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CA CPT : Volume 1 - Model Test Paper 14 (with Answers)

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BOARD OF STUDIES THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA COMMON PROFICIENCY TEST Model Test Paper BOS/CPT 14 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. SECTION A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. Commission received in advance account has a 2. (a) Credit balance (c) Negative balance Insurance unexpired account is a 3. (b) (d) A transaction Neither a transaction nor an event Ownership transfer Stock outflow (b) (d) Money received Risk What is the order in which the accounting transactions and events are recorded in the books? (a) (b) (c) (d) 6. An event A transaction as well as an event Out of the following at which point the treatment of Sales and Consignment is same: (a) (c) 5. Debit balance None of the above (a) Personal account (b) Real account (c) Nominal account (d) None of the above On March 31, 2010 Narain Enterprises purchased a loader from Laxmi Motors for Rs. 1,75,000 which is shown in the balance sheet as on 31st March, 2010. This is (a) (c) 4. (b) (d) Journal, subsidiary books, P/L A/c and Ledger Ledger, Journal, Balance Sheet and Profit and Loss A/c Journal, Ledger P/L A/c and Balance Sheet P/L A/c, Ledger and Balance Sheet Withdrawal column of the Pass Book showed a wrong entry of Rs. 112. When the balance as per Cash Book is the starting point. (a) (c) Rs 112 to be added No adjustment is required Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Rs 112 to be Subtracted None of these 371 MODEL TEST PAPER - 14 7. B/R is a (a) (c) 8. 29.05.2010 27.05.2010 Profit and Loss Account P/L appropriation account (b) (d) Trading account None of the three When separate set of joint venture books is prepared When each co-venture keeps records of all the joint venture transactions himself When each co-venture keeps records of their own joint venture transactions None of the above To be recognised as liability (b) To be disclosed as a contingent liability (d) To be recognised as provision None of these The party who sends the goods for sale on fixed commission basis is (a) (c) 15. (b) (d) If a reliable estimate of probable outflow of resources to settle a present obligation cannot be made, it is(a) (c) 14. 30.05.2010 28.05.2010 Memorandum joint venture account is prepared (a) (b) (c) (d) 13. Wages paid to Ram has been debited to his account The total of purchase journal has not been posted to purchase A/c Sales to X Rs. 20, posted to his A/c as Rs. 2 Furniture purchased on credit from Nigam for Rs. 300 posted to Machinery Account Balance of goods sent on consignment account is transferred to (a) (c) 12. Reserve for doubtful debts account Outstanding wages Capital account (Machinery brought in business) Loan to contractor A bill has been drawn on 26.02.2010 payable after 90 days. The maturity date of the bill will be (a) (c) 11. Fixed asset Intangible asset Which of the following error is an error of principle? (a) (b) (c) (d) 10. (b) (d) Which of the following account will have debit balance? (a) (b) (c) (d) 9. Current asset Fictitious asset Consignee Drawee (b) (d) Consignor Drawer If the incoming partner brings any additional amount in cash other than his capital contribution, then it is termed as (a) (c) Capital Goodwill 372 The Institute of Chartered Accountants of India (b) (d) Reserves Premium for goodwill Common Proficiency Test (CPT) Volume - I 16. Discounting, endorsement and collection of bills of exchange is made by (a) (c) 17. (b) (d) Purchases Capital Trading account Profit and Loss Account Profit and Loss appropriation A/c Balance Sheet Purchase Book Journal Proper (b) (d) Cash Book None of the above Declaring dividend (b) Issue of bonus shares Writing off preliminary expenses. Paying premium on redemption of preference shares. Receipt of order Delivery of goods (b) (d) Production of goods Purchase of raw material Ramesh drew a 45 days bill on Komal on 25th Jan., 2011. The bill falls due on (a) (c) 24. Sales Expenses A places an order to B for supply of certain goods yet to be manufactured. On receipt of order B purchases raw material, employs workers, produces the goods and delivers them to A. In this case, sale will be presumed to have been made at the time of (a) (c) 23. Sales None of the three Securities premium account should not be used for which of the following purposes (a) (c) (d) 22. (b) (d) Purchase of fixed assets on credit basis is recorded in (a) (c) 21. Capital Purchases The trial balance of M/s Narain Manufacturers shows closing inventory of Rs. 30,000. It will be recorded in (a) (b) (c) (d) 20. Drawee Supplier (credited) Drawings are deducted from (a) (c) 19. (b) (d) Sales returns appearing in the trial balance are deducted from (a) (c) 18. Drawer Bank March 14 March 10 (b) (d) Feb. 28 None of the three Birbal drew a three month bill on Satyapal for Rs. 5,000. On due date Satyapal approached Birbal to renew the bill for another month @ 12% p.a. Amount of the new bill will be (a) (c) Rs. 5,000 Rs. 4,050 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Rs. 5,050 None of the three 373 MODEL TEST PAPER - 14 25. Preet accepted a 90 days bill of Rs. 10,000 drawn by Jeet on 05.02.2010. On 13.03.2010, Preet wished to retire the bill. Jeet offered rebate @ 12% p.a. Considering the year of 360 days, rebate amount will be (a) (c) Rs. 150 Rs. 184 26. (b) (d) Rs. 180 None of the three Consignment Account To Goods sent on consignment (at invoice price) 1,00,000 By Consignee A/c (Sales) 1,50,000 To Consignee s A/c (indirect expenses) 40,000 By Inventory at Invoice price 10,000 To Profit 20,000 1,60,000 1,60,000 Consignor charged 25% profit on cost while sending the goods on consignment. Rectify the above A/c. Correct profit on consignment will be (a) (c) 27. Rs. 35,000 Rs. 40,000 Rs. 4,500 Rs. 4,000 (b) (d) Rs. 4,575 None of the three X consigned 100 packets of cosmetics each costing Rs. 300 to his agent at Bareilly. He paid Rs. 500 towards freight and insurance. 