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CA CPT : Volume 1 - Model Test Paper 19 (with Answers)

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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) (c) 2. (b) (d) Nominal account None of the three 6% Debentures Interest on debentures (b) (d) Loan to contractor Audit Fee Only credit transactions All transactions Cash and bank transactions Cash purchase and credit sale transactions A bill has been drawn on August 10, 2009 payable after 3 months. The maturity date of the bill will be (a) (c) 6. Personal account Real account Double column cash book records (a) (b) (c) (d) 5. Revenue expenditure None of the three All of the following have debit balance except (a) (c) 4. (b) (d) Commission received in advance is a (a) (c) 3. Capital expenditure Deferred revenue expenditure Nov. 13, 2009 Oct. 31, 2009 (b) (d) Nov. 10, 2009 None of the above (b) (d) Profit and Loss Account Balance Sheet Salary and wages is debited to (a) (c) Trading Account P/L Appropriation account Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 507 MODEL TEST PAPER - 19 7. In a sole trade, income tax is recorded as (a) (c) 8. Cost price Market price (b) (d) Invoice price None of the three. Profit and Loss account Trading account (b) (d) Balance Sheet Manufacturing account Debit Unfavourable (b) (d) Credit None of the three Debit; Debit and Total and balances (b) Posted balances; Total of balances (d) Opening Balances; Closing balances Debit balance; Credit balance Personal account Nominal account (b) (d) Real account None of the three Credits Either (a) or (b) (b) (d) Debits None of the three Abnormal loss on consignment is credited to ______ (a) (c) 17. Preceding working day Other agreed date When money is withdrawn from the bank, the bank _______ the account of the customer. (a) (c) 16. (b) (d) Prepaid salary account is (a) (c) 15. Next working day Holiday itself Trial balance is a statement which shows the ______ or the ______ of all the accounts (a) (c) 14. Credit sales Sales return Account payable normally has balance (a) (c) 13. (b) (d) Capital expenditures are recorded in the (a) (c) 12. Credit purchases Purchase of an asset on credit In case of consignment, abnormal loss is valued at (a) (c) 11. Liabilities None of the three If the date of maturity of a bill is a unforeseen holiday, then bill will mature on (a) (c) 10. (b) (d) Journal proper records (a) (c) 9. Drawings Expenses Profit and Loss account Consignment account (b) (d) Consignees account None of the three (b) (d) Fixed asset None of the three Land and building is a (a) (c) Current asset Fictitious asset 508 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 18. The profits of last three years are Rs. 84,000, Rs. 78,000 and Rs. 90,000. Find out the goodwill of two years purchase. (a) (c) 19. Profit and Loss account None of the above 3:2:1 5:3:2 (b) (d) 1:1:1 5:3:1 At original cost At market value (b) (d) At original cost less depreciation At realizable value Money measurement principle Full disclosure principle (b) (d) Historical cost concept Revenue recognition 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 suppliers. 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) (c) 24. (b) (d) 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) (c) 23. Trading account Balance Sheet When depreciation is recorded by charging to Asset Account, the asset appears(a) (c) 22. Rs. 1,68,000 Rs. 72,000 A & B are partners in a firm, sharing profits and losses in the ratio of 3:2. C was admitted for 1/6 share in the future profits with a capital of Rs. 25,000. The new profit sharing ratio will be (a) (c) 21. (b) (d) Closing inventory of Rs. 19,000 in trial balance will be recorded in (a) (c) 20. Rs. 84,000 Rs. 2,52,000 Rs. 15,000 Rs. 15,700 (b) (d) Rs. 15,500 None of the three If sales revenue is Rs. 5,00,000, cost of goods sold is Rs.3,10,000. The gross profit is (a) (c) Rs. 1,90,000 Rs. 3,10,000 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Rs. 2,00,000 None of the three 509 MODEL TEST PAPER - 19 25. Received a bill from Arun Rs. 5,000 passed through bills payable book. The rectification entry will be (a) (b) (c) (d) 26. (b) (c) (d) 5000 5000 Dr. Dr. 5000 5000 10000 Rs. 1,130 Rs. 1,200 (b) (d) Rs.1,000 None of the three. Accrued Interest To Customer Accrued interest To Interest Cash a/c Dr. To Interest None of the three Dr. Dr. Rs.500 Rs.480 (b) (d) Rs.600 None of the three 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) (c) 30. Dr. 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 inventory will increase by (a) (c) 29. 