Common Proficiency Test Model Paper 3

BOARD OF STUDIES THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA COMMON PROFICIENCY TEST Model Test Paper – BOS/CPT – 11 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. SECTION – A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. All the following errors do not effect the trial balance except (a) Compensating errors (b) Error of complete omission (c) Error of partial omission (d) Error of principle 2. Financial statements are part of - (a) Accounting (b) Book-keeping (c) All of the above (d) None of the above 3. The areas where in different accounting policies can be adopted are (a) Providing depreciation (b) Valuation of inventories (c) Valuation of investments (d) All of the above 4. The total of the sales book is posted periodically to the credit of (a) Sales account (b) Cash book (c) Journal proper (d) Name of the above 5. The amount of the dishonoured bill has been wrongly debited to general expenses account, which type of error has been committed? (a) Error of principle (b) Error of commission (c) Compensating error (d) Error of omission 6. Bank account is _____ (a) Personal account (b) Intangible real account (c) Nominal account (d) Both (b) and (c) Common Proficiency Test (CPT) Volume - I 293 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 11 7. Cost of tour abroad by the sales manager to develop markets (tour was successful) is ____ (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) Both (a) & (b) 8. ‘Advance received from customers is not taken as sale’ is based on (a) Money measurement concept (b) Accrual concept (c) Consistency concept (d) Conservation 9. Income includes (a) Income received (b) Income receivable (c) Both (a) and (b) (d) None of the above 10. Mohan Stationers will debit purchase of stationery in ____ (a) Stationery account (b) General expenses account (c) Purchases account (d) None of the three 11. Heavy amount spent on advertisement is _____ (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None of the above 12. Cost of goods sold can be calculated by ____ (a) Trading account (b) Profit & Loss account (c) Balance sheet (d) None of the above 13. Rs. 5,000 spent on repairs of a newly purchased old motor car is debited to _____ (a) Repairs account (b) General expenses account (c) Motor car account (d) None of the above 14. Suspense account debit balance Rs. 2000 in trial balance, will be recorded in the _____ (a) Liability side of Balance Sheet (b) Asset side of Balance Sheet (c) Profit & Loss account Cr side (d) None of the three 15. Liability for bill discounted is a ______ (a) Current liability (b) Contingent liability (c) Fixed liability (d) None of the three 16. In valuation of consignment stock only _______ expenses of the consignee are added (a) Direct (b) Indirect (c) Both (a) and (b) (d) None of the three 17. Premium on issue of shares is recorded in _______ (a) Profit & Loss debit side (b) Profit & Loss appropriation account Dr side 294 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India (c) Profit & Loss appropriation Cr side (d) Balance Sheet liability side 18. Interest is calculated on _______ securities (a) Market value (b) Face value (c) Purchase value (d) None of the three 19. Income tax in case of a sole trader is treated as ________ (a) Business expense (b) Personal expense (c) Debtors expense (d) None of the three 20. In double entry system every business transaction affects _____ (a) Two accounts (b) Two sides of the same account (c) The same account on different dates (d) None of the three 21. A businessman purchased goods for Rs. 25,00,000 and sold 70% of such goods during the accounting year ended 31st March, 2010. The market value of the remaining goods was Rs. 5,00,000. He valued the closing stock at Rs. 5,00,000 and not at Rs. 7,50,000 due to (a) Money measurement (b) Conservatism (c) Cost (d) Periodicity 22. XY LTD. 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. Applications received for 75,000 equity shares but the company issued to them only 25,000 shares. Excess money was refunded to them after adjustment for further calls. Last call on 500 shares were not received and were forfeited after due notice. The above is the case of _____ (a) Over subscription (b) Pro-rata allotment (c) Forfeiture of shares (d) All of the above 23. Opening stock Rs. 3,700, Purchases Rs. 20,800, Closing stock Rs. 2,500. Cost of goods sold will be _______ (a) Rs. 22,000 (b) Rs. 25,000 (c) Rs. 18,000 (d) Rs. 30,000 24. Original cost Rs. 25,000, salvage value Rs. 1,000, useful life 10 years. Annual depreciation under SLM will be (a) Rs. 2,000 (b) Rs. 2,400 (c) Rs. 3,000 (d) Rs. 2,500 Common Proficiency Test (CPT) Volume - I 295 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 11 25. When preparing a Bank Reconciliation Statement if you start with balance as per Pass Book, then cheques paid by bank recorded twice in Pass Book Rs. 1050 will be ______ (a) Added (b) Deducted (c) Not required to be adjusted (d) None of the three 26. Rs. Rs. Gross Profit 50,000 Provision for Bad Debts (old) 2,000 Rent paid 6,000 Apprentice Premium (Credit) 4,000 Salaries 5,800 Net profit of the firm will be (a) Rs. 44,200 (b) Rs. 40,000 (c) Rs. 42,000 (d) Rs. 45,000 27. A started business with Rs. 20,000 cash and Rs. 11,000 stock. Cash sales & cash purchases were Rs. 10,000 & Rs. 5,000. Total sales and purchases amounted to Rs. 70,000 & Rs. 50,000. Outstanding creditors were Rs. 15,000 and Debtors Rs. 25,000. Expenses paid Rs. 17,000. Machine was purchased for Rs. 10,000 out of which Rs. 8000 has been paid. Cash in hand at the end of the year was Rs. 5,000. Total of Trial Balance at the end of the year will be ___________ (a) Rs. 1,18,000 (b) Rs. 1,20,000 (c) Rs. 1,25,000 (d) Rs. 1,40,000 28. Capital introduced in the beginning by Ram Rs. 15,200, further capital introduced during the year Rs. 2,000. Drawings Rs. 400 per month and closing capital is Rs. 16,900. The amount of profit or loss for the year is _______ (a) Loss Rs. 3,000 (b) Loss Rs. 2,500 (c) Profit Rs. 5,000 (d) Profit Rs. 4,500 29. Goods purchased Rs. 1,00,000, sales Rs. 90,000 Margin 20% on sales. Closing stock is _____ (a) Rs. 10,000 (b) Rs. 25,000 (c) Rs. 28,000 (d) None of the above 30. Mohan paid Rs. 500 towards a debit of Rs. 2,500, which was written off as bad debt in the previous year. Mohan’s account will be credited with (a) Rs. 2,500 (b) Rs. 2,000 (c) Rs. 500 (d) None of the three 31. Income tax liability of the proprietor Rs. 1200 was paid out of petty cash. Journal entry will be ________ (a) Dr. drawings and Cr. Cash A/c Rs. 1200 (b) Dr. drawings and Cr. Petty Cash Rs. 1200 (c) Dr Income tax and Cr Cash A/c Rs. 1200 (d) None of the above 296 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 32. An old, machine was purchased for Rs. 60,000. It was repaired for Rs. 5,000 and Rs. 5,000 paid on its installation. Machinery repairs a/c will be debited by - (a) Rs. 10,000 (b) Rs. 5,000 (c) Rs. 15,000 (d) None of the three 33. Ras started business on 01.01.2010 with a capital of Rs. 20,000 and he borrowed Rs. 3,000 from a friend. He earned a profit of Rs. 10,000 during the year and withdrew cash Rs. 5,000 for private use. What is his capital at the end of the year? (a) Rs. 25,000 (b) Rs. 28,000 (c) Rs. 30,000 (d) Rs. 27,000 34. A partnership firm maintains the inventory records under perpetual system of inventory considering of the firm held for the month of March 2010. Date Particulars Quantity Cost per unit (Rs.) March 1 Opening Inventory 15 400 March 4 Purchases 20 450 March 6 Purchases 10 460 If the firm sold 32 units on March 24, 2010 closing inventory under FIFO method is - (a) Rs. 7500 (b) Rs. 5681 (c) Rs. 5800 (d) Rs. 5950 35. Capital introduced by Mr. A on 01.01.2009 Rs. 1,00,000. Further capital introduced during the year was Rs. 50,000. Mr. A withdrew Rs. 200 per month on the last date of each month. Interest on drawings was charged @ 5%. Profit earned during the year was Rs. 10,000. Capital on 31.12.2009 will be _______ (a) Rs. 1,57,545 (b) Rs. 1,57,000 (c) Rs. 1,60,000 (d) Rs. 1,55,000 36. Purchased goods from A Rs. 500 passed through sales book the rectifying journal entry will be ________ Rs. Rs. (a) Purchases A/c Dr. 500 To A 500 (b) A’s Capital a/c Dr. 500 To Sales 500 (c) Purchases A/c Dr. 500 To Sales A/c 500 To A 1,000 (d) None of the above Common Proficiency Test (CPT) Volume - I 297 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 11 37. Opening Stock 20,000 Closing Stock 18,000 Purchases 85,800 Carriage inwards 2,300 Carriage outwards 3,000 Office Rent 5,000 Sales 1,40,700 Gross profit will be _____ (a) Rs. 50,000 (b) Rs. 47,500 (c) Rs. 42,600 (d) Rs. 50,600 38. X of Kanpur sends out certain goods at cost + 25%. Invoice value of goods sent out Rs. 2,00,000. 