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Fundamentals of Accounting

Q. 1 All of the following are functions of Accounting except

1.
Decision making.

2.
Measurement

3.
Forecasting

4.
Ledger posting

1 marks

Q. 2 Manufacturing account is prepared to

1.
ascertain the profit or loss on the goods produced.
2.
ascertain the cost of the manufactured goods

3.
show the sale proceeds from the goods produced during the year

4.
both (2) and (3)

1 marks

Q. 3 On March 31, 2009 after sale of goods worth Rs. 2,000, A is left with the closing stock of Rs. 10,000.
This is

1.
An event

2.
A transaction

3.
A transaction as well as an event
4.
Neither a transaction nor an event

1 marks

Q. 4 Financial statements only consider

1.
Assets expressed in monetary terms

2.
Liabilities expressed in monetary terms

3.
Assets and liabilities expressed in non- monetary terms

4.
Assets and liabilities expressed in monetary terms

1 marks

Q. 5 A purchased a car for Rs. 5,00,000, making a down payment of Rs.1,00,000 and signing a
Rs.4,00,000 bill payable due in 60 days. As a result of this transaction
0

1.
Total assets increased by Rs.5,00,000

2.
Total liabilities increased by Rs.4,00,000

3.
Total assets increased by Rs.4,00,000.

4.
Total assets increased by Rs.4,00,000 with corresponding increase in liabilities by Rs.4,00,000.

1 marks

Q. 6 The debts written off as bad, if recovered subsequently are

1.
credited to Bad Debts Recovered Account

2.
credited to Debtors Account
3.
debited to Profit and Loss Account

4.
None of the above

1 marks

Q. 7 A withdrawal of cash from business by the proprietor should be credited to

1.
Drawings Account

2.
Capital Account

3.
Profit & Loss Account

4.
None of the above
1 marks

Q. 8 Contra entries are passed only when

1.
double column cash book is prepared

2.
three-column cash book is prepared

3.
single column cash book is prepared

4.
None of the above

1 marks

Q. 9 Consignment account is

1.
Real account
2.
Personal account

3.
Nominal account

4.
None of the above

1 marks

Q. 10 Economic life of an enterprise is split into the periodic interval as per ________

1.
Money Measurement

2.
Periodicity Concept

3.
Going concern
4.
Accrual

1 marks

Q. 11 Accounting policies refer to specific accounting ________

1.
Principles

2.
Methods of applying those principles

3.
Both (1) and (2)

4.
None of the above

1 marks

Q. 12 Dividends are usually paid as a percentage of


0

1.
Authorized share capital

2.
Net profit

3.
Paid-up capital

4.
Called-up capital

1 marks

Q. 13 ABC Company provides the following information about the month-end bank reconciliation:
Ending cash as per bank statement: -1,367
Ending cash as per company records: -7,383
Monthly bank service charge: -25
Deposits in transit at month-end: -8,345
Outstanding cheques at month-end: -2,399
Customer cheques returned NSF: -45
The correct ending cash balance is

1.
4,914
2.
7,268

3.
7,313

4.
7,383

1 marks

Q. 14 Which of the following inventory methods will always produce the same results under both a
periodic and perpetual system?

1.
FIFO

2.
LIFO

3.
Average
4.
None of these

1 marks

Q. 15 When reconciling the ending cash balance as per the bank statement to the correct adjusted cash
balance, how would deposits in transit be handled?

