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CA CPT : Volume 1 - Model Test Paper 11 (with Answers)

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BOARD OF STUDIES THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA COMMON PROFICIENCY TEST Model Test Paper BOS/CPT 11 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. SECTION A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. All the following errors do not effect the trial balance except (a) (c) 2. (b) (d) Book-keeping None of the above Providing depreciation Valuation of investments (b) (d) Valuation of inventories All of the above Sales account Journal proper (b) (d) Cash book None of the above The amount of the dishonoured bill has been wrongly debited to general expenses account, which type of error has been committed? (a) (c) 6. Accounting All of the above The total of the sales book is posted periodically to the credit of (a) (c) 5. Error of complete omission Error of principle The areas where in different accounting policies can be adopted are (a) (c) 4. (b) (d) Financial statements are part of (a) (c) 3. Compensating errors Error of partial omission Error of principle Compensating error (b) (d) Error of commission Error of omission (b) (d) Intangible real account Both (b) and (c) Bank account is _____ (a) (c) Personal account Nominal account Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 293 MODEL TEST PAPER - 11 7. Cost of tour abroad by the sales manager to develop markets (tour was successful) is ____ (a) (c) 8. Stationery account Purchases account (b) (d) General expenses account None of the three Capital expenditure Deferred revenue expenditure (b) (d) Revenue expenditure None of the above Trading account Balance sheet (b) (d) Profit & Loss account None of the above Repairs account Motor car account (b) (d) General expenses account None of the above Liability side of Balance Sheet Profit & Loss account Cr side (b) (d) Asset side of Balance Sheet None of the three Current liability Fixed liability (b) (d) Contingent liability None of the three In valuation of consignment inventory only _______ expenses of the consignee are added (a) (c) 17. Income receivable None of the above Liability for bill discounted is a ______ (a) (c) 16. (b) (d) Suspense account debit balance Rs. 2000 in trial balance, will be recorded in the _____ (a) (c) 15. Income received Both (a) and (b) Rs. 5,000 spent on repairs of a newly purchased old motor car is debited to _____ (a) (c) 14. Accrual concept Conservation Cost of goods sold can be calculated by ____ (a) (c) 13. (b) (d) Amount spent on advertisement is _____ (a) (c) 12. Money measurement concept Consistency concept Mohan Stationers will debit purchase of stationery in ____ (a) (c) 11. Revenue expenditure Both (a) & (b) Income includes (a) (c) 10. (b) (d) Advance received from customers is not taken as sale is based on (a) (c) 9. Capital expenditure Deferred revenue expenditure Direct Both (a) and (b) (b) (d) Indirect None of the three Premium on issue of shares is recorded in _______ (a) (b) Profit & Loss debit side Profit & Loss appropriation account Dr side 294 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I (c) (d) 18. Interest is calculated on _______ of securities (a) (c) 19. (b) (d) Personal expense None of the three 1 year 3 months (b) (d) 6 months 2 years Money measurement Cost (b) (d) Conservatism Periodicity Over subscription Forfeiture of shares (b) (d) Pro-rata allotment All of the above Opening inventory Rs. 3,700, Purchases Rs. 20,800, Closing inventory Rs. 2,500. Cost of goods sold will be _______ (a) (c) 24. Business expense Customers expense XY LTD. issued 25,000 equity shares of Rs. 100 each at a premium of Rs. 15 each payable as Rs. 25 on application, Rs. 40 on allotment and balance in the first call. Applications received for 75,000 equity shares but the company issued to them only 25,000 shares. Excess money was refunded to them after adjustment for further calls. Last call on 500 shares were not received and were forfeited after due notice. The above is the case of _____ (a) (c) 23. Face value None of the three A businessman purchased goods for Rs. 25,00,000 and sold 70% of such goods during the accounting year ended 31st March, 2010. The market value of the remaining goods was Rs. 5,00,000. He valued the closing inventory at Rs. 5,00,000 and not at Rs. 7,50,000 due to (a) (c) 22. (b) (d) For issuing shares at a discount, how much time is required after commencement of business: (a) (c) 21. Market value Purchase value Income tax in case of a sole trader is treated as ________ (a) (c) 20. Profit & Loss appropriation Cr side Balance Sheet liability side Rs. 22,000 Rs. 18,000 (b) (d) Rs. 25,000 Rs. 30,000 Original cost Rs. 25,000, salvage value Rs. 1,000, useful life 10 years. Annual depreciation under SLM will be (a) (c) Rs. 2,000 Rs. 3,000 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Rs. 2,400 Rs. 2,500 295 MODEL TEST PAPER - 11 25. When preparing a Bank Reconciliation Statement if you start with balance as per Pass Book, then cheques paid by bank recorded twice in Pass Book Rs. 1050 will be ______ (a) (c) 26. Rs. Gross Profit 50,000 Rent paid 6,000 Salaries 5,800 Net profit of the firm will be (a) (c) 27. Rs. 44,200 Rs. 42,000 (b) (d) Rs. 40,000 Rs. 45,000 Rs. 1,18,000 Rs. 1,25,000 (b) (d) Rs. 1,20,000 Rs. 1,40,000 Is an error of complete omission Will not affect the profit (b) (d) Will not affect the trial balance None of these Rs. 