15 packets were destroyed in the way. Consignee took delivery of the remaining packets and spent Rs. 700 as godown rent, Rs. 1,000 as clearing charges and Rs. 300 as carriage inwards. The agent sells away 70 packets. Inventory amount will be (a) (c) 29. (b) (d) X consigned 100 packets of cosmetics each costing Rs. 300 to his agent at Bareilly. He paid Rs. 500 towards freight and insurance. 15 packets were destroyed in the way. Consignee took delivery of the remaining packets and spent Rs. 700 as godown rent, Rs. 1,000 as clearing charges and Rs. 300 as carriage inwards. Cost of damage will be (a) (c) 28. Rs. 38,000 Rs. 30,000 Rs. 4,500 Rs. 4,651 (b) (d) Rs. 4,751 None of the above ELDER and LARGE enter into a joint venture sharing profits and losses equally. ELDER supplied goods to the value of Rs. 2,500 and incurred expenses of Rs. 200. LARGE supplied goods to the value of Rs. 2,000 and his expenses amounted to Rs. 150. LARGE sold the entire lot of goods on behalf of the joint venture and realized Rs. 6,000. LARGE was entitled to a commission of 5% on sales. Profit on the venture (a) (c) Rs. 850 Rs. 900 374 The Institute of Chartered Accountants of India (b) (d) Rs. 800 Rs. 1,000 Common Proficiency Test (CPT) Volume - I 30. Hardcore Computers Ltd. issued to public 15,000 shares of Rs. 10 each at a premium of Rs. 2. Applications were received for 10,000 shares. The amount payable was as follows: On application Rs. 3 per share On allotment Rs. 4 per share (including premium) On first and final call Rs. 5 per share All sums were duly received by the company except the following: Mr. Perfect holder of 100 shares did not pay allotment and call money. Mr. Right holder of 200 shares did not pay call money. The company forfeited all the shares of Mr. Perfect. Share Capital a/c will be debited by (a) (c) 31. Rs. 900 None of the three Profit Rs. 8,000 Profit Rs. 10,000 (b) (d) Loss Rs. 16,000 Loss Rs.15,000 J and R are equal partners U is admitted as a partner for share of profits but is unable to contribute premium for goodwill in cash amounting to Rs. 8,000 and so it is decided to raise a loan A/c in the name of U. Journal entry will be (a) (b) (c) (d) 33. (b) (d) A and B are doing business separately as building contractors. They undertook jointly to construct a building for a newly started joint stock company for a contract price of Rs. 2,00,000. A Bank A/c is opened in their joint names; A depositing Rs. 50,000 and B Rs. 30,000. They will share profits and losses in ratio of 2/3 and 1/3 respectively. Their transactions were as follows: Paid wages Rs. 60,000 Brought materials Rs. 1,62,000 Contract was completed and the price was duly received. B took inventory of materials for the Rs. 6,000. Profit or loss on joint venture will be (a) (c) 32. Rs. 1,000 Rs. 800 U s loan A/c To J U s loan A/c To R U s Loan A/c To J To R None of the three Dr. 8,000 Dr. 4,000 Dr. 8,000 8,000 4,000 4,000 4,000 Amit, Rohit and Sumit are partners sharing profits and losses in the ratio of 5:4:3. Sumit retires and if Amit and Rohit shares profits of Sumit in 4:3, then new profit sharing ratio will be (a) (c) 4:3 5:4 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 47:37 5:3 375 MODEL TEST PAPER - 14 34. Rachna and Sapna are partners sharing profits equally. They admitted Ashana for 1/3rd share in the firm. The new profit sharing ratio will be (a) (c) 35. (b) (d) Rs. 12,00,000 Nil Rs. 10,000 Rs. 12,000 (b) (d) Rs. 10,500 Rs. 11,000 Rs. 15,000 None of the above Rs. 13,500 Rs. 3,000 Rs. 6,000 (b) (d) Rs. 10,000 None of the three Trade payables for goods amounting to Rs. 50,000 are not responding during the last five years and payment for the same may not be made by the concern. Journal entry will be (a) (b) (c) (d) 39. Rs. 68,00,000 Rs. 11,88,000 Bank overdraft as per Cash Book Cheque deposited but not credited Cheque issued but not presented Overdraft as per bank statement will be (a) (c) 38. 2:2:1 Cannot be calculated Following figures have been taken from the trial balance of a trader Cost of goods sold Rs. 30,000 Sales Rs. 40,000 Closing inventory Rs. 5,000 The amount of profit will be (a) (c) 37. (b) (d) Find the goodwill of the firm using capitalization method from the following information: Total capital employed in the firm Rs. 80,00,000 Reasonable rate of return 15% Profits for the year Rs. 12,00,000 (a) (c) 36. 