1.
Added to the balance as per bank statement

2.
Subtracted from the balance as per bank statement

3.
Added to the balance as per company records

4.
ignored

1 marks

Q. 16 Under the __________ inventory method, the most recent costs incurred are assigned to cost of
goods sold on the income statement
0

1.
LIFO

2.
FIFO

3.
Weighted Average

4.
None of these

1 marks

Q. 17 A businessman purchased goods for Rs. 25,00,000 and sold 80% of such goods. During the
accounting year ended 31st March, 2009. The market value of the remaining goods was Rs.
4,00,000. He valued the closing stock at cost. He violated the concept of

1.
Money measurement.

2.
Conservatism.
3.
Cost.

4.
Periodicity.

1 marks

Q. 18 E Ltd., a dealer in second-hand cars has the following five vehicles of different models and makes
in their stock at the end of the financial year 2008-2009:
Car Fiat , Ambassador, Maruti Esteem, Maruti 800, Zen
Cost (Rs.): 90,000, 1,15,000, 2,75,000, 1,00,000 2,10,000
Net realisable value (Rs.): 95,000, 1,55,000, 2,65,000, 1,25,000, 2,00,000.
The value of stock included in the balance sheet of the company as on March 31, 2009 was

1.
Rs.7,62,500

2.
Rs.7,70,000

3.
Rs.7,90,000

4. Rs.8,70,000.
1 marks

Q. 19 Original cost = Rs.1,26,000; Salvage value = Nil; Useful life = 6 years. Depreciation for the first year
under sum of years digits method will be

1.
Rs. 6,000

2.
Rs. 12,000

3.
Rs.18,000

4.
Rs. 36,000

1 marks

Q. 20 Find the goodwill of the firm using capitalization method from the following information:
Total Capital Employed in the firm Rs. 8,00,000
Reasonable Rate of Return 15%
Profits for the year Rs. 12,00,000
0

1.
Rs. 82,00,000

2.
Rs. 12,00,000.

3.
Rs. 72,00,000.

4.
Rs. 42,00,000.

1 marks

Q. 21 When a partner draws a fixed sum at the middle of each month, interest on total drawings will be
equal to interest of ____ m/s at an agreed rate

1.
6

2.
6.5
3.
7

4.
7.5

1 marks

Q. 22 A, B and C are partners sharing profits and losses in the ratio 4:2:1. They admit D for 1/4th share.
For the purpose of admission of D, the goodwill of the firm should be valued on the basis of 2 yrs.
purchase of last 3 yrs. average profits. The profits were 2009 - 1,24,000; 2008 - 1,20,000; 2007 -
80,000; 2006-1,30,000. Calculate the value of goodwill

1.
Rs. 2,06,000

2.
Rs. 2,10,000

3.
Rs. 2,16,000

4.
Rs. 2,20,000
1 marks

Q. 23 If a purchase return of Rs.1,000 has been wrongly posted to the debit of the sales returns account,
but has been correctly entered in the suppliers' account, the total of the

1.
trial balance would show the debit side Rs.1,000 more than the credit.

2.
trial balance would show the credit side to be Rs.1,000 more than the debit

3.
the debit side of the trial balance will be Rs.2,000 more than the credit side.

4.
the credit side of the trial balance will be Rs.2,000 more than the debit side

1 marks

Q. 24 X and Y are partners sharing profits in the ratio 5:3. They admitted Z for 1/5th share of profits, for
which he paid Rs. 1,20,000 against capital and Rs. 60,000 against goodwill. Find the capital balances
for each partner taking Z's capital as base capital

0
1.
3,00,000; 1,20,000 and 1,20,000.

2.
3,00,000; 1,20,000 and 1,80,000.

3.
3,00,000; 1,80,000 and 1,20,000

4.
3,00,000; 1,80,000 and 1,80,000

1 marks

Q. 25 After all debentures have been redeemed, balance of Debenture Redemption Fund is transferred to

1.
Profit and Loss Account

2.
Capital Reserve

3. Loss on issue of debenture


4.
General Reserve

1 marks

Q. 26 Errors, whose effect is not reflected in the trial balance is

1.
Errors of Principle

2.
Compensating errors

3.
Errors of Posting

4.
Errors of Casting

1 marks
Q. 27 If the partner's capital account are fixed, withdrawal of capital will be recorded in

