the total cost of producing commodity X is Rs. 1,25000. Out of this cost implicit cost is Rs. 35000 and normal profit is Rs. 25000. What will be explicit cost of commodity X? (a) 90,000 (b) 65,000 (c) 60,000 (d) 1,00,000 418 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 149. Use table 3 to answer questions 149 – 150. Table 3 Hours of Labour Total output Marginal output 0 –– –– 1 350 350 2 –– 230 3 670 – What is the total output when 2 hrs of labour are employed (a) 500 (b) 580 (c) 600 (d) 680 150. What is the marginal product if the third hour of labour is employed? (a) 90 (b) 110 (c) 100 (d) 120 SECTION – D : QUANTITATIVE APTITUDE (50 MARKS) 151. Unequal widths of classes in the frequency distribution do not cause any difficulty in the construction of (a) Ogive (b) Frequency Polygon (c) Both (d) None of these 152. The presence of extreme observations does not affect (a) A.M. (b) Median (c) Mode (d) Any of these 153. S.D. of first n natural numbers is n(n−1) n(n−1) (a) (b) 2 2 n2 −1 (c) (d) None of these 12 154. For any two numbers range is always (a) Twice the Standard Deviation (b) Half the Standard Deviation (c) Square the Standard Deviation (d) None of these Common Proficiency Test (CPT) Volume - I 419 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 15 155. G.M. is defined only when (a) All observation have the same sign and none is zero. (b) All observation have the different sign and none is zero (c) All observation have same sign and one is zero (d) All observation have the different sign and one is zero 156. The quickest method to find correlation between two variables is: (a) Scatter diagram (b) Method of concurrent deviation (c) Method of Rank Correlation (d) Method of Product moment Correlation 157. In rank correlation coefficient the association need not be linear (a) False (b) True (c) Both (d) None of these 158 If P (x/y) = p(x), then (a) x is independent of y (b) y is independent of x (c) y is dependent of x (d) Both (a) and (b) 159. For a binomial distribution mean and mode are not equal, when q = 0.50 (a) True (b) False (c) Both (d) None of these 160. The standard deviation is required to determine sample size for (a) Estimating a mean (b) Estimating a proportion (c) Both (d) None of these 161. If log 3(x+1)=2then x is equal to ______ (a) 1 (b) 3 (c) 2 (d) 0 162. 31 4× 63 4× 25 4 is equal to (a) 10 (b) 12 (c) 14 (d) 0 163. The number ________ has same ratio to 7/33 as that 8/21 does to 4/9. (a) 2/11 (b) 3/11 (c) 2/21 (d) None of these 420 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India dx ∫ 164. is equal to 1+x (a) 2(1+x) −1 2 (b) (1+ x) −1 2 (c) 2(1+x) 1 2 (d) None of these 165. The 8th term of the series 4, 8, 16 …….. nth term is ______ (a) 128 (b) 256 (c) 64 (d) 512 166. The no. of permutation can be made out the letters of word “COMMERCE” is ________ (a) 5040 (b) 8! (c) 6! (d) None of these 167. The compound interest on Rs. 1000 for 10 years at 4% p.a. the interest being paid quarterly is _______? (a) 786 (b) 586 (c) 486 (d) 186 168. If SD = 40 and the sample size is 150, then the standard error of mean is _______ (a) 2 (b) 5 (c) 0.5 (d) None of these 169. The price level of a country in a certain year has increased 20% over the base period. The Index number is _____________ (a) 20 (b) 120 (c) 220 (d) None of these 170. If a pair of dice is thrown, the probability that the sum is neither 7 nor 11 is ________ (a) 7/9 (b) 5/9 (c) 11/9 (d) 2 x5 -243 lim 171. is equal to x→3 x5-9 (a) 150 (b) 125/2 (c) 135/2 (d) 0 172. If f(x) = 2x+ 5 and g(x) = x2+1, then the f o g is (a) 2x2 + 7 (b) 2x + 1 (c) x2 + 5 (d) None of these Common Proficiency Test (CPT) Volume - I 421 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 15 173. The 20th term of the progression 1, 4, 7, 10 ........... is (a) 58 (b) 52 (c) 0 (d) None of these 174. Find value of K, if line 2x + Ky-g = 0 and 3x - 4y + 7=0 are parallel (a) –8/3 (b) 2/3 (c) –4 (d) 3 175. The average marks scored by 50 students in a class were calculated to be 38. Later it was found, that marks of two students were wrongly copied as 34 and 23 instead of 43 and 32. Find correct average marks? (a) 37.36 (b) 39.00 (c) 38.36 (d) None of these ⎛ ⎞ d x ⎜ ⎟ 176. is equal to dx⎝ x2-1⎠ (a) −(x2−1) −3 2 (b) −(x2 −1) 3 2 (c) −(x2+1) −3 2 (d) (x2 −1) −3 2 177. How many words can be formed out of 5 different consonants and 4 different vowels if each word is to contain 3 consonants and 2 vowels (a) 7000 (b) 720 (c) 7020 (d) 7200 178. If 5 = x+ x+ x.............