3:2:1 1:1:1 Suppliers (creditors) A/c To P/L A/c P/L A/c To Suppliers (creditors) Suppliers (creditors) A/c To Cash A/c None of the three Dr. 50,000 Dr. 50,000 Dr. 50,000 50,000 50,000 50,000 Net salary paid to employees Rs. 45,000 in cash after deducting income tax Rs. 1,000, professional tax Rs. 200, employees provident fund Rs. 2,000, staff welfare fund Rs. 100 and recovery of loan Rs. 1,700. Salary A/c will be debited with (a) (c) Rs. 50,000 Rs. 48,000 376 The Institute of Chartered Accountants of India (b) (d) Rs. 45,000 None of the three Common Proficiency Test (CPT) Volume - I 40. Dividend received (net) Rs. 9200 for which tax deducted at source is Rs. 800. Dividend A/c will be credited with (a) (c) 41. (b) (c) (d) Rs. 9,200 None of the three Suppliers (creditors) A/c To A Suppliers (creditors) A/c To A To B A s Capital B s Capital C s Capital To Suppliers (creditors) None of the three Dr. 60,000 60,000 Dr. 60,000 30,000 30,000 Dr. Dr. Dr. 20,000 20,000 20,000 60,000 Dismantling and demolition charges is a _______ (a) (c) 43. (b) (d) Good purchased on credit during last year worth Rs. 60,000 were not recorded in the books of a partnership firm namely ABC and Co. whose profit is shared equally by A, B and C, but the said amount was included in last year s closing inventory figure. Adjusting entry will be (a) 42. Rs. 10,000 Rs. 9,000 Capital expenditure Deferred revenue expenditure (b) (d) Revenue expenditure None of the three There was an error in the trial balance. Difference was put to Suspense A/c. Later on, it was found that the opening inventory of Rs. 1,080 was brought into the books as Rs. 1,800. Rectifying entry will be (a) (b) (c) Suspense A/c To Opening inventory Opening inventory A/c To Suspense A/c Trading A/c To Opening inventory Dr. 720 Dr. 720 Dr. 720 720 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 720 720 377 MODEL TEST PAPER - 14 44. The profits for the last four years are given as follows Year Rs. 2006 40,000 2007 50,000 2008 60,000 2009 50,000 The value of goodwill on the basis of 3 years purchase of average profits based on the last four years will be (a) (c) 45. (b) (d) 12,000 shares None of the three. Profit Rs. 2,400 Loss Rs. 2,406 (b) (d) Profit Rs. 2,300 Loss Rs. 3,219 Rs. 2,40,000 Rs. 2,50,000 (b) (d) Rs. 2,00,000 None of the three Net Profit before charging manager commission is Rs. 22,000 and the manager is to be allowed a commission of 10% on the profit after charging such commission. Commission amount will be (a) (c) 49. 10,000 shares 9,000 shares The plant and machinery account of a firm had a debit balance of Rs. 1,47,390 as on 31st December, 2009. On 1st Jan., 2006 Co. started business and has been following the practice of charging full year s depreciation every year on Diminishing balance method @ 15%. Cost of machinery on 01.01.2006 will be (a) (c) 48. Rs. 1,50,000 None of the three In Jan., 2006 a trader purchased furniture for Rs. 10,000 Depreciation is charged @ 25% Diminishing balance. At the end of the third year it was sold for Rs. 1,000. Profit or loss as sale will be _______ (a) (c) 47. (b) (d) G. Ltd. acquired assets worth Rs. 1,50,000 from AB Ltd. by issue of shares of Rs. 10 each at a premium of Rs. 5. The number of shares to be issued by G. Ltd. to settle the purchase consideration will be (a) (c) 46. Rs. 1,00,000 Rs. 2,00,000 Rs. 2,000 Rs. 2,200 (b) (d) Rs. 18,000 None of the three X Co. Ltd. issued 1,00,000 debentures of Rs. 100 each at a discount of 4% redeemable after 5 years at a premium of 6%. Loss on issue of debentures will be (a) (c) Rs. 10,00,000 Rs. 16,00,000 378 The Institute of Chartered Accountants of India (b) (d) Rs. 6,00,000 Rs. 4,00,000 Common Proficiency Test (CPT) Volume - I 50. Rishi is a partner in a firm. He withdrew the following amounts during the year ended on 31st December, 2009. February 1 April 30 June 30 August 31 October 1 December 31 Interest on drawings @ 9% p.a. will be (a) (c) 51. Rs. 18,000 Rs. 16,000 (b) (d) Rs. 15,000 None of the three Rs. 18,400 Rs. 15,000 (b) (d) Rs. 18,000 None of the three A partner is admitted A business is sold out (b) (d) A partner retires A partner is insolvent A limited company forfeited 100 equity shares of the face value of Rs. 10 each, for nonpayment of first call of Rs. 2 per share. The forfeited shares were subsequently reissued as fully paid @ 7 each. Amount transferred to capital reserve will be (a) (c) 55. Rs. 2,000 None of the above Gaining ratio may be applied when (a) (c) 54. (b) (d) 9,000 Depreciation at 5% on office furniture of Rs. 8,000; at 10% on plant and machinery of Rs. 80,000 and at 5% on factory building of Rs. 2,00,000 have been charged by the entrepreneur during the year. Total amount of depreciation will be (a) (c) 53. Rs. Rs. Rs. 12,000 6,000 Rs. 12,000 8,000 7,000 Interest on capital at 6% p.a. is to be allowed. Capital in the beginning was Rs. 3,00,000. Interest amount will be (a) (c) 52. Rs. 2,295 Rs. 2,200 Rs. Rs. Rs. 500 Rs. 300 (b) (d) Rs. 200 None of the three Z Ltd. purchased plant and machinery for Rs. 2,00,000 payable as Rs. 65,000 in cash and the balance by an issue of 6% debentures of Rs. 1,000 each at a discount of 10%. Discount on issue of debentures will be (a) (c) Rs. 15,000 Rs. 10,000 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Rs. 14,000 None of the three 379 MODEL TEST PAPER - 14 56. A firm had an unrecorded investment of worth Rs. 5,000. Entry in the firms journal on admission of a partner will be (a) (b) (c) (d) 57. Dr. 5,000 Dr. 5,000 5,000 5,000 5,000 Rs. 400 Rs. 800 (b) (d) Rs. 600 None of the three Rs. 250 Rs. 600 (b) (d) Rs. 900 None of the three A company issued Rs. 2,00,000 15% debentures at a discount of 5% redeemable after 10 years at a premium of 10%. Loss on issue of debentures will be (a) (c) 60. 