10,000 Rs. 28,000 (b) (d) Rs. 25,000 None of the above Mohan paid Rs. 500 towards a debit of Rs. 2,500, which was written off as bad debt in the previous year. Mohan s account will be credited with (a) (c) 31. Provision for Bad Debts (old) Apprentice Premium (Credit) Rs. 2,000 4,000 Goods purchased Rs. 1,00,000, sales Rs. 90,000 Margin 20% on sales. Closing inventory is _____ (a) (c) 30. Deducted None of the three Both the discount columns of the Cash Book were omitted to be posted in the ledger. This error............................? (a) (c) 29. (b) (d) A started business with Rs. 20,000 cash and Rs. 11,000 inventory. Cash sales & cash purchases were Rs. 10,000 & Rs. 5,000. Total sales and purchases amounted to Rs. 70,000 & Rs. 50,000. Outstanding Trade Payables were Rs. 15,000 and Trade Receivables Rs. 25,000. Expenses paid Rs. 17,000. Machine was purchased for Rs. 10,000 out of which Rs. 8000 has been paid. Cash in hand at the end of the year was Rs. 5,000. Total of Trial Balance at the end of the year will be ___________ (a) (c) 28. Added Not required to be adjusted Rs. 2,500 Rs. 500 (b) (d) Rs. 2,000 None of the three Income tax liability of the proprietor Rs. 1200 was paid out of petty cash. Journal entry will be ________ (a) (b) (c) (d) Dr. drawings and Cr. Cash A/c Rs. 1200 Dr. drawings and Cr. Petty Cash Rs. 1200 Dr Income tax and Cr Cash A/c Rs. 1200 None of the above 296 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 32. An old, machine was purchased for Rs. 60,000. It was repaired for Rs. 5,000 and Rs. 5,000 paid on its installation. Machinery repairs a/c will be debited by (a) (c) 33. (b) (d) Rs. 5,000 None of the three Ras started business on 01.01.2010 with a capital of Rs. 20,000 and he borrowed Rs. 3,000 from a friend. He earned a profit of Rs. 10,000 during the year and withdrew cash Rs. 5,000 for private use. What is his capital at the end of the year? (a) (c) 34. Rs. 10,000 Rs. 15,000 Rs. 25,000 Rs. 30,000 (b) (d) Rs. 28,000 Rs. 27,000 A partnership firm maintains the inventory records under perpetual system of inventory. Consider the transactions occured for the month of March 2010. Date Particulars Quantity Cost per unit (Rs.) March 1 Opening Inventory 15 400 March 4 Purchases 20 450 March 6 Purchases 10 460 If the firm sold 32 units on March 24, 2010 closing inventory under FIFO method is (a) (c) 35. (b) (d) Rs. 5681 Rs. 5950 Capital introduced by Mr. A on 01.01.2009 Rs. 1,00,000. Further capital introduced during the year was Rs. 50,000. Mr. A withdrew Rs. 200 per month on the last date of each month. Interest on drawings was charged @ 5%. Profit earned during the year was Rs. 10,000. Capital on 31.12.2009 will be _______ (a) (c) 36. Rs. 7500 Rs. 5800 Rs. 1,57,545 Rs. 1,60,000 (b) (d) Rs. 1,57,000 Rs. 1,55,000 Purchased goods from A Rs. 500 passed through sales book the rectifying journal entry will be ________ (a) (b) (c) (d) Purchases A/c Dr. To A A s Capital a/c Dr. To Sales Purchases A/c Dr. To Sales A/c To A None of the above Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India Rs. 500 Rs. 500 500 500 500 500 1,000 297 MODEL TEST PAPER - 11 37. Opening inventory 20,000 Closing inventory 18,000 Purchases 85,800 Carriage inwards 2,300 Carriage outwards 3,000 Office Rent 5,000 Sales 1,40,700 Gross profit will be _____ (a) (c) 38. (b) (d) Rs. 5,200 Rs. 1,600 Rs. 1045 Rs. 1100 (b) (d) Rs. 1050 Rs. 1060 Rs. 30,000 Rs. 60,000 (b) (d) Rs. 20,000 NIL A, B & C are partners sharing profits in the ratio of 3:2:1. B retires and goodwill of the firm is fixed at Rs. 1,80,000. No goodwill A/c appears in the books of the firm. A & C decide to share profits in the ratio of 3:1. B s share of goodwill will be adjusted in the Capital accounts of A and C in (a) (c) 42. Rs. 4,800 Rs. 3,200 A & B purchased a piece of land for Rs. 60,000 and sold it for Rs. 90,000. A had contributed Rs. 40,000 and B Rs. 20,000. The profit on venture will be (a) (c) 41. Rs. 47,500 Rs. 50,600 Goods costing Rs. 1000 supplied to Ramesh at the invoice price of 10% above cost and a Trade Discount for 5%. The amount of Sales will be (a) (c) 40. (b) (d) X of Kanpur sends out certain goods at cost + 25%. Invoice value of goods sent out Rs. 2,00,000. 4/5th of the goods were sold by consignee at Rs. 1,76,000. Commission 2% upto invoice value and 10% on any surplus above invoice value. Commission amount will be ________ (a) (c) 39. Rs. 50,000 Rs. 42,600 Profit sharing Sacrificing ratio (b) (d) Gaining ratio Old ratio A Co. issued Rs. 1,00,000 12% Debentures at 5% discount, redeemable at 5% premium after 10 years. Loss on issue of debentures will be (a) (c) Rs. 15,000 Rs. 12,000 298 The Institute of Chartered Accountants of India (b) (d) Rs. 10,000 Rs. 20,000 Common Proficiency Test (CPT) Volume - I 43. A partnership firm earned net profits during the last 3 years as follows 2007 15,000 2008 20,000 2009 25,000 The capital investment in the firm throughout the above mentioned period has been Rs. 1,00,000. Having regard to the risk involved 15% is considered to be a fair return on capital. Goodwill on the basis of 2 years purchase of average super profit earned during the above mentioned 3 years will be (a) (c) 44. (b) (d) 2:1:1 None of the above 6000 shares 9375 shares (b) (d) 7500 shares 5625 shares Rs.6,000 Rs. 8,000 (b) (d) Rs. 5,000 None of the above A second hand car is purchased for Rs. 15000, the amount of Rs. 1000 is spent on its repairs, Rs. 500 is incurred to get the car registered in owners name and Rs. 1200 is paid as dealers commission. The amount debited to car account will be _____ (a) (c) 48. 