4/5th of the goods were sold by consignee at Rs. 1,76,000. Commission 2% upto invoice value and 10% on any surplus above invoice value. Commission amount will be ________ (a) Rs. 4,800 (b) Rs. 5,200 (c) Rs. 3,200 (d) Rs. 1,600 39. Goods costing Rs. 1000 supplied to Ramesh at the invoice price of 10% above cost and a Trade Discount for 5%. The amount of Sales will be (a) Rs. 1045 (b) Rs. 1050 (c) Rs. 1100 (d) Rs. 1060 40. A & B purchased a piece of land for Rs. 60,000 and sold it for Rs. 90,000. A had contributed Rs. 40,000 and Rs. 20,000. The profit on venture will be - (a) Rs. 30,000 (b) Rs. 20,000 (c) Rs. 60,000 (d) NIL 41. A, B & C are partners sharing profits in the ratio of 3:2:1. B retires and goodwill of the firm is fixed at Rs. 1,80,000. No goodwill A/c appears in the books of the firm. A & C decide to share profits in the ratio of 3:1. B’s share of goodwill will be adjusted in the Capital accounts of A and C in (a) Profit sharing (b) Gaining ratio (c) Sacrificing ratio (d) Old ratio 42. A Co. issued Rs. 1,00,000 12% Debentures at 5% discount, redeemable at 5% premium after 10 years. Loss on issue of debentures will be (a) Rs. 15,000 (b) Rs. 10,000 (c) Rs. 12,000 (d) Rs. 20,000 298 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 43. A partnership firm earned net profits during the last 3 years as follows – 2007 15,000 2008 20,000 2009 25,000 The capital investment in the firm throughout the above mentioned period has been Rs. 1,00,000. Having regard to the risk involved 15% is considered to be a fair return on capital. Goodwill on the basis of 2 years purchase of average super earned during the above mentioned 3 years will be (a) Rs. 8,000 (b) Rs. 10,000 (c) Rs. 12,000 (d) Rs. 15,000 44. A & B are partners in a business sharing profits and losses in the ratio of 7:3. They admit C as a partner. A sacrificed 1/7th share and B sacrificed 1/3rd of his share in favour of C. New Profit sharing ratio will be (a) 3:1:1 (b) 2:1:1 (c) 2:2:1 (d) None of the above 45. G Ltd. acquired assets worth Rs. 7,50,000 from H. Ltd. by issue of shares of Rs. 100 each at a premium of 25%. The number of shares to be issued by G. Ltd., to settle the purchase consideration will be (a) 6000 shares (b) 7500 shares (c) 9375 shares (d) 5625 shares 46. A & B are equal partners with capitals of the Rs. 10,000 and Rs. 8,000 respectively. They admit C as a partner with 1/4th share in the profits of the firm. C brings Rs. 8,000 as his share of capital. Value of goodwill will be ____ (a) Rs.6,000 (b) Rs. 5,000 (c) Rs. 8,000 (d) None of the above 47. A second hand car is purchased for Rs. 15000, the amount of Rs. 1000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owners name and Rs. 1200 is paid as dealers commission. The amount debited to car account will be _____ (a) Rs. 17,700 (b) Rs. 16,000 (c) Rs. 16,500 (d) Rs. 17,000 48. Ramesh & Suresh are partners sharing profits in the ratio of 2:1 (Ramesh Capital is Rs. 1,02,000 and Suresh Capital is Rs. 73,000) They admitted Mahesh & agreed to give him 1/5 in share. He brings Rs. 14,000 as his share of goodwill. He agreed to contribute capital in profit sharing ratio. How much capital will be brought by incoming partner? (a) Rs. 43,750 (b) Rs. 45,000 (c) Rs. 47,000 (d) Rs. 48,000 Common Proficiency Test (CPT) Volume - I 299 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 11 49. Debit Balance as per cash book of Narayan Enterprises as on 28th February 2010 is Rs. 15,000. Cheques deposited but not cleared Rs. 660 and cheques issued but not presented for payment Rs. 2150. Balance as per pass book should be ______ (a) Rs. 15,500 (b) Rs. 16,490 (c) Rs. 16,000 (d) Rs. 16,500 50. On 1st Sept. 2009 goods costing Rs. 33,000 were consigned by X to his agent Y at a proforma price which was cost plus one – sixth profit on invoice price. Invoice price of goods will be________ (a) Rs. 39,000 (b) Rs. 39,600 (c) Rs. 40,000 (d) Rs. 45,000 51. Suresh of Delhi consigned 600 fans to Naresh of Bareilly 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 & Cartage; Rs. 3500 for godown rent and insurance. 500 fans were sold 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. Profit on consignment will be ________ (a) Rs. 12,250 (b) Rs. 12,000 (c) Rs. 14,000 (d) Rs. 15,000 52. X and Y enter into a joint venture. X supplied goods to Y from his own stock worth Rs. 70,000. X incurred expenses amounting to Rs. 6000 on joint venture. The venture resulted in a total profit of Rs. 15,000 of which their ratio of distribution is 2:1. The entire sale proceeds were received by Y. No stock left at the end of the venture. Amount received by X from Y in final settlement will be ________ (a) Rs. 85,000 (b) Rs. 86,000 (c) Rs. 80,000 (d) Rs. 75,000 53. A and B are partners sharing profits in the ratio of 3:2 with capitals of Rs. 50,000 and Rs. 30,000 respectively. Interest on capital is agreed @ 6% p.a. B is to be allowed an annual salary of Rs. 2,500. The profits of the year prior to calculation of interest on capital but after charging B’s salary amounted to Rs. 12,500. Manager is to be allowed a Commission of 5% of profits remaining after deducting salary and interest on capital but before charging such Commission, Profit transferred to partners Capital Accounts will be ________ (a) A Rs. 4,389 B Rs. 2926 (b) A Rs. 4,000 B Rs. 3,315 (c) A Rs. 3,000 B Rs. 4315 (d) A Rs. 2,500 B Rs. 4,815 54. A and B are partners, sharing profits in the ratio of 5:3. They admit C with 1/5 share in profits, which he acquires equally from both 1/10 from A and 1/10 from B. New profit sharing ratio between A and B will be (a) 21:11 (b) 20:10:4 (c) 15:10:5 (d) None of the three 300 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 55. A, B, and C are partners, sharing profits in the ratio of 4:3:2. D is admitted for 2/9 share of profits and brings Rs. 30,000 as his capital and Rs. 10,000 for his share of Goodwill. The new profit sharing ratio between A:B:C:D will be 3:2:2:2. The Goodwill amount brought by D will be shared by: (a) AB & C (b) A & B (c) A only (d) B only 56. Shiva Ltd. Issued 20,000 shares of Rs. 10 each at a discount of 10% Payments were to be made as - application Rs. 3; on Allotment Rs. 4 and on First and Final Call Rs. 2. Applications were received for 18,000 shares and all were accepted. All money duly received. Balance Sheet total will be ________ (a) Rs. 1,80,000 (b) Rs. 1,62,000 (c) Rs. 1,90,000 (d) None of the three 57. X Ltd. Forfeited 100 shares of Rs. 10 each issued at a discount of 10% to Ravi on which he had paid Rs. 2.50 per share on application and Rs. 2.50 per share on allotment but on which he had not paid Rs. 2 on First Call. In case of forfeiture, share capital account will be debited by ________ (a) Rs. 800 (b) Rs. 700 (c) Rs. 900 (d) Rs. 1,000 58. 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 & 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 on fully paid at Rs. 80 per share. Amount transferred to Capital reserve will be ________ (a) Rs. 16,500 (b) Rs. 16,000 (c) Rs. 15,000 (d) None of the above 59. 100 articles at the sale price of Rs. 200 each sent to a customer on approval basis were recorded as actual sales and that price. The sale price was made it cost plus 25%. The amount of stock on approval will be amounting (a) Rs. 16,000 (b) Rs. 20,000 (c) Rs. 15,000 (d) None of the above 60. Share capital 5,00,000 shares of 10 each Rs. 5 called up Rs. 25,00,000 Calls in arrear Rs. 10,000 Calls in advance Rs. 15,000 Directors decide to provide 10% for dividend on share capital. Amount of proposed dividend will be __________ (a) Rs. 2,50,000 (b) Rs. 2,49,000 (c) Rs. 2,40,000 (d) None of the three Common Proficiency Test (CPT) Volume - I 301 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 11 SECTION – B : MERCANTILE LAWS (40 MARKS) 61. Which of the statement is incorrect? (a) All illegal agreements are void but all void agreements are not necessary illegal (b) A voidable contract is not voidable at the option of the aggrieved party (c) Contracts that are immoral or opposed to public policy are illegal in nature (d) All of the above 62. As per the India Contract Act, 1872, every person is competent to contract provided he: (a) Is of the age majority according to the 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. On the valid performance of the contractual obligations by the parties, the contract (a) Is discharged (b) becomes enforceable (c) becomes void (d) none of these 64. Which of the following agreements is void? (a) Agreement made under the unilateral mistake of fact (b) Agreements made under the bilateral mistake of fact (c) Agreement made under the influence of fraud (d) Contingent agreement 65. Which of the following agreements are void? (a) An agreement to share the salary of a public officer (b) An agreement to sell a religious office (c) An agreement with the objective of procuring a public post (d) All of the above 66. Coercion involves: (a) Physical Force or Threat (b) Mental Pressure (c) Both (a) and (b) (d) None of the Above 67. An agreement is void if it is opposed to public policy. Which of the following is not covered by heads of public policy? (a) Trading with an enemy (b) Trafficking in public offices (c) Marriage brokerage contracts (d) Contracts to do impossible acts 68. Consideration must move at the desire of (a) Promisor (b) Promisee (c) Any other person (d) Any of these 302 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 69. The following persons can enter into contracts as per the provisions of the Indian contracts Act, 1872 (a) Alien Enemy (b) Foreign Sovereigns or accredited representative of a foreign state (c) Insolvents and convicts (d) None of the above 70. The doctrine of Caveat Emptor does not apply, when (a) the goods are bought by sample (b) the goods are bought by sample as well as as description (c) the goods are purchased under its brand name (d) All of above 71. The Sale of Goods Act, 1930 deals with (a) Sale (b) mortgage (c) pledge (d) All of above 72. In which of the following cases, the unpaid seller loses his right to lien? (a) Delivery of goods to buyer (b) Delivery of goods to carrier (c) Tender of price by buyer (d) All of above 73. A person to whom money has been paid, 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. Necessary condition for existing goods is (a) They should be in existence at the time of the contract of sale (b) They should be owned or possessed by the seller (c) Both of the above (d) None of the above 75. In case of sale (a) Property in goods passes to the buyer (b) Risk in the goods passes to the buyer (c) Both the above (d) None of the above 76. Partnership (a) Arises by operation of law (b) Comes into existence only after registration (c) Can arise by agreement or otherwise (d) Arise by way of an agreement only Common Proficiency Test (CPT) Volume - I 303 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 11 77. 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 78. The test of good faith as provided under the Indian Partnership Act, 1932 requires the following: (a) That the expulsion must be in the interest of the partnership (b) That the partner to be expelled is served with a notice (c) That he is given an opportunity of being heard (d) All of the above 79. The essential elements of a partnership at will are: (a) No period has been fixed by the partners for its duration (b) There is no provision in the partnership agreement for its determination (c) Both of the above (d) None of the above 80. 