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CA CPT : Volume 1 - Model Test Paper 13 (with Answers)

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BOARD OF STUDIES THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA COMMON PROFICIENCY TEST Model Test Paper BOS/CPT 13 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. SECTION A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. Consignment account is a (a) (c) 2. (b) (d) Credit balance None of the above Supplier (creditors) Customers (b) (d) Seller None of the three Bills receivables Cash payments (b) (d) Bills payables Opening entry Inventories should be out of godown in the sequence in which they arrive is based on (a) (c) 6. Debit balance Negative balance Journal Proper records (a) (c) 5. Personal account None of the above Who is the acceptor of Bills of Exchange? (a) (c) 4. (b) (d) Bank overdraft has a (a) (c) 3. Real account Nominal account FIFO HIFO (b) (d) LIFO Weighted average When adjusted purchase is shown in the debit column of the trial balance then (a) (b) (c) (d) Both opening and closing inventory appear in trial balance Opening inventory is shown in trial balance and not the closing inventory Closing inventory is shown in trial balance and not opening inventory Both opening and closing inventory do not appear in trial balance Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 345 MODEL TEST PAPER - 13 7. Business unit is separate and distinct from the persons who supply capital to it is based on __________ (a) (c) 8. Compound journal entry Posting (b) (d) Separate journal entry None of the above Government Investors (b) (d) Management Suppliers Error of principle Error of omission (b) (d) Compensating errors Error of commission Revaluation A/c Partners capital accounts (b) (d) Memorandum Revaluation A/c Profit & Loss Adjustment account (b) (d) An appropriation None of the three Interest on Partner s capital is _________ (a) (c) 14. Profit and Loss A/c Either to (a) or (b) General reserve at the time of retirement of a partner is transferred to_______ (a) (c) 13. (b) (d) If effect of an error is cancelled by the effect of some other error, it is commonly known as _____________ (a) (c) 12. Trading A/c Balance Sheet Following is not an example of external users (a) (c) 11. Going concern concept Dual aspect concept If two or more transactions of the same nature are journalized together having either the debit or the credit account common then that journal entry is known as (a) (c) 10. (b) (d) All the expenditures and receipts of revenue nature go to (a) (c) 9. Money measurement concept Entity concept An expenditure A gain Noting charges are paid at the time of _____________ of the bill (a) (c) Retirement Renewal (b) (d) Dishonour None of the above 15. A ___________ is sent to a customer when he returns goods (a) Debit note (b) Credit note (c) Proforma Invoice (d) None of the above 16. Provision is (a) An unknown liability but its amount and due date are indeterminate (b) An unknown liability and its amount and due date are determinate (c) A known liability and its amount and due date are determinate (d) A known liability but its amount and due date are indeterminate 346 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 17. The left hand side of an account is known as _________ and the right hand side of an account is known as ________ (a) Debt side; Credit side (b) Credit side; Debit side (c) Liability; Asset (d) None of the three 18. Prepaid expenses refer to those expense which have been (a) Paid but not incurred during the current accounting period (b) Incurred but not paid during the current accounting period (c) Incurred but not paid during the previous accounting period (d) Paid but not incurred during the previous accounting period 19. Profit and loss of realization account is shared among the partners in _______ ratio (a) Old profit sharing ratio (b) New profit sharing ratio (c) Capital ratio (d) Equal ratio 20. P shows a profit of Rs. 7,00,000 for the year ended 31.3.08. The figure has been arrived at after charging following against revenue: (i) Purchase of Car on 28.3.08 for use in business Rs. 1,00,000 and treated as vehicle expenses. (ii) Omitting to record unpaid electricity bills for Feb. and March, 2008 of Rs. 15,000 per month. The correct profit for the year ended 31st March, 2008 is (a) Rs. 6,30,000 (b) Rs. 7,00,000 (c) Rs. 7,70,000 (d) Rs. 8,30,000 21. What is Rs. (a) (b) (c) (d) 22. A, B and C are partners in the firm sharing profits and losses in 5:3:2 ratio. The firm s balance sheet as on 31.03.2010 shows the reserve balance of Rs. 25,000, profit of the last year Rs. 50,000, Joint life policy of Rs. 10,00,000 and fixed assets of Rs. 12,00,000. On 1st June, 2010 C died and on the same date assets were revalued. The executor of the deceased partner will get along with the capital of C 23. (a) (b) (c) (d) A bill (a) (c) 24. would be treatment when plant and machinery is sold for Rs. 1,40,000 whose cost 1,00,000 and WDV is Rs. 40,000 Revenue receipt of Rs. 1,00,000 Capital receipt of Rs. 1,00,000 Capital profit of Rs. 40,000 and revenue profit of Rs. 60,000 Capital receipt of Rs. 40,000 and revenue receipt of Rs. 60,000 Share in the reserve account of the firm Proportionate share of profit upto the date of death Share in joint life policy All of the above of exchange matures on 16th July. It is a public holiday. Bill will mature on 17th July 16th July (b) (d) 15th July 18th July Which of the method is not recommended by AS 2? (a) FIFO (b) LIFO (c) Weighted average (d) Specific identification method Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 347 MODEL TEST PAPER - 13 25. Trial Balance (Total method) S.No. 1. 