3:1:1 2:2:1 A & B are equal partners with capitals of the Rs. 10,000 and Rs. 8,000 respectively. They admit C as a partner with 1/4th share in the profits of the firm. C brings Rs. 8,000 as his share of capital. Value of goodwill will be ____ (a) (c) 47. Rs. 10,000 Rs. 15,000 G Ltd. acquired assets worth Rs. 7,50,000 from H. Ltd. by issue of shares of Rs. 100 each at a premium of 25%. The number of shares to be issued by G. Ltd., to settle the purchase consideration will be (a) (c) 46. (b) (d) A & B are partners in a business sharing profits and losses in the ratio of 7:3. They admit C as a partner. A sacrificed 1/7th share and B sacrificed 1/3rd of his share in favour of C. New Profit sharing ratio will be (a) (c) 45. Rs. 8,000 Rs. 12,000 Rs. 17,700 Rs. 16,500 (b) (d) Rs. 16,000 Rs. 17,000 Ramesh & Suresh are partners sharing profits in the ratio of 2:1 (Ramesh Capital is Rs. 1,02,000 and Suresh Capital is Rs. 73,000) They admitted Mahesh & agreed to give him 1/5 in share. He brings Rs. 14,000 as his share of goodwill. He agreed to contribute capital in profit sharing ratio. How much capital will be brought by incoming partner? (a) (c) Rs. 43,750 Rs. 47,000 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Rs. 45,000 Rs. 48,000 299 MODEL TEST PAPER - 11 49. Debit Balance as per cash book of Narayan Enterprises as on 28th February 2010 is Rs. 15,000. Cheques deposited but not cleared Rs. 660 and cheques issued but not presented for payment Rs. 2150. Balance as per pass book should be ______ (a) (c) 50. (b) (d) Rs. 39,600 Rs. 45,000 Rs. 12,250 Rs. 14,000 (b) (d) Rs. 12,000 Rs. 15,000 Rs. 85,000 Rs. 80,000 (b) (d) Rs. 86,000 Rs. 75,000 A and B are partners sharing profits in the ratio of 3:2 with capitals of Rs. 50,000 and Rs. 30,000 respectively. Interest on capital is agreed @ 6% p.a. B is to be allowed an annual salary of Rs. 2,500. The profits of the year prior to calculation of interest on capital but after charging B s salary amounted to Rs. 12,500. Manager is to be allowed a Commission of 5% of profits remaining after deducting salary and interest on capital but before charging such Commission, Profit transferred to partners Capital Accounts will be ________ (a) (c) 54. Rs. 39,000 Rs. 40,000 X and Y enter into a joint venture. X supplied goods to Y from his own inventory worth Rs. 70,000. X incurred expenses amounting to Rs. 6000 on joint venture. The venture resulted in a total profit of Rs. 15,000 of which their ratio of distribution is 2:1. The entire sale proceeds were received by Y. No inventory left at the end of the venture. Amount received by X from Y in final settlement will be ________ (a) (c) 53. Rs. 16,490 Rs. 16,500 Suresh of Delhi consigned 600 fans to Naresh of Bareilly to be sold on his account and at his risk. The cost of each fan is Rs. 300. Suresh paid Rs. 6000 as freight and insurance. Naresh paid Rs. 1500 as Octroi & Cartage; Rs. 3500 for godown rent and insurance. 500 fans were sold for Rs. 1,80,000. Naresh was entitled to a commission of 4% on sale @ Rs. 350 per fan and 20% of any surplus price realized. Profit on consignment will be ________ (a) (c) 52. (b) (d) On 1st Sept. 2009 goods costing Rs. 33,000 were consigned by X to his agent Y at a proforma price which was cost plus one sixth profit on invoice price. Invoice price of goods will be________ (a) (c) 51. Rs. 15,500 Rs. 16,000 A Rs. 4,389 B Rs. 2926 A Rs. 3,000 B Rs. 4315 (b) (d) A Rs. 4,000 B Rs. 3,315 A Rs. 2,500 B Rs. 4,815 A and B are partners, sharing profits in the ratio of 5:3. They admit C with 1/5 share in profits, which he acquires equally from both 1/10 from A and 1/10 from B. New profit sharing ratio between A and B will be (a) (c) 21:11 15:10:5 300 The Institute of Chartered Accountants of India (b) (d) 20:10:4 None of the three Common Proficiency Test (CPT) Volume - I 55. A, B, and C are partners, sharing profits in the ratio of 4:3:2. D is admitted for 2/9 share of profits and brings Rs. 30,000 as his capital and Rs. 10,000 for his share of Goodwill. The new profit sharing ratio between A:B:C:D will be 3:2:2:2. The Goodwill amount brought by D will be shared by: (a) (c) 56. (b) (d) Rs. 1,62,000 None of the three Rs. 800 Rs. 900 (b) (d) Rs. 700 Rs. 1,000 Rs. 16,500 Rs. 15,000 (b) (d) Rs. 16,000 None of the above 100 articles at the sale price of Rs. 200 each sent to a customer on approval basis were recorded as actual sales on that price. The sale price was made cost plus 25%. The amount of inventory on approval will be (a) (c) 60. Rs. 2,00,000 Rs. 1,90,000 A Ltd. makes an issue of 10,000 Equity shares of Rs. 100 each payable as follows: On application and allotment Rs. 50 Rs. 25 On First Call On Second & Final Call Rs. 25 Members holding 400 shares did not pay the second call and the shares are duly forfeited, 300 of which are reissued on fully paid at Rs. 80 per share. Amount transferred to Capital reserve will be ________ (a) (c) 59. A&B B only 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. 