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Appendix CA CPT Solved Scanner English
Appendix CA CPT Solved Scanner English
Appendix
CA-CPT Solved Scanner (English)
December - 2013 Examination
Paper – 1 : Fundamentals of Accounting
therefore, be properly debited to the next year’s trading account. It justified the
principle that as per matching concept if some expenses has been incurred but
against it sale will take place in the next year or income will be received next
year, then it should be carry forward as asset.
Answer : (d)
Unit-3: Accounting Standards - Concepts, Objectives, Benefits
[6] According to consistency concept in order to achieve comparability of the
financial statements of an enterprise through time, the accounting policies,
accounting principles are followed consistently from one period to another.
Thus, we can say that consistency with reference to application of accounting
principles refer to the accounting methods and procedures used have to be
consistently applied from year to year.
Answer : (c)
Chapter-2: Accounting Process
Unit-1: Basic Accounting Procedures - Journal Entries
[7] The fixed asset are the long term asset which remain with the business for longer
duration so they sustain good profit for a business. Thus we can say that fixed
assets are held by business organization for generating income.
Answer : (b)
[8] In the given question, purchase of computer for 60,000 increase fixed asset by
60,000 and subsequently due to down payment of ` 10,000 reduces cash and
bank balance by 10,000, the net effect shows increase in asset side with `
50,000. Similarly there is a corresponding increase in liability side by `
50,000 in the name of bills payable.
Answer : (a)
[9] Profit earned and further capital introduced is added in capital A/c and losses is
less in capital A/c. It will change capital A/c of proprietor.
Thus option (D) any of the above is right answer.
Answer : (d)
Unit-2: Ledgers
[10] Market price = ` 60,000
Less: Purchase price = ` 45,000
Trade discount before discount = ` 15,000
Less: Cash discount = 9,000
Trade discount after cash discount = 6,000
Trade discountbeforecashdiscount 100
Percentage of Trade Discount =
Marketpr ice
CPT Solved Scanner (English) : Appendix 3
15,000
= x 100
60,000
= 25%
Answer : (d)
Unit-3: Trial Balance
[11] Since salary paid ` 4,500 is an expense and needs to be debited, which caused
shortfall of debit side by ` 4,500, on the other hand, this amount is wrongly
credited i.e. credit side of trial balance is increased by ` 4,500. In total the debit
side of trial balance will be short by ` 9,000 (4,500 + 4,500).
Answer : (c)
[12] Trial balance enables to check whether the posting and other accounting
processes have been done without arithmetical errors. In other words trial
balance is prepared to ascertain the arithmetical accuracy of posting and
balancing.
Answer : (c)
Unit-5: Cash Book
[13] In a business house, a number of small payments for telegram, taxi fare,
cartage, etc. have to be made. Such small expenses relating to postage and
conveyances etc. one paid from petty cash to lessen the burden of main
cashier.
Answer : (a)
Unit-6: Capital and Revenue Expenditures and Receipts
[14] Amount spent on increasing the seating capacity is a capital expenditure as
this expenditure proposes to increase the capacity which is a long-term benefit
for the organisation.
Answer : (a)
[15] Amount spent on renewal fee for patent right is a revenue expenditure.
Answer : (b)
Unit-8: Rectification of Errors
[16] It is a general rule that errors affecting two accounts can be corrected by a
journal entry. In other words, rectification entries are first recorded in Journal
proper.
Answer : (c)
[17] This is an error of principle when a transaction is recorded in contravention of
accounting principles like wages for installation of machine as normal wages. In
this case there is no effect on the trial balance since this amount is pleases on
the correct side, though in a wrong account.
4 CPT Solved Scanner (English) : Appendix
Answer : (b)
Chapter-3: Bank Reconciliation Statement
[18]
Bank Reconciliation Statement
as on ...
Amount
Balance as per pass book
Less: (1) Cheque issued yet not presented for
payment 75,800 65,600
(2) Wrongly credited by bank Overdraft as 20,600 (96,400)
per cash book (30,800)
Answer : (b)
[19] Debit Balance of pass book ` 3,159 can be written as Bank overdraft of ` 3,159.
