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Vidya Sagar Institute

K-50, Bhawna Tower, Income Tax Colony, Tonk Road,
Near Durga Pura, Bus Stand, Jaipur - 302018
Mobile :- 93514-68666 Ph. :- 7821821250, 7821821251, 7821821252,
7821821253, 7821821254. web : www.vsijaipur.com
 VIDYA SAGAR
CAREER INSTITUTE LIMITED
CPT Minor Test – 2 (Part – A)
Instruction:
1. Use HB Pencil to fill ovals for correct answer. Maximum Marks: 100
2. Each question carry one mark. Time : 2 Hours
3. Negative marking .25 marks for each wrong answer. Date : 15.5.2019
4. No negative marking for unattempted questions.
__________________________________________________________________________________
__
01. While finalizing the current year's profit, the company realized that there was an error in the
valuation of closing stock of the previous year. In the previous year, closing stock was valued more by
Rs.50,000. As a result
(a) Previous year's profit is overstated and current year's profit is also overstated
(b) Previous year's profit is understated and current year's profit is overstated
(c) Previous year's profit is understated and current year's profit is also understated
(d) Previous year's profit is overstated and current year's profit is understated

02. The following data has been provided by Omega Ltd.:

Item No. Units Cost per unit Realization value per unit
1 2 10 11
2 10 5 4
3 2 2 2
The value of Inventories on item by item basis will be
(a) Rs. 40. (b) Rs.64.
(c) Rs.66. (d) Rs.60.

03. In conditions of inflation, which method will lead to the lowest value of stock?
(a) FIFO (b) LIFO
(c) Average price method (d) Weighted average pricing method.

04. Physical Inventories system is also Know as :

(a) Perpetual Inventories System (b) Periodic Inventories System
(c) Inventories record System (d) None

05. Stock on 15th March 2008 is Rs. 50,000. Purchases made in 2nd week is Rs. 32,000 and sale is 12,000
Gross Profit on Sales is 25%. Closing stock as on 31st March, 2008 will be:
(a) Rs 75,000 (b) Rs. 73,000
(c) Rs. 60,000 (d) Rs. 50,000

06. The books of T Ltd. revealed the following information:

Particular Rs.
Opening inventory 6,00,000
Purchases during the year 2010-2011 34,00,000
Sales during the year 2010-2011 48,00,000
On March 31, 2011, the value of inventory as per physical stock-taking was Rs. 3,25,000. The
company's gross profit on sales has remained constant at 25%. The management of the company
suspects that some inventory might have been pilfered by a new employee. What is the estimated
cost of missing inventory?
 (a) Rs. 75,000 (b) Rs. 25,000
(c) Rs. 1,00,000 (d) Rs. 1,50,000
07. Mr. A started a business on 1st January 2009 with Rs. 5,00,000. During the year he bought goods
worth Rs. 1,00,000 on credit and sold 80% of the same goods at profit of 20% on cost. At the end of
the year 2009, the amount of opening stock to be shown in the trial balance of Mr. A will be:
(a) Rs. 20,000 (b) Rs. 24,000
(c) Rs. 1,00,000 (d) Nil

08. X sells goods at Cost plus 60%. Total sales were Rs. 16,000. cost price of the goods will be:
(a) Rs. 12,000 (b) 10,000
(c) Rs. 13,000 (d) None of the three

09. Rent paid on 1 October, 2008 for the year to 30 September, 2009 was Rs. 1,200 and rent paid on 1
October, 2009 for the year to 30 September, 2010 was Rs. 1,600. Rent payable, as shown in the profit
and loss account for the year ended 31 December 2009, would be:
(a) Rs. 1,200. (b) Rs. 1,600.
(c) Rs. 1,300. (d) Rs. 1,500.

10. Capital on April 1, 2009 Rs. 20,000

Capital on April 1, 2010 Rs. 25,000
Drawings during the year Rs. 5,000
Additional capital introduced Rs. 6,000
during the year
Net Profit of the year will be:
(a) Rs. 6,000 (b) Rs. 5,000
(c) Rs. 4,000 (d) Rs. 3,000

11. Goods destroyed by fire Rs. 50,000 and Insurance company admitted 60% claim. This adjustment will
be entered in:
(a) Trading Account (b) Profit & Loss Account
(c) Balance Sheet (d) All the three

12. A started business on Jan 1 with a capital of Rs. 40,000. On 31st Dec, his position was Creditors Rs.
4,700, machinery Rs. 40,000, furniture Rs. 2,000, Debtors Rs. 1,300, Cash Rs. 15,000.
He made drawings @ Rs. 200 per month and Rs. 1,000 which he brought on 1st Oct. in the business as
further capital. Business profit will be
(a) Rs. 15,000 (b) Rs. 16,000
(c) Rs. 14,000 (d) Rs. 17,000

13. What will be the treatment of “accrued income” if appearing in the Trial Balance:
(a) It will be shown on the assets side as current assets in the balance sheet
(b) It will be shown on the liability side as current liability in the balance sheet.
(c) It will be shown on the debit side of trading account as an expenses.
(d) it will be shown on the credit side of profit and loss account as an income.