4 on first and final call. In case of forfeiture, share capital account will be debited by ________ (a) (c) 58. (b) (d) Shiva Ltd. issued 20,000 shares of Rs. 10 each at a discount of 10%. Payments were to be made as - on application Rs. 3; on Allotment Rs. 4 and on First and Final Call Rs. 2. Applications were received for 18,000 shares and all were accepted. All money duly received. Balance Sheet total will be ________ (a) (c) 57. AB & C A only Rs. 16,000 Rs. 15,000 (b) (d) Rs. 20,000 None of the above Share capital 5,00,000 shares of Rs. 10 each Rs. 5 called up Rs. 25,00,000 Calls in arrear Rs. 10,000 Calls in advance Rs. 15,000 Directors decide to provide 10% for dividend on share capital. Amount of proposed dividend will be __________ (a) (c) Rs. 2,50,000 Rs. 2,40,000 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Rs. 2,49,000 None of the three 301 MODEL TEST PAPER - 11 SECTION B : MERCANTILE LAWS (40 MARKS) 61. Which of the statement is incorrect? (a) (b) (c) (d) 62. As per the India Contract Act, 1872, every person is competent to contract provided he: (a) (b) (c) (d) 63. Agreement made under the unilateral mistake of fact Agreements made under the bilateral mistake of fact Agreement made under the influence of fraud Contingent agreement An agreement to share the salary of a public officer An agreement to sell a religious office An agreement with the objective of procuring a public post All of the above Physical Force or Threat Both (a) and (b) (b) (d) Mental Pressure None of the Above An agreement is void if it is opposed to public policy. Which of the following is not covered by heads of public policy? (a) (c) 68. becomes enforceable none of these Coercion involves: (a) (c) 67. (b) (d) Which of the following agreements are void? (a) (b) (c) (d) 66. Is discharged becomes void Which of the following agreements is void? (a) (b) (c) (d) 65. Is of the age majority according to the 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 On the valid performance of the contractual obligations by the parties, the contract (a) (c) 64. All illegal agreements are void but all void agreements are not necessary illegal A voidable contract is not voidable at the option of the aggrieved party Contracts that are immoral or opposed to public policy are illegal in nature All of the above Trading with an enemy Marriage brokerage contracts (b) (d) Trafficking in public offices Contracts to do impossible acts (b) (d) Promisee Any of these Consideration must move at the desire of (a) (c) Promisor Any other person 302 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 69. The following persons can enter into contracts as per the provisions of the Indian contracts Act, 1872 (a) (b) (c) (d) 70. The doctrine of Caveat Emptor does not apply, when (a) (b) (c) (d) 71. Delivery of goods to buyer Tender of price by buyer (b) (d) Delivery of goods to carrier All of above 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 They should be in existence at the time of the contract of sale They should be owned or possessed by the seller Both of the above None of the above In case of sale (a) (b) (c) (d) 76. mortgage All of above Necessary condition for existing goods is (a) (b) (c) (d) 75. (b) (d) A person to whom money has been paid, anything delivered under coercion (a) (b) (c) (d) 74. Sale pledge In which of the following cases, the unpaid seller loses his right to lien? (a) (c) 73. the goods are bought by sample the goods are bought by sample as well as as description the goods are purchased under its brand name All of above The Sale of Goods Act, 1930 deals with (a) (c) 72. Alien Enemy Foreign Sovereigns or accredited representative of a foreign state Insolvents and convicts None of the above Property in goods passes to the buyer Risk in the goods passes to the buyer Both the above None of the above Partnership (a) (b) (c) (d) Arises by operation of law Comes into existence only after registration Can arise by agreement or otherwise Arise by way of an agreement only Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 303 MODEL TEST PAPER - 11 77. Which of the following is correct? (a) (b) (c) (d) 78. The test of good faith as provided under the Indian Partnership Act, 1932 requires the following: (a) (b) (c) (d) 79. Valid Illegal Misrepresentation Coercion (b) (d) Undue Influence All of the above Impossible Illegal (b) (d) Possible through an agreement to sell A myth A threatens to kill B if he does not agree to sell his scooter to him for Rs.5000 only. Here B s Consent is obtained by ________ (a) (c) 84. (b) (d) Actual Sale of future goods is (a) (c) 83. Void Voidable According to the Indian Contract Act, 1872, Consent is said to be free when it is not caused by ________ (a) (c) 82. No period has been fixed by the partners for its duration There is no provision in the partnership agreement for its determination Both of the above None of the above Implied contract, even if not in writing or express words, is perfectly ________ if other conditions are satisfied (a) (c) 81. That the expulsion must be in the interest of the partnership That the partner to be expelled is served with a notice That he is given an opportunity of being heard All of the above The essential elements of a partnership at will are: (a) (b) (c) (d) 80. Liability of a partner in a partnership firm is unlimited Liability of a member of a HUF is unlimited Both the above None of the above undue influence coercion (b) (d) fraud none of these Quasi - contracts arise (a) (b) (c) (d) Where obligations are created without a contract Where obligations are created under a contract Out of natural causes Out of man-made causes 304 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 85. An agreement made with free consent to which the consideration is lawful but inadequate, is ________ (a) (c) 86. (b) (d) voidable Both (b) & (c) Present Goods specified