CPT Mock Test – 2nd
Test Booklet No. – 110012
(1)
Debit balance as per the cash book of Mahendra traders as on 31.3.2007 was Rs.
10,000. Following were the reasons for disagreement with the balance in the
passbook.
(i)
Cheque deposited but credited in the passbook after 31st March Rs. 500.
(ii)
Cheque deposited in the bank credited in the passbook but not recorded in
the cash book Rs. 1,000.
Balance as per the passbook is __________ .
(a)
Rs. 10,500
(b)
Rs. 11,500
(c)
Rs. 8,500
(d)
Rs. 9,000
Ans. a
Explanation:
Cash Book Balance :
Less: Deposited but not cleared
Add: Next recorded in Cash book
Pass Book Balance
(2)
10000
(500)
1000
10500
Overdraft as per the passbook of Khushi traders as on 31.3.2007 was Rs. 10,000.
Following were the reasons for disagreement with the balance in cash book.
(i)
Debit side of the cash book was overcast by Rs. 2,200.
(ii)
Dividend collected by the bank not recorded in cash book Rs. 750
Overdraft as per cash book is _____________ as on 31.3.2007.
(a)
Rs. 11,450
(b)
Rs. 12,950
(c)
Rs. 8,550
(d)
Rs. 7,050
Ans. c
Explanation:
Pass Book Balance
Add: over costing of debit side
Less: Divided not recorded in Cash Book
Cash Book Balance
(3)
Duration : 2 Hours
Total Marks : 100
Date: - 03.05.2015
(10000)
2200
(750)
8550
Overdraft as per the passbook is the starting point. A debtor directly deposited in
bank but not recorded in the cash book is ________ for reconciliation.
(a)
Added
(b)
Subtracted
(c)
Not required to be adjusted
(d)
Neither of the three
Ans. a
Explanation:
Pass Book Balance
Less: Direct Deposit in Bank
MITTAL COMMERCE CLASSES
—
—
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Added
(4)
Debit balance as per the cash book of Amar traders as on 31.3.2007 was Rs. 20,250.
Following were the reasons for disagreement with the balance in the passbook.
(i)
Interest on investment collected by bank and credited in the passbook
amounted to Rs. 1,200.
(ii)
Cheques paid into bank but not cleared before 31st March were for Rs. 2,170.
Balance as per the passbook is ________ as on 31.3.2007.
(a)
Rs. 21,250
(b)
Rs. 23,620
(c)
Rs. 19,280
(d)
Rs. 16,880
Ans. c
Explanation:
Cash Book Balance
Add: Interest collected by bank
Less: Chq. deposited but not cleared
Pass Book Balance
(5)
20250
1200
(2170)
19280
The balance as per the cash book is the starting point. Cheques paid into bank but
not cleared before 31st March are __________ for reconciliation as on 31st March.
(a)
Added
(b)
Subtracted
(c)
Not required to be adjusted
(d)
Neither of the three
Ans. b
Explanation:
Cash Book Balance
Less: Chq. deposited but not cleared
Subtract
(6)
+
+
–
–
Debit balance as per the cash book of Mittal Traders as on 31.3.2007 was Rs.
10,800. Following were the reasons for disagreement with the balance in the
passbook.
(i)
Bank wrongly debited Mittal traders' account Rs. 500 which should have been
debited from chinu traders' account.
(ii)
Bank paid Insurance premium Rs. 450, not recorded in cash book.
Balance as per the passbook is __________ as on 31.3.2007
(a)
Rs. 9,850
(b)
Rs. 10,850
(c)
Rs. 11,750
(d)
Rs. 10,750
Ans. a
Explanation:
Cash Book Balance
Less: Wrong debit by bank
Less: Direct Payment by bank
Pass book balance
MITTAL COMMERCE CLASSES
10800
(500)
(450)
9850
2|Page
(7)
Overdraft as per the cash book of Chinmay traders is the starting point. Bank
wrongly debited charu traders' account which should have been debited from Chinu
traders, account is __________ for reconciliation.
(a)
Added
(b)
Subtracted
(c)
Not required to be adjusted
(d)
Neither of the three
Ans. c
Explanation: Bank does not made any adjustment in the books of chinmay traders.
(8)
The balance as per the cash book as on 31.3.2007 is the starting point. On 29th
March, three cheques were issued, one to Tina, one to Mina and one to Rina; but
they appear to have encashed their cheques on 31st March, 1st April and 6th April
respectively are __________ for reconciliation as on 31.3.2007.
(a)
Added (encashed on 1st and 6th April)
(b)
Subtracted (encashed on 1st and 6th April)
(c)
Not required to be adjusted
(d)
Neither of the three
Ans. a
Explanation:
Cash Book balance
Add: Issued but not cleared
Added
(9)
The balance as per the cash book is the starting point. The banker on 31st March
debited the passbook with bank charges, but no entry for this was made in the cash
book is ___________ for reconciliation as on 31st March.
(a)
Added
(b)
Subtracted
(c)
Not required to be adjusted
(d)
Neither of the three
Ans. b
Explanation:
Cash Book Balance
Less: Bank Charges not recorded in cash book
Subtract
(10)
+
+
+
+
–
–
A machine was purchased for Rs. 50,000. Installation expenses amounted to Rs.
2,000, wages of Rs. 4,000 were paid on installation. The scrap value at the end of its
useful life of 10 years is Rs. 6,000. Repairs of Rs. 6,000 was made after 6 months
from the date of purchase. Calculate depreciation
(a)
Rs. 5,600
(b)
Rs. 4,800
(c)
Rs. 5,000
(d)
None
Ans. c
Explanation:
Depreciation as per Straight Line Method may be expressed as follows:
MITTAL COMMERCE CLASSES
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Depreciation =
Depreciabl e value
Useful life
where,
Depreciable value = Cost of the asset - Scrap value
Cost of the asset = Purchase price + expenses related to bring the asset to working
condition.
Rs. 50000 + Rs. 2000 + Rs. 4000 = Rs. 56000
Rs.56000  Rs.6000
Depreciation =
= Rs. 5000
10
Note: Repairs of Rs. 6000 made after 6 months from the date of purchase, do not
constitute a capital expenditure and hence is not included in the cost of the asset.
Repairs of Rs. 6000 shall be written off from profit & Loss account of that year as it is
a normal business expenditure.
(11)
On 1.4.08, P draws as bill on Q for Rs. 40000 for 6 months. At maturity Q request P
to accept Rs. 10000 in cash and for balance to draw a fresh bill for 3 months
together with 14%. p.a. interest, amount of interest will be Rs.
(a)
Rs. 1,050
(b)
Rs. 1,000
(c)
Rs. 950
(d)
Rs. 850
Ans. a
Explanation: Interest = 30000 ×
(12)
14
3
= 1050