While credit balance of cash book ` 7,074 is written as Bank balance as on
31.03.2012 is the Balance Sheet.
Answer : (c)
[20] A Bank Reconciliation Statement is prepared to know the causes for difference
between, the balance of bank column of the cash book and pass book. Thus, for
preparing Bank Reconciliation Statement, the documents statements required
are bank column of cash book and bank statement.
Answer : (b)
Chapter-4: Inventories
[21] Net realizable value means that value which we have in hand.
Thus, we can say that net realizable value is estimated selling price less
cost incurred in order to make the sale.
Answer : (c)
[22] Calculation of closing stock :
Physical stock (on 20 April) = 1,60,000
(+) (Between 01 April to 20 April)
(i) Realizable Value of Damaged Goods = 15,000
(ii) Remaining Goods
4
40,000[15,000 × ] = 20,000
3
= 1,95,000
Answer : (b)
[23] Opening stock is immensely proportional to the gross profit. The overstatement
of opening stock leads to an understatement of gross profit. Thus, when
CPT Solved Scanner (English) : Appendix 5
Since, here Profit and Loss A/c is debited it means loss occur and other hand
Machinery A/c is credited it means balance of machinery A/c reduced.
Hence, we can say that above entry means loss on sale of machinery
transferred to Profit and Loss A/c.
Answer : (d)
Chapter-6: Preparation of Final Accounts of Sole Proprietors
[29] Intangible assets are such assets which can not be seen but felt. These include
Goodwill, Patent Rights, Designs and Brand names, etc. This the statement
intangible asset is not an asset is false
Answer : (c)
[30] Current assets are those assets that are meant to be converted into cash as
quickly as possible. These include stock in trade, sundry debtors, bills
receivable, prepayments, advances, bank and cash balance. Thus, accounts
receivable and salary paid in advance are current assets.
Answer : (b)
[31] Managers commission (10% of Net Profit)
= ` 25,000
25,000
Net Profit = = 2,50,000
10%
Sales - Profit = (Direct + Indirect expenses)
3,50,000 (-) 2,50,000 = 1,00,000
Answer : (b)
[32] When Prepaid Expenses A/c shows closing balance, it means that expenses
transferred from previous year for accounting in current year.
Thus, option (A) is right answer.
Answer : (a)
[33] “Bill Discounted ` 10,000" is a contingent liability. Since contingent liability is
shown in Balance Sheet as foot note.
So, option (A) foot notes to Balance Sheet is right answer.
Answer : (a)
[34] Since, Goodwill is an Intangible Asset and is shown in the Balance Sheet under
the head of Intangible Asset. So, Goodwill is not shown in ‘Miscellaneous
Expenditure’ in assets side of Balance Sheet.
Answer : (d)
[35] Selling and distribution expenses comprises of:
(i) Salesmen’s salaries and commission
(ii) Commission to agents
(iii) Advertising
(iv) Warehousing expenses
CPT Solved Scanner (English) : Appendix 7
2,50,000 2,50,000
Answer : (a)
[41] A joint venture is a very short duration business entered into by two or more
persons jointly without the use of firm name for a limited purpose. Hence, it can
be concluded the minimum number of co-venture will be at least 2 in joint
venture business.
Answer : (a)
[42] Joint venture is a kind of a temporary partnership and the co-ventures are
absolute free to decide their respective terms and conditions. Since it is a joint
venture, they usually contribute funds for running the venture.
Answer : (d)
[43] Net profit of Joint Venture is ` 33,600.
Commission on Net Profit 5% after charging such
5
Commission = 33,600 ×
105
= ` 1,600
Share of Profit of C and D before Commission
= Net profit - Commission
= 33,600 - 1,600
= ` 32,000
Share of Profit ` 32,000 is distributed between C and D is 5 : 3
5
So, therefore C’s share = 32,000 x = ` 20,000
8
3
and D = 32,000 x = ` 12,000
8
Answer : (b)
Unit-3: Bills of Exchange and Promissory Notes
[44] Many a times instances do arise when the acceptor has spare funds much
before the maturity date of the bill of exchange accepted by him. This is known
as retiring the bill, i.e. payment of bill before maturity or due date. In such
cases, the acceptor gets a certain rebate or interest or discount for premature
payment.
