Common Proficiency Test Model Paper 4

190. The nth term of the sequence 2, 4, 6, 8 ….. is ______ (a) 2n (b) 2n–1 (c) 2n + 1 (d) n 1 1 191. The sum of the series 1, , ,........... to∞is ______ 10 102 9 1 (a) (b) 1 10 9 (c) ∞ (d) None of these 192. If a, b, c are in A.P., then 2b = _____ (a) a – c (b) a + c a+c a−c (c) (d) 2 2 193. If a, b, c are in G.P., then b2 = _____ (a) ac (b) –ac (c) a + b (d) a – c 194. If A = {1, 3, 5} , B = {0, 2}, then A∪Bis ______ (a) {0, 1, 2, 3, 5} (b) φ (c) {1, 3, 5, 7, 9, 13} (d) None of these 3 ∫ (3x2+5x+2)dx 195. Evaluate the value of 0 (a) 55 (b) 55.5 (c) 57 (d) 56 196. If A = {1, 2, 3, 4} and B = {5, 6, 7}, then cardinal number of the set A×B is _____ (a) 7 (b) 1 (c) 12 (d) None of these 1 lim 197. is equal to _______ x→∞(x-a)2 (a) 0 (b) + ∞ (c) – ∞ (d) 1 Common Proficiency Test (CPT) Volume - I 503 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 18 X2-5X+6 lim 198. is equal to ________ x→∞ x -3 (a) –1 (b) + ∞ (c) 1 (d) Does not exist 3x+5 lim 199. is equal to __________ x→∞ x3+2 (a) 0 (b) 1 (c) –1 (d) Does not exist limf(x)=limf(x)= 200. The function f(x) is continuous at x = a if ___________ x→a+ x→a- (a) f(–a) (b) f(a) (c) f(0) (d) None of these (cid:2)(cid:2)(cid:2) 504 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 – 19 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. SECTION – A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. Rs. 1,500 spent on repairs before using a second hand car purchased recently is a (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None of the three 2. Commission received in advance is a (a) Personal account (b) Nominal account (c) Real account (d) None of the three 3. All of the following have debit balance except (a) 6% debentures (b) Loan to contractor (c) Interest on debentures (d) Audit Fees 4. Double column cash book records (a) Only credit transactions (b) All transactions (c) Cash and bank transactions (d) Cash purchase and credit sale transactions 5. A bill has been drawn on August 10, 2009 payable after 3 months. The Maturity date of the bill will be (a) Nov. 13, 2009 (b) Nov. 10, 2009 (c) Oct. 31, 2009 (d) None of the above 6. Salary and wages is debited to (a) Trading Account (b) Profit and Loss Account (c) P/L Appropriation account (d) Balance Sheet Common Proficiency Test (CPT) Volume - I 505 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 19 7. In a sole trade, income tax is recorded as (a) Drawings (b) Liabilities (c) Expenses (d) None of the three 8. Journal proper records (a) Credit purchases (b) Credit sales (c) Purchase of an asset on credit (d) Sales return 9. If the date of maturity of a bill is a public holiday, then bill will mature on (a) Next working day (b) Preceding working day (c) Holiday itself (d) Other agreed date 10. In case of consignment, abnormal loss is valued at (a) Cost price (b) Invoice price (c) Market price (d) None of the three. 11. Capital expenditures are recorded in the (a) Profit and Loss account (b) Balance Sheet (c) Trading account (d) Manufacturing account 12. Account payable normally has balance (a) Debit (b) Credit (c) Unfavourable (d) None of the three 13. Trial balance is a statement which shows the ______ or the ______ of all the accounts (a) Balances; Total and balances (b) Opening Balances; Closing balances (c) Posted balances; Total of balances (d) Debt balance; Credit balance 14. Consignment account is (a) Personal account (b) Real account (c) Nominal account (d) None of the three 15. When money is withdrawn from the bank, the bank _______ the account of the customer. (a) Credits (b) Debits (c) Either (a) or (b) (d) None of the three 16. Abnormal loss on consignment is credited to ______ (a) Profit and Loss account (b) Consignees’ account (c) Consignment account (d) None of the three 17. Land and building is a (a) Current asset (b) Fixed asset (c) Fictitious asset (d) None of the three 506 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 18. Drawings are deducted from (a) Sales (b) Purchases (c) Expenses (d) Capital 19. Closing stock of Rs. 19,000 in trial balance will be recorded in (a) Trading account (b) Profit and Loss account (c) Balance Sheet (d) None of the above 20. The amount of calls in arrear is deduced from ________ to arrive at _________ (a) Issued capital; called up capital (b) Called up capital; issued capital (c) Paid up capital; called up capital (d) Called up capital; paid up capital 21. Sometimes directors pay dividend even before the year is closed and the payment is out of current year’s profit. It is usually given on the debit side of trial balance and because it is an appropriation of profits, it is recorded on the debit side of profit and loss appropriation account. It is called - (a) Interim dividend (b) Final dividend (c) Unclaimed dividend (d) Proposed dividend 22. X Ltd. purchased equipment from Y Ltd. for Rs. 50,000 on 1st April 2009 the freight and cartage of Rs. 2,000 is spent to bring the asset to the factory and Rs. 3,000 is incurred on installing the equipment to make it possible for the intended use. The market price of machinery on 1st April, 2010 is Rs. 60,000 and the accountant of the company wants to disclose the machinery at Rs. 60,000 in financial statements. However, the auditor emphasizes that the machinery should be valued at Rs. 55,000 (a) Money measurement principle (b) Historical cost concept (c) Full disclosure principle (d) Revenue recognition 23. A started business with Rs. 10,000 cash. Sales amounted to Rs. 50,000 including Rs. 5,000 cash sale. Rs. 10,000 sales were outstanding at the end of the year. Purchases amounted to Rs. 30,000 including Rs.10,000 cash purchase Rs. 15,000 has been paid to creditors. Salaries paid amounted to Rs. 3,000, Rent Rs. 2,400, Stationery Rs. 900. Drawings were 4,000. Miscellaneous expenses Rs. 1,000 and machines purchased Rs. 8,000. Cash balance will be (a) Rs. 15,000 (b) Rs. 15,500 (c) Rs. 15,700 (d) None of the three 24. If sales revenue is Rs. 5,00,000, cost of goods sold is Rs.3,10,000. The gross profit is (a) Rs. 1,90,000 (b) Rs. 2,00,000 (c) Rs. 3,10,000 (d) None of the three Common Proficiency Test (CPT) Volume - I 507 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 19 25. Received a bill from Arun Rs. 5,000 passed through bills payable book. The rectification entry will be Rs. Rs. (a) B/R A/c Dr. 5000 To Arun 5000 (b) Arun Dr. 5000 To B/R A/c 5000 (c) B/R A/c Dr. 5000 B/P A/c Dr. 5000 To Arun 10000 (d) None of the three 26. A machinery of Rs. 4,000 was sold for Rs. 5,200. Depreciation provision to date was Rs. 500 and Commission paid to the selling agent was 420 and wages paid to workers for removing the machine was Rs. 150. Profit on sale of machinery will be (a) Rs. 1,130 (b) Rs.1,000 (c) Rs. 1,200 (d) None of the three. 27. Interest earned but not received, adjustment entry will be (a) Accrued Interest Dr. To Customer (b) Accrued interest Dr. To Interest (c) Cash a/cDr. To Interest (d) None of the three 28. Goods of Rs. 600 (sales price) sent on sale on approval basis were included in sales book. The profit included in the sales was at 20% on cost. Closing stock will increase by (a) Rs.500 (b) Rs.600 (c) Rs.480 (d) None of the three 29. A manager gets 5% commission on net profit after charging such commission. Gross profit Rs. 48,000 and expenses of indirect nature other than manager’s commission are Rs. 6,000. Commission amount will be (a) Rs.2,000 (b) Rs.1,800 (c) Rs.2,200 (d) None of the three 30. What shall be the commission of the manager in the above question if the rate of commission is 5% on net profit before charging such commission. Commission amount will be (a) Rs.2,100 (b) Rs.1,800 (c) Rs.1,500 (d) None of the three 508 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 31. X sells goods at cost plus 60%. Total sales were of Rs. 16,000 cost price of goods will be (a) Rs.10,000 (b) Rs.9,000 (c) Rs.15,000 (d) None of the three 32. A trader sells goods at a profit of 25% on sale. In a particular month, he sold goods costing Rs. 34,200. Rate of profit on cost will be - 1 (a) 33 % (b) 30% 3 (c) 35% (d) None of the three 33. 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. Commission will be (a) Rs. 2,500 (b) Rs. 2,400 (c) Rs. 2,000 (d) None of the three 34. Following balances have been taken from the books of VED & Co. Rs. Rs. General expenses 800 Discount allowed 200 Rent paid 3,710 Opening stock 16,500 Electric charges 190 Sales 63,500 Carriage inward 850 Purchases 46,850 Return outwards 110 Wages 2,500 Salaries 1110 Sales Return 450 Closing Stock 18,210 Net profit of the business will be ______ (a) Rs. 8,660 (b) Rs. 8,600 (c) Rs. 8,500 (d) Rs. 9,000 35. Capital introduced in the beginning by Ram Rs. 20,000; Further capital introduced during the year Rs. 2,000; Drawings Rs. 250 per month and closing capital is Rs. 12,750. Amount of Profit or Loss for the year will be (a) Loss Rs. 6,250 (b) Loss Rs. 6,000 (c) Profit Rs. 2,000 (d) Information is in sufficient for any comment 36. Overdraft as per Cash Book Rs. 4,500 (1) Cheques sent for collection but not credited by Bank Rs.6,225 (2) Cheque drawn but not presented for payment Rs.10,250 Overdraft as per Pass Book will be (a) Rs.475 (b) Rs.750 (c) Rs.500 (d) None of the three Common Proficiency Test (CPT) Volume - I 509 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 19 37. G’s trial balance contains the following information – Bad debts Rs. 4,000; Provision for Bad debts Rs. 5,000; Sundry debtors Rs. 25,000 It is desired to create a provision for Bad debts at 10% on Sundry debtors at the end of the year. Sundry debtors will appear in the balance sheet at (a) Rs. 21,000 (b) Rs. 22,500 (c) Rs. 22,000 (d) None of the three 38. An inexperienced book-keeper has drawn up a trial balance for the year ended 30th June, 2010. Dr. Cr. Rs. Rs. Provision for Doubtful Debts 200 Bank overdraft 1,654 Capital - 4591 Creditors - 1637 Debtors 2,983 Discount received 252 Discount allowed - 733 Drawings 1,200 Office furniture 2,155 General expenses - 829 Purchases 10,923 Return inward - 330 Rent and Rates 314 Salaries 2,520 Sales - 16882 Stock 2,418 Stationary 1,175 Provision for Depreciation on furniture 364 Total 26,158 25002 The total of corrected trial balance will be (a) Rs.25,580 (b) Rs.25,000 (c) Rs.24,000 (d) None of the three 39. Rs. Balance as per adjusted cash book 274 (i) Cheques not yet presented 730 (ii) Cheques deposited not yet recorded by bank 477 Balance as per Pass Book will be (a) Rs. 527 (b) Rs. 525 (c) Rs. 500 (d) None of the three. 