100 12
Mr. Gaurav sold goods worth Rs. 75,000 to Mr. Malay. Malay immediately accepted a
bill on 1.09.08, payable after 4 months. Gaurav discounted this bill @9% p.a. on
15.09.08. On the due date Malay failed to discharge the bill. Later on Malay became
insolvent and 60 paisa is recovered from Malay's estate. How much amount of bad
debt will be recorded in the books of Gaurav:
(a)
Rs. 30,000
(b)
Rs. 45,000
(c)
Rs. 15,000
(d)
Rs. 33,650
Ans. a
Explanation: Bad Debt = 75000 × 40% = Rs. 30000
(13)
Ram draws on Aslam a bill for Rs. 60,000 on 1.4.01 for 2 months. Aslam accepts the
bill and sends it to Ram who gets it discounted for Rs. 58,800. Ram immediately
remits Rs. 19,600 to Aslam. On due date, Ram being unable to remit the amount
due accepts a bill for Rs. 84,000 for 2 months which is discounted by Aslam for Rs.
82,200. Aslam sends Rs. 14,800 to Ram out of the same. How much discount will be
borne by Ram at the time of 14,800 remittances?
(a)
Rs. 1,200
(b)
Rs. 1,800
(c)
Rs. 1,100
(d)
Rs. 800
Ans. a
Explanation:
MITTAL COMMERCE CLASSES
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Percentage of Amt. remitted by Ram to Aslam =
Ram's Share =
1
1
19600
 100  33.33% or
3
5800
1 2

3 3
Ratio =
Ram
2
Discount on second bill
:
Aslam
:
1
= 84000 – 82200 = 1800
2
Ram's Share of Discount = 1800 
= 1200
3
(14)
On 1.06.08 Viral draws a bill of exchange for Rs. 20,000 due for payment after 3
months on Keta. Keta accepts to this bill of exchange. On 4.8.08, Keta retires the bill
of exchange at a discount of 15% p.a. Calculate the amount of discount received for
premature payment in the books of Viral?
(a)
Rs. 210
(b)
Rs. 250
(c)
Rs. 240
(d)
None of the Above
Ans. d
Explanation: Discount is received by Keta not Viral.
(15)
Bill of exchange sent to bank for collection dishonored is credited to _________
accounts in the books of drawer.
(a)
Bank A/c, Discount A/c
(b)
Endorsee A/c
(c)
Bills sent to the bank for collection A/c
(d)
None of these
Ans. c
Explanation:
Debtor A/c
Dr.
To Bill sent to the bank for collection A/c
(16)
Bill of exchange discounted with bank dishonoured is credited to _______ account in
the books of drawee.
(a)
Bills payable A/c
(b)
Drawer's A/c
(c)
Bank A/c
(d)
None of these
Ans. b
Explanation:
B/P A/c
To Drawer A/c
(17)
Dr.
J draws a bill on K for Rs. 5500 for mutual accommodation in the ratio 3:2. J got it
discounted at 5000 and remitted 2/5th of the proceeds to K. At the time of maturity,
how much amount K should remit to J?
(a)
Rs. 3,300
(b)
Rs. 3,000
(c)
Rs. 2,000
MITTAL COMMERCE CLASSES
5|Page
(d)
Nil
Ans. d
Explanation: At maturity, remittance is done by 'J' to 'K'.
(18)
Mr. Max accepted a bill drawn by Mr. Roni. Mr. Roni endorsed the bill to Mr. Toni. On
the due date, the bill is dishonoured as Mr. Max became insolvent. To record the
dishonour of the bill in the books of Mr. Roni, which of the following accounts should
be debited?
(a)
Mr. Max's Account
(b)
Bills Receivable account
(c)
Mr. Toni's Account
(d)
Bills payable account
Ans. a
Explanation:
Mr. Max. A/c
To Mr. Toni A/c
(19)
Dr.
Vijay Traders purchased Car on 1.4.08 for Rs. 3,00,000. They are charging
depreciaion on written Down Value method. On 31.3.09 they sold the Car for Rs.
1,65,000 and incurred a loss of Rs. 75,000. The rate of depreciation p.a. is :
(a)
10%
(b)
15%
(c)
20%
(d)
25%
Ans. c
Explanation:
Sale value of car
= Value of car on 31.03.2009
Cost price of car on 01.04.2008
Cost price of car on 01.04.2008
Now,
= Rs. 165000
= Rs. 75000
= Rs. 240000
= Rs. 300000

