Commerce 2012 June Paper 2 Solved

COMMERCE

Paper – II

Note : This paper contains fifty (50) objective type questions, each question carrying two (2)

marks. Attempt all the questions.

1. Which of the following denote the

structural changes in Indian economy ?

 (A) Primary sector contribution has

gone down.

 (B) Service sector contribution has

gone up.

 (C) Secondary sector has not

changed much.

 (D) All of the above

Answer:(D)

2. Broad Money has to be sensitized

through :

 (A) CRR

 (B) SLR

 (C) Repo Rate

 (D) All of the above

Answer:(D)

3. Which one is not an element of legal

environment ?

 (A) Act of Parliamentarians in Lok

Sabha

 (B) Indian Contract Act, 1872

 (C) Indian Partnership Act, 1932

 (D) Negotiable instruments Act,

1881

Answer:(A)

4. Out of the following, which are four

dimensions of Human Development

Index ?

 (i) Life Expectancy

 (ii) Literacy Level

 (iii) Success Rate of Marriages

 (iv) Standard of Living

 (v) Crime Rate

 (vi) Corruption Level

 (vii) Economic Entitlement

 (viii) Foreign Visits

Codes :

 (A) (i), (ii), (vi) and (viii)

 (B) (i), (ii), (iv) and (vii)

 (C) (ii), (iii), (vi) and (vii)

 (D) (iii), (v), (vii) and (viii)

Answer:(B)

5. Public Enterprise is defined as

 (A) An organisation run by joint

efforts of Centre and State

Governments.

 (B) An organisation which caters to

the needs relating to public

utilities.

 (C) An organisation in which capital

is invested by public.

 (D) An organisation owned and

managed by public authorities

for definite set of public

purposes.

Answer:(D)

6. Match List-I with List-II and select the

correct answer :

List – I  List – II

(i) Measurement

of income  (a) Accrues to

the equity of

owners

(ii) Recognition

of expense  (b) Recognition

of revenue

(iii) Basis of  (c) Matching revenue with

realization   expenses

 

(iv) Identification

of revenue  (d) Accounting period

Codes :

 (i) (ii) (iii) (iv)

 (A) (a) (b) (c) (d)

 (B) (b) (a) (c) (d)

 (C) (c) (d) (a) (b)

 (D) (c) (d) (b) (a)

Answer:(D)

7. Consider the following items :

 (i) Debentures

 (ii) Prepaid rent

 (iii) Interest accrued

 (iv) Bank overdraft

 Which of them are current liabilities ?

 (A) (i), (ii), (iii) and (iv)

 (B) (iv)

 (C) (ii), (iii) and (iv)

 (D) (i), (ii) and (iii)

Answer:(B)

8. Conversion cost is the sum of

 (A) Indirect wages and factory

overhead

 (B) Direct wages, direct expenses

and factory overhead

 (C) Direct material cost and indirect

wages

 (D) Prime cost and selling &

distribution overhead

Answer:(B)

9. (A) Assertion : Premium received on

issue of shares is credited to

share premium account but not to

Profit and Loss account.

(R) Reasoning : Since share premium

is not a trading profit, it is not

distributed to shareholders.

(A) Both (A) and (R) are true but (R)

is not correct explanation to (A).

 (B) (A) is false but (R) is correct.

 (C) Both (A) and (R) are true and (R)

is correct explanation of (A).

 (D) (A) is correct but (R) is false.

Answer:(C)

10. Consider the following :

 (i) Basic defensive and interval ratio

 (ii) Current ratio

 (iii) Superquick ratio

 (iv) Quick ratio

 Arrange these ratios in sequence to

reflect the liquidity in descending

order.

 (A) (ii), (iv), (iii) and (i)

 (B) (i), (ii), (iv) and (iii)

 (C) (iv), (ii), (iii) and (i)

 (D) (iii), (iv), (i) and (ii)

Answer:(A)

11. Normally Demand curve slopes

 (A) Upward

 (B) Downward

 (C) Horizontal

 (D) Vertical

Answer:(B)

12. Which of the following refers to

Perfect Competition ?