1.
Partner's capital account

2.
Partner's current account

3.
Partner's drawing account

4.
Partner's loan account

1 marks

Q. 28 In the absence of any agreement, partners are entitled to get ____ interest p.a. on loan

1.
6%

2. 6.25%
3.
6.50%

4.
6.75%

1 marks

Q. 29 A and B are two partners sharing profits and losses in the ratio 4:1. They earned a profit of Rs. 8,000
during the year. A, in addition, is entitled to a commission at a certain percentage of net profit (such
commission is to be charged in arriving at the net profit). First, Rs. 2,000 of the net profit to be
ignored. Next, Rs. 2,000 of the net profit to carry 10% commission. Next, Rs. 2,000 of the net profit
to carry 15% commission, and balance of net profit to carry 20% commission. Calculate the
commission of A

1.
Rs. 500

2.
Rs. 600

3.
Rs. 700
4.
Rs. 800

1 marks

Q. 30 A, B and C are partners contributing Rs. 2,00,000, Rs. 3,00,000 and Rs. 4,00,000 respectively. B and
C want the profit to be distributed in the ratio of capital contribution but A does not agree to it. The
partnership deed also does not exist. In such a situation, profit can be shared

1.
equally among all partners

2.
Capital contribution ratio

3.
equally among working partners only

4.
as per court order

1 marks
Q. 31 Consider the following data pertaining to a company for the month of March 2009:
Particulars -----Rs.
Opening stock -----22,000
Closing stock -----25,000
Purchases less returns ----1,10,000
Gross profit margin (on sales) -----20%
The sales of the company during the month are

1.
Rs.1,41,250

2.
Rs.1,35,600

3.
Rs.1,33,750

4.
Rs.1,28,400

1 marks

Q. 32 The cash book showed an overdraft of Rs.1,500, but the pass book made up to the same date
showed that cheques of Rs.100, Rs.50 and Rs.125 respectively had not been presented for
payments; and the cheque of Rs.400 paid into account had not been cleared. The balance as per the
pass book will be

1. Overdraft of Rs. 1,100.


2.
Overdraft of Rs. 2,175

3.
Overdraft of Rs. 1,625

4.
Overdraft of Rs. 1,375

1 marks

Q. 33 A bank reconciliation sometimes points to the need for adjusting entries. In general, the source of
the adjustments is

1.
The reconciliation of the ending balance as per the bank statement to the adjusted cash balance.

2.
The reconciliation of the cash balance as per the company records to the adjusted cash balance.

3. (1) and (2)


4.
None of the above

1 marks

Q. 34 Excess of purchase consideration over net assets is transferred to

1.
Goodwill

2.
Capital reserve

3.
General reserve

4.
Profit and Loss account

1 marks
Q. 35 Omega Ltd., a listed company, acquired assets worth Rs. 7,50,000 from Alpha Ltd and issues shares
of Rs. 100 each at premium of 25%. The number of shares to be issued by Omega Ltd. to settle the
purchase consideration will be

1.
6,000

2.
7,500

3.
9,375

4.
5,625

1 marks

Q. 36 A truck costing Rs.1,00,000 and standing in the books at Rs.60,000, was sold for Rs.70,000. The
amount of Rs.10,000 is

1.
Revenue loss
2.
Capital loss

3.
Revenue profit

4.
Capital profit

1 marks

Q. 37 X sent out certain goods to Y of Delhi. 1/10 of the goods were lost in transit. Invoice value of goods
lost was Rs.12,500. Invoice value of goods sent out on consignment will be

1.
Rs.120,000

2.
Rs.125,000

3.
Rs.140,000

4. Rs.100,000
1 marks

Q. 38 F Ltd. purchased Machinery from G Company for a book value of Rs.4,00,000. The consideration
was paid by issue of 10% debentures of Rs.100 each at a discount of 20%. The debenture account
was credited with

1.
Rs.4,00,000

2.
Rs.5,00,000

3.
Rs.3,20,000

4.
Rs.4,80,000

1 marks

Q. 39 P Ltd. issued 5,000, 12% debentures of Rs.100 each at a premium of 10%, which are redeemable
after 10 years at a premium of 20%. The amount of loss on redemption of debentures to be written
off every year is
0