510 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 40. R owed Rs. 1,000 to S. On 1st Oct., 2004, R accepted a bill drawn by S for the amount for 3 months. Before the due date, R approached S for renewal of the bill. S agreed on the conditions that Rs. 500 to be paid immediately together with interest on the remaining amount at 12% p.a. for 3 months and for the balance R accepted a new bill for 3 months. Later on, R became insolvent and 40% of the amount could be recovered from his estate. Bad debt amount will be (a) Rs. 400 (b) Rs. 300 (c) Rs. 250 (d) None of the three 41. A of Allahabad sent on consignment to B of Bareilly 1,000 transistors costing Rs. 80 each. A paid freight amounting to Rs. 1,000 and cartage Rs. 45. B received only 900 sets as 100 sets were destroyed in transit. B incurred an expenditure of Rs. 1,000 on account of clearing charges and cartage. Amount of abnormal loss will be (a) Rs. 8,104.50 (b) Rs. 8,000 (c) Rs. 8,100 (d) None of the three 42. Amit of Delhi sent 200 chairs @ Rs. 300 per chair to Sumit of Chandigarh. Amit paid freight of Rs. 500 and Rs. 200 as insurance in transit. Sumit paid Rs. 100 as Cartage and Rs. 300 as godown rent. At the end of the year, 150 chairs were sold. The selling price of each chair in Chandigarh was Rs. 350. Value of stock unsold will be (a) Rs. 15,000 (b) Rs. 15,200 (c) Rs. 16,000 (d) None of the three 43. C of Calcutta and D of Delhi entered into a joint venture for the purpose of buying and selling second-hand motor cars. C to make purchases and D to effect sales. A sum of Rs. 1,00,000 was sent by D to C for this joint venture. C purchases 10 cars for Rs. 80,000 and spent Rs. 43,500 for their reconditioning and dispatched them to Delhi. His other expenses were. 2½% purchase commission and miscellaneous expenses Rs. 250. D spent Rs. 7,500 as railway freight and Rs. 3,750 an Octroi at the time of taking delivery. He sold all the cars for Rs. 1,88,500. His expenses were Insurance Rs. 1,500; Garage rent Rs. 2,500; Brokerage Rs. 6,850 and other expenses Rs. 4,500. Profit of venture on will be (a) Rs. 36,150 (b) Rs. 36,000 (c) Rs. 35,000 (d) None of the three 44. A, B and C are partners sharing profits in the ratio of 5:4:1. C is given a guarantee that his share of profit in any given year would not be less than Rs. 5,000. Deficiency if any would be borne by A and B equally. The Profits for the year 2009 amounted to Rs. 40,000. The amount of C’s deficiency to be shared by A and B will be (a) Rs. 500 each. (b) Rs. 400 each (c) Rs. 600 each (d) None of the three. Common Proficiency Test (CPT) Volume - I 511 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 19 45. Raja, Roopa and Mala Sharing profits and losses equally have fixed capitals of Rs.1,20,000, Rs.90,000 and Rs.60,000 respectively. For the year 2009, interest on capital was credited to them @ 6% instead of 5%. Adjusting entry will be Rs. Rs. (a) Raja’s Current A/c Dr. 300 To Mala’s Current A/c 300 (b) Raja’s Capital A/c Dr. 300 To Mala’s Capital A/c 300 (c) Mala’s Current A/c Dr. 300 To Raja’s Current A/c 300 (d) None of the three 46. A, B and C are partners sharing profits/losses at 3:2:1. D was admitted in the firm as a new partner with 1/6th share. New profit/loss sharing ratio will be (a) 15:10:5:6 (b) 10:15:6:5 (c) 5:6:15:10 (d) None of the three 47. A and B are partners sharing profits in the ratio of 4:1. A surrenders ¼th part of his share and B surrenders ½ part of his share in favour of C, a new partner. Sacrificing ratio of A and B will be ____ (a) 2:1 (b)1:2 (c) 1:1 (d)None of the three 48. Goodwill of the firm is valued at three year’s purchase of the average profits of the last five years. The profits are as under: Rs. 2005 40,000 Profit 2006 20,000 Loss 2007 10,000 Profit 2008 60,000 Profit 2009 80,000 Profit Goodwill amount will be (a) Rs.1,02,000 (b) Rs.1,00,000 (c) Rs.1,05,000 (d) None of the three 49. (i) Actual average profit Rs. 72,000 (ii) Normal rate of return 10% (iii) Assets Rs. 9,70,000 (iv) Current Liabilities Rs. 4,00,000 Goodwill according to capitalization method will be (a) Rs. 1,50,000 (b) Rs. 1,40,000 (c) Rs. 1,60,000 (d) None of the three 512 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 50. “Bill payable discounted in cash by creditor.” This transaction will be recorded in (a) Journal (b) Ledger (c) Bank book (d) No entry required to be made 51. The capitals of A and B after all adjustments and revaluations are Rs. 24,000 and Rs.16,000 respectively. They admitted C as a new partner with 1/5th share in the profits. Capital to be brought by C will be (a) Rs.10,000 (b) Rs.15,000 (c) Rs.12,000 (d) None of the three 52. X and Y are partners in a firm sharing profits in the ratio of 3:2 with capitals of Rs. 1,20,000 and Rs. 54,000 respectively. They admitted Z as a partner with Rs. 75,000 for 1/3rd share in the profits of the firm. Adjust the capitals of the partners according to Z’s capital and his share in the business. What cash will be paid off to X? (a) Rs. 30,000 (b) Rs.25,000 (c) Rs. 28,000 (d) None of the three 53. A Ltd. forfeited 400 shares of Anil of Rs. 10 each fully called up for non payment of final call of Rs. 2 per share and reissued to Sunil as fully paid for Rs. 10 per share. Amount transferred to Capital Reserve will be (a) Rs. 3,200 (b) Rs. 3,000 (c) Rs. 2,800 (d) None of the three 54. D Ltd. forfeited 800 shares of Rs. 10 each fully called up, on which the holder has paid only application money of Rs. 3 per share. Out of these 500 shares were reissued as Rs. 11 per share fully paid up. Capital Reserve will be credited by (a) Rs. 1,500 (b) Rs. 1,800 (c) Rs. 2,000 (d) None of the three 55. X Ltd. purchased the business of Y Ltd. for Rs. 90,000 payable in fully paid shares of Rs. 10 each at a discount of 10%. No. of shares given to vendors will be (a) 9,000 shares (b) 8,000 shares (c) 7,000 shares (d) None of the three. 56. A company purchased an established business for Rs. 4,00,000 payable Rs. 1,30,000 in cash and the balance by 12% debentures of Rs. 100 each at discount of 10%. Discount on issue of debentures will be (a) Rs. 25,000 (b) Rs.30,000 (c) Rs. 32,000 (d) None of the three Common Proficiency Test (CPT) Volume - I 513 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 19 57. Issued 2,000, 12% Debentures of Rs. 100 each at a discount of 2% redeemable at a premium of 5%. Loss on issue of debentures will be (a) Rs.14,000 (b) Rs.12,000 (c) Rs.10,000 (d) None of the three 58. (i) 1,00,000 Equity shares of 10 each fully called up. (ii) Calls in arrears Rs. 10,000 (iii) Calls in advance Rs. 5,000 (iv) Proposed dividend 15% Dividend payable will be (a) Rs.1,48,500 (b) Rs.1,50,000 (c) Rs.1,45,000 (d) None of the three 59. The paid up capital of the company consisted of 3,000 6% preference shares of Rs. 100 each and 40,000 equity shares of Rs. 10 each. Interim dividend on equity shares was paid during the year at 75 paise per share. Last year’s profit is Rs. 31,000; Current Year’s profit Rs. 52,000; The following appropriations were passed at the annual general meeting of the company (i) To pay the years dividend on preference shares. (ii) To pay final dividend on equity shares at 50 paise per share (iii) To transfer Rs. 5,000 to General reserve. The balance of Profit and Loss appropriation A/c to be transferred to Balance Sheet will be (a) Rs. 40,000 (b) Rs. 12,000 (c) Rs. 15,000 (d) None of the three 60. On 1st January 2010, Badri of Kanpur consigned 100 cases, cost price Rs. 7,500, at a proforma invoice price of 25% profit on sales to his agent Anil of Allahabad. Balance of Goods sent on consignment A/c transferred to General Trading A/c will be (a) Rs. 7,500 (b) Rs. 10,000 (c) Rs. 8,000 (d) None of the three SECTION – B : MERCANTILE LAWS (40 MARKS) 61. Which of example is the case of Undue influence, where one party is in a position to influence the will of other party? (a) Agreement between one trader with other trader (b) Doctor and patient (c) Father with his son (d) Employer and his employee 514 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 62. Which is the example of wagering agreement? (a) To purchase a lottery ticket (b) Speculative trading in stock exchange (c) Horse – race (d) All of these 63. Which of the following statement is true? (a) If there is no consideration, there is no consideration (b) Past consideration is no consideration in India (c) Consideration must result in a benefit to both the parties (d) Consideration must be adequate 64. Which of the following statement is false? (a) a stranger to a contract cannot sue (b) a verbal promise