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CA CPT : Volume 2 - Model Test Paper 4 (with Answers & Explanations)

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BOARD OF STUDIES THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA COMMON PROFICIENCY TEST Model Test Paper BOS/CPT 4 Time : 4 hours Maximum Marks : 200 The test is divided into four sections. Questions 1 to 200 have only one correct answer and carry + 1mark for each correct answer and 0.25 mark for each wrong answer. SECTION A : FUNDAMENTALS OF ACCOUNTING (60 MARKS) 1. Which error cannot be revealed on the preparation of trial balance? (a) (b) (c) (d) 2. A change in accounting policy is justified (a) (b) (c) (d) 3. To comply with accounting standard To ensure more appropriate presentation of the financial statement of the enterprise To comply with law All of the above. The determination of expenses for an accounting period is based on the principle of (a) (c) 4. Wrong totaling of account Compensatory error Error of commission Wrong balancing of an account Periodicity Materiality (b) (d) Matching Both (a) & (b) In the case of downward revaluation of an asset, which is for the first time revalued, ................account is debited. (a) (c) Fixed Asset Profit and Loss A/c 83 Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India (b) (d) Revaluation Reserve General Reserve 83 MODEL TEST PAPER - 4 5. Parties to a bill of exchange are (a) (c) 6. Market Value Book Value Profit of the year Salaries of the partner (b) (d) Interest on capital All of the above Rs. 5,300 Rs. 7,700 (b) (d) Rs. 7,380 Rs. 4,980. Bank overdraft as per cash book Cash balance with bank (b) (d) Debit balance in pass book None of the above Customers (Trade receivables) A/c (b) Commission Earned A/c (d) General Trading A/c Consignee A/c Consignment Account Profit & Loss Account b) d) Consignee s Account Not credited to any account. If the debit as well as credit aspects of a transaction are recorded in Cash Book itself, it is called: (a) (c) 14. (b) (d) Normal loss on consignment is credited to a) c) 13. Fair Value Net Realisable Value If del-credere commission is allowed for bad debt, consignee will debit the bad debt amount to : (a) (c) 12. Net Realisable Value Fair Market Value Debit balance as per pass book means (a) (c) 11. (b) (d) Overdraft as per cash book is Rs. 6,340. Interest on overdraft for 6 month ending 31st December, 2011 Rs. 160 is entered in pass book. Interest on investment collected by bank and credited in the pass book Rs. 1,200. Overdraft as per pass book will be (a) (c) 10. Present value Replacement Value Fluctuating capital account is credited with.......... (a) (c) 9. Payee All of the above The value of an asset after deducting depreciation from the historical cost is known as (a) (c) 8. (b) (d) Inventories should be generally valued at lower of cost or............ (a) (c) 7. Drawee Drawer Opening entry Transfer entry (b) (d) Compound entry Contra entry The un-expired portion of capital expenditure is shown in the financial statement (a) (c) As a liability As an Income 84 The Institute of Chartered Accountants of India (b) (d) As an asset As an expense Common Proficiency Test (CPT) Volume - II 15. Rs. 5,000 spent on maintenance of computer is........... (a) (c) 16. The Journal The Purchaser Book (b) (d) The Cash Book The Sales Book Bank loan Drawings (b) (d) Bad debts recovered Salary payable Rs. 4,00,000 Rs. 3,20,000 b) d) Rs. 5,00,000 None of the above. Salvage value Accumulated value (b) (d) Realisable Value Book value XYZ Ltd. purchased goods for Rs. 25,00,000 and sold 80% of such goods during the accounting year ended 31st March 2010. The Market Value of the remaining goods was Rs. 4,00,000. The company valued the closing Inventory at cost. They violated the concept of (a) (c) 22. Unequal Usage None of the above The portion of the acquisition cost of the asset yet to be allocated is known as........ (a) (c) 21. (b) (d) A Ltd. purchased a machinery from B Ltd. The consideration for the same is paid by issue of 5,000 debentures of Rs. 100 each at a discount of 20%. The amount of the machinery purchased is a) c) 20. Equal usage Charge .............will generally show a debit balance (a) (c) 19. Capital expenditure None of the above The following is a book of original entry & also part of the ledger: (a) (c) 18. (b) (d) The assumption underlying the fixed instalment method of depreciation is that of.........of the asset over its useful life (a) (c) 17. Deferred capital expenditure Revenue expenditure Conservatism Periodicity (b) (d) Money Measurement Cost Rohan, Mohan and Sohan are partners in the firm sharing profits and losses in 5:3:2 ratio. The firm s balance sheet as on 31.3.2010 shows the reserve balance of Rs. 25,000. Profit of the last year Rs. 1,00,000, joint life policy of Rs. 5,00,000, fixed asset of Rs. 50,00,000. On 1st October, Rohan died and on the same date assets were revalued. The executor of the deceased partner will get........... along with the capital of Rohan (a) (b) (c) (d) Share in joint life policy Share in reserve account the firm Proportionate share of profit upto the date of death All of the above Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India 85 MODEL TEST PAPER - 4 23. A building purchased on 1st January 2006 at Rs. 15,00,000 having useful life of 15 years was depreciated on straight line basis. On 1st January 2009 the same building was revalued upward by Rs. 3 lakhs. The revised amount of depreciation for the year 2009 will (a) (c) 24. Rs. 16,167 Rs. 24,250 (b) (d) Rs. 32,333 Rs. 25,000 Rs. 1,600 Rs. 1,500 (b) (d) Rs. 1,700 Rs. 1,800 Rs. 1,26,000 Rs. 36,000 (b) (d) Rs. 42,000 Rs. 84,000 The credit side of the trial balance will be Rs. 2000 more than the debit side The debit side of the trial balance will be Rs. 2000 more than the credit side Trial balance would show the credit side to be Rs. 1000 more than the debit Trial balance would show the debit side to be Rs. 1000 more than the credit 10,000 equity shares of Rs. 10 each were issued to public at a premium of Rs. 2 per share. Applications were received for 12,000 shares. Amount of securities premium account will be (a) (c) 30. Rs. 1,20,000 Rs. 1,00,000 If a purchase return of Rs. 1,000 has been wrongly posted to the debit of the sales return account, but has been correctly entered in the suppliers account then the total of the (a) (b) (c) (d) 29. (b) (d) The profit of last three years are Rs. 42,000, Rs. 39,000 and Rs. 45,000. Find out the goodwill at two year s purchase. (a) (c) 28. Rs. 1,25,000 Rs. 1,40,000 If sales are Rs. 2,000 and the rate of gross profit on cost of goods sold is 25% than the cost of goods sold will be (a) (c) 27. Rs. 1,26,000 Rs. 1,30,000 Ram drew a bill on Shyam for Rs. 50,000 for 3 months proceeds of which are to be shared equally. Ram got the bill discounted at 12% p.a. and remits proceeds to Shyam. The amount of such remittance will be (a) (c) 26. (b) (d) Gopal sent out certain goods to Ramesh of Delhi. 