14. Total Debtors on 31.12.2009 were Rs. 48,000 before writing off bad debts but after allowing discounts.
During the year bad debts amounted to Rs. 2,000 and discount allowed were Rs. 100. It is the firm's
policy to maintain a provision of 5% against bad and doubtful debts. Find out the amount of provision
for Bad and Doubtful debts as on 31.12.2009:
(a) Rs. 2400 (b) Rs. 2305
(c) Rs. 2300 (d) Rs. 2000

15. Opening balance of debtors is Rs. 35,000 Cash Received from Debtors is Rs. 30,000 Cash sales is Rs.
20,000 which is 20% of total sales. B/R Received for Rs. 40,000 and discount allowed is 1% of cash
collection. Find the closing debtors:
 (a) Rs. 15,300 (b) Rs. 44,700
(c) Rs. 64,700 (d) Rs. 35,700

16. Opening Capital = Rs. 5,00,000

Profits during the year = Rs. 1,00,000
Calculate the Average Capital of the year :
(a) Rs. 5,50,000 (b) Rs. 3,00,000
(c) Rs. 9,167 (d) Rs. 50,000

17. A manager gets 5% commission on net profit after charging such commission. If gross profit is Rs.
48,000 and expenses of indirect nature other than manager's commission are Rs. 6,000. Commission
amount will be:
(a) Rs. 2100 (b) Rs. 2000
(c) Rs. 2200 (d) Rs. 2400

18. Opening Stock = 1,00,000 ` , Closing stock = 10,000 ` Profit = 25% on sale, Calculate amount of Profit:
(a) ` 25,000 (b) ` 30,000
(c) ` 27,500 (d) ` 22,500

19 Net Profit = 1,00,000 `, Carriage-inward = 10,000 `, Carriage outward = 5,000 `, Calculate gross Profit
amount:
(a) ` 85,000 (b) ` 1,05,000
(c) ` 1,10,000 (d) ` 1,15,000

20 Average Capital 12000, Closing Capital is less then 3,000 ` as compare to opening capital, Calculate
opening capital:
(a) ` 9,000 (b) ` 13,500
(c) ` 10,500 (d) None of these

21. From the following information calculate the Historical Cost of inventories, Using adjusted selling Price
Method:
Sale during the year ` 2,00,000
Cost of Purchase ` 2,00,000
Opening Stock Nil
Closing Stock at Selling Price ` 50,000
(a) ` 50,000 (b) ` 10,000
(c) ` 40,000 (d) None of these

22. In perpetual inventory system loss of goods included in:

(a) Cost of Goods sold (b) Closing stock
(c) Sale (d) None of these

23. Calculate the cost of goods sold from the following:

Sales = ` 1,00,000 , Rate of Gross Loss on cost of goods sold is 20%
(a) ` 80,000 (b) ` 1,20,000
(c) ` 1,00,000 (d) ` 1,25,000

24. Cash credit and prepayment are respectively:

(a) Current assets & current liability (b) Current liability & current assets
(c) Short term loan & current assets (d) Long term loan & current assets

25. The opening stock is overstated by Rs. 10,000 and closing stock is understated by Rs. 15,000. The
impact of these on net profit for the current year is:
(a) Rs. 5000 overstated (b) Rs. 25000 overstated
(c) Rs. 25000 understated (d) Rs. 5000 understated
26. M/s Delhi Stationers purchase goods from the manufacturers, do packaging and labelling and sell to
their customers. At the year-end they had 1,000 pieces of toilet soaps in hand, purchase price of which
is Rs.3.25 per piece. These are not yet packed and labelled. The packaging cost per unit is Re. 0.35 per
piece and selling price is Rs. 4.25 per piece. The historical cost and selling price of the closing stock will
be:
(a) Rs. 3,250 and Rs.3,900 respectively. (b) Rs. 3,600 and Rs. 4,250 respectively.
(c) Rs. 3,250 and Rs. 4,250 respectively. (d) Rs. 3,600 and Rs.3,900 respectively.

27. Goods in Transit but not taken in Closing Stock will be credited to:
(a) Purchase A/c or Trading a/c (b) Supplier A/c
(c) Goods in Transit a/c (d) Cash A/c

28. Mr Prakash sells goods at 25% on sales. His sales were Rs.10,20,000 during the year. However, he sold
damaged goods for Rs.20,000 costing Rs.30,000. This sale is included in Rs.10,20,000. The amount of
gross profit is:
(a) Rs. 1,90,000 (b) Rs.2,50,000
(c) Rs. 2,40,000 (d) Rs.2,00,000.

29. Following figures have been taken from the trial balance of a trader
Cost of goods sold Rs. 30,000
Sales Rs. 40,000
Closing Stock Rs. 5,000
The amount of profit will be
(a) Rs. 10,000 (b) Rs. 15,000
(c) Rs. 12,000 (d) None of the above

30. Trading Account is a:

(a) Personal Account (b) Real Account
(c) Nominal account (d) None of these

31. Following are the extracts from the Trial Balance of a firm as at 31st March, 2010:
Name of Account Debit Balance Credit Balance
Rs. Rs.
Salaries 16,000
P.F. deducted from salaries 1,000
Provide for employer's share of P.F. equivalent to employee's share to P.F. The amount at which
salaries expense will be shown in the Profit and Loss A/c is
(a) Rs.15,000 (b) Rs.17,000
(c) Rs.16,000 (d) None of the above.

32. Find out the corrected net profit;

Profit before taking into account following adjustments was Rs.7,00,000
Rs. 1,00,000 spent on purchase of motor car for business purpose, treated as expense in P & L A/c.
Rs. 15,000 p.m. rent outstanding for the month of February and March not taken into account:
(a) Rs. 7,70,000 (b) Rs. 7,85,000
(c) Rs. 6,15,000 (d) Rs. 6,30,000

33. Prepaid Rent is shown as:

(a) Current asset (b) Current Liability
(c) Fixed asset (d) Income

34. _________Reserve is not shown in Balance Sheet:

(a) General (b) Capital
(c) Secret (d) None of the three
35. Which of the following are fixed assets:
(a) Closing Inventory (b) Fixed deposits in Bank (for 3 years)
(c) Prepaid Expenses (d) Patents

36. Only personal and Real accounts are shown in:

(a) Trial balance (b) Balance Sheet
(c) Trading A/c (d) Profit & Loss A/c

37. If profit is 25% on cost price then the profit on sale price will be:
(a) 20% (b) 30%
(c) 33.33% (d) 40%

38. A Club paid subscription fees of Rs. 1,800 out of which Rs. 400 is prepaid. In such case:
(a) P & L A/c is debited with Rs. 1,400 (b) Rs. 400 is shown as current assets
(c) Both (a) and (b) (d) None of the above.