5000 Interest earned but not received, adjustment entry will be (a) 28. B/R A/c B/P A/c To Arun None of the three Dr. Rs. 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) (c) 27. B/R A/c To Arun Arun To B/R A/c Rs. 5000 Rs.2,000 Rs.2,200 (b) (d) Rs.1,800 None of the three What shall be the commission of the manager if the rate of commission is 5% on net profit before charging such commission and when gross profit is Rs. 48,000 and expenses of indirect nature other than manager s commission is Rs. 6,000? (a) (c) Rs.2,100 Rs.1,500 510 The Institute of Chartered Accountants of India (b) (d) Rs.1,800 None of the three Common Proficiency Test (CPT) Volume - I 31. X sells goods at cost plus 60%. Total sales were of Rs. 16,000. Cost price of goods will be (a) (c) 32. Rs.10,000 Rs.15,000 1 % 3 33 (c) 35% (d) None of the three Rs. 2,500 Rs. 2,000 (b) (d) Rs. 2,400 None of the three Rs. 8,660 Rs. 8,500 (b) (d) Rs. 200 16,500 63,500 46,850 2,500 450 18,210 Rs. 8,600 Rs. 9,000 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) (b) (c) (d) 36. 30% Following balances have been taken from the books of VED & Co. Rs. General expenses 800 Discount allowed Rent paid 3,710 Opening inventory Electric charges 190 Sales Carriage inward 850 Purchases Return outwards 110 Wages Salaries 1110 Sales Return Closing inventory Net profit of the business will be ______ (a) (c) 35. (b) 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) (c) 34. Rs.9,000 None of the three 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 (a) 33. (b) (d) Loss Rs. 6,250 Loss Rs. 6,000 Profit Rs. 2,000 Information is insufficient for any comment 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) (c) Rs.475 Rs.500 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Rs.750 None of the three 511 MODEL TEST PAPER - 19 37. G s trial balance contains the following information Bad debts Rs. 4,000; Provision for doubtful debts Rs. 5,000; Trade receivables Rs. 25,000 It is desired to create a provision for doubtful debts at 10% on Trade receivables at the end of the year. Trade receivables will appear in the balance sheet at (a) (c) 38. Rs. 21,000 Rs. 22,000 (b) (d) Rs. 22,500 None of the three An inexperienced book-keeper has drawn up a trial balance for the year ended 30th June, 2010. Dr. Rs. 200 1,654 2,983 252 1,200 2,155 10,923 314 2,520 2,418 1,175 364 26,158 Provision for Doubtful Debts Bank overdraft Capital Trade payables Trade receivables Discount received Discount allowed Drawings Office furniture General expenses Purchases Return inward Rent and Rates Salaries Sales Inventory Stationary Provision for Depreciation on furniture Total Cr. Rs. 4591 1637 733 829 330 16882 25002 The total of corrected trial balance will be (a) (c) Rs.25,580 Rs.24,000 (b) (d) Rs.25,000 None of the three 39. Balance as per adjusted cash book (i) Cheques issued but not yet presented (ii) Cheques deposited but not collected by bank Balance as per Pass Book will be (a) (c) Rs. 527 Rs. 500 512 The Institute of Chartered Accountants of India (b) (d) Rs. 274 730 477 Rs. 525 None of the three. Common Proficiency Test (CPT) Volume - I 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) (c) 41. Rs. 8,104.50 Rs. 8,100 (b) (d) Rs. 8,000 None of the three Rs. 15,000 Rs. 16,000 (b) (d) Rs. 15,200 None of the three 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 2 % 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 on venture will be (a) (c) 44. Rs. 300 None of the three 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 inventory unsold will be (a) (c) 43. (b) (d) 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) (c) 42. Rs. 400 Rs. 250 Rs. 36,150 Rs. 35,000 (b) (d) Rs. 36,000 None of the three 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) (c) Rs. 500 each Rs. 600 each Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Rs. 400 each None of the three. 513 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 (a) (b) (c) (d) 46. Rs. 300 Dr. 300 Dr. Rs. 300 300 300 300 15:10:5:6 5:6:15:10 (b) (d) 10:15:6:5 None of the three A and B are partners sharing profits in the ratio of 4:1. A surrenders th part of his share and B surrenders part of his share in favour of C, a new partner. Sacrificing ratio of A and B will be ____ (a) (c) 48. Dr. 