1.
Rs. 80,000

2.
Rs. 40,000

3.
Rs. 10,000

4.
Rs. 8,000

1 marks

Q. 40 A and B are partners sharing profits in the ratio 2:3. They admit C as a partner for 1/5th share. The
sacrificing ratio of A and B will be

1.
1:5

2.
1.6 : 2.4
3.
2:5

4.
2:3

1 marks

Q. 41 T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 1, 2007 and the
company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2009, the
amount shown as ''interest accrued but not due'' in the Balance Sheet will be

1.
Rs. 70,000 shown along with debentures

2.
Rs. 2,10,000 under current liabilities

3.
Rs. 1,40,000 shown along with debentures

4.
Rs. 2,80,000 under current liabilities
1 marks

Q. 42 A and B enter into a joint venture sharing profit and losses in the ratio 2:1. A purchased goods
costing Rs. 2,00,000. B sold the goods for Rs.2,50,000. A is entitled to get 1% commission on
purchase and B is entitled to get 5% commission on sales. The profit on venture will be

1.
Rs. 35,500

2.
Rs.36,000

3.
Rs. 34,000

4.
Rs.38,000

1 marks

Q. 43 Ram purchased a machine on 01.01.2009 for Rs. 1,20,000. Installation expenses were Rs. 10,000.
Residual value after 5 years is Rs. 5,000. On 01.07.2009, expenses for repairs were incurred to the
extent of Rs. 2,000. Depreciation is provided under straight line method. Annual depreciation is

0
1.
13,000

2.
17,000

3.
21,000

4.
25,000

1 marks

Q. 44 X draws a bill on Y for Rs 30,000. X wants to endorse it to W in settlement of Rs 35,000 at 2%


discount with the help of Y's acceptance and balance in cash. How much cash X will pay to W?

1.
4,300

2.
4,000

3. 4,100
4.
5,000

1 marks

Q. 45 The excess of closing capital over opening capital represents

1.
profit only if there is introduction fresh capital

2.
loss if there is drawing

3.
profit if there is no introduction fresh capital

4.
loss if there is no drawing

1 marks
Q. 46 A company sends its cars to dealers 'on sale or return' basis. All such transactions are however
treated like actual sales and are passed through the sales day book. Just before the end of the
financial year, two cars which had cost Rs.55,000 each have been sent on 'sale or return' and have
been debited to customers at Rs.75,000 each, cost of goods lying with the customers will be

1.
Rs.1,10,000.

2.
Rs. 55,000.

3.
Rs. 75,000

4.
None of the above

1 marks

Q. 47 Goods costing Rs. 2,00,000 sent out to consignee at Cost + 20%. Invoice value of the goods will be

1.
Rs.250,000
2.
Rs.2,40,000

3.
Rs.300,000

4.
None of the above

1 marks

Q. 48 R, J and D are partners sharing profits in the ratio 7:5:4. D died on 30th June 2009 and profits for the
accounting year 2008-2009 were Rs. 24,000. How much share in profits for the period 1st April 2009
to 30th June 2009 will be credited to D's Account

1.
Rs. 6,000

2.
Rs. 1,500

3.
Nil.
4.
Rs. 2,000

1 marks

Q. 49 X of Kolkata send certain goods at cost + 25%. Invoice value of goods sent was Rs. 2,00,000. 4/5th
of the goods were sold by consignee at Rs.1,76,000. Commission 2% upto invoice value and 10% of
any surplus above invoice value is payable. The amount of commission will be

1.
Rs.4,800

2.
Rs.5,200

3.
Rs.3,200

4.
Rs.1,600

1 marks

Q. 50 The sub-field of accounting is


0

1.
Book-keeping

2.
Financial accounting

3.
Management accounting

4.
All of the above

1 marks

Q. 51 When a stock is valued at cost in one accounting period and at a lower of cost or net realizable
value in another accounting period, this conflicts with the principle of