5,000 Alok Ltd. forfeited 300 shares of Rs. 10 each fully called up held by Ram for non payment of allotment money of Rs. 3 per share and final call money of Rs. 4 per share. Out of these shares 250 were reissued to Sohan for a total payment of Rs. 2,000. Amount transferred to capital reserve account will be (a) (c) 59. Dr. A company issued debentures of the face value of Rs. 1,00,000 at a discount of 6% on Jan. 1, 2009. These debentures are redeemable by annual drawings of Rs. 20,000 made on 31st Dec. each year. The directors decided to write off discount based on the debentures outstanding each year. Amount of discount to be written off in the 5th year will be (a) (c) 58. Unrecorded Investment A/c To Revaluation A/c Revaluation A/c To Unrecorded Investment Partner Capital a/c To Unrecorded Investment None of the three Rs. 30,000 Rs. 20,000 (b) (d) Rs. 15,000 None of the three A, B & C are partners sharing profits & losses in equal ratio. A paid firm s liability of Rs. 10,000 out of his private funds. How will you record this in firm s books? (a) No entry will be made in the books of the firm (b) A s Capital A/c Dr. Rs. 10,000 To Liability A/c Rs. 10,000 (c) Liability A/c Dr. Rs 10,000 To A s Capital Rs. 10,000 (d) Liability A/c Dr. Rs. 10,000 To All Partner s Capital A/c Rs. 10,000 SECTION B : MERCANTILE LAWS (40 MARKS) 61. An agreement made without consideration is valid under the Indian Contract Act, 1872 if (a) The agreement is expressed in writing 380 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I (b) (c) (d) 62. As per the Indian Contract Act, 1872 every person is competent to contract provided he: (a) (b) (c) (d) 63. (b) (d) Voidable Illegal Coercion Misrepresentation (b) (d) Undue Influence Fraud Quasi Contract Wagering agreement (b) (d) Contingent Contract Voidable Contract General Offer Counter Offer (b) (d) Cross Offer Special Offer An agreement to pay money s worth on the happening or non-happening of a specified uncertain event, is a (a) (c) 69. Void Valid When offer is made to a definite person, it is known as (a) (c) 68. Agent Bailee A agrees to pay Rs. 1,000 to B if it rains, and B promises to pay a like amount to A, if it does not rain, this agreement is called (a) (c) 67. (b) (d) Moral pressure is involved in the case of (a) (c) 66. Principal Servant When the consent of a party is not free, the contract is (a) (c) 65. Is of the age of majority according to law to which he is subject Is of sound mind Is not disqualified from contracting by any law to which he is subject All of the above A person employed to do any act for another or to represent and another in dealings with the third parties is: (a) (c) 64. The agreement is made on account of natural love and affection of the parties to the agreement stand in a near relation to each other The document is registered under the law for the time being in force for registration of such document All of the above Wagering agreement Quasi contract (b) (d) Contingent contract Uncertain agreement A contingent contract dependent on the happening of specified uncertain event within fixed time can be enforced if the event (a) (b) Does not happen within fixed time Becomes impossible before the expiry of fixed time Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 381 MODEL TEST PAPER - 14 (c) (d) 70. Essentials of Contract of Sale are (a) (c) 71. (d) (d) In case of this collateral agreement are void Not enforceable in a court of law An agreement enforceable by law at the option of one or more of the parties thereon but not at the option of the other or others Enforceable at the option of the parties Becomes the owner of such money or those goods Is allowed to sell the goods and retain the money realized from such sale Has no obligation to return the money, he may do so only a good gesture Must repay the money or return those goods Condition as to title Sale by sample (b) (d) Sale by description All of the above A minor may be: (a) (b) (c) (d) 76. Has a right to become a partner in the firm of the deceased partner Does not have a right to become a partner in the firm of the deceased partner Can becomes a partner in the firm of the deceased partner only if the surviving partners give their consent in this regard Both (b) and (c) Following conditions are implied in a Contract of Sale of Goods unless the circumstances of the contract show a different intention: (a) (c) 75. Subject matter must be goods Both (a) and (b) A person to whom money has been paid, or anything delivered under coercion (a) (b) (c) (d) 74. (b) (d) Valid contract: (a) (b) (c) 73. At least 2 parties None of the above The heir of the deceased partner (a) (b) (c) 72. Happened within the fixed time Both (a) and (b) A partner of a firm Representative of the firm Entitled to carry on the business of the firm Admitted to the benefits of the partnership A partnership firm is compulsorily dissolved where (a) (b) (c) (d) All partners have become insolvent Firm s business has become unlawful The fixed term has expired In cases (a) and (b) only 382 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 77. A partnership may be registered with (a) (c) 78. (d) Promisee or any other person Promisor (b) (d) Promisee An independent person Physical force Moral pressure (b) (d) Mental pressure Threat Liability for special damages Liability for nominal damages (b) (d) Liability for exemplary damages Liability for disciplinary damages Substituting a new contract for the old one Cancellation of the old contract Modifying or altering the terms of contract so that it has the effect of substituting a new contract for the old one Dispensing away the performance of the promise made by the other party A _______ agreement is one, which is enforceable at the option of one party (a) (c) 85. Sleeping partner All of the above Recission means _______ (a) (b) (c) 84. (b) (d) _______ does not exist (a) (c) 83. Active partner Nominal partner Coercion involves _______ (a) (c) 82. Dissolution by the adjudication of all the partner or of all the partner but one as insolvent Dissolution as a result of any agreement between all the partners Dissolution by the business of the firm becoming unlawful All of the above There can be a stranger to a consideration but a stranger to a contract