∞ , then value of x is (a) 10 (b) 20 (c) 5 (d) ∞ 179. The value of log log 81 is equal to 4 3 (a) 1 (b) 0 (c) 3 (d) None of these 180. At what interset rate will a sum doubles itself in 7 years, if the interest is compounded annually. (a) 7.0% (b) 8.0% (c) 10.41% (d) 7.9% 181. Three numbers are in A.P. of whose sum is 15 and whose product is 105, then numbers are: (a) 3, 5, 7 (b) 2, 5, 8 (c) 0, 5, 10 (d) None of these 422 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 182. The standard deviation of 100 and 150 items are 5,6 respectively; if mean of 250 item is 44, mean of 100 and 150 item are 50 and 40 respectively, then find S.D. for 250 items. (a) 7.46 (b) 7.64 (c) 6.74 (d) 4.67 183. If r = 0.5, ∑xy = 120, σ = 8, ∑x2 = 90, then value of n is equal to ______ y (a) 5 (b) 10 (c) 15 (d) 20 184. Two lines of regression are given by 5x+7y–22=0 and 6x+2y–22=0. If the variance of y is 15, find the standard deviation of x? (a) 5 (b) 6 (c) 7 (d) 8 185. A card is drawn at random from a well shuffled pack of 52 cards. Find the probability of getting a two of heart or one of diamond. (a) 1/26 (b) 2/51 (c) 2/26 (d) 1/52 186. If the probability of a defective bolt is 0.1, find the standard deviation for the distribution of defective bolt in a total of 500. (a) 7.6 (b) 7.5 (c) 6.5 (d) 6.7 187. If the A.M. of two numbers is 6 and G.M. is 6, then find the two numbers? (a) 6, 6 (b) 10, 8 (c) 10, 6 (d) 9, 2 188. Relation “Is Equal to” over the set of all natural numbers is explained as (a) Reflexive (b) Symmetric (c) Transitive (d) Equivalence 189. What must be added to each of the numbers 6, 15, 20 and 43 to make them proportional. (a) 5 (b) 4 (c) 3 (d) 2 190. If f(x+1)= 2x + 7 then f(0) is equal to (a) 5 (b) 4 (c) 3 (d) 0 191. Find the equation of line passing through the point (–2, 3) and having x-intercept 4 units. (a) 2x + y – 4 = 0 (b) x + 2y – 4 = 0 (c) x + y – 4 = 0 (d) x – y – 4 = 0 Common Proficiency Test (CPT) Volume - I 423 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 15 192. The compounded ratio of duplicate ratio of 3:5 and the sub triplicate ratio of 1:27 and reciprocal of 1:5 is equal to (a) 3:5 (b) 1:2 (c) 3:25 (d) 9:25 193. Find the amount of annuity of payment of Rs. 7000 is made annually for 7 years at interest rate of 6% compounded annually ? (a) 49,000 (b) 49,300 (c) 58,756 (d) 50,500 194. In a group of 40 children 16 like cricket but not movie and 26 like cricket. The number of children like movie but not cricket are (a) 12 (b) 14 (c) 2 (d) None of these xn -3n lim 195. If = 40 5,then value of n is equal to x→3 x-3 (a) 4 (b) 6 (c) 5 (d) 7 196. If the median of 5, 9, 11, 3, 4, x, 8 is 6, the value of x is equal to (a) 6 (b) 5 (c) 4 (d) 3 197. Find the coefficient of correlation when its probable error is 0.2 and the number of pairs of item is 9. (a) 0.505 (b) 0.332 (c) 0.414 (d) None of these 198. If 5:6 = 45:a, find the value of a (a) 54 (b) 45 (c) 15 (d) 0 log(logx) ∫ 199. dxis equal to x (a) log (log x) – 1 + K (b) log(log x) + K (c) [log(logx) –1] + K (d) None of these 200. The 4th term of series whose sum to n terms is 5n2+2n is (a) 5n + 3 (b) 10n – 2 (c) 5n + 2 (d) 10n – 3 (cid:2)(cid:2)(cid:2) 424 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 – 16 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. SECTION – A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. The expired portion of capital expenditure is shown in the financial statements (a) As an income (b) As an expense (c) As an asset (d) As a liability 2. Users of accounting information include (a) Creditors (b) Lenders (c) Customers (d) All the above 3. Accounting standards in India are issued by: (a) Central Govt. (b) State Govt. (c) Institute of Chartered Accountants of India (d) Reserve Bank of India 4. Cost of advertisement on a new product is a_________ (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) Capital lost 5. The total of the purchase day book is posted periodically to the debit of _______ (a) Purchases A/c (b) Cash Book (c) Journal proper (d) None of these 6. Unexpired insurance is ______ (a) Nominal account (b) Real account (c) Representative personal account (d) Both (a) and (b) Common Proficiency Test (CPT) Volume - I 425 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 16 7. The accounting policies once adopted are not changed unless there is an urgent need for such change is based on (a) Money measurement concept (b) Accrual concept (c) Consistency (d) Conservation 8. Cash column in cash book has always ______ (a) Dr. Balance (b) Cr. Balance (c) Overdraft (d) Both Dr and Cr. 9. Depletion method of depreciation is used in _____ (a) Cattle, loose tools etc. (b) Mines and quarries (c) Machinery and Building (d) None of these 10. Goods purchased from A for Rs. 2000 passed through the sales book. The rectification of this error will result in ________ (a) Decrease in Gross profit (b) No effect on Gross profit (c) Increase in Gross profit (d) Increase in Sundry debtors 11. The purpose of accommodation bill is _______ (a) To finance actual purchase or sale of goods. (b) To facilitate trade transaction (c) When both parties are in need of funds (d) none of the above 12. Accounts receivable normally has _______ balance (a) Debit (b) Credit (c) Unfavourable (d) None of the above 13. Capital expenditure are recorded in the _______ (a) Balance Sheet (b) Profit & Loss Account (c) Trading Account (d) Manufacturing account. 