39. Capital is the difference between:

(a) Income and expenses (b) Sales and Cost of goods sold
(c) Assets and liabilities (d) None of the above

40. The provision for discount on debtors is calculated on debtors:

(a) Before deducting the provision for doubtful debts
(b) After deducting the provision for doubtful debts
(c) Before deducting the actual bad debts and the provision
(d) After adding the actual bad-debts.

41. Sales Tax will be debited to Profit & Loss A/c:

(a) To the extent recovered from customers
(b) To the extent not recovered from customers
(c) Both recovered and not recovered from customers
(d) To the extent paid to sales tax department

42. Opening Capital Rs. 30,000, Closing Capital Rs. 15,000, Loss during the year Rs. 8,000, Drawings Rs.
7,000, Additional Capital introduced will be:
(a) Nil (b) Rs. 8,000
(c) Rs. 16,000 (d) Rs. 23,000

43. Manufacturing account is prepared to:

(a) ascertain the profit or loss on the goods produced
(b) ascertain the cost of the manufactured goods
(c) show the sale proceeds from the goods produced during the year
(d) both (b) and (c)

44. What are the consequences of undervaluation of closing stock:

(a) Under reporting of profit (b) Creation of hidden reserves
(c) Reduction of tax liability (d) All the these

45. When closing Inventories will be overstated it will result in:

(a) Net income for the period to be overstated (b) Cost of goods sold to be understated
(c) Both (a) and (b) (d) None of these

46. Which method matches current cost with current revenue:

(a) LIFO (b) FIFO
(c) Weighted Average Method (d) Simple Average Method
47. “Inventories should be out of godown in the sequence in which they arrive” is based on:
(a) HIFO. (b) LIFO.
(c) FIFO. (b) Weighted average.

48. Financial position of the business is ascertained on the basis of:

(a) Profit and Loss account (b) Trial balance
(c) Balance Sheet (d) None of the above

49. If purchase account is not credited in case of goods lost in transit then which account can be credited:
(a) Goods Lost in Transit Account (b) Purchase Return Account
(c) Trading Account (d) Sales Account

50. Salaries paid in cash Rs. 2,00,000. It includes previous year's outstanding Rs. 10,000 and salary paid in
advance for the next year RS. 20,000. Salary outstanding for the year is Rs. 15,000. Salary of ______
shall be debited in the profit and loss account:
(a) Rs. 2,25,000 (b) Rs. 1,85,000
(c) Rs. 2,05,000 (d) Rs. 1,75,000

51. Income tax in case of sole trader is treated as___________:

(a) Business expense (b) Personal expense
(c) Debtors expense (d) None of the three

52. Under-statement of closing work in progress in the period will:

(a) Understate cost of goods manufactured in that period.
(b) Overstate current assets.
(c) Overstate gross profit from sales in that period.
(d) Understate net income in that period

53. The following ledger posting in the debtors Account specify:

(a) Trade Discount (i) is allowed for payment before a certain date
(b) Cash Discount (ii) is allowed when a customer’s purchases
during
a period total up to a certain figure.
(c) Bad Debts (iii) allowed when the order of goods is not below
a certain figure.
(d) Rebate (iv) is debited when all hope of recovery is lost.
A B C D
(a) ii iii iv i
(b) iii iv i ii
(c) iii i ii iv
(d) iii i iv ii

54. From the given data find out the historical cost of inventories using adjusted selling price method:
Goods received from Suppliers : ` 15,75,500
(Subject to trade discount and taxes)
Trade discount is 3% and Sales tax is 11%
Packaging and transportation charges : ` 87,500
Sales during the year : ` 22,45,500
Sales price of closing inventories : ` 2,35,000
(a) ` 4,61,659 (b) ` 1,68,988
(c) ` 6,96,659 (d) ` 2,35,000
55. Assets held for resale is known as:
(a) Fixed Assets. (b) Current Assets
(c) Fictitious Assets (d) All of these

56. What will be the treatment of duty drawback:

(a) Deducted from Sales (b) Deducted from Purchase
(c) Add in Sales (d) Add in Purchase

57. Goods withdrawn by owner for personal purpose will have effect on capital, Gross Profit and Net
Profit will be:
(a) Reduce, Reduce, Reduce (b) Increase, Reduce, Unchanged
(c) Reduce, Unchanged, Unchanged (d) Unchanged, Unchanged, Unchanged

58. Payment made for salary during the year : Rs 15000

O/S salary at the end of year : Rs. 4000
Prepaid Salary at the beginning : Rs. 2000
Amount to be debited in Profit & Loss Account will be:
(a) Rs. 15,000 (b) Rs. 17,000
(c) Rs. 21,000 (d) Rs. 19,000

59. Gross profit Rs. 20,000, Carriage Inward Rs. 2,000 was wrongly credited to Trading Account. Wages &
Salary Rs. 4,000, Carriage outward – 2,000, Personal Expenses Rs. 5,000, Interest (Cr.) Rs. 1,000,
Discount allowed Rs. 500, Net Profit will be:
(a) Rs. 11,500 (b) Rs. 18,500
(c) Rs. 22,500 (d) Rs. 14,500

60. When inventory are not ordinarily interchangeable, then which method will be suitable for valuation
of inventory :-
(a) FIFO (b) LIFO
(c) Adjusted Selling Price Method (d) Specific Identification Method

61. A contract can be discharged by performance in the ways of___________.

(a) Offer to perform (b) Actual performance
(c) (a)or(b) (d) (a) and (b)

62. Performance of contract means the performance of respective obligations under the contract by
(a) Promisee only (b) Promisor only
(c) Both the promisor and the promisee (d) Court of law

