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CA CPT : Volume 1 - Model Test Paper 17 (with Answers)

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BOARD OF STUDIES THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA COMMON PROFICIENCY TEST Model Test Paper BOS/CPT 17 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. SECTION A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. All the following are functions of accounting except (a) (c) 2. (b) (d) Deferred revenue expenditure None of the above Credited to Bad Debt recovered A/c Debited to Profit and Loss A/c Credited to Trade Receivables A/c None of the above Sales Return Account Journal proper (b) (d) Cash Book None of the above (b) (d) Nominal A/c Both (a) and (b) Bills payable is ______ (a) (c) 6. Capital expenditure Revenue expenditure The total of the sales return book is posted periodically to the debit of _____ (a) (c) 5. Measurement Ledger posting Debts written off as bad if recovered subsequently are (a) (b) (c) (d) 4. (b) (d) Rs. 25,000 incurred on structural alterations to existing asset whereby its revenue earning capacity is increased is _______ (a) (c) 3. Decision making Forecasting Real A/c Personal A/c Human assets have no place in accounting records is based on _____ (a) (c) Money measurement concept Consistency Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Accrual concept Conservatism 455 MODEL TEST PAPER - 17 7. Sales return book records _______ (a) (c) 8. (d) Drawer Payee (b) (d) Drawee All of the above Financial transaction Settlement (b) (d) Barter None of the above Inflow of assets or incurrence of liabilities. (b) Inflow of assets or decrease of liabilities. (d) Outflow of assets or decrease of liabilities. Outflow of assets or incurrence of liabilities. Nature of business. Technical know-how. (b) (d) Efficiency of management. Location of customers. Profit and loss on revaluation is shared among the partners in ________ ratio. (a) (c) 15. Real A/c None of the above Following are the factors which affects goodwill except: (a) (c) 14. (b) (d) Income is reflected in the form of (a) (c) 13. Personal A/c Nominal A/c An economic event that involves transfer of money or money s worth is(a) (c) 12. No. of years purchased is multiplied with Super profit. No. of years purchased is multiplied with Average profit. Present value of Re 1 for number of years at specified rate is multiplied with super profit of the year. Super profit is divided with expected rate of return. Parties to Bill of Exchange are: (a) (c) 11. Cash sales return Purchase return Patent Account is: (a) (c) 10. (b) (d) For calculation of goodwill as per Annuity method: (a) (b) (c) 9. Credit sales return Both (a) and (b) Old profit sharing ratio Capital ratio (b) (d) New profit sharing ratio Equal ratio Which one of the following is correct(a) (b) (c) (d) The term Purchases includes the purchases of fixed assets for cash as well as on . The term Sales includes the sales of fixed assets for cash as well as on credit. The term Opening inventory means the goods lying unsold at the end of previous accounting period. The term Closing inventory means the goods lying unsold at the beginning of current accounting period. 456 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 16. A, B & C entered into a partnership sharing profits & losses at the ratio of 5:3:2. A retired & B and C agreed to share profits & losses in the ratio of 3:2. General reserve balance was Rs 10,000. Balance of general reserve will be transferred to partners capital accounts in the ratio of: (a) 5:3:2 (b) 3:2 (c) 1:1:1 (d) None of the above 17. Depreciation on machinery in trial balance is recorded in ____________ (a) (c) Trading A/c Balance Sheet (b) (d) Profit & Loss A/c None of the three 18. A cheque of 2,500 received for loss of inventory by fire has been deposited by proprietor into his private bank account and has not recorded in the business book. The rectifying entry will be (a) Bank A/c Dr. 2,500 To Insurance company A/c 2,500 (b) Insurance company A/c Dr. 2,500 To Drawings A/c 2,500 (c) Drawings A/c Dr. 2,500 To Insurance company A/c 2,500 (d) Drawings A/c Dr. 2,500 To Bank A/c 2,500 19. Fixed capital A/c is credited with _______ (a) (c) 20. Profit of the year None of the above. Capital Gain (b) (d) Expense None of the three Ramesh, the acceptor of the bill has to honour a bill on 31st March 2010. Due to financial crisis, he is unable to pay the amount of bill of Rs. 20,000. Therefore, he approaches Ram on 20th March 2010 for extension of the bill for further 3 months. Ram agrees to extend the credit period by drawing a new bill for Rs. 20,500 together with interest of Rs. 1000 in cash. In this case old bill of Rs. 20,000 will be considered as: (a) (c) 22. (b) (d) Interest on drawing is ______ for the business (a) (c) 21. Interest on capital Salary of the partner Discounted Cancelled (b) (d) Dishonoured Retired M/s Kapoor Bros, which was registered in the year 2000, has been following straight line method (SLM) of depreciation. In the current year it changed its method from SLM to written down value (WDV) method, since such change would result in the additional depreciation of Rs. 200 lakhs as a result of which the firm would qualify to be declared as a sick industrial unit. The auditor raised objection to this change in the method of depreciation. Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 457 MODEL TEST PAPER - 17 Auditors objection is justified because (a) (b) (c) 23. Change in the method of depreciation should be done only with the consent of the auditor. Depreciation method can be changed only from WDV to SLM and not Vice Versa. Change in the method of depreciation should be done only if it is required by some statute and change would result in appropriate presentation of financial statement. (d) Method of depreciation cannot be changed under any circumstances. A company purchased a plant for Rs. 5,000 useful life of the plant is 10 years and residual value is Rs. 500. Rate of depreciation will be ____ (a) (c) 24. 25. 26. 27. 9% 15% Gross Profit Carriage Outwards Rent paid Bad Debts Apprentice premium (Cr.) Printing & Stationery Net profit of the firm will be (b) (d) Rs. 51,000 5,800 6,400 2,600 1,500 1,000 10% 12 % (a) Rs. 38,900 (b) Rs. 36,700 (c) Rs. 35,000 (d) Rs. 40,000 A started business with Rs. 10,000 cash and Rs. 2,000 furniture. Sales amounted to Rs. 50,000 including Rs. 5,000 cash sale. Rs. 10,000 sales were outstanding at the end of the year. Purchases amounted to Rs. 30,000 including Rs. 10,000 cash purchase. Rs. 15,000 has been paid to suppliers. Expenses paid during the year are Rs. 19,300. Cash balance at the end will be _________ (a) Rs. 6,000 (b) Rs. 7,000 (c) Rs. 5,700 (d) Rs. 5,000 On Jan 1, 2010 Ram Gopal invested Capital of Rs. 50,000. He withdrew Rs. 2,000 on the first day of each month interest on drawings is provided @ 10%. The amount of interest on drawings deducted from Capital will be _________ (a) Rs. 1,300 (b) Rs. 1,400 (c) Rs. 1,500 (d) Rs. 1,000 Received one bill from A Rs. 500 passed through B/P book. The rectifying entry will be_ (a) (b) (c) (d) A Dr. To B/P B/R A/c Dr. To A B/P A/c Dr. B/R A/c Dr. To A None of the above. 458 The Institute of Chartered Accountants of India Rs. 500 Rs. 500 500 500 500 500 1000 Common Proficiency Test (CPT) Volume - I 28. Goods costing Rs. 7,500 were sold at 25% profit on selling price. The sales will be of : (a) (c) 29. Rs. 10,000 Rs. 8,000 Rs. 9,000 None of the three Following figures have been taken from the books of a trader Purchases Purchase Returns Sales Sales Returns Opening inventory Carriage & Freight Duty & Clearing Charges Wages Closing inventory Gross profit will be ________ (a) (c) 30. (b) (d) 3,00,000 6,000 4,10,000 10,000 80,000 12,000 4,000 8,000 60,000 (b) (d) Rs. 60,000 Rs. 62,000 Rs. 61,000 Rs. 65,000 Trial Balance containing obvious errors is given below: Dr. (Rs.) Purchases 60,000 Reserve Fund Cr. (Rs.) 20,000 Sales 1,00,000 Purchase return 1,000 Sales Return Opening Inventory 2,000 30,000 Closing Inventory 40,000 Sundry Expenses 20,000 Outstanding Expenses 2,000 Cash at Bank 5,000 Fixed Assets 50,000 Trade receivables 80,000 Trade payables 30,000 Capital 94,000 Suspense A/c 10,000 2,72,000 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 2,72,000 459 MODEL TEST PAPER - 17 Total of corrected trial balance will be ________ (a) (c) 31. Rs. 2,000 Rs. 2,500 Conservatism Principle Cost Principle Following are the details of position Rs. Closing Inventory 40,000 Drawings 12,000 Net Profit 18,000 Capital 70,000 Trade receivables 40,000 Cash at Bank 8,000 Balance sheet total will be: (a) Rs. 1,16,000 (c) Rs. 1,20,000 34. Rs. 2,47,000 Rs. 2,38,000 (b) (d) Rs. 2,100 Rs. 2,200 Mr. Y followed WDV Method and SLM Method of Depreciation during 2006 and 2007 respectively. He has violated(a) (c) 33. (b) (d) Bank overdraft as per Cash book is Rs. 2500 Cheque deposited but not cleared Rs.1000 Cheque issued but not cashed Rs.1400 Bank overdraft as per Bank statement will be ________ (a) (c) 32. Rs. 2,40,000 Rs. 2,50,000 (b) (d) Materiality Principle Consistency Principle statement Cash Bills receivable Bills payable Machinery Depreciation provision Liabilities for expenses Trade payables (b) (d) Rs. 3,000 5,000 3,000 20,000 4,000 3,000 30,000 Rs. 1,15,000 Rs. 1,25,000 Panna Lal sends 100 sewing machines on consignment to Ram Ji Lal. The cost of each machine is Rs. 150. Panna Lal spends Rs. 500 on packing and dispatch. Ram Ji Lal receives the consignment and informed that 90 machines have been sold at Rs. 180 each. Expenses paid by Ram Ji Lal are freight Rs. 500, carriage and octroi Rs. 200, Godown rent Rs. 100 and insurance Rs. 150. Ram Ji Lal is entitled to a commission of 7 % on sales. Profit on consignment will be: (a) (c) Rs. 150 Rs. 200 (b) (d) Rs. 155 Rs. 160 35. Bharti consigned to Bhawna 1,500 Kg of flour costing Rs. 4500. She spent Rs. 307 as forwarding charges. 