Goods (b) (d) existing Goods none of the above delivery of goods fall of hammer (b) (d) payment of price none of the above delivery of goods regain the possession (b) (d) retain the possession none of the above Can sue for price Can sue for damages Can sue the buyer for injunction None of the above Buyer means a person who ________ (a) (c) 93. Not voidable Valid In case of an agreement to sell, the aggrieved party ________ (a) (b) (c) (d) 92. Voidable Illegal The essence of a right of lien is to ________ (a) (c) 91. (b) (d) An auction Sale is complete on the ________ (a) (c) 90. Void Valid Goods which are in existence at the time of the Contract of Sale is known as ________ (a) (c) 89. Valid Unlawful A unilateral mistake as to fact leads to an agreement which is ________ (a) (c) 88. (b) (d) When after the formation of a valid contract, an event happens which makes the performance of contract impossible, and then the contract becomes ________ (a) (c) 87. Void Voidable Buys goods Has bought goods (b) (d) Agrees to buy goods Buys or agrees to buy goods A person who finds goods belonging to another and takes them into his custody________ (a) (b) (c) (d) Becomes the owner of those goods thereafter Is subject to the same responsibilities as a bailee Is allowed to sell them and retain the money realized from such sale Has no obligation to return those goods, he may do so only a goods gesture Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 305 MODEL TEST PAPER - 11 94. Conditions and warranties ________ (a) (c) 95. any time during auction before payment of price (b) (d) before fall of hammer cannot withdraw at all Liability for special damages Liability for nominal damages (b) (d) Liability for exemplary damages Liability for disciplinary damages Compulsory from the beginning Not compulsory till first five years of beginning of the partnership Not compulsory at all Compulsory only if the Registration of Firm, gives an order in the regard A believes blue colour to be black colour, for any reason whatsoever. He has a garment shop. He sells one blue colour shirt to B, representing it to be black colour. B knows nothing about colour. B believes A and accepts the blue colour to be black colour, Later on B s mother explains B that the colour of the shirt is actually blue and not black. It is a clear case of (a) (c) 100. Optional None of the above Registration of a partnership firm is- ________ (a) (b) (c) (d) 99. (b) (d) ________ does not exist. (a) (c) 98. Compulsory Occasional The bidder at an auction sale can withdraw his bid ________ (a) (c) 97. Must be implied if not expressed None of the above Registration of a firm is ________ (a) (c) 96. Must be expressed (b) May either be expressed or implied (d) Misrepresentation Unintentional fraud (b) (d) Fraud Cheating A agrees with B to carry passengers by taxi from Kanpur to Lucknow on the following terms, namely, B is to pay A Rs. 100 per mile per annum, and A and B are to share the costs of repairing and replacement of the cars, and to divide equally between them the proceeds of fares received from passengers, Choose the alternative. (a) (c) A and B are partners A and B are co-owners (b) (d) A and B are owners Can t be decided SECTION C : GENERAL ECONOMICS (50 MARKS) 101. Total utility is maximum when: (a) (b) (c) (d) marginal utility is zero marginal utility is at its highest point marginal utility is equal to average utility average utility is maximum 306 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 102. The consumer is in equilibrium at a point where the budget line : (a) (c) 103. (b) (d) is below an indifference curve cuts an indifference curve An indifference curve slopes down towards right since more of one commodity and less of another result in: (a) (c) 104. is above an indifference curve is tangent to an indifference curve same satisfaction maximum satisfaction (b) (d) greater satisfaction decreasing expenditure The consumer is in equilibrium when the following condition is satisfied: (a) (b) MUX PX < MUY PY (c) 105. MU X PX > MUY PY MUX PX = MUY PY (d) None of the above In the case of a Giffen good, the demand curve will be: (a) (c) 106. (b) (d) homogeneous product absence of transport cost AC = MR MR = AR (b) (d) MC = MR AC = AR monopoly oligopoly (b) (d) imperfect competition perfect competition Under which of the following forms of market structure does a firm have no control over the price of its product? (a) (c) 110. large number of buyers and sellers freedom of entry In which form of the market structure is the degree of control over the price of its products by a firm very large? (a) (c) 109. downward-sloping to the right vertical Which is the first order condition for the profit of a firm to be maximum? (a) (c) 108. (b) (d) Which of the following is not an essential condition of pure competition ? (a) (c) 107. horizontal upward-sloping to the right monopoly oligopoly (b) (d) monopolistic competition perfect competition Price discrimination will be profitable only if the elasticity of demand in different markets in which the total market has been divided is: (a) (c) uniform less Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) different zero 307 MODEL TEST PAPER - 11 111. The law of consumer surplus is based on : (a) (c) 112. decreases first declines and then rises production cost real cost (b) (d) physical cost opportunity cost 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 positive negative (b) (d) zero infinite zero