63. A and B contracted that A shall build a house for B at a fixed price. Here:
(a) A's promise to build house must be performed before payment
(b) B's promise to pay must be performed before construction of house
(c) If A do not build house before payment by B, B can avoid the contract
(d) Both (a) and (c)

64. When a promisor is declared insolvent, he is.....all his liabilities incurred prior to his adjudication.
(a) Penalized for (b) Responsible for
(c) Discharged from (d) Rendered helples for

65. In case the promisor dies before the performance of the contract, then which of the following
statements is correct?
(a) The contract comes to an end if it involves the personal skill of the promisor or is founded on
personal consideration
 (b) His legal representatives become liable to perform the contract if the contract does not involve
any personal skill of the promisor
(c) Both (a) and (b)
(d) None of these

66. Assignment of contract may be done by

(a) Operation of law (b) The act of parties
(c) (a) or (b) (d) None of the above

67. On the death of the party to the contract, both benefit and burden attaching to a
contract..........devolve on legal heir
(a) Always (b) Sometimes
(c) Never (d) None of these

68. Offer of performance must be made at a proper place and time under such a circumstance a person by
whom it is made is
(a) Able and willing there
(b) Able to do the whole of which he is bound to do
(c) Able and willing to do the whole or part of which he is willing to do
(d) (a) and (b) both

69. In case of default by joint promisors, the promisee.

(a) Cannot sue any single promisor
(b) Can sue any one of them to the extent of his share in the joint promise
(c) Can sue any one of them for the entire promise
(d) Both (a) and (b)

70. The right of joint promisees to demand performance is

(a) Joint (b) Several
(c) Joint or several (d) Joint and several

71. Where the contingency of event merely indicates the mode or manner of performance, the contract is
not
(a) Valid (b) Void
(c) Contingent (d) Lawful

72. A contract may consist of:

(a) An act and a promise (b) Two promises
(c) Either (a) or (b) (d) Both (a) and (b)

73. If the performance beyond the stipulated time is accepted, and the promisee demands compensation
of the delay:
(a) Promisee must give the notice of his intention to claim compensation at the time of acceptance of
performance
(b) No notice is required to be given to promisor
(c) Performance beyond stipulated time itself raises the cause of action to demand compensation
(d) Promisor does not waive the right to claim compensation if he does not give notice for it

74. Contracts in which time is not essential:

(a) Cannot be avoided by other party in any case
(b) It must be performed within reasonable time otherwise it become voidable at the option of
promisee
(c) No compensation can be claimed by aggrieved party
(d) All of these
75. Commercial impossibility does not make the contract:
(a) Valid (b) Void
(c) voidable (d) Illegal

76. What is the limitation period for enforcing the right by the aggrieved party in case of a simple
contract:
(a) 3 years (b) 3 months
(c) 6 years (d) 6 months

77. Where a debtor owing several distinct debts to one person makes a payment to him and neither party
makes any appropriation, the payment shall be applied in discharge of the debts:
(a) Proportionately (b) In order of time
(c) In order to time excluding time-barred debts (d) In order of time including time-barred debts

78. In case of..........only the old contract is cancelled and no new contract comes to exist in its place:
(a) Novation (b) Rescission
(c) Alteration (d) Accord and satisfaction

79. Match the following:

(i) Novation (a) When all or some of the terms of the contract
are cancelled.
(ii) Rescission (b) When all or some of the terms of the contract
are modified by mutual consent of parties
(iii) Alteration (c) Acceptance of a lesser fulfillment of the
promise made
(iv) Remission (d) New contract substituted for an existing one
between same parties
i ii iii iv
(a) a b d c
(b) d a b c
(c) d c b a
(d) b a d c

80. A promisee may accept any satisfaction he think fit is called:

(a) Novation (b) Rescission
(c) Remission (d) Accord and satisfaction

81. In case of_____________,the term of contract may be altered by mutual consent, but the parties to
the contract will remain the same
(a) Novation (b) Remission
(c) Rescission (d) Alteration

82. Anticipatory breach of contract may be

(a) Express (b) Implied
(c) (a) or (b) (d) (a) and (b) both

83. Damages represent:

(a) Financial compensation (b) Non-financial compensation
(c) Both (a) & (b) (d) None of the above

84. The duty to mitigate or minimse the loss consequent upon the breach of contract is that of:
(a) The promisor (b) The promisee
(c) Both the promisor and the promisee (d) The promisor or the promisee
85. Remote or indirect damages are not due to natural and probable consequence of the breach. These
are:
(a) Illegal (b) Not recoverable
(c) Recoverable (d) Both (b) and (c)

86. Where a party to a contract breaches the contract the other party can claim:
(a) Ordinary damages (b) Special damages
(c) Either (a) or (b) (d) Both (a) and (b)

87. An injunction is granted by the Court to enforce:

(a) The positive terms of a contract (b) The negative terms of a contract
(c) (a) or (b) above (d) None of the above

88. In which of the following cases, specific performance can be allowed:

(a) Contract to sing a song (b) Contract to enter into partnership at will
(c) Contract to paint a picture (d) None of these

89. Quantum meruit can be claimed where:

(a) Work has been done and accepted under a contract which is subsequently discovered void
(b) A person does some act for another with the intention to receive payment and other person
accepts such services
(c) Contract is dividible and party performs part of contract, party in default may sue if other party
enjoys the benefit
(d) All of these

90. If time is the essence of a contract and the promisor fails to perform the contract by the specified
time, the contract:
(a) Remains Valid (b) Becomes Void
(c) Becomes Unenforceable (d) Becomes Voidable at the instance of the
promisee

91. When after the formation of a valid contract, an event happens which makes the performance of
contract impossible, and then the contract becomes ___________:
(a) Void (b) Voidable
(c) Valid (d) Illegal

92. A contract dependent on the happening or non-happening of future uncertain event, is a __________:
(a) Uncertain contract. (b) Contingent contract.
(c) Void contract. (d) Voidable contract.