5% of the consignment was lost in weighing and handling. Bhawna sold 1,350 Kg of flour at Rs. 4 per kg. Her selling expenses being Rs. 550 and commission at 12 % on sales. Valuation of closing inventory will be ________ 460 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (a) (c) 36. Rs. 250 Rs. 275 Bills Receivable Trade receivables (b) (d) Inventory Furniture and Fittings Deepak Ltd. forfeited 40 shares of 100 each (Rs. 60 called up) issued at par to Mukesh on which he had paid Rs. 20 per share. Out of these 30 shares were reissued to Sujoy as Rs. 60 paid up for Rs. 45 per share. Amount transferred to capital reserve will be ________ (a) (c) 38. (b) (d) Which of the following is not a current asset? (a) (c) 37. Rs. 253 Rs. 350 Rs. 150 Rs. 200 (b) (d) Rs. 100 Rs. 120 The following information pertains to Quick Ltd. (i) (ii) (iii) (iv) Rs. 10,00,000 40,000 25,000 5% Equity share capital called up Calls in arrear Calls in advance Proposed dividend The amount of dividend payable is ________ (a) (c) 39. Plant and machinery Trade receivables (b) (d) Inventory Cash Rs. 300 Rs. 400 (b) (d) Rs. 200 Rs. 500 A company purchased machinery for Rs. 20,000 on 1st January 2006 and followed the diminishing balance method @ 15%. At the end of 2009 it was decided to follow fixed Instalment method of depreciating the machine at Rs. 3000 per year from the very beginning and the necessary amount of unabsorbed depreciation of 2006 to 2008 to be adjusted in 2009. Adjusted amount will be: _________ (a) (c) 42. Rs. 50,000 Rs. 49,250 Ram Ltd. re-issued 200 equity shares of Rs.10 each @ Rs. 7 per share. These shares were issued originally at a discount of 10%. Amount debited to discount on re-issue of shares will be (a) (c) 41. (b) (d) Which of the following is fixed asset? (a) (c) 40. Rs. 48,000 Rs. 60,000 Rs. 1,282 Rs. 1,400 (b) (d) Rs. 1,300 Rs. 1,500 On 1st April, 2009 M/s Omega Bros. had a provision for bad debts of Rs. 6,500. During 2009-2010 Rs. 4,200 proved irrecoverable and it was desired to maintain the provision for bad debts @ 4% on trade receivables which stood at Rs. 1,95,000 before writing off Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 461 MODEL TEST PAPER - 17 Amount of net provision debited to profit and loss A/c will be: _________ (a) (c) 43. Rs. 7,800 Rs. 5,332 (b) (d) Rs. 7,500 Rs. 5,000 Following figures have been taken from the books of a trader Rs. Purchases 60,000 Purchase returns 10,000 Sales 80,000 Sales Return 10,000 Carriage outwards 1,000 Office Rent 1,000 Amount of Gross Profit will be _________ (a) (c) 44. Rs. 20,000 Rs.15,000 (b) (d) Rs.10,000 None of the three The profits for the last four years are given as follows: Year Rs. 2006 40,000 2007 50,000 2008 60,000 2009 50,000 The value of goodwill on the basis of three years purchase of average profits based on last four years will be _________ (a) (c) 45. (b) (d) Rs. 1,50,000 None of three Goods destroyed by fire Rs. 50,000 and Insurance company admitted 60% claim. This adjustment will be entered in: (a) (c) 46. Rs. 1,00,000 Rs. 2,00,000 Trading Account Balance Sheet (b) (d) Profit & Loss Account All the three Following balances are given in trial balance Dr. Rs. Cr. Rs. 6% Loan on (1.1.2009) 10,000 Interest on Loan 300 Interest payable and outstanding will be: _________ (a) (c) Rs. 600 Rs. 500 462 The Institute of Chartered Accountants of India (b) (d) Rs. 300 Rs. 700 Common Proficiency Test (CPT) Volume - I 47. Machinery bought on 1st July 2006 for Rs. 20,000 was sold on Dec. 31, 2009 for Rs. 15,000. Depreciation is charged @ 10% p.a. on original cost. Accounting year closes on 31st December each year. Profit on sale will be _________ (a) (c) 48. (b) (c) (d) (b) (d) Rs. 15,000 Rs. 15,500 Purchases A/c To Cash A/c Suspense A/c To Purchases A/c Purchases A/c To Suspense None of the above Dr. Rs. 500 Dr. 500 Dr. Rs. 500 500 500 500 Repairs to building wrongly debited to Building A/c Total of purchase Journal is short by Rs. 1,000 Freight paid on purchase of new machinery debited to freight account. None of the above. A s acceptance to B for Rs. 8,000 renewed for 3 months on the condition that Rs. 4,000 be paid in cash immediately and the remaining amount will carry interest @ 12% p.a. The amount of interest will be (a) (c) 52. Rs. 14,580 Rs. 14,000 Which of the following errors will effect the trial balance? (a) (b) (c) (d) 51. Rs. 2,000 Rs. 4,000 Syam prepared a trial balance for his factory on 31st March, 2010. The debit total of trial balance was short by Rs. 500. He transferred the deficiency to suspense A/c. After a close examination he found that the purchase day book for Sept. 2009 was undercast by Rs. 500. Necessary Journal entry to rectify the error will be: (a) 50. (b) (d) A boiler was purchased from abroad for Rs. 10,000, shipping and forwarding charges amounted to Rs. 2,000, Import duty Rs. 7,000 and expenses of installation amounted to Rs. 1,000. It was depreciated for three years @ 10% on diminishing balance method, Balance of machinery A/c at the end of third year will be _____ (a) (c) 49. Rs. 3,000 Rs. 2,500 Rs. 120 Rs. 80 (b) (d) Rs. 100 Rs. 160 A Limited Company purchased machine worth Rs. 1,15,000 from Indian Traders. Payment was made as to Rs. 10,000 by cross cheque and the remaining amount by issue of Equity Shares of the face value of Rs. 10 each fully paid at an issue price of Rs. 10.50 each. Amount of securities premium will be (a) (c) Rs. 6,000 Rs. 5,000 Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Rs. 7,000 Rs. 4,000 463 MODEL TEST PAPER - 17 53. B sold 50 televisions at Rs. 15,000 per television. He was entitled to commission of Rs. 500 per television sold plus one fourth of the amount by which the gross sale proceeds less total commission there on exceeded a sum calculated at the rate of Rs. 12,500 per television sold. Amount of commission will be (a) (c) 54. 