 (i) There are restrictions on buyers

and sellers

 (ii) There are no restrictions on

movement of goods

 (iii) There are no restrictions on

factors of production

 Correct one is

 (A) only (i) and (ii)

 (B) only (ii) and (iii)

 (C) only (i) and (iii)

 (D) only (i)

Answer:(B)

13. Assertion (A): Total utility will be

maximum when marginal utility

to price of respective products

are equal.

Reason (R) : Deviation from this

situation leads to reduction in

maximum utility.

 (A) (A) and (R) are not correct.

 (B) (A) is correct but (R) is not

correct.

 (C) (A) and (R) are correct.

 (D) (A) is incorrect, (R) is correct.

Answer:(C)

14. Match List-I with List-II and select the

correct answer.

List – I  List – II

(i) Survival  (a) Economic

Objective

(ii) R.O.I  (b) Natural Urge

(iii) Growth  (c) Business  Purpose

(iv) Innovation  (d) Primary Objective

 Codes :

 (a) (b) (c) (d)

 (A) (ii) (iii) (iv) (i)

 (B) (ii) (i) (iii) (iv)

 (C) (i) (ii) (iii) (iv)

 (D) (iv) (iii) (ii) (i)

Answer:(A)

15. Consider the oligopoly models :

 (i) Sweezy’s kinked demand curve

model

 (ii) Newman and Morgenstern Game

Theory model

 (iii) Cournal’s duopoly model

 (iv) Baumal’s sales maximisation

model

 Arrange them in correct sequence as

per order of evolution.

 (A) (iv), (iii), (ii), (i)

 (B) (ii), (i), (iii), (iv)

 (C) (iii), (i), (ii), (iv)

 (D) (i), (iii), (ii), (iv)

Answer:(C)

16. Which of the following is not a restricted

random sampling technique ?

 (A) Stratified sampling

 (B) Simple random sampling

 (C) Systematic sampling

 (D) Multistage sampling

Answer:(B)

17. Classification of respondents only on

the basis of gender is an application of

 (A) Ordinal scale

 (B) Nominal scale

 (C) Interval scale

 (D) Ratio scale

Answer:(B)

18. Karl Pearson’s co-efficient of

correlation between two variables is

 (A) the product of their standard

deviations

 (B) the square root of the product of

their regression co-efficients

 (C) the co-variance between the

variables

 (D) None of the above

Answer:(B)

19. Statistical software packages for

research in social sciences include

 (A) SPSS

 (B) STATA

 (C) MiniTab

 (D) All of the above

Answer:(D)

20. F-test is used to test the significance of

the differences between/among

 (A) Two sample mean

 (B) More than two samples mean

 (C) Variance of two samples

 (D) (B) and (C)

Answer:(D)

21. Match the following

List-I  List-II

(i) The Practice of  (a) Henry Fayol

Management 

(ii) Philosophy of  (b) F.W. Taylor

Management

(iii) Scientific  (c) Oliver Sheldon

Management 

(iv) General and  Industrial (d) Peter F Drucker

     Administration          

Codes :

 (i) (ii) (iii) (iv)

 (A) (a) (b) (c) (d)

 (B) (d) (c) (b) (a)

 (C) (d) (c) (a) (b)

 (D) (c) (d) (b) (a)

Answer:(B)

22. Identify the correct sequence of steps

involved in planning :

 (i) Selecting the best course of

action

 (ii) Establishing the sequence of

activities

 (iii) Establishment of objectives

 (iv) Evaluating alternative courses

 (v) Determining alternative courses

 (A) (i), (ii), (iii), (iv) and (v)

 (B) (iii), (v), (iv), (ii) and (i)

 (C) (v), (iv), (iii), (ii) and (i)

 (D) (iii), (v), (iv), (i) and (ii)

Answer:(D)

23. Assertion (A) : One can be sure about

future course of actions by

making good plans.

 Reasoning (R) : Planning brings

certainty in future course of

actions of an organisation.

 (A) (R) is correct but (A) is not

correct.

 (B) (A) is correct but (R) is not

correct.