2. 3. 4. 5. 6. 7 8. Dr. (Rs.) Cash account Capital account Bank account Purchases account Sales account Krishna Salary Rent Account Cr. (Rs.) 11045 Name of the account 7865 10000 100 7000 725 950 375 10 375 5 150 19300 19300 Amount of total balance according to balance method will be: (a) (c) 26. (b) (d) Rs.10,900 Rs.10,500 A, B and C are partners in a partnership firm. During the financial year 2008-09 firm earned profit accounting to Rs. 18,000. They distributed the profit in the ratio of 2:2:1. But there is no partnership deed of the firm. Necessary adjustment will be: (a) (b) (c) (d) 27. Rs.10,955 Rs.10,000 P/L Adjustment A/c To A To B To C P/L Adjustment A/c To A To B To C A B To C None of the above Rs. 18,000 Dr. Rs. 7,200 7,200 3,600 Dr. 18,000 6,000 6,000 6,000 Dr. Dr. 1,200 1,200 2,400 On Jan 1, 2001 the position of V. Mathur was as follows Inventory in hand Rs. 2400; Bills payable Rs. 400; Cash at Bank Rs. 1800; Plant and machinery Rs. 1000; Trade receivables Rs. 500; Trade payables Rs. 800; Investments 2000; Loan from Raja Ram Rs. 1500. V. Mathur s capital on the above date will be (a) (c) Rs. 5000 Rs. 6000 348 The Institute of Chartered Accountants of India (b) (d) Rs. 4000 None of the three Common Proficiency Test (CPT) Volume - I 28. Goods worth Rs. 1000 taken by the proprietor for personal use should be credited to (a) (c) 29. The honesty of the book keeper None of the three Balance in P/L A/c Revenue profits (b) (d) Capital profits Provisions Rs. 9,000 Rs. 10,000 (b) (d) Rs. 8,000 Rs. 9,500 Rs. 35,000 Rs. 37,000 (b) (d) Rs. 30,000 Rs. 32,000 Which of the following would not be included in current assets? (a) (c) 35. (b) (d) Total sales during the year amounted to Rs. 70,000; Cash sales Rs. 10,000; Balance of trade receivables at the end of the year Rs. 25,000. Cash received from customers during the year will be (a) (c) 34. Arithmetical accuracy of books The valuation of closing inventory In the beginning of 2009 person has goods worth Rs. 4000 in his godown. During the year he purchased goods worth Rs. 20,000. His sales during the year were Rs. 30,000 and there were goods still lying in his godown worth Rs. 3000. Profit has been made (a) (c) 33. The financial position of the concern The degree of honesty with which accounting work has been done The capital invested in business Profit earned or loss suffered by the firm Capital Reserves are credited out of (a) (c) 32. Purchase A/c Proprietor s personal A/c The trial balance checks (a) (c) 31. (b) (d) The profit and loss account shows (a) (b) (c) (d) 30. Sales A/c Expenses A/c 60 days Bills receivable Rs. 500 with cashier (b) (d) Balance as per Pass Book is Cheques paid but not yet credited Bank Charges entered in pass book Cheques issued but not presented for payment Balance as per Cash Book will be (a) (c) Rs. 2,370 Rs. 2,300 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Short term deposit with bank Machinery purchased Rs. 2,430 Rs. 1,390 Rs. 260 Rs. 1,710 Rs. 2,500 Rs. 2,380 349 MODEL TEST PAPER - 13 36. Overdraft as per Cash Book Cheque deposited but not credited Cheques issued but not presented for payment Overdraft as per Pass Book will be (a) (c) 37. (b) (d) Rs. 20500 Rs. 21000 Sales of a Plant and Machinery is a revenue receipt Any amount which is unreasonably high need not be a capital expenditure Income tax of the sole proprietor paid is treated as drawing Bills Payable is a current liability Rs.3,500 Rs.4,000 (b) (d) Rs.3,700 Rs.3,400 A seven years lease has been purchased for a sum of Rs. 60,000 and it is proposed to depreciate it under annuity method charging 4% interest. In reference to annuity table, Rs. 9996.55 should be charged to Depreciation A/c. Balance of Lease A/c at the end of the 1st year will be (a) (c) 41. Rs. 20730 Rs. 20200 A trader purchased furniture on Jan 1, 2007 for Rs. 5,200. Its scrap value is 200 and life 10 years. Depreciate furniture according to fixed instalment method. Balance of furniture a/c at the end of third year will be (a) (c) 40. Rs. 6,000 Rs. 6,330 Select the false statement (a) (b) (c) (d) 39. (b) (d) 6,340 2,360 2,368 Following figures have been taken from the trial balance of a trader Opening Inventory Rs. 14,500 Purchases Rs. 75,995 Carriage Inward Rs. 1,700 Wages Rs. 825 Sales Rs. 93,750 Goods sent on Consignment Rs. 20,000 Amount of profit will be (a) (c) 38. Rs. 6,332 Rs. 6,300 Rs. Rs. Rs. Rs. 50,003.45 Rs. 50,000 (b) (d) Rs. 52,000 None of the above After preparing the trial balance the accountant find that the total of the credit side is short by Rs. 1500. This difference will be (a) (b) (c) (d) Credited to suspense account Debited to suspense account Adjusted to any of the debit balance a/c Adjusted to any of the credit balance a/c 350 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 42. On 01.12.09, X draws a bill on Y for 30 days after sight. The date of acceptance is 08.12.09. The due date of the bill will be (a) (c) 43. Profit Rs. 7,085 Loss Rs. 6,000 Rs.11,000 Rs. 9,000 (b) (d) Rs. 10,000 Rs. 12,000 Suspense A/c Dr 250; To Discount A/c 250 Discount A/c Dr. 250; To Suspense A/c 250 Discount A/c Dr. 250; To Customer A/c 250 None of the three Capital A/c Dr. Rs. 6,300; To P/L A/c Rs. 6,300 P/L A/c Dr. Rs. 6,300; To Capital A/c Rs. 6,300 Trading A/c Dr. Rs. 6,300; to P/L A/c Rs. 6,300 None of the three Gross profit is the difference between (a) (c) 48. (b) (d) Closing entry for transfer of Net profit Rs. 6,300 to capital A/c will be (a) (b) (c) (d) 47. Profit Rs. 7,095 Loss Rs. 5,000 The total of Discount allowed column in the cash book for the month of September, 2009 amounting to Rs. 250 was not posted Rectifying entry for the same will be (a) (b) (c) (d) 46. 