CPT Mock Test – 2nd
Test Booklet No. – 110011
(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
Added
MITTAL COMMERCE CLASSES
—
—
+
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(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)
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)
20250
1200
(2170)
19280
+
–
–
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
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(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:
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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:
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Percentage of Amt. remitted by Ram to Aslam =
Ram's Share =
19600
1
 100  33.33% or
3
5800
1 2
1 
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
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(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
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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
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(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
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 61952

 100 
= 
88


Then:
 70400

 100 

 88

Dep. for 6th year = 80000 × 12%
(31)
=
70400
=
80000
= Rs. 9600
Burden to prove undue influence is on (a)
Defaulted party
(b)
Aggrieved party
(c)
Both
(d)
third party
Ans. b
Explanation: Because it is liability of aggriened party to prove undue influence
(32)
Promise made with intention of not to perform is (a)
Fraud
(b)
Coercion
(c)
Under influence
(d)
Mis-statement
Ans. a
Explanation: Because promise mode with intention of not to perform will be fraud.
(33)
_____________ Contract is good in substance but suffers from some technical
defect:
(a)
Valid
(b)
Illegal
(c)
Voidable
(d)
Unenforceable
Ans. d
Explanation: Unenforceable contract is good in substance but suffers from some
technical defect (such as not in writing, not under stamped). Such contracts can be
enforced if the technical defect involved is removed.
(34)
A, by a letter dated 10th January 2008, offers to sell his house to B for Rs. 40 Lacs.
The letter reaches B on 17th January 2008, who posts his acceptance on 18th
January 2008 which reaches A on 30th January 2008. Here, the communication of
offer is complete on :
(a)
18.01.2008
(b)
30.01.2008
(c)
17.01.2008
(d)
10.01.2008
Ans. c
Explanation: The communication of offer is complete when it comes to the
knowledge of the person to whom it is made. In case an offer is made by post, its
communication will complete when the letter containing the offer reaches the
offeree.
Hence, in this case, the communication of offer is complete on 17.01.2008
MITTAL COMMERCE CLASSES
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(35)
A sent a proposal for sale of goods to B through a letter. However, letter was still in
transit, A sent the letter of revocation of offer to B which was received by B before
the first letter reached B.
(a)
The contract is valid
(b)
The revocation is valid as it reached B before the first letters reached B.
(c)
The contract is void.
(d)
None of these.
Ans. b
Explanation: As per the Indian Contract Act, 1872, communication of
revocation is complete as against the person to whom it is made, when it comes to
his knowledge.
As per the contract Act, a proposal may be revoked at any time, before the
communication of its acceptance is complete as against the proposer.
In the instant case, B has sent the letter of revocation of offer which has
reached B before the letter of offer has reached B. Therefore revocation of offer is
valid.
(36)
__________ is a game of chance.
(a)
Conditional Contract
(b)
Contingent Contract
(c)
Wagering contract
(d)
Quasi Contract
Ans. c
Explanation: Wagering Contract is an agreement involving payment of a sum of
money upon the determination of an uncertain event. The essence of a wager is that
each side should stand to win or lose, depending on the way an uncertain event
takes place in reference to which the chance is taken and in the occurrence of which
neither of the parties has legitimate interest. Hence, we can say that wagering
contract is a game of chance.
(37)
A offers B to supply books @ Rs. 100 each but B accepts the same with condition of
10% discount. This is a case of
(a)
Counter offer
(b)
Cross offer
(c)
Specific offer
(d)
General offer
Ans. a
Explanation: When offeree offers to qualified acceptance of the offer subject to
modifications and variations in the terms of original offer, he is said to have made a
counter offer. So, in the given question A offers B to supply books @ Rs. 100 each
but B accetps the same with the condition of 10% discount. Hence, we can say that
this is a case of counter offer.
(38)
The inadequacy of consideration will be taken into account by a court of law:
(a)
Always at the discretion of the court
(b)
When the promisor performs his promise
(c)
When absence of free consent is pleaded in the formation of the contract
(d)
When the promisor expresses his desire to get maximum return for his
promise
MITTAL COMMERCE CLASSES
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Ans. c
Explanation: According to Explanation 2 of Section 25, an agreement to which the
consent of the promisor is freely given is not void merely because the consideration
is inadequate; but the inadequacy of the consideration may be taken into account by
the Court in determining the question whether the consent of the promisor was
freely given.
(39)
Under the Indian Contract Act, 1872, which one of the following is not an essential
elements of a contract?
(a)
Intention to create a legal relationship.
(b)
Adequacy of consideration.
(c)
Certainty of meaning.
(d)
Free Consent.
Ans. b
Explanation: Because consideration can be inadequate.
(40)
Mistake as to a law not in force in India makes the contract _____________.
(a)
Void
(b)
Valid
(c)
Voidable
(d)
Illegal
Ans. a
Explanation: As per the Indian Contract Act, 1872, mistake as to a law in India is not
taken as a mistake of fact and so the contract remains valid. But, however, a