14. In case of Debit Balance the words __________ are written on the debit side. (a) To balance b/d (b) To balance c/d (c) By balance b/d (d) By balance c/d 15. Outstanding wages in trial balance is recorded in ________ (a) Trading account (b) Profit & Loss account (c) Balance sheet (d) None of the three 16. Errors are ____________ mistakes. (a) Intentional (b) Unintentional (c) Undetected (d) None of the three 426 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 17. _________ is not added in the total of Balance sheet. (a) Fixed liability (b) Current liability (c) Contingent liability (d) None of the three 18. Dividend paid before the end of the financial year is known as _________ (a) Interim dividend (b) Unclaimed dividend (c) Proposed dividend (d) None of the three 19. ___________ Reserve is not shown in Balance Sheet. (a) General (b) Capital (c) Secret (d) None of the three 20. Capital expenditure provide _________ benefit. (a) Short period (b) Long period (c) Very short period (d) None of the three 21. Suraj consigned goods costing Rs. 250,000 to Mohan on 1st Jan 2006 by incurring Rs. 20,000 on freight. Some goods were lost in transit. For remaining goods Mohan spent Rs. 15,000 to take the delivery including storage charges. During the quarter agent sold ¾ of the goods received by him for Rs. 3,00,000 and charged commission @ 10% on it. Suraj asked the details of goods lost, sold, expenses, commission and balance due to him alongwith the consignment stock from Mohan. As desired, agent sent the periodical details statement commonly known as: (a) Account sales (b) Summary Statement (c) Account statement (d) Statement of affairs. 22. A business man purchased goods for Rs. 25,00,000 and sold 80% of such goods during the accounting year ended 31st March, 2009. The market value of the remaining goods was Rs. 4,00,000. He valued the closing stock at cost. He violated the concept of: (a) Money measurement (b) Conservatism (c) Cost (d) Periodicity 23. An item of Rs. 500 relating to prepaid rent account was omitted to be brought forward. The rectifying journal entry will be: (a) Rent A/c Dr 500 To Cash 500 (b) Prepaid rent A/c Dr. 500 To Cash 500 (c) Prepaid rent A/c Dr. 500 To suspense 500 (d) None of the three Common Proficiency Test (CPT) Volume - I 427 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 16 24. Cash Sales 50,000 Cash Collected from debtors 1,30,000 Bad Debts during the year 5,000 Debtors at the beginning 10,000 Total sales will be ______ (a) Rs. 175,000 (b) Rs. 170,000 (c) Rs. 180,000 (d) Rs. 178,000 25. An asset is purchased for Rs. 25,000, depreciation is to be provided annually according to straight line method. Useful life of the asset is 10 years and the residual value is Rs. 5,000. Rate of depreciation will be ______ (a) 10% (b) 8% (c) 12% (d) 15% 26. Rs. Rs. Opening Stock 5,570 Purchases 13,816 Closing Stock 8,880 Sales 15,248 Purchase return 390 Import charges 1,650 Sales return 524 Salary & wages 1,000 Above figures will show Gross Profit ________________ (a) Rs. 3,000 (b) Rs. 2,958 (c) Rs. 2,500 (d) Rs. 4,000 27. Stock worth Rs. 10,000 (cost price Rs. 7,500) taken by Mohan office clerk. Amount to be deducted from his salary in the subsequent month. Journal entry will be (a) Dr Salary and Cr Purchases A/c Rs. 10,000 (b) Dr Mohan and Cr purchases Rs. 10,000 (c) Dr Salary and Cr Purchases Rs. 7500 (d) None of the above 28. Cost of goods sold is 100,000 Opening Stock 5,000 Closing Stock 10,000 Amount of purchases will be _______ (a) 105,000 (b) 120,000 (c) 95,000 (d) 130,000 29. Rent has been paid for 11 months from April to February 2010 amounting Rs. 55,000 The amount of outstanding rent shown in balance sheet will be (a) Rs. 6,000 (b) Rs. 5,000 (c) Rs. 4,000 (d) None of the above. 428 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 30. Capital introduced by Mr. A on 01.04.09 Rs. 300,000, further capital introduced during the year was Rs. 50,000 in the mid of the year. Mr. A withdrew Rs. 2,000 on the first day of each month. Interest on drawings is charged @ 5%. Profit earned during the year was Rs. 20,000. Capital at the end of the financial year will be __________ (a) Rs. 3,45,350 (b) Rs. 3,95,000 (c) Rs. 3,46,000 (d) None of the three 31. A cheque of Rs. 1000 received from Ramesh was dishonoured and had been posted to the debit of sales return account. Rectifying Journal entry will be ____________ (a) Sales return A/c Dr 1000 To Ramesh 1000 (b) Ramesh Dr. 1000 To Sales return 1000 (c) Sales return of Dr. 1000 To suspense 