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CA CPT : Volume 1 - Model Test Paper 20 (with Answers)

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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) (c) 2. Trade receivables account Bad debts account (b) (d) Loan account Bank overdraft Trading account Balance Sheet (b) (d) Profit and Loss a/c None of the above On 01.09.2011, A draws a bill on B for 30 days after sight . The date of acceptance is 08.09.2011. The maturity date of the bill will be (a) (c) 5. Revenue expenditure None of the above Unexpired portion of Capital expenditure is shown in (a) (c) 4. (b) (d) Which of the following is nominal account (a) (c) 3. Capital expenditure Deferred revenue expenditure 08.10.2011 11.10.2011 (b) (d) 10.10.2011 09.10.2011 If the firm pays Income Tax on behalf of partners, such payment of personal income tax should be treated as (a) (c) Income tax of firm Income of the firm 534 The Institute of Chartered Accountants of India (b) (d) Drawings of partners None of the above Common Proficiency Test (CPT) Volume - I 6. Which of the following account will have credit balance? (a) (c) 7. Fair value Market value (b) (d) Book value Net realizable value Total method Total and Balance both (b) (d) Balance method All the three. Prudence Materiality (b) (d) Substance over form All of the above Historical cost Realisable value (b) (d) Current cost All of the above Old profit sharing ratio Capital ratio (b) (d) New profit sharing ratio Equal ratio In case of admission of a partner, the first account prepared is (a) (c) 15. All transactions Profit or loss on revaluation is shared among the partners in (a) (c) 14. Only cash transactions (b) Cash, Bank and discount transactions Cash purchases and cash sale transactions Which of the followings is a valuation principal? (a) (c) 13. Rs. 31,000 None of the above Selection of accounting policies is based on: (a) (c) 12. (b) (d) Trial Balance is prepared according to (a) (c) 11. Rs. 30,000 Rs. 36,000 The value of an asset after reducing depreciation from the historical cost is known as (a) (c) 10. Carriage inward Bills receivable Three column cash book records (a) (c) (d) 9. (b) (d) The book value of the assets as on 1st April, 2011 is Rs. 1,00,000. Depreciation is charged on the assets @ 10%. On 1st October, 2011, the asset is sold for Rs. 64,000. Profit or Loss on the sale will be (a) (c) 8. Debentures A/c Prepared insurance Revaluation account (b) Profit and Loss adjustment account (d) Realisation account Bank account After the death of a partner, amount payable is received by (a) (c) Government Executor of the death partner Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Firm None of the three 535 MODEL TEST PAPER - 20 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) (c) 17. Deducted None of the above (b) (d) An expense An asset Income Liability Added in the bank reconciliation statement Subtracted in the bank reconciliation statement Not required to be adjusted in the bank reconciliation statement None of the above Capital ratio Gaining ratio (b) (d) Sacrificing ratio Profit sharing ratio 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) (c) 22. (b) (d) 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) (c) 21. Added Not required to be adjusted When balance as per Cash book is the starting point, Dividend collected by bank is: (a) (b) (c) (d) 20. 8% None of the three Debit balance of the cash is (a) (c) 19. (b) (d) 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) (c) 18. 9% 10% Memorandum Revaluation A/c Profit & Loss Adjustment A/c (b) (d) Revaluation A/c None of the above (b) (d) Listed in NSE None of the above In case of Private companies shares are: (a) (c) Listed in BSE Not listed in any stock exchange 536 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 23. From the following figures prepare Balance Sheet of the Mr. X as on Dec. 31, 2009. Goodwill Rs. 70,000 Trade receivables Rs. 35,000 Plant & Machinery 60,000 Furniture 10,000 Investments 25,000 Bills payable 10,000 Outstanding expenses 5,000 Bills Receivable 9,000 6,000 Closing inventory 25,000 Cash Trade payables 45,000 Drawings Net Profit 22,000 Capital Bank overdraft 15,000 12,000 1, 55,000 Balance Sheet total will be (a) (c) 24. Rs. 2,40,000 Rs. 2,30,000 Cost of goods sold Closing inventory Sales Gross Profit will be (a) (c) (b) (d) Rs. 2,50,000 None of the three Rs. 19,000 Rs. 6,000 Rs. 30,000 Rs. 10,000 Rs. 5,000 25. (b) (d) Rs. Salaries Interest on overdraft Rs. 11,000 None of the three Rs. 4,000 General expenses Advertisement 200 5,100 5,000 Office expenses 5,000 Gross profit Rent paid 2,000 Commission received Capital 35,000 4,000 50,000 Amount of net profit will be (a) (c) Rs. 17,700 Rs. 15,000 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Rs.17,000 None of the three. 