240000 
= 1  1
  100
300000 

= [1–0.8] × 100
= 0.2 × 100
= 20%
OR
by hit and trial method, rate of depreciation
300000 × 20% = 60000
now, value of car on 31.03.2009 = 300000 – 60000 = 240000
rate of depreciation
(20)
Machinery has a life of 4 years. If it is depreciated by the Reducing Balance Method,
at the end of 4 years, its book value is 24% of its Original Cost. The rate of
depreciation applied is :
(a)
24%
(b)
26%
(c)
30%
(d)
32%
MITTAL COMMERCE CLASSES
6|Page
Ans. c
Explanation:
If original cost is Rs. x and rate of depreciation is 30%
Book value of machinery after 4 years
= x – 30% of x – 30% of x – 30% of x
= 0.24x
Thus book value is 24% of original cost after 4 years.
Thus, rate of depreciation is 30%.
(21)
(i)
(ii)
(a)
(b)
(c)
(d)
The written down value of asset declines at constant annual rate in case of
the straight line method.
The written down value of asset declines at constant annual rate in case of
the reducing balance method.
(i)
(i)
(i)
(i)
True
True
False
False
(ii)
(ii)
(ii)
(ii)
True
False
True
False
Ans. c
Explanation: WDV under straight line method reduces at constant annual amount
and not at the constant annual rate.
(22)
Depreciation on increased value of fixed asset on upward revaluation is charged to
(a)
Depreciation fund A/c
(b)
Profit and loss A/c
(c)
Revaluation reserve A/c
(d)
None of these
Ans. c
Explanation: Revaluation reserve is decreased till the balance is available in
revaluation reserve A/c.
(23)
Consider the following data pertaining to M/s. G Ltd. who constructed a cinema
house:
Rs.
Cost of second-hand furniture
2,00,000
Cost of repainting the furniture
50,000
Wages paid to employees for fixing the furniture 5,000
Fire insurance premium
5,000
The amount debited to furniture account is
(a)
Rs. 2,60,000
(b)
Rs. 1,45,000
(c)
Rs. 3,00,000
(d)
Rs. 2,55,000
Ans. d
Explanation:
Annual expresses does not form part of cost.
Cost = 2,00,000 + 50,000 + 5,000 = Rs. 2,55,000
MITTAL COMMERCE CLASSES
7|Page
(24)
Smit Ltd. purchased a machine on 1.2.2008 for Rs. 7,20,000. Installation expenses
were Rs. 70,000. Residual value after 6 years was Rs. 79,000. On 1.7.2008,
expenses for repaires were incurred to the extent of Rs. 5,000. Depreciation is
provided under straight line method. Depreciation rate = 15%. Annual Depreciation
= _________.
(a)
Rs. 1,18,500
(b)
Rs. 1,75,000
(c)
Rs. 1,06,500
(d)
Rs. 1,08,000
Ans. a
Explanation: Dep. = (7,20,000 + 70,000) × 15% = Rs. 1,18,500
(25)
The purchase price of a machine of Sanj Enterprises is Rs. 2,50,000 as on 1.4.05.
The depreciation on this is calculated by reducing balance method at the rate of
15% p.a. Accounting year ends on March 31. After how many years the book value
of the machine would be Rs. 1,80,625?
(a)
1.5 years
(b)
3 years
(c)
2 years
(d)
None of these
Ans. c
Explanation:
Value after 2 years
= 2,50,000 – 15% – 15% = Rs. 1,80,625
(26)
Manali Products purchased a machine for Rs. 5,00,000 as on 1.4.04. It is depreciated
by reducing balance method. The book value at the end of 3 years is Rs. 3,89,344.
The rate of depreciation is
(a)
8.5%
(b)
7%
(c)
8%
(d)
6.5%
Ans. c
Explanation:
Required value can be derived by applying 8%, as rate of depreciation. Value =
5,00,000 – 8% – 8% – 8% = 3,89,344
(27)
The purchase price of a machine is Rs. 75,900. The installation charges and other
expenses were Rs. 2,100. Its estimated scrap value at the end of expected life of 15
years is Rs. 3,000. Then, calculate the annual depreciation for forth year under
straight line method, if at the end of third year asset is revalued upward by Rs.
2,000 :
(a)
Rs. 5,060
(b)
Rs. 5,400
(c)
Rs. 5,167
(d)
Rs. 5,260
Ans. c
Explanation:
Dep. for 1st year = [(75,900 + 2,100) – 3,000]= Rs. 5,000
MITTAL COMMERCE CLASSES
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15
Total Dep. for 3 years = 5000 × 3 =
Value at the end of 3rd year= 78000–15000
Add: Upward revaluation
15000
= Rs. 63000
Rs. 2000
65000
 65000  3000 
Dep. for 4th year= 
=
12


(28)
5167
Cost price of a machine of Devikrupa Ltd. is Rs. 75,000. The rate of depreciaiton is
12% by straight line method. The book value of the machine will be Rs. 30,000 at
the end of ___________ years.
(a)
5 Years
(b)
3 Years
(c)
4 Years
(d)
2 Years
Ans. a
Explanation:
Dep. per year = 75000 × 12%
= Rs. 9000
Total Dep. Charged = 75000 – 30000 = Rs. 45000
45000
No. of years for which dep. is charged =
= 5 years
9000
(29)
A machine with purchase price Rs. "X" is depreciated by reducing balance
method at the rate of 6% p.a. It was purchased on April 1, 2006. Its written down
value as on March 31, 2008 is Rs. 88,360. Compute the value of "X".
(a)
Rs. 94,000
(b)
Rs. 1,06,383
(c)
Rs. 1,00,000
(d)
None of these
Ans. c
Explanation:
Time period 01.04.2006 to 31.03.2008 = 2 years
88360
Value as on 01.04.2007 =
94000
 100 =
94
94000
Value as on 01.04.2006 =
 100 = 100000
94
(30)
A machine purchased on 1st day of accounting period being depreciated by reducing
balance method at the rate of 12% p.a. Its book value at the end of 7th year is Rs.
61,952. Hence, the depreciation for sixth year is Rs. _________.
(a)
Rs. 6,900
(b)
Rs. 6,750
(c)
Rs. 9,600
(d)
None of these
Ans. c
Explanation:
Value at the end of 5th year or at the beginning of 6th year :
MITTAL COMMERCE CLASSES
9|Page
 61952