1/10th of the goods were lost in transit. Invoice value of goods lost is Rs. 12,500. Invoice value of goods sent out on consignment will be (a) (c) 25. Rs. 1,33,000 Rs. 1,25,000 Rs. 40,000 Rs. 16,000 (b) (d) Rs. 20,000 Rs. 24,000 Rachna and Payal are partners sharing profits and losses equally. They admitted Ashna for 1/3 share in the firm. The new profit sharing ratio will be (a) (c) 2:2:1 1:2:1 86 The Institute of Chartered Accountants of India (b) (d) 3:2:1 1:1:1 Common Proficiency Test (CPT) Volume - II 31. Rohit purchased a machine on 1.1.2010 for Rs. 1,20,000 installation expenses were Rs. 10,000. Residual value after 5 years Rs. 5,000. On 01.02.2010 expenses for repair were incurred to the extent of Rs. 2,000. Depreciation is provided under straight line method. Annual depreciation is (a) (c) 32. Rs. 10,000 None of the above Rs. 40,000 Rs. 1,20,000 (b) (d) Rs. 1,00,000 Rs. 80,000 Rs. 3,000 Rs. 4,000 (b) (d) Rs. 15,000 Rs. 8,000 Rs. 15,500 Rs. 17,000 (b) (d) Rs. 15,700 Rs. 15,000 If sales revenue is Rs. 4,00,000, cost of goods sold is Rs. 3,10,000 and operating expenses are Rs. 60,000, the gross profit is (a) (c) 37. (b) (d) A draws a bill on B for Rs. 30,000 for mutual accommodation. A discounted that bill for Rs. 28,000 from bank and remitted Rs.14,000 to B. On due date A will send to B (a) (c) 36. Rs. 15,000 Rs. 20,000 18% investment of Rs. 1,00,000 and interest received on investment Rs. 15,000 have been given in the trial balance for the period ended on 31.3.2010. The amount of interest outstanding in the final accounts will be (a) (c) 35. Rs. 22,000 Rs. 26,000 Ansh and Vansh entered into a joint venture where Ansh purchased goods costing Rs.2,40,000. Vansh sold goods costing Rs. 1,60,000 at Rs. 2,40,000. Balance goods were taken over by Ansh at same gross profit percentage as in case of sale. The sale value of goods taken over will be (a) (c) 34. (b) (d) A firm has on average profit of Rs. 60,000; rate of return on capital employed is 12.5% p.a.; total capital employed in the firm was Rs. 4,00,000. Goodwill on the basis of two year s purchase of super profit is (a) (c) 33. Rs. 20,000 Rs. 25,000 Rs. 90,000 Rs. 30,000 (b) (d) Rs. 60,000 Rs. 2,50,000 Average Inventory = Rs. 12,000. Closing Inventory is Rs. 3,000 more than opening Inventory. The value of closing Inventory will be (a) (c) 24,000 10,500 Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India (b) (d) 12,000 13,500 87 MODEL TEST PAPER - 4 38. Goods costing Rs. 2,00,000 sent out to consignee at cost + 25%. Invoice value of the goods will be (a) (c) 39. 22,223 shares 25,000 shares (b) (d) Rs. 20,000 Rs. 16,000 Rs. 4,000 None of the above Rs. 3,04,000 Rs. 3,80,000 (b) (d) Rs. 76,000 Rs. 3,00,000 Asset will increase by 4,00,000 Liabilities will increase by 4,00,000 Both (a) and (b) Asset will increase by 5,00,000 The cash-book showed on overdraft of Rs. 1,500 but the pass book made up to the same date showed that cheque of Rs. 100, Rs. 50 and Rs. 125 respectively had not been presented for payment and the cheque of Rs. 400 paid into account had not been cleared. The balance as per the pass book will be (a) (c) 44. (b) (d) Manish purchased a car for Rs. 5,00,000 making a down payment of Rs. 1,00,000 and signing a bill payable of Rs. 4,00,000. As result of this transaction (a) (b) (c) (d) 43. 18,182 shares 20,000 shares Beta Ltd. was formed as a public limited company with on authorised capital of Rs. 20,00,000 divided into shares of Rs. 10 each. Beta Ltd. issued fully paid up shares of Rs. 10 each in consideration of acquiring asset worth Rs. 3,80,000 from M/s Rahim Bros. The shares are issued at a premium of 25%. To record this transaction share capital need to be credited by (a) (c) 42. Rs. 2,30,000 None of the above Ajay bought goods of the value Rs. 20,000 and consigned them to Saroj to be sold by them on a joint venture, profits being divided equally. Ajay draws a bill on Saroj for an amount equivalent to 80% of cost of consignment. The amount of bill will be (a) (c) 41. (b) (d) The Board of Directors of a company decides to issue minimum number of equity shares of Rs. 10 each at 10% discount to redeem Rs. 5,00,000 preference shares. The maximum amount of divisible profits available for redemption is Rs. 3,00,000. The number of share to be issued by the company will be (a) (c) 40. Rs. 2,40,000 Rs. 2,50,000 Rs. 1,625 Rs. 2,175 (b) (d) Rs. 1,375 Rs. 1,100 If repair cost is Rs. 25,000, white wash expenses are Rs. 5,000 cost of extension of building is Rs. 2,50,000 and cost of improvement in electrical wiring is Rs. 19,000. The amount to be capitalized will be (a) (c) Rs. 2,69,000 Rs. 2,80,000 88 The Institute of Chartered Accountants of India (b) (d) Rs. 2,99,000 Rs. 2,74,000 Common Proficiency Test (CPT) Volume - II 45. Ram draws a bill on Rahim for Rs. 30,000. Ram wants to endorse it to Shyam in settlement of Rs. 35,000 at 2% discount and balance in cash. How much cash Ram will pay to Rahim. (a) (c) 46. At the time of liquidation, debenture holders are paid before payment made to shareholders. Debentures can be forfeited for non-payment of calls money Debentures can be converted into shares as per the terms of issue of debentures None of the above. Rs. 200 Rs. 220 (b) (d) Rs. 250 Rs. 230 Rs. 5,000 Rs. 20,000 (b) (d) Rs. 15,000 NIL Rs. 440 Rs.420 (b) (d) Rs.400 Rs.410 On 1.8.09 Ram draws a bill on Moti for 30 days after sight. The date of acceptance is 8.8.09 the maturity date of the bill will be (a) (c) 52. Rs. 8,000 Rs. 30,000 On 1.6.09 X draws a bill on Y for Rs. 25,000. At maturity bill was dishonoured and noting charges incurred Rs. 100. Y requested X to accept Rs. 5,100 in cash and for the balance X draws a bill on Y for 2 months at 12% p.a. Interest amount will be (a) (c) 51. (b) (d) If unsold goods costing Rs. 20,000 is taken over by venturers at Rs. 15,000 the joint venture A/c will be credited by (a) (c) 50. Rs. 10,000 Rs. 2,000 Mohan and Sohan enter into joint venture sharing profits and losses equally. Mohan purchased 100 kg of rice @ 20 kg. Brokerage paid Rs. 200, carriage Rs. 300 Sohan sold 90 kg of rice @ Rs. 22 Kg. Balance rice was taken over by Sohan at cost. The value of rice taken over to be recorded in joint venture will be (a) (c) 49. Rs. 4,200 Rs. 4,600 Which of the following statement is false? a) b) c) d) 48. (b) (d) Gopal Ltd. issued 20,000, 8% debentures of Rs. 10 each at par which are redeemable after 5 years at a premium of 20%. The amount of loss on redemption of debenture to be written off every year will be (a) (c) 47. Rs. 5,000 Rs. 4,300 10.9.09 9.9.09 (b) (d) 8.9.09 11.9.09 Fees paid in cash to Notary Public is charged by them from (a) (c) Drawer Holder of bill of exchange Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India (b) (d) Drawee None of the above 89 MODEL TEST PAPER - 4 53. Ryan Ltd. issued 5,000, 12% debentures of Rs. 100 each at a premium of 10% which are redeemed after 10 years at a premium of 20%. The amount of loss on redemption of debenture to be written off every year will be (a) Rs.8,000 (b) Rs.10,000 (c) Rs.30,000 (d) Rs.40,000 54. As per the Companies Act, Interest accrued and due on debentures should be shown (a) Under Debentures Account (b) As Current liabilities (c) As Provision (d) As a reduction of bank balance 55. Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5% by issue of equity shares amounting to Rs. 1,00,000 at a premium of 10% the amount to be transferred to capital redemption reserve account will be (a) (c) 56. Rs.1,05,000 Rs.2,00,000 (b) (d) Rs.1,00,000 Rs.1,11,000 If the rate of depreciation is same then the amount of depreciation under straight line method vis-a-vis written down value method will be (a) (b) (c) (d) Equal in all years Equal in the first year but higher in subsequent years Equal in the first year but lower in subsequent years Lower in the first year but equal in subsequent years 57. A of Mumbai sends goods to B of Delhi, the goods are to be sold at 125% of cost which is invoice price or above. B was entitled to the commission of 10% on sales plus 25% on any surplus realised above invoice price. 10% of goods sent out on consignment (invoice value of which is Rs. 12,500) were destroyed. 75% of the total consignment is sold by B at Rs. 1,00,000. The amount of commission payable will be (a) Rs.10,000 (b) Rs.11,562.50 (c) Rs.9,700 (d) Rs.9,000 58. A and B enter into a joint venture sharing profits and losses in the ratio 2:3. Goods purchased by A for Rs. 45,000. Expense incurred by A Rs. 13,500 and by B Rs. 5,200. B sold the goods for Rs. 85,000. Remaining Inventory taken over by B as Rs. 7,200. The profit of the venture will be (a) Rs.9,800 (b) Rs.35,700 (c) Rs.21,300 (d) Rs.28,500 59. On 1.4.2009 Mohan invested Rs. 1,00,000 in a business. Interest on capital is to be allowed @ 12% p.a. Accounting year is financial year. Amount of interest to be charged to Profit and Loss account for the year 2009-2010 is (a) Rs.12,000 (b) Rs.9,000 (c) Rs.10,000 (d) Rs.11,000 90 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II 60. 1,000 kgs. of Apple are consigned to a whole saler the cost being Rs. 8 per kg. plus Rs. 925 of freight. It is concluded that a loss of 15% is unavoidable the cost per kg. of apple will be (a) (c) Rs.9.41 Rs.10.00 (b) (d) Rs.10.50 Rs.9.50 SECTION B : MERCANTILE LAWS (40 MARKS) 61. Which of the following is not the legal requirements of a valid offer? (a) (b) (c) (d) 62. A promisee is a person (a) (b) (c) (d) 63. Partly true Partly false Moral Pressure Mental Pressure (b) (d) Moral or Mental Pressure Moral and Mental Pressure General offer Specific offer (b) (d) Express offer Standing offer A voidable contract is one which (a) (b) (c) (d) 67. (b) (d) A Offers to sell his car to B . Only A can accept or reject it. This is a case of (a) (c) 66. True False Coercion involves (a) (c) 65. Who makes a promise A person who monitors the statement intentions of two parties To whom the promise is made Who fails to perform the promise Silence cannot amount to offer by conduct. It is (a) (c) 64. It must be communicated to the offeree It must be made with a view to obtain offeree s assent It must express offeror s final willingness It must be made to specific person and not to public at large Can be enforced at the option of aggrieved party Cannot be enforced in a court of law Can be enforced at the option of both the parties Courts prohibit According to the Indian Contract Act, 1872 an agreement must be (a) (b) (c) (d) In writing Registered Out of natural love and affection between two near relations All of the above Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India 91 MODEL TEST PAPER - 4 68. Which one of the following is an essential element of a valid contract? (a) (c) 69. (d) In case of sale the subject matter of contract exists at the time of sale The term does not include shares In a contract of sale, the price may be paid partly in cash and partly in goods valued in terms of money A contract of sale must be in writing A stipulation essential to the main purpose of the contract A stipulation collateral to the main purpose of the contract Either (a) or (b) Both (a) and (b) Condition Condition precedent (b) (d) Warranty Either (a) or (b) Repudiate a contract Claim damages only Repudiate the contract and claim damages None of the above Any stipulation other than time of payment is of the essence of the contract depends upon (a) (b) (c) (d) 75. Reasonable price Ad hoc price Breach of a condition gives a right to (a) (b) (c) (d) 74. (b) (d) A stipulation in a contract of sale with reference to the goods which are the subject matter thereof may be (a) (c) 73. Net realisable value Resale price According to Sale of Goods Act, 1930 a warranty is (a) (b) (c) (d) 72. Consideration All of the above Which of the following statements are correct? (a) (b) (c) 71. (b) (d) Where no price is fixed by express agreement or by implication, the buyer shall pay the seller (a) (c) 70. Free consent Competent parties Stipulation as to time given under Section 11 of the Indian Contract Act, 1872 Operation of law Terms of the contract All of the above Lien in Sale of Goods Act 1930, is a right to (a) (b) (c) (d) Regain possession of goods Retain possession of goods Give away possession of goods All of the above 92 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II 76. The right of lien is available to the unpaid seller, only when (a) (b) (c) (d) 77. Seller is not in possession of the goods Seller is in possession of goods Seller delivered the goods to the carrier Seller has delivered the goods to the buyer The term business under the the Partnership Act 1932, includes (a) (c) Trade Profession (b) (d) Occupation All of the above 78. A minor when admitted into partnership (a) Can opt to continue as a partner or not, on attaining majority (b) Becomes personally liable (c) Cannot inspect any books of accounts of the firm (d) Can interfere in the day to day affairs of the firm 79. For admitting a minor into the benefits of the partnership, which of the following is required? (a) (b) (c) (d) Consent of guardian Consent of Registrar of firms Consent of all the partners of the firms Consent of majority partners of the firm 80. A partnership firm is compulsorily dissolved where___________. (a) All partners have become insolvent (b) Firm s business has become unlawful (c) The fixed term has expired (d) In cases (a) and (b) only 81. Unregistered firm cannot file a suit against a _________ to enforce any right arising from a contract. (a) Incoming partner (b) Outgoing partner (c) Third party (d) Minor admitted to benefits of partnership. 