537 MODEL TEST PAPER - 20 26. Trial Balance shows the following balance Dr. Rs. Capital Income tax Income tax advance payment Capital A/c balance will be (a) Rs. 38,400 (c) Rs. 40,000 27. Rs. 570 Rs. 750 (b) (d) Rs. 500 None of the three Current liability Fixed liability (b) (d) Contingent liability None of the three Rs. 300 Rs. 350 (b) (d) Rs. 250 None of the three 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. Inventory on approval will be (a) (c) 31. Rs. 38,000 None of the three Loan @ 9% 10,000 Interest on loan 600 Outstanding interest on loan will be (a) (c) 30. (b) (d) Rs. 50,000 claim for workman s compensation under dispute is a (a) (c) 29. 10,000 1,600 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 Trade receivables 30,000 Information (i) Make a provision for bad debts 5% on Trade receivables. (ii) Make a provision for discount on Trade receivables 2%. Provision for discount on Trade receivables will be (a) (c) 28. Cr. Rs. 50,000 Rs. 4,500 Rs. 4,000 (b) (d) Rs. 5,000 None of the three 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) (c) Rs. 1,080 Rs. 1,000 538 The Institute of Chartered Accountants of India (b) (d) Rs. 1,200 None of the three Common Proficiency Test (CPT) Volume - I 32. Loan A/c credit balance on Dec. 31, 2009 Loan paid on June 30, 2009 Loan paid on Sept. 30, 2009 Interest on loan is to be charged Interest amount for the year 2009 will be (a) (c) 33. (b) (c) (d) Rs. 1,800 None of the three B/P To A B/R To A Bills Payable A/c Bills Receivable A/c To Suspense None of the three Dr. Rs. 1,000 Rs. 1,000 Dr. 1,000 Dr. Dr. 1,000 1,000 1,000 2,000 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 (a) (b) (c) (d) 35. (b) (d) 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 (a) 34. Rs. 1,867.50 Rs. 2,000 15,000 4,000 5,000 9% p.a. Purchase A/c Dr. To Suppliers A/c To Suspense A/c Purchases A/c Dr. To Suppliers Purchase A/c Dr. To Suppliers None of the three Rs. 136 Rs. 100 36 136 136 136 136 The accountant of the firm M/s ABC is unable to tally the following trial balance. Debit (Rs.) Account heads Sales Purchases 10,000 Miscellaneous expenses Total 10,000 The above difference in trial balance is due to S. No. 1. 2. 3. (a) (b) (c) (d) Credit (Rs.) 12,500 2,500 15,000 Wrong placing of sales account Incorrect totalling. Wrong placing of miscellaneous expenses account Wrong placing of all accounts. Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 539 MODEL TEST PAPER - 20 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) (c) 37. (b) (d) Rs. 6,750 Rs. 6,000 (b) (d) Rs. 9,000 None of the three. Rs. 10,500 Rs. 8,250 Rs. 12,000 Rs. 6,500 None of the three Ram, the manager, is entitled to get a commission of Rs. 25 per article sold plus th 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) (c) 40. Rs. 9,500 Rs. 9,800 Rs. 4,800 and 3,000 None of the above. Rs. 10,000 Rs. 2,300 Rs. 2,000 Rs. 800 Bank overdraft as per cash book on 31st Dec. 2010 Cheque sent for collection but not collected Cheque issued but not presented for payment Balance as per pass book overdraft will be (a) (c) 39. (b) (d) Balance as per Cash Book on 31.03.2010 Cheque issued and presented on 4th April Cheque sent to bank but not credited B/P paid by Bank not entered in cash Book Balance on per pass book will be (a) (c) 38. Rs. 4,680 and Rs. 3,120 Rs. 5,000 and Rs. 2,800 Rs. 12,500 Rs. 12,000 (b) (d) Rs. 12,510 None of the three 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) (c) Rs. 6,820 Rs. 6,000 540 The Institute of Chartered Accountants of India (b) (d) Rs. 6,800 None of the three Common Proficiency Test (CPT) Volume - I 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 inventory will be (a) (c) 42. (b) (d) Rs. 8,000 None of the three Increase in Asset & Owner s Equity Decrease in Asset & Owner s Equity Increase in Liability & Owner s Equity Decrease in Liability & Increase in Owner s Equity Rs. 35,500 Rs. 36,000 (b) (d) Rs. 35,000 None of the three 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) (c) 46. Rs. 8,125 Rs. 8,200 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) (c) 45. Rs. 2,000 None of the three Goods returned to supplier is an example of: (a) (b) (c) (d) 44. (b) (d) 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) (c) 43. Rs. 2,250 Rs. 2,200 Rs. 3,000 Rs. 3,500 (b) (d) Rs. 3,430 None of the three 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) (c) 21:11:8 8:11:21 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 11:21:8 None of the three 541 MODEL TEST PAPER - 20 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) (c) 48. 