 100 
= 
88


Then:
 70400

 100 

 88

Dep. for 6th year = 80000 × 12%
(31)
=
70400
=
80000
= Rs. 9600
The liabilities of a minor when admitted to the benefits of the Partnership (a)
Is confined to his share of the profits and property in the firm
(b)
Is as that of any other partner in the firm
(c)
Is similar as that of any other partner in the firm
(d)
Is unlimited
Ans. a
Explanation: Minor can be beneficiary.
Sec 30(3) the liability of the minor partner is confined only to the extent of his share
in the profit and property of the firm. Over and above this he is neither personally
liable nor his private estate liable.
(32)
Which
(a)
(b)
(c)
(d)
of the following is not an essential feature of partnership?
Result of an agreement
Organised to carry on business
Carried on by all or any of them acting for all
Separate legal entity
Ans. d
Explanation: A firm is not a distinct legal entity apart from the partner constituting it,
unlike a company which is a corporate body it is not regarded as a separate person
in the eyes of the law.
(33)
Sharing of profits is___________ evidence of existence of partnership.
(a)
Primafacie
(b)
Confirmative
(c)
Conclusive
(d)
No
Ans. a
Explanation: Sharing of profits is prima facie evidence of partnership but the fact
there is sharing of profit between some person will not automatically make them
partner.
Existing of an agreement, business and mutual agency are also needed along with
the sharing of profits for the determination of partnership.
(34)
Profits of a partnership firm must be distributed among the partners as per the
partnership deed while the profits of a company _____
(a)
Must be distributed to its shareholders
(b)
May or may not be distributed to its shareholder
(c)
May or may not be distributed to its board of directors, shareholders and
other stakeholders
(d)
Are not distributable at all
Ans. b
MITTAL COMMERCE CLASSES
10 | P a g e
Explanation: Profits of a company may be distributed or not distributed between its
shareholders because it depends upon the decision taken is annual general meeting
of the company.
(35)
In case of one person company maximum number of persons can be (a)
1
(b)
20
(c)
50
(d)
200
Ans. a
(36)
The public notice is not required if partner ___________
(a)
Retires
(b)
Expelled
(c)
Dies
(d)
Either (a) or (b)
Ans. c
Explanation: In all the cases of reconstitution of the firm public notice must be given
in newspapers and official gazette but if partner dies, public notice is not required.
[Sec. 72]
(37)
‘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)
‘A’ will be personally liable
(b)
It will bind the firm
(c)
A as well as firm both will be liable
(d)
All of these
Ans. b
Explanation: Firm is liable because if partner is doing usual course of business firm
will be liable for that act
(38)
A notice given to a partner is deemed to be a notice given to the firm when notice is
given to
(a)
Any active partner
(b)
Any partner
(c)
Sleeping partner
(d)
All the partner
Ans. a
Explanation: If notice is given to a partner it is deemed to be notice to the firm but
that partner must be any active partner.
(39)
According to Partnership Act, a partner has
(a)
no right to transfer his interest in the firm
(b)
a right to transfer his interest in the firm with the consent of all the partners
(c)
a right to transfer his interest in the firm with consent of majority of partners
(d)
a right to transfer his interest without the consent of any partner.
Ans. b
MITTAL COMMERCE CLASSES
11 | P a g e
Explanation: According to section 29 a partner can transfer his interest in the firm
with consent of all the partners, but transferee has right only of receiving profits. He
has no other rights.
(40)
Audit
(a)
(b)
(c)
(d)
of a partnership firm’s account is compulsory under the partnership Act, 1932
Yes
Partly yes
No
Partly No
Ans. c
Explanation: Audit of companies is must but audit of partnership firm is not
compulsory, it is optional.
(41)
A partnership firm may be dissolved by notice to all the partners by any partner if
the partnership is
(a)
for a fixed duration
(b)
at will
(c)
for a particular venture
(d)
for unlimited period.
Ans. b
Explanation: Because in partnership at will partnership may be dissolved at any time
and duration is not fixed.
(42)
Loss arising out of partners’ insolvency can be recouped from________
(a)
The solvent partners.
(b)
The partners’ estate
(c)
The partners’ Legal Heirs
(d)
The Firm itself.
Ans. a
Explanation: This rule was given in the case of Garner v/s Murry
(43)
Upon dissolution of firm, all or some of the partners agree not to carry on similar
business for a specified period or with in - specified local limits. This agreement is
restraint of trade but it is __________
(a)
Valid
(b)
Void
(c)
Voidable
(d)
Contingent.
Ans. a
Explanation: According to Indian Contract act any agreement in restraint of trade is
void but restriction an partners is an exception to the rule.
(44)
Prior to enactment of The Indian Partnership Act, 1932, the law relating to
partnership in India were embodied in :
(a)
Companies Act
(b)
Chapter XI of The Indian Contract Act
(c)
Hindu Law
(d)
Chapter X of the Indian Contract Act
MITTAL COMMERCE CLASSES
12 | P a g e
Ans. b
Explanation: Prior to enactment of the Indian Partnership Act, 1932, the laws
relating to partnership in India were embodied in Chapter XI of the India Contract
Act.
(45)
What
(a)
(b)
(c)
(d)
is a Partnership?
An agreement between persons
An association of persons
A body of Individuals
All of the above
Ans. a
Explanation: As per Section - 4 of the Indian Partnership act, 1932 the following
essential elements must co-exist to form a partnership:
(i)
It must be a result of an agreement between two or more persons.
(ii)
The agreement must be to share the profits of the business.
(iii)
The business should be carried on by all or any of them acting for all.
Therefore, a partnership is an agreement between persons.
(46)
An introduces B to C as a partner in his firm. B, in fact is not a partner but did not
deny the fact. C advance a loan to A, which he (A) could not pay back. C held B
liable for repayment of loan because: B is a
(a)
Sleeping partner
(b)
Sub Partner
(c)
Dormant Partner
(d)
Partner by estoppel or Holding out
Ans. d
Explanation: Where a person holds himself out as a partner or allows, other to do it,
he is then stopped from denying the character he has assumed and upon the faith of
which creditors may be presumed to have acted. In this case, he is liable, like a
partner in the firm to anyone who on the faith of such representation has given
credit to the firm. This is a case of partner by holding out or estoppel. [Section 28 of
the Indian Partnership Act 1932]
(47)
A third party deals with the firm without knowledge that Mr X has been expelled from
the firm. In such a case, Mr X _________ :
(a)
Is liable to the firm
(b)
Is liable to third parties
(c)
Is liable to the continuing partners
(d)
Is not liable to the third partners
Ans. b
Explanation: When a third party deals with the firm without the knowledge that Mr. X
has been expelled from the firm, in such a case Mr. X is liable to the third parties
because public notice of his expulsion has not yet been given.
(48)
A change in nature of business can be effected only by:
(a)
Unanimous consent of all partners
(b)
Consent of majority partners
(c)
Consent of working partners
(d)
Consent of sleeping partners
MITTAL COMMERCE CLASSES
13 | P a g e
Ans. a
Explanation: A change in nature of business (e.g. extension or restriction of the
implied authority of any partner) can be affected only by the unanimous consent of
all Partners. According to Section 20 of The Indian Partnership Act, 1932, any one
partner, or even a majority of the partner cannot restrict or extend the implied
authority.
(49)
The private property of any partner shall be applied first in payment of:
(a)
Firm's debt
(b)
Joint debt
(c)
Personal debts
(d)
Unsecured debts
Ans. c
Explanation: According to Section 49 of the Indian Partnership Act, 1932, private
assets of any partner shall be applied first to pay his private debts and then, if there
is any surplus it can be applied to pay the debts of the firm, if necessary. Thus,
partner's private assets can be used for payment of firm's debts only after his private
liabilities have been paid off and that too if firms assets are insufficient to pay firm's
debts.
(50)
The loss arising out of partners insolvency shall be borne by _______ according to
Gamer Vs. Murray case :
(a)
All the Partner's Equally
(b)
Solvent partners in capital ratio
(c)
All the partners in profit & loss sharing ratio
(d)
None of the above
Ans. b
Explanation: Justice Joycee held that the loss arising due to the insolvency of a
partner must be distinguished from an ordinary loss. Unless otherwise agreed, the
decision in Garner v. Murray requires:(i)
That the solvent partners should bring in cash equal to their respective shares
of losses on realisation.
(ii)
That the Solvent partners should bear the loss arising due to the insolvency of
a partner in the ratio of their last agreed capitals.
(51)
Supply of a commodity is a:
(a)
Stock concept
(b)
A flow concept
(c)
Both stock and flow concept
(d)
None of these
Ans. b
Explanation:
Flow Concept - Supply of commodity depends upon the level of production.
Production depends upon Demand. The seller produces products according to
demand. Hence all is continuous & in flow.
(52)
Elasticity of supply refers to the degree of responsiveness of supply of a good to
changes in its.
(a)
Demand
(b)
Price
MITTAL COMMERCE CLASSES
14 | P a g e
(c)
(d)
Cost of production
State of technology
Ans. b
Explanation:
Elasticity of supply refers to the degree of responsiveness of supply of a good to
changes in its price because a seller is ready to sell the goods at a particular price.
(53)
If the price of apples rises from Rs. 30 per kg. to Rs. 40 per kg and the supply
increases from 240 kg to Rs. 300 kg. Elasticity of supply is:
(a)
.77
(b)
.67
(c)
(-).67
(d)
(-).77
Ans. a
Explanation:
P1  30 / 
Q1  240 / 
P2  40 / 
Q2  300 / 
 Q  Q2 P1  P2 
ea   1