19th July, 2010 20th July, 2010 (b) (d) 18th July, 2010 16th July, 2010 Rs. 36,000 Rs. 35,000 (b) (d) Rs. 36,400 Rs. 36,500 The expired portion of capital expenditure is (a) (c) Expense Asset (b) (d) 57. Capital on January 1, 2009 Capital on January 1, 2010 Drawings made during the year Additional Capital introduced during the year Profit of the firm will be (a) (c) 58. Rs. 50,000 Rs. 35,000 A and B entered into a joint venture and agreed to share profits and losses in the ratio of 3:2. A Joint Bank A/c was opened where in A contributed Rs. 50,000 and B contributed Rs. 20,000. Their transactions were as follows: Rs. Material Purchased 65,000 Wages paid 6,000 Administrative expenses paid by B 3,000 Selling expenses 6,170 Expenses paid by A 1,630 Sales 1,12,000 Remaining inventory was taken by A for Rs. 6,200. Joint venture profit will be (a) (c) 56. (b) (d) On 16.06.2010, X draws a bill on Y for Rs. 25,000 for 30 days. July 19th is a public holiday. The maturity date of the bill will be _________ (a) (c) 55. Rs. 45,000 Rs. 40,000 Rs. 4,500 Rs. 4,800 (b) (d) Income Liability Rs. 15,200 16,900 4,800 2,000 Rs. 4,000 Rs. 5,000 In the bank reconciliation statement, when balance as per cash book is taken as the starting point, then interest collected by bank Rs. 500 and direct deposit by a customer into his bank Rs. 2,500 will be: (a) (c) Added Ignored 464 The Institute of Chartered Accountants of India (b) (d) Subtracted None of the above Common Proficiency Test (CPT) Volume - I 59. Recovery of bad debts is a (a) (c) 60. Revenue receipt Capital expenditure (b) (d) Capital receipt Revenue expenditure A draws a bill on B for Rs. 50,000 for mutual accommodation. A discounted the bill for Rs. 48,000 from bank and remitted Rs. 24,000 to B. On maturity date, A will send to B (a) (c) Rs. 25,000 Rs. 23,000 (b) (d) Rs. 24,000 Rs. 26,000 SECTION B : MERCANTILE LAWS (40 MARKS) 61. An agreement to do an impossible act is: (a) (c) 62. Suit for rescission Suit for specific performance (b) (d) Suit for damages All of these Is entitled to recover compensation Has a right to sue for damages Has a right to rescinded the contract All of these A contract can be discharged by operation of law by (a) (c) 66. Becomes void on C s death Should be performed by A and B along with C s legal representatives Should be performed by A and B alone Should be renewed between A, B, and D Which is true statement in voidable contract, the injured party (a) (b) (c) (d) 65. Voidable None of these In case of breach of contract, which of the following remedy is available to the aggrieved party? (a) (c) 64. (b) (d) A, B, and C jointly promised to pay Rs. 50,000 to D on the performance of the contract. C dies. Here the contract (a) (b) (c) (d) 63. Void Illegal Death of promisor By Lunacy of promiser (b) (d) By insolvency of promiser By death or insolvency of promiser Which does not relate with seller s suits? (a) (b) (c) (d) Suit for price Suit for damages for non acceptance Suit for repudiation of contract by the buyer before due date Suit for taking back the goods Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 465 MODEL TEST PAPER - 17 67. Future goods means goods to be manufactured or acquired by the seller. (a) (c) 68. A competent person Non-resident Indian (b) (d) An unmarried woman Alien enemy From status decided by court By operation of law (b) (d) As a result of an agreement All of these In partnership the liability of the partner is: (a) (b) (c) (d) 74. The sale is complete when the auctioneer announces its completion by the fall of hammer The sale is complete after certain period The sale is complete after five hours The sale is complete after eight hours A Joint Hindu family arises (a) (c) 73. Suit for price and damages for non-acceptance Suit for damages for non-acceptance Suit for price only Cannot sue for price and damages Who cannot become a partner in partnership firm (a) (c) 72. The buyer many sue the seller for damages for non-delivery The buyer may not sue the seller The buyer may compel the seller to deliver the goods The buyer may not compel the seller to deliver the goods Which of the statement is true in case of an auction sale (a) (b) (c) (d) 71. At the time of contract of sale All of these Which of seller s right against the buyer in case of breach of contract is: (a) (b) (c) (d) 70. (b) (d) Where seller refuses to deliver the goods the buyer (a) (b) (c) (d) 69. Before making the contract of sale After making the contract by sale Limited to share in partner ship firm Unlimited Decided by court Decided by other partners The Sale of Goods Act, 1930 gives the remedies to a seller for breach of contract of sale. Which is correct. (a) (b) (c) (d) Suit for price Suit for damages for non-acceptance Suit for damages for reputation of contract by the buyer before due date All of these 466 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 75. The term goods includes (a) (c) 76. Every trade Profession only (b) (d) Every occupation All of these A minor may be admitted to the benefits of partnership with the consent of all other partners. A minor may be admitted to the benefits of partnership with no consent of other partners A minor may be admitted to the benefits of partnership with the consent of his parents A minor may be admitted to the benefits of partnership with the guarantee of his parents Compulsory Not necessary Compulsory if the court orders to do so Compulsory