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 81. According to the Indian Contract Act, 1872, Consent is said to be free when it is not caused by ________ (a) Misrepresentation (b) Undue Influence (c) Coercion (d) All of the above 82. Actual Sale of future goods is (a) Impossible (b) Possible through an agreement to sell (c) Illegal (d) A myth 83. A threatens to kill B if he does not agree to sell his scooter to him for Rs.5000 only. Here B’s Consent is obtained by ________ (a) undue influence (b) fraud (c) coercion (d) none of these 84. 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 304 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 85. An agreement made with free consent to which the consideration is lawful but inadequate, is ________ (a) Void (b) Valid (c) Voidable (d) Unlawful 86. When after the formation of a valid contract, an event happens which makes the performance of contract impossible, and then the contract becomes ________ (a) Void (b) Voidable (c) Valid (d) Illegal 87. Consent is not said to be free when it is caused by ________ (a) Coercion (b) Undue Influence (c) Fraud (d) All of these 88. Goods which are in existence at the time of the Contract of Sale is known as ________ (a) Present Goods (b) existing Goods (c) specified Goods (d) none of the above 89. An auction Sale is complete on the ________ (a) delivery of goods (b) payment of price (c) fall of hammer (d) none of the above 90. The essence of a right of lien is to ________ (a) delivery of goods (b) retain the possession (c) regain the possession (d) none of the above 91. In case of an agreement to sell, the aggrieved party ________ (a) Can sue for price (b) Can sue for damages (c) Can sue the buyer for injunction (d) None of the above 92. ‘Buyer’ means a person who ________ (a) Buys goods (b) Agrees to buy goods (c) Has bought goods (d) Buys or agrees to buy goods 93. 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 responsibilities as a bailee (c) Is allowed to sell them and retain the money realized from such sale (d) Has no obligation to return those goods, he may do so only a goods gesture Common Proficiency Test (CPT) Volume - I 305 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 11 94. Conditions and warranties ________ (a) Must be expressed (b) Must be implied if not expressed (c) May either be expressed or implied (d) None of the above 95. Registration of a firm is- ________ (a) Compulsory (b) Optional (c) Occasional (d) None of the above 96. The bidder at an auction sale can withdraw his bid ________ (a) any time during auction (b) before fall of hammer (c) before payment of price (d) cannot withdraw at all 97. ________ does not exist. (a) Liability for special damages (b) Liability for exemplary damages (c) Liability for nominal damages (d) Liability for disciplinary damages 98. -Registration of a partnership firm is- ________ (a) Compulsory from the beginning (b) Not compulsory till first five years of beginning of the partnership (c) Not compulsory at all (d) Compulsory only if the Registration of Firm, gives an order in the regard 99. A believes blue colour to be black colour, for any reason whatsoever. He has a garment shop. He sells one blue colour shirt to B, representing it to be black colour. B knows nothing about colour. B believes A and accepts the blue colour to be black colour, Later on B’s mother explains B that the colour of the shirt is actually blue and not black. It is a clear case of (a) Misrepresentation (b) Fraud (c) Unintentional fraud (d) Cheating 100. A agrees with B to carry passengers by taxi from Kanpur to Lucknow on the following terms, namely, B is to pay A Rs. 100 per mile per annum, and A and B are to share the costs of repairing and replacement of the cars, and to divide equally between them the proceeds of fares received from passengers, Choose the alternative. (a) A and B are partners (b) A and B are owners (c) A and B are co-owners (d) Can’t be decided SECTION – C : GENERAL ECONOMICS (50 MARKS) 101. Total utility is maximum when: (a) marginal utility is zero (b) marginal utility is at its highest point (c) marginal utility is equal to average utility (d) average utility is maximum 306 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 102. The consumer is in equilibrium at a point where the budget line : (a) is above an indifference curve (b) is below an indifference curve (c) is tangent to an indifference curve (d) cuts an indifference curve 103. An indifference curve slopes down towards right since more of one commodity and less of another result in: (a) same satisfaction (b) greater satisfaction (c) maximum satisfaction (d) decreasing expenditure 104. The consumer is in equilibrium when the following condition is satisfied: MU P MU P X > X X < X (a) (b) MU P MU P Y Y Y Y MU P X = X (c) (d) None of the above MU P Y Y 105. In the case of a Giffen good, the demand curve will be: (a) horizontal (b) downward-sloping to the right (c) upward-sloping to the right (d) vertical 106. 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 107. 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 108. In which form of the market structure is the degree of control over the price of its products by a firm very large? (a) monopoly (b) imperfect competition (c) oligopoly (d) perfect competition 109. Under which of the following forms of market structure does a firm have no control over the price of its product? (a) monopoly (b) monopolistic competition (c) oligopoly (d) perfect competition 110. Price discrimination will be profitable only if the elasticity of demand in different markets in which the total market has been divided is: (a) uniform (b) different (c) less (d) zero Common Proficiency Test (CPT) Volume - I 307 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 11 111. The law of consumer surplus is based on : (a) indifference curve analysis (b) revealed preference theory (c) law of substitution (d) the law of diminishing marginal utility 112. Which of the following cost curves is never ‘U’ shaped ? (a) Average cost curve (b) Marginal cost curve (c) Average variable cost curve (d) Average fixed cost curve 113. In the short run, when the output of a firm increases, its average fixed cost: (a) increases (b) decreases (c) remains constant (d) first declines and then rises 114. The cost of one thing in terms of the alternative given up is known as: (a) production cost (b) physical cost (c) real cost (d) opportunity cost 115. 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 116. In the case of an inferior good the income elasticity of demand is: (a) positive (b) zero (c) negative (d) infinite 117. The elasticity of substitution between two perfect substitutes is: (a) zero (b) greater than zero (c) less than infinity (d) infinite 118. 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 119. Elasticity of supply refers to the degree of responsiveness of supply of a good to changes in its: (a) demand (b) price (c) costs of production (d) state of technology 120. An isoquant slopes : (a) downward to the left (b) downward to the right (c) upward to the left (d) upward to the right 308 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 121. Which of the following is considered production in economics? (a) Tilling of soil (b) Singing a song before friends (c) Preventing a child from falling into a manhole on the road (d) Painting a picture for pleasure 122. Which of the following is not a characteristic of land? (a) its supply for the economy is limited (b) it is immobile (c) its usefulness depends on human efforts (d) it is produced by our forefathers 123. Who is the official “lender of the last resort” in India? (a) SBI (b) PNB (c) RBI (d) OBC 124. Which of the following statement regarding privatization is correct? (a) Privatization is panacea for all economic problems (b) Privatization always leads to attaining social and economic efficiency (c) Privatization may result in lopsided development of industries in the country (d) None of the above 125. Which of the following statements is correct? (a) The disinvestments programme has been successfully carried out in India (b) Privatization up to 100 percent has been carried out in all the PSUs in India (c) Under strategic sale method of disinvestments, the government sells a major share to strategic buyer (d) None of the above 126. At present 100 per cent FDI is allowed in - (a) defence (b) drugs and Pharmaceuticals (c) banks (d) insurance 127. FRBM Act stands for (a) Fiscal Revenue and Budget Management (b) Foreign Revenue and Business Management (c) Fiscal Responsibility and Budget Management (d) Foreign Responsibility and Budget Management 128. The share of concessional debt in total external debt of India has: (a) remained the same (b) doubled (c) reduced (d) increased Common Proficiency Test (CPT) Volume - I 309 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 11 129. Which of the following statements is incorrect? (a) The Indian road network is one of the largest networks in the world (b) The rural road network connects around 65 per cent of all weather roads (c) Most of the State Road Transport Corporations are running on profits (d) The National highways carry more than 40 per cent of the total road traffic 130. In terms of generation of power ____________’s contribution, is the maximum (a) hydel (b) nuclear (c) thermal (d) others 131. NTPC stands for (a) National Thermal Power Corporation (b) National Tidal Power Corporation (c) National Theological Power Corporation (d) National Talent and Potential Corporation 132. Most of the unemployment in India is: (a) voluntary (b) structural (c) frictional (d) technical 133. What is India’s rank in world population? (a) First (b) Second (c) Third (d) Fourth 134. In which state is the sex ratio most favourable to women? (a) Andhra Pradesh (b) Uttar Pradesh (c) Kerala (d) Karnataka 135. India’s present population is: (a) Between 50 – 60 crore (b) Between 60 – 70 crore (c) Between 70 – 80 crore (d) Above 100 crore 136. India accommodates nearly _________ per cent of world’s population (a) 10 (b) 50 (c) 17 (d) 45 137. Which of the following statements is correct? (a) Excise duty is levied on sales volume (b) Custom duties have been drastically cut down since 1991 (c) VAT has been adopted by all the states in India (d) Agriculture contributes the maximum to the direct tax revenues in India 310 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 138. Find the tax which is direct tax among the following: (a) Personal income tax (b) Excise duty (c) Sales tax (d) Service tax 139. Per capita national income means: (a) NNP ÷ population (b) Total capital ÷ population (c) Population ÷ NNP (d) None of the above 140. Which of the following is an economic activity? (a) Listening to music on the radio (b) Teaching one’s own son at home (c) Medical facilities rendered by a charitable dispensary (d) A housewife doing household duties 141. 