 (C) Both (A) and (R) are correct.

 (D) Both (A) and (R) are not correct.

Answer:(A)

24. According to Kieth Devis, which one

is not a barrier of communication ?

 (A) Physical Barriers

 (B) Technological Barriers

 (C) Personal Barriers

 (D) Linguistic Barriers

Answer:(B)

25. While establishing relation between

Maslow’s and Herzberg’s theories,

which Needs of Hierachy Theory will

fall under the Hygiene Factors ?

 (A) Self actualisation, esteem and

social needs

 (B) Esteem, social and safety needs

 (C) Social, safety and physiological

needs

 (D) Only social needs

Answer:(C)

26. Howard-Sueth model of consumer

behaviour is popularly known as

 (A) Machine Model

 (B) Human Model

 (C) Marketing Model

 (D) Purchase Model

Answer:(A)

27. To generate and facilitate any

exchange intended to satisfy human

needs or wants such that the

satisfaction of these wants occur with

minimal detrimental impact on the

natural environment is known as

 (A) Aggressive marketing

 (B) Operating marketing

 (C) Green marketing

 (D) All of the above

Answer:(C)

28. All the activities involved in selling

goods or services directly to final

consumers for personal non-business

uses are done by

 (A) Wholesalers

 (B) Retailers

 (C) Mediators

 (D) Commission Agents

Answer:(B)

29. To manage a business well is to

manage its future and to manage the

future is to manage information is

termed as

 (A) Management information system

 (B) Marketing information system

 (C) Future information system

 (D) General information system

Answer:(A)

30. DAGMAR approach in marketing is

used to measure

 (A) Public relations

 (B) Advertising results

 (C) Selling volume

 (D) Consumer satisfaction

Answer:(B)

31. Which one is not an important

objective of Financial Management ?

 (A) Profit Maximisation

 (B) Wealth Maximisation

 (C) Value Maximisation

 (D) Maximisation of social benefits

Answer:(D)

32. Which one refers to cash inflow under

payback period method ?

 (A) Cash flow before depreciation

and taxes

 (B) Cash flow after depreciation and

taxes

 (C) Cash flow after depreciation but

before taxes

 (D) Cash flow before depreciation

and after taxes

Answer:(D)

33. The concept of present value is based

on the :

 (A) Principle of compounding

 (B) Principle of discounting

 (C) (A) and (B)

 (D) None of the above

Answer:(B)

34. Cost of capital from all the sources of

funds is called

 (A) Specific cost

 (B) Composite cost

 (C) Implicit cost

 (D) Simple Average cost

Answer:(B)

35. Match the following with most suitable

option :

(a) Modigiliani (i) Commercial

Miller apparoach  Papers

(b) Net Operating  (ii) Working Capital

Income Approach  Management

 (c) Short term

Money  (iii) Capital Structure

Market

Instrument

 (d) Factoring  (iv) Arbitrage

Codes :

 (a) (b) (c) (d)

 (A) (iv) (iii) (i) (ii)

 (B) (iii) (iv) (i) (ii)

 (C) (iii) (ii) (i) (iv)

 (D) (iii) (ii) (iv) (i)

Answer:(A)

36. Which four are the factors influencing

the Human Resource Management of

an organisation ?

 (i) Size of workforce

 (ii) Employee Expectations

 (iii) Composition of workforce

 (iv) Political influence

 (v) Changes in technology

 (A) (i), (ii), (iii) and (iv)

 (B) (i),(ii), (iii) and (v)

 (C) (i), (ii), (iv) and (v)

 (D) (i), (iii), (iv) and (v)

Answer:(C)

37. Assertion (A) : One can not be sure

about the quality of appraisal on

the basis of length of service.

Reasoning (R) : Initial appraisal and

promotional appraisal are done

separately and differently since

the length of service is different.

(A) (R) is correct but (A) is not

correct.

 (B) (A) is correct but (R) is not

correct.

 (C) (A) and (R) both are correct.

 (D) (A) and (R) both are not correct.

Answer:(D)

38. Which of the following are covered

under the scope of Human Resource

Management ?