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) (c) 47. Raja s Current A/c To Mala s Current A/c Raja s Capital A/c To Mala s Capital A/c Mala s Current A/c To Raja s Current A/c None of the three 2:1 1:1 (b)1:2 (d)None of the three 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) (c) 49. Rs.1,02,000 Rs.1,05,000 (b) (d) Rs.1,00,000 None of the three (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) (c) Rs. 1,50,000 Rs. 1,60,000 514 The Institute of Chartered Accountants of India (b) (d) Rs. 1,40,000 None of the three Common Proficiency Test (CPT) Volume - I 50. Bill payable discounted in cash by supplier. This transaction will be recorded in (a) (c) 51. Rs.15,000 None of the three Rs. 30,000 Rs. 28,000 (b) (d) Rs.25,000 None of the three Rs. 3,200 Rs. 2,800 (b) (d) Rs. 3,000 None of the three Rs. 1,500 Rs. 2,000 (b) (d) Rs. 1,800 None of the three 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) (c) 56. (b) (d) 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) (c) 55. Rs.10,000 Rs.12,000 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) (c) 54. Ledger No entry required to be made 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) (c) 53. (b) (d) 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) (c) 52. Journal Bank book 9,000 shares 7,000 shares (b) (d) 8,000 shares None of the three. 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) (c) Rs. 25,000 Rs. 32,000 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Rs.30,000 None of the three 515 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) (c) 58. Rs.12,000 None of the three Rs.1,48,500 Rs.1,45,000 (b) (d) Rs.1,50,000 None of the three Which of the following is correct? (a) (b) (c) (d) 60. (b) (d) (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) (c) 59. Rs.14,000 Rs.10,000 Profit/Loss = Closing Capital + Additional Capital Drawings made Opening Capital Profit/Loss = Closing Capital Drawings Additional Capital -Opening Capital Profit/Loss = Closing Capital Drawings Additional Capital Opening Capital Profit/Loss = Closing Capital + Drawings Additional Capital Opening Capital 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) (c) Rs. 7,500 Rs. 8,000 (b) (d) Rs. 10,000 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) (b) (c) (d) 62. Agreement between one trader with other trader Doctor and patient Father with his son Employer and his employee Which is the example of wagering agreement? (a) (b) (c) (d) To purchase a lottery ticket Speculative trading in stock exchange Horse race All of these 516 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 63. Which of the following statement is true? (a) (b) (c) (d) 64. Which of the following statement is false? (a) (b) (c) (d) 65. A threat to commit suicide does not amount to coercion Undue influence involves use of physical pressure Ignorance of law is no excuse Silence always amounts to fraud a party substitutes a new contract for the old when the parties to a contract agree to rescind it when the parties to a contract agree to alter it. All of these is discharged become unenforceable (b) (d) becomes void None of these Contract of sale means (a) (b) (c) (d) 70. a person of unsound mind all of these On the valid performance of the contractual obligation by the parties the contract is: (a) (c) 69. (b) (d) Which of the example is the case of contracts need not be performed? (a) (b) (c) (d) 68. Minor foreign enemy Which of the following statement is true? (a) (b) (c) (d) 67. a stranger to a contract cannot sue a verbal promise to pay a time barred debt is valid Completed gifts need no consideration No consideration is necessary to create an agency An agreement is not said to be a contract when it is entered into by (a) (c) 66. If there is no consideration, there is no contract Past consideration is no consideration in India Consideration must result in a benefit to both the parties Consideration must be adequate A contract between one person to another for exchange of property in goods A contract between buyer and seller for exchange of property in goods a contract between buyer and seller intending to exchange property in goods for a price All of these Which of the following sentence is true ? (a) (b) (c) (d) There should be immediate delivery of goods There should be immediate payment of price There may be delivery of goods and payment of price on to be made at some future date. All of these Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 517 MODEL TEST PAPER - 19 71. Where there is an agreement to sell specific goods and goods subsequently perish before risk passes to the buyer, the agreement becomes (a) (c) 72. (b) (d) The description only Sample, description and fair price repudiate the contract declare the contract as illegal (b) (d) sue for damages caused to him declare the contract as void Conditions Conditions and warranties both (b) (d) Warranties None of these From status By operation of law (b) (d) As the result of an agreement Both (a) & (c) Only with the consent of all the partners No consent of all the partners