Mittal Commerce Classes Pvt. Ltd.
Test Booklet No. – 110013
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Foundation Mock Test
Total Marks : 200
(B)
Firm is known as price maker and not price taker in monopoly market.
(C)
In 1969 population per branch was 55000 persons and in 2008 it is 15000 persons per branch.
(D)
Commercial banks are suffering from regional imbalances, increasing over-dues, lower efficiency etc.
(D)
Land is free gift of nature and it is not produced by our forefathers.
(A)
Robbins expressed the view that economics is neutral between ends.
(B)
Capital intensive technique would get chosen in capital surplus economy
(D)
Production possibilities curve shows various combinations of goods that can be produced in any economy when
it uses its available sources and technology efficiently.
(C)
If increase in input is greater then increase in output that means law of diminishing returns to scale is followed.
(B)
In long run all firms in monopolistic competition earn normal profits because of free entry and exit of new
firms.
(D)
Natural resources, human capital and physical capital are all the sources of growth.
(D)
Medium of exchange, measure of value, store of value, transfer of value, standard of deferred payment etc. are
the functions of money.
(A)
Rajeev Gandhi grameen vidhutikaran Programme was started to provide electricity to all areas including
villages.
(C)
Land reforms include abolition of zamindari, change in land revenues, consolidation of holdings, Ceiling on
holding, providing land to landless etc. that’s why agriculture holding tax is not a part of land reforms.
(B)
The government aims at reducing the maternal mortality rate (MMR) to 1 per 1000 live births by end of the
eleventh plan.
(B)
Eleventh Five year plan (2007-12) object is to achieve an average growth rate of 9% per annum.
(B)
As per arc elasticity method
ep =
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Session - IInd
Paper – 3, 4
Q P1  P2

P Q1  Q2
(D)
Consumer ready to pay = Rs. 520
Consumer actually pays i.e. = Rs. 380
Consumer surplus = Consumer ready to pay - he actually pays
= Rs. (520-380)
= Rs. 140
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(C)
Under short run cost analysis AFC continuously decreases but never be zero or negative.
Output
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(A)
No. of output = 10 units
Average cost = Rs. 200
Total cost = AC  Q
= 200×10=Rs.2000
TVC = TC-TFC
= 2000 - 500 = Rs. 1500
AVC =
20
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Increasing return to scale occurs due to:
(a) Economies of Scale
(b) Dis-economies of Scale
(c) Specialisation
(d) Indivisibility of factor
(A)
Specialisation and indivisibility is the cause of increasing return in short run but in long run increasing return to
scale is possible due to economies of scale.
(C)
As we know that there is reverse relation b/w MP&MC. Since here MC decrease therefore MP should be
increase, it is possible in case of increasing return to scale.
(B)
MR = MC is the condition of producer's equi where producers gain maximum profit.
(A)
As we know that point falls inside PPC shows under utilisation of resource and if points falls at the PPC it shows
fully utilisation of resources.
(D)
Marshall define economics as study of Wealth and Welfare of Society.
(D)
es 
Price
60
80

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TVC
Rs.1500

 Rs.150
No. of Units
10
Q P1  P2

P Q1  Q2
Q.S.
480
600
120 80  60

20
1080
Inelastic (es < 0)
(B)
In short run as output increases, TVC also increases and TFC always be constant. So we can say TC increases due
to increase in TVC.
(D)
Prime cost = Direct material + wages + direct exp.
(D)
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(D)
Price
Supply
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(D)
Cost
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Output
Output
(B)
(C)
(B)
Price
Expenditure
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(D)
P = MU
1Re = 1util
(A)
As we know that each and every point on same IC shows same level of satisfaction.
(B)
X  21,
 X=630
x i
n
630
21 
n
630
n
21
n  30
X=
The value of n = 30
Sol.
(C)
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37
X
X
X
X
X
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 X X 
n 
10   10 

2
10  10

2
0

2
0
Sum of all observation 
Number of Observation 
(D)
n 1
 For Natural Numbers
2
n  10
X
10  1 11

2
2
X  5.5
X
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(A)
For a symmetrical distribution
Mean = Median = Mode
(B)
CV 

X
 100
5
 100
25
 20

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(B)
Range = 60,
Maximum Value = 80
Minimum Value = ?
Range = Maximum Value - Minimum Value
60 = 80 - Minimum Value
Minimum Value = 80 - 60 = 20
Minimum Value = 20
(C)
F  L P
 324  144
 46,656
 216
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(A)
Price index in 1980  100 base
Price index in 1990  80% increase
P01= 180
Per annum = 60,000
80% of 60000 = 48000
Total = 60,000 + 48,000
= 1,08,000 Per Annum
(A)
Purchasing power of a rupee
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100
100

 0.125
Price Index 800

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(B)
Total outcomes n = 62=36
9
 3,6  ,  6,3 ,  4,5  ,  5,5  ,  5,6  ,  6,5  ,  6,6  , 5, 4  ,  4,6  ,  6, 4 
P  A 
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10 5