82. A ware house keeper agrees to hold goods of X on behalf of B at X s request . This amounts to: (a) (c) 83. Symbolic delivery Actual delivery (b) (d) Constructive delivery Both (a) & (b) Caveat Emptor means(a) Responsibility of the seller to inspect the goods (b) Responsbility of the seller to reveal the defect (c) Responsibility of the buyer to inspect goods (d) Seller is responsible to the buyer. Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India 93 MODEL TEST PAPER - 4 84. In a contract of sale of goods, implied condition as to description of goods applies where goods are sold by _________. (a) (c) 85. Description Junk dealer Substantial portion of the price Whole of the price Part of the price Minimum portion of the price In the Indian Partnership Act, 1932, partners in a firm are entitled to share profits _____and contribute to losses ________ : (a) (b) (c) (d) 87. (b) (d) When the goods have not been sold on credit and the buyer fails to pay the ________, the unpaid seller can exercise his right of lien. (a) (b) (c) (d) 86. Sample Sample and description Equally, equally Equally in capital contribution ratio Profit sharing ratio, in capital contribution ratio Capital contribution ratio, equally A travel agency operates buses from Jaipur to Agra. The bus standing at its bus terminals is with a view to taking the passengers. There is __________to take passengers. (a) (c) Internal offer Implied offer (b) (d) External offer Express offer 88. The parties to a contract should be __________ to contract. (a) Able (b) Competent (c) Reliable (d) Incapacitated 89. In a wagering agreement, the future event is the _________ in determining the agreement. (a) Collateral aspect (b) Primary factor (c) Secondary factor (d) (a) and (b) 90. In case of firms carrying on business other than banking, maximum numbers of partners are ________. (a) (c) 91. (b) (d) 21 10 _________ is an error of belief about something. (a) (c) 92. 20 25 Fraud Mistake (b) (d) Representation Misrepresentation (b) (d) Consideration Promise There can be a stranger to a ________. (a) (c) Contract Agreement 94 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II 93. Every partner has the right to retire by___________. (a) (c) 94. Nominal Damages Vindictive Damages (b) (d) Special Damages Ordinary Damages Foreign Law Law (b) (d) Indian Law Fact Payment of price Consent of the owner goods (b) (d) Fall of the hammer Happening of all the above Legal Express (b) (d) Implied Birth A contracts to sing for B at concert for Rs. 5000 which is paid in advance. A is too ill to sing. Decide. (a) (b) (c) (d) 100. Understandable Unreasonable Partnership is merely an ________ relation between the partners. (a) (c) 99. (b) (d) In a contract of auction sale, the property in the goods passes with _______. (a) (c) 98. Reasonable Considerable A question of foreign law is a question of (a) (c) 97. Consent of all the partners Giving notice _________ awarded with a view to punish the defendant, and not solely with the idea of awarding compensation. (a) (c) 96. (b) (d) When a seller of goodwill of a business agrees not to carry on similar business, the limits and conditions imposed have to be _________ having regard to the nature of the business. (a) (c) 95. Majority of partners Will A will not refund the advance of Rs. 5000 to B. A must refund the advance of Rs. 5000 to B A should make a new contract for sing B will compel A to sing A and B are partners in a stationary business. A buys on credit certain quantity of pencils for a whole seller in the firm s name. He uses these pencils for the family. Decide. (a) (b) (c) (d) A will be personally liable It will bind the firm A as well as firm both will be liable All of these Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India 95 MODEL TEST PAPER - 4 SECTION C : GENERAL ECONOMICS (50 MARKS) 101. The definition Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses was given by: (a) (c) 102. Scientist discovering new techniques of production Workers getting job in making fly-over War destroying resources of the country The country finds new techniques of agricultural production + 2.5 - .4 (b) (d) 2.5 + .4 The consumer surplus concept is derived from: (a) (b) (c) (d) 107. There is equality of income among people in the economy Profit-motive gets precedence over social motive Freedom of enterprise about what to produce Right to own property Calculate Income-elasticity for the household when the income of a household rises by 5% and the demand for bajra falls by 2%. (a) (c) 106. Not a normative science. Not a positive science. Partly science and partly art Neither a normative nor a positive science. Which of the following is likely to cause an inward shift in a country s PPC? (a) (b) (c) (d) 105. Alfred Marshal Paul. A. Samuelson Which of the following statements is incorrect in case of capitalist economy? (a) (b) (c) (d) 104. (b) (d) Economics is _________. (a) (b) (c) (d) 103. J. B. Say Robbins Law of demand Indifference curve analysis Law of diminishing marginal utility All of above The consumer is in equilibrium when: (a) (b) (c) (d) When marginal utility is constant When marginal utility is greater than price of the good When marginal utility is less than price of the good When marginal utility is equal to price of the good 96 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II 108. Which is not the property of Indifference curve analysis? (a) (b) (c) (d) 109. Capital is a: (a) (c) 110. Unfavorable balance of trade All of the above 1950 1966 (b) (d) 1951 1955 Environmental care Health care in village s (b) (d) Adult care in urban areas Social care in urban areas Punjab U. P. (b) (d) Maharashtra Delhi 1985 2005 (b) (d) 1998 False it is still continuing In order to improve production of power, Electricity Act was passed in (a) (c) 117. (b) (d) Wealth Tax was abolished in: (a) (c) 116. Favorable balance of trade Balanced balance of trade Highest density of population is in: (a) (c) 115. Initiating a business enterprise and resource co-ordination Risk bearing or uncertainty bearing Innovation Mobilisation of savings ASHA is related to : (a) (c) 114. Flow Concept None of the above A full fledged Department of Family Planning was created in India in (a) (c) 113. (b) (d) Types of balance of trade are (a) (c) 112. Stock concept Both (a) and (b) Which is not the function of an entrepreneur? (a) (b) (c) (d) 111. Indifference curves slope downward to the left Indifference curves are always convex to the origin Indifference curves can never intersect each other A higher indifference curve represents a higher level satisfaction than the lower indifference curve 2003 2002 (b) (d) 2005 2004 India s debt service ratio is _______ per cent (2011-12) (a) (c) 11.5 30.5 Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India (b) (d) 6 10 97 MODEL TEST PAPER - 4 118. About percent of sick units are other than small units (a) (c) 119. (b) (c) (d) Income from salary. Interest on fixed deposits. (b) (d) Income from house property. None of the above Private Provident Fund Public Provident Fund (b) (d) Personal Provident Fund Public Presidency Fund 1885 1887 (b) (d) 1886 1890 VAT Corporate Tax (b) (d) Wealth Tax Income Tax (b) (d) Goods sold in India Goods exported from India Excise duty is imposed on (a) (c) 126. 