to pay a time barred debt is valid (c) Completed gifts need no consideration (d) No consideration is necessary to create an agency 65. An agreement is not said to be a contract when it is entered into by (a) Minor (b) a person of unsound mind (c) foreign enemy (d) all of these 66. Which of the following statement is true? (a) A threat to commit suicide does not amount to coercion (b) Undue influence involves use of physical pressure (c) Ignorance of law is no excuse (d) Silence always amounts to fraud 67. Which of the example is the case of contracts need not be performed? (a) a party substitutes a new contract for the old (b) when the parties to a contract agree to rescind it (c) when the parties to a contract agree to alter it. (d) All of these 68. On the valid performance of the contractual obligation by the parties the contract is: (a) is discharged (b) becomes void (c) become unenforceable (d) None of these 69. Contract of sale means (a) A contract between one person to another for exchange of property in goods (b) A contract between buyer and seller for exchange of property in goods (c) a contract between buyer and seller intending to exchange property in goods for a price (d) All of these Common Proficiency Test (CPT) Volume - I 515 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 19 70. Which of the following sentence is true ? (a) There should be immediate delivery of goods (b) There should be immediate payment of price (c) There may be delivery of goods and payment of price on to be made at some future date. (d) All of these 71. Where there is an agreement to sell specific goods and goods subsequently perish before risk passes to the buyer, the agreement becomes (a) Void (b) Voidable (c) Illegal (d) None of these 72. Which is not the subject matter of contract of sale ? (a) Goods (b) Price (c) Immovable property (d) Shares and stocks of companies 73. Where the goods are sold by sample as well as by description the implied condition is that the bulk of the goods supplied must correspond with (a) Sample only (b) The description only (c) Sample and description both (d) Sample, description and fair price 74. In the case the goods correspond with the sample but do not tally with the description the buyer has right to (a) repudiate the contract (b) sue for damages caused to him (c) declare the contract as illegal (d) declare the contract as void 75. A stipulation essential to the main purpose of the contract is: (a) Conditions (b) Warranties (c) Conditions and warranties both (d) None of these 76. A Joint Hindu Family arises (a) From status decided by court (b) As the result of an agreement (c) By operation of law (d) All of these 77. In partnership a new partner can be admitted (a) Only with the consent of all the partners (b) No consent of all the partners (c) With the consent of two third majority of partners (d) With the consent of two partners 78. Goodwill is (a) The value of reputation which the firm establishes overtime (b) The value of reputation which the firm earns due to integrity, efficient service to the customers 516 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India (c) The value of reputation earned by the firm due to quality of its products, industry etc. (d) All of these 79. Which is appropriate that partner is liable for all acts of the firm done while he is a partner - (a) Jointly with all other partners (b) Severally (c) Not liable (d) None of these 80. A contract dependant on the happening of future uncertain event, is a _______ (a) Uncertain contract (b) Contingent contract (c) Void contract (d) Voidable contract 81. A contingent contract depending on the happening of future uncertain event can be enforced when the event. (a) happens (b) Becomes impossible (c) Does not happen (d) Either of these 82. For the purpose of entering into a contract, a minor is a person who has not completed the age of _______ (a) 20 years (b) 21 years (c) 18 years (d) 25 years 83. A contract with the minor which is beneficial for him is ________ (a) Void abinitio (b) Viodable (c) Valid (d) Illegal 84. If a creditor does not file a suit against the buyer for recovery of the price within three years the debt becomes ______ (a) Time-barred and hence irrecoverable (b) Time barred but recoverable (c) No time-barred (d) None of these 85. Delivery means _____ (a) Compulsory transfer of possession by one person to another person (b) Voluntary transfer of possession by one person to another (c) Mere transfer of possession by one person to another person (d) All of these 86. The general principle of regarding the transfer of title is that ______ (a) The seller can transfer to the buyer of goods a better title than he himself has (b) The seller cannot transfer to the buyer of goods a better title than he himself has (c) The seller can transfer to the buyer of goods no title than the himself has (d) None of these Common Proficiency Test (CPT) Volume - I 517 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 19 87. When the owner is estopped for the conduct from denying the sellers authority to sell, the transfer will get _____ (a) A good title as against the true owner (b) A better title as against the true owner (c) No title as against the true owner (d) None of these 88. When an unpaid seller who had exercised the right of lien resells the goods, the buyer acquires ________ (a) A good title to the goods as against the original buyer (b) Better title as against the true buyer (c) No title as against the true owner (d) None of these 89. When the time of sending the goods has not been fixed by the parties the seller must send them within ______ (a) Reasonable time (b) One month of the contract (c) Two months of the contract (d) Before making the contract 90. The expenses of putting the goods into a deliverable state must be bone by ______ (a) The buyer (b) The seller (c) The buyer and seller both (d) The third party 91. The seller of goods is deemed to be an unpaid seller when ______ (a) The whole of price has not been paid (b) The same part of price has not been paid (c) Half part of price has not been paid (d) 25% of price has not been paid 92. The unpaid seller has against the goods (a) Rights of lien (b) Right of stoppage in transit (c) Right of resale (d) All of these 93. The term goods under Sale of Goods Act, 1930 does not include _________ (a) Goodwill and money (b) Stocks and shares (c) Harvested crops (d) Any movable property 94. A contract for sale of future goods is ________ (a) Sale (b) Agreement to sell (c) Hire purchase agreement (d) Quasi Contract 518 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 95. A stipulation in a contract of Sale of goods where violation by seller gives a right of recision to buyer, is called _______ (a) Guarantee (b) Warrantee (c) Condition (d) Term 96. The Sale of Goods Act, 1930 deals with the ________ (a) Movable goods only (b) Immovable goods only (c) Both immovable and movable goods (d) Tangible goods only 97. A stipulation which is collaterals to the main purpose of contract gives the buyer only right to claim the damages, is known as ______ (a) Condition (b) Guarantee (c) Warranty (d) Agreement to sell 98. The number of partners in firm carrying an banking business should not exceed (a) 20 persons (b) 15 persons (c) 10 persons (d) 30 persons 99. A enters into a contract with B for the sale of goods to be delivered at a future date decide which type of case is this: (a) It is a case of wagering agreement (b) it is a case of future consideration (c) It is a case of contingent contract (d) It is impossible agreement to be performed 100. A entered into a contract with B for the supply of certain things manufactured by ‘C’. ‘C’ did not manufacture those goods what is your advise:– (a) A is discharged from his obligation (b) A is not discharged from his obligation and is liable to ‘B’ for damages (c) B can say to A to get manufactured the goods from other party (d) Contract becomes void. SECTION – C : GENERAL ECONOMICS (50 MARKS) 101. Which of the following curve cannot be u-shaped? (a) Average total cost (b) Average variable cost (c) Average fixed cost (d) Marginal cost 102. The meaning of the word ‘Economic’ is most closely connected with the word : (a) Extravagant (b) Scarce (c) Unlimited (d) Restricted Common Proficiency Test (CPT) Volume - I 519 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 19 103. The average fixed cost : (a) remains the same whatever the level of output (b) increase as output increases (c) diminishes as output increases (d) all of the above 104. Average variable cost curve : (a) slopes downwards at first and then upwards (b) slopes upwards, then remains constant and then falls (c) slopes downwards (d) none of the above 105. If a firm produces zero output in the short period : (a) its total cost will be zero (b) its variable cost will be positive (c) its fixed cost will be positive (d) its average cost will be zero 106. The average total cost of producing 50 units is Rs. 250 and total fixed cost is Rs.1000. What is the average fixed cost of producing 100 units? (a) Rs.10 (b) Rs.30 (c) Rs.20 (d) Rs.5 107. The MC curve cuts the AVC and ATC curves (a) at different points (b) at the falling parts of the each curve (c) at their respective minima (d) at the rising parts of each curve 108. Demand curve in most cases slopes (a) downward towards right (b) vertical and parallel to Y-axis (c) upward towards left (d) horizontal and parallel to X-axis 109. The concept of elasticity of demand was developed by : (a) Alfred Marshall (b) Edwin Camon (c) Paul Samuelson (d) Fredric Bonham 110. Price elasticity of demand is defined as Changeinquantitydemanded (a) Changeinprice Proportionate changeinquantitydemanded (b) Changeinprice 520 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India Changeinquantitydemanded (c) Proportionchangeinprice Proportionchangeinquantitydemanded (d) Proportionchangeinprice 111. Under marginal utility analysis, utility is assumed to be a (a) cardinal concept (b) ordinal concept (c) indeterminate concept (d) none of the above 112. The utility may be defined as (a) the power of commodity to satisfy wants (b) the usefulness of a commodity (c) the desire for a commodity (d) none of the above 113. Marginal utility of a commodity depends on its quantity and is (a) inversely related to its quantity (b) not proportional to its quantity (c) independent of its quantity (d) none of the above 114. Consumer’s surplus is the highest in the case of (a) necessities (b) comforts (c) luxuries (d) capital goods 115. Consumer stops purchasing the additional units of the commodity when - (a) marginal utility starts declining (b) marginal utility become zero (c) marginal utility is equal to marginal utility of money (d) total utility is increasing 116. Indifference curve approach assumes (a) consumer has full knowledge of all relevant information (b) all commodities are homogenous and divisible (c) prices of commodities remain the same throughout the analysis (d) all of the above 117. The ‘substitution effect’ takes place due to change in (a) income of the consumer (b) prices of the commodity (c) relative prices of the commodities (d) all of the above Common Proficiency Test (CPT) Volume - I 521 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 19 118. Under income effect, consumer (a) moves along the original indifference curve (b) moves to higher or lower indifference curve (c) always purchases higher quantities of both the commodities (d) none of the above 119. In a perfect competitive market : (a) firm is the price-giver and industry the price taker (b) firm is the price taker and industry the price giver (c) both are the price takers (d) none of the above 120. One of the essential conditions of perfect competition is - (a) product differentiation (b) multiplicity of prices for identical product at any one time (c) many sellers and few buyers (d) only one price for identical goods at any one time 121. Under the perfect competition a firm will be in Equilibrium when : (a) MC = MR (b) MC cuts the MR from below (c) MC is rising when it cuts the MR (d) All of the above 122. Which of the following influences most the price level in the very short-run period? (a) demand (b) supply (c) cost (d) production 123. Long-run normal prices is that which is likely to prevail (a) all the times (b) in market period (c) in short-run period (d) in long-run period 124. A perfectly competitive firm has control over (a) price (b) production as well as price (c) control over production, price and consumers (d) none of the above 125. By imperfect monopoly, we mean (a) It is possible to substitute the monopolized product with another monopolized product (b) Entry of new firms is possible to produce the same product (c) The amount of output produced is very small (d) None of the above 522 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 126. The demand curve facing an industrial firm under monopoly is a/an - (a) horizontal straight line (b) indeterminate (c) downward sloping (d) upward sloping 127. The degree of monopoly power is measured in terms of difference between (a) Marginal cost and the price (b) Average cost and average revenue (c) Marginal cost and average cost (d) Marginal revenue and average cost 128. A monopoly producer usually earns ______ even in the long run (a) super normal profits (b) only normal profits (c) losses (d) none of the above 129. Price discrimination is not possible : (a) under monopoly situation (b) under any market firm (c) under monopolistic competition (d) under perfect competition 130. Discriminating monopoly is possible if two markets have : (a) rising cost curves (b) rising and declining cost curves (c) different elasticities of demand (d) equal elasticities of demand 131. Consumer’s surplus left with the consumer under price discrimination is : (a) maximum (b) minimum (c) zero (d) not predictable 132. A firm under monopolistic competition advertises : (a) as it has no control over the price of its product (b) to lower its cost of production (c) to increase its sales and profit (d) because it cannot raise price 133. In short run, a firm in monopolistic competition (a) always earns profits (b) incurs losses (c) earns normal profit only (d) may earn normal profit, super normal profit or incur losses 134. In long-run, all firms in monopolistic competition (a) earn super normal profits (b) earn normal profits (c) incur losses (d) may earn super normal profit, normal profit or in incur losses Common Proficiency Test (CPT) Volume - I 523 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 19 135. Differentiated oligopoly is one where there are (a) many sellers producing homogeneous product (b) few sellers producing homogenous product (c) many sellers producing differentiated product (d) few sellers producing differentiated product 136. Per capita national income means __________ (a) Total capital / Population (b) Population / NNP (c) Personal Income / Population (d) NNP / Population 137. Which one of the following is not a cause of poverty in India? (a) abundant population (b) abundant natural resources (c) abundant inequalities to distribution of income (d) abundant surplus manpower in agriculture 138. The most important remedy to the problem of poverty in India is : (a) changes in the ownership pattern (b) higher productivity (c) re-distribution of income through fiscal, pricing and other measures (d) all of the above 139. Which is the central bank of India? (a) The State Bank of India (b) The U.N.O. (c) The World Bank (d) The Reserve Bank of India 140. Growth rate of population can be measured by (a) division of death rate by birth rate (b) multiplication of death rate by birth rate (c) addition of death rate and birth rate (d) subtraction of death rate from birth rate 141. Infant mortality rate refers to : (a) the number of children dying before reaching the school going age (b) the number of children dying before reaching 3 years of age (c) the proportion of children dying within a year of their birth (d) none of the above 142. Density of population indicates the (a) Capital - and ratio (b) Land - output ratio (c) Land - labour ratio (d) the number of person per square kilometre 524 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 143. Occupational structure refers to the (a) number of people living in a country (b) size of working force in a country (c) distribution of working force among the different occupations (d) occupations available in a country 144. The first All India population census was conducted in the year : (a) 1865 (b) 1870 (c) 1872 (d) 1882 145. The population of India in 2008-09 was __________ (a) 100 crores (b) 101 crores (c) 102 crores (d) 115 crores 146. According to 2001 census, density of population per square kilometre in India was _____ (a) 225 (b) 280 (c) 324 (d) 330 147. The real determinant of the size of market in a country is the (a) income of its population (b) geographical area (c) size of its population (d) income of the government 148. The occupational structure of India’s labour force since 1951 has (a) changed significantly (b) remained more or less static (c) moved against services and in favour of agriculture (d) shown trends which cannot be titled in any pattern 149. According to the Planning Commission, using Uniform Recall Period (URP) ____ % people were below poverty line in 2004-05. (a) 55.5 (b) 27.5 (c) 32.5 (d) 40.5 150. As per 2001 census, Kerala had _____ females for 1000 males (a) 933 (b) 1006 (c) 1036 (d) 1058 SECTION – D : QUANTITATIVE APTITUDE (50 MARKS) dy 151. If y = 5xx, then is equal to _____ dx (a) 5xx(1– log x) (b) 5xx–1 (c) 5xx(1+ log x) (d) None of these Common Proficiency Test (CPT) Volume - I 525 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 19 dy 152. If y = eax3+bx2+cx+d then is _______ dx (a) (3ax2 + 2bx + c)y (b) 3ax2 + 2bx + c (c) eax3+bx2+cx+d (d) None of these ⎛ 1⎞2 ∫ 153. ⎜x– ⎟ dx is equal to ____ ⎝ x⎠ x3 1 x3 1 (a) +2x− +c (b) −2x− +c 3 x 1 3 x 1 x3 1 (c) +2x+ +c (d) None of these 3 x 1 154. The best method to collect data in case of a natural calamity is ________? (a) Telephone interview (b) Indirect interview (c) Personal interview (d) All these 155. If the A.M. and G.M. of two observations are 5 and 4 respectively, then the two observations are ________ (a) 8, 2 (b)7, 3 (c) 6, 4 (d)5, 5 156. For the numbers 1, 2, 3 ……, n standard deviation is ______ n2 +1 n2 −1 (a) (b) 12 12 n2 −1 (c) (d) None of these 12 157. For a group of 8 students, the sum of squares of differences in ranks for Economics and English marks was 50. The value of rank correlation coefficient is ________. (a) 0.40 (b)0.50 (c) 0.30 (d)None of these 526 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 158. A number is selected from the numbers 1, 2, 3, 4 ….., 25.The probability for it to be divisible by 4 or 7 is ____. 