 Q1  Q2 P1  P2 
  60 70 

= 

 540  10 
 42 
  0.77
 54 
= 
(54)
If as a result of 10% increase in price, the quantity supplied does not change at all, it
implies that the elasticity of Supply is:
(a)
Zero
(b)
Infinite
(c)
Equal to one
(d)
Greater than Zero but less than are
Ans. a
Explanation:
If there is no change in Quantity supplied it means quantity supplied remains
unchanged then elasticity will be zero.
y
s
P1
e1
Price P1
e0
P2
e2
MITTAL COMMERCE CLASSES
15 | P a g e
(55)
An expansion in the supply of a good is caused by a:
(a)
Rise in the price of good
(b)
Fall in the prices of other goods.
(c)
Fall in the prices of factors of production
(d)
All of the above
Ans. a
Explanation:
An Expansion in supply is also known as increase in quantity supplied, Because there
is a positive relationship between price and quantity supplied. Hence, An expansion
in supply is due to rise in price of a good.
(56)
Typically, the supply curve___________
(a)
Slopes upward
(b)
Slopes downward
(c)
Is horizontally straight
(d)
Is vertically straight.
Ans. a
Explanation:
Because There is a positive relationship between good's price and quantity supplied.
Hence, the slope of supply curve is upward.
(57)
____________ shows the quantity of products producer or seller wishes to sell at a
given price level.
(a)
Average product curve
(b)
Supply curve
(c)
Marginal product curve
(d)
Total product curve.
Ans. b
Explanation:
A curve which shows the quantity of products which a producer is ready to sell at a
particular price is known as "supply curve".
(58)
When
(a)
(b)
(c)
(d)
more units of the product are supplied at a higher price, it is called:
Contraction of supply
Increase in supply
Change in supply
Extension of supply.
Ans. d
Explanation:
MITTAL COMMERCE CLASSES
16 | P a g e
Because the quantity supplied is related with price and when more units of product
are supplied at higher price, this is known as "Extension/Expansion in supply"
(59)
When
(a)
(b)
(c)
(d)
supply is perfectly elastic, elasticity of supply is equal to________________
+1
0
—1
infinity.
Ans. d
Explanation:
When there is no change in price even quantity supplied changes then the elasticity
is perfectly elastic.
(60)
Contraction of supply is the result of decrease in the price of the goods concern.
(a)
True
(b)
False
(c)
Partly True
(d)
None
Ans. a
Explanation:
Contraction is supply means "Decrease in quantity supplied is due to decrease in
price of goods concern."
(61)
Consumer surplus is highest in the case of:
(a)
Necessities.
(b)
Luxuries.
(c)
Comforts.
(d)
Conventional necessities
Ans. a
Explanation:
Since for necessities a consumer is ready to pay a very high price hence it is highest
(62)
The law of consumer surplus is based on
(a)
Indifference curve analysis
(b)
Revealed preference theory.
(c)
Law of substitution
(d)
The law of diminishing marginal utility.
Ans. d
Explanation:
Because consumer surplus is measured with what a consumer is ready to pay and it
can only measured by marginal utility only.
(63)
The consumer is in equilibrium when the following condition is satisfied:
MUx Px
(a)