if the government thinks fit to do so Implied Implied and Express both (b) (d) Express None of these Under the doctrine of Caveat Emptor the seller is _____________ (a) (b) (c) (d) 82. Only written Implied only There may be ____________ condition (a) (c) 81. (b) (d) In case of partnership, registration of firm is: (a) (b) (c) (d) 80. Express or implied Oral only Which is the true statement regarding the inclusion of minor in partnership firm (a) (b) (c) (d) 79. Money All of these The term business includes _________ (a) (c) 78. (b) (d) The partnership agreement may be: _________ (a) (c) 77. Stocks and shares Actionable claim Responsible for bad selection of goods by the buyer Not responsible for the bad selection of goods by the buyer Both of these None of these The unpaid seller loses the right of lien (a) (b) (c) (d) Where seller waived the right of lien By estoppel Where the buyer obtains possession of goods Any of the above Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 467 MODEL TEST PAPER - 17 83. If the seller hands over the key to the buyer of warehouse containing the goods, the delivery is known as (a) (c) 84. Buyer cannot reject the goods Seller is liable to punishment Transfer Delivery (b) (d) Possession None of these Maximum 20 Unlimited No. of persons decided by the government Maximum 10 Cannot sue a third party The third party can sue the firm The partners cannot sue the firm A partner cannot sue to any other partner Every partner has ____________ (a) (b) (c) (d) 90. (b) (d) An unregistered firm _____________ (a) (b) (c) (d) 89. Buyer can reject the goods Contract is terminated In a joint family business there should be _____________ members (a) (b) (c) (d) 88. Has an option to buy the goods Must buy the goods Must return the goods Is not given the possession of goods Voluntary transfer of possession by one person to another is known as _________ (a) (c) 87. Actual delivery No delivery In case of goods sold by sample, the goods should correspond with the sample otherwise ______ (a) (c) 86. (b) (d) In a hire purchase agreement the hirer ___________ (a) (b) (c) (d) 85. Constructive delivery Symbolic delivery A right to inspect the books of the firm No right to inspect the books of the firm A right with the consent of other partners to inspect the books A right to inspect the books with the consent of the Registrar If claim on interest on capital is called, it is payable only out of (a) (c) Profit Capital 468 The Institute of Chartered Accountants of India (b) (d) Turnover Assets Common Proficiency Test (CPT) Volume - I 91. In absence of specific agreement partner is entitled to interest at the rate of ____________ an advances made for the purpose of business of the firm (a) (c) 92. Not entitled to receive any remuneration Entitled to receive remunerate with the consent of other partners Entitled to receive remuneration by order of the court Entitled to receive remuneration Tangible asset Fixed Asset (b) (d) Liquid Asset Intangible Asset Sleeping partner Sub-Partner (b) (d) Nominal Partner No partner 6 months 3 months (b) (d) 12 months 1 month A partner may retire from a firm ___________ (a) (b) (c) (d) 98. Court Two partners On attaining majority the minor partner has to decide within ______ whether he shall continue in the firm or learn it. (a) (c) 97. (b) (d) When a partner agrees to share his profits derived from the firm with a third person, that third person is known as ____________ (a) (c) 96. Majority of partners Government Goodwill is ______________ (a) (c) 95. 10% 12% A partner is (a) (b) (c) (d) 94. (b) (d) The partners cannot be expelled from the firm by ______________ (a) (c) 93. 6% 8% With the consent of all other partners With the consent by sleeping partner With the consent of main partner No consent of any partner Where a partner in a firm is adjudicated insolvent (a) (b) (c) (d) He ceases to be a partner He does not cease to be a partner He ceases to be a partner with the consent of all other partner He ceases to be a partner by order of the court Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 469 MODEL TEST PAPER - 17 99. A , a man enfeebled by disease is induced by B s influence over him as his medical attendant, to agree to pay B an unreasonable sum for his services. It is the case of : (a) (c) 100. Undue Influence Fraud (b) (d) Coercion Mistake A contracts to sing for B at a concert for Rs. 5,000, which is paid in advance, A is too ill to sing. Decide best (a) (b) (c) (d) A must refund the advance of Rs. 5,000 to B A is not liable to refund the many B should force A to sing A is liable to refund only 50% of advance money to B SECTION C : GENERAL ECONOMICS (50 MARKS) 101. Who is the main exponent of Marginal utility analysis ? (a) (c) 102. Indifference curve None zero negative (b) (d) positive none upward horizontal (b) (d) downward vertical positive zero (b) (d) negative infinity If all inputs are trebled and the resultant output is doubled, this is a case of: (a) (c) 107. (b) (d) Cross elasticity of demand between tea and coffee is: (a) (c) 106. Marginal Utility theory Revealed preference In case of Giffen goods, demand curve will slope : (a) (c) 105. Hicks Marshall In case of inferior goods, income elasticity is : (a) (c) 104. (b) (d) Cardinal measure of utility is required in: (a) (c) 103. Paul Samuelson Keynes constant returns to scale diminishing returns to scale (b) (d) increasing returns to scale negative returns to scale Indifference curve is downward slopping _______ (a) (c) always never 470 The Institute of Chartered Accountants of India (b) (d) sometimes none of these Common Proficiency Test (CPT) Volume - I 108. Demand curve can be derived from: (a) (c) 109. Supernormal profits Losses (b) (d) Normal profits Any of the above More inelastic Less elastic (b) (d) More elastic Inelastic Monopolistic competition Non-collusive Oligopoly (b) (d) Monopoly Perfect competition Market period Long run (b) (d) Short run None of these Price discrimination is not possible in the case of (a) (c) 117. MR curve cannot be defined AR curve cannot be defined the short run supply curve cannot be defined none of the above Period in which supply cannot be increased is called (a) (c) 116. Can be controlled by individual firm Cannot be controlled by individual firm Can be controlled within certain limit by individual firm None of the above Price leadership is a form of (a) (c) 115. Giffen goods none The upper portion of the kinked demand curve is relatively (a) (c) 114. (b) (d) In case of monopoly a firm in the short run can have (a) (c) 113. Veblen goods Both (a) & (b) In the case of monopoly: (a) (b) (c) (d) 112. PCC None Under perfect competition price of the product : (a) (b) (c) (d) 111. (b) (d) The exception to law of demand are: (a) (c) 110. MU curve Both (a) & (b) Perfect competition Monopolistic competition (b) (d) Monopoly Nothing can be said If the income elasticity is greater than one the commodity is (a) (c) Necessity Inferior goods Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Luxury None of these 471 MODEL TEST PAPER - 17 118. Full capacity is utilized only when there is (a) (c) 119. Medium of exchange Transfer of value (b) (d) Store of value All the above Cost push inflation Structural inflation (b) (d) Demand pull inflation None of the above Axis IBRD (b) (d) IFCI SEBI (b) (d) SEBI Finance Ministry Securities Exchange Board of India Reserve Bank of India Company Law Board Registrar of Companies Monetary policy is formulated by : (a) (c) 126. it is highly hypothetical and imaginary it ignores the interdependence between the goods it cannot be measured in terms of money because marginal utility of money changes all of the above Banks are regulated by: (a) (b) (c) (d) 125. Marginal utility Quantity supplied Which of the following is a commercial bank in India? (a) (c) 124. (b) (d) Increase in money supply will lead to: (a) (c) 123. Total utility Price offered Which of the following is a function of money? (a) (c) 122. Perfect competition Oligopoly Which among the following is the drawback of consumer surplus (as explained in marginal utility analysis)? (a) (b) (c) (d) 121. (b) (d) The Diamond Water controversy is explained by (a) (c) 120. Monopoly Price discrimination RBI CLB In case RBI wants to increase rate of interest then it should: (a) (c) sell securities hold securities 472 The Institute of Chartered Accountants of India (b) (d) buy securities none of the above Common Proficiency Test (CPT) Volume - I 127. Major commercial banks of India were nationalized in (a) (c) 128. (b) (d) 20% 30% Free play of market forces Monetary authority (b) (d) Commercial banks None of the above 31st March 1st April (b) (d) 31st April 1st March Defence Atomic energy (b) (d) Airlines Railways negative zero (b) (d) positive none of the above (b) (d) State governments None of the above VAT is levied by: (a) (c) 136. 15% 23% Revenue deficit in India is (a) (c) 135. Demand for Credit is Zero Demand for Credit is higher than supply Demand for Credit is low None of the above Which budget in India is passed separately? (a) (c) 134. agency services none of the above In India, fiscal year starts from (a) (c) 133. (b) (d) The cash reserve ratio is determined by : (a) (c) 132. loans both (a) & (b) Statutory liquidity Ratio in India is: (July, 2013) (a) (c) 131. 1970 1972 Rationing of Credit takes place when: (a) (b) (c) (d) 130. (b) (d) Commercial banks provide: (a) (c) 129. 1969 1971 Central government Local government Which of the following are sources of growth? (a) (c) Natural resources Physical capital Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Human capital All the above 473 MODEL TEST PAPER - 17 137. In 2011, the population was more than : (a) (c) 138. (d) zero equal to one (b) (d) infinite greater than zero but less than one High birth rate Immigration (b) (d) Low death rate All the above tea and sugar tea and ball pen (b) (d) tea and coffee tea and shirt Average cost equals price at the profit maximising level of output Average variable cost equals price at the profit maximising level of output Average fixed cost equals price at the profit maximising level of output None of the above Manufacturing industries are a part of : (a) (c) 145. the area inside the budget line the area between the average revenue and marginal revenue curves the difference between the maximum amount a person is willing to pay for a good and its market price none of the above A firm encounters its shut down point when: (a) (b) (c) (d) 144. industry household Which of the following pairs of goods in an example of substitutes ? (a) (c) 143. (b) (d) Increase in population can be caused by (a) (c) 142. agriculture transport A horizontal supply curve parallel to the quantity axis implies that the elasticity of the supply is: (a) (c) 141. 