70-80% of GDP 30-40% of GDP Which of the following is not the example of direct tax? (a) (c) 125. (b) (d) Income Tax was introduced first time in India in 1860 and then discontinued in 1873. It was re-introduced in the year: (a) (c) 124. 50-60% of GDP 40-50% of GDP PPF stands for: (a) (c) 123. The agricultural sector provides food and other products for the consumption purpose of industrial sector The agricultural sector provider market for the industrial products The agricultural sector provides raw materials to industry All of the above On which of the following, income tax is not imposed in India? (a) (c) 122. 4% 30% The service sector in India now accounts for: (a) (c) 121. (b) (d) The industrial sector depends on the agricultural sector because: (a) 120. 96% 5% Goods imported in India Goods manufactured in India Which of the following is correct? (a) (b) (c) (d) Expenditure on financial assets which are produced and owned within the country is included in national expenditure Expenditure on financial assets of foreign countries is included in national expenditure Goods produced in preceding years are also included in national income. None of the above 98 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II 127. Which of the following is included in national income ? (a) (c) Scholarship Unemployment Allowance (b) (d) Old age pensions None of the above Use table to answer question 128-129 House of Labour 0 1 2 3 128. 200 380 120 180 (b) (d) 100 480 Explicit cost Variable cost (b) (d) Implicit cost Fixed cost NNP/ Population Population / NNP (b) (d) Total capital / Population None of the above 0.368 0.53 (b) (d) 0.29 0.18 TRAI is regulatory, authority for in India (a) (c) 134. (b) (d) According to the Human Development Report 2010, the GINI index for India in 2000-10 (survey year) was: (a) (c) 133. 180 480 Per capita national income means: (a) (c) 132. 200 180 __ The cost that firm incurs in hiring or purchasing any factor of production is referred as: (a) (c) 131. 200 480 What is the marginal product of the third hour labour? (a) (c) 130. Marginal Product What is the total output when 2 hours of labour are employed? (a) (c) 129. Total Output Tourism Transport (b) (d) Telecom Technical Education India s population is : (a) (b) (c) (d) Less than that of China More than that of China Less than that of U.S.A. Less than that of Australia Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India 99 MODEL TEST PAPER - 4 135. Indian Government aimed at reducing the maternal mortality rate to per thousand birth by the end of Eleventh Plan (a) (c) 136. (b) (d) Average cost curve Marginal revenue curve 40 % 59 % (b) (d) 65 % 70 % First Third (b) (d) Second Fourth A higher level of satisfaction A higher level of income (b) (d) A higher level of production None of the above Primary Deficit Budget Deficit (b) (d) Capital Deficit Money Deficit In the case of a Giffen good, the demand curve will be (a) (c) 144. Budget line Indifference map In fiscal deficit we add borrowing and other liabilities to the (a) (c) 143. .4 4 A higher indifference curve shows: (a) (c) 142. (b) (d) Population explosion occurs in stage of the theory of demographic transition (a) (c) 141. . 04 4 The share of Indirect taxes in the gross tax revenue (centre and state combined) is about (a) (c) 140. Promote economic growth Mobilise resources for economic growth Ensure economic growth and equitable distribution All the above depicts complete picture of consumer tastes and preferences. (a) (c) 139. 1 3 Suppose income of the consumers increases by 50 % and the demand for commodity x increases by 20 % what will be the income elasticity of demand for commodity x ? (a) (c) 138. (b) (d) The main objective of fiscal policy in developing countries is to: (a) (b) (c) (d) 137. 5 2 Downward sloping to the right Vertical (b) (d) Upward sloping to the right None of the above In case of an inferior good the income elasticity of demand is: (a) (c) Zero Negative 100 The Institute of Chartered Accountants of India (b) (d) Positive None of the above Common Proficiency Test (CPT) Volume - II 145. When quantity demanded changes by larger percentage than does price, elasticity is termed as: (a) (c) 146. (b) (d) Doubled Increased The level and rate of taxation Who ultimately bears the money burden of the tax The growth of taxation The way in which a tax is collected The change in total cost due to a 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 Which is the other name that is given to the Long run average cost curve? (a) (c) 150. Remained the same Reduced Marginal cost is defined as: (a) (b) (c) (d) 149. Elastic Perfectly Inelastic The incidence of taxes refers to: (a) (b) (c) (d) 148. (b) (d) The share of concessional debt in total external debt of India has: (a) (c) 147. Inelastic Perfectly Elastic Envelope curve Demand curve (b) (d) Profit curve Supply Curve (b) (d) Decreasing marginal cost Decreasing average fixed cost Diminishing marginal returns imply: (a) (c) Decreasing average variable cost Increasing marginal cost SECTION D : QUANTITATIVE APTITUDE (50 MARKS) 151. A person opened a savings bank account 4 months ago, which has now a balance of Rs. 21,315. If the bank pays 4.5% simple interest, how much money was deposited by him, initially? (a) (c) 152. Rs. 21,000 Rs. 15,000 (b) (d) Rs. 20,000 None of these Mohan deposits Rs. 500 into an account paying 8% simple interest. He makes two more deposits of Rs. 1,000 each; first after 3 months and second after 6 months. How much will be in his account at the end of the year, if he makes no other deposits and withdrawals during the time? (a) (c) Rs. 2,600 Rs. 2,640 Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India (b) (d) Rs. 2,650 None of these 101 MODEL TEST PAPER - 4 153. How long will it take Rs. 1,200 to amount Rs. 2,000 at 5% converted quarterly at Compound Interest? (a) (c) 154. Rs. 1750 Rs. 1776 (b) (d) Rs. 1800 None of these Rs. 150 Rs. 130 (b) (d) Rs. 140 None of these Rs. 3800 Rs. 4000 (b) (d) Rs. 3000 None of these Rs. 7650.75 Rs. 7000 (b) (d) Rs. 7600.50 None of these The compound interest on any sum at the rate of 5% for two years is Rs. 512.50. Find the sum. (a) (c) 160. 8% None of these Rs. 7500 is borrowed at compound interest at the rate of 4% per annum. What will be the amount to be paid after 6 months, if interest is compounded quarterly? (a) (c) 159. (b) (d) The rate of interest for the first 2 years is 3% per annum, for the next 3 years is 8% per annum and for the period beyond 5 years, 10% per annum. If a man gets Rs. 1520 as a simple interest for 6 years; how much money did he deposit? (a) (c) 158. 