question of foreign law is, however, treated as a question of fact. So, mistake as to
law not in force in India (i.e. foreign law) renders the contract void. This provision is
enacted keeping in mind that it is not possible for any one to know about the laws of
other countires.
(41)
Which
(a)
(b)
(c)
(d)
of the following is not expressly declared void ?
Wagering agreement
Agreement to pay time barred debt.
Agreement the meaning of which is uncertain
Consideration unlawful in part.
Ans. b
Explanation: Certain agreement have been expressly declared void by the Contract
Act. These are void-ab-initio and do not give rise to any legal consequences. Some of
them are A. Agreement by incompetent parties
B. Consideration unlawful in part
C. Wagering agreement
D. Agreement - the meaning of which is uncertain.
E. Agreement made under a mutual mistake of fact, etc
Therefore, we can conclude that except agreement to pay time barred debt, all other
are expressly declared void. On the other hand agreement to pay time barred debt is
valid under the exemptions to the rule - 'No Consideration No Contract.'
(42)
Y sold some goods to X which Y believes to be of superior quality where as they are
of inferior quality. It is a case of :
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(a)
(b)
(c)
(d)
Misrepresentation
Coercion
Mistake
Fraud
Ans. a
Explanation: As per section 18 of the Indian Contract Act, 1872:
"Where a person asserts something which is not true, though he believes it to be
true, his assertion amounts to misrepresentation".
It can be either innocent or without any reasonable ground. In the present case, Y
who has sold goods to X has believed the goods to be of superior quality while
actually they are of inferior quality. This has resulted in misrepresentation.
(43)
Ram, a minor got injured his left leg in a football match. He engaged a doctor for the
treatment of the leg. The doctor wants to claim for his services from the minor's
property. The claim of the doctor is ______ under the Indian Contract Act, 1872.
(a)
Valid
(b)
Invalid
(c)
Void
(d)
Illegal
Ans. a
Explanation: Under Section 68, any person would be entitled to reimbursement out
of minor's estate, for necessaries supplied to him or to his family. Necessaries means
goods suitable to the condition in the life of infant as required by him at the time of
sale of delivery.
Thus, in the given case the claim of doctor who had treated the injured leg of
minor is valid under the Indian Contract Act.
(44)
Which of the following statements is not correct ?
(a)
In matters of fraud, intention to defraud is essential
(b)
Where consent to a contract is obtained by misrepresentation, the contract is
voidable
(c)
A unilateral mistake renders the agreement void
(d)
A mistake of foreign law is equal to mistake of fact
Ans. c
Explanation: According to Section 20, when both the parties to an agreement are
under a mistake to a matter of fact essential to the agreement, the agreement is
altogether void.
A unilateral mistake, that is to say, mistake of one party, does not render the
agreement void.
Thus, Option (c) is the correct answer.
(45)
In the
(a)
(b)
(c)
(d)
famous case of Mohari Bibi V. Dharmodas Ghosh, the Court ruled that:
in India age of majority is 21 years.
a person of unsound mind is not competent to contract.
a guardian cannot make an enforceable contract of marriage of a minor.
minor's contract is absolutely void.
Ans. d
MITTAL COMMERCE CLASSES
13 | P a g e
Explanation: A minor is not competent to contract and any agreement with or by a
minor is void from the very beginning. In the leading case of Moheri Bibi vs.
Dharmodas Ghose it was held that minor's contracts are absolutely void.
(46)
Contractual freedom of parties is absolute in nature. this statement is (a)
True
(b)
Untrue
(c)
Partly true
(d)
Both (a) & (c)
Ans. b
Explanation: Contractual freedom of parties is not absolute in nature. For eg. In case
of unlawful consideration and in case of unlawful object.
(47)
In Gujarat & Maharashtra, wagering agreements are :
(a)
Valid
(b)
Void
(c)
Illegal
(d)
Contingent
Ans. c
Explanation: In Gujarat & Maharashtra, wagering agreements are illegal.
(48)
Shashank contracts to sell his book to Pankaj at the price which Pankaj may be able
to pay. This contract is (a)
Void
(b)
Illegal
(c)
Valid
(d)
Implied
Ans. a
Explanation: Because price is not certain therefore contract is void because of
uncertainty.
(49)
Speculatative transaction are (a)
Valid
(b)
Void
(c)
Illegal
(d)
None
Ans. a
Explanation: Because as per Indian Contract Act speculative transaction are valid.
(50)
A minor's liability for 'necessaries' supplied to him :
(a)
Arises after he attains the age of majority
(b)
Is against minor's property only
(c)
Does not arise at all
(d)
Arises only when minor promises to pay for them
Ans. b
Explanation: As per Section 68 of Indian Contract Act, 1872, any person would be
entitled to reimbursement out of the minor's estate, for necessaries supplied to him
MITTAL COMMERCE CLASSES
14 | P a g e
or his family. In other words, it can be said that minor's liability for 'necessaries'
supplied to him is against minor's property only.
(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
(c)
Cost of production
(d)
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:
MITTAL COMMERCE CLASSES
15 | P a g e
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
0
Q0
x
Q.S.
(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:
MITTAL COMMERCE CLASSES
16 | P a g e
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 more units of the product are supplied at a higher price, it is called:
(a)
Contraction of supply
(b)
Increase in supply
(c)
Change in supply
(d)
Extension of supply.
Ans. d
Explanation:
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 supply is perfectly elastic, elasticity of supply is equal to________________
(a)
+1
(b)
0
(c)
—1
(d)
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.
MITTAL COMMERCE CLASSES
17 | P a g e
(63)
The consumer is in equilibrium when the following condition is satisfied:
MUx Px
(a)