1.
Money measurement

2.
Consistency
3.
Conservatism

4.
Historical cost

1 marks

Q. 52 As per the Accounting Equation Approach, ''outstanding salary account'' is classified as

1.
Assets account

2.
Liabilities account

3.
Nominal account

4.
Personal account
1 marks

Q. 53 The maturity date of a bill amounting Rs. 1,000 drawn on 7 January 2009 for a period of 4 months is

1.
7 May 2009

2.
7 June 2009

3.
10 May 2009

4.
10 June 2009

1 marks

Q. 54 The profit/loss on sale of goods sent on consignment belongs to the

1.
Consignor
2.
Consignee

3.
Buyer

4.
Agent

1 marks

Q. 55 When debentures are to be redeemed at the end of specific period, ___________ is preferred for
calculating the amount of loss on debentures

1.
Fixed installment method

2.
Fluctuating installment method

3.
Both (1) or (2)
4.
None of the above.

1 marks

Q. 56 A Joint venture account reflects

1.
capital contributed by each co-venturers

2.
expenditure incurred

3.
profit or loss

4.
cash and bank balances

1 marks

Q. 57 On purchase of old machinery, expenditure of Rs. 1,000 was incurred for its repair. The repair
expenses of Rs. 1,000 will be debited to
0

1.
Repair account

2.
Machinery account

3.
Profit/ loss account

4.
Supplier account

1 marks

Q. 58 Under the Reserve Bank of India regulations, __________ cannot be made payable to the bearer

1.
Promissory note

2.
Bill of exchange
3.
Cheque

4.
None of the above.

1 marks

Q. 59 Depending on the method used for depreciation calculation

1.
there is a difference in the amount for annual depreciation charged.

2.
there is difference in the total amount of depreciation charged over the entire life of an asset

3.
both (1) and (2)

4.
None of above
1 marks

Q. 60 The books in which transactions or events are first recorded are called

1.
Principal books

2.
Subsidiary books

3.
Ledger

4.
Trial Balance

1 marks

Mercantile Law

Q. 61 An instrument where the last endorsement is in blank is

1. Order instrument
2.
Inland instrument

3.
Foreign instrument

4.
Bearer instrument

1 marks

Q. 62 Which of the following agreements are void?

1.
Agreements made under a mutual mistake of fact.

2.
Agreements the consideration of which is unlawful.

3. Agreements made without consideration


4.
All of the above

1 marks

Q. 63 As per section 29 of the Indian Partnership Act, 1932 a partner may transfer his interest in the firm
_______

1.
By sale

2.
By mortgage

3.
By charge

4.
All of the above

1 marks
Q. 64 A finder of goods is entitled to sell the goods only when the

1.
Lawful charges of the finder, in respect of goods found amounts to 2/3rd of its value.

2.
Owner cannot be found by reasonable diligence.

3.
Owner refuses to pay the lawful charges of the finder

4.
All of the above

1 marks

Q. 65 One of the essential elements of partnership is agreement _________

1.
which is enforceable
2.
which is legal

3.
between two or more persons

4.
the object of which is not prohibited by law

1 marks

Q. 66 A del-credere agent is

1.
A person who undertakes to act as a mediator for a contract.

2.
A person who undertakes to be liable to the principal for failure of the third party to perform a
contract

3.
A person who undertakes to act as a guarantor to a signatory of a contract

4. A person who is liable to the principal if the third party refuses to carry out the contract
1 marks

Q. 67 P consigned a quantity of butter through a railway company. Because of a strike, some delay took
place in transit and the railway company sold the butter. This is an agency created by