signifies that a consideration may move from _______ (a) (c) 81. Registrar of partners District court Types of partner includes (a) (c) 80. (b) (d) Dissolution by agreement is: (a) (b) (c) (d) 79. Registrar of companies Registrar of firms Voidable Valid (b) (d) Void Illegal The position of stranger to a contract and that of stranger to consideration is _______ (a) (c) Partially different Entirely different Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Partially same Same 383 MODEL TEST PAPER - 14 86. Agreement to share profits _______ (a) (b) (c) (d) 87. A person who is mentally deranged due to same mental strain or other personal experience and suffers from intermittent intervals of sanity and insanity is _______ (a) (c) 88. Ratification All of the above The buyer may take delivery of them The buyer would, under contract, be bound to take delivery of them The seller is in a position to deliver them All of the above A wagering contract A contingent contract A wagering contract plus a contingent contract Neither a contingent contract nor a wagering contract Right against the goods Right of re-sale (b) (d) Right of stoppage in transit All of the above Sells goods Sells or agree to sell goods (b) (d) Agrees to sell goods Has sold goods Where in an auction sale, the seller appoints more than one bidder, the sale is _______ (a) (c) 94. (b) (d) Seller means a person who _______ (a) (c) 93. Express or implied agreement Operation of law Rights of an unpaid seller include _______ (a) (c) 92. Lunatic person All of the above A contract to pay B Rs. 2,00,000/- if B s house is destroyed by fire. It is _______ (a) (b) (c) (d) 91. (b) (d) Goods are said to be in a deliverable state when _______ (a) (b) (c) (d) 90. Idiot person Intoxicated person The relationship of principal and agent may arise by _______ (a) (c) 89. Implies an agreement to share losses Does not necessarily mean an agreement to share losses Must be coupled with an agreement to share losses Is same as agreement to share losses Void Conditional (b) (d) Illegal Voidable In a contract of sale _______ (a) (b) (c) (d) Delivery of goods & payments of price are concurrent conditions Delivery of goods to be made first Payment of price to be made first Both (b) & (c) 384 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 95. A person who finds goods belonging to another and takes them into his custody _______ (a) (b) (c) (d) 96. Each of the partner is _______ (a) (c) 97. Only agents of the firm Only co-partners of the firm Sharing of profits Sharing of profits and losses Mutual agency Existence of an agreement to share profits of the business Compulsory Occasional (b) (d) Optional None of the above A contracted with Housing Corporation for construction of number of houses. In calculating his price for the houses, A by mistake deducted a particular sum twice over. The Corporation affixed its seal to the contract, which correctly represented its intention. (a) (b) (c) (d) 100. (b) (d) Registration of firm is _______ (a) (c) 99. Principals as well agents Only representatives of the firm True test of partnership is (a) (b) (c) (d) 98. Becomes the owner of those goods thereafter Is subject to the same responsibility as a bailee Is allows to sell them and retain the money realized from such sale Has no obligation to return those goods, he may do so only as a good gesture The contract is now binding The contract can be avoided by A There is no contract at all since there is no consensus ad idem The contract is not binding A had offered B, a price of Rs. 10,000/- for B s flat but B was not ready to sell the flat at all. A says to B that I shall kill you if you do not agree to sell me your house for Rs.10,000/- . B thereafter did all that was the desire of A in order to save his life. What is immediate answer? (a) (c) A can enforce the contract A has applied coercion (b) (d) B can enforce the contract The contract is unenforceable SECTION C : GENERAL ECONOMICS (50 MARKS) 101. Which (a) (b) (c) (d) 102. Labour intensive technique would get chosen in a : (a) (c) of the following is the best general definition of the study of Economics? Inflation and unemployment in a growing economy Business decision making under foreign competition Individual and social choice in the face of scarcity The best way to invest in the stock market Labour surplus economy Developed economy Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Capital surplus economy Developing economy 385 MODEL TEST PAPER - 14 103. Which of the following is not one of the four central questions that the study of economics is supposed to answer? (a) (c) 104. One s choices be arrived at logically and without errors One s choices be consistent with one s goals One s choices never vary One s makes choices that do not involve trade offs Decrease in the number of consumers Increase in the price of the good concerned Increase in the prices of other goods Decrease in the income of purchasers 0 1.5 (b) (d) 1 2 Remain the same Decrease (b) (d) Increase Any of these All of the following are determinants of demand except (a) (c) 110. Production curve Production possibilities curve If the demand for a good is inelastic, an increase in its price will cause the total expenditure of the consumers of the good to: (a) (c) 109. (b) (d) In the case of a straight line demand curve meeting the two axes the price elasticity of demand at the mid-point of the line would be: (a) (c) 108. Demand curve Supply Curve Contraction of demand is the result of: (a) (b) (c) (d) 107. When are goods produced? How are goods produced? Rational decision making requires that: (a) (b) (c) (d) 106. (b) (d) The various combinations of goods that can be produced in any economy when it uses its available sources and technology efficiently are depicted by: (a) (c) 105. Who produces what? Who consumes what? tastes and preferences income (b) (d) quantity supplied price of related goods The price of hot dogs increases by 22% and the quantity of hot dog demanded falls by 25% this indicates that demand for hot dog is (a) (c) elastic unitarily elastic 386 The Institute of Chartered Accountants of India (b) (d) inelastic perfectly elastic. Common Proficiency Test (CPT) Volume - I 111. If electricity demand is inelastic, and electric rates increase, which of the following is likely to occur? (a) (b) (c) (d) 112. An indifference curve slopes down towards right since more of one commodity and less of another results in : (a) (c) 113. (b) (d) Marginal cost curve Average fixed cost curve ATC = AFC = AVC AFC = ATC + AVC (b) (d) AVC = AFC + ATC AFC = ATC AVC Rs. 60 Rs. 40 (b) (d) Rs. 30 Rs. 20 Up to six month from now As long as all inputs are fixed (b) (d) Up to five years from now As long as at least one input is fixed What is the shape of the demand curve faced by a firm under perfect competition? (a) (c) 119. Average cost curve Average variable cost curve In describing a given production technology, the short run is best described as lasting: (a) (c) 118. zero infinity equal to one greater than zero but less than infinity A firm s average fixed cost is Rs. 20 at 6 units of output. What will it be at 4 units of output? (a) (c) 117. greater satisfaction decreasing expenditure Which of the following statements is true of the relationship among the average cost functions? (a) (c) 116. (b) (d) Which of the following cost curves in never U shaped? (a) (c) 115. same satisfaction maximum satisfaction A vertical supply curve parallel to Y axis implies that the elasticity of supply is: (a) (b) (c) (d) 114. Quantity demanded will fall by a relatively large amount Quantity demanded will fall by a relatively small amount Quantity demanded will rise in the short run, but fall in the long run Quantity demanded will fall in the short run, but rise in the long run Horizontal Positively sloped (b) (d) Vertical Negatively sloped Which is the first order condition for the profit of a firm to be maximum? (a) (c) AC = MR MR = AR Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) MC = MR AC = AR 387 MODEL TEST PAPER - 14 120. In which form of the market structure is the degree of control over the price of its product by a firm very large? (a) (c) 121. Monopolistic Oligopolistic AC = AR MC = AC (b) (d) MC = MR AR = MR Wheat revolution Maize revolution (b) (d) Rice revolution Forest revolution Remained constant Increased (b) (d) Decreased First increased and then decreased Industrial reforms in India Land reforms in India (b) (d) External sector reforms in India Banking reforms in India Remained constant Decreased (b) (d) Increased First increased and then decreased Which of the following has been specifically established to meet the requirements of credit of the farmers and villagers? (a) (c) 129. (b) (d) In absolute terms, the number of people engaged in agricultural activities over the planning period has (a) (c) 128. Perfectly competitive Monopolistically competitive Abolition of Intermediaries and tenancy reforms are both part of : (a) (c) 127. Price rigidity Collusion among rivals The area under irrigation has over the years in India (a) (c) 126. (b) (d) The green revolution is also known as : (a) (c) 125. Price and output determination Price leadership When ____________ we know that the firm are earning just normal profits: (a) (c) 124. Imperfect competition Perfect competition The structure of the tooth paste industry in India is best described as: (a) (c) 123. (b) (d) The kinked demand hypothesis is designed to explain in the context of oligopoly (a) (c) 122. Monopoly Oligopoly ICICI Bank State Bank of India (b) (d) Regional Rural Banks EXIM Bank Mahalanobis model stressed upon the establishment of: (a) (c) Consumer goods industries Agro-based industries 388 The Institute of Chartered Accountants of India (b) (d) Export oriented industries Capital and basic goods industries Common Proficiency Test (CPT) Volume - I 130. About ______________ per cent of the sick units in India are small units. (a) (c) 131. (b) (d) More than 70 per cent of GDP More than 90 per cent of GDP Bharat Petro Organisation Big Portfolio Outsourcing (b) (d) Business Process Outsourcing Business Partners Organization Current transforms from the rest of the world Net indirect taxes National debt interest It does not differ Consumer household Corporate enterprises only (b) (d) Government enterprises only All producing sector of an economy Payments accruing to factors of production Compensation to employees Wages plus rent plus rent Value of output minus depreciation Find the tax which is direct tax among the following: (a) (c) 138. More than 80 per cent of GDP More than 50 per cent of GDP Net value added is equal to: (a) (b) (c) (d) 137. Private sector units Sick units Demand for intermediate consumption arises in: (a) (c) 136. (b) (d) National income differs from net national product at market price by the amount of: (a) (b) (c) (d) 135. Small scale units Public sector units BPO stands for: (a) (c) 134. 4 per cent 96 per cent The service sector in India now accounts for: (a) (c) 133. (b) (d) Oil and Natural Gas Corporation, Indian Oil Corporation, Steel Authority of India, and Bharat Heavy Electricals are all examples of: (a) (c) 132. 