12:6:7 12:4:5 (b) (d) 12:5:6 None of the three The profits of a firm for the last 5 years were as follows: Year ended 31st March 2005 2006 2007 2008 2009 Profits (Rs.) 43,000 50,000 52,000 65,000 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 1 2 Goodwill amount will be (a) (c) 49. (b) (d) 2009 5 Rs. 1,30,000 None of the three Rs. 44,100 Rs. 45,000 (b) (d) Rs. 47,000 None of the three Goods purchased Rs. 3,00,000; sales Rs. 2,70,000. If margin 20% on sales then closing inventory will be (a) (c) 51. 2008 4 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) (c) 50. Rs. 1,31,200 Rs. 1,32,000 2007 3 Rs. 84,000 Rs. 75,000 (b) (d) Rs. 80,000 None of the three 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) (c) Rs. 2,550 Rs. 1,500 542 The Institute of Chartered Accountants of India (b) (d) Rs. 1,550 None of the three Common Proficiency Test (CPT) Volume - I 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) (c) 53. Rs. 300 Rs. 650 Rs. 13,23,000 Rs. 12,00,000 (b) (d) Rs. 13,00,000 None of the three Rs. 800 Rs. 700 (b) (d) Rs. 600 None of the three Rs. 3,000 Rs.1,500 (b) (d) Rs. 1,800 None of the three 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) (c) 58. (b) (d) 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) (c) 57. Rs. 900 Rs. 600 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) (c) 56. Rs. 3,000 None of the three 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) (c) 55. (b) (d) 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) (c) 54. Rs. 2,000 Rs. 4,000 3,000 debentures 2,800 debentures (b) (d) 3,100 debentures None of the three 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) (c) Rs.10,000 Rs.11,000 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Rs.12,000 None of the three 543 MODEL TEST PAPER - 20 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) (c) 60. Rs. 1,200 Rs. 1,500 (b) (d) Rs. 1,000 None of the three 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) (c) Rs. 400 Rs. 800 (b) (d) Rs. 500 None of the three SECTION B : MERCANTILE LAWS (40 MARKS) 61. Which does not came into the category of delivery? (a) (c) 62. He can sell goods if the owner cannot be found He can sell the goods if the owner is found and he refuses to pay lawful charges He can sell the goods if the goods are of perishing nature He cannot sell the goods in any condition Cost, Identify and Freight Colour, Insurance and Freight Cost, Insurance and Freight Calculation, Insurance and Freight Which does not relate the term delivery of goods? (a) (c) 65. Symbolic Perpetual In C.I.F. Contracts, C.I.F. stands for: (a) (b) (c) (d) 64. (b) (d) Which is not true in case of a finder of goods? (a) (b) (c) (d) 63. Actual Constructive Actual delivery Constructive delivery (b) (d) Symbolic delivery Specific delivery Which is true regarding the expulsion of a partner? (a) (b) (c) (d) The expulsion must be in the interest of the partnership The partner to be expelled is served with notice He should be given an opportunity of being heard All of these 544 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 66. Which of the following is an essential feature of partnership? (a) (c) 67. (b) (d) Void Illegal Void Voidable (b) (d) Valid Illegal Void Voidable (b) (d) Valid Illegal Quasi contract Wagering agreement (b) (d) Contingent contract Voidable contract Voidable Valid (b) (d) Void None of these Consideration must move at the desire of the (a) (c) 75. Valid Voidable In case of illegal agreements, the Collateral agreements are (a) (c) 74. He has ratified the contract Third party has acquired right in good faith Contract is not separable All of these 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) (c) 73. Quasi contract Wagering conduct A contract made by mistake about some foreign law is (a) (c) 72. (b) (d) Where the consent of both the parties is given by mistake, the contract is: (a) (c) 71. Contingent contract Implied contract Agreement of uncertain meaning is (a) (c) 70. Partnership deed Separate legal entity A party entitled to rescind the contract, loses the remedy where (a) (b) (c) (d) 69. (b) (d) A agrees to pay one crore to B if he brings on earth a star from sky. This is a (a) (c) 68. Registration Test of mutual agency Promisor Any person (b) (d) Promisee Third party Which partner does not take active part in the business (a) (c) Minor partner Dormant partner Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Sub partner Estopped partner 545 MODEL TEST PAPER - 20 76. Contingent contract is (a) (c) 77. To take part in the business of the firm