CAT – Level – I Sample Question Paper

Paper – 2
Time Allowed: 2 Hrs Max Marks: 100

Que No. 1. Working for more than __________ hours in a week is called “overtime”

(A) 44 Hours

(B) 45 Hours

(C) 42 Hours

(D) 40 Hours

Que No. 2. The term “Take Home” salary means?

(A) Salary that the employee takes with him after depositing money with bank

(B) Salary after all deductions excluding income tax

(C) Salary after all deductions

(D) 90% of salary

Que No. 3. LIFO Stand for

(A) Last in Fast Out

(B) Last in first out

(C) Latest in Fast Out

(D) None of the above

Que No. 4. Maintenance of certain minimum quantity of materials in stock is the underlying principle
of :

(A) Base stock method

(B) Simple average method

(C) Highest In First Out (HIFO)

(D) Market Price Method

Que No. 5. Intent for material is prepared by

(A) Production department

(B) Sales department

(C) Material department

(D) Purchase department

Que No. 6. Wages for labourers are generally:

(A) Fixed

(B) Related with sales level

(C) Partly fixed and partly related with sales level

(D) Related with production level

Que No. 7. Salaries and Wages is an ______________ and it is debited to Profit & Loss Account.

(A) Capital Expenditure

(B) Direct Expenses

(C) Indirect Expenses

(D) None of the above

Que No. 8. Bonus refers to ____________ payment made voluntarily without any obligation:

(A) Award

(B) Ex-gratia

(C) Allowance

(D) None of the Above

Que No. 9. A machine was purchase on 1st October 2017 for Rs. 50,000 and Rs. 3,000 spend on
installation. Depreciation is at the rate of 10% and the company is using Straight Line Method for
charging depreciation. The books are closed on 31 march every year. What will be the written down
value of the machine as on 31 March 2019.

(A) Rs. 39,750

(B) Rs. 50,350

(C) Rs. 45,050

(D) Rs. 53,000

Que No. 10. Which of the following is not included in employee earning:

(A) Allowances

(B) Gratuity

(C) Overtime

(D) Bonus
Que No. 11. Impact on the Company books, when HIFO method of raw materials issue is applied:

(A) Shows higher profit

(B) Shows lower profit

(C) Shows same profit

(D) None of the above

Que No. 12. Consider following statements:

1) Sales allowance arises after the initial billing to the customer but before the payment is received
from the customer.

2) Sales Returns and Sales Allowances are same

(A) Only statement (2) is correct

(B) Only statement (1) is correct

(C) Both the statements are correct

(D) Both the statements are incorrect

Que No. 13. Components of pay roll are :

(A) Employee Earnings

(B) Deductions/withholdings from the employee earnings

(C) All of the above

(D) None of the Above

Que No. 14. Credit Note is prepared for:

(A) Return Inward

(B) Return Outward

(C) Carriage outward

(D) None of the Above

Que No. 15. Break- even point means:

(A) Break down of plant and machinery

(B) Point of Highest profit

(C) Point where assets are broken in even pieces

(D) Point of no profit and no loss

Que No. 16. In project financing, ROI stands for

(A) Regular office interactions

(B) Right of information

(C) Reason of inquiry

(D) Return on investment

Que No. 17. __________ is a statement prepared categorising the debtors outstanding for the
period:

(A) Cash Statement

(B) Ageing Analysis

(C) Working Capital Statement

(D) None of the above

Que No. 18. What is BOM under Stores Accounting:

(A) Bill of Maintenance

(B) Bill of Materials

(C) Board of Management

(D) Bin of Materials

Que No. 19. Which of the following is not a goal of Cash Management:

(A) Maximise the Risk of Insolvency

(B) Maximize the availability of cash for working capital

(C) Maintain level of a company's liquidity to ensure adequate profitability

(D) Reduce the period of operating cycle

Que No. 20. Accounting Standard 9 Covers:

(A) Construction Contracts

(B) Inventory Valuation

(C) Revenue Recognition

(D) Cash Flow Statement

Que No. 21. Which of the Following is Prepaid Expenses:

(A) Travelling Expenses Paid for Previous Year

(B) Printing & Stationery Expenses

(C) Telephone bill paid in advance for next financial year

(D) None of the above

Que No. 22. As per AS-2, Inventory Valuation can be done on the basis of:

(A) Higher of Cost or Market Value

(B) Lower of Cost or Market Value

(C) Book Value

(D) Market Value

Que No. 23. Which one of the following is not a characterstic of a Project:

(A) Indefinite Project Life

(B) A nominated project manager

(C) An approved project plan and budget

(D) Specified source of funding

Que No. 24. Production Planning Officer is considered as:

(A) Indirect Labour

(B) Direct Labour

(C) All of the above

(D) None of the above

Que No. 25. Which of the following is not a statutory report with regard to payroll process:

(A) EPF returns

(B) GST Returns

(C) ESI returns

(D) TDS returns

Que No. 26. It is the point at which if material in store reached, the order of further supply of
material must be placed:

(A) Minimum Stock Level

(B) Re-order Level

(C) Maximum Stock Level

(D) Average Stock Level

Que No. 27. Consider following statements:

1) Maximum Stock Level = Economic Order Quantity + Minimum Stock.

2) Re-order Level = Maximum Re-Order Period + Maximum usage.

(A) Only Statement (2) is Correct

(B) Both Statements are Incorrect

(C) Only statement (1) is correct

(D) Both Statements are Correct

Que No. 28. What is accumulated depreciation:

(A) Sum of all depreciation expenses of a Fixed Asset

(B) Depreciation Expenses

(C) Cost of depleation of Asset

(D) Future Value of Fixed Asset

Que No. 29. _________ is to be used for the reimbursment or purchase of item of an insignificant
nature and for minor expenditures:

(A) Online Transfer

(B) Letter of Credit

(C) Cash Credit Limit

(D) Petty Advance

Que No. 30. In Stores Accounting LTAS Stands for:

(A) Long Term Asset Stores

(B) Limited Time Asset Stores

(C) Latest Time Asset Stores

(D) Life Time Asset Stores

Que No. 31. Economic Order Quantity = 2AB/C, where "C" denote:

(A) Capative Consumption

(B) Consumable Cost

(C) Carrying Cost

(D) None of the Above

Que No. 32. The term ________ means "income"

(A) Revenue

(B) Money

(C) Bank Balance

(D) None of the Above

Que No. 33. Average Stock Level = Minimum stock level + ______________.

(A) ½ of reorder level

(B) Reorder Level

(C) ½ of reorder quantity

(D) Reorder Quantity

Que No. 34. Cash Account is a type of:

(A) Nominal Account

(B) Real Account

(C) Personal Account

(D) None of the above

Que No. 35. LNM Company decided to write off Rs. 20,000 as there is no reason to be realised that
amount and they are "Bad Debts". Journalize the transaction:

(A)

(B)

(C)

(D)

Que No. 36. Expand RTGS:

(A) Right Time Gross Settlement

(B) Real Time Gross Settlement

(C) Real Time Goods Settlement

(D) Real Time Gross Savings

Que No. 37. Goods worth Rs. 14,550 sold to kamal for cash. Under which subsidiary book, will you
record this transaction:

(A) Sales Book

(B) Cash Book

(C) General Ledger

(D) None of the above

Que No. 38. Calculate the Total Fixed Expenses with following figures.

Total Fixed Expenses = ?

Depreciation = Rs. 7,000

Preliminary Expenses Written off = Rs. 6,600

Sales (Per Unit) = Rs. 150

Variable Cost (Per Unit) = Rs. 30

Cash Break

(A) Rs. 48,000

(B) Rs. 60,000

(C) Rs. 41,400

(D) Rs. 55,000

Que No. 39. "It is a debt owed to the firm by customers arising from sale of goods or services in
ordinary course of business." It defines:

(A) Bank overdraft

(B) Cash credit

(C) Accounts payable

(D) Accounts receivable

Que No. 40. Consider following statements:

1) Accounts Receivables are the non-collectable balance of debtors, which are not due at the time of
closing of books

2) Prepaid expenses are the expenses paid in cash and recorded as expenditure in books.

(A) Only statement (2) is correct

(B) Only statement (1) is correct

(C) Both Statements are Incorrect

(D) Both Statements are correct

Que No. 41. Under __________ method, payment consists of two portions - one based on regular
time and other is linked to cost of living (eg. Dearness allowance and merit awards).