10 per cent 30 per cent Personal income tax Sales tax (b) (d) Excise duty Service tax Which of the following statements is correct? (a) (b) (c) (d) Income tax was abolished in India in 1991 Service tax was introduced in the financial year 1994-95 Direct tax code was made applicable in 2009-10 Custom duty was abolished in 1995 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 389 MODEL TEST PAPER - 14 139. The annual addition to India s population is almost equal to the total population of: (a) (c) 140. Third Second 10 17.5 (b) (d) 50 45 Easy Assistance Scheme Endless Assistance Scheme Employment Assurance Scheme Employment Assessment Scheme Second Sixth (b) (d) Third Tenth Southern region Western region (b) (d) Northern region Eastern region Power load factor Plant load factor (b) (d) Power leakage factor Plant leakage factor Who is regulatory authority for telecom in India? (a) (c) 148. (b) (d) ____________ measures the operational efficiency of a thermal plant. (a) (c) 147. Fourth First According to the latest data (2012-13) Plant Load Factor (PLF) is lowest in: (a) (c) 146. 2001 1921 Every ____________ person in the world is an Indian (a) (c) 145. (b) (d) EAS stand for (a) (b) (c) (d) 144. 1991 1981 India accommodates nearly _______percent of world s population (a) (c) 143. Australia China India passing through ___________ stage of demographic transition. (a) (c) 142. (b) (d) Which year is known as year of great divide for India s population? (a) (c) 141. Bangladesh Japan SEBI MTNL (b) (d) TRAI BSNL Which of the following statements is correct with regard to external sector in the pre-reform period? (a) (b) The foreign trade policy was very liberal, it allowed import of all types of goods Import of foodgrains was strictly prohibited 390 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I (c) (d) 149. The pre-condition for privatization to be successful requires: (a) (b) (c) (d) 150. The balance of payments situation was quite comfortable None of the above Liberalization and de-regulation of the economy Capital markets should be sufficiently developed None of the above Both of the above (a) and (b) Privatisation in India has taken place in all of the cases except: (a) (c) CMC VSNL (b) (d) BALCO None of the above SECTION D : QUANTITATIVE APTITUDE (50 MARKS) 151. Pie diagram is used for (a) (b) (c) (d) 152. Which of the following measures of central tendency is based on only 50% of the central values? (a) (c) 153. Mode Both (a) and (b) New Standard Deviation would also be divided by 3 New Standard Deviation would be multiplied by 3 New Standard Deviation will increase by 3 New Standard Deviation will decrease by 3 True Both (b) (d) False None of these To find the median graphically we use ________. (a) (c) 156. (b) (d) More laborious numerical calculations are involved in A.M. than G.M. (a) (c) 155. Mean Median If all the observations are divided by 3, then (a) (b) (c) (d) 154. Comparing different components and their relation to the total Representing qualitative data in a circle Representing quantitative data in a circle (b) or (c) Ogive Histogram (b) (d) Frequency Polygon None of these Which measures of dispersion is the quickest to compute (a) (c) Standard deviation Quartile deviation Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Mean deviation Range 391 MODEL TEST PAPER - 14 157. 2nd decile is greater than 1st decile (a) (c) 158. 1 1/2 (b) (d) True Both (b) (d) Circular test Time Reversal test (b) (d) Big Moderate (b) (d) n (1 p) (b) (c) np (d) Unit test None of these Small None of these np (1 p) np(1 p) A is pure event B is an impossible event (b) (d) B is a sure event A is not an impossible event (b) (d) None of these AUA is equal to (a) (c) 166. False None of these P (B/A) is defined only if ___________ (a) (c) 165. 1/2 0 The mean of binomial distribution with parameters n and p is _______ (a) 164. False None of these We use t-distribution when the sample size is ________ (a) (c) 163. (b) (d) Fisher s Ideal formula does not satisfy_________ test (a) (c) 162. True Both In audit test statistical methods are not used (a) (c) 161. False None of these Probability of throwing an even number with an ordinary six faced dice is (a) (c) 160. (b) (d) Correlation coefficient is not a pure number (a) (c) 159. True Both A 2A The sum of m terms of A.P. is n and the sum of n terms of A.P. is m. The sum of m+n terms is ______ (a) (c) (m+n) (m n)2 392 The Institute of Chartered Accountants of India (b) (d) (m+n) m2 n 2 Common Proficiency Test (CPT) Volume - I 167. The null set is given by (a) (c) 168. If x = (a) (c) 174. Median Mean (b) (d) Mode None of these 2 4 (b) (d) 5 3 1:4 3:1 (b) (d) 1:3 None of these 2 4 (b) (d) 3 0 (b) (d) 5 0 2 - 2 - 2 then it is equal to 2 2 The equation of a straight line passing through (3, 2) and making equal intercepts on axis (a) (c) 175. Sample Space (P P ) If x = 9 then 2x1/2 3x-1 is equal to (a) (c) 173. (b) (d) The compounded ratio of 4:9 and sub-duplicate ratio of 9:16 is (a) (c) 172. 0 The number of factors must be known are ___________ in determining the sample size for estimating a population mean. (a) (c) 171. { } {0} In normal distribution, as the distance from ________ decreases, the curve goes far and far to the horizontal axis. (a) (c) 170. (b) (d) If P is a set of natural number then P P is (a) (c) 169. 