7% 7.5% What annual payment will discharge a debt of Rs. 770 due in years, the rate of interest being 5% per annum? (a) (c) 157. 10 years 5 months None of these The compound interest earned by a money lender on Rs. 7,000 for 3 years if the rate of interest for 3 years are 7%, 8% and 8.5% respectively is (a) (c) 156. (b) (d) A man borrowed Rs. 20,000 from a money lender but he could not repay the amount for a period of 4 years. According the money lender s demand showed Rs. 26,500 due from him. At what rate percent annum compound interest did the money lender lend his money? (a) (c) 155. 10 years 3 months 10 years Rs. 4000 Rs. 3,000 (b) (d) Rs. 5,000 None of these In what rate per cent per annum will Rs. 1,000 amount to Rs. 1331 in 3 years? The interest is compounded yearly is: (a) (c) 10% 11% 102 The Institute of Chartered Accountants of India (b) (d) 12% None of these Common Proficiency Test (CPT) Volume - II 161. The range of 10 observations is 20. If each item is increased by 15, then the range of new series is (a) (c) 162. 10 None of these 9 3 (b) (d) 6 None of these Q.D. Mean deviation (b) (d) Range Standard Deviation. 2 4 (b) (d) 2 None of these (b) (d) 60 None of these Find the average of first 25 multiples of 5. (a) (c) 167. (b) (d) If the Standard Deviation of 10 observations is 4 and if each item is divided by 2 then Standard Deviation of new series is (a) (c) 166. 10 20 In grouped frequency distribution, if the Class interval Gap is unequal; then which dispersion is more appropriate? (a) (c) 165. 35 None of these The relation between two variables is 2x 3x + 12 = 0. If mean deviation of y is 6 then mean deviation of x is (a) (c) 164. (b) (d) The range of 10 observations is 20. If each item is divided by 2, then the range of new series is (a) (c) 163. 20 5 65 75 If a, b, c, d, e are five consecutive odd integers, then their average is (a) (b) abcde 5 (c) 168. a+5 5(a + b + c + d + e) (d) a+4 A cricketer scored 180 runs in the first test and 258 runs in the second. How many runs should be score in the third test so that his average score in three tests would be 230 runs. (a) (c) 219 334 Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India (b) (d) 242 None of these 103 MODEL TEST PAPER - 4 169. In a coconut grove, (x+2) trees yield 60 nuts per year, x trees yield 120 nuts per year and (x 2) trees yield 180 nuts per year. If the average yield per year per tree be 100, then the value of x is (a) (c) 170. (c) There is a perfect correlation between x & y. x and y are not correlated. There is a positive correlation between x & y. Do not exist. Positive (a) or (b) (b) (d) Negative None of these x =4& y =7 x =5& y =6 (b) x =7& y =4 (d) None of these 0.5 0.6 (b) (d) 0.5 None of these (b) (d) not reversible None of these Two regression lines are (a) (c) 176. 40 years None of these Consider the two regression lines 3x+2y = 26 & 6x + y = 31. Find the correlation coefficient between x & y. (a) (c) 175. (b) (d) Consider the two regression lines 3x+2y = 26 & 6x + y = 31. Find the mean values of x and y. (a) 174. 50 years 60 years If Covariance (x, y) < 0; then the relation between two variable is (a) (c) 173. 6 2 If r = 0, then (a) (b) (c) (d) 172. (b) (d) The average age of 24 students and the class teacher is 16 years. If the class teachers age is excluded, the average reduces by 1 year. What is the age of the class teacher? (a) (c) 171. 4 8 Reversible cannot say A problem of Mathematics is given to three students X, Y and Z whose chances of solving it are 1 1 1 , and respectively. Find the chance that the problem will be solved? 3 4 5 (a) 4 5 (b) 2 5 (c) 3 5 (d) None of these 104 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II 177. If P(A) = 1 1 1 ; P(B) = and P( A B ) = then the value of P(A / B) is 2 3 4 (a) (b) 1 4 (c) 178. 3 4 2 5 (d) None of these If P(A) = 1 1 1 ; P(B) = and P( A B ) = then the value of P( A B ) is 2 3 4 (a) (b) 11 12 (c) 179. 1 3 1 / 12 (d) None of these If P(A) = 1 1 1 ; P(B) = and P( A B ) = then the value of P ( A B ) is 2 3 4 (a) (b) 7 12 (c) 180. 5 12 1 2 (d) None of these If P(A) = 1 1 1 ; P(B) = and P( A B ) = then the value of P ( A B ) is 2 3 4 (a) (b) 3 4 (c) 181. 1 4 2 5 (d) None of these From the following probability distribution table, find E(x). x: 2 3 f(x): (a) (c) 1 1 2 1 3 1 6 1 1.67 Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India (b) (d) 1.50 None of these 105 MODEL TEST PAPER - 4 182. From the following probability distribution table, Find V(X) x: 183. 2 3 f(x): (a) (c) 1 1 2 1 3 1 6 0.5556 0.506 (b) (d) 0.556 None of these In a box carrying one dozen of oranges, one third has become bad. If 3 oranges are taken out from the box at random, what is the probability that at least one orange out of the three oranges picked up is good? (a) (b) 1 55 (c) 184. 54 55 45 50 (d) None of these A and B are two candidates seeking admission in I.I.T. The probability that A is selected is 0.5 and the probability both A and B are selected is at most 0.3. Then the probability of B getting selected is (a) (c) 185. 3:5 5:3 (b) (d) 3:2 None of these 0.015326 0.012326 (b) (d) 0.15326 None of these Find the probability that at least 5 defective bolts will be found in a box of 200 bolts. If it is known that 2% of such bolts are expected to be defective (Given: e 4 = 0.0183) (a) (c) 188. < 0.9 None of these If x be a poison variates with parameter 1; then find P(3<x<5) (Given: e 1 = 0.36783) (a) (c) 187. (b) (d) One of the two events must happen. Given that the chance of one is two third that of the other. Then the odds in favour of the other (a) (c) 186. < 0.8 < 0.7 0.4717 0.3017 (b) (d) 0.3717 None of these A man is dealt 4 spade cards from an ordinary pack of 52 cards. If he is given three more cards, find the probability p that at least one of the additional cards is also a spade. (a) (c) 0.5718 0.4718 106 The Institute of Chartered Accountants of India (b) (d) 0.3718 None of these Common Proficiency Test (CPT) Volume - II 189. The mean and variance of the poison distribution are equal. (a) (c) 190. (c) 0.015 0.017 None of these (b) (d) 5.453, 5.747 6.485, 7.647 (b) (d) 30.72, 27.32 30.272, 32.728 (b) (d) 8.5%, 17.5% 8%, 12% 0.15 None of these 16.453, 7.747 None of these 27.272, 28.728 None of these (b) (d) 0.85%, 0.175% None of these Find the sample size such that the probability of the sample means differing from the population mean by not more than (a) (c) 196. (d) 2 2 In a large consignment of oranges a random sample of 500 oranges revealed that 65 oranges were bad. Find the 99.73% Confidence limit of bad ones? (For 99.73%, Z = 3) (a) (c) 195. (b) A sample of size 64 was drawn from a population consisting of 128 units. The sample mean of the measurements on a certain characteristic was found to be 28. If the population Standard Deviation is 4 then find the 96% confidence limit for the population mean? (For 96%, Z = 2.05) (a) (c) 194. 