36 18
(B)
1 Card r = 1
n=52
p
1
C1
C1
52
 1/ 52
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(A)
13
C1
C1
13!
13  1!1!
52!
 52  1!1!
1
= 13/ 52 
4
p
52
(B)
Number divisible by 8 from 1 to 120
= {8, 16, 24, 32, 40, 48, 56, 64, 72, 80, 88, 96, 104, 112, 120}
n8 = 15
P(8) = 15/120
Number divisible by 10 from 1 to 120
={10,20,30,40,50,60,70,80,90,100,110,120}
P(10) = 12/120,
3
120
P  8U 10   P  8   P 10   P  8  10 
P  8  10  

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3


 0.2
120 120 120
(D)
Data can be well displayed or presented by graph, tabulation and classification.
(C)
In an Ogive curve, the class limits and cumulative frequencies are plotted.
(D)
1,25,000 + 25,000 – 10,000 – 7,000 = 1,33,000
(A)
Historical cost
(B)
Materiality
(D)
Accrual
(C)
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Increase by Rs. 500
Discount is expense debited to P&L A/c and Profit is reduced but actually it should not be debited and
profit is to be increased due to rectification.
(C)
-984
(B)
-45
(A)
536
(B)
Useful life
(B) 19600
19600 
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(C)
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(C)
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100000  2000 
5
 Rs.19600
 19600

19.6%  
 100   19.6%
 100000

1,600  Let cost = 100, profit = 100  25%  25, SP= 100+25  125
25
Profit % age on SP 
 100  20%
125
COGS = Sales – G.P.  2000  20%  Rs.1600
(D)
7,000  O.P. Stock + purchases - COGS
6000+10000-9000  Rs. 7000
(A)
6,000  Sales – COGS
 15000-9000  Rs. 6,000
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(C)
2,000
 Gross profit - Selling Expenses
 6000–4000  Rs. 2000
(D)
50600  Sales + Closing stock – O.P. Stock – Purchases – Carriage on purchases
 140700+18000–20000–85800–2300
Rs. 50600
(A) 42600
Gross profit – Carriage on sales – Rent of office
50600-3000-5000 = Rs. 42600
(C) 8000
Carriage on sales + rent of office = 3000+5000 = Rs. 8000.
(B)
Raw material consumed.
(B)
(D)
Diya is given 1/5th share. That means I - 1/5 = 4/5 is for Lara & Priyanka. Question is silent about how
this will be shared hence it will be shared by them in old ratio.
Lara’s share
= 4/5  ½
= 2/5
Priyanka’s share
= 4/5  ½
= 2/5
Diya’s share
= 1/5
i.e. new ratio is 2 : 2: 1
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(C)
(A)
Super Profit = Average Profit - Normal Profit
= 60,000 - (4,00,000  12.5%) = 60,000 - 50,000 = 10,000
Goodwill at 2 year’s purchase of super profit = 10,000  2 year
= Rs.20,000
(A)
Credit of goodwill to Amit and Anil (Old Ratio 5:3) = 10,000 : 6,000
Amit’s Capital 2,50,000 + 10,000 =
Anil’s Capital = 2,00,000 + 6,000 =
Atual’s Capital = 50,000 =
(A)
2,60,000
2,06,000
50,000
(A)
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(D)
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(A)
Profit = Claim - Surrender Value
= 3,00,000 - 90,000 = Rs.2,10,000
Profit will be transferred in old Ratio to old partners i.e. in 3:2:1 to A, B & C i.e. Rs.l,05,000, Rs.70,000,
Rs. 35,000
(C)
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(A)
Amount forfeited = No. of shares  Amount Received
= 200  70 = 14,000
(B)
(B)
(C)
(D)
Redeemable preference shares =
Less Fresh issue of equity shares =
Balance redemption out of profit & hence amount transferred to C.R.R. A/c
(D)
3,00,000
(250,000)
Rs.50.000
(C)
Independent Audit also known as statutory Audit/Financial Audit. Objectives of such audit is to
examine financial statements independently and to express an opinion there on.
(C)
Material misstatements include fraud, error and even omission which affects the decision of users of
financial statements.
(D)
Compliance test procedures performed by the auditor determines the effectiveness of internal control
system whereas substantive procedures performed by the auditor determines the effectiveness of
accounting system but if internal control system is proper the accounting system is taken to be
proper.
(C)
Business operations and working includes its profits and all the activities, owner will be satisfied
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through audit that no fraud error has occurred.
(B)
Audits are generally divided into two categories:
(1)
Audits required under law i.e. compulsory audit – Example: External Audit, Cost Audit, Financial
Audit
(2)
Voluntary Audit: Example – Internal Audit
(C)
Similar features are:
– separation of ownership from management
– Capital contributed by members.
(D)
Guess Work does not work in Audit, Audit needs reasonable assurance.
(B)
Adverse report means negative report, when mis-statements are so important that they affect the
true & fair view then auditor gives negative/adverse report.
(B)
If quantification is not possible then auditors has to state that quantification is not possible.
(C)
Unqualified opinion means No issues, No reservations, No qualification so clean report.
(A)
(B)
Audit working papers are papers designed by the auditor while conducting audit.
(C)
According to section 227(1A) of companies act, 1956.
(B)
According to section 227(1A) of companies act, 1956.
(C)
According to section 227(1A) of companies act, 1956.
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