less than infinity (b) (d) greater than zero infinite zero equal to one (b) (d) infinity greater than Zero but less than infinity Elasticity of supply refers to the degree of responsiveness of supply of a good to changes in its: (a) (c) 120. (b) (d) A vertical supply curve parallel to Y axis implies that the elasticity of supply is: (a) (c) 119. increases remains constant The elasticity of substitution between two perfect substitutes is: (a) (c) 118. Marginal cost curve Average fixed cost curve In the case of an inferior good the income elasticity of demand is: (a) (c) 117. (b) (d) Contraction of demand is the result of (a) (b) (c) (d) 116. Average cost curve Average variable cost curve The cost of one thing in terms of the alternative given up is known as: (a) (c) 115. revealed preference theory the law of diminishing marginal utility In the short run, when the output of a firm increases, its average fixed cost: (a) (c) 114. (b) (d) Which of the following cost curves is never U shaped ? (a) (c) 113. indifference curve analysis law of substitution demand costs of production (b) (d) price state of technology (b) (d) downward to the right upward to the right An isoquant slopes : (a) (c) downward to the left upward to the left 308 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 121. Which of the following is considered production in economics? (a) (b) (c) (d) 122. Which of the following is not a characteristic of land? (a) (b) (c) (d) 123. (d) Privatization is panacea for all economic problems Privatization always leads to attaining social and economic efficiency Privatization may result in lopsided development of industries in the country None of the above The disinvestments programme has been successfully carried out in India Privatization up to 100 percent has been carried out in all the PSUs in India Under strategic sale method of disinvestments, the government sells a major share to strategic buyer None of the above defence banks (b) (d) drugs and Pharmaceuticals insurance FRBM Act stands for (a) (b) (c) (d) 128. PNB OBC At present 100 per cent FDI is allowed in (a) (c) 127. (b) (d) Which of the following statements is correct? (a) (b) (c) 126. SBI RBI Which of the following statement regarding privatization is correct? (a) (b) (c) (d) 125. its supply for the economy is limited it is immobile its usefulness depends on human efforts it is produced by our forefathers Who is the official lender of the last resort in India? (a) (c) 124. Tilling of soil Singing a song before friends Preventing a child from falling into a manhole on the road Painting a picture for pleasure Fiscal Revenue and Budget Management Foreign Revenue and Business Management Fiscal Responsibility and Budget Management Foreign Responsibility and Budget Management The share of concessional debt in total external debt of India has: (a) (c) remained the same reduced Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) doubled increased 309 MODEL TEST PAPER - 11 129. Which of the following statements is incorrect? (a) (b) (c) (d) 130. In terms of generation of power ____________ s contribution, is the maximum (a) (c) 131. (b) (d) structural technical First Third (b) (d) Second Fourth Andhra Pradesh Kerala (b) (d) Uttar Pradesh Karnataka Between 50 60 crore Between 70 80 crore (b) (d) Between 60 70 crore Above 120 crore India accommodates nearly _________ per cent of world s population (a) (c) 137. voluntary frictional India s present population in 2010 is: (a) (c) 136. National Thermal Power Corporation National Tidal Power Corporation National Theological Power Corporation National Talent and Potential Corporation In which state is the sex ratio most favourable to women? (a) (c) 135. nuclear others What is India s rank in world population? (a) (c) 134. (b) (d) Most of the unemployment in India is: (a) (c) 133. hydel thermal NTPC stands for (a) (b) (c) (d) 132. The Indian road network is one of the largest networks in the world The rural road network connects around 65 per cent of all weather roads Most of the State Road Transport Corporations are running on profits The National highways carry more than 40 per cent of the total road traffic 10 17.5 (b) (d) 50 45 Which of the following statements is correct? (a) (b) (c) (d) Excise duty is levied on sales volume Custom duties have been drastically cut down since 1991 Fiscal policy uses the tools of CRR and Bank Rate to control expenditure Agriculture contributes the maximum to the direct tax revenues in India 310 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 138. Find the tax which is direct tax among the following: (a) (c) 139. Listening to music on the radio Teaching one s own son at home Medical facilities rendered by a charitable dispensary A housewife doing household duties household sector only government sector only both household and government sectors neither household nor government sector net output method industry of origin method (b) (d) production method all of the above GDP at market price = GDP at factor cost plus net indirect taxes NNP at factor cost = NNP at market price minus indirect taxes GNP at market price = GDP at market price plus net factor income from abroad None of the above Nearly _____ percent of working population is engaged in the service sector (2009-10). (a) (c) 145. Total capital population None of the above Which of the following is incorrect ? (a) (b) (c) (d) 144. (b) (d) The net value added method of measuring national income is