3 9 (a) (b) 25 25 1 (c) (d)None of these 25 159. If 15 days are selected at random, then the probability of getting two Fridays are _________ (a) 0.13 (b)0.19 (c) 0.29 (d)0.39 160. A company estimates the mean life of a drug under typical weather conditions. A simple random sample of 81 bottles yields the following information Sample mean = 23 months, Population variance = 6.25 (months)2 The interval estimate with a confidence level of 90% is _________ (a) [22.543, 23.457] (b) [22.6421, 23.5481] (c) [22.451, 22.523] (d) None of these 161. The value of 5-1(54)1/4 is _________ (a) 1 (b)5 (c) 0 (d)None of these 162. The value of 3(256)–1/8 is _________ 2 3 (a) (b) 3 2 (c) 3 (d)None of these 1 1 163. The value of (243)5(128)7 is _________ (a) 1 (b)6 (c) 2 (d)3 164. log (12 + 22 + 32) is equal to _________ (a) log 12 + log 22 + log 32 (b) log 2 + log 7 (c) log 2 – log 7 (d) None of these 165. log (3 × 5 ×7)2 is equal to _________ (a) 2(log 3 + log 5 + log 7) (b) log (2×3×5×7) (c) 2(log 3 – log 5 – log 7) (d) None of these Common Proficiency Test (CPT) Volume - I 527 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 19 166. The solution of the equation x3 – 5x2 + 6x = 0 is _________ (a) 2, 3 (b) 0, –2, –3 (c) 0, 2, 3 (d) None of these 167. The equation y3 – 7y + 6 = 0 is satisfied by _________ (a) 1, 2, –3 (b) 1, 2, 3 (c) –1, –2, 3 (d) 1, –2, 3 168. The equation x3 – x2 – 12x = 0 is satisfied by _________ (a) 1, 4, –3 (b) 0, 4, –3 (c) 0, –4, 3 (d) None of these 169. The solution of the equation (x – 3) (x – 5) (x – 7) = 0 is _________ (a) 3, 5, 7 (b) –3, –5, –7 (c) 3, –5, –7 (d) –3, –5, 7 170. The roots of the equation x2 – 18x + 81 = 0 are _________ (a) Imaginary and unequal (b) Real and unequal (c) Real and equal (d) None of these 171. The roots of the equation 23–y +2y–2 – 3 = 0 are _________ (a) –2, –3 (b) 2, 3 (c) 4, 8 (d) None of these 172. If one root of the quadratic equation is 2+ 3, the equation is _________ (a) x² – 4x + 1 = 0 (b) x² + 4x + 1 = 0 (c) x² – 4x – 1 = 0 (d) None of these 173. The inequalities x < 0, y > 0 represents _________ (a) First quadrant (b) Second quadrant (c) Third quadrant (d) Fourth quadrant 174. The inequalities x > 0, y < 0 represents _________ (a) First quadrant (b) Second quadrant (c) Third quadrant (d) Fourth quadrant 175. Simple interest on Rs. 50,000 for three years at interest rate of 5.5% p.a. is _________ (a) Rs. 8250 (b) Rs. 825 (c) Rs. 8520 (d) None of these 528 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 176. Rs. 1000 is invested at annual rate of interest of 10% p.a. The amount after two years if compounding is done annually is _________ (a) Rs. 121 (b) Rs. 1210 (c) Rs. 2110 (d) None of these 177. Rs. 2,000 is invested at annual rate of interest of 10% p.a. The amount after two years if compounding is done half yearly is _________ (a) Rs.2431 (b) Rs.243.10 (c) Rs.2341 (d) None of these 178. Rs. 3,000 is invested at annual rate of interest of 10% p.a. The amount after two years if compounding is done quarterly is _________ (a) Rs. 3556.20 (b) Rs. 3565 (c) Rs. 3655.20 (d) None of these 179. Rs. 4,000 is invested at annual rate of interest of 10% p.a. The amount after two years if compounding is done monthly is _________ (a) Rs. 4881.16 (b) Rs. 4818.16 (b) Rs. 4888.16 (d) None of these 180. 0×7×2 is equal to _________ (a) 10080 (b) 0 (c) 5040 (d) None of these 181. If n+1 = 20 n−1, then value of n is (a) 6 (b)5 (c) 4 (d)None of these 182. The value of 11 is equal to P 9 11 11 (a) (b) 9 2 2 11 2 (c) (d) None of these 9 183. In how many different ways can seven persons stand in a line for a group photograph? (a) 5040 (b)720 (c) 120 (d)27 Common Proficiency Test (CPT) Volume - I 529 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 19 184. In how many ways can 11 persons sit at a round table? (a) 11 (b) 10 (c) 11 (d) 10 185. There are 5 books on Physics, 3 on Chemistry and 2 on Mathematics. In how many ways can these be placed on a shelf if the books on the same subject are to be together? (a) 8640 (b) 1440 (c) 4320 (d) None of these 186. How many different numbers can be formed by using any four out of six digits 1, 2, 3, 4, 5, 6, no digit being repeated in any number? (a) 60 (b) 120 (c) 30 (d) 15 187. How many five digit numbers can be formed out of digits 1, 2, 4, 5, 6, 7, 8, if no digit is repeated in any number? (a) 2520 (b) 840 (c) 1680 (d) None of these 188. A Committee of 7 persons is to be formed out of 11. The number of ways of forming such a committee is _________ (a) 660 (b) 330 (c) 300 (d) None of these 189. How many different arrangements are possible from the letters of the word CALCULATOR? (a) 453600 (b) 50400 (c) 45360 (d) None of these 190. A man has 7 friends, in how many ways can he invite one or more of his friends? (a) 127 (b) 256 (c) 255 (d) None of these 191. There are 7 boys and 3 girls. The number of ways, in which a committee of 6 can be formed from them, if the committee is to include at least 2 girls, is _________ (a) 140 (b) 105 (c) 35 (d) None of these 192. 5C + 5C + 5C + 5C + 5C is equal to _________ 1 2 3 4 5 (a) 30 (b) 31 (c) 32 (d) 25 530 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 193. The 20th term of the A.P. 1, 3, 5, 7, ….. is (a) 39 (b) 37 (c) 35 (d) None of these 194. The sum of the series 1,2,3,4,….., 70 is equal to _________ (a) 2484 (b) 2485 (c) 2486 (d) None of these 195. The Arithmetic mean between 5 and 13 is _________ (a) 9 (b) 10 (c) 8 (d) None of these 196. The sum of the series 1, 3, 5, 7, …. , 99 is equal to _________ (a) 2499 (b) 2501 (c) 9801 (d) None of these 197. The series 12 + 22 + 32 + 42 + ... + 102 is equal to (a) 385 (b) 386 (c) 384 (d) None of these 198. The series 13 + 23 + 33 + ... + 203 is equal to (a) 4410 (b) 4410000 (c) 44100 (d) None of these 1 199. The eleventh term of the G.P. , 1, 2, 2², ……. nth term is 2 (a) 512 (b) 256 (c) 1024 (d) None of these 200. The sum of the series 1,2,4,8, …. nth term to 10 term is (a) 1024 (b) 1023 (c) 1025 (d) None of these (cid:2)(cid:2)(cid:2) Common Proficiency Test (CPT) Volume - I 531 © The Institute of Chartered Accountants of India . © The Institute of Chartered Accountants of India BOARD OF STUDIES THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA COMMON PROFICIENCY TEST Model Test Paper – BOS/CPT – 20 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. SECTION – A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. Rings and pistons of an engine were changed at a cost of Rs. 5,000 to increase fuel efficiency is: (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None of the above 2. Which of the following is nominal account (a) Debtors account (b) Loan account (c) Provision for Bad debts (d) Bank overdraft 3. Unexpired portion of Capital expenditure is shown in (a) Trading account (b) Profit and Loss a/c (c) Balance Sheet (d) None of the above 4. According to money measurement concept, currency transactions and events are recorded in the books of accounts (a) In the ruling currency of the country in which transaction takes place (b) In the ruling currency of the country in which books of accounts are prepared (c) In the currency set by ministry of finance (d) In the currency set by Govt. 5. Profit leads to increase in (a) Assets (b) Capitals (c) Both (a) and (b) (d) Neither (a) nor (b) Common Proficiency Test (CPT) Volume - I 533 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 20 6. Which of the following account will have credit balance? (a) Debentures A/c (b) Carriage inward (c) Prepared insurance (d) Bills receivable 7. Insurance unexpired account is a (a) Real account (b) Nominal account (c) Personal account (d) None of the three 8. Three column cash book records (a) Only cash transactions (b) All transactions (c) Cash, Bank and discount transactions (d) Cash purchases and cash sale transactions 9. The value of an asset after reducing depreciation from the historical cost is known as (a) Fair value (b) Book value (c) Market value (d) Net realizable value 10. Trial Balance is prepared according to (a) Total method (b) Balance method (c) Total and Balance both (d) All the three. 11. The parties to joint venture is called (a) Partners (b) Principal and agent (c) Friends (d) Co-ventures 12. Owner of the consignment stock is (a) Consignee (b) Consignor (c) Debtors (d) None 13. Profit or loss on revaluation is shared among the partners in (a) Old profit sharing ratio (b) New profit sharing ratio (c) Capital ratio (d) Equal ratio 14. In case of admission of a partner, the first account prepared is (a) Revaluation account (b) Realisation account (c) Profit and Loss adjustment account (d) Bank account 15. After the death of a partner, amount payable is received by (a) Government (b) Firm (c) Executor of the death partner (d) None of the three 534 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 16. A company purchased a plant for Rs. 5,000. The useful life of the plant is 10 years and the residual value is Rs. 500. SLM rate of depreciation will be (a) 9% (b) 8% (c) 10% (d) None of the three 17. When preparing a Bank Reconciliation Statement, if you start with credit balance as per Pass Book, then cheque deposited in the bank but not credited within the period are (a) Added (b) Deducted (c) Not required to be adjusted (d) None of the above 18. The balance of the petty cash is (a) An expense (b) Income (c) An asset (d) Liability 19. If del credere commission is allowed for bad debt, consignee will debit the bad debt amount to (a) General Trading A/c (b) Debtors A/c (c) Consignor A/c (d) Commission earned A/c 20. Outgoing partner is compensated for parting with firm’s future profits in favour of remaining partners. The remaining partners contribute to such compensation amount in (a) Capital ratio (b) Sacrificing ratio (c) Gaining