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 sector 142. The net value added method of measuring national income is also known as: (a) net output method (b) production method (c) industry of origin method (d) all of the above 143. Which of the following is incorrect ? (a) GDP at market price = GDP at factor cost plus net indirect taxes (b) NNP at factor cost = NNP at market price minus indirect taxes (c) GNP at market price = GDP at market price plus net factor income from abroad (d) None of the above 144. Nearly ______ percent of working population is engaged in the service sector (2004-05). (a) 28.5 (b) 45 (c) 80 (d) 50 145. The industrial sector depends on the agricultural sector because (a) the agricultural sector provides food and other products for the consumption purposes of industrial sector (b) the agricultural sector provides raw materials for the development of agro-based industries of the economy (c) the agricultural sector provides market for the industrial products (d) all of the above Common Proficiency Test (CPT) Volume - I 311 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 11 146. The Indian industry faced the process of retrogression and deceleration because of: (a) unsatisfactory performance of agriculture (b) slackening of real investment in public sector (c) narrow market for industrial goods, especially in rural areas (d) all of the above 147. Which of the following statements is incorrect? (a) About 80 per cent of agricultural area has irrigation facilities (b) About two third area is rain-fed in India (c) Productivity per worker in agriculture is much lower than that in industry (d) Cropping pattern is quite skewed in India 148. We can say Indian agriculture has become modern since: (a) there has been an increase in the use of high yielding varieties of seeds, fertilizers pesticides etc. (b) there has been noticeable positive change in the attitude of farmers towards new techniques of production (c) farmers are increasingly resorting to intensive cultivation, multiple cropping, scientific water management (d) all of the above 149. Generally an economy is considered underdeveloped if: (a) the standard of living of people is low and productivity is also considerably low. (b) agriculture is the main occupation of the people and productivity in agriculture is quite low (c) the production techniques are backward (d) all of the above 150. _______ is the apex bank for agriculture credit in India. (a) RBI (b) SIDBI (c) NABARD (d) ICICI SECTION – D : QUANTITATIVE APTITUDE (50 MARKS) 151. Laspeyre’s and Pasche’s method satisfy time reversal test (a) True (b) False (c) Both (d) None of these 152. A frequency distribution (a) Arranges observations in an increasing order (b) Arranges observations in terms of a number of groups (c) Relates to measurable characteristic (d) All of these 312 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 153. Ogive is used to obtain (a) Mean (b) Mode (c) Quartiles (d) All of these 154. The value of middlemost item when they are arranged in order of magnitude is called (a) Standard deviation (b) Mean (c) Mode (d) Median 155. The errors in case of regression equation are (a) Positive (b) Negative (c) Zero (d) All of these 156. The probability of an event can assume any value between (a) –1 and 1 (b) 0 and 1 (c) –1 and 0 (d) None of these 157. The most important continuous probability distribution is known is (a) Binomial distribution (b) Normal distribution (c) Chi-Square Distribution (d) Sampling Distribution 158. A measure of precision obtained by sampling is given by (a) Standard error (b) Sampling fluctuation (c) Sampling distribution (d) Expectation 159. A range of value is (a) A point estimate (b) An interval estimate (c) Both (a) and (b) (d) None of these 160. The index number is a special type of G.M. (a) True (b) False (c) Both (d) None of these 161. The number of test of adequacy is ___________ (a) 2 (b) 5 (c) 3 (d) 4 162. If b2 – 4ac = 0, the roots are ____________ (a) Equal and real (b) Unequal and real (c) Complex numbers (d) Imaginary numbers 163. If (7p+3q) : (3p-2q) = 43:2 , then p:q is __________ (a) 5:4 (b) 4:5 (c) 7:2 (d) 2:7 Common Proficiency Test (CPT) Volume - I 313 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 11 164. Number of ________________ arrangement can be made by using all the letters of word Monday. (a) 120 (b) 720 (c) 41 (d) 51 165. Which term of series 7,11,15, ………. nth term is equal to 403. (a) 50 (b) 100 (c) 101 (d) 51 128 log 166. is equal to _____________________ 2 (a) 6 (b) 12 (c) 24 (d) 14 167. The number of ways in which 6 boys sit in a round table so that two particular boys sit together (a) 48 (b) 720 (c) 120 (d) None of these 168. Rs. 4000 amount to Rs. 6000 in 3 years at the _______________ p.a., if interest is compounded half yearly. (a) 12% (b) 14% (c) 16% (d) 8% 169. A graphical representation of __________ can be prepared in 2 different ways. (a) Median (b) Mode (c) Mean (d) None 170. The value of deciles divides the total number of observations into _____ equal parts. (a) 100 (b) 10 (c) 2 (d) None of these 3x+1-3 171. lim is equal to x→0 x (a) Does not exist (b) Exist and is equal to 4 (c) Exist and is equal to 3 log 3 (d) Exist and is equal to 3 e dy ⎛ x2 y2 ⎞ of⎜ + =1⎟ 172. Find dx ⎝a2 b2 ⎠ (a) –b2x / a2y (b) –b y / a2x 2 (c) –b2 / a2 (d) 0 314 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 173. 6th term of series ab, a2b3, a3b5 ……. nth term is equal to (a) a6b11 (b) a5 b10 (c) a6b6 (d) a5 b11 e ∫ logxdx 174. is equal to 2 (a) log 2 – 1 (b) –(2 log 2 – 2) (c) 2 log 2 – 1 (d) 0 175. In how many ways can the letters of words “ACCOUNTANT” be arranged if vowels always occur together? (a) 7560 (b) 7650 (c) 7660 (d) 7550 176 . Find the present value of Rs. 500 due 10 years hence when interest of 10% is compounded half yearly? (a) Rs. 188.40 (b) Rs. 193.94 (c) Rs. 138.94 (d) Rs. 50.00 177. If f(x) = x2+ 3x then f(2) – f(4) is equal to (a) –15 (b) –18 (c) 18 (d) 12 178. For what value of ‘K’ the equation 9x2 – 24x + K = 0 has equal roots (a) –16 (b) –15 (c) 0 (d) 16 179. Two number are in the ratio of 5:6. If 5 is subtracted from each of them their ratio becomes 4:5. Find the numbers (a) 25 and 30 (b) 15 and 18 (c) 60 and 72 (d) None of these 180. The equation of right bisector of line joining the points A (3, –4) and B (5, –6) is equal to (a) 2x – 2y – 9 = 0 (b) x + y + 1 = 0 (c) 3x – 2y + 7 = 0 (d) x – 5y + 4 = 0 181. The regression equation are 8x – 10y + 66 = 0 and 40 x – 18y = 214, find the coefficient of correlation (a) 4/5 (b) –4/5 (c) 3/5 (d) –1 Common Proficiency Test (CPT) Volume - I 315 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 11 182. The mean weight of 150 students in a class is 60 kg. The mean weight of the boys is 70 kg, while that of girls is 55 kg, find the number of boys and number of the girls in the class. (a) 50 boys and 100 girls (b) 100 boys and 50 girls (c) 75 boys and 75 girls (d) None of these 183. Two cards are drawn from a well shuffled pack of playing cards. Find the probability that both are ace. (a) 1:221 (b) 2:221 (c) 10:21 (d) None of these 184. A random sample was taken to estimate the mean annual income of 100 families and the mean and standard deviation were found to the Rs. 6,300 and Rs. 9.5 respectively find standard error for 95% confidence level. (a) 2.25 (b) 1.50 (c) 2.15 (d) 1.862 185. If 10 coins are tossed 100 times, how many times would you expect 7 coins to fall head upward. (a) 14 (b) 12 (c) 13 (d) 11 186. Coefficient of variation of two series are 60% and 80% respectively. Their standard deviation are 20 and 16 respectively, what are their A.M. (a) 15 and 20 (b) 33.3 and 20 (c) 33.3 and 15 (d) 12 and 16 187. The height of 8 boys in a class (in cumulative) are 135, 138, 160, 141, 155, 146, 158, 149. Find 61st percentile. (a) 139.81 (b) 151.91 (c) 153.98 (d) None of these 188. The roots of equation 9x+2 – 6.3 x+1 + 1 = 0 are (a) – 2 (b) – 2 and + 2 (c) – 2 and + 3 (d) – 2, 0 189. How many diagonals can be drawn in a plane figure of 16 sides. (a) 100 (b) 50 (c) 104 (d) 54 190. The sum of squares of first n natural numbers is equal to n(n+1) n (a) (b) (n+1)(2n+1) 2 6 316 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India ⎡n ⎤2 (c) ⎢ (n+1)⎥ (d) None of these ⎣6 ⎦ 191. Find the gradient of curve y = 3x2-5x+4 at the point (1, 2) (a) 1 (b) 3 (c) 4 (d) 5 192. “Is greater than” over the set of all natural number if known as (a) Transitive (b) Symmetric (c) Reflexive (d) Equivalence 193. Find the least value of n for which the sum 1 + 3 + 32 + 33 ________ to n terms of greater than 7000. (a) 8 (b) 9 (c) 7 (d) 15 194. The number of subsets of the set {1,2,3,4} is (a) 13 (b) 12 (c) 16 (d) 15 195. ∫ x2 +a2 dx is equal to x a2 (a) x2 +a2 + log x2+ x2 +a2 2 2 x a2 (b) x2 − a2 + log x2− x2 − a2 2 2 x a2 (c) x2 − a2 − log x2+ x2 + a2 2 2 (d) None of these 196. If c(n, 8) = c (n, 6), find c(n, 2) (a) 14 (b) 91 (c) 19 (d) 41 197. An experiment succeeds twice as often as it fails. What is the probability that in next five trials there will be three success. (a) 192/243 (b) 19/243 (c) 80/243 (d) 50/243 Common Proficiency Test (CPT) Volume - I 317 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 11 198. If a:b = 4:5, find the value of (5a – 3b): (6a + 3b) (a) 7:39 (b) 15:39 (c) 1:3 (d) 5:39 199. What is the modal value for the numbers 4, 3, 8, 15, 4, 3, 6, 3, 15, 3, 4. (a) 3 (b) 4 (c) 15 (d) None of these p ⎛p⎞q p -1 200. If pq = qp then value of ⎜ ⎟ -pq reduces to ⎝q⎠ (a) p (b) q (c) 0 (d) None of these (cid:2)(cid:2)(cid:2) 318 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 – 12 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. SECTION – A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. Which of the following is not a sub-field of a accounting? (a) Management accounting (b) Cost accounting (c) Financial accounting (d) Book-keeping 2. Capital brought in by the proprietor is an example of _____ (a) Increase in asset and increase in liability (b) Increase in liability and decrease in asset (c) Increase in asset and decrease in liability (d) Increase in one asset and decrease in another asset 3. Cost of removal of business to a more convenient locality is _____ (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) Capital loss 4. Salary Rs. 2000 payable to clerk is credited to _______ (a) Salary account (b) Cash account (c) Clerks Account (d) None of the above 5. Total of purchase return book is posted periodically to the credit of ______ (a) Purchase return account (b) Cash book (c) Journal proper (d) None of the three 6. No Journal entry is required to be passed when there is ______ (a) Normal loss (b) Abnormal loss (c) Loss of band debts (d) Loss by riots. Common Proficiency Test (CPT) Volume - I 319 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 12 7. Stock is valued at cost or market value, whichever is less, is based on ______ (a) Entity concept (b) Money measurement concept (c) Accrual concept (d) Conservation 8. Account sale is sent by _____ (a) Consignor (b) Consignee (c) Supplier (d) None of the three 9. Which of the following statement is not true? (a) If del credere commission is allowed, bad debts will not be recorded in the books of the consignor. (b) If del credere commission is allowed, bad debts will be debited in consignment account. (c) If del credere commission is allowed by consignor to consignee, loss of bad debts is borne by consignee (d) Del credere commission is generally given to promote credit sales. 10. In the absence of any provision in the partnership agreement, profits and losses are shared: (a) In the ratio of capitals (b) Equally (c) In the ratio of capital invested by partners to the firm (d) None of the above 11. Loss on issue of debentures is treated as ______ (a) Intangible asset (b) Current asset (c) Current liability (d) Miscellaneous expenditure 12. Dividends are usually paid as a percentage of ______ (a) Authorised shares capital (b) Net profit (c) Paid up capital (d) Called up capital 13. According to the Companies Act, 1956, Balance Sheet of a company is prepared as per (a) Part II of Schedule VI (b) Part I of Schedule VI (c) Part II of Schedule VII (d) Part I of Schedule VII 14. The parties to joint venture are called _______ (a) Co ventures (b) Partners (c) Principal and agent (d) Friends 15. The owner of the consignment stock is ______ (a) Consignee (b) Consignor (c) Debtors (d) None 320 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 16. In case of credit balance, the words _______ are written on the credit side. (a) To balance b/d (b) To balance c/d (c) By balance b/d (d) By balance c/d 17. Prepaid insurance given in trial balance is recorded in __________ (a) Trading account (b) Profit & Loss account (c) Balance sheet (d) None of the three 18. Present liability of uncertain amount which can be measured reliably by using a substantial degree of estimation is termed as _______ (a) Provision (b) Liability (c) Contingent liability (d) None of the above 19. When preparing a Bank reconciliation statement, if you start with balance as per cash book, then dividends directly collected by bank but not yet entered in cash book within the period are ____________ (a) Added (b) Deducted (c) Not required to be adjusted (d) None of the above 20. Goodwill is a ____________ (a) Current asset (b) Intangible fixed asset (c) Tangible fixed asset (d) Investment 21. A trader purchased a machinery costing Rs. 1,00,000 on 1st Oct. 2009. Transportation and installation charges were incurred amounting Rs. 10,000 and Rs. 4,000 respectively. Dismentling charges of the old machine in place of which new machine was purchased amounted Rs. 10,000. Market value of machine was estimated at Rs. 1,20,000 on March 31, 2010, while finalizing the annual accounts. Trader values the machinery at Rs. 1,20,000 in his books which of the following concepts was violated by the trader? (a) Cost concept (b) Matching concept (c) Realisation (d) Periodicity concept 22. Accounting has certain norms to be observed by the accountants in recording of transactions and preparation of final statements. These norms reduce the vagueness and chances of misunderstanding by harmonizing the varied accounting practices. These norms are _________ (a) Accounting regulations (b) Accounting guidance notes (c) Accounting standards (d) Accounting frame work Common Proficiency Test (CPT) Volume - I 321 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 12 23. Opening Stock 8,500 Purchases 30,700 Direct Expenses 4,800 Indirect Expenses 5,200 Closing Stock 9,000 Cost of goods sold will be: _________ (a) Rs. 30,000 (b) Rs. 35,000 (c) Rs. 32,000 (d) Rs. 40,000 24. The plant and machinery account of a firm had a debit balance of Rs. 1,47,390 on Jan. 1, 2010. It has purchased the plant and machinery on Jan 1, 2007. Firm has been following the practice of charging full years depreciation every year on diminishing balance system @ 15%. Cost of machinery on 1.1.2007 will be _____ (a) Rs. 240,000 (b) Rs. 250,000 (c) Rs. 200,000 (d) Rs. 260,000 25. A new firm commenced business on Jan. 1, 2009 purchased goods costing Rs. 19,500 during the year. A sum of Rs. 400 was spent on carriage inward and Rs. 1000 on wages. At the end of the year the cost of goods still unsold was Rs. 12,000. Sales during the year Rs. 25,000. What is the gross profit earned by the firm _________ (a) Rs. 16,100 (b) Rs. 18,200 (c) Rs. 20,000 (d) Rs. 15,100 26. Dr. Cr. Rs. Rs. Cost of goods sold 1,50,000 — Closing Stock — 40,000 Debtors — 60,000 Fixed Assets 50,000 — Opening Stock 60,000 — Sundry Expenses — 20,000 Sales — 2,00,000 Capital 90,000 — Creditors 30,000 3,50,000 3,50,000 Total of corrected trial balance will be ________ (a) Rs. 3,20,000 (b) Rs. 3,60,000 (c) Rs. 3,00,000 (d) Rs. 4,00,000 27. Journal entry for wages paid Rs. 20,000 for installation of machinery will be ______ (a) Dr. wages A/c and Cr. Cash A/c Rs. 20000 (b) Dr. Machinery A/c and Cr. Cash A/c Rs. 20000 (c) Dr. machinery repairs A/c and Cr. Cash A/c Rs. 20000 (d) None of the above 322 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 28. Capital introduced in the beginning by Syam Rs. 40,000, further capital introduced during the year Rs. 1000 Drawings Rs. 200 per month and closing capital is Rs. 53,600. The amount of profit or loss for the year is _________ (a) Rs. 15,000 profit (b) Rs. 5,000 loss (c) Rs. 20,000 profit (d) Information is insufficient for any comment. 29. Goods purchased Rs. 1,00,000. The goods were sold Rs. 80,000. Margin 20% on sales. Closing stock is _______ (a) Rs. 36,000 (b) Rs. 40,000 (c) Rs. 50,000 (d) None of the above. 30. The securities premium account may be applied by the company (a) In writing off the preliminary expenses of the company. (b) In writing off the expenses of or the commission paid or discount allowed on, any issue of shares or debentures of the company. (c) In paying up un-issued shares of the company to be issued to members of the company as fully paid bonus shares. (d) All of the above. 31. Following information pertains to X Ltd. Rs. Equity share capital called up 4,60,000 Calls in arrears 7,500 Calls in advance 5,000 Proposed dividend 5% The amount of dividend payable will be ______ (a) Rs. 22,625 (b) Rs. 23,000 (c) Rs. 20,000 (d) None of the three 32. Pavan Ltd.’s authorized capital is 60,000 shares of 10 each. 4000 fully paid shares were issued to promoters for their services. This amount will be debited to_______ (a) Preliminary expenses (b) Goodwill (c) Sundry expenses (d) None of the three 33. X Ltd. purchased the business of Y Ltd. for Rs. 9,00,000 payable in fully paid shares of 100 each at a premium of 25%. The number of shares to be issued by X Ltd. to settle the purchase consideration will be ______ (a) 7000 (b) 5000 (c) 7200 (d) None of the three Common Proficiency Test (CPT) Volume - I 323 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 12 34. Gopal was holding 100 shares of Rs. 10 each of a company on which he had paid Rs. 3 on application and Rs. 2 on allotment but could not pay Rs. 2 on first call. Directors forfeited his shares. Share capital will be debited by _____________ (a) Rs. 1000 (b) Rs. 700 (c) Rs. 500 (d) Rs. 800 35. Pavan Ltd. invited application for 30,000 shares payable as under: Rs. 3 per share on application; Rs. 3 per share on allotment; Rs. 2 per share on First call; Rs. 2 per share on final call; Ashok, who had been allotted 500 shares failed to pay both the calls. His shares were forfeited and reissued at Rs. 9 per share to Hari, as fully paid up. Amount transferred to capital Reserve will be _____________ (a) Rs. 2,000 (b) Rs. 2,500 (c) Rs. 2,800 (d) Rs. 1,500 36. Z Ltd. forfeited 600 shares of Rs. 10 each, on which first call of Rs. 3 per share was not received; the second and final call of Rs. 2 per share has not yet been called. Forfeited share A/c will be credited with _____________ (a) Rs. 3,000 (b) Rs. 2,000 (c) Rs. 1,500 (d) Rs. 1,000 