Answer : (d)
CPT Solved Scanner (English) : Appendix 9
locality due to its locational advantage, personal reputation of the partner etc.
The necessity for revaluation of goodwill in a firm arises in the following cases:
(i) When the profit sharing ratio is changed.
(ii) When a new partner is admitted.
(iii) When a partner retires or dies and
(iv) When the business is dissolved or sold.
Thus, Option (A) Goodwill is right answer.
Answer : (a)
Unit-4: Retirement of a Partner
[50] Under Ordinary Business Expense Method, the premium is treated is an
ordinary expense and Joint Life Policy does not appear as an asset in the
Balance Sheet of the firm.
Answer : (a)
Chapter-9: Company Accounts
Unit-1: Introduction to Company Accounts
[51] Following are few salient features of a company
(i) Incorporated association
(ii) Separate legal entity
(iii) Perpetual Succession
(iv) Distinction between ownership and management.
Thus, no separation between management and ownership is not the feature
of a company.
Answer : (d)
Unit-2: Issue, Forfeiture and Re-Issue of Shares
[52] As per Section 79, a company can issue shares at a discount if atleast one year,
must have elapsed since the commencement of the business and shares are of
such a class which has already been issued. This is the clear implication of the
restriction that it is not possible for a company limited by shares to issue
shares at a discount at the time of commencement.
Answer : (b)
[53] Discount on issue of share A/c is always credited at the time of forfeiture with
the amount of discount allowed while issuing shares.
Share Capital A/c (1,000 × 20) Dr. 20,000
To Share forfeiture A/c (1,000 × 6) 6,000
To Share discount A/c (1,000 × 2) 2,000
To Calls in arrear A/c (1,000 × 12) 12,000
Answer : (c)
[54] Shares applied by M = 600 shares
CPT Solved Scanner (English) : Appendix 11
5,000
Shares allotted to M = 600 x = 400 Shares
7,500
Money sent by him on application (600 × 3) = 1,800
Money utilised on allotment (400 × 3) = 1,200
Amount to be carried forward for adjustment
against allotment money from M will be 600
Answer : (c)
[55] The share capital of a company is divided into following categories:
(i) Authorised share capital
(ii) Issued share capital
(iii) Called-up share capital
(iv) Paid-up share capital
(v) Subscribed share capital
(vi) Reserve Capital.
The un-issued capital i.e. the remaining portion of authorised capital which is
not issued in cash or in consideration is not shown in balance sheet.
Answer : (b)
[56] As we know that underwriting commission is paid only to the underwriter who
gives the guarantee of taking up those all left shares, hence it will be not paid to
directors or promoters of the company, it will be paid only to the underwriters.
Thus option (D) is right answer.
Answer : (d)
Unit-3: Redemption of Preference Shares
[57] It is the requirement of companies Act, 1956 that no preference shares can be
redeemed unless they are fully paid. So preference shares cannot be redeemed
unless they are fully paid up.
Answer : (b)
Unit-4: Issue of Debentures
[58] In the Balance Sheet of a company, debentures are shown under the secured
loan on the liability side because they are generally issued by creating charge
on the assets of a company as a security.
Answer : (a)
6
[59] Total interest (1 July - 31 Dec.) = 20,00,000 × 15% ×
12
= 1,50,000
6
Total interest upto June 30 = 20,00,000 × 15% ×
12
= 1,50,000
12 CPT Solved Scanner (English) : Appendix
Total interest accrued by not yet due for the period 1 April - June 30, i.e. 3 months
3 months
= 1,50,000 × = ` 75,000
6 months
Answer : (c)
[60] As we know that debentures are issued by company for cash and for
consideration other than cash and to buy its own debentures. So, the above all
aspects are correct regarding issuing of debentures.
So, we may conclude that the incorrect aspect of debentures is that cannot
be issued in lieu of dividends.
Answer : (d)
[5] Completed contracts are also called contracts with executed consideration i.e.
the consideration for the promise in a contract is given or executed.