1000 (d) None of the three 32. A purchased goods costing Rs. 42,500. B sold goods costing Rs. 40,000 at Rs. 50,000. Balance goods were taken over by A at Rs. 4,000. The profit on joint venture is (a) Rs. 11,500 (b) Rs. 7,500 (c) Rs. 3,500 (d) Nil 33. Cost of machine Rs. 135,000 Residual value Rs. 5,000 Useful life 10 years. Company charged depreciation for the first 5 years on straight line method. Later on, it reviewed the useful life and decided to take it as useful for another 8 years. In the 6th year amount of depreciation will be __________ (a) Rs. 8,000 (b) Rs. 8,125 (c) Rs. 9,000 (d) Rs. 8,500 34. Mohan and Krishna are equal partners. They admitted Ram for ¼ share in future profits. New profit sharing ratio will be __________ (a) 3:3:2 (b) 3:2:1 (c) 2:2:1 (d) Cannot be calculated. 35. Expenses incurred by the consignor on sending goods to consignee are Rs. 1000 for packing, Rs. 1500 on freight and Rs. 500 for insurance, while expenses incurred by the consignee on behalf of consignment are Rs. 300 on Octroi, Rs. 800 Godown rent and Rs. 1000 selling expenses. Expense amount to be excluded while calculating consignment stock will be (a) Rs. 1,800 (b) Rs. 2,100 (c) Rs. 2,000 (d) Rs. 2,600 Common Proficiency Test (CPT) Volume - I 429 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 16 36. A, B and C are partners sharing profits in the ratio of 4:3:2 B retires. A and C decide to share profits in future in the ratio of 5:3. Gaining ratio between A and C will be ______ (a) 13:11 (b) 12:10 (c) 10:12 (d) None of the three 37. Virender Ltd. Forfeited 20 shares of Rs. 100 each (Rs. 60 called up) issued at par to Ram on which he had paid Rs. 20 per share. All the forfeited shares were reissued to Syam as Rs. 60 paid up for Rs. 45 per share. Amount transferred to capital reserve will be. (a) Rs. 150 (b) Rs. 100 (c) Rs. 75 (d) Rs. 60 38. Consignee is entitled to get a commission of Rs. 25 per article sold plus one fourth of the amount by which gross sale proceeds less his total commission thereon exceeded a sum at the rate of Rs. 125 per articles sold. He sold 450 articles at Rs. 73,800. Commission amount will be____ (a) Rs. 12,510 (b) Rs. 10,510 (c) Rs. 10,000 (d) Rs.11,000 39. Goods worth Rs. 500 given as charity should be credited to (a) Sales account (b) Purchases account (c) Charity account (d) None of the three 40. A company issued Rs. 1,00,000 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. 15,000 (b) Rs. 12,000 (c) Rs. 10,000 (d) None of the three 41. As per section 12 of Negotiable Instruments Act, which of the following is not a foreign bill? (a) A bill drawn outside India and made payable outside India. (b) A bill drawn outside India and made payable in India. (c) A bill drawn in India on a person resident in India. (d) A bill drawn in India on a person resident outside India and made payable outside India. 42. 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 250 shares were reissued to Syam for a total payment of Rs. 2000. Amount transferred to capital Reserve will be ______ (a) Rs. 200 (b) Rs. 250 (c) Rs. 300 (d) None of the three 430 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 43. A company issued debentures of the face value of Rs. 100,000 at discount of 6% on Jan 2009. These debentures are redeemable by annual drawings of Rs. 20,000 made on 31st December each year. Directors decided to write off discount based on the debentures outstanding each year. Discount written off in the fifth year will be _______ (a) Rs. 400 (b) Rs. 500 (c) Rs. 600 (d) None of the three 44. A, B and C are partners sharing profits in the ratio of 4:3:2 D is admitted for 1/3rd share in future profits. Sacrificing ratio will be __________ (a) 4:3:2 (b) 3:2:3 (c) 2:3:2 (d) None of the three 45. Can forfeited shares be reissued at a discount? If yes, what is the allowable maximum discount. (a) 5% (b) 10% (c) 15% (d) None of the above. 46. A and B are partners. A’s capital is Rs. 10,000 and B’s capital is Rs. 6,000 Interest is payable @ 6% P.A. B is entitled to a salary of Rs.300 per month. Profit for the current year before interest and salary to B is Rs. 8,000. Profit between A and B will be divided: (a) A Rs. 1,720, B Rs. 1720 (b) A Rs. 2,000, B Rs. 1,440 (c) A Rs. 1,440, B Rs. 2000 (d) None of the three 47. A, B and C entered into partnership on 1st April, 2009 to share profits and losses in the ratio of 4:3:3. A, however, personally guaranteed that C’s share of profit after charging interest on capital @ 5% P.A. would not be less than Rs. 40,000 in any year. Capitals were as follows. A Rs. 300,000 B Rs. 200,000 C Rs. 150,000 Profit for the year ended on 31st March 2010 amounted to Rs. 160,000. Sacrifice made by A for C will be ________ (a) Rs. 1,750 (b) Rs. 1,800 (c) Rs. 2,000 (d) None of the above 48. A and B are partners sharing profits in the ratio of 3:2. C is admitted as a partner. The new profit sharing ratio among A, B and C is 5:3:2. Sacrificing ratio will be _______ (a) 1:1 (b) 3:2 (c) 2:3 (d) None of the above. 