37. When preparing a Bank reconciliation statement, if you start with a debit balance as per cash book, cheques sent to Bank but not collected within the period should be _____________ (a) Added (b) Deducted (c) Not required to be adjusted (d) Name of the above 38. A company purchased plant for Rs. 5,000. The useful life of the plant is 10 years and the residual value is Rs. 500. When the management wants to depreciate it by straight line method. Rate of depreciation will be _____________ (a) 8% (b) 9% (c) 10% (d) None of the three 39. X sells goods at Cost plus 60%. Total sales were Rs. 16,000. cost price of the goods will be: _____________ (a) Rs. 12,000 (b) Rs. 10,000 (c) Rs. 13,000 (d) None of the three 40. A trader sells goods at a profit of 25% on sale. In a particular month he sold goods costing Rs. 34,200 sale price of goods will be _____________ (a) Rs. 45,000 (b) Rs. 45,600 (c) Rs. 45,500 (d) Rs. 42,000 324 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 41. A manager gets 5% commission on sales, cost price of goods sold is Rs. 40,000 which he sells at a margin of 20% on sale. Manager Commission will be ______ (a) Rs. 2000 (b) Rs. 2500 (c) Rs. 2800 (d) None of the three 42. A manager gets 5% commission on net profit after charging such commission. If gross profit is Rs. 48,000 and expenses of indirect nature other than manager’s commission are Rs. 6,000. Commission amount will be _________ (a) Rs. 2100 (b) Rs. 2000 (c) Rs. 2200 (d) Rs. 2400 43. On January 1, Mohan paid wages amounting Rs. 10,000. This is ______ (a) An event. (b) A transaction. (c) Either (a) or (b). (d) Neither (a) nor (b). 44. Omega Stationers used Stationery for business purposes Rs. 300. Amount will be credited to: (a) Sales A/c (b) Purchases A/c (c) Cash A/c (d) None of the three 45. A machinery of Rs. 3,000 was sold for Rs. 4200. Depreciation provision till date of sale was Rs. 400 and commission paid to the selling agent was Rs. 420 and wages paid to the workers for removing the machine was Rs. 30. Profit on sale of machinery will be _________ (a) Rs. 1200 (b) Rs. 1000 (c) Rs. 1150 (d) None of the three 46. Cost of goods sold 158600 Stock in hand at the close of the year 25,400 Stock in hand at the beginning of the year 44,000 Purchases amount will be ______ (a) Rs. 1,40,000 (b) Rs. 1,35,000 (c) Rs. 1,30,000 (d) Rs. 1,45,000 Rs. 47. Opening balance of Capital 5,000 Net profit 2,770 Income tax 550 Drawings 650 Interest on capital 500 Interest on Drawings 120 Capital at end will be (a) Rs. 6950 (b) Rs. 6000 (c) Rs. 6500 (d) Rs. 6600 Common Proficiency Test (CPT) Volume - I 325 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 12 48. Trial balance of a trader shows the following balances Rs. Opening Stock 9600 Purchases less returns 11850 Salaries and wages 3200 Carriage on Purchases 200 Carriage outwards 300 Sales 24900 Closing Stock 3500 Gross profit will be (a) Rs. 6750 (b) Rs. 6500 (c) Rs. 3250 (d) Rs. 3200 49. Rs. Jan 1, 2009 Provision for Bad Debts 2,500 Dec. 31, 2009 Bad debts 1,870 Debtors 20,000 Make a provision for bad debts @ 5% on debtors. Provision for bad debts in Profit and Loss A/c will be _________ (a) Rs. 370 (b) Rs. 400 (c) Rs. 500 (d) None of the three 50. Goods destroyed by fire Rs. 25000 and Insurance company admitted full claim. Claim receivable will be recorded in _________ (a) Trading A/c (b) P/L Account (c) Balance Sheet (d) P/L Appropriation A/c 51. On 1st January, 2010 Badri of Bombay consigned 100 cases (cost price Rs. 7500) at a proforma invoice price of 25% profit on sales to his agent Anil of Agra. On the same date Badri paid non recurring expenses of Rs. 600. On 5th January. Anil took delivery and paid Rs. 1200 for Octroi. On 31st January he sold 80 cases for Rs. 10,500. He charged Rs. 775 as his commission. Consignment profit will be _________ (a) Rs. 2,285 (b) Rs. 2,200 (c) Rs. 2,500 (d) Rs. 2,000 52. If sales revenue are Rs. 4,00,000, cost of goods sold is 3,10,000 and operating expenses are Rs. 60,000, the gross profit is (a) Rs. 90,000 (b) Rs. 30,000 (c) Rs. 3,40,000 (d) Rs. 60,000 326 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 53. A, B and C are partners in a business sharing profits and losses in the ratio of 3:2:1. On 30th June, 2009, C retired from business, when his capital A/c after all necessary adjustments showed a balance of Rs. 10,950. It was agreed that he should be paid Rs. 4950 in cash on retirement and the balance in three equal yearly instalments with interest at 6% per annum. Amount of last instalment with interest will be: _________ (a) Rs. 2120 (b) Rs. 2100 (c) Rs. 2200 (d) Rs. 2500 54. A, B and C share profit and losses in the ratio of 3:2:1. Upon admission of D they agreed to share in the ratio of 5:4:2:1 sacrificing ratio will be: ______ 1 1 (a) : NIL : NIL (b) NIL : : NIL 12 12 1 (c) NIL : NIL : (d) None of the three 12 55. Rs. 35,000 was spent on painting the new factory. It is a _________ (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None of the above 56. The total cost of goods available for sale with a company during the current year is Rs. 12,00,000. Total sales during the period are Rs. 13,00,000. If the gross profit margin is 1 33 % on cost. Closing inventory of the current year will be _________ 3 (a) Rs. 4,00,000 (b) Rs. 3,00,000 (c) Rs. 2,25,000 (d) Rs. 2,50,000 57. Opening Debtors Rs.10,200 Cash Received from debtors during the year (as per cash book) Rs. 30,400 Returns Inwards Rs. 2,700 Bad debts Rs. 1,2 00 Debtors at end Rs. 13,800 Cash Sales (As per cash book) Rs. 28,400 Total Sales will be (a) Rs. 66,300 (b) Rs. 66,000 (c) Rs. 65,000 (d) Rs. 66,500 58. A company wishes to earn 20% profit margin on selling price. Which of the following is the profit mark upon cost, which will achieve the required profit margin? (a) 25% (b) 30% (c) 20% (d) None of the above. Common Proficiency Test (CPT) Volume - I 327 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 12 59. Anwar Ltd. Purchased building worth Rs. 99,00,000 and issued 12% debentures of 100 each at a premium of 10%. Premium amount will be __________ (a) Rs. 9,00,000 (b) Rs. 8,00,000 (c) Rs. 7,00,000 (d) Rs. 10,00,000 60. Green Ltd. issued 5,000, 6% debentures of Rs.100 each at a discount of 5% repayable after 5 years at a premium of 5%. Total loss on issue of debentures will be __________ (a) Rs. 40,000 (b) Rs. 50,000 (c) Rs. 60,000 (d) Rs. 70,000 SECTION – B : MERCANTILE LAWS (40 MARKS) 61. Consent is not said to be free when it is caused by __________ (a) Coercion (b) Undue Influence (c) Fraud (d) All of these 62. Which of the following statements are correct? (a) In the case of fraud, the person making the representation believes it to be true. (b) In the case of misrepresentation, the maker does not believe it to be true. (c) Fraud does not afford a ground for bringing an action in tort for damages; whereas misrepresentation does. (d) In the case of misrepresentation, the fact the plaintiff had means of discovering the truth by exercising ordinary diligence can be good defence against the repudiation of the contract but such a defence cannot be set up in the case of fraud other then fraudulent silence. 63. Which of the following statement is true? (a) A contract with a minor is voidable at the option of the minor. (b) An agreement with a minor can be ratified after he attains majority. (c) A person who usually of an unsound mind cannot enter into contract even when he is of a sound mind. (d) A person who usually of a sound mind cannot enter into contract when he is of unsound mind. 64. On the valid of the contractual obligations by the parties, the contract (a) is discharged. (b) becomes enforceable. (c) becomes void (d) None of these. 65. Consideration in simple term means: (a) Anything in return. (b) Something in return (c) Everything in return (d) Nothing in return 328 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 66. Which of the following statement is true? (a) There can be a stranger to a contract (b) There can be a stranger to a consideration (c) There can be a stranger to a contract & consideration (d) None of the above 67. An agreement is void if it is opposed to public policy. Which of the following is not covered by heads of public policy? (a) Trading with an enemy (b) Trafficking in public offices (c) Marriage brokerage contracts (d) Contracts to do impossible acts 68. Ordinarily, a minor’s agreement is (a) Void-ab-intio (b) Voidable (c) Valid (d) Unlawful 69. A contract is discharged by rescission which means the (a) Change in one or more terms of the contract (b) Acceptance of lesser performance. (c) Abandonment of rights by a party (d) Cancellation of the existing contract 70. In case of a firm carrying on the business of banking (a) There should be at least seven members and maximum number of members should not exceed fifty. (b) There should be at least two members and maximum number of members should not exceed ten. (c) There should be at least ten members and maximum number of members should not exceed twenty. (d) There should be at least two members and maximum number of members should not exceed fifty. 71. The bidder at an action sale can withdraw his bid: (a) Any time during auction (b) Before fall of hammer (c) Before payment of price. (d) None of these 72. In case of sale on approval, the ownership is transfer to the buyer when he: (a) Accepts the goods (b) Adopts the transaction (c) Fails to return goods (d) In all the above cases 73. 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 become a partner in the firm of the deceased partner only if the surviving partner give their consent in this regard. (d) Both (b) & (c) Common Proficiency Test (CPT) Volume - I 329 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 12 74. The Sale of Goods Act, 1930 came into force on ______ (a) 15th March, 1930 (b) 30th July, 1930 (c) 30th June,1930. (d) 1st July, 1930 75. An auction sale is complete on the ______ (a) Delivery of goods. (b) Payment of price. (c) Fall of hammer. (d) None of the above. 