0 x+y 1=0 3x - 2y + 1 = 0 (b) (d) x+y 5=0 None of these If P + P = 6/25, then value of P is equal to (a) (c) 1/5 1/25 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 2/5 2/25 393 MODEL TEST PAPER - 14 176. Rs. 80,000 is invested to earn a monthly interest of Rs. 12,00 at the rate of _______ p.a. simple interest. (a) (c) 177. lim x 0 (a) (c) 179. (b) (d) 2 loge3 Does not exist (b) (d) x2 + 1/x3 + K None of these 3x - 1 is equal to 1+ x -1 3 loge2 loge6 x3 + 1/x2 + K x2 2/x3 + K 26 months 15 months (b) (d) 16 months 20 months 120 30 (b) (d) 60 15 The difference between Compound Interest and Simple Interest on a certain sum for 2 years at 6% p.a. is Rs. 13.50. Find the sum (a) (c) 183. 1/log x x/log x How many three digit numbers are there, with distinct digits, with each digits odd (a) (c) 182. (b) (d) (1 + log x ) log x A person pays Rs. 975 in monthly instalment, each instalment is less than former by Rs. 5. The amount of first instalment is Rs. 100. In what time entire amount will be paid (a) (c) 181. 14% 18% If f (x) = 3x2 2/x3 then f(x) = ? (a) (c) 180. (b) (d) d (x log x) is equal to dx (a) (c) 178. 12% 16% Rs. 3,750 Rs. 4,750 If f(x) = x2 1 and g(x) = (a) (c) (b) (d) Rs. 2,750 None of these x+1 f(3) ,then is 2 f(3) + g(3) 5/4 3/5 394 The Institute of Chartered Accountants of India (b) (d) 4/5 5/3 Common Proficiency Test (CPT) Volume - I 184. The sum of two numbers is 16 and twice the square of larger part exceeds the square of smaller part by 164, the numbers are (a) (c) 185. (b) (d) 152.5 151 4, 12, 36 5, 17, 30 (b) (d) 10, 16, 26 None of these 60 720 (b) (d) 40 120 109.29% 9.29% (b) (d) 9.09% None of these 0.12 0.0001 (b) (d) 0.001 1 A letter lock has three rings each marked with 10 different letters. In how many ways it is possible to make an unsuccessful attempt to open the lock. (a) (c) 192. 153 155 A sample of 100 gave a mean of 7.4 kg and a standard deviation of 1.2 kg. The standard error of mean will be (a) (c) 191. 6 1 If with rise of 10% in prices the wages are increased by 20%. Find the percentage of real wage increase (a) (c) 190. (b) (d) In how many ways can the letters of the word PENCIL be arranged so that N is always next to E (a) (c) 189. 6 2 Find the three numbers in G.P whose sum is 52 and the sum of their product in pairs is 624. (a) (c) 188. 12 and 4 None of these The mean height of 8 student is 152 cm. Two more students of heights 143 cm and 156 cm join the group. New mean height is equal to (a) (c) 187. (b) (d) If 3y 2x = 4 and 4y px = 2 are perpendicular to each other, the value of p is equal to (a) (c) 186. 10 and 6 11 and 5 1000 5040 (b) (d) 999 None of these A candidate is selected for interview for 3 posts, for the first there are 3 candidates, for the second there are 4 and for the third there are 2. What are the chances of his getting at least one. (a) (c) 3/4 1/10 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 2/3 1 395 MODEL TEST PAPER - 14 193. Equations of two lines of regression are 4x + 3y + 7 = 0 and 3x + 4y + 8 = 0, the mean of x and y are (a) (c) 194. (b) (d) 4/7 and 11/7 None of these If the first quartile is 104 and quartile deviation is 18, the third quartile will be (a) (c) 195. 5/7 and 6/7 2 and 4 140 20 (b) (d) 116 0 What is the present value of Re. 1 to be received after 2 years compounded annually at 10%? (a) (c) 0.56 0.99 (b) (d) 0.78 0.83 1 196. The value of x(1- x) n dx is equal to 0 (a) (b) 1 (c) 197. 0 1 (n + 1)(n + 2) (d) (n + 1)(n + 2) In a class of 30 students, 20 students like maths, 18 like science and 12 like both the subjects. Find the number of students who like no subject. (a) (c) 198. 5 None of these 2 x2 (b) (d) 2x 0 If the quartile deviation of x is 6 and 4x + 8y = 20, what is the quartile deviation of y (a) (c) 200. (b) (d) d 2logx e is equal to dx (a) (c) 199. 4 8 3 5 (b) (d) 4 1 For a group of 8 students, the sum of square of differences in ranks for maths and Economics marks was found to be 50. What is the value of rank correlation coefficient? (a) (c) 0.50 1.00 396 The Institute of Chartered Accountants of India (b) (d) 0.40 1.00 Common Proficiency Test (CPT) Volume - I Model Test Paper BOS/CPT-14 SECTION A : FUNDAMENTALS OF ACCOUNTING 1 (a) 2 (a) 3 (c) 4 (c) 5 (c) 6 (b) 7 (a) 8 (d) 9 (a) 10 (a) 11 (b) 12 (c) 13 (c) 14 (b) 15 (d) 16 (a) 17 (b) 18 (d) 19 (d) 20 (c) 21 (a) 22 (c) 23 (a) 24 (b) 25 (b) 26 (a) 27 (b) 28 (d) 29 (a) 30 (a) 31 (b) 32 (c) 33 (b) 34 (c) 35 (d) 36 (a) 37 (a) 38 (a) 39 (a) 40 (a) 41 (c) 42 (b) 43 (a) 44 (b) 45 (a) 46 (d) 47 (a) 48 (a) 49 (a) 50 (a) 51 (a) 52 (a) 53 (b) 54 (a) 55 (a) 56 (a) 57 (a) 58 (a) 59 (a) 60 (c) SECTION B : MERCANTILE LAWS 61 (d) 62 (d) 63 (b) 64 (b) 65 (b) 66 (c) 67 (d) 68 (a) 69 (d) 70 (d) 71 (d) 72 (d) 73 (d) 74 (d) 75 (d) 76 (d) 77 (c) 78 (b) 79 (d) 80 (a) 81 (a) 82 (d) 83 (b) 84 (a) 85 (c) 86 (b) 87 (b) 88 (d) 89 (b) 90 (b) 91 (d) 92 (c) 93 (d) 94 (a) 95 (b) 96 (a) 97 (c) 98 (b) 99 (a) 100 (c) Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 589 ANSWERS SECTION C : GENERAL ECONOMICS 101 (c) 102 (a) 103 (b) 104 (d) 105 (b) 106 (b) 107 (b) 108 (b) 109 (b) 110 (a) 111 (b) 112 (a) 113 (a) 114 (d) 115 (d) 116 (b) 117 (d) 118 (a) 119 (b) 120 (a) 121 (b) 122 (c) 123 (a) 124 (a) 125 (c) 126 (c) 127 (b) 128 (b) 129 (d) 130 (d) 131 (c) 132 (c) 133 (b) 134 (b) 135 (d) 136 (a) 137 (a) 138 (b) 139 (b) 140 (d) 141 (d) 142 (c) 143 (c) 144 (c) 145 (d) 146 (c) 147 (b) 148 (d) 149 (d) 150 (d) SECTION D : QUANTITATIVE APTITUDE 151 (a) 152 (c) 153 (a) 154 (b) 155 (a) 156 (d) 157 (a) 158 (b) 159 (c) 160 (b) 161 (a) 162 (b) 163 (c) 164 (d) 165 (a) 166 (a) 167 (c) 168 (a) 169 (c) 170 (d) 171 (b) 172 (a) 173 (a) 174 (c) 175 (c) 176 (d) 177 (a) 178 (b) 179 (a) 180 (c) 181 (b) 182 (a) 183 (b) 184 (a) 185 (a) 186 (c) 187 (a) 188 (d) 189 (b) 190 (a) 191 (b) 192 (a) 193 (b) 194 (a) 195 (c) 196 (c) 197 (a) 198 (b) 199 (a) 200 (b) 590 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 14 with Answers
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