With the consent of two third majority of partners With the consent of two partners Goodwill is (a) (b) (c) (d) 79. Sample only Sample and description both In partnership a new partner can be admitted (a) (b) (c) (d) 78. Price Shares and stocks of companies A Joint Hindu Family arises (a) (c) 77. (b) (d) A stipulation essential to the main purpose of the contract is: (a) (c) 76. Goods Immovable property In the case the goods correspond with the sample but do not tally with the description the buyer has right to (a) (c) 75. Voidable None of these 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) (c) 74. (b) (d) Which is not the subject matter of contract of sale ? (a) (c) 73. Void Illegal The value of reputation which the firm establishes overtime The value of reputation which the firm earns due to integrity, efficient service to the customers The value of reputation earned by the firm due to quality of its products, industry etc. All of these Which is appropriate that partner is liable for all acts of the firm done while he is a partner (a) (c) Jointly with all other partners Not liable 518 The Institute of Chartered Accountants of India (b) (d) Severally None of these Common Proficiency Test (CPT) Volume - I 80. A contract dependant on the happening of future uncertain event, is a _______ (a) (c) 81. 20 years 18 years (b) (d) 21 years 25 years Void abinitio Valid (b) (d) Viodable Illegal Time-barred and hence irrecoverable Time barred but recoverable No time-barred None of these Compulsory transfer of possession by one person to another person Voluntary transfer of possession by one person to another Mere transfer of possession by one person to another person All of these The general principle of regarding the transfer of title is that ______ (a) (b) (c) (d) 87. Becomes impossible Either of these Delivery means _____ (a) (b) (c) (d) 86. (b) (d) If a creditor does not file a suit against the buyer for recovery of the price within three years the debt becomes ______ (a) (b) (c) (d) 85. happens Does not happen A contract with the minor which is beneficial for him is ________ (a) (c) 84. Contingent contract Voidable contract For the purpose of entering into a contract, a minor is a person who has not completed the age of _______ (a) (c) 83. (b) (d) A contingent contract depending on the happening of future uncertain event can be enforced when the event. (a) (c) 82. Uncertain contract Void contract The seller can transfer to the buyer of goods a better title than he himself has The seller cannot transfer to the buyer of goods a better title than he himself has The seller can transfer to the buyer of goods no title than the himself has None of these When the owner is estopped for the conduct from denying the sellers authority to sell, the transfer will get _____ (a) (b) (c) (d) A good title as against the true owner A better title as against the true owner No title as against the true owner None of these Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 519 MODEL TEST PAPER - 19 88. When an unpaid seller who had exercised the right of lien resells the goods, the buyer acquires ________ (a) (b) (c) (d) 89. When the time of sending the goods has not been fixed by the parties the seller must send them within ______ (a) (b) (c) (d) 90. The whole of price has not been paid The same part of price has not been paid Half part of price has not been paid 25% of price has not been paid Rights of lien Right of resale (b) (d) Right of stoppage in transit All of these Goodwill and money Harvested crops (b) (d) Stocks and shares Any movable property A contract for sale of future goods is ________ (a) (c) 95. The seller The third party The term goods under Sale of Goods Act, 1930 does not include _________ (a) (c) 94. (b) (d) The unpaid seller has against the goods (a) (c) 93. The buyer The buyer and seller both The seller of goods is deemed to be an unpaid seller when ______ (a) (b) (c) (d) 92. Reasonable time One month of the contract Two months of the contract Before making the contract The expenses of putting the goods into a deliverable state must be bone by ______ (a) (c) 91. A good title to the goods as against the original buyer Better title as against the true buyer No title as against the true owner None of these Sale Hire purchase agreement (b) (d) Agreement to sell Quasi Contract A stipulation in a contract of Sale of goods where violation by seller gives a right of recision to buyer, is called _______ (a) (c) Guarantee Condition 520 The Institute of Chartered Accountants of India (b) (d) Warrantee Term Common Proficiency Test (CPT) Volume - I 96. The Sale of Goods Act, 1930 