93. A quasi contract is ..............:

(a) A contract (b) A contingent contract
(c) An agreement (d) A legal obligation

94. B agree to pay A a sum of money if C marries A, C married D. The marriage of A to C is now considered:
(a) Impossible (b) Possible as D may die and after that C marry A
(c) Both (a) and (b) (d) None of these

95. The difference between contingent contract and wagering agreements are as follows:
(a) A wagering agreement consists of reciprocal promises whereas a contingent contract may not
contain reciprocal promises.
(b) In a wagering agreement the uncertain event is the sole determining factor while in a contingent
contract the event is only collateral.
(c) A wagering agreement is void whereas a contingent contract is valid.
(d) All of the above.
96. The basis of 'quasi contractual relations' is the ______________:
(a) Existence of a valid contract between the parties
(b) Prevention of unjust enrichment at the expense of others
(c) Provisions contained in Section 10 of the Contract Act
(d) Existence of a voidable contract between the parties

97. About quasi-contractual obligations, which of the following statements is correct:

(a) There is no offer and acceptance (b) There is no real contract in existence
(c) There is no intention to make a contract (d) All of these

98. A transport company refuses to deliver certain goods to the consignee, except upon the payment of
an illegal charge of carriage. The consignee pays the sum charged in order to obtain the goods. Discuss
the rights of the consignee as against the transport company
(a) The consignee is entitled to recover the amount form the transport company (Sec.72)
(b) No, consignee can't recover anything form the transport company.
(c) The consignee can recover by new contract
(d) None

99. A finder of goods can sell the goods when his lawful charges in respect of them exceed .......of the
value of goods found:
(a) 50% (b) 60%
(c) Two-thirds (d) One-third

100. A person to whom.........by mistake, or under coercion, must repay or return it:
(a) Money has been paid (b) Anything has been delivered
(c) (a) or (b) above (d) (a) and (b) above
 VIDYA SAGAR
CAREER INSTITUTE LIMITED
CPT Minor Test – 2 (Part – B)

Instruction: Maximum Marks: 100

5. Use HB Pencil to fill ovals for correct answer. Time : 2 Hours
6. Each question carry one mark. Date : 15.5.2019
7. Negative marking .25 marks for each wrong answer.
8. No negative marking for unattempted questions.

___________________________________________________
01. Before financial reforms, the banking system was characterised by all of the following except:
(a) Administered interest rate structure
(b) Quantitative restrictions on credit flow
(c) High revenue requirements
(d) Keeping very less lendable resources for the priority sector

02. At present there are only ___________industries for which licensing in compulsory:
(a) 5 (b) 10
(c) 18 (d) 9

03. 100% FDI was allowed in:

(a) Banking (b) Insurance
(c) Defense (d) None of these

04. DFEC stands far:

(a) Duty Freedom Export Credit (b) Duty Free Export Credit
(c) Direct Foreign Exchange Control (d) Duty Free Exchange Credit

05. Special Drawing Rights were issued on ____:

(a) 1969 (b) 1970
(c) 1989 (d) 2000

06. As a result of the foreign trade reforms:

(a) The number of import license has increased
(b) Only a few types of goods and services can now be exchanged freely
(c) EPCG scheme has been abolished
(d) The average tariff rates have been reduced

07. The economic reforms have failed to:

(a) keep fiscal deficits to the targeted levels. (b) fully implement industrial deregulation.
(c) not fully open the economy to trade. (d) all of the above

08. Which of the following is not an indirect tax reform:

(a) reducing the peak rate of custom duties
(b) rectifying anomalies like inverted duty structure
(c) the tax rate on foreign companies has also been reduced from 55% to 40%
(d) introduction of value added tax for achieving harmonized taxation regime
09. Which of the following statements is correct:
(a) The public sector was given a dominant position in the newly independent India
(b) The foreign trade policy post independent allowed free trade of all goods and services
(c) Monetary policy post independence sought to keep the CRR at a very low level
(d) None of the above

10. Liberalisation and Globalisation are:

(a) Regulatory (b) Complementary
(c) Contradictory (d) Competitive

11. Which of the following in not a dynamic function of money:

(a) Direct economic trends (b) Encouragement of division of labour
(c) Store of value (d) Smoothens transformation of saving into
investment
12. Which of the following statements is correct:
(a) The disinvestments programme has been successfully carried out in India.
(b) Privatization up to 100 percent has been carried out in all the PSUs in India
(c) Under strategic sale method of disinvestments, the government sells a major share to strategic
buyer
(d) None of the above

13. Cross Holding is a method of __________:

(a) Privitization (b) Globalization
(c) Disinvestment (d) Liberalization

14. Integration of the domestic economy with the world economy is called:
(a) disinvestment (b) privatization
(c) liberalisation (d) globalisation

15. The present membership of IMF:

(a) 148 (b) 177
(c) 189 (d) 149

16. Where is secretariat office of WTO:

(a) Geneva (b) New York
(c) New Delhi (d) Tokyo

17. Match the following:

(1) WTO I. Provides loans to address short-term balance of
payments problems
(2) RBI II. Multilateral trade negotiating body.
(3) IMF III. Facilitating lending and borrowing for reconstruction and
development.
(4) IBRD IV. Central Bank of India
1 2 3 4
(a) ii iv i iii
(b) ii iv iii i
(c) iv ii i iii
(d) iv ii iii i

18. The number of Member Countries of WTO presently is:

(a) 184 (b) 164
(c) 150 (d) 177
19. Which of the following will not come under narrow money?
(a) Currency in circulation (b) Demand deposit
(c) Time deposit (d) None of the above

20. Narrow money refers to:

(a) M1 (b) M2
(c) M3 (d) M4

21. NM1 in the money stock in India refers to:

(a) post office saving deposits
(b) total post office deposits
(c) currency plus demand deposits plus other deposits with RBI
(d) time deposits with banks

22. ICICI bank is a:

(a) central bank. (b) private commercial bank.
(c) rural regional bank. (d) nationalized bank.