Answer : (b)
[6] If entire specified goods is perished before entering into contract of sale, the
contract is void. This contract cannot be enforced by law. Such contract which
cannot be enforced becomes void.
Answer : (b)
[7] Where a contract is good in substance but because of some technical defect
i.e., absence in writing, barred by limitation etc. one or both the parties cannot
sue upon it, it is described as unenforceable Contract.
Answer : (b)
[8] When the offeree offers to qualified acceptance of the offer subject to
modification and variations in the terms of original offer, he is said to have made
a counter offer. It amounts to rejection of the original offer.
Answer : (a)
Unit-2: Consideration
[9] As per the general rule, an agreement without any consideration is void.
However, there are certain exceptions to this rule which are as follows:
(i) Agreement based on Natural Love and Affection
(ii) Compensation for past voluntary services
(iii) Promise to pay time barred debt
(iv) Agency
(v) Completed gift.
In the given statement all are the exceptions of this rule, hence none of the
above is not an exception to the rule “no consideration, no contract”.
Answer : (d)
Unit-3: Other Essential Elements of a Valid Contract
[10] An agreement is void because of unlawful consideration. In the question G paid `
10,000 to H to influence the head of a Government Organisation in order to
provide an employment to him. The consideration, being opposed to public
policy, is unlawful. Hence, he cannot recover any amount.
Answer : (d)
[11] The consent is said to have been obtained by Undue Influence where is the
relations subsisting between the parties are such that one of the parties is in a
position to dominate the will of another and uses his position to obtain an unfair
advantage of the other.
Answer : (b)
14 CPT Solved Scanner (English) : Appendix
[24] According to the Sale of Goods Act,1930, the seller has the right to sell the
goods at the time when the property is to pass. If seller’s title turns out to be
defective, the buyer must return the goods to the true owner and recover the
price from the seller.
Therefore, when a seller sells the goods by infringing the copyright or trademark
of the other, there is a breach of an implied condition as to title.
Answer : (a)
[30] A partner who does not take an active part in the conduct of the business of the
firm is called as dormant partner and dormant partner is also known as sleeping
partner.
Answer : (a)
[31] According to partnership, the business must be carried on by all or any of them
acting for all. When a partner carries business by himself, he is in the position of
principal and when business is carried by any of them acting for all, he is in the
position of agent.
Thus, option(C) is right.
Answer : (c)
[32] Partnership is formed as a result of an agreement between two or more
persons. However, a partner becoming of unsound mind or a convict
undergoing imprisonment results in dissolution of a firm which means that under
the Partnership Act, partnership cannot be formed with them.
Thus, partnership can be formed with one Indian and two foreigners.
Answer : (a)
Unit-2: Relations of Partners
[33] All partners of the firm (whether active or sleeping)is entitled to have access to
any of the books of the firm and to inspect and take out of copy thereof. The
right must however, be exercised bonafide. Thus, the action of other partners is
not correct since Robert has right of access to books of accounts.
Answer : (a)
[34] As per Sec. 19 of Indian Partnership Act, 1932, the acts beyond the Implied
authority of partner of a firm are as follows :
(i) Submit a dispute relating to business of the firm .
(ii) Open a bank account an behalf of firm in his own name.
(iii) Compromise an any claim by the firm against a third party.
(iv) Withdraw a suit or proceedings filed on behalf of the firm.
(v) Admit any liability in a suit or proceedings against the firm.
(vi) Acquire immovable property on behalf of the firm.
(vii) Transfer immovable property belonging to the firm.
(viii) Enter into partnership on firm’s behalf.
Hence, purchase and sell goods in which the firm is dealing is, within the
implied authority of a partner of a firm.
Answer : (d)
[35] According to the Indian Partnership Act, 1932, the liabilities of the new partner
ordinarily commence from the date when he is admitted as a partner, unless he
agrees to be liable for obligations incurred by the firm prior to the date. Thus, it
depends upon the terms of the partnership agreement.