10.01.09 09.10.09 The total of debit and credit side of Mr. Raja Ram s Trial balance as on 31st March, 2010 were Rs. 20,000 and Rs. 10,000 respectively. The difference was transferred to suspense A/c. On 4th April 2010, it was found that the total of sales book was carried forward as 5,000 instead of 4,000. The balance of suspense A/c after rectification of this error will be (a) (c) 45. (b) (d) Capital introduced in the beginning by Ram Rs. 16,080; further capital introduced during the year in the form of machinery Rs. 2000; personal expenses during the year Drawings in cash Rs. 3,000 Life Insurance Premium Rs. 250 Closing capital Rs. 21,925 The amount of profit or loss for the year will be (a) (c) 44. 8.01.09 11.01.09 Sales and purchases Sales and total expenses (b) (d) Sales and cost of sales None of the three (b) (d) An expense or on asset None of the three Credit balances in the ledger will be (a) (c) A revenue or an asset A revenue or a liability Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 351 MODEL TEST PAPER - 13 49. Miss Rakhi consigned 1,000 Radio sets costing Rs. 900 each to Miss Gita, her agent on July 1, 2009. Miss Rakhi incurred the following expenses. Carriage Rs. 650 Freight Rs. 7,000 Insurance Rs. 3,250 Miss Gita received the delivery of 950 radio sets. 750 sets were sold for Rs. 9,00,000 and Miss Gita incurred total expenses Rs. 13,000. Agents commission 6% on sales. Insurance company admitted claim of Rs. 35,000. Consignment inventory was valued Rs. 1,84,391. Consignment Profit will be (a) (c) 50. 1,52,000 None of the three Capital expenditure Deferred revenue expenditure (b) (d) Revenue expenditure Capital loss Goodwill is to be calculated at one year s purchase of the average of the last 3 years profit. The profit of the first year was Rs. 6,000, second year twice the profit of the first year and the third year one and half times of the profit of the second year goodwill amount will be (a) (c) 52. (b) (d) Amount spent on Structural alterations under pressure of law is a (a) (c) 51. 1,52,036 1,50,000 Rs.10,000 Rs.11,000 (b) (d) Rs.12,000 Rs.13,000 A, B and C share the profits and losses in the ratio of 3:2:1. D is admitted. He gets 1 in 6 share entirely from A. New ratio will be (a) (b) 3:1:1:1 (c) 53. 1 1 1 1 : : : 3 3 6 6 2:2:2:1 (d) None of the three A, B and C share profit and losses in the ratio of 3:2:1 upon admission of D. They agreed to share 5:4:2:1 sacrificing ratio will be (a) (c) 1/12:NIL:NIL NIL: NIL:1/12 (b) (d) NIL:1/12:NIL None of the three 54. A, B and C entered into a joint venture with equal risks contributing Rs. 20,000, Rs. 27,500 and Rs. 35,000 respectively. The amounts were banked in a joint account. Joint Transactions were as follows: Purchase of goods Rs. 66,600 Expenses on goods purchased Rs. 6,629 Total sales Rs. 89,000 352 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India C, who effected these transactions, was allowed 6% commission on sales. Profit on joint venture will be (a) (c) 55. Rs. 400 None of the three Invoice Value At invoice value less inventory reserve At lower than cost price At 10% lower than invoice value Packing, loading & insurance paid by consignor Inward consignment freight paid by consignee Transport charges up to godown paid by consignee Insurance Charges paid by consignee 6,000 shares 8,000 shares (b) (d) 7,200 shares 7,000 shares A company on non-receipt of First Call money of Rs.2 per share and Final Call money of Rs.3 per share from Rahul, debited Call-in-Arrears account by Rs. 2,000 and Rs.3,000 respectively. After due notice 1,000 shares of Rs.10 each were forfeited from Rahul. The amount to be credited to First Call Account at the time of entry for forfeiture will be (a) (c) 60. (b) (d) X Ltd. purchased the business of Y Ltd. for Rs. 90,000 payable in fully paid shares of 10 each; shares were issued at a premium of 25%. Number of shares issued against purchased consideration will be (a) (c) 59. Rs. 500 Rs. 600 Which of the following expense is not considered as part of cost of inventory? (a) (b) (c) (d) 58. Rs. 10,000 Rs. 12,000 Consignment inventory will be recorded in the balance sheet of consignor on asset side at: (a) (b) (c) (d) 57. (b) (d) Gopal was holding 100 shares of 10 each of a company on which he had paid Rs. 3 on application and Rs. 2 allotment, but could not pay Rs. 2 on first call. Forfeited shares a/c will be credited with (a) (c) 56. Rs. 10,431 Rs. 11,000 Rs.2,000 Nil (b) (d) Rs.3,000 Rs.10,000 X Ltd. purchased assets of Y Ltd. as under Plant and machinery of Rs. 20,00,000 at Rs. 18,00,000; Land and building of Rs. 30,00,000 at Rs. 42,00,000 for purchase consideration of Rs. 55,00,000 and paid Rs. 10,00,000 in cash and remaining by issue of 8% debentures of 100 each at a premium of 20%. No. of debentures issued to vendors will be (a) (c) 37,000 35,500 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 37,500 38,000 353 MODEL TEST PAPER - 13 SECTION B : MERCANTILE LAWS (40 MARKS) 61. Contracts may be classified on the basis of their validity, formation or performance. Contracts classified