2 A random sample of the heights of 100 students from a large population of students in a College having Standard Deviation of 0.75 ft. has an average height of 5.6 ft., Find 95% confidence limits for the average height of all the students of the College. (For 95%, Z = 1.96) (a) (c) 193. False None of these A random sample of the heights of 500 oranges was taken from a large consignement. 65 were found to be defective. Find Standard Error of the proportion of defectives. (a) (c) 192. (b) (d) If a variable x follows a poison law such that P(x = 1) = P(x = 2); then the variance of the distribution is (a) 191. True Either (a) or (b) 1 th of the Standard Deviation is 0.95. 10 300 395 (b) (d) 384 None of these The variance of 10 observations is 4, then their Standard Deviation is +2 or 2. This is (a) (c) True Either (a) or (b) Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India (b) (d) False None of these 107 MODEL TEST PAPER - 4 197. Find the variance of binomial distribution with n = 10, p = 0.3 (a) (c) 198. True Either (a) or (b) (b) (d) The 95% confidence limit for the sample mean (a) (c) 200. (b) (d) 3 None of these When the cost of living increases, the standard of living improves. This is (a) (c) 199. 2.1 7 True Either (a) or (b) (b) (d) False None of these . This is n ( x ) is 1.96 False None of these The mean and variance of Binomial distribution is 12. This is (a) (c) True Either (a) or (b) (b) (d) False None of these YYY 108 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II Answer of Model Test Papers Model Test Paper BOS/CPT 4 SECTION A : FUNDAMENTALS OF ACCOUNTING 1. (b) 2. (d) 3. (b) 4. (c) 5. (d) 6. (b) 7. (d) 8. (d) 9. (a) 10. (a) 11. (c) 12. (d) 13. (d) 14. (b) 15. (c) 16. (a) 17. (b) 18. (c) 19. (a) 20. (d) 21. (a) 22. (d) 23. (c) 24. (a) 25. (c) 26. (a) 27. (d) 28. (b) 29. (b) 30. (d) 31. (c) 32. (c) 33. (c) 34. (a) 35. (d) 36. (a) 37. (d) 38. (c) 39. (b) 40. (c) 41. (a) 42. (c) 43. (a) 44. (a) 45. (c) 46. (b) 47. (b) 48. (b) 49. (b) 50. (b) 51. (a) 52. (c) 53. (b) 54. (a) 55. (b) 56. (b) 57. (b) 58. (d) 59. (a) 60. (b) SECTION B : MERCANTILE LAWS (40 MARKS) 61. (d) 62. (c) 63. (a) 64. (c) 65. (c) 66. (a) 67. (d) 68. (d) 69. (b) 70. (c) 71. (b) 72. (d) 73. (c) 74. (c) 75. (b) 76. (b) 77. (d) 78. (a) 79. (c) 80. (d) 81. (c) 82. (b) 83. (c) 84. (b) 85. (b) 86. (a) 87. (c) 88. (b) 89. (b) 90. (a) 91. (c) 92. (b) 93. (b) 94. (a) 95. (c) 96. (d) 97. (b) 98. (a) 99. (b) 100. (b) Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India 281 ANSWERS Answer of Model Test Papers Model Test Paper BOS/CPT 4 SECTION C : GENERAL ECONOMICS (50 MARKS) 101 (c) 111 (d) 121 (d) 131 (a) 141 (a) 102 (c) 112 (c) 122 (c) 132 (a) 142 (c) 103 (a) 113 (c) 123 (b) 133 (b) 143 (b) 104 (c) 114 (d) 124 (a) 134 (a) 144 (c) 105 (c) 115 (d) 125 (c) 135 (b) 145 (b) 106 (c) 116 (a) 126 (b) 136 (d) 146 (c) 107 (d) 117 (b) 127 (d) 137 (b) 147 (b) 108 (a) 118 (b) 128 (d) 138 (c) 148 (a) 109 (a) 119 (d) 129 (b) 139 (c) 149 (a) 110 (d) 120 (a) 130 (a) 140 (b) 150 (c) SECTION D : QUANTITATIVE APTITUDE (50 MARKS) 151. (a) 152. (c) 153. (a) 154. (c) 155. (c) 156. (b) 157. (a) 158. (a) 159. (b) 160. (a) 161. (a) 162. (b) 163. (a) 164. (a) 165. (a) 166. (a) 167. (d) 168. (d) 169. (a) 170. (b) 171. (b) 172. (b) 173. (a) 174. (b) 175. (a) 176. (c) 177. (a) 178. (c) 179. (a) 180. (b) 181. (c) 182. (a) 183. (a) 184. (a) 185. (b) 186. (a) 187. (b) 188. (c) 189. (a) 190. (b) 191. (a) 192. (a) 193. (b) 194. (a) 195. (b) 196. (a) 197. (a) 198. (b) 199. (b) 200. (b) 282 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II ANSWERS = x 65 70 65 1 P 5 25 = 1 P (z < 1) = 1 0 .041 P = 0.06 Ans. (c) 0.06 Model Test Paper BOS/CPT 4 151. P = 100 A 100 21315 4 100 + RT 100 + 0 .045 12 P = 21000 Ans. (a) 152. I1 = 500 Rs. 21000 8 1 = 40 100 I2 =1000 8 3 = 60 100 4 I3 =1000 8 1 = 40 100 2 Total Amount = 500 + 1000 + 1000+40 + 60 + 60 = 2640 Ans. Rs. 2640 5 153. 2000 = 1200 1 + 4 100 81 5=3 80 4n 4n After taking log both side and solved. log 5 = log 3 + 4n [log 81 log 80] n = 10 years 3 months Ans. (a) 10 years 3 months 338 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II r 154. 26500 = 20000 1 + 100 4 After taking log and solving it r = 7.5% Ans. (c) 7.5% 85 7 8 155. C I = 7000 1 + 1 + 1 + 1 100 100 100 C I = 1776 157. I 1 = P 3 6P 2 = 100 100 I2 = P 8 24 P 3 = 100 100 I3 = P 10 10 P 1= 100 100 Total interest = 1520 40 P 100 1520 = 1520 P = 100 40 P = 3800 Ans. Rs. 3800 (a) [ 158. A = 7500 (1 + i)n = ] [I = 0.01 n = 2] 7500 [1+0.01) 2 7500 (1.01) 2 A = 7650.75 Ans. (a) Rs. 7650.75 159. 512.50 = P [(1 + 0.05 ) 1] 2 512.50 = P 0.1025 P = 5000 Ans. (b) Rs. 5000 r 160. 1331 = 1000 1 + 100 3 3 3 r r 11 = 1 + 1.1 = 1+ 100 10 100 Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India 339 ANSWERS 0.1 = r / 100 r = 10% Ans. (a) 10% 161. Range = L S L S = 20 (i) If each item is increased by 15 Range = (L + 15) (S + 15) Range = L S = 20 Ans. (a) [from e.g. (i)] 20 162. Range = L S L S 20 If each item is divided by 2 Range = L S 1 = (L S ) 2 2 2 Range = 1 20 = 10 [( ) sign ignored] 2 Range = 10 (because it is difference between largest and smallest data) Ans. (b) 10 164. In grouped frequency distribution, if the class interval is unequal then quartile deviation is more appropriate. Ans. (a) Q.D. d 2 (4) 165. SD = 2 n = d2 d2 10 = 160 If each item divided by 2 Corrected (d ' )2 = Corrected S.D. = 160 ( 2 ) 2 =40 (d ' ) 2 n = 40 =2 10 S.D. = 2 Ans. (a) 2 340 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II 166. x = (5 + 10 + 15 .......... .... + 125 25 25 [2 5 + (25 1)5 ] 130 2 = = 65 25 2 Average = 65 Ans. (a) 65 167. a, b, c, d, e are five add integers. a + b + c + d + e a + (a + 2 ) + (a + 4 ) + (a + 6 ) + (a + 8 ) = 5 5 average = (a + 4) Ans. (d) a+4 180 + 258 + x 3 168. Av = 230 = 438 + x 690 438 = x 3 x = 252 he should score 252 runs. Ans. (d) None of these 169. 100 = ( x + 2 )60 + x.120 + ( x 2 )180 ( x + 2) + x + x 2 300x = 360x 240 60x = 240 x=4 Ans. (a) 170. 16 = 15 = 4 x 25 x1 24 x = 400 x1 = 360 Age of Teacher = 400 360 = 40 Ans. 40 Years 171. Ans. (b) Refer Properties 172. Ans. (b) Refer Properties 173. Given two regression lines are Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India 341 ANSWERS 3 x + 2 y = 26 (1) 6 x + y = 31 (2) Since the two lines of regression intersect at the point (x, y ) , replacing x and y by and respectively in the given regression equation, we get. (1) 2 y = 26 3 x y = 13 (2) 3 x (3) 2 6 x + 13 3 x = 31 2 12 x + 26 3 x = 31 2 9 x + 26 = 62 9 x = 62 26 = 36 x = 4 (3) y = 13 = 3 (4) 2 13 6 = 7 x = 4, y = 7 Ans. (a) 174. Let us assume that 3x + 24 = 26 (1) represent the regression line of y on x and 6x + y = 31 (2) represent the regression line of x on y. (1) 2y = 26 3x y = 13 byx = 3 x 2 3 2 (2) 6x = 31 y x= 31 1 y 6 6 bxy = 1 6 342 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II 3 1 1 r 2 = byx bxy = = 2 6 4 1 1 = = 0 .5 4 2 r= Ans. (b) We take the sign of n as negative since bot h the regression coefficients are negative). 