110 crs. 105 crs. Consumer surplus means ________ (a) (b) (c) 140. (b) (d) The highest user of commercial energy is ________ (a) (c) 139. 100 crs. 121 crs. primary sector tertiary sector (b) (d) secondary sector none of the above Mark the correct statement (a) (b) (c) (d) India is a purely capitalist economy India is a stagnant economy India is a developing economy India is a resources poor economy 474 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - I 146. Public sector in India suffers from: (a) (c) 147. 1949 1935 (b) (d) 1956 1901 1986-87 1991-92 (b) (d) 1988-89 1995-96 Liberalisation process in India was initiated by (a) (c) 150. political interference all of the above Disinvestment programme started in India after (a) (c) 149. (b) (d) The Reserve Bank of India was set up in : (a) (c) 148. over staffing uncompetitiveness Yashwant Singh Jaswant Singh (b) (d) Manmohan Singh Both (a) & (b) (b) (d) 1951 1962 First plan was initiated in: (a) (c) 1950 1956 SECTION D : QUANTITATIVE APTITUDE (50 MARKS) 151. A good estimator posses the following property (a) (c) 152. Histogram Frequency polygon (b) (d) Ogive None of these True Both (b) (d) False None of these (b) (d) Binomial distribution None of these Quartile deviation can be affected by: (a) (c) 155. Consistency All these Mean may lead to fallacious conditions in the absence of original observations (a) (c) 154. (b) (d) Frequency density is used in the construction of (a) (c) 153. Unbiasedness Efficiency Poisson distribution Sampling fluctuations The chart that was logarithm of the variable is known as (a) (c) Line chart Multiple line chart Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) Ratio chart Component line chart 475 MODEL TEST PAPER - 17 156. Which measure of dispersion has some desirable mathematical properties? (a) (c) 157. (b) (d) f( x) = f(x) None of these P01 x P12 x P20 = 1 P10 x P20 x P21 = 1 (b) (d) P02 x P10 x P20 = 1 None of these Add Multiply (b) (d) Subtract Divide P(AB) P (A/B) (b) (d) P(A+B) None of these 3 1 (b) (d) 2 3/2 The fourth proportional to (a2 ab + b2), (a3 + b3) and (a-b) is equal to _________ (a) (c) 165. f(x) = f(x) f( x) = f(x) log64 512 is equal to (a) (c) 164. False None of these Probability of occurrence of A as well as B is denoted by _________ (a) (c) 163. (b) (d) If the same quantity is multiplied to all the values the mean shall ______ by the same amount. (a) (c) 162. True P(AUB) = P (A/B) In a circular test the _____________condition must be satisfied? (a) (c) 161. Can have any unit Is expressed as the product of units of two variable. Is a unit free measure None of these A function f(x) is an even function, if (a) (c) 160. Mean deviation All these measure If A and B are two mutually exclusive events, then P(AUB) = P (A) + P (B) (a) (c) 159. (b) (d) The coefficient of correlation between two variables (a) (b) (c) (d) 158. Standard deviation Quartile deviation a2 + b2 1 (b) (d) a2 b2 None of these The sum of series 4 , 0, 4 , 8 .100th terms is _____ (a) (c) 19400 150 476 The Institute of Chartered Accountants of India (b) (d) 292 100 Common Proficiency Test (CPT) Volume - I 166. Number of arrangement that can be made by word APPLE is _______ (a) (c) 167. 50 60 Rs. 600 Rs. 550 (b) (d) Rs. 625 Rs. 575 (b) (d) 0 Does not exist (b) (d) 0 1 (b) (d) Interval None of these lim log(1+ x)1 x is equal to x 0 (a) (c) 1 169. 40 120 A person lend _______ at simple interest in order of getting Rs. 645 at the end of 1 years @ 5% p.a. (a) (c) 168. (b) (d) 1 e 1 log( x - 1)dx is equal to _______ 0 (a) (c) 170. A _______ estimate is a single number (a) (c) 171. (b) (d) 0 2 9, 36 18, 72 (b) (d) 29, 56 None of these A man has only 20 paise coins and 25 paise coins in his purse. If he has 50 coins in all totalling Rs. 11.25, how many coins of each does he have (a) (c) 174. 1 3/4 Find two numbers such that mean proportional between them is 18 and third proportional to them is 144. (a) (c) 173. Point Both Find the value of m, if one of root is 3/2 of the equation x2+x m=0 (a) (c) 172. 1 2 15, 35 40, 10 If a function in x is defined by f(x) = (a) (c) (b) (d) x , X R then f(1/x) = ________ x +1 2 f(x) f(x) Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 25, 25 30, 20 (b) (d) f( x) 0 477 MODEL TEST PAPER - 17 175. A line intersects x-axis at ( -2, 0) and cuts off an intercept of 3 from the positive side of y-axis, the equation of line is (a) (c) 176. lim x 1 (a) (c) 177. 1/7 2/5 (b) (d) 3/7 2/7 60% and 40% 70% and 30% (b) (d) 75% and 25% 80% and 20% 9.2 9.7 (b) (d) 9.5 None of these 25% 24.0% (b) (d) 20.83% 26.30% 0.64 0.60 (b) (d) 0.40 0.80 A class consists of 10 boys and 20 girls of which half the boys and half the girls have blue eyes. Find the probability that a student chosen random is a boy and has blue eyes. (a) (c) 183. 3/5 0 If r = 0.8, then coefficient of correlation shall be _________ (a) (c) 182. 1/5 1/2 After settlement the average weekly wage in a factory has increased from Rs. 8 to Rs. 12 and standard deviation has increased from 2 to 2.5. Find the coefficient of variation after the settlement. (a) (c) 181. (b) (d) X 2 - 4x + 3 is equal to X 2 - 6x + 5 For the series 13, 14, 7, 12, 9, 17, 8, 10, 6, 15, 18, 20, 21 calculate third decile (a) (c) 180. 