also known as: (a) (c) 143. NNP population Population NNP Demand for final consumption arises in: (a) (b) (c) (d) 142. Excise duty Service tax Which of the following is an economic activity? (a) (b) (c) (d) 141. (b) (d) Per capita national income means: (a) (c) 140. Personal income tax Sales tax 25 80 (b) (d) 45 50 The industrial sector depends on the agricultural sector because (a) (b) (c) (d) the agricultural sector provides food and other products for the consumption purposes of industrial sector the agricultural sector provides raw materials for the development of agro-based industries of the economy the agricultural sector provides market for the industrial products all of the above Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 311 MODEL TEST PAPER - 11 146. The Indian industry faced the process of retrogression and deceleration because of: (a) (b) (c) (d) 147. Which of the following statements is incorrect? (a) (b) (c) (d) 148. (b) (c) (d) there has been an increase in the use of high yielding varieties of seeds, fertilizers pesticides etc. there has been noticeable positive change in the attitude of farmers towards new techniques of production farmers are increasingly resorting to intensive cultivation, multiple cropping, scientific water management all of the above Generally an economy is considered underdeveloped if: (a) (b) (c) (d) 150. About 80 per cent of agricultural area has irrigation facilities About two third area is rain-fed in India Productivity per worker in agriculture is much lower than that in industry Cropping pattern is quite skewed in India We can say Indian agriculture has become modern since: (a) 149. unsatisfactory performance of agriculture slackening of real investment in public sector narrow market for industrial goods, especially in rural areas all of the above the standard of living of people is low and productivity is also considerably low. agriculture is the main occupation of the people and productivity in agriculture is quite low the production techniques are backward all of the above _______ is the apex bank for agriculture credit in India. (a) (c) RBI NABARD (b) (d) SIDBI ICICI SECTION D : QUANTITATIVE APTITUDE (50 MARKS) 151. Laspeyre s and Pasche s method satisfy time reversal test (a) (c) 152. True Both (b) (d) False None of these A frequency distribution (a) (b) (c) (d) Arranges observations in an increasing order Arranges observations in terms of a number of groups Relates to measurable characteristic All of these 312 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 153. Ogive is used to obtain (a) (c) 154. 1 and 1 1 and 0 (b) (d) 0 and 1 None of these Binomial distribution Chi-Square Distribution (b) (d) Normal distribution Sampling Distribution Standard error Sampling distribution (b) (d) Sampling fluctuation Expectation A point estimate Both (a) and (b) (b) (d) An interval estimate None of these True Both (b) (d) False None of these 2 3 (b) (d) 5 4 (b) (d) Unequal and real Imaginary numbers If b2 4ac = 0, the roots are ____________ (a) (c) 163. Negative All of these The number of test of adequacy is ___________ (a) (c) 162. (b) (d) The index number is a special type of G.M. (a) (c) 161. Positive Zero A range of value is (a) (c) 160. Mean Median A measure of precision obtained by sampling is given by (a) (c) 159. (b) (d) The most important continuous probability distribution is known is (a) (c) 158. Standard deviation Mode The probability of an event can assume any value between (a) (c) 157. Mode All of these The errors in case of regression equation are (a) (c) 156. (b) (d) The value of middlemost item when they are arranged in order of magnitude is called (a) (c) 155. Mean Quartiles Equal and real Complex numbers If (7p+3q) : (3p-2q) = 43:2 , then p:q is __________ (a) (c) 5:4 7:2 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 4:5 2:7 313 MODEL TEST PAPER - 11 164. Number of ________________ arrangement can be made by using all the letters of word Monday. (a) (c) 165. 120 41 log (a) (c) 167. lim x 0 (a) (c) 172. 128 is equal to _____________________ 6 24 (b) (d) 12 14 48 120 (b) (d) 720 None of these 12% 16% (b) (d) 14% 8% Median Mean (b) (d) Mode None The value of deciles divides the total number of observations into _____ equal parts. (a) (c) 171. 100 51 A graphical representation of __________ can be prepared in 2 different ways. (a) (c) 170. 2 (b) (d) Rs. 4000 amount to Rs. 6000 in 3 years at the _______________ p.a., if interest is compounded half yearly. (a) (c) 169. 50 101 The number of ways in which 6 boys sit in a round table so that two particular boys sit together (a) (c) 168. 720 51 Which term of series 7,11,15, . nth term is equal to 403. (a) (c) 166. (b) (d) 100 2 (b) (d) 10 None of these (b) (d) Exist and is equal to 4 Exist and is equal to 3 3 x+1 - 3 is equal to x Does not exist Exist and is equal to 3 log e3 dy x 2 y 2 of 2 + 2 =1 Find dx a b (a) b2x / a2y (b) b2y / a2x (c) b2 / a2 (d) 0 314 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 173. 6th term of series ab, a2b3, a3b5 . nth term is equal to (a) (c) a 6 b 11 a6b6 (b) (d) a5 b10 a5 b11 e 174. log x dx is equal to 2 (a) (c) 175. Rs. 188.40 Rs. 138.94 (b) (d) Rs. 193.94 Rs. 50.00 15 18 (b) (d) 18 12 16 0 (b) (d) 15 16 25 and 30 60 and 72 (b) (d) 15 and 18 None of these The equation of right bisector of line joining the points A (3, 4) and B (5, 6) is equal to (a) (c) 181. 