deals with the ________ (a) (b) (c) (d) 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) (c) 98. (b) (d) Guarantee Agreement to sell 20 persons 10 persons (b) (d) 15 persons 30 persons 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) (b) (c) (d) 100. Condition Warranty The number of partners in firm carrying an banking business should not exceed (a) (c) 99. Movable goods only Immovable goods only Both immovable and movable goods Tangible goods only It is a case of wagering agreement it is a case of future consideration It is a case of contingent contract It is impossible agreement to be performed 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) (b) (c) (d) A is discharged from his obligation A is not discharged from his obligation and is liable to B for damages B can say to A to get manufactured the goods from other party Contract becomes void. SECTION C : GENERAL ECONOMICS (50 MARKS) 101. Which of the following curve cannot be u-shaped? (a) (c) 102. (b) (d) Average variable cost Marginal cost The meaning of the word Economic is most closely connected with the word : (a) (c) 103. Average total cost Average fixed cost Extravagant Unlimited (b) (d) Scarce Restricted The average fixed cost : (a) (b) remains the same whatever the level of output increase as output increases Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 521 MODEL TEST PAPER - 19 (c) (d) 104. Average variable cost curve : (a) (b) (c) (d) 105. Rs.10 Rs.20 (b) (d) Rs.30 Rs.5 at different points at their respective minima (b) (d) at the falling parts of the each curve at the rising parts of each curve downward towards right vertical and parallel to Y-axis upward towards left horizontal and parallel to X-axis The concept of elasticity of demand was developed by : (a) (c) 110. its variable cost will be positive its average cost will be zero Demand curve in most cases slopes (a) (b) (c) (d) 109. (b) (d) The MC curve cuts the AVC and ATC curves (a) (c) 108. its total cost will be zero its fixed cost will be positive 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) (c) 107. slopes downwards at first and then upwards slopes upwards, then remains constant and then falls slopes downwards none of the above If a firm produces zero output in the short period : (a) (c) 106. diminishes as output increases all of the above Alfred Marshall Paul Samuelson (b) (d) Edwin Camon Fredric Bonham Price elasticity of demand is defined as (a) Change in quantity demanded Change in price (b) Proportionate change in quantity demanded Change in price (c) Change in quantity demanded Proportion change in price 522 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I (d) 111. Under marginal utility analysis, utility is assumed to be a (a) (c) 112. inversely related to its quantity not proportional to its quantity independent of its quantity none of the above necessities luxuries (b) (d) comforts capital goods marginal utility starts declining marginal utility become zero marginal utility is equal to marginal utility of money total utility is increasing Indifference curve approach assumes (a) (b) (c) (d) 117. the power of commodity to satisfy wants the usefulness of a commodity the desire for a commodity none of the above Consumer stops purchasing the additional units of the commodity when (a) (b) (c) (d) 116. ordinal concept none of the above Consumer s surplus is the highest in the case of (a) (c) 115. (b) (d) Marginal utility of a commodity depends on its quantity and is (a) (b) (c) (d) 114. cardinal concept indeterminate concept The utility may be defined as (a) (b) (c) (d) 113. Proportion change in quantity demanded Proportion change in price consumer has full knowledge of all relevant information all commodities are homogenous and divisible prices of commodities remain the same throughout the analysis all of the above The substitution effect takes place due to change in (a) (b) (c) (d) income of the consumer prices of the commodity relative prices of the commodities all of the above Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 523 MODEL TEST PAPER - 19 118. Under income effect, consumer (a) (b) (c) (d) 119. In a perfect competitive market : (a) (b) (c) (d) 120. (b) (d) supply production all the times in short-run period (b) (d) in market period in long-run period A perfectly competitive firm has control over (a) (b) (c) (d) 125. demand cost Long-run normal prices is that which is likely to prevail (a) (c) 124. MC = MR MC cuts the MR from below MC is rising when it cuts the MR All of the above Which of the following influences most the price level in the very short-run period? (a) (c) 123. product