on the basis of formation are of the following types: (a) (c) 62. cancellation of the existing contract change in one or more terms of the contract Substitution of existing contract for a new one None of these Is discharged becomes void (b) (d) becomes enforceable None of these Revocation Rejection of offer by offeree (b) (d) Counter offer All of these Valid Void able (b) (d) Void Any of these Which of the following is false? An acceptance: (a) (b) (c) (d) 69. Special damages Nominal damages In case of illegal agreements, the collateral agreements are: (a) (c) 68. (b) (d) An offer may lapse by: (a) (c) 67. Ordinary damages Remote damages One the valid performance of the contractual obligation by the parties, the contract (a) (c) 66. Must move at the desire of the promisor May move from any person Must be illusory Must be of some value A contract is discharged by novation which means the (a) (b) (c) (d) 65. Implied contracts All of the above Generally, the following damages are not recoverable? (a) (c) 64. (b) (d) Which of the following statement is false, Consideration: (a) (b) (c) (d) 63. Express contracts Quasi contracts Must be communicated Must be absolute and unconditional Must be accepted by a person having authority to accept May be presumed from silence of offeree Which of the following statements is not true about minor s position in a firm? (a) He cannot become a partner in an existing firm 354 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I (b) (c) (d) 70. A contract for a sale of goods where property would pass to the buyer on payment of total price would be; (a) (c) 71. (b) (d) Appropriation Storage sell and consign goods sell or buy goods (b) (d) raise money on the security of goods any of the above constructive delivery actual delivery (b) (d) structured delivery symbolic delivery Stock and share Both (a) and (b) (b) (d) Growing crops, grass None of the above Which of the following is correct: (a) (b) (c) (d) 77. Distribution amortization Under Sale of goods Act, 1930 the terms goods means every kind of the movable property and it includes (a) (c) 76. movable goods only immovable goods only both movable and immovable goods All goods except ornaments Which of the following is not a form of delivery? (a) (c) 75. Agreement to sell Sale on approval Mercantile Agent is having an authority to (a) (c) 74. (b) (d) Selection of goods with the intention of using them in performance of the contract and with the mutual consent of the seller and the buyer is known as (a) (c) 73. Sale hire-purchase contract The Sale of Goods Act, 1930 deals with the (a) (b) (c) (d) 72. He can become a partner in an existing firm He can be admitted only to the benefits of any existing a major He can become partner on becoming a major 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 Which of the following is not the right of a partner i.e, which he cannot claim as a matter of right? (a) (b) Right to take part in business Right to have access to account books Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 355 MODEL TEST PAPER - 13 (c) (d) 78. On which of the following grounds, a partner may apply to the court for dissolution of the firm? (a) (c) 79. (b) (d) Undue Influence Misrepresentation Mistake of fact fraud (b) (d) Mistake of India law misrepresentation Guarantee condition (b) (d) warranty term When it is put in course of transmission to him so as to be out of reach of the acceptor When it comes to the knowledge of the proposer When both the proposer and acceptor declare the acceptance When the acceptor accepts his acceptance in court of law Every person attains majority an completion of ________ years of age (a) (c) 85. coercion Fraud The communication of an acceptance is complete as against acceptor ________ (a) (b) (c) (d) 84. It can not file a suit against third parties Its partners cannot file a suit against a firm It can claim a set-off exceeding Rs. 100 It can be sued by a third party A stipulation in a contract of sale of goods whose violation by seller gives a right of rescission to buyer, is called ________ (a) (c) 83. Misconduct of a partner All of the above A mistake as to a law not in force in India has the same effect as ________ (a) (c) 82. (b) (d) A Hindu widow borrowed money from a lender for the purpose of filling a suit for maintenance. The lender advanced money at 100 percent rate of interest. The act of the money lender is induced by (a) (c) 81. Insanity of a partner Perpetual losses in business Which of the following is not disability of an unregistered firm? (a) (b) (c) (d) 80. Right to share profits Right to receive remuneration 21 years 16 years (b) (d) 18 years 20 years Doctrine of Caveat Emptor means ________ (a) (c) let the seller beware let the creditor beware 356 The Institute of Chartered Accountants of India (b) (d) let the buyer beware None of the above Common Proficiency Test (CPT) Volume - I 86. The essence of a right of lien is to ________ (a) (c) 87. Valid and effective None of these Past Future (b) (d) Present Past and present Express or implied agreement Operation of law (b) (d) Ratification All of the above Sale Void (b) (d) Agreement to sell Hire-purchase contract Right against the law Right of re-sale (b) (d) Right in stoppage in transit All of the above Guarantee Condition (b) (d) Warranty Term Total substitution of new contract in place of the old contract takes place in case of ________ (a) (c) 95. (b) (d) A stipulation in a contract of sale of goods whose