1.
Necessity

2.
Holding out

3.
Estoppel

4.
Ratification

1 marks

Q. 68 In case of breach of warranty


0

1.
The contract is void

2.
The aggrieved party can claim damages

3.
The aggrieved party can treat the contract as repudiated

4.
The contract is voidable at the option of the aggrieved party

1 marks

Q. 69 Relation of partners to one another is governed by the following sections of The Indian Partnership
Act, 1932

1.
1-8

2.
9-17
3.
18-27

4.
28-36

1 marks

Q. 70 Dissolution by agreement is

1.
Dissolution by the adjudication of all the partners or of all the partners but one as insolvent

2.
Dissolution as a result of any agreement between all the partners

3.
Dissolution by the business of the firm becoming unlawful

4.
All of the above
1 marks

Q. 71 A wager is
I. a contingent contract.
II. void by law.
III. that which includes accidental loss.
IV. payment of money for work

1.
Only I

2.
Only II

3.
I , II and III

4.
Only IV

1 marks

Q. 72 An offer comes to an end when

1. It is not accepted within the prescribed time.


2.
A counter offer is made

3.
It is not accepted according to the prescribed mode

4.
All of the above

1 marks

Q. 73 The phrase 'ex nudo pacto non oritur actio' means

1.
The acts of an agent, subject to certain conditions, are acts of the principal

2.
An agreement made without consideration is void

3. Ignorance of law is no excuse


4.
No action arises from a base cause

1 marks

Q. 74 In case of a sale, the risk of loss resulting from the insolvency of the buyer is borne by______

1.
The seller

2.
The buyer

3.
Both of the above

4.
General Insurance Company of India

1 marks
Q. 75 Registration of a partnership firm is_______

1.
Compulsory from the beginning

2.
Not compulsory till first five years of beginning of the partnership

3.
Not compulsory at all

4.
Compulsory only if the registrar of firms gives an order in this regard

1 marks

Q. 76 Compulsory dissolution includes

1.
Dissolution by the adjudication of all the partners or of all the partners but one as insolvent

2. Dissolution by the business of the firm becoming unlawful.


3.
Both (1) and (2)

4.
None of the above

1 marks

Q. 77 The right of a minor when admitted to the benefits of the partnership includes

1.
Right to share of the property and profits of the firm as may be agreed upon

2.
Right to have access to and inspect and copy any of the account of the firm

3.
Right to cast his vote on the question of appointment of managing partner

4. (1) and (2) but not (3)


1 marks

Q. 78 'Buyer' means a person who__________

1.
Buys goods

2.
Agrees to buy goods

3.
Has bought goods

4.
Buys or agrees to buy goods

1 marks

Q. 79 Agreement to share profits _________

0
1.
Implies an agreement to share losses

2.
Does not necessarily mean an agreement to share losses

3.
Must be coupled with an agreement to share losses

4.
Is same as agreement to share losses

1 marks

Q. 80 Actual sale of future goods is __________

1.
Impossible

2.
Possible through an agreement to sale

3. Illegal
4.
A myth

1 marks

Q. 81 Every __________ forming the consideration for each other is an agreement

1.
proposal

2.
offer

3.
promise

4.
acceptance

1 marks
Q. 82 Which of the following is correct?

1.
The liability of partners of a firm is unlimited.

2.
Generally the liability of a member of a company is limited but it can be unlimited

3.
Both (1) and (2)

4.
The liability of partner of a firm is same as any member of a company

1 marks

Q. 83 The heir of a deceased partner

1.
Has a right to become partner in the firm of the deceased partner.

2. Does not have a right to become partner in the firm of the deceased partner
3.
Can become a partner in the firm of a deceased partner only if the surviving partners give their
consent in this regard.

4.
Both (2) and (3)

1 marks

Q. 84 In case of agreement to sale, if the seller becomes insolvent while the goods are in his possession,
the buyer's remedy is

1.
to claim the goods from the official receiver or assignee.

2.
is to claim dividend from the estate of the seller for the price paid

3.
is not available

4. is to file a suit for damages


1 marks

Q. 85 'X' promises to pay 'Y' a sum of money if a certain ship does not return within a year. The contract
may be enforced if

1.
the ship does not return within the year

2.
the ship is burnt within the year

3.
either of the above

4.
none of the above.