23. Nationalised Banks include:

(a) Punjab National Bank (b) Citibank
(c) American Express Bank (d) All of the above

24. Rural bank branches constitute ______ percent of total bank branches in India in June 2016:
(a) 14 (b) 60
(c) 38 (d) 82

25. The pre-condition for privatization to be successful requires:

(a) Liberalization and de-regulation of the economy
(b) Capital markets should be sufficiently developed
(c) None of the above
(d) Both of the above (a) & (b)

26. What was the SLR during 1990-1999 when it was at peak?
(a) 25% (b) 38.5%
(c) 15% (d) 5%

27. A Central Bank differs from a commercial bank in that:

(a) It has no branches (b) It is the banker of the government
(c) It deals with general public (d) None of the above

28. 'The lender of last resort' means -------------------------------------:

(a) the government coming to the rescue of poor farmers.
(b) central bank coming to the rescue of other banks in times of financial crisis
(c) commercial banks coming to the rescue of small industrial units.
(d) people coming to the rescue of commercial banks in times of their financial crisis.

29. Who is the custodian of nation reserves of international currency:

(a) SBI (b) IDBI
(c) RBI (d) ICICI

30. -----------------is the custodian of monetary reserves in India:

(a) SBI (b) SIDBI
(c) NABARD (d) RBI
31. At present, the responsibility for the provision of finance for Agriculture, External Trade and small
industries has been handed over to:
(a) SBI (b) NABARD
(c) NABARD, SIDBI (d) NABARD, EXIM and SIDBI

32. Monetary policy is given by:

(a) Commercial banks (b) Central bank
(c) Both (a) and (b) (d) Ministry of Finance

33. The effect of increase CRR will be reduced or nullified if:

(a) Bank rate is reduced
(b) Securities are sold in the open market
(c) SLR is increased
(d) People do not borrow from non-banking institutions

34. The main security guard for international Trade is _______________:

(a) IMF (b) World Bank
(c) WTO (d) RBI

35. In order to encourage investment in the country, the RBI may :

(a) Decrease Bank Rate (b) Increase CRR
(c) Sell securities in the open market (d) Increase Bank Rate

36. Economic reform is required to overcome the problem of:

1. Excess consumption and expenditure over revenue
2. Over protection to industry and heavy losses in public sector
3. Mismanagement of firm, economy and poor technological development
4. Mismanagement of foreign exchange reserve and shortage of foreign exchange Codes:
(a) 1 and 2 (b) 1 and 3
(c) 1, 2 and 3 (d) All of the above

37. 'Served from India' scheme was introduced to accelerate growth of .........:
(a) Export of goods (b) Export of capital goods
(c) Export of services (d) Export of agriculture goods

38. For disinvestments of public sector shares, .......... should be sufficiently developed:
(a) Money market (b) Commodity market
(c) Bullion market (d) Capital market

39. Main steps toward globalization does not include:

(a) Liberalization of import (b) Opening up of foreign capital
(c) Exchange rate adjustment (d) Non convertibility of rupee

40. GATT is stand for:

(a) General agreement for trade and tariff (b) General agreement on tour and travel
(c) Govt. agreement on tour and travel (d) General agreement on trade and tour

41. Which of the following is not considered as a kind of money in a modern economy:
(a) Coins (b) Currency notes
(c) Wheat (d) Deposit money
42. Increase in export leads to:
(a) Increase in money supply (b) Decrease in money supply
(c) Constant money supply (d) Indeterminate

43. Which of the following is NOT a function of commercial bank:

(a) Acceptance of deposit (b) Purchase and sale of foreign exchange
(c) Discounting bills of exchange (d) Controlling credit expansion

44. After 1950, commercial banks in India were nationalized:

(a) Once in 1969 (b) Twice in 1969 and 1980
(c) Thrice in 1969, 1980 and 1991 (d) None of the above

45. Quantitative method of credit control includes

1. Bank rate policy 2. Open market operations
3. Regulation of margin requirements 4. Cash-reserve ratio
(a) Only 1, 2 and 3 (b) Only 2,3 and 4
(c) Only 1,2 and 4 (d) Only 1,3 and 4

46. Govt. allowed increase in FDI in defence beyond 26% but will be on case to case basis, And after
clearance from:
(a) Ministry of finance (b) RBI
(c) Foreign exchange contract committee (d) Cabinet Committee on security headed by
Prime Minister
47. Privatization offers _______to the economy.
(a) opportunities (b) Threats
(c) Both of above (a) and (b) (d) None of these

48. Which of the following be included in measures towards globalization:

(a) Foreign company can use their trademark in India
(b) Foreign company can carry any activity of trading commercial or industrial nature.
(c) Repartiation of profit of foreign company allowed.
(d) All of the above

49. Which money acts as a measure of calculating relative prices of goods and services:
(a) Commodity Money (b) Credit Money
(c) Fiat Money (d) Dear Money

50. In World Trade Organization, each member country has:

(a) One vote
(b) Depends upon National Income of the nation
(c) Depends upon UNO ranking
(d) Depends upon whether the country is developed, developing or underdeveloped
51. How many numbers greater than 35000 can be formed with 1,2,3,4,5 if no digit is being repeated:
(a) 56 (b) 54
(c) 64 (d) None of these

52. 3 Ladies and 3 Gents can be seated at a round table so that any two and only two of the ladies sit
together. The number of ways is:
(a) 70 (b) 27
(c) 72 (d) None of these