violation by seller gives a right of damages only to buyer, is called ________ (a) (c) 94. Invalid and ineffective Conditional Right of an unpaid seller include ________ (a) (c) 93. Recission All of the above A contract for the sale of future goods is ________ (a) (c) 92. (b) (d) The relationship of principal and agent may arise by ________ (a) (c) 91. Novation Alteration ________ consideration is no consideration in England. (a) (c) 90. retain the possession none of the above Where the goods are delivered to a carrier or wharfinger for the purpose of transmission to the buyer, the delivery is ________ (a) (c) 89. (b) (d) Discharge by mutual agreement may involve ________ (a) (c) 88. deliver the goods regain the possession Remission Novation (b) (d) Recission Alteration Non-registration of a partnership firm ________ (a) (b) Is a criminal offence Renders the partnership illegal Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 357 MODEL TEST PAPER - 13 (c) (d) 96. A partner may be expelled from the firm on the fulfillment of the condition that the expulsion power is exercised - ________ (a) (c) 97. By majority of partners All of the above Retain possession Remove possession (b) (d) Regain possession Recharge possession Active Partner Partner by estoppel (b) (d) Dormant partner Partner by stoppage Under which circumstances the unpaid seller can exercise right of re-sale (a) (b) (c) (d) 100. (b) (d) Partner by holding out is also known as ________ (a) (c) 99. As given by express contract In absolute good faith Right of lien is to ________ (a) (c) 98. Is compulsory to activate the partnership Is not compulsory but desirable when the goods are of perishable nature when he gives notice to the buyer When he gives notice to the buyer of his intention to re-sale and the buyer does not within reasonable time pay the price Both (a) and (b) A timber merchant agreed to supply best teak at a certain agreed price to a builder. Later the merchant supplied timber, which was identified as ordinary class of timber and demanded the payment from the builder which of the following statements is/are true? (a) (b) (c) (d) Builder can reject the goods can claim damages Builder has accept the goods Builder has to pay the price by taking delivery of teak wood Timber merchant cannot plead the doctrine of caveat emptor SECTION C : GENERAL ECONOMICS (50 MARKS) 101. Which of the following is not an essential condition of pure competition? (a) (c) 102. Large number of buyers and sellers (b) Freedom of entry (d) Homogeneous product Absence of transport cost Which of the following is not a characteristic of a Price taker ? (a) (b) (c) (d) TR = P x Q AR = Price Negatively sloped demand curve Marginal Revenue = Price 358 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 103. Which of the following is not a condition of perfect competition ? (a) (b) (c) (d) 104. All of the following are characteristics of a monopoly except (a) (c) 105. (b) (d) planning curve indifference curve uniform less (b) (d) different zero response to a price increase is less than the response to a price decrease response to a price increase is more than the response to a price decrease elasticity of demand is constant regardless of whether price increases or decreases elasticity of demand is perfectly elastic if price increases and perfectly inelastic if price decreases Agricultural goods markets depict characteristics close to: (a) (c) 110. profit curve demand curve The kinked demand curve model of oligopoly assumes that: (a) (b) (c) (d) 109. his output is maximum he charges a high price his average cost is minimum his marginal cost is equal to marginal revenue. Price discrimination will be profitable only if the elasticity of demand in different market in which the total market has been divided is: (a) (c) 108. the firm is a price taker the existence of some advertising Which is the other name that is given to the long run average cost curve? (a) (c) 107. there is a single firm (b) the firm produces a unique product (d) A monopolist is able to maximize his profits when: (a) (b) (c) (d) 106. A large number of firms Perfect mobility of factors Informative advertising to ensure that consumers have good information Freedom of entry and exit into and out of the market Perfect competition Monopoly (b) (d) Oligopoly Monopolistic competition Which of the statements is correct? (a) (b) (c) (d) The tertiary sector contributes the maximum to the GDP India is a basically a socialist economy The distribution of income and wealth in India is quite equitable None of the above Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 359 MODEL TEST PAPER - 13 111. NABARD is the apex bank for ___________ credit in India. (a) (c) 112. (d) (c) (d) slow and uneven growth inadequate finance (b) (d) inadequate and incomplete land reforms all of the above 5 per cent 8.5 per cent (b) (d) 8 per cent 6 per cent The industrial pattern on the eve of independence was quite balanced During the planning period the structure of Indian industry has shifted in favour of basic and capital goods and intermediate goods Most of the big industrial units in India are sick None of the above increased remained constant (b) (d) decreased remained above 50 per cent India has the _____________ largest scientific and technical manpower in the world (a) (c) 119. Special schemes have been started to promote agro-products India has been a big importer of food grains especially since 1990s High yielding varieties programme