differentiation multiplicity of prices for identical product at any one time many sellers and few buyers only one price for identical goods at any one time Under the perfect competition a firm will be in Equilibrium when : (a) (b) (c) (d) 122. firm is the price-giver and industry the price taker firm is the price taker and industry the price giver both are the price takers none of the above One of the essential conditions of perfect competition is (a) (b) (c) (d) 121. moves along the original indifference curve moves to higher or lower indifference curve always purchases higher quantities of both the commodities none of the above price production as well as price control over production, price and consumers none of the above By imperfect monopoly, we mean (a) (b) (c) (d) It is possible to substitute the monopolized product with another monopolized product Entry of new firms is possible to produce the same product The amount of output produced is very small None of the above 524 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 126. The demand curve facing an industrial firm under monopoly is a/an (a) (c) 127. under monopoly situation under monopolistic competition (b) (d) under any market firm under perfect competition rising cost curves different elasticities of demand (b) (d) rising and declining cost curves equal elasticities of demand maximum zero (b) (d) minimum not predictable as it has no control over the price of its product to lower its cost of production to increase its sales and profit because it cannot raise price In short run, a firm in monopolistic competition (a) (b) (c) (d) 134. only normal profits none of the above A firm under monopolistic competition advertises : (a) (b) (c) (d) 133. (b) (d) Consumer s surplus left with the consumer under price discrimination is : (a) (c) 132. super normal profits losses Discriminating monopoly is possible if two markets have : (a) (c) 131. Marginal cost and the price Average cost and average revenue Marginal cost and average cost Marginal revenue and average cost Price discrimination is not possible : (a) (c) 130. indeterminate upward sloping A monopoly producer usually earns ______ even in the long run (a) (c) 129. (b) (d) The degree of monopoly power is measured in terms of difference between (a) (b) (c) (d) 128. horizontal straight line downward sloping always earns profits incurs losses earns normal profit only may earn normal profit, super normal profit or incur losses In long-run, all firms in monopolistic competition (a) (b) (c) (d) earn super normal profits earn normal profits incur losses may earn super normal profit, normal profit or in incur losses Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 525 MODEL TEST PAPER - 19 135. Differentiated oligopoly is one where there are (a) (b) (c) (d) 136. Per capita national income means __________ (a) (c) 137. changes in the ownership pattern higher productivity re-distribution of income through fiscal, pricing and other measures all of the above The State Bank of India The World Bank (b) (d) The U.N.O. The Reserve Bank of India division of death rate by birth rate multiplication of death rate by birth rate addition of death rate and birth rate subtraction of death rate from birth rate Infant mortality rate refers to : (a) (b) (c) (d) 142. abundant population abundant natural resources abundant inequalities to distribution of income abundant surplus manpower in agriculture Growth rate of population can be measured by (a) (b) (c) (d) 141. Population / NNP NNP / Population Which is the central bank of India? (a) (c) 140. (b) (d) The most important remedy to the problem of poverty in India is : (a) (b) (c) (d) 139. Total capital / Population Personal Income / Population Which one of the following is not a cause of poverty in India? (a) (b) (c) (d) 138. many sellers producing homogeneous product few sellers producing homogenous product many sellers producing differentiated product few sellers producing differentiated product the number of children dying before reaching the school going age the number of children dying before reaching 3 years of age the proportion of children dying within a year of their birth none of the above Density of population indicates the (a) (b) (c) (d) Capital - and ratio Land - output ratio Land - labour ratio the number of person per square kilometre 526 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 143. Occupational structure refers to the (a) (b) (c) (d) 144. The last All India population census was conducted in the year: (a) (c) 145. (b) (d) 101 crores 117 crores 225 324 (b) (d) 280 330 income of its population size of its population (b) (d) geographical area income of the government changed significantly remained more or less static moved against services and in favour of agriculture shown trends which cannot be titled in any pattern Which of the following is correct? (a) (b) (c) (d) 150. 