53. The simple interest on a sum of money is of the principal and the number of years is equal to the
rate of interest per annum. Find the rate of interest per annum:
(a) 5% (b) 6%
(c) 8% (d) None of these

54. The number of rectangles in a chess board is:

(a) 204 (b) 1296
(c) 1536 (d) 1834

55. In a class of boys (x) and girls (y) the maximum seating capacity is 360. This can be shown by:
(a) x + y ≤ 360 (b) x + y ≥ 360
(c) x + y = 360 (d) None of these
56. If x < y and a < b then :
(a) a + x < b + y (b) a-x<b-y
(c) ax > by (d) None of these

57. If |2x + |> then :

(a) x< or x > (b) x< or x <

(c) <x< (d) None of these

58. An automobile company manufactures two cars A and B, Model A requires 15 man - hours for
assembly; 5 man - hours for painting and finishing and 1 man - hours for checking testing. Model B
requires 6 man - hours for assembly; 4 man - hours for painting and finishing and 2 man - hours for
checking and testing. There are 400 man - hours in assembly shop; 150 man - hours in painting and
finishing shop and 40 man - hours are available in checking and testing division. Express this using
linear inequalities:
(a) 15x + 6y ≤ 400, 5x + 4y ≤ 150, (b) 15x + 6y ≥ 400, 5x + 4y ≥ 150
x + 2y ≤ 40, x ≥ 0; y ≥ 0 x + 2y ≥ 40, x ≥ 0; y ≥ 0
(c) 6x + 15y ≤ 400, 6x + 5y ≤ 150 (d) None of these
x + 2y ≥ 40, x ≥ 0; y ≥ 0
59. The shaded region represents :

Y
x+
(0, 6) y=
6

4)
(2, 0
=
-y
(0, 0) 2x

(6, 0) X
X' 0
Y'

(a) x + y > 6, 2x-y >0 (b) x + y < 6, 2x - y > 0

(c) x + y > 6,2x-y<0 (d) x + y ≥ 6, 2x-y ≥ 0

60. A sum of Rs. 7,200 amounts to Rs. 8,300 in two years at simple interest. What will the sum amount to
in eight years:
(a) Rs. 14,600 (b) Rs. 12,600
(c) Rs. 10,600 (d) Rs. 11,600

61. A sum of money 6 times itself in 25 years. The number of years it would 12 times itself is:
(a) 50 years. (b) 37.5 years.
(c) 75 years. (d) None of these.

62. Find the numbers of years in which a sum doubles itself at the rate of 8% per annum:
(a) 11 (b) 12

(c) 9 (d) 13

63. If simple interest on Rs. 2,000 increases by Rs. 40, when the time increases by 4 years. Find the rate
percent per annum.
(a) 1% (b) 0.5%
(c) 2% (d) None of these

64. In what time will Rs. 8000 amount to Rs. 8820 at 10% per annum interest compounded half-yearly :
(a) 3 (b) 1
(c) 2 (d) 5

65. The difference between the simple and compound interest on a certain sum for 3 years at 5% p.a. is
Rs. 228.75. The principal is:
(a) Rs. 25,000 (b) Rs. 28,000
(c) Rs. 30,000 (d) None of these
66. Find the effective rate of interest if I = Rs.l800,P= 18000, t = 1 year:
(a) 10% (b) 9%
(c) 18% (d) None of these

67. A company sets aside a sum of Rs. 5000 annually for 10 years to pay off a debenture issue of Rs.
60,000. If the fund accumulates at 5% per annum. Find the surplus after full redemption of the
debenture issue : [Given (1.05)10 = 1.629]
(a) Rs. 62,900 (b) Rs. 5,400
(c) Rs. 2,900 (d) Rs. 6,050.27

68. Mr. X borrowed Rs. 5120 at 12½% p.a. C.I. At the end of 3 yrs, the money was repaid along with the
interest accrued. The amount of interest paid by him is:
(a) Rs. 2100 (b) Rs. 2170
(c) Rs. 2000 (d) None of these

69. A company is considering proposal of purchasing a machine either by making full payment of Rs. 4000
or by leasing it for four years at an annual rate of Rs. 1250. Which course of action is preferable, if the
company can borrow money at 14% compounded annually : [Given : (1.14)4 = 1.68896]
(a) Leasing is preferable (b) Should be purchased by making full payment
(c) No Difference (d) None of these

70. Eleven students are participating in a race. In how many ways the first 5 prizes can be won:
(a) 44550 (b) 55440
(c) 120 (d) 90

71. In how many ways 5 Sanskrit, 3 English and 3 Hindi books be arranged keeping the books of the same
language together :
(a) 5! x 3! x 3! x 3! (b) 5! x 3! x 3!
5
(c) P3 (d) None of these

72. In how many ways can 9 letters be posted in 4 letter boxes:

(a) 94 (b) 49
9 9
(c) P4 (d) C4

73. If 500C 92 = 499 C 92 + nC91 then n is:

(a) 501 (b) 500
(c) 1520 (d) 499

74. Let S be collection of eight points in the plane with no three points on the straight line. Find the
number of triangles that have points of S as vertices:
(a) 56 (b) 36
(c) 46 (d) 96

75. The number of ways in which 15 mangoes can be equally divided among 3 students is:
(a) 15! / (5!)3 . 3! (b) 15! / (5!)3
(c) 15! / (5!)2 (d) None of these
76. If the plotted points in a Scatter diagram are evenly distributed, then the correlation is :
(a) Zero (b) Positive
(c) Negative (d) None of These

77. The coefficient of Correlation between two variables:

(a) Can have any unit
(b) Is expressed as the product of units of the two variables
(c) Is a unit free measure
(d) None of These

78. If the coefficient of concurrent deviation for 10 pairs of observations was found to be 1/ .
The value of Concurrent Deviations is:
(a) 10 (b) 6
(c) 8 (d) None of These