ratio (d) Profit sharing ratio 21. Sometimes, in case of admission of a partner, all partners may agree to show the assets and liabilities in the new balance sheet at their old figures even when they agree to revalue them. This A/c is prepared only when it is mentioned that assets and liabilities other than cash not to be altered in new balance sheet. The account is known as (a) Memorandum Revaluation A/c (b) Revaluation A/c (c) Profit & Loss Adjustment A/c (d) None of the above 22. A businessman purchased goods for Rs. 25,00,000 and sold 80% of such goods during the accounting year ended 31st March 2010. The market value of the remaining goods was Rs. 4,00,000. He valued closing stock at cost. He violated the concept of (a) Money measurement (b) Conservatism (c) Cost (d) Periodicity Common Proficiency Test (CPT) Volume - I 535 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 20 23. From the following figures prepare Balance Sheet of the Mr. X as on Dec. 31, 2009. Rs. Rs. Goodwill 70,000 Debtors 35,000 Plant & Machinery 60,000 Furniture 10,000 Investments 25,000 Bills payable 10,000 Outstanding expenses 5,000 Bills Receivable 9,000 Closing stock 25,000 Cash 6,000 Creditors 45,000 Drawings 12,000 Net Profit 22,000 Capital 1, 55,000 Bank overdraft 15,000 Balance Sheet total will be (a) Rs. 2,40,000 (b) Rs. 2,50,000 (c) Rs. 2,30,000 (d) None of the three 24. Cost of goods sold Rs. 19,000 Closing Stock Rs. 6,000 Sales Rs. 30,000 Gross Profit will be (a) Rs. 10,000 (b) Rs. 11,000 (c) Rs. 5,000 (d) None of the three 25. Rs. Rs. Salaries 4,000 General expenses 5,100 Interest on overdraft 200 Advertisement 5,000 Office expenses 5,000 Gross profit 35,000 Rent paid 2,000 Commission received 4,000 Capital 50,000 Amount of net profit will be (a) Rs. 17,700 (b) Rs.17,000 (c) Rs. 15,000 (d) None of the three. 536 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 26. Trial Balance shows the following balance Dr. Cr. Rs. Rs. Capital- 50,000 Income tax 10,000 Income tax advance payment 1,600 Capital A/c balance will be (a) Rs. 38,400 (b) Rs. 38,000 (c) Rs. 40,000 (d) None of the three 27. As per trial balance Rs. Jan 1, 2009 Provision for doubtful debts A/c 990 Dec. 31, 2009 Bad Debts 1,850 Dec. 3, 2009 Debtors 30,000 Information (i) Make a provision for bad debts 5% on debtors. (ii) Make a provision for discount on debtors 2%. Provision for discount on debtors will be (a) Rs. 570 (b) Rs. 500 (c) Rs. 750 (d) None of the three 28. Rs. 50,000 claim for workman’s compensation under dispute is a (a) Current liability (b) Contingent liability (c) Fixed liability (d) None of the three 29. Loan @ 9% 10,000 Interest on loan 600 Outstanding interest on loan will be (a) Rs. 300 (b) Rs. 250 (c) Rs. 350 (d) None of the three 30. Included in the sales were sale of goods of Rs. 5,000 on “Sale on approval” basis for which consent of the customer was not received upto Dec. 31st. Goods sent on approval included profits at 25% on cost. Stock on approval will be (a) Rs. 4,500 (b) Rs. 5,000 (c) Rs. 4,000 (d) None of the three 31. On 1st Jan. 2009 Loose Tools A/c showed the balance of Rs. 4,320. On 31st Dec. 2009 closing balance of loose tools were Rs. 4,680. During the year loose tools were purchased for Rs. 1,440. Depreciation on loose tools will be (a) Rs. 1,080 (b) Rs. 1,200 (c) Rs. 1,000 (d) None of the three Common Proficiency Test (CPT) Volume - I 537 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 20 32. Loan A/c credit balance on Dec. 31, 2009 15,000 Loan paid on June 30, 2009 4,000 Loan paid on Sept. 30, 2009 5,000 Interest on loan is to be charged 9% p.a. Interest amount for the year 2009 will be (a) Rs. 1,867.50 (b) Rs. 1,800 (c) Rs. 2,000 (d) None of the three 33. B/R from Mr. A of Rs. 1,000 was posted to the credit of Bills payable A/c and also credited to the account of Mr. A. Rectifying entry will be Rs. Rs. (a) B/P 1,000 To A 1,000 (b) B/R 1,000 To A 1,000 (c) Bills Payable A/c Dr. 1,000 Bills Receivable A/c Dr. 1,000 To Suspense 2,000 (d) None of the three 34. An item of purchase of Rs. 151 was entered in the Purchase Book as Rs. 15 and posted to Suppliers A/c as Rs. 51 rectifying entry will be Rs. Rs. (a) Purchase A/c Dr. 136 To Suppliers A/c 100 To Suspense A/c 36 (b) Purchases A/c Dr. 136 To Suppliers 136 (c) Purchase A/c Dr. 136 To Suppliers 136 (d) None of the three 35. The accountant of the firm M/s ABC is unable to tally the following trial balance. S. No. Account heads Debit (Rs.) Credit (Rs.) 1. Sales 12,500 2. Purchases 10,000 3. Miscellaneous expenses 2,500 Total 10,000 15,000 The above difference in trial balance is due to (a) Wrong placing of sales account (b) Incorrect totalling. (c) Wrong placing of miscellaneous expenses account (d) Wrong placing of all accounts. 538 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 36. Sita and Gita are partnes haring profits and losses in the ratio of 3:2 having the capital of Rs. 80,000 and Rs. 50,000 respectively. They are entitled to 9% p.a. interest on capital before distributing the profits. During the year firm earned Rs. 7,800 after allowing interest on capital. Profits apportioned among Sita and Gita is: (a) Rs. 4,680 and Rs. 3,120 (b) Rs. 4,800 and 3,000 (c) Rs. 5,000 and Rs. 2,800 (d) None of the above. 37. Balance as per Cash Book on 31.03.2010 Rs. 10,000 Cheque issued and presented on 4th April Rs. 2,300 Cheque sent to bank but not credited Rs. 2,000 B/P paid by Bank not entered in cash Book Rs. 800 Balance on per pass book will be (a) Rs. 9,500 (b) Rs. 9,000 (c) Rs. 9,800 (d) None of the three. 38. Bank overdraft as per cash book on 31st Dec. 2010 Rs. 10,500 Cheque sent for collection but not collected Rs. 8,250 Cheque issued but not presented for payment Rs. 12,000 Balance as per pass book overdraft will be (a) Rs. 6,750 (b) Rs. 6,500 (c) Rs. 6,000 (d) None of the three 39. Ram, the manager, is entitled to get a commission of Rs. 25 per article sold plus ¼th of the amount by which the gross sales proceeds less total commission there on exceed a sum at the rate of Rs. 125 per article sold. Ram sold 450 articles at Rs. 73,800. Commission amount will be - (a) Rs. 12,500 (b) Rs. 12,510 (c) Rs. 12,000 (d) None of the three 40. Vimal of Kanpur consigned to his agent Nirmal of Allahabad 100 machines at Rs. 500 each. He paid the following expenses-packing charges Rs. 20 per machine, forwarding charges Rs. 400 and freight Rs. 600 Nirmal received the consignment and paid Rs. 600 for cartage and octroi. He also paid Rs. 500 for godown charges. He sold 60 machines @ 700 per machine. He was entitled to a commission of 6%. Profit on consignment will be (a) Rs. 6,820 (b) Rs. 6,800 (c) Rs. 6,000 (d) None of the three Common Proficiency Test (CPT) Volume - I 539 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 20 41. PARIKH & CO. of Nagpur consigned D of Delhi 1,000 Kgs. of Oil @ Rs. 13 per Kg. Consignor spent Rs. 750 on cartage, Insurance and freight. On the way due to leakage 50 kg. of oil was spoiled (Normal loss) D spent Rs. 500 on Octroi and carriage. His selling expenses were Rs. 400 on 800 Kg. of oil sold. Value of consignment stock will be (a) Rs. 2,250 (b) Rs. 2,000 (c) Rs. 2,200 (d) None of the three 42. Cost of machine Rs.1,35,000. Residual value Rs. 5,000. Useful life 10 years the 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. Depreciation amount for 6th year will be. (a) Rs. 8,125 (b) Rs. 8,000 (c) Rs. 8,200 (d) None of the three 43. Indian currency is a a) Promissory Note b) Cheque c) Bill of exchange d) Bank draft 44. A and B enter into a joint venture sharing profit and losses in the ratio of 2:1:. A purchased goods costing Rs. 2,00,000. B sold the goods for Rs. 2,50,000. A is entitled to get 1% commission purchase and B is entitled to get 5% commission on sales. The profit on venture will be (a) Rs. 35,500 (b) Rs. 35,000 (c) Rs. 36,000 (d) None of the three 45. Capital introduced in the beginning by Shyam Rs. 12,000; Further capital introduced during the year Rs. 4,000. He made drawings of Rs. 3,000 and closing capital is Rs. 16,430. The amount of profit for the year will be (a) Rs. 3,000 (b) Rs. 3,430 (c) Rs. 3,500 (d) None of the three 46. A and B are partners, sharing profits in the ratio 5:3. They admit C with 1/5 share in profits, which he acquires equally from both i.e. 1/10 from A and 1/10 from B. Now profit sharing ratio will be (a) 21:11:8 (b) 11:21:8 (c) 8:11:21 (d) None of the three 540 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 47. A and B are partners in a firm sharing profits and losses in the ratio of 3:2. A new partner C is admitted. A surrenders 1/5th share of his profit in favour of C and B surrenders 2/5th share of his profit in favour of C. New profit sharing ratio will be (a) 12:6:7 (b) 12:5:6 (c) 12:4:5 (d) None of the three 48. The profits of a firm for the last 5 years were as follows: Year ended 31st March Profits (Rs.) 2005 43,000 2006 50,000 2007 52,000 2008 65,000 2009 85,000 Goodwill is to be calculated on the basis of two years purchase of weighted average profits. The weights to be used are 2005 2006 2007 2008 2009 1 2 3 4 5 Goodwill amount will be (a) Rs. 1,31,200 (b) Rs. 1,30,000 (c) Rs. 1,32,000 (d) None of the three 49. Ramesh and Suresh are partners sharing profits in the ratio of 2/3 and 1/3. Their capitals on Dec. 31, 2009 were Rs. 1,02,900 and Rs. 73,500 respectively. Mohan was admitted as a new partner on Jan. 1, 2010 for 1/5 share. He contributes Rs. 15,210 as goodwill. He brings his capital in profit sharing ratio. Capital amount will be. (a) Rs. 44,100 (b) Rs. 47,000 (c) Rs. 45,000 (d) None of the three 50. Goods purchased Rs. 3,00,000; sales Rs. 2,70,000. If margin 20% on sales then closing stock will be (a) Rs. 84,000 (b) Rs. 80,000 (c) Rs. 75,000 (d) None of the three 51. A’s acceptance to B for Rs. 2,500 discharged by a cash payment of Rs. 1000 and a new bill for the balance plus Rs. 50 for interest. The amount of the new bill will be (a) Rs. 2,550 (b) Rs. 1,550 (c) Rs. 1,500 (d) None of the three Common Proficiency Test (CPT) Volume - I 541 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 20 52. Ramesh, an employee gets a salary of Rs. 10,000, he withdrew goods of Rs. 7,000 (cost price Rs. 6,000) for personal use and got salary Rs. 6,000. The excess payment will be (a) Rs. 2,000 (b) Rs. 3,000 (c) Rs. 4,000 (d) None of the three 53. Mr. A receives a bill from B for Rs. 30,000 on 01.01.2010 for 3 months. On 04.02.2010. Mr. A got the bill discounted at 12%. The amount of discount will be (a) Rs. 900 (b) Rs. 300 (c) Rs. 600 (d) Rs. 650 54. Chandra Ltd. issued 15,000 equity shares of Rs. 100 each at a discount of 5%. Payments were made as - on application Rs. 25; on allotment Rs. 35 and Rs. 35 on first and final call. Applications for 14,000 shares were received and all were accepted. All the money was duly received except the first and final call on 200 shares cash book balance will be (a) Rs. 13,23,000 (b) Rs. 13,00,000 (c) Rs. 12,00,000 (d) None of the three 55. 