MUy Py
MUx Px
(b)

MUy Py
MITTAL COMMERCE CLASSES
17 | P a g e
(c)
(d)
MUx Px

MUy Py
None of the above
Ans. c
Explanation:
The consumer is in equilibrium when the marginal utility of a product is equal to the
price paid by the consumer
MUX = PX
& MUY = PY
(64)
Indifference curve is downward slopping _______
(a)
Always
(b)
Sometimes
(c)
Never
(d)
None of these
Ans. a
Explanation:
Since MRS is falling and it is convex to the origin and all the combinations gives
“equal satisfaction”
(65)
Indifference curve is convex to the origin due to:
(a)
Falling MRS
(b)
Rising MRS
(c)
Constant MRS
(d)
None of the above
Ans. a
Explanation:
Since MRS showing the rate of substitution between two goods and IC yields “Same
or equal satisfaction”.
(66)
Indifference curve represents
(a)
Four commodities
(b)
Less than two commodities
(c)
More than two commodities
(d)
Only two commodities
Ans. d
Explanation:
It represents combination of two commodities which gives equal satisfaction.
(67)
Consumer surplus is the area _______________.
(a)
Below the demand curve and above the price.
(b)
Above the supply curve and below the price.
(c)
Above the demand curve and below the price.
(d)
Below the supply curve and above the price.
Ans. a
Explanation:
Since consumer surplus is based what a consumer is ready to pay minus what he
actually pays. Hence it can also be called as buyers surplus.
MITTAL COMMERCE CLASSES
18 | P a g e
(68)
If a buyer's willingness to pay for a new car is Rs. 2,00,000 and she is able to
actually buy it for Rs.1,80,000 her consumer surplus is
(a)
Rs18,000.
(b)
Rs20,000.
(c)
Rs 2,000.
(d)
Rs 0.
Ans. b
Explanation:
200000-180000= 20,000
Because consumer surplus is the difference between what a consumer is ready to
pay minus what he actually pays.
(69)
Who is the main exponent of Marginal utility analysis ?
(a)
Paul Samuelson
(b)
Hicks
(c)
Keynes
(d)
Marshall
Ans. d
Explanation:
According to Marshall, “Utility is measurable in terms of money”.
(70)
Indifference curve analysis is propounded by:
(a)
Alfred Marshall
(b)
Adam Smith
(c)
Hicks and Allen
(d)
None of the above
Ans. c
Explanation:
According to this approach consumer derives equal satisfaction out of different
combination of two goods.
(71)
Demand is a ____________________statement?
(a)
Qualitative
(b)
Quantitative
(c)
a & b both
(d)
None
Ans. a
Explanation:
Since all the other factor are analyzed in law of demand.
(72)
In real life _____________________is a imaginary concept.
(a)
E=0
(b)
E=∞
(c)
E<1
(d)
E>1
Ans. b
Explanation:
Since there is practically no such commodity which price is fixed.
MITTAL COMMERCE CLASSES
19 | P a g e
x
p
o
(73)
Qd
x
Giffen goods have _____________price relationship.
(a)
Positive
(b)
Negative
(c)
Zero
(d)
Infinite
Ans. a
Explanation:
Since as per sir Robert Giffen they have positive price effect and negative income
effect.
(74)
Impulsive purchase is________________.
(a)
Determinant of demand
(b)
Exception of law of demand
(c)
Both a & b
(d) None
Ans. b
Explanation;
Since when consumer buys impulsively he behaves irrationally and law of demand
breaks.
(75)
Cross
(a)
(b)
(c)
(d)
elasticity between unrelated goods is:
E=0
E=1
E>1
E=∞
Ans. a
Explanation:
Since two goods which are not related the cross elasticity between them is zero.
(76)
The equation of right bisector of line joining the points A (3, -4) and B (5, -6) is
equal to:
(a)
2x–2y–9=0
(b)
x-y-9= 0
(c)
3x–2y+7=0
(d)
x–5y+4=0
Ans. b
Explanation:
MITTAL COMMERCE CLASSES
20 | P a g e
A
(3, –4)
x1, y1
B
P
(5, –6)
x2, y2
Eqn of AB line
6  (4)
(x  3)
53
6  4
y4
(x  3)
2
y  4  x  3
x  y 1  0
y  (4) 
Point P is the middle point
35
4
2
4  6
y
 5
2
x
Point (4, –5)
So Equation of perpendicular line
xyk 0
which passes through
(4, 5)
4+5+k=0
k = -9
So line  x  y  9  0
(77)
The points A (7,3)and C (0,-4) are two opposite vertices of a rhombus ABCD. Find
the equation of diagonal AC.
(a)
2x+2y–3=0
(b)
x–y+3=0
(c)
y–x+4=0
(d)
None of these
Ans. c
Explanation:
A(7, 3)
C(0, –4)
4  3
(x  7)
07
7
y  3  (x  7)
7
y 3  x 7
xy4 0
(y  3) 
MITTAL COMMERCE CLASSES
21 | P a g e
(78)
The difference between a two digit number and the number obtained by inter—
changing the digit is 54. What is the difference of the two digits of the number?
(a)
4
(b)
3
(c)
6
(d)
None of these
Ans. c
Explanation:
No. – R.No = 54
(10x  y)  (10y  x)  54
10x  y  10y  x  54
9x  9y  54
xy6
(79)
If
x
17
what is