 (i) Forecasting Human Resource

Needs

 (ii) Replacement Planning

 (iii) Human Resource Dynamics

 (iv) Human Resource Development

Planning

 (v) Human Resource Audit

 (A) (i), (iii), (v)

 (B) (i), (ii), (iii), (iv)

 (C) (iii), (v)

 (D) (i), (ii), (iii), (iv), (v)

Answer:(D)

39. On which of the following, at the

initial stage, the Indian IT companies

relying more for getting good IT

professionals ?

 (A) Job Portals

 (B) Placement Agencies

 (C) Campus Placement

 (D) All of the above

Answer:(C)

40. Statement (i) : Labour always get a

major share of productivity

gains.

Statement (ii) : Partial stoppage of

work by workers amounts to

strike.

(A) Statement (i) is true but (ii) is

false.

 (B) Statement (ii) is true but (i) is

false.

 (C) Both statements are true.

 (D) Both statements are false.

Answer:(B)

41. Imperial Bank was established on

January 27, 1921 on the advise of

 (A) J. M. Keynes

 (B) Lord Illingworth

 (C) King George V

 (D) Winston Churchill

Answer:(A)

42. Read the following events :

 (i) Allowing convertibility of rupee

at the market rate in the current

account

 (ii) Nationalisation of general

insurance business

 (iii) Establishment of IDBI

 (iv) Nationalisation of life insurance

business

 (v) Capital adequacy norms for

commercial banks

 Arrange the events in the ascending

order of their occurrence :

 (A) (iv), (iii), (ii), (i), (v)

 (B) (v), (iv), (iii), (ii), (i)

 (C) (i), (ii), (iii), (v), (iv)

 (D) (i), (v), (ii), (iv), (iii)

Answer:(A)

43. In India, the Commercial Banks are

given license of operation by

 (A) The Government of India

 (B) The Ministry of Finance

 (C) Reserve Bank of India

 (D) Banking Companies Regulation

Act, 1949

Answer:(C)

44. The provisions of General Reserve in

Banking Companies are made keeping

in view the provisions of

 (A) Indian Companies Act, 1956

 (B) Banking Companies Act, 1949

 (C) SEBI Act, 1992

 (D) Statutory Auditor

Answer:(B)

45. Which among the following is not true

with regard to merchant banker ?

 (i) It can accept deposits.

 (ii) It can advance loans.

 (iii) It can do other banking activities.

 (iv) It can be manager to a public

issue.

 (A) (i), (ii) and (iii)

 (B) (ii), (iii) and (iv)

 (C) (i), (iii) and (iv)

 (D) (ii) and (iv)

Answer:(A)

46. Balance of Payments can be made

favourable if

 (A) Exports are increased

 (B) Imports are increased

 (C) Devaluation of money

 (D) (A) and (C)

Answer:(D)

47. Which one is not an objective of IMF ?

 (A) To promote international

monetary co-operation

 (B) To ensure balanced international

trade

 (C) To finance productive efforts

according to peace-time

requirement

 (D) To ensure exchange rate stability

Answer:(C)

48. EPCG denotes

 (A) Export Potential and Credit

Guarantee

 (B) Earning Promotion and Credit

Guarantee

 (C) Export Promotion and Credit

Guarantee

 (D) Export Potential and Credit

Goods

Answer:(C)

49. Which one of the following matches

correspond to the Member and

Observer countries of the SAARC ?

 (i) India, Pakistan, Bangladesh,

Bhutan, Nepal, Sri Lanka,

Afghanistan, Maldive

 (ii) Iran, China, Japan, USA, South

Korea, European Union

 (iii) Pakistan, Nepal, India,

Bangladesh, Iran

 (iv) UK, USA, North Korea, South

Africa

 (A) (iii) and (iv)

 (B) (ii) and (iv)

 (C) (i) and (ii)

 (D) (ii) and (iii)

Answer:(C)

50. Which one is not an international

organisation ?

 (A) SAARC

 (B) ASEM

 (C) ASEAN

 (D) CBDT

Answer:(D)