Answer : (b)
18 CPT Solved Scanner (English) : Appendix
U e=
P e>1
M e= 1
Q e<1
e=0
X
0 L
Elasticity between mid point and upper extreme point of a straight line
LP 3
=
= UP 1 >1
Answer : (c)
[9] Price Elasticity of demand
= changeinquantity × original price
originalquantity change in price
= 25000 × 100
125000 25
Ep = 0.8
Thus, option B is correct
Answer : (b)
[10] Coefficient of price elasticity of demand
= change in Quantity × original price
original Quantity change in price
5 10
= = -1.00
25 2
Thus, option B is correct.
Answer : (b)
Unit-2: Theory of Consumer Behaviour
[11] An indifference curve is a curve which represents all those combinations of
goods which provides equal amount of satisfaction to the consumer and
CPT Solved Scanner (English) : Appendix 21
TU
X
Consumption
MU
[14] The concept of consumer’s surplus is derived from the law of diminishing
marginal utility. According to this concept as the consumer consumes more and
more of a commodity, the utility derived from every additional goes on
diminishing.
Thus, option A is correct.
Answer : (a)
[15] A budget line shows all those combinations of two goods which the consumer
can buy spending his given money income on the two goods at their given
prices.
Price line
Good y
X
0 Good x
CPT Solved Scanner (English) : Appendix 23
P
R
I p
C
E
D
X
OUTPUT
Thus, option A is correct.
Answer : (a)
[23] Long run is a period long enough to allow the monopolist to adjust his plant size
or use his existing plant at any level that maximizes his profit. In the absence of
competition the monopolist need not produce at the optimum level.
Therefore, the monopolist will not continue if he makes losses in the long run.
He will continue to make super normal profits abnormal even in the long run
as entry of outside firm is blocked.
Thus, option B is correct.
Answer : (b)
[24] In a monopolistic competitive market since the product is differentiated between
firms, each firm does not faces a perfectly elastic demand for its product. Each
firm is a price maker and is in a position to determine price of its own product.
Thus, under monopolistic competition firm has considerable control over its
price.
Answer : (b)
Chapter-5: Indian Economy: A Profile
Unit-1: Indian Economy
CPT Solved Scanner (English) : Appendix 25
[25] The distribution of Income and Wealth in India is not equitable. In order to
measure the inequality of income and wealth Gini Index is used. It measures the
extent to which distribution of income/consumption among individuals or
household deviates from a perfectly equal distribution. If Gini Index of zero
represents perfect equality while an Index of one represents perfectly inequality.
The coefficient lies between 0 and 1.
Thus option (A) Gini Index is correct.
Answer : (a)
[31] Product Method of calculating National Income is also called value added
method or Net value added method.
Answer : (b)
Unit-4: Tax System
[32] Direct Taxes are imposed according to the ability of the person to pay. The
revenue is income elastic, because of the progressive character revenue will
increase faster than the increase in income.
Thus, option A is correct.
Answer : (a)
[39] Under strategic sale method the government sells a major portion of its stake to
a strategic buyer and also gives over the management control.
Under this disinvestment price would be market based and not prefixed.
Answer: (d)
Unit-3: Globlisation
[40] Convertibility of Rupee allows to determine the currency its own exchange rate
in the international market without any official intervention. Current account
convertibility means freedom to buy or sell foreign exchange for the following
transactions:-
(1) all payments due in connections with foreign trade.
(2) payment due as interest on loans and as net income from banking and
credit facility.
(3) payments of moderate amount of amortisation of loans or for
depreciation of direct investments.
(4) Moderate remittances for family living expenses. Thus option (a) allow it to
determine its own exchange rate in international market is correct.
Answer: (a)
[41] Globalisation means integrating the domestic economy with the world economy.
• Globalisation help to restructure the production and trade pattern in a
capital scarce.
• It attracts foreign capital and updated technology also enters in the
country.
• As the foreign capital enters the competition begins which helps in
removal of import tarrif barriers.
• It is believed that the main effect of integration will be felt in the
industrial and related sectors.
• It is also believed that the efficiency of banking and financial sectors
will improve.
Thus, option B is correct.
Answer: (b)
[42] In International market, the firms carry out price discrimination with the following
objectives —
(i) to capture foreign markets
28 CPT Solved Scanner (English) : Appendix