To share exclusive profits To use the property of the firm for personal purpose Tone of these At the age of superannuation At the low ebb of capital a/c In accordance with the partnership deed On nominee becoming a partner Principals as well as agent Only representative of the firm (b) (d) Only agents of the firm Only co-partners of the firm (b) (d) Compulsory Occassional Optional None of these The resconstitution of firm takes place in case ________ (a) (c) 84. Partners dues are paid off The registrar strikes off the name. Registration of firm is ________ (a) (c) 83. (b) (d) Each of the partner is ________ (a) (c) 82. Accounts are settled Public notice is given A partner can retire on ________ (a) (b) (c) (d) 81. Duration not fixed Duration fixed Dissolved at any time Can be dissolved on the happening of an event Every partner has the right (a) (b) (c) (d) 80. Valid Void On dissolution the partners remain liable, till (a) (c) 79. (b) (d) A partnership at will is one (a) (b) (c) (d) 78. Illegal Voidable Admission of partner Death of a partner (b) (d) Retirement of a partner All of the above A partnership firm is dissolved where ________ (a) (b) (c) (d) All partners have become insolvent Firms business has become unlawful The fixed term has expired All of these 546 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 85. It is not a right of partner ________ (a) (c) 86. Gambling by a partner on stock exchange Fraudulent breach of trust by a partner Persistent refusal by a partner to attend to the business All of these Any profession Business of his choice (b) (d) Lawful profession Any business A voidable contract ________ (a) (b) (c) (d) 92. Dissolution by agreement Compulsory dissolution Dissolution in the happening of certain contingency Dissolution by leaving insolvent partner Every citizen is at liberty to conduct________ (a) (c) 91. Active partner Sleeping partner Representative of deceased partner Both (b) and (c) ________ is the case of misconduct (a) (b) (c) (d) 90. To buy or sell goods on account To borrow money for the purposes of firm To enter into partnership on behalf of firm To engage a lawyer to defend actions against firm ________ does not relate the dissolution of firm (a) (b) (c) (d) 89. To take access to accounts book To receive renumeration After retirement from firm, ________ partner is not liable by holding out (a) (b) (c) (d) 88. (b) (d) It is not included in the implied authority of a partner ________ (a) (b) (c) (d) 87. To take part in business To share profits Can be enforced at the option of aggrieved party Can be enforced at the option of both the parties Cannot be enforced in a court of law Is prohibited by court. There can be a stranger to a ________ (a) (c) Contract Agreement Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Consideration Promise 547 MODEL TEST PAPER - 20 93. A minor is liable for ________ supplied to him (a) (c) 94. Valid Voidable (b) (d) Void None of these Promise alone Agent of the promisor (b) (d) Legal representative of promisor All of these Past Future (b) (d) Present All of these Coercion Misrepresentation (b) (d) Undue influence Fraud A sells to B a horse which A knows to be unsound. B is A s daughter. Choose the best alternative (a) (b) (c) (d) 100. Offence under the Indian Penal Code Fraud Moral pressure is involved in the case of ________ (a) (c) 99. (b) (d) Consideration may be ________ (a) (c) 98. Coercion Undue influence ________ can perform the contract (a) (c) 97. Luxuries All the things An agreement the object of which is unlawful is ________ (a) (c) 96. (b) (d) Threat to commit suicide amounts to ________ (a) (c) 95. Necessaries Necessities The relation between A and B would make it A s duty to tell B if the horse is unsound If A is silent, silence will not be equivalent to speech Here it is not duty of A to tell the horse s defect A is not bound to tell the defect as the rule of caveat emptor applies 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) (b) (c) (d) The physician cannot claim for his services due to contract with minor which is void The physician has a valid claim for his services which are included in the Necessaries The physician has no claim for minor s necessaries and minor will be personally liable The physician can claim for his services from minor s parents SECTION C : GENERAL ECONOMICS (50 MARKS) 101. The LAC curve (a) (b) (c) (d) Falls when the LMC curve falls Rises when the LMC curve rises Goes through the lowest point of the LMC curve Falls when LMC < LAC and rises when LMC > LAC 548 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 102. At shut down point : (a) (c) 103. (b) (d) (1) and (2) only (1), (2), (3) and (4) Firm is the price giver and industry the price take Firm is the price taker and industry the price giver Both are the price takers None of the above Coke will rise (b) Coke and Thumbs-Up will increase (d) Thumbs-Up will decrease Coke and Thumbs-Up will decrease Excess price Consumer surplus (b) (d) Excess demand Exploitation Excess Capacity is the essential characteristic of the firm in the market form of : (a) (c) 109. (1) only (1), (2) and (3) only The difference between the price a consumer is willing to pay and the price he actually pays is called (a) (c) 108. Between zero and one Between one and infinity If the price of Pepsi decreases relative to the price of Coke and Thumbs-Up, the demand for: (a) (c) 107. (b) (d) In a perfect competitive market (a) (b) (c) (d) 106. Zero Infinite 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) (c) 105. Total revenue is equal to TVC All of the above If as a result of change in price, the quantity supplied of the good remains unchanged, we say elasticity of supply is: (a) (c) 104. Price is equal to AVC (b) Total loss of the firm is equal to TFC (d) Monopoly Monopolistic competition (b) (d) Perfect competition Oligopoly Personal disposable income refers to : (a) (b) (c) (d) The income of the person after all personal taxes are deducted Total income earned by the person Personal taxes paid to the government Personal and indirect taxes paid to the government Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 549 MODEL TEST PAPER - 20 110. National income of a country is also known as : (a) (b) (c) (d) 111. The indifference curve approach does not assume : (a) (b) (c) (d) 112. The level and rate of taxation Who ultimately bears the money burden of the tax The growth of taxation The way in which a tax is collected Which of the following is an example of perfect competition? (a) (b) (c) (d) 114. Rationality on the parts of consumers Ordinal measurement of satisfaction Consistent consumption pattern behaviour of consumers Cardinal measurement of utility The incidence of taxes refers to : (a) (b) (c) (d) 113. Gross National Product at market prices Net National Product at factor cost Gross Domestic Product at factor cost Net Domestic Product at Market prices Market for agricultural goods Market for soaps Market for petroleum products Market for clothes The main objective of fiscal policy in developing countries is to : (1) (2) (3) (4) (a) (c) 115. Promote economic growth Mobilise resources for economic growth Ensure economic growth and distribution Increase employment opportunities only 1 and 2 are correct only 2 and 4 are correct only 2 and 3 are correct 1, 2, 3 and 4 are correct Budgetary deficit can be expressed as: (a) (b) (c) (d) 116. (b) (d) The excess of pubic expenditure over public revenue The sum of deficit on revenue account and deficit on capital account That portion of government expenditure which is financed through the sale of 91 days Treasury Bills and drawing down of cash balances All of the above A Government budget is defined as: (a) (b) A description of the fiscal policies of the government and the financial plans A financial plan describing estimated receipts and proposed expenditures and Disbursement under various heads 550 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I (c) (d) 117. ________ depicts complete picture of consumer s tastes and preferences (a) (c) 118 . (b) (c) (d) Does not own any land Workers on a land holding of less than one hectare Works on a land holding for wages Keeps shifting between agriculture and non-agriculture jobs Provide credit and other facilities to small and marginal farmers, agricultural labours and artisans in rural areas Provide credit to the common people in rural areas Take over the functions of Agricultural Refinance Corporation of India Supplement scheduled commercial banks Tenth Fifth (b) (d) Fourth Second The second plan s programme of industrialization was based on the ______ model (a) (c) 124. Indian Statistical Institute National Sample Survey Organization Central Statistical organization National Accounts Organization India currently ranks as the world s _________ largest Energy producer. (a) (c) 123. Health, literacy and employment National income, size of population and general price level National income, per capita income and per capita consumption Physical resources, monetary resources and population size The main objective of the Regional Rural Bank is to (a) 122. Average cost curve Marginal revenue curve The marginal farmer in India is defined as a cultivator who : (a) (b) (c) (d) 121. (b) (d) The task of national income