79. If 2x+3y=4 is the r egression line of Y on X and AM of Y is -2 then the AM of X is:

(a) -3 (b) 5
(c) -5 (d) 8/3

80. Given the following data:

Variable X Y
Mean 80 98
Variance 4 9
Coefficient of correlation = 0.6
What is the most likely value of Y when X = 90?
(a) 90 (b) 103
(c) 104 (d) 107

81. The two lines of regression are given by 8x+10y = 25 & 16x+5y = 12 respectively. If the variance of X is
25 what is the standard deviation of Y:
(a) 16 (b) 8
(c) 64 (d) 4

82. A correlation coefficient + 1 indicates tendency for the larger values of one variable to be associated
with the larger values of the others. This statement is:
(a) True (b) False
(c) Both (d) None of these

83. A relationship r2 = 1 -580/600 is possible

(a) True (b) false
(c) both (d) None of These

84. In Case of ‘ Production and Price per unit’- correlation is

(a) Positive (b) Negative
(c) Zero (d) None of These
85. Regression coefficient is independent from the change of
(a) Scale (b) Origin
(c) Both (d) Neither origin nor scale

86. The equation of two lines of regression is 4x+3y=7 & 4y=8-3x. the correlation coefficient between X &
Y is;
(a) 1.25 (b) 0.25
(c) -0.75 (d) -0.25

87. If the correlation coefficient between X & Y is -0.98 then between U=(X-5)/10 & V= (7-Y)/2 is
(a) 0.98 (b) -0.98
(c) 0.49 (d) -0.49

88. For 10 pairs of observations the sum of the squares of differences between the corresponding ranks
was 55. Value of spearmen’s rank correlation coefficient will be:
(a) 2/3 (b) -2/3
(c) 1/3 (d) None of these.

89. The circular test is satisfy by

(a) Fisher index number (b) Passche’s index number
(c) Laspeyre’s index number (d) Weighted Aggregative with fixed Base

90. Fisher’s Ideal Index is the only formula which satisfies

(a) Time reversal test (b) Circular test
(c) Factor reversal test (d) Both (a) and (c)

91. With the base 2010 the C.L.I. in 2012 stood at 250. X was getting a monthly salary of Rs. 10,000 in 2010
and Rs. 20,000 in 2012.
To maintain his standard of living X have received an extra allowance is:
(a) 25,000 (b) 5,000
(c) 10,000 (d) None of these

92. For constructing consumer price index ………….. is used

(a) Marshall edge Worth Method (b) Passche’s Method
(c) Walsh’s Method (d) Laspeyre’s Method

93. The Price index number using simple GM of relatives is given by:
(a) Log Pon = 2-  Log Pn/Po (b) Log Pon = 2+ Log Pn/Po

(c) Log Pon = Log Pn/Po (d) None of these

94. From the following data. The general Index is:

Index 120 132 98 115 108 95
Weight 6 3 4 2 1 4
(a) 113.45 (b) 117.25
(c) 111.3 (d) 114.75
95. Cost of living index is also used to find real wages by the process of
(a) Deflating (b) Splicing
(c) Base Shifting (d) None of These

96. Symbolically, time reversal test is represented by:

(a) Po1 X Q01 =1 (b) Io1 X I10 =1
(c) Io1 X I12 X I20=1 (d) None of These

97. Purchasing power of money is

(a) Reciprocal of Price index number (b) Equal to price Index
(c) Square of price Index (d) None of These

98. There is no such thing as unweighted index number:

(a) False (b) True
(c) Both (d) None of These

99. …………..is an extension of time reversal test:

(a) Factor Reversal Test (b) Circular Test
(c) Both (d) None of These

100. If Bowley’s index number = 150, Laspeyre’s index = 180 then Fisher’s index number is
(a) 120 (b) 147
(c) 300 (d) None of These
 Minor Test 2 Dt 15.5.2019
Part A
1 D 21 C 41 B 61 C 81 D
2 B 22 B 42 A 62 C 82 C
3 B 23 D 43 B 63 D 83 A
4 B 24 C 44 D 64 C 84 B
5 B 25 C 45 C 65 C 85 B
6 A 26 C 46 A 66 C 86 D
7 D 27 A 47 C 67 B 87 B
8 B 28 C 48 C 68 D 88 D
9 C 29 A 49 C 69 C 89 D
10 C 30 C 50 B 70 A 90 D
11 D 31 B 51 B 71 C 91 A
12 A 32 A 52 D 72 C 92 B
13 A 33 A 53 D 73 A 93 D
14 C 34 C 54 B 74 B 94 A
15 B 35 D 55 B 75 B 95 D
16 A 36 B 56 B 76 A 96 B
17 B 37 A 57 C 77 D 97 D
18 B 38 C 58 C 78 B 98 A
19 B 39 C 59 D 79 B 99 C
20 B 40 B 60 D 80 D 100 C

Part B
1 D 21 C 41 C 61 D 81 B
2 A 22 B 42 A 62 B 82 A
3 D 23 A 43 D 63 B 83 A
4 B 24 C 44 B 64 B 84 B
5 A 25 D 45 C 65 C 85 B
6 D 26 B 46 D 66 A 86 C
7 D 27 B 47 C 67 C 87 A
8 C 28 B 48 D 68 B 88 A
9 A 29 C 49 C 69 A 89 D
10 B 30 D 50 A 70 B 90 D
11 C 31 D 51 B 71 A 91 B
12 C 32 B 52 C 72 B 92 D
13 C 33 A 53 C 73 D 93 B
14 D 34 C 54 B 74 A 94 C
15 C 35 A 55 A 75 B 95 A
16 A 36 D 56 A 76 A 96 B
17 A 37 C 57 A 77 C 97 A
18 B 38 D 58 A 78 B 98 A
19 C 39 D 59 D 79 B 99 B
20 A 40 A 60 D 80 D 100 B