2x 2y-3 = 0 None of these The mean annual salary of all employees in a company is Rs. 25,000. The mean salary of male and female employees is Rs. 27,000 and Rs. 17,000 respectively. Find the percentage of males and females employed by the company. (a) (c) 179. (b) (d) Three horses A, B and C are in a race, A is twice as likely to win as B and B is twice as likely to win as C. What is the possibility of C winning the race? (a) (c) 178. 2x 3y + 3 = 0 3x 2y + 6 = 0 1/6 1/2 (b) (d) 3/5 None of these If x is a Poisson variate such that P(x=2) = 9P(x=4) + 90P(x=6), find mean of x. (a) (c) m=2 m= 1 478 The Institute of Chartered Accountants of India (b) (d) m=1 m = 4 Common Proficiency Test (CPT) Volume - I 184. If sample mean is 20, population standard deviation is 3 and sample size is 64, find the interval estimate of the mean at confidence integral of 95%. (a) (c) 185. (b) (d) [19.801, 17.735] None of these A person invested money in bank paying 6% p.a. compounded semi annually. If the person expects to receive Rs. 8000 in 6 years, what is the present value of investment. (a) (c) 186. [19.265, 20.735] [20.735, 25.834] Rs. 5,000 Rs. 5,611.03 (b) (d) Rs. 4,611.03 None of these Out of 6 teachers and four boys, a committee of eight is to be formed. In how many ways can this be done when there should not be less than four teachers in the committee. (a) (c) 45 30 (b) (d) 55 50 (b) (d) 57 56 (b) (d) 3 None of these 3 187. Evaluate the value of (3x 2 + 5x + 2)dx 0 (a) (c) 188. Evaluate lim x 2 (a) (c) 189. 1 2 x + 2x log x 3 log x (b) (d) 3 + 2 log x 2x log x 5 7 (b) (d) 9 2 If 3x = 2, 5y =3 and 2z =5, find the value of multiply of x.y.z (a) (c) 192. 1 1 ) - 2 x - 2 x - 3x + 2 x 2 + 3x + 2 ) Compute the value of lim ( 3 x + 2x - x +1 x 2 (a) (c) 191. ( Find the second differential coefficient of y = x2 log x (a) (c) 190. 55 55.5 0 2 (b) (d) 1 None of these If f(x) = |x + 1| and g(x) = 3x2 2 5, find the value of g of = ? (a) (c) 3x2 + 6x 2 | 3x2-5 | Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India (b) (d) 2x2 6x + 3 x 5 479 MODEL TEST PAPER - 17 4 193. (x + 1) (x + 4) dx x 0 (a) (c) 194. 51 48 4.0 4.5 (b) (d) 2.5 3.5 5.1% 6.0% (b) (d) 4.9% None of these 100 0 (b) (d) m+n m n 3 units 4 units (b) (d) 5 units 2 units. Reflexive Transitive (b) (d) Symmetric None of these If P= {1, 2, 3, 4} and Q= {2, 4, 6} then P Q (a) (c) 200. 7 15 The relation is father of Over the set of family members is the relation (a) (c) 199. 55 The distance from the origin to the point of intersection of two straight lines having equation 3x 2y = 6 and 3x+2y = 18 is (a) (c) 198. (d) The sum of first m terms of an A.P. is same as the sum of first n terms. Find the sum of first (m+n) terms: (a) (c) 197. 48 5 For a 10 year deposit, what interest rate payable annually is equivalent to 5% interest payable quarterly ? (a) (c) 196. (b) The mean of numbers 1, 7, 5, 3, 4, 4 is m. The numbers 3, 2, 4, 2, 3, 3, P have mean m-1. Then mean of P and 1 is equal to _______ (a) (c) 195. 1 5 {1,2,3,4,6} {1,2,3,6} (b) (d) {1,4,6} None of these There are four hotels in a certain city. If 3 men check into hotels in a day, what is the probability that they each are into a different hotels. (a) (c) 0.050 0.675 480 The Institute of Chartered Accountants of India (b) (d) 0.375 0.525 Common Proficiency Test (CPT) Volume - I Model Test Paper BOS/CPT-17 SECTION A : FUNDAMENTALS OF ACCOUNTING 1 (d) 2 (a) 3 (a) 4 (a) 5 (c) 6 (a) 7 (a) 8 (b) 9 (c) 10 (d) 11 (a) 12 (c) 13 (b) 14 (a) 15 (c) 16 (a) 17 (b) 18 (c) 19 (d) 20 (c) 21 (c) 22 (c) 23 (a) 24 (b) 25 (c) 26 (a) 27 (c) 28 (a) 29 (c) 30 (b) 31 (b) 32 (d) 33 (a) 34 (b) 35 (a) 36 (d) 37 (a) 38 (a) 39 (a) 40 (b) 41 (a) 42 (c) 43 (a) 44 (b) 45 (d) 46 (b) 47 (b) 48 (a) 49 (c) 50 (b) 51 (a) 52 (c) 53 (a) 54 (b) 55 (b) 56 (a) 57 (a) 58 (a) 59 (a) 60 (a) SECTION B : MERCANTILE LAWS 61 (a) 62 (b) 63 (d) 64 (d) 65 (d) 66 (d) 67 (c) 68 (a) 69 (a) 70 (a) 71 (d) 72 (c) 73 (b) 74 (d) 75 (a) 76 (a) 77 (d) 78 (a) 79 (b) 80 (c) 81 (b) 82 (b) 83 (c) 84 (a) 85 (a) 86 (c) 87 (b) 88 (b) 89 (a) 90 (a) 91 (a) 92 (a) 93 (a) 94 (d) 95 (c) 96 (a) 97 (a) 98 (a) 99 (a) 100 (a) Common Proficiency Test (CPT) Volume - I The Institute of Chartered Accountants of India 595 ANSWERS SECTION C : GENERAL ECONOMICS 101 (d) 102 (a) 103 (c) 104 (a) 105 (a) 106 (c) 107 (a) 108 (c) 109 (c) 110 (b) 111 (c) 112 (d) 113 (b) 114 (c) 115 (a) 116 (a) 117 (b) 118 (b) 119 (b) 120 (d) 121 (d) 122 (b) 123 (a) 124 (b) 125 (a) 126 (a) 127 (a) 128 (c) 129 (b) 130 (c) 131 (c) 132 (c) 133 (d) 134 (a) 135 (b) 136 (d) 137 (c) 138 (b) 139 (c) 140 (b) 141 (d) 142 (b) 143 (b) 144 (b) 145 (c) 146 (d) 147 (c) 148 (c) 149 (b) 150 (b) SECTION D : QUANTITATIVE APTITUDE 151 (d) 152 (a) 153 (a) 154 (c) 155 (b) 156 (a) 157 (c) 158 (a) 159 (b) 160 (a) 161 (c) 162 (a) 163 (d) 164 (b) 165 (a) 166 (c) 167 (a) 168 (c) 169 (b) 170 (a) 171 (c) 172 (a) 173 (b) 174 (a) 175 (c) 176 (c) 177 (a) 178 (d) 179 (a) 180 (b) 181 (a) 182 (a) 183 (b) 184 (a) 185 (c) 186 (a) 187 (c) 188 (a) 189 (b) 190 (d) 191 (b) 192 (a) 193 (d) 194 (b) 195 (a) 196 (c) 197 (b) 198 (d) 199 (a) 200 (b) 596 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 17 with Answers
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