has resulted in improvement in production and productivity of food grains in India None of the above Over the planning period the share of industrial sector in the GDP of India has __________ (a) (c) 118. decreased first decreased and then increased Which of the following statements is correct? (a) (b) 117. (b) (d) The Eleventh plan aims at achieving a growth rate of ________ in the industrial sector. (a) (c) 116. remained constant increased Agriculture sector faces the problem of: (a) (c) 115. small scale industries none of the above Which is of the following is incorrect? (a) (b) (c) 114. (b) (d) The share of agriculture in India s national income has __________ over the years. (a) (c) 113. real estate agriculture Fifth Eighth (b) (d) Tenth Third Demand for final consumption arises in: (a) (b) (c) (d) household sector only government sector only both household and government sectors neither household nor government sectors 360 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 120. Which of the following is an economic activity ? (a) (b) (c) (d) 121. Per capita national income means (a) (c) 122. China Canada Andhra Pradesh Kerala (b) (d) Uttar Pradesh Karnataka more than that of China less than that of Pakistan (b) (d) less than that of China less than that of England National Thermal Power Corporation National Tidal Power Corporation National Theological Power Corporation National Talent and Potential Corporation All banks have been privatised. All banks have been nationalised. NPA as a percentage of gross advances have shown a falling trend. State Bank of India replaced RBI as lender of the last resort. _______________ refers to disposal of public sector s units in equity in the market. (a) (c) 128. (b) (d) Which of the following is correct in relation to banks in the post reform period? (a) (b) (c) (d) 127. U.S.A. Australia NTPC stands for: (a) (b) (c) (d) 126. Total capital / population None of the above India s present population is: (a) (c) 125. (b) (d) In which state is the sex ratio most favourable to women? (a) (c) 124. NNP / population Population / NNP India s rank in world Population comes after _____ (a) (c) 123. Playing friendly cricket match Teaching one s own daughter at home Manufacturing chairs at subsidised rate A housewife doing household duties Globalisation Disinvestment (b) (d) Privatisation Liberalisation (b) (d) around 20000 around 45000 Population per bank in India is : (2012) (a) (c) around 5000 around 12500 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 361 MODEL TEST PAPER - 13 129. Commercial banks suffer from : (a) (c) 130. (d) Its supply for the economy is limited It is immobile Its usefullness depends on human efforts It is produced by our forefathers Accumulation of capital depends solely on income Savings can also be affected by the state External economies go with size and internal economies with location The supply curve of labour is an upward slopping curve total product divided by the number of units of variable input the additional output resulting from a one unit increase in the variable input The additional output resulting from a one unit increase in both the variable and fixed inputs The ratio of the amount of the variable input that is being used to the amount of the fixed input that is being used Diminishing marginal returns imply (a) (c) 136. post office saving deposits total post office deposits currency plus demand deposits plus other deposits with RBI time deposits with banks The marginal product of a variable input is best described as: (a) (b) (c) 135. bonds, government securities all of the above Which of the following statements is true ? (a) (b) (c) (d) 134. (b) (d) currencies and demand deposits equity shares Which of the following is not a characteristic of land? (a) (b) (c) (d) 133. increasing overdues all the above M1 in the money stock in India refers to: (a) (b) (c) (d) 132. (b) (d) Money includes (a) (c) 131. regional imbalances lower inefficiency decreasing average variable costs increasing marginal costs (b) (d) decreasing marginal costs decreasing average fixed costs To economists, the main difference between the short run and the long run is that: (a) (b) in the short run all inputs are fixed, while in the long run all inputs are variable in the short run the firm varies all of its inputs to find the least cost combination of inputs 362 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I (c) (d) 137. Which cost increases continuously with the increase in production? (a) (c) 138. decreases first declines and then rises The wages a proprietor could have made by working as an employee of a large firm The income that could have been earned in alternative uses by the resources owned by the firm The payment of wages by the firm The normal profit earned by a firm the change in total cost due to one unit change in output total cost divided by output the change in output due to a one unit change in an input total product divided by the quantity of input The production function Taxes (b) (d) The price of labour The price of the firm s output Rs. 20 Rs. 320 (b) (d) Rs. 120 Rs. 420 Which of the following is a function of an entrepreneur? (a) (c) 144. (b) (d) A firm s average total cost is Rs. 300 at 5 units of output and Rs. 320 at 6 units of output the marginal cost of producing the 6th unit is: (a) (c) 143. increases remains constant Which of the following is not a determinant of the firm s cost function? (a) (c) 142. Marginal cost