x  y 23
(a)
(b)
(c)
(d)
x y
equal to
x y
11/23
17/32
23/11
None of these
Ans. c
Explanation:
x
17

x  y 23
 23x  17x  17y
 23x  17x  17y
 6x  17y
x 17

y 6
x  y 17  6 23


Now
x  y 17  6 11
(80)
A number of men went to a hotel and each spent as many rupees as there were
men. If the money spent was Rs, 15625; find the number of men.
(a)
110
(b)
125
(c)
145
(d)
None of these
Ans. b
Explanation:
If
1st man spent = Rs. 125
2nd man spent = Rs. 125
Similarly 125 man spent = Rs. 125
So 125 men spent Rs. 125
by 125 125  15625
MITTAL COMMERCE CLASSES
th
each, therefore the total money spent by them is given
22 | P a g e
(81)
If
 ,  are the roots of x2 - 3x + 2 = 0, then the equation whose roots (  + 1), ( 
+ 1) is
(a)
x2
x2
x2
x2
(b)
(c)
(d)
 5x  6  0
 5x  6  0
 5x  6  0
 5x  6  0
Ans. d
Explanation:
1  x 2  3x  2
   3
  2
Equation whose roots are
(  1), (  1)
So sum =   1    1
= (  )  2
=3+2
=5
Product = (  1)(  1)
=   (  )  1
=2+3+1
=6
Equation  x 2  5x  6  0
(82)
If x =
1  1  1      then the positive value of x is
7 1
2
6 1
2
3 1
2
5 1
2
(a)
(b)
(c)
(d)
Ans. d
Explanation:
x  1 x
x2  1 x
x2  x 1  0
 b  b 2  4ac
x=
from quadratic equation
2a
x
1  5
2
MITTAL COMMERCE CLASSES
23 | P a g e
 1 5
only this solution is possible
2
 x / y 1 
 is
The value of  2
2
 x / y 1
y
(a)
x y
x
(b)
x y
xy
(c)
x y
x
(d)
x y
x=
(83)
Ans. a
Explanation:
x 
  1
y 
 x2 
 2  1
y

xy
y2
 
 2
2
 y  x y
y

xy
(84)
The length of a rectangle is 4cm more than the breadth and the perimeter is 11cm
more than the breadth. The length and breadth of the rectangle respectively are:
(a)
5cm, 1cm
(b)
7 cm, 3cm
(c)
9cm, 5cm
(d)
none of these
Ans. a
Explanation:
Let the breadth (B) of the rectangle is x cm,
So that the length (L) = x + 4cm.
Perimeter = 2(L + B)
= 2(x  x  4)  4x  8
Given, perimeter = breadth + 11 = x + 11
 4x + 8 = x + 11  3x  3  x  1 i.e., breadth = 1 cm
 length = 1 + 4 = 5 cm
(85)
The solution of the system of equations :
x y
  2; ax  by  a 2  b 2 is :
a b
(a)
a, b
MITTAL COMMERCE CLASSES
24 | P a g e
(b)
(c)
(d)
−a, b
−a, −b
none of these
Ans. a
Explanation:
From (i) equation, bx + ay = 2ab
From (ii) equation, ax  by  a 2  b2
Multiply eqn (i) by a and eqn (ii) by b, we get
abx  a 2 y  2a 2b
…(iii)
and abx  b2 y  a 2 b  b3
…(iv)
Subtracting (iii) and (iv), b2 y  a 2 y  b3  a 2b