49 A company issues 50,000 equity shares of Rs. 100 each at a discount of 10% (allowed at the time of allotment) the net amount payable is as follows: (a) On application 20 (b) On Allotment 20 (c) On First Call 25 (d) On Final Call 25 Shveti holding 100 shares did not pay final call money. His shares were forfeited. Amount credited to forfeited share a/c will be _______ (a) Rs. 6,000 (b) Rs. 6,500 (c) Rs. 5,000 (d) None of the above. Common Proficiency Test (CPT) Volume - I 431 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 16 50. A, B and C are equal partners with capitals of Rs. 1,00,000, Rs. 75,000 and Rs. 50,000 respectively. On C’s retirement his share is acquired by A and B in the ratio of 6:4 respectively. Gaining ratio will be _________ (a) 3:2 (b)2:2 (c) 2:3 (d)None of the above 51. On admission of a partner unrecorded investments worth Rs. 5000 and unrecorded liability towards suppliers for Rs. 1500 will be recorded in (a) Revaluation A/c (b) Capital Accounts (c) Realisation A/c (d) None of the three 52. Dr. balance as per cash book is Rs. 3000. Cheque issued but not presented for payment Rs. 500, Interest collected by Bank Rs. 400, Deposit by a Customer direct into his bank Rs. 250. Bank reconciliation statement will show balance as per Pass Book _______ (a) Rs. 4,150 (b) Rs. 4,000 (c) Rs. 4,500 (d) None of the above. 53. Goodwill is to be calculated at one and half years purchase of average profit of last 5 years. The firm earned profit during the first 3 years as Rs. 20,000, 18,000 and 9,000 and suffered losses of Rs. 2,000 and 5,000 in last 2 years. Goodwill amount will be _______ (a) Rs. 12,000 (b) Rs. 10,000 (c) Rs. 15,000 (d) None of the above. 54. A started business with Rs. 10,000 cash and Rs. 2,000 furniture. Sales amounted to Rs. 50,000 including Rs. 5,000 cash sale. Rs. 10,000 sales were outstanding at the end of the year. Cash balance will be ___________ (a) Rs. 50,000 (b) Rs. 45,000 (c) Rs. 40,000 (d) None of the three 55. Depreciation at 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. Total depreciation will be ______ (a) Rs. 18,000 (b) Rs. 18,400 (c) Rs. 20,000 (d) None of the above. 56. As old machinery appearing in the books at Rs. 5,000 is to be exchanged for a new machinery of Rs. 5,000. The old machinery has been valued at Rs. 800 for exchange purpose. Loss on exchange will be _________ (a) Rs. 4,000 (b) Rs. 4,200 (c) Rs. 4,500 (d) NIL 57. Goods of Rs. 600 (sales price) sent on sale on approval basis were included in the sales book. The profit included in the sales was 20% on cost. Stock with the party will increase closing stock by ________ (a) Rs. 600 (b) Rs. 500 (c) Rs. 400 (d) None of the three 432 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 58. Indian Currency is a ________ (a) Bills of exchange (b) Cheque (c) Promissory Note (d) Bank draft 59. Cheque of Rs. 700 received from Hariram in settlement of a debt of Rs. 720, was dishonoured and returned. Entry for dishonour will be _______ (a) Hari Ram Dr. 700 To Bank 700 (b) Bank Dr. 700 Discount Dr. 20 To Hari Ram 720 (c) Hari Ram Dr. 720 To Bank 700 To Discount 20 (d) None of the above. 60. Paid rent to land lord Rs. 2,400, debited to Land Lord’s A/c by Rs. 2,009. Rectifying entry will be ________ (a) Rent A/c Dr. 2400 To Landlord 2400 (b) Rent A/c Dr. 2004 To Landlord 2004 (c) Rent A/c Dr. 2400 To Landlord 2004 To Suspense 396 (d) None of the three SECTION – B : MERCANTILE LAWS (40 MARKS) 61. In which form of contract the property in goods passes to the buyer immediately (a) Agreement to sell (b) Hire purchase (c) Sale (d) Auction sale 62. Which of the following modes of delivery of goods is considered effective for a valid contract of sale (a) Actual delivery (b) Symbolic delivery (c) Constructive delivery (d) All of these 63. Goods which are in existence at the time of the contract of sale is known as: (a) Present goods (b) Existing goods (c) Specific goods (d) Future goods Common Proficiency Test (CPT) Volume - I 433 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 16 64. The Right of Lien means (a) To refuse to deliver the goods (b) To take back delivery of goods (c) To hold goods until payment is made (d) None of these 65. The right of lien can be exercised (a) Only for the price (b) Only for the expenses (c) Either for the price and expenses (d) All of these 66. In case of breach of contract by the seller, the buyer has rights (a) For suit for damages (b) Suit for specific performance (c) Suit for breach of warranty (d) All of these 67. In case of perishable goods the unpaid seller can (a) Resell goods (b) Not resell goods (c) Resell after