76. A share in a partnership be transferred like any other ______ (a) Property (b) Goods (c) Currency (d) Investment 77. The maximum number of partners is mentioned in : (a) The Partnership Act (b) The General Clauses Act (c) The Companies Act (d) The Societies Registration Act 78. Active partner is one who : (a) Takes part in the business of the firm (b) Actively participates in co-curricular activities (c) Actively shares the profits. (d) Makes a show of authority. 79. A minor may be : (a) Admitted to the benefits of the partnership (b) A partner of the firm (c) Representative of the firm (d) Entitled to carry on the business of the firm 80. The agent should be in possession of goods with the consent of the ________ (a) Owner (b) Seller (c) Buyer (d) Principal 81. All contracts are ________ (a) Agreement (b) Promises, (c) Set of promises (d) Proposals 82. Agreement with a minor is altogether ________ (a) Void (b) Voidable (c) Illegal (d) enforceable 83. Delivered by acknowledgement is ________ (a) Actual Delivery (b) Constructive Delivery (c) Symbolic Delivery (d) None of the above 330 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 84. Total substitution of new contract in place of old contract takes place in case of ________ (a) Remission (b) Rescission (c) Novation (d) Alteration 85. ‘Buyer’ means a person who: (a) Buys Goods (b) Agrees to buy goods (c) Has bought goods (d) Buy or agrees to buy goods 86. 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 87. Contract of sale is ________ (a) Executory Contract (b) Executed contract (c) Executory Contract or Executed Contract (d) None of the above 88. Quasi-Contracts arise ________ (a) Where obligation are created without a contract (b) Where obligation are created under a contract (c) Out of natural causes (d) Out of man-made causes 89. Conditions and warranties ________ (a) Must be expressed (b) Must be implied if not expressed (c) May either be expressed or implied (d) None of the above 90. The maxim ‘delegates non protest delegate’ means ________ (a) A person whom authority has been given cannot delegate the authority to another (b) A person whom authority has been given can delegate the authority to another with prior permission (c) A person whom authority has been given to indemnify agent for injury caused by principal’s neglect can be delegated (d) An authority can be delegated under protest by the person to whom authority has been given. 91. 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 Common Proficiency Test (CPT) Volume - I 331 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 12 (c) The seller is in a position to delivery them (d) All of the above 92. In case of a 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 93. In case of an agreement to sell, subsequent loss of destruction of the goods is the liability of ______ (a) The buyer (b) The seller (c) Both the buyer and the seller (d) The insurance company 94. True test of partnership is ________ (a) Sharing of profits (b) Sharing of profit and losses (c) Mutual agency (d) Existence of an agreement to share profit of the business 95. The reconstitution of the firm takes place in case of ________ (a) Admission of a partner (b) Retirement of a partner (c) Expulsion or death of a partner (d) All of the above 96. The liabilities of a minor when admitted to the benefits of the Partnership ________ (a) Is confined to his share of the profits and property in the firm (b) Is as that of any other partner in the firm (c) Is similar as that of any other partner in the firm (d) Is unlimited 97. In case of an agreement to sell, the ownership in the goods remains with ________ (a) The buyer (b) The seller (c) Both the buyer and seller (d) The Central Government or the state government, as the case may be 98. Expulsion of a partner, which is not in accordance with provisions of the Indian Partnership Act, 1932 is ________ (a) Null and void (b) Null and void to some extent (c) Is unconstitutional (d) In good faith and in the interest of the partnership 332 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 99. State whether X and Y are partners in the following circumstances: (a) X agrees Y to carry passengers by taxi from Delhi to Gurgaon on the followings terms, namely, Y is to pay X Rs. 100 per mile per annum, and X and Y are to share to costs of repairing and replacement of the care, and to divide equally between them the proceeds of fares received from passengers. (b) X and Y are co-owners of a house let to a tenant. X and Y divide the net rents (after deduction of the incidental taxes; etc.) between themselves. (c) X and Y buy 200 bales of cotton agreeing to share the same between them. (d) X and Y agree to work together as carpenters but X shall receive all profit and shall pay wages to Y. 100. An auctioneer in Mumbai advertised in a newspaper that a sale of office furniture would be held on December 23, 2005 a broker came from Hyderabad to attend the auction, but all the furniture was withdrawn. The broker from Hyderabad sued the auctioneer for loss of his time and expenses. Which of the following statement(s) is correct? (a) The broker can get damages from the auctioneer for loss of his time and expenses. (b) The broker will not get damages from the auctioneer for loss of his time and expenses. (c) An invitation to make offer is a valid offer. (d) A declaration of intention by a person will give right of action to another. SECTION – C : GENERAL ECONOMICS (50 MARKS) 101. Which of the following statements is correct? (a) Robbins has made economics as a form of welfare economics (b) The law of demand is always true (c) All capital is wealth but all wealth is not capital (d) None of the above 102. State which of the following represents macro from the national point of view. (a) Turnover ratio of Reliance Ltd. (b) Capital output ratio of Indian Industries (c) Debt equity ratio of TELCO (d) All the above 103. Which of the following can be regarded as law of economics? (a) Ceteris Paribus, if the price of a commodity rises the quantity demanded of it will fall (b) Higher the income, greater is the expenditure (c) Taxes have no relation with the benefits which a person derives from the state (d) None of the above 104. When as a result of decrease in the price of good, the total expenditure made on it decreases we say that price elasticity of demand is: (a) less than unity (b) unity (c) zero (d) greater than unity Common Proficiency Test (CPT) Volume - I 333 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 12 105. The point elasticity at the mid-point on the demand curve is: (a) one (b) zero (c) less than one (d) less than zero 106. If as a result of 50 per cent increase in all inputs, the output rises by 75 per cent, this is a case of: (a) increasing returns to a factor (b) increasing returns to scale (c) constant returns to a factor (d) constant returns to scale 107. The income of a household rises by 20 per cent, the demand for computer rises by 25 percent, this means computer (in Economics) is a/an: (a) inferior good (b) luxury good (c) necessity (d) can’t say 108. Which of the following is not a property of the indifference curve ? (a) Indifference curves are convex to the origin (b) Indifference curves slope downwards from left to right (c) No two indifference curve can cut each other (d) None of the above 109. The structure of the cold drink industry in India is best described as: (a) Perfectly competitive (b) Monopolistic (c) Oligopolistic (d) Monopolistically competitive 110. If the price of apples rises from Rs. 30 per kg to Rs. 40 per kg and the supply increases from 240 kg to Rs. 300 kg. Elasticity of supply is: (a) .77 (b) .67 (c) (–) .67 (d) (–) .77 111. Which of the following statement is correct ? (a) Land is highly mobile factor of production (b) Man cannot create matter (c) The services of housewife are termed as production in economics (d) None of the above 112. Under which market structure, average revenue of a firm is equal to its marginal revenue (a) Oligopoly (b) Monopoly (c) Perfect competition (d) Monopolistic competition 113. If a seller realizes Rs. 10,000 after selling 100 units and Rs. 14,000 after selling 120 units. What is the marginal revenue here? (a) Rs. 4000 (b) Rs. 450 (c) Rs. 200 (d) Rs. 100 334 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 114. Under which market condition, though the firms earn normal profits in the long run, there is always excess capacity with them: (a) Perfect competition (b) Monopoly (c) Oligopoly (d) Monoplistic competition 115. Price discrimination is profitable when: (a) the elasticity of the product in different markets is same (b) the elasticity of the product in different market is different (c) the elasticity of the product in different market is zero (d) none of the above. 