MUy Py
MUx Px
(b)

MUy Py
MUx Px
(c)

MUy Py
(d)
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:
MITTAL COMMERCE CLASSES
18 | P a g e
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.
(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 elasticity between unrelated goods is:
(a)
E=0
(b)
E=1
(c)
E>1
(d)
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:
A
(3, –4)
x1, y1
P
B
(5, –6)
x2, y2
Eqn of AB line
MITTAL COMMERCE CLASSES
20 | P a g e
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) 
(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:
MITTAL COMMERCE CLASSES
21 | P a g e
No. – R.No = 54
(10x  y)  (10y  x)  54
10x  y  10y  x  54
9x  9y  54
xy6
(79)
x
17
what is

x  y 23
If
(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
Now
(80)
x  y 17  6 23


x  y 17  6 11
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
(81)
If
th
each, therefore the total money spent by them is given
 ,  are the roots of x2 - 3x + 2 = 0, then the equation whose roots (  + 1), ( 
+ 1) is
(a)
(b)
(c)
(d)
x2
x2
x2
x2
 5x  6  0
 5x  6  0
 5x  6  0
 5x  6  0
Ans. d
MITTAL COMMERCE CLASSES
22 | P a g e
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
(a)
(b)
(c)
5 1
2
(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
 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=
(83)
MITTAL COMMERCE CLASSES
23 | P a g e
x
x y
xy
x y
x
x y
(b)
(c)
(d)
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)
(b)
(c)
(d)
a, b
−a, b
−a, −b
none of these
Ans. a
Explanation:
From (i) equation, bx + ay = 2ab
From (ii) equation, ax  by  a 2  b2
MITTAL COMMERCE CLASSES
24 | P a g e
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), b y  a y  b  a b
2

 
 y b2  a 2  b b2  a 2
2
3
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:
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.
MITTAL COMMERCE CLASSES
25 | P a g e
(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
(d)
None
Ans. b
Explanation:
5x+2y=17
2𝑦
17
x=- +
5
5
M.D of x = |𝑏| × 𝑀. 𝐷. 𝑜𝑓 𝑦.
MITTAL COMMERCE CLASSES
26 | P a g e
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
(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)
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Median - Mean =
(94)
63
3
= 21
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
3
Q.D.<S.D
(95)
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
=
10 3
= 2000x
x
=
x
(96)
1
40  50  x 3
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
2 3 5
Ans. a
Explanation:
Arrange the data in ascending order:
𝑥/5, 𝑥/3, 𝑥/2, 𝑥
M = Simple Average of two middle terms
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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
(b)
40
(c)
20
(d)
none of these
Ans. a
Explanation:
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Coefficient of Variation =
So S.D. =
SD
SD
 100  125 
 100
Mean
40
125
 50
2.5
(100) If a variable x takes 20 values x1 , x 2 ,......., x10 ,  x1 ,  x 2 ,........  x10 such that
20
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 
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