giving notice to the buyer (d) Resell goods without giving notice to the buyer 68. When the right to bid at an auction is expressly deserved the seller may (a) bid at the auction (b) not bid at the auction (c) be restrained to bid at an auction (d) be forced to bid at an auction 69. The Law of Partnership is contained in the (a) Chapter XI of the Indian Contract Act (b) Indian Partnership Act, 1930 (c) Indian Partnership Act, 1934 (d) Companies Act, 1956 70. In any partnership business, the number of partners should not exceed (a) 10 (b) 20 (c) 15 (d) 25 71. The partnership agreement may be __________ (a) Express or implied (b) Only written (c) Only oral (d) Only implied 434 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 72. In a Joint Hindu family business (a) A male member becomes a member by his birth (b) A female does not become its member by birth (c) A male member becomes a member by the permission of Karta (d) A male becomes member by operation of law 73. Which is not appropriate regarding the kind of partner (a) Actual partner (b) Sleeping partner (c) Active partner (d) Dummy partner 74. A partner may retire from a firm (a) With consent of all other partners (b) With the consent of main partner (c) With the consent of sleeping partner (d) No consent of any partner 75. Which is not true regarding the rights of a minor partner (a) He has a right such share of the property and profits of the firm as may have been agreed upon. (b) He has right to have access to and inspect and copy of books of the firm (c) He has right to have access to and inspect and copy of any of accounts (d) All of these 76. A partner may be expelled from partnership subject to which conditions (a) The power of expulsion of a partner should be conferred by the contract between the partners (b) The power should be exercised by majority of partners (c) The power should be exercised in good faith (d) All of these 77. An agreement to share earnings of smuggling business is: (a) Valid (b) Void (c) Voidable (d) Contingent 78. A party entitled to rescind the contract, loses the remedy when (a) He has ratified the contract (b) The third party has acquired right in good faith (c) Contract is not separable (d) All of these 79. Standing offer means (a) After allowed to remain open (b) After made to public in general Common Proficiency Test (CPT) Volume - I 435 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 16 (c) When the offeree offers to qualified acceptance of the offer (d) Offer made to a definite person 80. In F.O.B. Contracts, F.O.B. stands for (a) Free on Bill (b) Free on Board (c) Free on Boarded Ship (d) Free on Bill of Lading 81. In case the goods are destroyed or damaged or lot by accident the loss will fall on _______ (a) The owner of the goods (b) The buyer (c) The owner and the buyer (d) The third party 82. Where goods are sold by a person who is not the owner thereof, the buyer ______ (a) Acquires no better title to the goods than the seller had (b) Acquires same title of the goods as the owner had (c) No title of goods (d) None of these 83. If there is breach of warranty, the aggrieved party can ________ (a) Only claim damages (b) Treat the contract as repudiated (c) Treat the Contract illegal (d) All of these 84. If there is breach of contract of sale, the aggrieved party can _________ (a) File a suit for damages for non delivery of goods (b) File suit for specific performance (c) File suit for breach of warranty (d) All of these 85. Only __________ can be subject matter of a sale (a) existing goods (b) future goods (c) specific goods (d) contingent goods 86. The delivery of goods and payment of price are ______ (a) Concurrent conditions (b) Principal conditions (c) Mutual conditions (d) All of these 87. A contract of sale involves transfer of __________ (a) Title of goods (b) Ownership (c) Liability (d) None of these 88. A warranty is a stipulation ____________ (a) Essential to main purpose of contract of sale (b) Collateral to the main purpose of contract of sale 436 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India (c) Secondary to the main purpose of contract of sale (d) None of these 89. The unpaid seller may exercise his right of stoppage in transit __________ (a) By taking actual possession of the goods (b) By giving notice of his claim to the carrier (c) By giving notice of his claim to the bailee in whose possession the goods are (d) All of these 90. The unpaid seller’s right of lien shall be lost ________ (a) When the goods are delivered to a carrier (b) When the goods are delivered to a bailee (c) When seller waives his right of lien (d) All of these 91. The transit comes to an end (a) When buyer takes the delivery (b) When delivery is made to a ship (c) When there is part delivery of goods (d) All of these 92. The term seller