estimation to India is entrusted to the (a) (b) (c) (d) 120. Budget line Indifference map Human Development Index (HDI) is a composite index of : (a) (b) (c) (d) 119. Neither of the above Both (a) and (b) above British P.C. Mahalanobis (b) (d) V.V. Bhatt Vera Anstey An inferior commodity is one which is consumed in smaller quantities when the income of consumer : (a) (c) Becomes nil Falls Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Remains the same Rises 551 MODEL TEST PAPER - 20 125. Which of the following equation is correct? (a) PY PX (b) MRTSX = (c) 126. MRTSXY = MRTSYX = PY PX (d) None of the above The marginal cost curve intersects the average cost curve when average cost is: (a) (c) 127. Blocked entry The low LAC costs (b) (d) The high price he charges Advertising He operates in more than one market He makes more profit because he discriminates He maximizes his profits in each market He charges different prices in each market Recognize their independence Tend to keep prices constant (b) (d) Do not collude All of the above The demand for a factor of production is said to be a derived demand because (a) (b) (c) (d) 132. The firm is a price taker The firm cannot influence the price The firms marginal revenue curve coincides with its average revenue curve All of the above In both the Chamberlin and kinked demand curve models, the oligopolists (a) (c) 131. Minimum Falling Which of the following statements is not true about a discriminating monopolist? (a) (b) (c) (d) 130. (b) (d) In long run equilibrium the pure monopolist can make pure profits because of (a) (c) 129. Maximum Raising If the demand curve confronting an individual firm is perfectly elastic, then : (a) (b) (c) (d) 128. PX PY It is a function of the profitability of an enterprise It depends on the supply of complementary factors Its stems from the demand for the final product It arises out of means being scarce in relation to wants. Positive income elasticity implies that as income rises, demand for the commodity (a) (c) Rises Remains unchanged 552 The Institute of Chartered Accountants of India (b) (d) Falls Becomes zero Common Proficiency Test (CPT) Volume - I 133. A Central Bank differs from a commercial bank in that : (a) (b) (c) (d) 134. Open market operations by a Central bank involve : (a) (b) (c) (d) 135. IDA MIGC (b) (d) IFC ICSID Occupational structure refers to the (a) (b) (c) (d) 140. Outward oriented growth Export promotion Import restrictions Emphasizing comparative advantage Which is the soft lending arm of the World Bank? (a) (c) 139. Common Entity Value Added Tax Corporate Entity Value Added Tax Central Value Added Tax None of the above Export led growth strategy does not include : (a) (b) (c) (d) 138. Loans and advances Money at call and short notice Bills discounted and purchased Investment in government securities CENVAT stands for : (a) (b) (c) (d) 137. Sale and purchase of government securities Increase and decrease of discount rate Changing the reserve ratio up and down Raising or lowering of the margin requirements Which one of the following is the most profitable but least liquid asset of a commercial bank? (a) (b) (c) (d) 136. It has no branches It is the banker of the government It deals with general public None of the above Number of workers living in a country Size of working population in the industrial sector Distribution of working population among different occupations Nature of different occupations in the economy The Year of Great Divide with regard to population growth in India is : (a) (c) 1911 1947 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 1921 1971 553 MODEL TEST PAPER - 20 141. FIEO stands for : (a) (b) (c) (d) 142. The Eleventh Five Year Plan (2007-12) kept a target of a GDP growth rate ____ (a) (c) 143. Defective manpower planning All of the above Agriculture development Education (b) (d) Industrial development Health Administered interest rate structure Quantitative restrictions on credit flow High revenue requirements Keeping very less lendable resources for the priority sector 2001-04 1981-83 (b) (d) 1991-93 1971-73 Overgrowing service sector Poor infrastructural facilities (b) (d) Westernised social attitudes Modern agrarian system India is termed as a developing economy because of her : (a) (b) (c) (d) 149. (b) (d) Economic development has retarded in India mainly due to : (a) (c) 148. Underdevelopment Rapid population growth During ___ we had surplus in the current account. (a) (c) 147. 9 per cent 12 per cent Before financial reforms, the banking system was characterised by all of the following except : (a) (b) (c) (d) 146. (b) (d) The largest share of foreign aid in India has been used in the programme of : (a) (c) 145. 