7650 7550 Two number are in the ratio of 5:6. If 5 is subtracted from each of them their ratio becomes 4:5. Find the numbers (a) (c) 180. (b) (d) For what value of K the equation 9x2 24x + K = 0 has equal roots (a) (c) 179. 7560 7660 If f(x) = x2+ 3x then f(2) f(4) is equal to (a) (c) 178. (2 log 2 + 2) 0 Find the present value of Rs. 500 due 10 years hence when interest of 10% is compounded half yearly? (a) (c) 177. (b) (d) In how many ways can the letters of words ACCOUNTANT be arranged if vowels always occur together? (a) (c) 176 . log 2 1 2 log 2 1 2x 2y 9 = 0 3x 2y + 7 = 0 (b) (d) x+y+1=0 x 5y + 4 = 0 The regression equation are 8x 10y + 66 = 0 and 40 x 18y = 214, find the coefficient of correlation (a) (c) 4/5 3/5 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 4/5 1 315 MODEL TEST PAPER - 11 182. The mean weight of 150 students in a class is 60 kg. The mean weight of the boys is 70 kg, while that of girls is 55 kg, find the number of boys and number of the girls in the class. (a) (c) 183. (b) (d) 1.50 1.862 14 13 (b) (d) 12 11 15 and 20 33.3 and 15 (b) (d) 33.3 and 20 12 and 16 139.81 153.98 (b) (d) 151.94 None of these 2 2 and + 3 (b) (d) 2 and + 2 2, 0 How many diagonals can be drawn in a plane figure of 16 sides. (a) (c) 190. 2.25 2.15 The roots of equation 9x+2 6.3 x+1 + 1 = 0 are (a) (c) 189. 2:221 None of these The height of 8 boys in a class (in cumulative) are 135, 138, 160, 141, 155, 146, 158, 149. Find 61st percentile. (a) (c) 188. (b) (d) Coefficient of variation of two series are 60% and 80% respectively. Their standard deviation are 20 and 16 respectively, what are their A.M. (a) (c) 187. 1:221 10:21 If 10 coins are tossed 100 times, how many times would you expect 7 coins to fall head upward. (a) (c) 186. 100 boys and 50 girls None of these A random sample was taken to estimate the mean annual income of 100 families and the mean and standard deviation were found to the Rs. 6,300 and Rs. 9.5 respectively find standard error for 95% confidence level. (a) (c) 185. (b) (d) Two cards are drawn from a well shuffled pack of playing cards. Find the probability that both are ace. (a) (c) 184. 50 boys and 100 girls 75 boys and 75 girls 100 104 (b) (d) 50 54 The sum of squares of first n natural numbers is equal to (a) n(n + 1) 2 316 The Institute of Chartered Accountants of India (b) n (n + 1)(2n + 1) 6 Common Proficiency Test (CPT) Volume - I (c) 191. 1 4 Transitive Reflexive 8 7 13 16 (b) (d) Symmetric Equivalence (b) (d) 9 15 (b) (d) 12 15 (b) (d) 91 41 x 2 a2 x + a 2 + log x 2 + x 2 + a 2 2 2 (b) x 2 a2 2 x a + log x 2 x 2 a 2 2 2 (c) x 2 a2 2 x a log x 2 + x 2 + a 2 2 2 (d) None of these If c(n, 8) = c (n, 6), find c(n, 2) (a) (c) 197. 3 5 x 2 +a 2 dx is equal to (a) 196. (b) (d) The number of subsets of the set {1,2,3,4} is (a) (c) 195. None of these Find the least value of n for which the sum 1 + 3 + 32 + 33 ________ to n terms of greater than 7000. (a) (c) 194. (d) Is greater than over the set of all natural number if known as (a) (c) 193. 2 Find the gradient of curve y = 3x2-5x+4 at the point (1, 2) (a) (c) 192. n (n + 1) 6 14 19 An experiment succeeds twice as often as it fails. What is the probability that in next five trials there will be three success. (a) (c) 192/243 80/243 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 19/243 50/243 317 MODEL TEST PAPER - 11 198. If a:b = 4:5, find the value of (5a 3b): (6a + 3b) (a) (c) 199. 7:39 1:3 (b) (d) What is the modal value for the numbers 4, 3, 8, 15, 4, 3, 6, 3, 15, 3, 4. (a) (c) 3 15 (b) (d) p 200. 15:39 5:39 4 None of these p q q -1 If pq = qp then value of - p reduces to q (a) (c) p p 0 318 The Institute of Chartered Accountants of India (b) (d) q None of these Common Proficiency Test (CPT) Volume - I Model Test Paper BOS/CPT-11 SECTION A : FUNDAMENTALS OF ACCOUNTING 1 (c) 2 (a) 3 (d) 4 (a) 5 (a) 6 (a) 7 (c) 8 (b) 9 (c) 10 (c) 11 (b) 12 (a) 13 (c) 14 (d) 15 (c) 16 (a) 17 (d) 18 (b) 19 (b) 20 (c) 21 (b) 22 (d) 23 (a) 24 (b) 25 (a) 26 (a) 27 (a) 28 (d) 29 (c) 30 (d) 31 (b) 32 (d) 33 (a) 34 (d) 35 (a) 36 (c) 37 (d) 38 (a) 39 (a) 40 (a) 41 (b) 42 (b) 43 (b) 44 (a) 45 (a) 46 (a) 47 (a) 48 (a) 49 (b) 50 (b) 51 (a) 52 (b) 53 (a) 54 (a) 55 (b) 56 (a) 57 (d) 58 (a) 59 (a) 60 (b) SECTION-B : MERCANTILE LAWS 61 (b) 62 (d) 63 (a) 64 (b) 65 (d) 66 (a) 67 (d) 68 (a) 69 (d) 70 (b) 71 (a) 72 (d) 73 (d) 74 (c) 75 (c) 76 (d) 77 (a) 78 (d) 79 (c) 80 (b) 81 (d) 82 (b) 83 (c) 84 (a) 85 (b) 86 (a) 87 (a) 88 (b) 89 (c) 90 (b) 91 (b) 92 (d) 93 (b) 94 (c) 95 (b) 96 (b) 97 (d) 98 (c) 99 (a) 100 (a) Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 583 ANSWERS SECTION C : GENERAL ECONOMICS 101 (a) 102 (c) 103 (a) 104 (c) 105 (c) 106 (d) 107 (b) 108 (a) 109 (d) 110 (b) 111 (d) 112 (d) 113 (b) 114 (d) 115 (b) 116 (c) 117 (d) 118 (a) 119 (b) 120 (b) 121 (a) 122 (d) 123 (c) 124 (c) 125 (c) 126 (b) 127 (c) 128 (c) 129 (c) 130 (c) 131 (a) 132 (b) 133 (b) 134 (c) 135 (d) 136 (c) 137 (b) 138 (a) 139 (a) 140 (c) 141 (c) 142 (d) 143 (d) 144 (a) 145 (d) 146 (d) 147 (a) 148 (d) 149 (d) 150 (c) SECTION D : QUANTITATIVE APTITUDE 151 (b) 152 (d) 153 (c) 154 (d) 155 (d) 156 (d) 157 (b) 158 (a) 159 (b) 160 (b) 161 (d) 162 (a) 163 (b) 164 (b) 165 (b) 166 (d) 167 (a) 168 (b) 169 (a) 170 (b) 171 (c) 172 (a) 173 (a) 174 (b) 175 (a) 176 (b) 177 (b) 178 (d) 179 (a) 180 (b) 181 (c) 182 (a) 183 (a) 184 (d) 185 (b) 186 (b) 187 (b) 188 (a) 189 (c) 190 (b) 191 (a) 192 (a) 193 (b) 194 (c) 195 (a) 196 (b) 197 (c) 198 (d) 199 (a) 200 (c) 584 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I

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