includes (a) Actual seller (b) Any person who is in a position of seller (c) Consignor of goods (d) All of these 93. The seller of goods is deemed to be an unpaid seller _________ (a) When the part of the price has not been paid (b) When the whole of the price has not been paid (c) When a bill of exchange has been dishonoured (d) All of these 94. Right of resale can be exercised (a) Where the goods are of perishable nature (b) When the seller expressly reserves a right of resale (c) After giving reasonable notice (d) All of these 95. C.I.F. contract is ____________ (a) Contract for the sale of insured goods (b) Contract for sale of document (c) Contract for sale of goods (d) Contract for sale of specific goods Common Proficiency Test (CPT) Volume - I 437 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 16 96. Partnership is the relation (a) Between persons (b) Between firms (c) Among numberless persons who have agreed to share the profits of a business carried on by them (d) Established by way of land of agency. 97. The court may not dissolve the firm in case of ____________ (a) Insanity of a partner (b) Permanent incapabity of a partner (c) Misconduct of a partner (d) Retirement of a partner 98. In settling the accounts of a firm after dissolution ________ (a) The good will must be included in the assets (b) The good will must not be included in the assets (c) The good will should be separated before settlement (d) The goodwill should be distributed among all the partners 99. A invited B to a Birthday party. B promised to attend and give A Rs. 500 as a present on his birthday. B failed to attend. What are remedies for A - (a) A cannot recover any damages from B (b) A can file suit for recovery of Rs. 500 (c) A can file a suit for breaking the promise (d) A cannot file a suit for breaking the promise. 100. A owes C Rs. 10,000 but the debt is barred by the limitation Act. D signs a written promise to pay C Rs. 5000 on account of the debt. Choose the best alternative (a) A promise to pay a time barred debt is not enforceable (b) It is not a valid contract (c) It is a voidable contract (d) A promise to pay full amount of Rs. 10,000 is a valid contract SECTION – C : GENERAL ECONOMICS (50 MARKS) 101. Find the correct match of the following: (a) Economics is a science of wealth – Alfred Marshall (b) “The range of our enquiry becomes restricted to that part of social welfare that can be brought directly or indirectly into relation with measuring Rod of money”. – Hicks. (c) “Economics is the Science which studies human behaviour as a relationship between ends and scares means which have alternative uses.” – Robbins (d) Economics as a Science of Dynamic Growth and Development. – A.C. Pigou 102. Which of the following falls under Micro Economics ? (a) National Income (b) General Price level (c) Factor Pricing (d) National Saving and Investment 438 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 103. Which of the following steps relates only to deductive method in Economics? (a) Testing of Hypothesis (b) Collection of data (c) Classification of data (d) Perception of the problem 104. Broad Money refers to: (a) M (b) M 1 2 (c) M (d) M 3 4 105. Monetary policy means: (a) Policy relating to non-banking financial institution (b) Policy relating to public revenue and public expenditure (c) Policy relating to money and banking in a country (d) All of the above. 106. W.T.O. was established on: (a) 1st Jan 1991 (b) 2nd March 1992 (c) 1st Jan 1995 (d) 2nd March 1997 107. When indifference curve is L shaped then two goods will be: (a) Perfect substitute Goods (b) Substitute Goods (c) Perfect complementary goods (d) Complementary goods 108. If a point on a demand curve of any commodity lies on X Axis then price elasticity of demand of that commodity at that point will be : __________ (a) Infinite (b) More than zero (c) Less than zero (d) zero 109. Which of the following statement is incorrect ? (a) Indian tax structure relies on a very narrow population base (b) Direct taxes are differential, indirect taxes are progressive in nature (c) The ratio of Direct taxes to indirect taxes which was 40:60 in 1951 declined to 20:80 in 1991 (d) The total tax revenue is highly insufficient to meet the expenditure requirement of the economy 110. Which of the following statements about Central Bank is incorrect? (a) Central bank regulates currency in accordance with the requirements of business and the general public (b) Central banks performs general banking and agency service for the state (c) Central bank generally deals with the public and tries to encourage saving habits among people (d) None of the above. Common Proficiency Test (CPT) Volume - I 439 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 16 111. Structural unemployment results due to: (a) A change