(A) Flat Time Rate

(B) Graduated Time Rate

(C) High Wages System

(D) None of the Above

Que No. 42. The term accrual denots, __________________

(A) "Something that becomes due"

(B) "Something that paid in advance"

(C) "Something which is not payable in future"

(D) "Something that payable after 1 year"

Que No. 43. What does HRA stands for in Payroll Accounting:

(A) House Rate Allowance

(B) Home Rent Allowance

(C) House Rent Assistance

(D) House Rent Allowance

Que No. 44. Which of the following is not an advantage of On-line transfer:

(A) To increase the working capital for business

(B) To reduce the operating cycle time in cash management

(C) To reduce the liquidity in the organisation

(D) To reduce the floats in cash management

Que No. 45. Which one of the following equation is correct:

(A) Asset + Debtors = Liabilities

(B) Asset + Creditors = Liabilities

(C) Asset- Owner’s Equity = Liabilities

(D) Asset - Debtors = Liabilities

Que No. 46. From the Information extracted from books of M/s Ram Sevak Traders, compute the
closing balance of debtors account: Debtors (Opening Balance) - Rs. 25,500 (Debit), Cash Sales - Rs.
71,000, Credit Sales - Rs. 94,750, Cash Received - Rs. 76,000, Bad debts - Rs. 3,000, Return Inwards -
Rs. 6,750.

(A) Rs. 1,05,500 (Debit)

(B) Rs. 34,500 (Debit)

(C) Rs. 37,500 (Debit)

(D) Rs. 44,250 (Debit)

Que No. 47. As per the Companies Act, 2013 , the rate of depreciation to be charged on the assets of
the company are provided in:

(A) Schedule III

(B) Schedule II

(C) Schedule V

(D) Schedule IV

Que No. 48. What is COD:

(A) Credit on Delivery

(B) Customer on Debt

(C) Cash on Delivery

(D) None of the Above

Que No. 49. Sales day book includes

(A) Cash sales

(B) Asset sales

(C) Credit sales

(D) All of the above

Que No. 50. Which of the following is not an intangible asset:

(A) Computer equipment

(B) Trade mark

(C) Patent

(D) Goodwill

Que No. 51. _______ is the main decision making body, which is formed to finalized the design of
Goods & Service Tax.

(A) GST Committee

(B) GST Council

(C) GST Convention

(D) GST Authority

Que No. 52. Expand CDF:

(A) Cash Declaration Form

(B) Currency Declaration Form

(C) Customs Declaration Form

(D) Carrier Declaration Form

Que No. 53. GST is ______ based tax on consumption of goods and services:

(A) Destination

(B) Development

(C) Destiny

(D) Dividend
Que No. 54. Territorial Waters of India extend up to _______ inside sea from baseline of the Indian
Coast.

(A) 12 nautical miles

(B) 5 nautical miles

(C) 22 nautical miles

(D) 10 nautical miles

Que No. 55. The Companies Act makes it _________ to write off depreciation on fixed assets before
declaring dividend.

(A) Optional

(B) Mandatory

(C) Recommendatory

(D) None of the above

Que No. 56. Which of the following tax will not subsumed within the GST:

(A) CST

(B) State VAT

(C) Tax on Alcohol for Human Consumption

(D) Central Excise Duty

Que No. 57. Which of the following taxes will be levied on Imports of Goods and Services:

(A) Exempt

(B) SGST

(C) CGST

(D) IGST

Que No. 58. Which of the following is an Intrastate Supply under GST:

(A) Supplier of Goods at Lucknow and place of supply is at Ghaziabad

(B) Supplier of Goods Located in Rohtak (Haryana) and Place of Supply in Delhi

(C) Supplier of Goods Located in Nagpur and Place of Supply in Chennai

(D) All of the above

Que No. 59. Which of the following statement is false:

(A) Input Tax Credit of IGST can be adjusted against CGST & SGST

(B) Input Tax credit of CGST can be adjusted against IGST

(C) Input Tax Credit of SGST can not be adjusted against CGST

(D) Input tax Credit of CGST can be adjusted against SGST

Que No. 60. In India GST is effective from:

(A) 1st April 2016

(B) 1st April 2017

(C) 1st Sept. 2017

(D) 1st July 2017

Que No. 61. Shipping Bill for export of duty free goods are in colour of:

(A) Pink

(B) White

(C) Yellow

(D) Blue

Que No. 62. What is meant by Coastal goods:

(A) Goods imported from other Countries

(B) Goods exported from Indian Coast

(C) Goods sent from one port to another within India

(D) None of the Above

Que No. 63. TDS is not deducted on Lottery Income up to:

(A) Rs. 25,000

(B) Rs. 20,000

(C) Rs. 10,000

(D) Rs. 15,000

Que No. 64. Which of the following document is not required to be submitted by the importer to the
customs authorities:

(A) Invoice

(B) MRN

(C) Packing list

(D) Bill of lading

Que No. 65. Supply of goods from one state to another state will leavy:

(A) CGST

(B) IGST

(C) SGST

(D) All of the Above

Que No. 66. “Dumping” under the Customs Act means?

(A) Destroying excess goods imported or exported

(B) Dispose of excess stock of goods at very low price

(C) Good imported or exported without paying custom duty

(D) None of the above

Que No. 67. TDS Provisions will apply if aggregate sum of rent paid exceeds:

(A) Rs. 180,000

(B) Rs. 120,000

(C) Rs. 144,000

(D) Rs. 168,000

Que No. 68. ________________ will display the total amount deposited by the tax payer towards
discharge of his tax liability or late fee or penalty and other amounts.

(A) Electronic Cash Ledger

(B) Electronic Credit Ledger

(C) Electronic Liability Ledger

(D) Input Credit Ledger

Que No. 69. Expand MAT:

(A) Maximum Advance Tax

(B) Maximum Alternate Tax

(C) Municiple Authority Tax

(D) Minimum Alternate Tax

Que No. 70. Which of the following statement is false with reference to Input Tax Credit:

(A) SGST Input Tax Credit can't be used to adjust Output CGST

(B) CGST Input Tax Credig first utilized towards the payment of output CGST

(C) CGST Input Tax Credit can be used to adjust Output SGST

(D) All of the above

Que No. 71. Margin of Dumping means the difference between ________ and _________:

(A) Normal value, Export price

(B) Import price, Export price

(C) Assessable Value, Import Price

(D) Assessable Value, Export Price

Que No. 72. Cost of acquisition of Bonus shares will be treated as:

(A) NIL

(B) Market Value of Shares

(C) Nominal Value

(D) None of the above

Que No. 73. What is the due date of first installment of Advance Tax:

(A) 15th July of Previous Year

(B) 15th June of Previous Year

(C) 15th September of Previous Year

(D) 15th May of Previous Year

Que No. 74. What is rate of Income Tax with the amendment in section 115JC by the Finance Act
2012 for SEZ:

(A) 18.5%.

(B) 20%.

(C) 30%.

(D) 15%.

Que No. 75. What is the maximum rate prescribed under Goods & Service Tax

(A) 5%.

(B) 18%.

(C) 28%.

(D) 20%.

Que No. 76. Expand CBDT:

(A) Central Board of Direct Taxation

(B) Central Bureau of Direct Tax

(C) Central Board of Dividend Transaction

(D) Central Board of Direct Transaction

Que No. 77. Application for refund of custom duty must be made in:

(A) Triplicate

(B) Duplicate

(C) Quadruplicate

(D) None of the Above

Que No. 78. Every taxable person register as Input Service Distributor is required to furnish credit
distributed on form:

(A) GSTR 4

(B) GSTR 1

(C) GSTR 5A

(D) GSTR 6
Que No. 79. How much Income is exempt from tax for Individual and HUF (Except Sr. Citizen) for the
Assessment Year 2017-18:

(A) Rs. 2,50,000

(B) Rs. 2,00,000

(C) Rs. 2,40,000

(D) Rs. 3,00,000

Que No. 80. Who is the chairman of GST Council:

(A) Finance Secretary

(B) Union Finance Minister

(C) Prime Minister

(D) RBI Governer

Que No. 81. The base year for cost of inflation index for the earlier Financial Year 1981-82 changed
to Financial Year __________:

(A) 2010-11

(B) 2000-01

(C) 2001-02

(D) 1991-92

Que No. 82. Under which of the Entry No. “Custom Duty” is dealt with in Constitution:

(A) Entry No. 83

(B) Entry No. 82

(C) Entry No. 84

(D) Entry No. 85

Que No. 83. A lady passanger residing in abroad for more than 1 year, on return to India, how much
value of jewellery allowed to her for duty free clearance:

(A) 40 Grams with a Value cap of Rs. 1,00,000

(B) 20 Grams with a value cap of Rs. 50,000

(C) 50 grams with a value cap of Rs. 1,40,000

(D) No Exemption
Que No. 84. What are the taxes levied on Intra State Supply:

(A) IGST & SGST

(B) SGST

(C) CGST

(D) CGST & SGST

Que No. 85. If the population of city exceeds 25 Lakhs, in that case, value of perquisite for rent free
unfurnished accomodation for Private Sector employees are:

(A) 15% of Salary

(B) 25% of Salary

(C) 7.5% of Salary

(D) 10% of Salary

Que No. 86. Who is liable to file form GSTR 7 Return:

(A) E Commerce Operator

(B) Composition Supplier

(C) Tax Deductor

(D) None of the Above

Que No. 87. Electronic Credit Ledger shall be maintained in form:

(A) GST PMT 02

(B) GST PMT 05

(C) GST PMT 06

(D) GST PMT 04

Que No. 88. GST Model has _______ rate structures:

(A) 2

(B) 3

(C) 4

(D) 5
Que No. 89. A person who is liable to pay tax under section 50(1) and fails to pay the tax or a part
thereof to the Government with in the prescribed period shall pay interest at the rate of:

(A) 18%.

(B) 24%.

(C) 6%.

(D) 12%.

Que No. 90. A registered person may not issue a tax invoice if the value of goods/service is lass that
______:

(A) Rs. 500

(B) Rs. 1000

(C) Rs. 5000

(D) Rs. 200

Que No. 91. Standard deduction from annual value under Income from House property is:

(A) 30%.

(B) 20%.

(C) 25%.

(D) 15%.

Que No. 92. What is rate of depreciation on Residential Building under Income Tax Act:

(A) 5%.

(B) 10%.

(C) 15%.

(D) 20%.

Que No. 93. Any area in which imported goods or export are ordinarily kept before clearance by
Custom Authorities is called:

(A) Custom Destination

(B) Custom Station

(C) Custom Area

(D) None of the Above

Que No. 94. Expand SEZ:

(A) Service Entry Zone

(B) Special Excisable Zone

(C) Special Economic Zone

(D) Special Exempted Zone

Que No. 95. Which of the following taxes is not levied by the State Government:

(A) Entertainment Tax

(B) VAT

(C) Professional Tax

(D) None of the Above

Que No. 96. Section 80C provides for deduction in respect of tution fee up to ________ children.

(A) Three

(B) Two

(C) Four

(D) One

Que No. 97. What is the rate of custom duty on baggage except education cess:

(A) 30%.

(B) 25%.

(C) 35%.

(D) 15%.

Que No. 98. What will be the tax rate of a Co-operative society if Net Income is Rs. 9,215:

(A) 10%.

(B) NIL

(C) 20%.

(D) 5%.

Que No. 99. Expand TAN:

(A) Tax Deduction Account Number

(B) Tax Account Number

(C) TDS Account Number

(D) None of the Above

Que No. 100. What is the rate of Income Tax for Local Authorities:

(A) 5%.

(B) 20%.

(C) 22%.

(D) 30%.

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 Answer Key

Que No. Answer Que No. Answer Que No. Answer Que No. Answer Que No. Answer

1 D 21 C 41 B 61 A 81 C

2 C 22 B 42 A 62 C 82 A

3 B 23 A 43 D 63 C 83 A

4 A 24 A 44 C 64 B 84 D

5 A 25 B 45 C 65 B 85 A

6 D 26 B 46 B 66 B 86 C

7 C 27 C 47 B 67 A 87 A

8 B 28 A 48 C 68 A 88 C

9 C 29 D 49 C 69 D 89 A

10 B 30 B 50 A 70 C 90 D

11 B 31 C 51 B 71 A 91 A

12 B 32 A 52 B 72 A 92 A

13 C 33 C 53 A 73 B 93 C

14 A 34 B 54 A 74 A 94 C

15 D 35 A 55 B 75 C 95 D

16 D 36 B 56 C 76 A 96 B

17 B 37 B 57 D 77 B 97 C

18 B 38 D 58 A 78 D 98 A

19 A 39 D 59 D 79 A 99 A

20 C 40 B 60 D 80 B 100 D