1 marks

Q. 86 The original contract needs to be performed, if the parties to the contract agree for
0

1.
Novation

2.
Rescission

3.
Alteration

4.
None of the above

1 marks

Q. 87 A sold a piece of land to B. At the time of sale, both the parties believed in good faith that the area
was 200 sq. yards. It, however turned out to be only 175 sq. yards. The contract of sale is

1.
Valid

2.
Void
3.
Illegal

4.
Invalid

1 marks

Q. 88 Which of the following is not an essential feature of a wagering agreement?

1.
Uncertain agreement

2.
Parties should have control over the event

3.
Promise to pay money or money's worth

4.
Each party must stand to win or lose
1 marks

Q. 89 Which of the following is an exception to the rule that an agreement without consideration is void?

1.
Promise to pay a time barred debt

2.
Love & affection

3.
Agency

4.
All of the above

1 marks

Q. 90 Chandu orally offered to pay Ashok, an auto mechanic, Rs. 100 for testing a used car which Chandu
was about to purchase from Dharam. Ashok agreed and tested the car. Chandu paid Ashok Rs. 100
in cash for his services. The agreement between Chandu & Ashok is

1.
Implied, executed and valid
2.
Express, executed and valid

3.
Implied, executory and valid

4.
Express, executed and voidable

1 marks

Q. 91 Which of the following relationships does not raise the presumption of undue influence?

1.
Doctor & patient

2.
Debtor & creditor

3.
Landlord and tenant
4.
Both (2) and (3)

1 marks

Q. 92 In a contract induced by fraud, the defrauded party

1.
cannot rescind the contract.

2.
cannot rescind the contract but can sue for damages

3.
cannot sue for damages.

4.
can insist that he shall be put in a position in which he would have been if the representation
made had been true

1 marks

Q. 93 The court may grant rescission where


0

1.
the contract is voidable by the plaintiff

2.
the plaintiff has expressly or impliedly ratified the contract

3.
owing to change in circumstances (not being due to any act of the defendant himself), the parties
cannot restore to their original positions

4.
third parties have, during the subsistence of the contract, acquired rights in good faith and for
value.

1 marks

Q. 94 Identify the correct statement from the following

1.
A minor may appoint an agent through his guardian

2.
An agency without consideration is invalid
3.
A minor appointed as an agent is capable of creating a valid contract between the principal and a
third party

4.
Both (1) and (3)

1 marks

Q. 95 Which of the following is/are true?

1.
Consideration must be real

2.
Consideration can be inadequate.

3.
Consideration must be adequate

4.
Both (1) and (2)
1 marks

Q. 96 By which of the following cases a contract stands discharged by operation of law?

1.
By express consent

2.
By novation of terms of contract

3.
By unauthorized alteration of terms of contract

4.
By renunciation of obligations

1 marks

Q. 97 The appropriation must be made by _________

1.
The seller with the assent of the buyer
2.
The buyer with the assent of the seller

3.
The buyer or the seller with or without the assent of the other

4.
Both (1) & (2)

1 marks

Q. 98 When a party repudiates his promise or obligation under the contract before the time for
performance arrives, it is called

1.
Waiver

2.
Rescission

3.
Actual breach of contract
4.
Anticipatory breach of contract

1 marks

Q. 99 A had offered B, a price of Rs.10,00,000/- for B's flat. But B was not ready to sell the flat at all. A
says to B that ''I shall kill you if you don't agree to sell me your house for Rs.10, 00,000/-''. B
thereafter did all that was the desire of A in order to save his life. What is immediate answer?

1.
A can enforce the contract

2.
B can enforce the contract

3.
A has applied coercion

4.
The contract is unenforceable

1 marks

Q. 100 Partner by holding out is also known as _________


0

1.
Active Partner

2.
Dormant Partner

3.
Partner by estoppel

4.
Partner by stoppage

1 marks