6 per cent 10 per cent The major cause of unemployment in India is : (a) (c) 144. Foreign Import Export Organization Federation of Import Export Organization Forum of Indian Export Organization Federation of Indian Export Organization Initiative for determined planned economic development Rapid population growth Predominant agrarian set-up Slow Industrial Progress The percentage of people working in agriculture sector came down to around ________in 2010-11. (a) (c) 50 per cent 65 per cent 554 The Institute of Chartered Accountants of India (b) (d) 80 per cent 10 per cent Common Proficiency Test (CPT) Volume - I 150. The Government aimed at reducing the Maternal Mortality Rate (MMR) to ______ per 1000 live births by the end of the Eleventh Plan. (a) (c) 5 2 (b) (d) 1 3 SECTION D : QUANTITATIVE APTITUDE (50 MARKS) 151. The series 1 1 1 1 + + + + ........ to is 3 32 33 34 (a) (b) 1 2 (c) 152. 1 3 1 6 (d) None of these The series 1 + 10 1 + 10 2 + 10 3..... to is (a) (b) 1 10 (c) 153. 9 10 10 9 (d) None of these The sum of the series 1,-1,1,-1,1 to 100 terms is equal to (a) (c) 154. 1 0 (b) (d) 1 100 Set of all natural members Set of all numbers (b) (d) Set of all integers Set of functions If A = {1, 3, 5, 7, } and B= {2, 4, 6, 8, ..}, then A B is equal to (a) (c) 157. 1 50 If A = {1, 3, 5, 7, } and B= {2, 4, 6, 8, ..}, then A B is equal to (a) (c) 156. (b) (d) The sum of the series 1,-1,1,-1,1 to 101 terms is equal to (a) (c) 155. 1 0 Set of all integers (b) (d) Set of all positive integers None of these (b) (d) Null set None of these The set of squares of positive integers is (a) (c) A finite set An infinite set Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 555 MODEL TEST PAPER - 20 158. If A = {1, 2, 3, 4, 5} and B = {6, 7, 8}, then cardinal number of AXB is: (a) (c) 159. If f(x) = (a) (c) 165. B None of these B Whole set (b) (d) Null set None of these 36 256 (b) (d) 128 None of these 1 10 (b) (d) 0 Undefined (b) (d) 2 1 (b) (d) Undefined x2 4 , then f(2) is If f(x) = x 2 (a) (c) 164. (b) (d) x2 25 , f(5) is If f(x) = x 2 (a) (c) 163. Null Set Whole set The number of subsets of the set A = {1, 2, 3, 4, 5, 6, 7, 8} is (a) (c) 162. 5 8 If B is any set then B B is (a) (c) 161. (b) (d) If B is any set then B B is (a) (c) 160. 15 3 If f(x) = 0 4 5 , then f(0) is x + 5 x2 1 , x 1, f(1) = A x 1 For what value of A, f(x) is continuous at x = 1? (a) (c) 1 0 556 The Institute of Chartered Accountants of India (b) (d) 2 None of these Common Proficiency Test (CPT) Volume - I 166. lim + x 0 (a) (c) 167. None of these + Does not exist (b) (d) None of these (b) (d) 1 0 x 2 25 lim is equal to x 0 x 5 does not exist 10 Let f(x) = (a) (c) 170. (b) (d) 1 is x 0 x (a) (c) 169. + Doesnot exist lim (a) (c) 168. 1 is x lim x x 2 6x + 9 , x 3 , f(3) = 0, then f(x) is x 3 Continuous at x = 3 Discontinuous for all x (b) (d) Discontinuous at x = 3 None of these 1 + 2 + 3 + .... + n is equal to n2 (a) (b) 1 2 (c) 171. 1 0 (d) None of these 12 + 22 + 32 + .... + n 2 is equal to n n3 lim (a) 1 3 (b) 0 (c) 1 (d) None of these Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 557 MODEL TEST PAPER - 20 172. 13 + 23 + 33 + .... + n3 is equal to n n4 lim (a) (b) 1 (c) 173. 1 4 0 (d) None of these (b) (d) Discontinuous for all x None of these (b) x 5 + e2x + (d) None of these (b) (d) 3a3x loga + 36x8 None of these If f(x) = 5x, when x > 0 = 5x, when x < 0 Then f(x) is (a) (c) 174. If y = x 5 + e 2x + log3x , then (a) (c) 175. dy is dx 1 x 1 4 2x 5x + e + 3x 5x 4 + 2e 2x + If y = a3x + 4x9 + 10,, then (a) (c) 176. Discontinuous at x = 0 Continuous at x = 0 dy is dx a3x + 36x9 + 10x 3a3x log a + 36x8 + 10x If x = at2, y = 2at, then dy is equal to dx (a) 1 t (b) 2 at (c) 177. 1 3x 2a (d) a t (b) (d) 2 3 If x2 + y2 = a2, then (a) (c) dy at ( 2, 2) is dx 2 1 558 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 178. If y = 2x2 + 3x + 10, then (a) (c) 179. 10 3 (b) (d) 0 None of these The gradient of the curve y = x x at (0, 0) is (a) (c) 180. dy at (0,0) is dx 1 1 The value of (b) (d) ( 6x 5 0 None of these + 3e 2x + 5 ) dx is equal to (a) 3 x 6 + e 2x + 5x + k 2 (b) 30x 4 + 6e 2x (c) 3 x 6 + eex 2 (d) None of these (a) x3 1 + 2x 3 x (b) x3 1 2x + k 3 x (c) x2 +k 3 (d) None of these (b) (d) 5xex + 5ex +5x + c None of these 2 181. 182. 1 The value of x dx is x The value of (a) (c) 183. ( 5xe x + 10 ) dx is equal to 5xex 5ex +10x + c xex 5ex +10x + c The value of dx is equal to 2 1) x(x (a) 1 1 log 1 + 2 2 x (b) 1 1 log 1 2 + k 2 x (c) 1 log 1 2 x (d) None of these Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 559 MODEL TEST PAPER - 20 184. The value of the integral 1 +c (a) ( x log x ) (c) log (log x) + c, 1 185. 