100 crores 102 crores The occupational structure of India s labour force since 1951 has (a) (b) (c) (d) 149. 2001 1991 The real determinant of the size of market in a country is the (a) (c) 148. (b) (d) According to 2001 census, density of population per square kilometre in India was _____ (a) (c) 147. 2005 2011 The population of India in 2009-10 was more than__________ (a) (c) 146. number of people living in a country size of working force in a country distribution of working force among the different occupations occupations available in a country Nearly half of the population pays income tax in India. Less than 5 percent of population pays income tax in India. India is a zero tax economy Name of the above As per 2001 census, Kerala had _____ females for 1000 males (a) (c) 933 1036 (b) (d) 1006 1058 SECTION D : QUANTITATIVE APTITUDE (50 MARKS) 151. If y = 5xx, then (a) (c) dy is equal to _____ dx 5xx(1 log x) 5xx(1+ log x) Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 5xx 1 None of these 527 MODEL TEST PAPER - 19 152. If y = e ax 3 +bx 2 +cx +d (a) e ax dy is _______ dx (3ax2 + 2bx + c)y (c) then 3 + b x 2 + cx + d (b) 3ax2 + 2bx + c (d) None of these 2 153. 1 x dx is equal to ____ x (a) (b) x3 1 2x + c1 3 x (c) 154. x3 1 + 2x + c1 3 x x3 1 + 2x + + c1 3 x (d) None of these The best method to collect data in case of a natural calamity is ________? (a) (c) 155. (b) (d) 8, 2 6, 4 (b)7, 3 (d)5, 5 For the numbers 1, 2, 3 , n standard deviation is ______ (a) n2 +1 12 (b) (c) 157. Indirect interview All these If the A.M. and G.M. of two observations are 5 and 4 respectively, then the two observations are ________ (a) (c) 156. Telephone interview Personal interview n2 1 12 (d) n2 1 12 None of these 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) (c) 0.40 0.30 528 The Institute of Chartered Accountants of India (b)0.50 (d)None of these Common Proficiency Test (CPT) Volume - I 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 ____. (a) (b) (c) 159. 3 25 1 25 (d)None of these If 15 days are selected at random, then the probability of getting two Fridays are _________ (a) (c) 160. (b)0.19 (d)0.39 [22.543, 23.457] [22.451, 22.523] (b) (d) [22.6421, 23.5481] None of these The value of 5-1(54)1/4 is _________ (a) (c) 162. 0.13 0.29 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) (c) 161. 9 25 1 0 (b)5 (d)None of these The value of 3(256) 1/8 is _________ (a) 2 3 (b) (c) 3 (d)None of these 1 163. 1 2 (b)6 (d)3 log (12 + 22 + 32) is equal to _________ (a) (c) 165. 1 The value of (243) 5 (128) 7 is _________ (a) (c) 164. 3 2 log 12 + log 22 + log 32 log 2 log 7 (b) (d) log 2 + log 7 None of these (b) (d) log (2 3 5 7) None of these log (3 5 7)2 is equal to _________ (a) (c) 2(log 3 + log 5 + log 7) 2(log 3 log 5 log 7) Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 529 MODEL TEST PAPER - 19 166. The solution of the equation x3 5x2 + 6x = 0 is _________ (a) (c) 167. 0, 4, 3 None of these 3, 5, 7 3, 5, 7 (b) (d) 3, 5, 7 3, 5, 7 Imaginary and unequal Real and equal (b) (d) Real and unequal None of these 2, 3 4, 8 (b) (d) 2, 3 None of these x 4x + 1 = 0 x 4x 1 = 0 (b) (d) x + 4x + 1 = 0 None of these First quadrant Third quadrant (b) (d) Second quadrant Fourth quadrant The inequalities x > 0, y < 0 represents _________ (a) (c) 175. (b) (d) The inequalities x < 0, y > 0 represents _________ (a) (c) 174. 1, 4, 3 0, 4, 3 If one root of the quadratic equation is 2 + 3 , the equation is _________ (a) (c) 173. 1, 2, 3 1, 2, 3 The roots of the equation 23 y + 2y 2 3 = 0 are _________ (a) (c) 172. (b) (d) The roots of the equation x2 18x + 81 = 0 are _________ (a) (c) 171. 1, 2, 3 1, 2, 3 The solution of the equation (x 3) (x 5) (x 7) = 0 is _________ (a) (c) 170. 0, 2, 3 None of these The equation x3 x2 12x = 0 is satisfied by _________ (a) (c) 169. (b) (d) The equation y3 7y + 6 = 0 is satisfied by _________ (a) (c) 168. 