Variable cost Marginal cost is defined as : (a) (b) (c) (d) 141. (b) (d) Which of the following is an example of an explicit cost ? (a) (b) (c) (d) 140. Average cost Fixed cost In the short run, when the output of firm increases, its average fixed cost: (a) (c) 139. in the short-run, at least one of the firm s input levels is fixed in the long run, the firm is making a constrained decision about how to use existing plant and equipment efficiently Initiating a business enterprise Innovating (b) (d) Risk bearing All of the above The law of scarcity (a) (b) (c) (d) does not apply to rich developed countries applies only to the less developed countries implies that consumers wants will be satisfied in a socialistic system implies that consumers wants will never be completely satisfied Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 363 MODEL TEST PAPER - 13 145. Who expressed the view that economics is neutral between end ? (a) (c) 146. Determining the GNP of India Identifying the causes of inflation in India Finding the causes of failure of X and Co. Analyse the causes of failure of industry in providing large scale employment Slower economic growth in the future Greater economic growth in the future No change in our economic growth rate Greater capital accumulation in the future Capital intensive technique would get chosen in a : (a) (c) 150. an analysis of the relationship between the price of food and the quantity purchased determining how much income each person should be granted determining the fair price for food deciding how to distribute the output of the economy What is one of the future consequences of an increase in the current level of consumption in the India? (a) (b) (c) (d) 149. Marshall Adam Smith Which of the following does not suggest a macro approach for India ? (a) (b) (c) (d) 148. (b) (d) An example of positive economic analysis would be: (a) (b) (c) (d) 147. Robbins Pigou labour surplus economy developed economy (b) (d) capital surplus economy developing economy Consider the following and decide which if any economy is without scarcity: (a) (b) (c) (d) The pre-independent Indian Economy, where most people were farmers A mythical economy where everybody is a billionaire Any economy where income is distributed equally among its people None of the above SECTION D : QUANTITATIVE APTITUDE (50 MARKS) 151. Representation of data is done by (a) (c) 152. Diagrams Charts (b) (d) Pictures All these (b) (d) Bar diagram None of these Ogive is a (a) (c) Line diagram Both 364 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 153. Which result is true? (a) (c) 154. Perfect positive Both (a) and (b) (b) (d) Perfect negative Either (a) or (b) P (A B) < P (A) + P (B) P (A B) < P(A) + P (B) (b) (d) P (A B) > P(A) + P (B) P (A B) > P(A) + P (B) May be equal Are always equal (b) (d) May be different (a) or (b) A function of sample observation A characteristic of a population (b) (d) A function of population units A part of population False Both (b) (d) True None of these Unit test Time reversal test (b) (d) Circular test None of these Under Algebric method we get _____ Linear equations (a) (c) 163. False None of these Fisher s ideal formula does not satisfy _______ test. (a) (c) 162. (b) (d) The index number is not a special type of average (a) (c) 161. True Both A statistic is described as (a) (c) 160. 16 12 The mode and mean of a normal distribution (a) (c) 159. (b) (d) For any two events A and B (a) (c) 158. 3 25 In a Scatter diagram, if the plotted points lie on a single line, then the correlation is: (a) (c) 157. H.M. > G.M. > A.M. G.M. > A.M. > H.M. Median is affected by extreme values (a) (c) 156. (b) (d) The range of 12, 15, 17, 9, 21, 25 (a) (c) 155. H.M. < G.M. < A.M. H.M. < G.M. < A.M. Two One (d) (b) (d) Three None of these 24, 32, ___________, 40 are in proportion. (a) (c) 25 30 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 20 None of these 365 MODEL TEST PAPER - 13 164. log3 log3 27 is equal to _______ (a) (c) 165. (b) (d) 9:5 1:1 (b) (d) 57 50 (b) (d) 2 years 2 months 4 years 4 months (b) (d) n(1-p) (b) (c) np (d) lim x 2 (a) (c) 172. 54 54 3 years 3 months 5 years 5 months np(1-p) np( 1 p ) If P(A) = 6/9 then the odds against the event is ________ (a) (c) 171. 126:1 2:5 The mean of binomial distribution with parameters n and p is ________ (a) 170. b2 4 ac > 0 b2 4 ac > 0 Rs. 3,52,000 will produce Rs. 28,600 interest in ___________ years at 2.5% p.a. simple interest. (a) (c) 169. b2 4 ac = 0 b2 4 ac < 0 The 13th term of series 93, 90, 87 .. nth term is ________ (a) (c) 168. -1 1 The letters of the words ALLAHABAD and INDIA are arranged in all possible ways. The ratio of the number of these arrangement is _________________ (a) (c) 167. (b) (d) If _______________, the roots are imaginary . (a) (c) 166. 0 3 3/9 3/6 x2 - 9 x - 3 is equal to (b) (d) 6/3 3/15 (b) (d) 2 does not exist (b) (d) log x 1 + log x 3 - x -1 2-x 0 The derivative of y = log xx is (a) (c) 1/x 1/x. log x 366 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 173. dx e +1 is equal to x (a) (b) (ex+1) 2 + K (c) 174. log (1+e x) + K 1 +K 1 + ex (d) None If f(x) = 2x + 3 then f(2x) 2f(x) + 3 is equal to (a) (c) 175. (b) (d) Which term of series 3, (a) (c) 176. 1 1 3 , 1, 1 1 ... nth term is ? 3 243 13 15 (b) (d) Laspeyse s index Pasche s Index (b) (c) P q P q 1 (d) None of these 7.164 and 7.635 4.001 and 5.001 (b) (d) 5.164 and 5.635 None of these A dice is tossed thrice, if getting a four is considered a success, find the variance of probability distribution of number of success. (a) (c) 1/2 5/12 (b) (d) 1/4 7/12 A pair of dice is rolled. If the sum on the dice is 9. Find the probability that one of dice showed 3. (a) (c) 180. 