1 x log x dx The value of 2 is (b) log (x log x) (c) (d) None of these x dx is x + 1 x 0 (a) 1 2 (b) 1 (c) 2 (d) 0 (b) (d) 6 None of these (b) 1 2 log (d) None of these (b) (d) Commerce only All these and in other subjects 1 186. The value of ( 2x + 5 ) is 0 (a) (c) 54 19 3 187. The value of x+3 x + 1 dx is 2 (a) (c) 188. 1 + 2 log 1 + log 4 3 3 4 Statistics is applied in (a) (c) 189. 4 3 Psychology only Economics only The mean salary for a group of 4 male is Rs. 5200 per month and that for a group of 6 female is Rs. 6800 per month. What is the combined salary? (a) (c) Rs. 6,160 Rs. 6,110 560 The Institute of Chartered Accountants of India (b) (d) Rs. 6,610 None of these Common Proficiency Test (CPT) Volume - I 190. For the numbers 1, 2, 3, 4, 5, 6, 7 standard deviation is: (a) (c) 191. 0.50 0.60 (b) (d) 0.40 None of these 0.26 0.36 (b) (d) 0.46 None of these 0.7 0.6 (b) (d) 0.5 None of these 0.37 0.27 (b) (d) 0.17 None of these If 15 dates are chosen at random, then the probability of getting two Fridays is (a) (c) 197. 3 None of these Eight balls are distributed at random in three containers. The probability, that the first container would contain three balls, is (a) (c) 196. (b) (d) Suresh is selected for three different posts. For the first post there are 2 candidates, for the second post there are 3 candidates, for the third post there are 10 candidates. The probability, that Suresh would be selected, is (a) (c) 195. -4 5 A number is selected from the set S = {1, 2, 3, 4 .. 25}. The probability that it would be divisible by 4 or 7 is (a) (c) 194. 4 None of these For a group of 8 students, the sum of squares of differences in ranks for Economics and Commerce marks was 50, the value of rank correlation coefficient is equal to (a) (c) 193. (b) (d) If the quartile deviation of x is 8 and 3x + 6y = 20, then the quartile deviation of y is (a) (c) 192. 3 2 0.13 0.47 (b) (d) 0.38 None of these Between 7 and 8 P.M., the average number of phone calls per minute is 4. The probability, that during one particular minute there will be no phone calls, is (a) e 3 (b) 1 e (c) e 4 (d) None of these Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 561 MODEL TEST PAPER - 20 198. 1 e The points of inflexion of the normal curve f(t) = 4 2 (a) (c) 199. (b) (d) 2 32 are 5, 15 None of these A population consists units a, b, c, d, e, f. The total number of all possible samples of size four without replacement are (a) (c) 200. 6, 14 4, 16 ( t 10 ) 10 15 (b) (d) If y = x10 + 5log 3x + 6e2x + 10 then (a) 10x 9 + 15x + 12e 2x (c) 10x 9 + 5 + 6e 2x x 562 The Institute of Chartered Accountants of India 12 None of these dy is equal to dx 5 + 12e 2x x (b) 10x 9 + (d) None of these Common Proficiency Test (CPT) Volume - I Model Test Paper BOS/CPT-20 SECTION A : FUNDAMENTALS OF ACCOUNTING 1 (a) 2 (c) 3 (c) 4 (c) 5 (b) 6 (a) 7 (b) 8 (c) 9 (b) 10 (d) 11 (d) 12 (d) 13 (a) 14 (a) 15 (c) 16 (a) 17 (a) 18 (c) 19 (a) 20 (c) 21 (a) 22 (c) 23 (a) 24 (b) 25 (a) 26 (a) 27 (a) 28 (b) 29 (a) 30 (c) 31 (a) 32 (a) 33 (c) 34 (a) 35 (c) 36 (a) 37 (a) 38 (a) 39 (b) 40 (a) 41 (a) 42 (a) 43 (d) 44 (a) 45 (b) 46 (a) 47 (a) 48 (a) 49 (a) 50 (a) 51 (b) 52 (a) 53 (c) 54 (a) 55 (a) 56 (a) 57 (a) 58 (a) 59 (a) 60 (a) SECTION B : MERCANTILE LAWS 61 (d) 62 (d) 63 (c) 64 (d) 65 (d) 66 (c) 67 (a) 68 (d) 69 (b) 70 (a) 71 (a) 72 (c) 73 (b) 74 (a) 75 (c) 76 (b) 77 (c) 78 (c) 79 (a) 80 (c) 81 (a) 82 (b) 83 (d) 84 (d) 85 (d) 86 (c) 87 (d) 88 (d) 89 (d) 90 (b) 91 (a) 92 (b) 93 (a) 94 (a) 95 (b) 96 (d) 97 (d) 98 (b) 99 (a) 100 (b) Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 601 ANSWERS SECTION C : GENERAL ECONOMICS 101 (d) 102 (d) 103 (a) 104 (d) 105 (b) 106 (d) 107 (c) 108 (c) 109 (a) 110 (b) 111 (d) 112 (b) 113 (a) 114 (d) 115 (d) 116 (d) 117 (c) 118 (a) 119 (c) 120 (b) 121 (a) 122 (c) 123 (c) 124 (d) 125 (c) 126 (b) 127 (d) 128 (a) 129 (c) 130 (d) 131 (c) 132 (a) 133 (b) 134 (a) 135 (d) 136 (c) 137 (c) 138 (a) 139 (c) 140 (b) 141 (d) 142 (b) 143 (d) 144 (b) 145 (d) 146 (a) 147 (c) 148 (a) 149 (a) 150 (b) SECTION D : QUANTITATIVE APTITUDE 151 (b) 152 (c) 153 (c) 154 (a) 155 (a) 156 (c) 157 (c) 158 (a) 159 (b) 160 (a) 161 (c) 162 (c) 163 (c) 164 (d) 165 (b) 166 (a) 167 (b) 168 (c) 169 (a) 170 (b) 171 (a) 172 (a) 173 (c) 174 (a) 175 (b) 176 (a) 177 (c) 178 (b) 179 (b) 180 (a) 181 (b) 182 (a) 183 (b) 184 (c) 185 (a) 186 (b) 187 (a) 188 (d) 189 (a) 190 (c) 191 (a) 192 (b) 193 (c) 194 (a) 195 (c) 196 (a) 197 (c) 198 (a) 199 (c) 200 (b) 602 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 20 with Answers
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