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, Share capital in case of forfeiture will be debited by (a) Rs. 800 (b) Rs. 600 (c) Rs. 700 (d) None of the three 56. B Ltd. forfeited 500 shares of Rs. 10 each fully called up for non payment of first call of Rs. 2 per share. All these shares were reissued as fully paid for Rs. 8 per share. Amount transferred to capital reserve will be (a) Rs. 3,000 (b) Rs. 1,800 (c) Rs.1,500 (d) None of the three 57. The Promising Co. Ltd. took over assets of Rs. 3,50,000 and liabilities of Rs. 30,000 of X Ltd. for a purchase consideration of Rs. 3,30,000. The Promising Co. Ltd. paid the purchase consideration by issuing 12% debentures of Rs. 100 each at 10% premium. Number of Debentures issued will be (a) 3,000 debentures (b) 3,100 debentures (c) 2,800 debentures (d) None of the three 58. A Company issued 2,000, 12% debentures of Rs. 100 each at par but redeemable at 5% premium. Loss on issue of debentures will be (a) Rs.10,000 (b) Rs.12,000 (c) Rs.11,000 (d) None of the three 542 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 59. On 1st Jan. 2010, a Limited Co. issued 14% Rs. 1,00,000 debentures at a discount of 6% repayable at the end of 5 years. Amount of discount to be written off every year will be (a) Rs. 1,200 (b) Rs. 1,000 (c) Rs. 1,500 (d) None of the three 60. The Company issued debentures of the face value of Rs. 1,00,000 at a discount of 6% on 1st January, 2004. These debentures are redeemable by annual drawings of Rs. 20,000 made on 31st Dec. each year. The Directors decided to write off discount based on the debentures outstanding each year. Discount to be written off in the fifth year will be (a) Rs. 400 (b) Rs. 500 (c) Rs. 800 (d) None of the three SECTION – B : MERCANTILE LAWS (40 MARKS) 61. Which does not came into the category of delivery? (a) Actual (b) Symbolic (c) Constructive (d) Perpetual 62. Which is not true in case of a finder of goods? (a) He can sell goods if the owner cannot be found (b) If the owner is found find he refuses to pay lawful charges (c) He can sell the goods if the goods are of perishing nature (d) He cannot sell the goods in any condition 63. In C.I.F. Contracts, C.I.F. stands for: (a) Cost, Identify and Freight (b) Colour, Insurance and Freight (c) Cost, Insurance and Freight (d) Calculation, Insurance and Freight 64. Which does not relate the term delivery of goods? (a) Actual delivery (b) Symbolic delivery (c) Constructive delivery (d) Specific delivery 65. Which is true regarding the expulsion of a partner? (a) The expulsion must be in the interest of the partnership (b) The partner to be expelled is served with notice (c) He should be given an opportunity of being heard (d) All of these Common Proficiency Test (CPT) Volume - I 543 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 20 66. Which of the following is an essential feature of partnership? (a) Registration (b) Partnership deed (c) Test of mutual agency (d) Separate legal entity 67. A agrees to pay one crore to B if he brings on earth a star from sky. This is a (a) Contingent contract (b) Quasi contract (c) Implied contract (d) Wagering conduct 68. A party entitled to rescind the contract, loses the remedy where (a) He has ratified the contract (b) Third party has acquired right in good faith (c) Contract is not separable (d) All of these 69. Agreement of uncertain meaning is (a) Valid (b) Void (c) Voidable (d) Illegal 70. Where the consent of both the parties is given by mistake, the contract is: (a) Void (b) Valid (c) Voidable (d) Illegal 71. A contract made by mistake about same foreign law is (a) Void (b) Valid (c) Voidable (d) Illegal 72. A agrees to pay Rs. 5,000 to B if it rains and B promises to pay a like amount to A if it does not rain, the agreement is called. (a) Quasi contract (b) Contingent contract (c) Wagering agreement (d) Voidable contract 73. In case of illegal agreements, the Collateral agreements are (a) Voidable (b) Void (c) Valid (d) None of these 74. Consideration must move at the desire of the (a) Promisor (b) Promisee (c) Any person (d) Third party 75. Which partner does not take active part in the business (a) Minor partner (b) Sub partner (c) Dormant partner (d) Estopped partner 544 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 76. Contingent contract is (a) Illegal (b) Valid (c) Voidable (d) Void 77. A partnership at will is one (a) Duration not fixed (b) Duration fixed (c) Dissolved at any time (d) Can be dissolved on the happening of an event 78. On dissolution the partners remain liable, till (a) Accounts are settled (b) Partners dues are paid off (c) Public notice is given (d) The registrar strikes off the name. 79. Every partner has the right (a) To take part in the business of the firm (b) To share exclusive profits (c) To use the property of the firm for personal purpose (d) Tone of these 80. A partner can retire on ________ (a) At the age of superannuation (b) At the low ebb of capital a/c (c) In accordance with the partnership deed (d) On nominee becoming a partner 81. Each of the partner is ________ (a) Principals as well as agent (b) Only agents of the firm (c) Only representative of the firm (d) Only co-partners of the firm 82. Registration of firm is ________ (a) Compulsory (b) Optional (c) Occassional (d) None of these 83. The resconstitution of firm takes place in case ________ (a) Admission of partner (b) Retirement of a partner (c) Death of a partner (d) All of the above 84. A partnership firm is dissolved where ________ (a) All partners have become insolvent (b) Firms business has become unlawful (c) The fixed term has expired (d) None of these Common Proficiency Test (CPT) Volume - I 545 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 20 85. It is not a right of partner ________ (a) To take part in business (b) To take access to accounts book (c) To share profits (d) To receive renumeration 86. It is not included in the implied authority of a partner ________ (a) To buy or sell goods on account (b) To borrow money for the purposes of firm (c) To enter into partnership on behalf of firm (d) To engage a lawyer to defend actions against firm 87. After retirement from firm, ________ partner is not liable by holding out (a) Active partner (b) Sleeping partner (c) Representative of deceased partner (d) Both (b) and (c) 88. ________ does not relate the dissolution of firm (a) Dissolution by agreement (b) Compulsory dissolution (c) Dissolution in the happening of certain contingency (d) Dissolution by leaving insolvent partner 89. ________ is the case of misconduct (a) Gambling by a partner on stock exchange (b) Fraudulent breach of trust by a partner (c) Persistent refusal by a partner to attend to the business (d) All of these 90. Contingent contract is ________ (a) Illegal (b) Valid (c) Voidable (d) Void 91. A voidable contract ________ (a) Can be enforced at the option of aggrieved party (b) Can be enforced at the option of both the parties (c) Cannot be enforced in a court of law (d) Is prohibited by court. 