1 Lasperyre' s Index Pasche' s Index A sample of 100 gave a mean of 7.4 kg and a standard deviation of 1.2 kg. Find 95% confidence limits for population mean. (a) (c) 179. 0 1 178. 14 12 Fisher s ideal idex no. is equal to (a) 177. 0 None of these 1/9 1/2 (b) (d) 1/4 1 The two regression lines obtained from certain data were y = x + 5 and 16 x = 9y 94. Find the variance of x if variance of y is 16. (a) (c) 4/16 1 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 9 5/16 367 MODEL TEST PAPER - 13 181. If (a) (c) 182. 3/2 2/9 (b) (d) 9/2 None of these 5! X 3! X 3! 5! X 3! (b) (d) 5 P3 5! X 3! X 3! X 3! 5872.98 4999.98 (b) (d) 5000.00 None of these concurrent Parallel to each other (b) (d) Not concurrent Perpendicular to each other 2, 8/3 2 (b) (d) 2, 3/8 None of these 50 80 (b) (d) 40 None of these Sum of three numbers in A.P. is 12 and the sum of their cube is 408. The numbers are (a) (c) 190. 7 9 If a number of which the half is greater than 1/10th of number by 20 then the number is (a) (c) 189. (b) (d) Solving equation 3x2 2x 16 = 0 we get root as (a) (c) 188. 6 8 The lines x y 3 = 0, 3x 2y 5 = 0 and 4x 3y 20 = 0 are (a) (c) 187. 14 12 If a loan of Rs. 50,000 is paid back in equal instalments for 20 years and 10% interest on balance loan. What will be equal instalment . (a) (c) 186. (b) (d) In how many ways 5 physics, 3 chemistry and 3 maths books be arranged keeping the books of the same subject together. (a) (c) 185. 15 13 In a G.P. series the product of first three term is 729/ 8. The middle term is (a) (c) 184. P13 : n +1 P12 = 3 :4 then value of n is In a group of 23 children 10 drink tea but not coffee and 15 like tea. The number of children drinking coffee but not tea is (a) (c) 183. n 3, 4, 5 2, 4, 6 (b) (d) 1, 4, 7 None of these The number of subset of a set containing n element is: (a) (c) 2n 2-n 368 The Institute of Chartered Accountants of India (b) (d) 2n None of these Common Proficiency Test (CPT) Volume - I 191. Wages of 8 workers expressed in Rs. as follows 80, 96, 51, 72, 67, 50, 70, find Coefficient of range? (a) (c) 192. e 30.5 31.00 px (b) (d) 35.3 31.51 dx is equal to (a) e +c (b) epx +c p (c) log x + c (d) None of these (b) (d) 3 1 x 3 193. Evaluate (x 3 + x)dx -3 (a) (c) 194. If Arithmetic Mean and coefficient of variation of x are 5 and 20 respectively. What is the variance of (15-2x)? (a) (c) 195. 2 32 (b) (d) -1 None of these dy - y 2 + 4 is equal to dx 1 0 124 126 (b) (d) 125 None of these The A.M. between two numbers is 34 and their G.M. is 16, the numbers are ? (a) (c) 198. (b) (d) 6 seats of articled clerks are vacant in a Chartered Accountant firm . How many different batches of candidates can be chosen out of 10 candidates if one candidate is always selected. (a) (c) 197. 16 64 If y = ex e-x then (a) (c) 196. 0 3 4, 64 32, 64 (b) (d) 4, 32 None of these For a group of 8 students the sum of squares of differences in ranks for Accounts and Economics marks was found to be 50. What is the rank correlation coefficient. (a) (c) 0.50 0.30 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 0.40 0.20 369 MODEL TEST PAPER - 13 199. A sum of money triples itself in 20 years. Using Simple Interest calculate number of years it would double itself. (a) (c) 200. 25 years 10 years (b) (d) 15 years None of these The value of (logba logcb logac)5 is equal to (a) (c) 5 1 370 The Institute of Chartered Accountants of India (b) (d) 0 None of these Common Proficiency Test (CPT) Volume - I Model Test Paper BOS/CPT-13 SECTION A : FUNDAMENTALS OF ACCOUNTING 1 (c) 2 (b) 3 (c) 4 (d) 5 (a) 6 (c) 7 (c) 8 (d) 9 (a) 10 (b) 11 (b) 12 (c) 13 (b) 14 (b) 15 (b) 16 (d) 17 (a) 18 (a) 19 (a) 20 (c) 21 (c) 22 (d) 23 (b) 24 (b) 25 (a) 26 (c) 27 (a) 28 (b) 29 (d) 30 (a) 31 (b) 32 (a) 33 (a) 34 (d) 35 (a) 36 (a) 37 (a) 38 (a) 39 (b) 40 (a) 41 (a) 42 (b) 43 (a) 44 (a) 45 (b) 46 (b) 47 (b) 48 (c) 49 (a) 50 (b) 51 (b) 52 (a) 53 (a) 54 (a) 55 (a) 56 (b) 57 (d) 58 (b) 59 (c) 60 (b) SECTION B : MERCANTILE LAWS 61 (d) 62 (c) 63 (c) 64 (c) 65 (a) 66 (d) 67 (d) 68 (d) 69 (b) 70 (b) 71 (a) 72 (b) 73 (d) 74 (b) 75 (c) 76 (a) 77 (d) 78 (d) 79 (d) 80 (b) 81 (a) 82 (c) 83 (b) 84 (b) 85 (b) 86 (b) 87 (d) 88 (b) 89 (a) 90 (d) 91 (b) 92 (d) 93 (b) 94 (c) 95 (d) 96 (d) 97 (a) 98 (c) 99 (d) 100 (a) Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 587 ANSWERS SECTION C : GENERAL ECONOMICS 101 (d) 102 (c) 103 (c) 104 (b) 105 (d) 106 (b) 107 (b) 108 (a) 109 (a) 110 (a) 111 (c) 112 (b) 113 (b) 114 (d) 115 (c) 116 (b) 117 (a) 118 (d) 119 (c) 120 (c) 121 (a) 122 (b) 123 (c) 124 (b) 125 (a) 126 (c) 127 (c) 128 (c) 129 (d) 130 (d) 131 (c) 132 (d) 133 (b) 134 (b) 135 (c) 136 (c) 137 (d) 138 (b) 139 (c) 140 (a) 141 (d) 142 (d) 143 (d) 144 (d) 145 (a) 146 (a) 147 (c) 148 (a) 149 (b) 150 (d) SECTION D : QUANTITATIVE APTITUDE 151 (d) 152 (a) 153 (a) 154 (b) 155 (b) 156 (d) 157 (a) 158 (c) 159 (a) 160 (a) 161 (b) 162 (a) 163 (c) 164 (d) 165 (c) 166 (b) 167 (a) 168 (b) 169 (c) 170 (c) 171 (a) 172 (d) 173 (a) 174 (b) 175 (a) 176 (b) 177 (a) 178 (c) 179 (c) 180 (b) 181 (a) 182 (c) 183 (b) 184 (d) 185 (a) 186 (b) 187 (a) 188 (a) 189 (b) 190 (b) 191 (d) 192 (b) 193 (a) 194 (c) 195 (c) 196 (c) 197 (a) 198 (b) 199 (c) 200 (c) 588 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I

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