caused by the introduction of new machines, labour saving devices and improvement in methods of production (b) A change caused by recessionary and depressionary phases of the economy (c) A change caused by high population growth, primitive state of technology, low capital formation and vicious circle of poverty etc. (d) A change caused by a decline in demand for production in particular industry and consequent disinvestments and reduction in its manpower requirement 112. Which of the following statements is correct about under utilization of capacity of industries in India? (a) The magnitude of under-utilisation varies from 20% to 60% in different industrial sectors (b) The average under-utilization being in the region of 40% to 50% (c) Over optimistic demand projection is one of the factors responsible for under utilization in industries (d) All of the above 113. Marginal cost is defined as (a) The change in output due to a one unit change in output (b) Total cost divided by output (c) The change in total cost due to one unit change in output (d) Total revenue divided by the quantity of input 114. If as a result of a change in price, the quantity supplied of a good remains unchanged, we conclude that: (a) Elasticity of supply is perfectly inelastic (b) Elasticity of supply is relatively greater-elastic (c) Elasticity of supply is inelastic (d) Elasticity of supply is relatively less-elastic 115. One characteristic not typical of oligopolistic industry is: (a) Too much importance to non-price competition (b) Price leadership (c) Horizontal demand curve (d) A small number of firms in the industry 116. Which of the following statements is incorrect about the benefits of value added tax? (a) Overall tax burden will be rationalized (b) There is a provision of self-assessment (c) Price will in general fall (d) There will be less transparency 440 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 117. Balance of services is the sum of all invisible service receipts and payment which could be ___________. (a) Zero (b) Positive (c) Negative (d) Zero, positive or negative 118. The cost of tax collection has increased from Rs. 543 crore in 1990-91 (Central Government) to more than __________ in 2007-08. (a) 4,500 crore (b) 3,700 crore (c) 5,900 crore (d) 2,000 crore 119. If NNP figure is available at market prices we will ________ indirect taxes and ________ subsidies to the figure to get National Income of the economy. (a) Add, subtract (b) Add, divide (c) Subtract, add (d) Subtract, divide 120. At present CRR (June, 2010) is _______ and SLR is ________ for entire net demand and time liabilities of the scheduled commercial banks. (a) 10, 35 (b) 7, 30 (c) 6, 25 (d) 10, 25 121. India ranks _________ among the top fifteen debtor countries of the world 2008. (a) Seventh (b) Sixth (c) Ninth (d) Eighth 122. The National Highways now carry more than ________ percent of the total road traffic. (a) 10 (b) 20 (c) 30 (d) 40 123. According to 1991 the sex ratio (females per 1000 males) was _________ (a) 929 (b) 729 (c) 927 (d) 933 124. The share of tertiary or services sector in GDP in 2007-08 was ___________ (a) 51.4 per cent (b) 45.1 per cent (c) 42.3 per cent (d) 57.2 per cent 125. The Government established __________ in 1982 to finance rural projects at lower rate of interests. (a) Regional Rural Banks (b) Reserve Bank of India (c) National Bank for Agriculture and Rural Development (d) Co-operative Banks Common Proficiency Test (CPT) Volume - I 441 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 16 126. The percentage of people working in Agriculture sector came down to around ______ per cent in 2008-09. (a) 40 (b) 60 (c) 52 (d) 67 127. The 10th plan targeted a reduction in infant mortality rate (IMR) to _________ per 1000 by 2007 (a) 28 (b) 45 (c) 16.2 (d) 74 128. Employment Assurance Scheme and Jawahar Gram Sammridhi Yozana have been merged with ___________ (a) NFFWP (b) SGRY (c) SGSY (d) IAY 129. Every ___________ person in the world is an Indian and every third poor person in the world is also an Indian (a) Third (b) Sixth (c) Fourth (d) Ninth 130. Till date, nearly __________ per cent of villages are not electrified (a) 17 (b) 16 (c) 19 (d) 14 131. In a free market-economy, when consumer decrease their purchase of a good and the level of _______ exceeds _________ then prices tend to fall. (a) Prices, demand (b) Profits supply (c) Demand supply (d) Supply, demand 132. At present, the responsibility for the provision of finance for Agriculture, Trade and small industries has been handed over to: (a) SBI (b) NABARD (c) NABARD, SIDBI (d) NABARD, EXIM and SIDBI Figure given below gives the PPC for producing two types of commodities X and Y. Read the figure and answer questions 133-135 442 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India