92. There can be a stranger to a ________ (a) Contract (b) Consideration (c) Agreement (d) Promise 546 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 93. A minor is liable for ________ supplied to him (a) Necessaries (b) Luxuries (c) Necessities (d) All the things 94. Threat to commit suicide amounts to ________ (a) Coercion (b) Offence under the Indian Penal Code (c) Undue influence (d) Fraud 95. An agreement the object of which is unlawful is ________ (a) Valid (b) Void (c) Voidable (d) None of these 96. ________ can perform the contract (a) Promise alone (b) Legal representative of promisor (c) Agent of the promisor (d) All of these 97. Consideration may be ________ (a) Past (b) Present (c) Future (d) All of these 98. Moral pressure is involved in the case of ________ (a) Coercion (b) Undue influence (c) Misrepresentation (d) Fraud 99. A sells to B a horse which A knows to be unsound. B is A’s daughter. Choose the best alternative (a) The relation between A and B would make it A’s duty to tell B if the horse is unsound (b) If A is silent, silence will not be equivalent to speech (c) Here it is not duty of A to tell the horse’s defect (d) A is not bound to tell the defect as the rule of caveat emptor applies 100. M, a minor aged 17, broke right arm in a cricket match. He engaged a physician to set it. Does the physician have a valid claim for his services. Choose the best alternative. (a) The physician cannot claim for his services due to contract with minor which is void (b) The physician has a valid claim for his services which are included in the “Necessaries” (c) The physician has no claim for minor’s “necessaries” and minor will be personally liable (d) The physician can claim for his services from minor’s parents SECTION – C : GENERAL ECONOMICS (50 MARKS) 101. The LAC curve (a) Falls when the LMC curve falls (b) Rises when the LMC curve rises (c) Goes through the lowest point of the LMC curve (d) Falls when LMC < LAC and rises when LMC > LAC Common Proficiency Test (CPT) Volume - I 547 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 20 102. At shut down point : (a) Price is equal to AVC (b) Total revenue is equal to TVC (c) Total loss of the firm is equal to TFC (d) All of the above 103. If as a result of change in price, the quantity supplied of the good remains unchanged, we say elasticity of supply is: (a) Zero (b) Between zero and one (c) Infinite (d) Between one and infinity 104. The conditions of long-period equilibrium for the firm operative under perfect competition are: (1) MC = MR (2) AR = MR (3) AC = AR (4) AC = MC (a) (1) only (b) (1) and (2) only (c) (1), (2) and (3) only (d) (1), (2), (3) and (4) 105. In a perfect competitive market (a) Firm is the price giver and industry the price take (b) Firm is the price taker and industry the price giver (c) Both are the price takers (d) None of the above 106. If the price of Pepsi decreases relative to the price of Coke and 7-Up, the demand for: (a) Coke will rise (b) 7-Up will decrease (c) Coke and 7-Up will increase (d) Coke and 7-Up will decrease 107. The difference between the price a consumer is willing to pay and the price he actually pays is called - (a) Excess price (b) Excess demand (c) Consumer surplus (d) Exploitation 108. ‘Excess Capacity’ is the essential characteristic of the firm in the market form of : (a) Monopoly (b) Perfect competition (c) Monopolistic competition (d) Oligopoly 109. ‘Personal disposable’ ‘income’ refers to : (a) The income of the person after all personal taxes are deducted (b) Total income earned by the person (c) Personal taxes paid to the government (d) Personal and indirect taxes paid to the government 548 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 110. National income of a country is also known as : (a) Gross National Product at market prices (b) Net National Product at factor cost (c) Gross Domestic Product at factor cost (d) Net Domestic Product at Market prices 111. The indifference curve approach does not assume : (a) Rationality on the parts of consumers (b) Ordinal measurement of satisfaction (c) Consistent consumption pattern behaviour of consumers (d) Cardinal measurement of utility 112. The incidence of taxes refers to : (a) The level and rate of taxation (b) Who ultimately bears the money burden of the tax (c) The growth of taxation (d) The way in which a tax is collected 113. Optimum population is that level of population at which (a) Output per capita is the highest (b) Output per capita is the lowest (c) Output per capita is the same (d) None of the above 114. The main objective of fiscal policy in developing countries is to: (1) Promote economic growth (2) Mobilise resources for economic growth (3) Ensure economic growth and distribution (4) Increase employment opportunities (a) only 1 and 2 are correct (b) only 2 and 3 are correct (c) only 2 and 4 are correct (d) 1, 2, 3 and 4 are correct 115. Budgetary deficit can be expressed as: (a) The excess of pubic expenditure over public revenue (b) The sum of deficit on revenue account and deficit on capital account (c) That portion of government expenditure which is financed through the sale of 91 days Treasury Bills and drawing down of cash balances (d) All of the above 116. A Government budget is defined as: (a) A description of the fiscal policies of the government and the financial plans (b) A financial plan describing estimated receipts and proposed expenditures and Disbursement under various heads Common Proficiency Test (CPT) Volume - I 549 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 20 (c) Neither of the above (d) Both (a) and (b) above 117. ________ depicts complete picture of consumer’s tastes and preferences (a) Budget line (b) Average cost curve (c) Indifference map (d) Marginal revenue curve 118 . Human Development Index (HDI) is a composite index of : (a) Health, literacy and employment (b) National income, size of population and general price level (c) National income, per capita income and per capita consumption (d) Physical resources, monetary resources and population size 119. The task of national income estimation to India is entrusted to the (a) Indian Statistical Institute (b) National Sample Survey Organization (c) Central Statistical organization (d) National Accounts Organization 120. The marginal farmer in India is defined as a cultivator who : (a) Does not own any land (b) Workers on a land holding of less than one hectare (c) Works on a land holding for wages (d) Keeps shifting between agriculture and non-agriculture jobs 121. The main objective of the Regional Rural Bank is to (a) Provide credit and other facilities to small and marginal farmers, agricultural labours and artisans in rural areas (b) Provide credit to the common people in rural areas (c) Take over the functions of Agricultural Refinance Corporation of India (d) Supplement scheduled commercial banks 122. At present, the area covered by forests as a percentage of total land area in India lies within a range of (a) 11% to 15% (b) 16% to 20% (c) 21% to 25% (d) 26% to 30% 123. The second plan’s programme of industrialization was based on the ______ model (a) British (b) V.V. Bhatt (c) P.C. Mahalanobis (d) Vera Anstey 124. An inferior commodity is one which is consumed in smaller quantities when the income of consumer : (a) Becomes nil (b) Remains the same (c) Falls (d) Rises 550 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India 125. Which of the following equation is correct? P P Y X (a) MRTS = (b) MRTS = XY P X P X Y P Y (c) MRTS = (d) None of the above YX P X 126. The marginal cost curve intersects the average cost curve when average cost is: (a) Maximum (b) Minimum (c) Raising (d) Falling 127. If the demand curve confronting an individual firm is perfectly elastic, then : (a) The firm is a price taker (b) The firm cannot influence the price (c) The firms marginal revenue curve coincides with its average revenue curve (d) All of the above 128. In long run equilibrium the pure monopolist can make pure profits because of (a) Blocked entry (b) The high price he charges (c) The low LAC costs (d) Advertising 129. Which of the following statements is not true about a discriminating monopolist? (a) He operates in more than one market (b) He makes more profit because he discriminates (c) He maximizes his profits in each market (d) He charges different prices in each market 130. In both the Chamberlin and kinked demand curve models, the oligopolists (a) Recognize their independence (b) Do not collude (c) Tend to keep prices constant (d) All of the above 131. The demand for a factor of production is said to be a derived demand because (a) It is a function of the profitability of an enterprise (b) It depends on the supply of complementary factors (c) Its stems from the demand for the final product (d) It arises out of means being scarce in relation to wants. 132. Positive income elasticity implies that as income rises, demand for the commodity (a) Rises (b) Falls (c) Remains unchanged (d) Becomes zero Common Proficiency Test (CPT) Volume - I 551 © The Institute of Chartered Accountants of India MODEL TEST PAPER - 20 133. A Central Bank differs from a commercial bank in that : (a) It has no branches (b) It is the banker of the government (c) It deals with general public (d) None of the above 134. Open market operations by a Central bank involve : (a) Sale and purchase of government securities (b) Increase and decrease of discount rate (c) Changing the reserve ratio up and down (d) Raising or lowering of the margin requirements 135. Which one of the following is the most profitable but least liquid asset of a commercial bank? (a) Loans and advances (b) Money at call and short notice (c) Bills discounted and purchased (d) Investment in government securities 136. CENVAT stands for : (a) Common Entity Value Added Tax (b) Corporate Entity Value Added Tax (c) Central Value Added Tax (d) None of the above 137. Export led growth strategy does not include : (a) Outward oriented growth (b) Export promotion (c) Import restrictions (d) Emphasizing comparative advantage 138. Which is the soft lending arm of the World Bank? (a) IDA (b) IFC (c) MIGC (d) ICSID 139. Occupational structure refers to the (a) Number of workers living in a country (b) Size of working population in the industrial sector (c) Distribution of working population among different occupations (d) Nature of different occupations in the economy 140. The ‘Year of Great Divide’ with regard to population growth in India is : (a) 1911 (b) 1921 (c) 1947 (d) 1971 552 Common Proficiency Test (CPT) Volume - I © The Institute of Chartered Accountants of India