175. Ans. (a) Refer Properties 176. Let E 1 , E 2 , E 3 denote the events that the probability is solved by X,Y and Z respectively. Then we have P(E 1 ) = 1/3 P ( E1 ) = 1 P (E 1 ) = 2/3 P(E 2 ) = 1/4 P ( E 2 ) = 1 P(E 2 ) = 3/4 P(E 3 ) = 1/5 P ( E 3 ) = 1 P(E 3 ) = 4/5 Problem will be solved if at least one of the three is able to solve it. Hence, the required probability that the problem will be solved is given by P (E 1 E 2 E 3 ) = 1 P ( E1 E2 E3 ) = 1 P E1 . P E2 . P E3 = 1 2/3 x 3/4 x 4/5 = 1 2/5 = 3/5 [ ( ) ( ) ( )] [Since E 1 , E 2 , E 3 are independent] Ans. (c) 1 2 177. Given P(A) = P(B) = 1 3 P (A B ) = 1 4 1 P (A B) 4 1 3 3 = = = P(A|B) = 1 4 1 4 P (B) 3 Ans. (a) Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India 343 ANSWERS 1 1 1 , P(B) = and P (A B) = 2 3 4 178. Given P(A) = ( ) P A B = P(B) P (A B) 1 1 4 3 1 = = 3 4 12 12 = Ans. (c) 179. Given P(A) ( 1 1 1 , P(B) = , P (A B ) = 2 3 4 ) P A B = 1 P (A B ) = 1 {P(A) +P(B) P (A B )} = 1 P(A) P(B) + P (A B ) = 1 1 1 1 + 2 3 4 = 12 6 4 + 3 5 = 12 12 Ans. (a) 180. P (A) = , P(B) = ( ) ( 1 1 , P (A B ) = 3 4 = P A B = P A B = 1 P (A B ) = 1 = ) 4 1 3 = 4 4 Ans. (b) 181. Given x1 = 1, x 2 =2, x 3 = 3 1 1 P ( x1 ) = , P (x 2 ) = , P (x 3 ) = 1 / 6 2 3 E(x) = x1 P(x 1 ) + x 2 P(x 2 ) + x 3 P(x 3 ) = 1 1 1 1 2 1 1 + 2 + 3 = + + 2 3 6 2 3 2 344 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II = 3 + 4 + 3 10 5 = = = 1 .666 .... 6 6 3 = 1.67 Ans. (c) 182. Given x1 = 1, x 2 = 2 , x 3 = 3 P ( x1 ) = 1 1 1 , P ( x 2 ) = , P (x 3 ) = 2 3 6 V(x) = E(x 2 ) [E(x) ] 2 E(x) = x1P ( x1 ) + x 2 P ( x 2 ) + x 3 P ( x 3 ) 1 1 1 1 + 2 + 3 2 3 6 = E(x) = = ( ) 1 2 1 + + 2 3 2 3 + 4 + 3 10 5 = = 6 6 3 E x 2 = x1 P (x1 ) + x 2 P (x 2 ) + x 3 P (x 3 ) 2 2 = 1 1 1 1 + 4 + 9 2 3 6 = 1 4 3 + + 2 3 2 = 3 + 8 + 9 20 10 = = 6 6 3 10 5 V(x) = 3 3 = 2 10 25 3 9 V(x) = 2 30 25 5 = = .5556 9 9 Ans. (a) 183. Let x denote the number of defective lamps. X can assume the values 0, 1, 2, 3 Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India 345 ANSWERS p(X=0) p:probably having 0 bad orange out of 4 bad orange and 3 good orange out of 8 good orange. P(x=0) = 4 C 0 8 C 3 56 = 12 C 3 55 P(x=1)= 4 C 1 8 C 2 28 = 12 C 3 55 P(x=2)= 4 C 2 8 C 2 12 = 12 C 3 55 P(x=3) = Probability having 3 bad orange out of 4 bad orange and 0 good orange out of 8 good orange. = 4 C 3 8C 0 1 = 12 C 3 55 Probability that at least one orange out of three oranges is good = 1 P (x=3) = 1 1/55 = 55 1 54 = 55 55 Ans. (a) 184. Given P(A) = 0.5, P (AB) < 0.3 By Addition thereon, P(A or B) = P(A) + P(B) P (AB) P(A) + P(B) P(AB) < 1 P(B) < 1 <1 [ P(A or B) < 1] P(A) + P (AB) 0.5 + 0.3 P(B) < 0.8 Ans. (a) 185. Let the given events be A, B and P(A) = 2/3 P(B) Let P(B) = x P(A) = 2/3 x The events A and B are exhaustive P(A or B) = 1 P(A) + P(B) = 1 2/3 x + x = 1 346 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II 5/3 x = 1 x = 3/5 P(B) = 3/5 P(A) = 2/3 x 3/5 = 2/5 P(B) = 3/5 odds in favour of B are 3 : 5 3 = 3: 2 Ans. (b) 186. Given person variates with parameter = 1 i.e. = 1 By the poison distribution p(x) = e . x , x>0 x! The required probability P(3 < <5) P(x = 4) = e . 4 4! = e 1 (1) 4 4! = P(3 < x <5) = 0 .36783 1 24 = 0.015326 Ans. (a) 187. Given p = 2% = 2/100 = .02 n = 200 = np = 200 .02 = 4 The probability of at least 5 defective means. P(x > 5) = 1 P (x < 5) = 1 {P(x=0) + P(x=1) + P(x=2) + p(x=3) + P(x=4)} = e 4 ( 4 ) 0 e 4 ( 4 )1 e 4 ( 4 ) 2 e 4 ( 4 ) 3 e 4 ( 4 ) 4 1 + + + + 1! 2! 3! 4! 0! Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India 347 ANSWERS = 42 43 44 1 e 4 1 + 4 + + + 2! 3! 4! = 16 64 256 1 e 4 1 + 4 + + + 2 6 24 = 1 (0 .183 ) {5 + 8 + 10 .6667 + 10 .667 } = 1 (0 .83 ) (34 .3334 ) = 1 0 .6283 P (x > 5) = 0.3717 Ans. (b) 188. After a man is dealt 4 spade cards from an ordinary pack of 52 cards, there are 52 4 = 48 cards left in the pack, out of which 9 are spade cards and 39 are no spade cards. Now, 3 more cards can be dealt to the same man out of the 48 cards in 48 C 3 ways, which determines the exhaustive number of ways. If none of these 3 additional cards is a s pade cards, then the 3 additional cards must be drawn out of the 39 non-spade cards, which can be done in 39C3 ways. The probability that none of the three additional cards dealt to the man is a spade card = 39 C 3 48 C 3 Hence, the required probability, 'P' that at least one of the additional cards is a spade cards is given by: p = 1 39 C 3 48 C 3 = 1 39 38 37 3! 3! 48 47 46 = 1 13 19 37 16 47 23 = 1 9136 17296 = 10.5282 p = 0.4718 Ans. (c) 190. Given P (x = 1) = P (x = 2) Given x is a poison variable. 348 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II e ( )(1) e ( )( 2 ) = 1! 2! = 2 2 = 2 = variance Ans. (b) 191. P = Q= 65 500 Q=1 P = 1 65 500 435 500 n = 500 PQ n SE of Proportion of defectives = = 65 435 1 500 500 500 SE = 0.015 Ans. (a) 0.015 192. Standard Error of Mean (SE) = n = 0 .75 100 SE = 0.075 95% Confidence Limit for population m ean are given by : x 1.96 SE = 5.6 1.96 0.75 = 5.6 0.147 The Confidence level are 5.453 and 5.747 Ans. (a) 5.453 and 5.747 193. Standard Error (SE) = 4 = = 0 .353 n 128 96% confidence limit for population mean are x + 2.05 SE = 28 2.05 0.353 28 0.72 The confidence level are 27.272 and 28.728 Ans. (b) 27.272 and 28.728 Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India 349 ANSWERS 194. P = 65 435 65 Q= , Q=1 P=1 500 500 500 SE of proportion of defectives = 65 435 1 500 500 500 = SE PQ n = 0.015 Confidence limits for the population are = P 3 SE = 65 3 0 .015 500 0.13 0.045 Levels are 0.085 and 0.175 or Levels are 8.5% and 17.5% Ans. (a) 8.5% and 17.5 196. Variance = 4 = 4 = 2 Statement is true Ans. (a) True 197. n = 10 P = 0.3 Q = (1 P) = 1 0.3 = 0.7 = npq Variance = npq = 10 0.3 0.7 Variance = 2.1 Ans. (a) 2.1 198. When the cost of living increases, the standard of living improves. Ans. (b) false 199. The 95% confidence limit for the sample mean (x ) is x 1.96 which is not given n Ans. (b) False 350 The Institute of Chartered Accountants of India Common Proficiency Test (CPT) Volume - II 200. Mean and variance never be equal Statement is false Ans. (b) False Model Test Paper BOS/CPT 5 151. Let the fraction be x/y. Then according to the given condition of the problem, 3x 18 = y 3 11 33x = 18y 54 33x 18y+54 = 0 11x 6y+18 = 0 and .................... (i) x+8 2 = 2y 5 5x + 40 = 4y 5x 4y+40 = 0 .....................(ii) (i) 2 22x 12y+36 = 0 .....................(iii) (ii) 3 15x 12y+120 = 0 .... ................(iv) (iii) (iv),we get 7x 84 = 0 7x= 84 x = 84/7 = 12 (i) (11) (12) 6y + 18 = 0 132 6y + 18 = 0 6y = 150 y =150/6 = 25 Hence, the required fraction is 12/25 Ans. (c) 152. Let the two numbers are x and y Given x + y = 150 % of y Common Proficiency Test (CPT) Volume - II The Institute of Chartered Accountants of India 351

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