 
 y b2  a 2  b b2  a 2

 yb
Putting y = b in the equation (i)
bx  a(b)  2ab
 bx  ab  x  a
(86)
The largest angle of a triangle is twice the sum of other two. The smallest is onefourth of the largest. The smallest angle in degrees is
(a)
300
(b)
600
(c)
(d)
450
none of these
Ans. a
Explanation:
Let the other angles be x 0 and y 0 , x  y
Largest angle = 2(x  y)
Also, x  y  2(x  y)  1800  x  y  600
 Largest angle = 2  600  1200
 Smallest angle =
(87)
1200
 300
4
The ratio of the prices of two houses was 16 : 23. Two years later when the price of
the first has increased by 10% and that of the second by Rs. 477. the ratio of the
prices becomes 11 : 20. Find the original prices of the two houses.
(a)
(b)
(c)
(d)
Rs. 848, Rs. 1219
Rs. 748, Rs. 1018
Rs. 578, Rs. 998
None of These
Ans. a
Explanation:
MITTAL COMMERCE CLASSES
25 | P a g e
Let the original prices of two houses be Rs. 16x and Rs. 23x respectively. Then by
16𝑥+10% 𝑜𝑓 16𝑥
11
the given conditions,
=
or,
16𝑥+1.6𝑥
23𝑥+477
=
11
20
23𝑥+477
20
𝑜𝑟 320𝑥 + 32𝑥 = 253𝑥 + 5247
or, 352x - 253x = 5247, or 99x = 5247; x = 53
Hence the original prices of two houses are Rs. 16 x 53 and Rs. 23 x 53 i.e. Rs. 848
and Rs. 1,219.
(88)
Find in what ratio will the total wages of the workers of a factory be increased or
decreased if there be a reduction in the number of workers in the ratio 15 : 11 and
an increment in their wages in the ratio 22 : 25.
(a)
(b)
(c)
(d)
5:6
6:5
3:4
4:3
Ans. b
Explanation:
Let x be the original number of workers and Rs. Y the (average) wages per workers.
Then the total wages before changes = Rs. xy.
After reduction, the number of workers = (11 x)/15
After increment, the (average) wages per workers = Rs. (25y)/22
11
25
15
22
The total wages after changes = ( 𝑥) × (𝑅𝑠.
𝑦) = 𝑅𝑠.
5𝑥𝑦
6
Thus, the total wages of workers get decreased from Rs. xy to Rs. 5xy/6
5𝑥𝑦
Hence, the required ratio in which the total wages decrease is xy:
= 6: 5.
6
(89)
When
(a)
(b)
(c)
(d)
mean is 3.57 and mode is 2.13 then the value of median is ____________.
3.09
5.01
4.01
None of these
Ans. a
Explanation:
Mean = 3.57
Mode = 2.13
As per the empirical formula
Mode = 3 Median - 2 Mean
2.13 = 3 Me - 2x3.57
2.13 = 3 Me- 7.14
3 Me = 2.13 + 7.14
3 Me = 9.27
9.27
Me=
= 3.09
3
Median = 3.09
(90)
The Equation of a line is 5x+2y = 17. Mean deviation of y about mean is 5. Calculate
mean deviation of x about mean.
(a)
-2
(b)
2
(c)
-4
MITTAL COMMERCE CLASSES
26 | P a g e
(d)
None
Ans. b
Explanation:
5x+2y=17
2𝑦
17
x=- +
5
5
M.D of x = |𝑏| × 𝑀. 𝐷. 𝑜𝑓 𝑦.
2
= |− | × 5
2
5
= ×5
5
=2
(91)
If variance of x is 5, then find the variance of (2-3x).
(a)
10
(b)
45
(c)
5
(d)
-13
Ans. b
Explanation:
y=2-3x
Variance of y = |𝑏|2 × 𝑉𝑎𝑟𝑖𝑎𝑛𝑐𝑒 𝑜𝑓 𝑥
= |−3|2 × 5 = 9 × 5 = 45
(92)
Given the observations 4, 9, 11, 14, 37.
Find the mean deviation about the Median is:
(a)
11
(b)
8.5
(c)
7.6
(d)
7.45
Ans. c
Explanation:
4, 9, 11, 14, 37
=(
𝑛+1 th
2
)
=(
5+1 th
2
) 𝑡𝑒𝑟𝑚
¾ 11
𝑥 |d| = |x − 11|
4
7
9
2
11
0
14
3
37
26
38
Mean deviation about median
𝑀. 𝐷. =
(93)
∑|d|
𝑛
=
38
5
= 7.6
If the difference between mean and Mode is 63, then the difference between mean
and Median will be ______________.
(a)
63
(b)
31.5
(c)
21
MITTAL COMMERCE CLASSES
27 | P a g e
(d)
None of the above
Ans. c
Explanation:
Given: Mode - Mean = 63
We know the empirical relationship between mean, Median & Mode i.e.
(Mode - Mean) = 3 (Median - Mean)
63
Median - Mean = = 21
3
(94)
For Normal distribution the relation between quartile deviation (Q.D) and standard
deviation (S.D) is:
(a)
Q.D>S.D
(b)
Q.D<S.D
(c)
Q.D=S.D
(d)
None of the above
Ans. b
Explanation:
2
We Know Q.D = 𝑆. 𝐷
Q.D.<S.D
(95)
3
Geometric mean of three observation 40, 50 and x is 10. The value of x is:
(a)
2
(b)
4
(c)
1/2
(d)
None of the above
Ans. c
Explanation:
Given G.M of three observation = 10
Given No. of observation (n) = 3
x1 = 40, x2 = 50, x3 = x
G.M.
=  x1 .x 2 .x3  3
10
= 40  50  x  3
10 3
= 2000x
x
=
x
(96)
1
1
1000
2000
1
=
2
𝑥 𝑥 𝑥
The median of X, , , is 10.
Find x where X>0
(a)
24
(b)
32
(c)
8
(d)
16
MITTAL COMMERCE CLASSES
2 3 5
28 | P a g e
Ans. a
Explanation:
Arrange the data in ascending order:
𝑥/5, 𝑥/3, 𝑥/2, 𝑥
M = Simple Average of two middle terms
x x

M  2 3  10
2
x x
  20
2 3
5x
 20
6
x = 24
(97)
If mean = 5, standard deviation = 2.6, median = 5 and quartile deviation = 1.5,
then the coefficient of quartile deviation equals.
(a)
35
(b)
39
(c)
30
(d)
32
Ans. c
Explanation:
Given
𝑀𝑒𝑎𝑛 (𝑥) = 5; 𝑆. 𝐷. (𝜎) = 2.6 𝑄. 𝐷 = 1.5
𝑄 −𝑄
= 3 1 × 100
𝑄3 +𝑄1
𝑄3 −𝑄1
=
=
(98)
2
1.5
× 100
5
150
5
= 30
What
(a)
(b)
(c)
(d)
will be the probable value of mean deviation? When Q3=40 and Q1=15
17.50
18.75
15.00
None of the above
Ans. c
Explanation:
𝑄3 = 40 and 𝑄1 = 15
𝑄 −𝑄
40−15
25
𝑄. 𝐷. = 3 1 =
= = 12.50
2
2
2
5𝑀. 𝐷. = 6 𝑄. 𝐷. ⇒ 𝑀. 𝐷. =
6
6
5
𝑄. 𝐷.
MD.= × 12.50 = 15
5
(99)
The mean and coefficient of variation of runs made by a batsman in 10 innings are
40 and 125 respectively. Then standard deviation of the runs made by the batsman
is
(a)
50
MITTAL COMMERCE CLASSES
29 | P a g e
(b)
(c)
(d)
40
20
none of these
Ans. a
Explanation:
Coefficient of Variation =
So S.D. =
SD
SD
 100  125 
 100
Mean
40
125
 50
2.5
20
(100) If a variable x takes 20 values x1 , x 2 ,......., x10 ,  x1 ,  x 2 ,........  x10 such that
x
2
i
 40,
i 1
then standard deviation of x is
(a)
1
(b)
(c)
(d)
2
4
none of these
Ans. b
Explanation:
Given x takes x1 , x 2 , ...........x10 ,  x1 ,  x 2 , .........  x10

20
x
i
0
i 1
20
and given
x
2
i
 40
i 1
20

 S.D. of x =
x i2
i 1
n
 20
xi

i 1


n











2
2
=
40  0 
   2
20  20 
MITTAL COMMERCE CLASSES
30 | P a g e