116. The cost of one thing in terms of the alternative given up is known as: (a) opportunity cost (b) real cost (c) actual cost (d) deferred cost 117. Which of the following statement is incorrect? (a) Even monopolist can earn losses (b) Firms in a perfectly competitive market are price takers (c) It is always beneficial for a firm in the perfectly competitive market to discriminate prices (d) Economic laws are less exact than the laws of physical sciences 118. In economics, what a consumer is ready to pay minus what he actually pays, is termed as: (a) Consumer’s equilibrium (b) Consumer’s surplus (c) Consumer’s expenditure (d) None of the above 119. The producer is in equilibrium at a point where the cost line is: (a) above the isoquant (b) below the isoquant (c) cutting the isoquant (d) tangent to isoquant 120. If the price of ‘X’ rises by 10 per cent and the quantity demanded falls by 10 per cent, ‘X’ has: (a) In elastic demand (b) Unit elastic demand (c) Zero elastic demand (d) Elastic demand 121. Which of the following is not an economic activity? (a) A son looking after his ailing mother (b) A chartered accountant doing his own practice (c) A soldier serving at the border (d) A farmer growing millets 122. If real national income rises by 10 per cent and population increases by 2 per cent, per capita income will increase by: (a) 5 per cent (b) 8 per cent (c) 12 per cent (d) 6 per cent Common Proficiency Test (CPT) Volume - I 335 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 12 123. Which of the following statement is correct? (a) Cropping pattern in India is quite balanced (b) India is passing through the first stage of demographic transition (c) India’s population is second largest in the world (d) None of these 124. Which sector of the Indian economy contributes the largest to national income? (a) Primary sector (b) Manufacturing sector (c) Secondary sector (d) Tertiary sector 125. Economic development is (a) synonymous with economic growth (b) narrower concept than economic growth (c) broader concept than economic growth (d) none of the above 126. Which of the following is correct: (a) GDP at market price = GDP at factor cost plus net indirect taxes (b) NNP at factor cost = GNP at market price (c) GNP at market price = NNP at market price plus net income from abroad (d) All of the above 127. Fiscal policy is concerned with: (a) public revenue, public expenditure and public debt (b) controlling the BOP situation (c) controlling the banks (d) none of the above 128. In order to control credit and investment, the Central Bank should: (a) decrease Cash reserve ratio (b) decrease Bank rate (c) buy securities in the open market (d) sell securities in the open market 129. Pick up the correct statement: (a) Inflation is a persistent fall in the price level (b) The Indian direct tax structure relies on a very narrow population base (c) Mixed income of self-employed means gross profits received by proprietors (d) All of the above 130. Which of the following is an economic activity? (a) Medical facilities rendered by a charitable dispensary (b) Teaching one’s own nephew at home (c) A housewife doing household duties (d) Watching television 336 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 131. Which of the following statement is correct ? (a) Income tax was abolished in India in 1991 (b) Gift tax abolished in India in 1998 (c) All the States have adopted VAT (d) Estate duty was abolished in 1995 132. Demand for intermediate consumption arises in: (a) household consumers (b) government enterprises only (c) corporate enterprises only (d) all producing sectors of the economy 133. Transfer payments refer to payment which are made: (a) without any exchange of goods and services (b) to workers on transfer from one job to another (c) as compensation to employees (d) none of the above 134. Net National Product at factor cost is: (a) equal to national income (b) more than national income (c) less than national income (d) always more than the gross national product 135. The net value added method of measuring national income is also known as: (a) net output method (b) production method (c) industry of origin method (d) all the above 136. Which of the following is incorrect? (a) GDP at market price = GDP at factor cost plus net indirect taxes (b) NNP at factor cost = NNP at market prices minus net indirect taxes (c) GNP at market prices = GDP at market prices plus net factor income from abroad (d) None of the above 137. What is India’s world rank in population? (a) First (b) Second (c) Third (d) Fourth 138. In which state or union territory is the literacy rate highest in the country? (a) Delhi (b) Chandigarh (c) Karnataka (d) Kerala 139. Which year is known as ‘year of great divide’ for India’s population? (a) 1921 (b) 1951 (c) 1991 (d) 1981 Common Proficiency Test (CPT) Volume - I 337 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 12 140. Which is the other name that is given to the average revenue curve? (a) Profit curve (b) Demand curve (c) Average cost curve (d) Indifference curve 141. 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 142. Which is the other name that is given to the demand curve? (a) Profit curve (b) Average Revenue curve (c) Average Cost Curve (d) Indifference Curve 143. 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 144. A horizontal supply curve parallel to the quantity axis implies that the elasticity of supply is: (a) zero (b) infinity (c) equal to one (d) greater than zero but less than one. 145. The second glass of lemonade gives lesser satisfaction to a thirsty boy, this is a clear case of: (a) Law of demand (b) Law of diminishing returns (c) Law of diminishing marginal utility (d) Law of supply 146. Which of the following statement is incorrect? (a) An indifference curve slopes downward to the right (b) Convexity of a curve implies that the slope of the curve diminishes as one moves from left to right (c) The elasticity of substitution between two goods to a consumer is zero (d) The total effect of a change in the price of a good on its quantity demanded is called the price effect 147. The second slice of bread gives less satisfaction to a hungry boy. This is a clear case of: (a) Law of demand (b) Law of diminishing returns (c) Law of diminishing utility (d) Law of supply 148. Three steel plants in Bhilai, Rourkela and Durgapur were set up in the (a) First plan (b) Second plan (c) Third plan (d) Fourth plan 338 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 149. 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 150. 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 Bank (c) State Bank of India (d) EXIM Bank SECTION – D : QUANTITATIVE APTITUDE (50 MARKS) 151. The class having maximum frequency is called ______ (a) Modal class (b) Median class (c) Mean Class (d) None of these 152. The errors in case of regression equation are ______ (a) Positive (b) Negative (c) Zero (d) All these 153. Karl Pearson’s coefficient is defined from ______ (a) Ungrouped data (b) Grouped data (c) Both (d) None 154. If P (A∩B) = 0 then two events A and B are: (a) Mutually exclusive (b) Equally like (c) Independent (d) Exhaustive 155. A binomial distribution is (a) Never Symmetrical (b) Never Negatively skewed (c) Symmetrical when p = 0.5 (d) never positively skewed 156. As the sample size decreases, standard error: (a) Increases (b) Decreases (c) Remains constant (d) Increases proportionately 157. Standard deviation of sampling distribution is itself the standard error: (a) True (b) False (c) Both (d) None of these 158. Theoretically, A.M. is the best average in the construction of index nos. but in practice, mostly the G.M. is used: (a) False (b) True (c) Both (d) None of these Common Proficiency Test (CPT) Volume - I 339 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 12 159. The result of ODI matches between INDIA and ENGLAND follows: (a) Binomial distribution (b) Poisson distribution (c) Normal distribution (d) (b) or (c) 160. If P (AB) = P (A) × P(B), two events A and B are said to be (a) Dependent (b) Equally like (c) Independent (d) None 161. Correlation Co-efficient is _______ of the units of measurements (a) Dependent (b) Independent (c) Both (d) None of these 162. log 64/8 is equal to ______ (a) log 64 – log 8 (b) 23 (c) 8 log 64 (d) None of these 163. If ________, the roots are real but unequal (a) b2 – 4ac = 0 (b) b2 – 4ac >0 (c) b2 – 4ac<0 (d) b2 – 4ac <0 164. _____________ is the mean proportional between 4p2 and 9q2 (a) 6 pq (b) 36 pq (c) 6p2q2 (d) None of these 165. r, bxy, byx all have _____________ sign (a) Different (b) Same (c) Both (d) None of these 166. The 8th term of series 4, 8, 16 ……... nth term is ______________. (a) 1024 (b) 256 (c) 32 (d) 2048 167. The total no. of seating arrangement of 5 person in a row is _____. (a) 5! (b) 4! (c) 2 x 5! (d) None of these 168. In __________________ the quantities are in ratios (a) A.M. (b) G.M. (c) H.M. (d) None of these 340 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 169. The present value of Rs. 10,000 due in 2 years at 5% p.a. compound interest when the interest is paid on half yearly is Rs. _______ (a) 9070 (b) 9069 (c) 9061 (d) 9060 170. The equation of line passing through the points (1, -1) and (3, -2) is given by ________ (a) 2x + y + 1 = 0 (b) 2x + y + 2 = 0 (c) x + y + 1 = 0 (d) x + 2 y + 1 = 0 x2−9 lim 171. is equal to x→3 x−3 (a) 0 (b) 6 (c) Does not exist (d) – 6 172. The derivative of y = 2x+1 w.r.t..x is: 1 -1 (a) (b) 2x+1 2x+1 1 (c) . 2x+1 (d) None of these 2 1 ∫ 173. dx is equal to x 1 (a) x log x (b) x2 (c) log x + c (d) none of these 1 ⎛ 1 ⎞ 174. If f (x) = -x, f ⎜ ⎟ x ⎝ 2 ⎠ (a) 3/2 (b) 2/3 (c) 1 (d) 0 175. The sum of square of first natural numbers (a) n ( n +1 ) (b) n (n+1)(2n+1) 2 6 (c) ⎡ ⎢ n( n+1 ) ⎤ ⎥ 2 (d) None of these ⎣2 ⎦ Common Proficiency Test (CPT) Volume - I 341 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 12 176. P is the index for time 10 (a) 1 on 0 (b) 0 on 1 (c) 1 on 1 (d) 0 on 0 177. If a sample of 500 eggs produces 25 rotten eggs arranges, then the estimates of SE of the proportion of rotten eggs in the sample is (a) 0.01 (b) 0.05 (c) 0.028 (d) 0.0593 178. The mode of the nos. 7, 7, 9, 7, 10, 15, 15, 15, 10 is (a) 7 (b) 10 (c) 15 (d) 7 and 15 179. There are 11 trains plying between Delhi & Kanpur. The number of ways in which a person can go from Delhi to Kanpur and return by a different train (a) 121 (b) 100 (c) 110 (d) None of these 180. If in a party every person gives a gifts to each other and total number of gift taken is 132. The number of guests in the party is ________ (a) 11 (b) 12 (c) 13 (d) 14 181. The sum of certain numbers of terms of an A.P. series –6, -3, 0 ……. nth term is 225. The number of terms is ________ (a) 16 (b) 15 (c) 14 (d) 13 182. If each item is reduced by 12, A.M. is ________ (a) Reduced by 12 (b) Increased by 12 (c) Unchanged (d) None of these 183. If x and y are perfectly related by 2x + 3y + 4 = 0 and SD of x is 6 then SD of y is (a) 22 (b) 4 (c) 25 (d) 8.30 184. If f (x+1) = 2x + 7 then f ( – 2) is ________ (a) 1 (b) 2 (c) 3 (d) 4 185. The roots of the equation 4x+1 + 41-x = 10 are ________ 1 1 (a) ,− (b) 2, – 2 2 2 (c) 1, – 1 (d) None of these 342 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India