2, 3 0, 2, 3 First quadrant Third quadrant (b) (d) Second quadrant Fourth quadrant Simple interest on Rs. 50,000 for three years at interest rate of 5.5% p.a. is _________ (a) (c) Rs. 8250 Rs. 8520 530 The Institute of Chartered Accountants of India (b) (d) Rs. 825 None of these Common Proficiency Test (CPT) Volume - I 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) (c) 177. Rs. 3556.20 Rs. 3655.20 (b) (d) Rs. 4881.16 Rs. 4888.16 Rs. 3565 None of these (b) (d) Rs. 4818.16 None of these 10080 5040 (b) (d) 0 None of these 6 4 (b)5 (d)None of these The value of 11P9 is equal to (a) 11 9 2 (b) (c) 183. Rs.243.10 None of these If n + 1 = 20 n 1 , then value of n is (a) (c) 182. (b) (d) 0 7 2 is equal to _________ (a) (c) 181. Rs.2431 Rs.2341 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) (b) 180. Rs. 1210 None of these 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) (c) 179. (b) (d) 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) (c) 178. Rs. 121 Rs. 2110 11 2 9 (d) 11 2 None of these In how many different ways can seven persons stand in a line for a group photograph? (a) (c) 5040 120 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b)720 (d)27 531 MODEL TEST PAPER - 19 184. In how many ways can 11 persons sit at a round table? (a) (c) 185. 60 30 (b) (d) 120 15 2520 1680 (b) (d) 840 None of these 660 300 (b) (d) 330 None of these 453600 45360 (b) (d) 50400 None of these 127 255 (b) (d) 256 None of these 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) (c) 192. 1440 None of these A man has 7 friends, in how many ways can he invite one or more of his friends? (a) (c) 191. (b) (d) How many different arrangements are possible from the letters of the word CALCULATOR? (a) (c) 190. 8640 4320 A Committee of 7 persons is to be formed out of 11. The number of ways of forming such a committee is _________ (a) (c) 189. 10 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) (c) 188. 10 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) (c) 187. (b) (d) 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) (c) 186. 11 11 5 140 35 (b) (d) 105 None of these C1+ 5C2+ 5C3+ 5C4+ 5C5 is equal to _________ (a) (c) 30 32 532 The Institute of Chartered Accountants of India (b) (d) 31 25 Common Proficiency Test (CPT) Volume - I 193. The 20th term of the A.P. 1, 3, 5, 7, .. is (a) (c) 194. 9 8 (b) (d) 2499 9801 (b) (d) 385 384 10 None of these 2501 None of these (b) (d) 386 None of these (b) (d) 4410 44100 The eleventh term of the G.P. (a) (c) 200. 2485 None of these 4410000 None of these The series 13 + 23 + 33 + ... + 203 is equal to (a) (c) 199. (b) (d) The series 12 + 22 + 32 + 42 + ... + 102 is equal to (a) (c) 198. 2484 2486 The sum of the series 1, 3, 5, 7, . , 99 is equal to _________ (a) (c) 197. 37 None of these The Arithmetic mean between 5 and 13 is _________ (a) (c) 196. (b) (d) The sum of the series 1,2,3,4, .., 70 is equal to _________ (a) (c) 195. 39 35 1 , 1, 2, 2 , . nth term is 2 512 1024 (b) (d) 256 None of these The sum of the series 1,2,4,8, . nth term to 10 term is (a) (c) 1024 1025 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 1023 None of these 533 Model Test Paper BOS/CPT-19 SECTION A : FUNDAMENTALS OF ACCOUNTING 1 (a) 2 (a) 3 (a) 4 (c) 5 (a) 6 (b) 7 (a) 8 (c) 9 (a) 10 (a) 11 (b) 12 (b) 13 (d) 14 (a) 15 (b) 16 (c) 17 (b) 18 (b) 19 (c) 20 (a) 21 (b) 22 (b) 23 (d) 24 (a) 25 (c) 26 (a) 27 (b) 28 (a) 29 (a) 30 (a) 31 (a) 32 (a) 33 (a) 34 (a) 35 (a) 36 (a) 37 (b) 38 (a) 39 (a) 40 (b) 41 (a) 42 (b) 43 (a) 44 (a) 45 (d) 46 (a) 47 (a) 48 (a) 49 (a) 50 (d) 51 (a) 52 (a) 53 (a) 54 (a) 55 (d) 56 (b) 57 (a) 58 (a) 59 (d) 60 (a) SECTION B : MERCANTILE LAWS 61 (b) 62 (a) 63 (a) 64 (b) 65 (d) 66 (c) 67 (d) 68 (a) 69 (c) 70 (c) 71 (a) 72 (c) 73 (c) 74 (a) 75 (a) 76 (d) 77 (a) 78 (d) 79 (a) 80 (b) 81 (a) 82 (c) 83 (c) 84 (a) 85 (b) 86 (b) 87 (a) 88 (a) 89 (a) 90 (b) 91 (a) 92 (d) 93 (a) 94 (b) 95 (c) 96 (a) 97 (c) 98 (c) 99 (b) 100 (b) Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 599 ANSWERS SECTION C : GENERAL ECONOMICS 101 (c) 102 (b) 103 (c) 104 (a) 105 (c) 106 (a) 107 (c) 108 (a) 109 (a) 110 (d) 111 (a) 112 (a) 113 (a) 114 (a) 115 (c) 116 (d) 117 (c) 118 (b) 119 (b) 120 (d) 121 (d) 122 (a) 123 (d) 124 (d) 125 (a) 126 (c) 127 (a) 128 (a) 129 (d) 130 (c) 131 (c) 132 (c) 133 (d) 134 (b) 135 (d) 136 (d) 137 (b) 138 (d) 139 (d) 140 (d) 141 (c) 142 (d) 143 (c) 144 (c) 145 (d) 146 (c) 147 (a) 148 (b) 149 (b) 150 (d) SECTION D : QUANTITATIVE APTITUDE 151 (c) 152 (a) 153 (b) 154 (c) 155 (a) 156 (b) 157 (a) 158 (b) 159 (a) 160 (a) 161 (a) 162 (c) 163 (b) 164 (d) 165 (a) 166 (c) 167 (a) 168 (b) 169 (a) 170 (c) 171 (b) 172 (a) 173 (b) 174 (d) 175 (a) 176 (b) 177 (a) 178 (c) 179 (a) 180 (a) 181 (c) 182 (b) 183 (a) 184 (b) 185 (a) 186 (d) 187 (a) 188 (b) 189 (a) 190 (c) 191 (a) 192 (b) 193 (a) 194 (b) 195 (a) 196 (c) 197 (a) 198 (c) 199 (a) 200 (b) 600 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I

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Additional Info : Chartered Accountancy ICAI India : Common Proficiency Test CPT - Volume 1, Model Test Paper 19 with Answers
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