PAPER-II
COMMERCE
Note : This paper contains fifty (50) objective type questions of
two (2) marks each. Allquestions are compulsory.
two (2) marks each. Allquestions are compulsory.
1. The responsibility of the organization to the workers includes :
(i) The payment of fair wages
(ii) Arrangement of proper training and education of the workers
(iii) The installation of an efficient grievance handling system
(iv) Welfare of family members
(v) The provision of the best possible working conditions
Identify the correct combination :
(A) (i), (ii), (iii) and (v) (B) (ii), (iii), (iv) and (v)
(C) (i), (ii), (iii) and (iv) (D) (i), (iii), (iv) and (v)
Answer:(A)
2. Match the items of List – I with List – II :
List – I List – II
a. Industries Development Regulation Act i. 1947
b. Import and Export Control Act ii. 1948
c. Foreign Exchange Management Act iii. 1951
d. Factories Act iv.1999
Identify the correct combination :
Codes :
a b c d
(A) i iii iv ii
(B) iii i ii iv
(C) iii i iv ii
(D) iii iv ii i
Answer:(C)
3. Which among the following is not a correct sequential combination ?
(A) Macro Environment → Economic Environment → National Income → Pattern of
Income Distribution
(B) Business Environment → Internal Environment → Business Ethics → Payment of
Fair Wages
(C) Business Environment → External Environment → Micro Environment →
Suppliers
(D) Macro Environment → External Environment → Customers → Prospects of
Business Development
Answer:(D)
4. Which among the following is not a correct combination ?
(A) Industrial Policy – 1948
(B) Industrial Policy Statement – 1977
(C) Industrial Policy Statement – 1980
(D) Industrial Policy Statement – 1991
Answer:(D)
5. Statement – I : The industrial policy of the Government of India is aimed at increasing
the tempo of industrial development.
Statement – II : After the New Industrial Policy – 1991, the Balance of Trade for India
has always been positive.
Codes :
(A) Statement (I) is correct, but (II) is incorrect.
(B) Statement (II) is correct, but (I) is incorrect.
(C) Both Statements (I) and (II) are correct.
(D) Both Statements (I) and (II) are incorrect.
Answer:(A)
6. Current Ratio 2.5, Liquid Ratio 1.5 and Working Capital INR 60,000.
What is Current Assets ?
(A) INR 60,000 (B) INR 80,000
(C) INR 1,00,000 (D) INR 1,20,000
Answer:(C)
7. X, Y, Z are sharing profits in the ratio of 6 : 5 : 3. A is admitted into partnership for 1/8th
share. The sacrificing ratio of X, Y and Z is
(A) Equal
(B) 6 : 5 : 3
(C) 5/14, 4/14, 5/14
(D) 4 : 5 : 5
Answer:(B)
8. Accounting information given by a company :
Total assets turnover 3 times
Net profit margin 10%
Total assets INR 1,00,000
The net profit is
(A) INR 10,000 (B) INR 15,000
(C) INR 25,000 (D) INR 30,000
Answer:(D)
9. “Make sufficient provisions for future losses, but do not anticipate future profits.” This
statement is in accordance to the concept of :
(A) Matching (B) Objectivity
(C) Conservatism (D) Materiality
Answer:(C)
10. When a firm is dissolved, profit or loss on realisation is shared by the partners
(A) Equal
(B) In the ratio of their capital balances
(C) In the profit sharing ratio
(D) In the ratio laid down in Garner Vs. Murray
Answer:(C)
11. The inverse relationship between variations in the price and quantity demanded is not due
to
(A) Income Effects
(B) Substitution Effects
(C) Future Expectations
(D) Law of Diminishing Marginal Utility
Answer:(C)
12. Consumer is said to be in equilibrium, maximizing his total utility, when
(A) the marginal utilities of the two goods consumed are equal.
(B) the proportions of the marginal utilities and respective prices are equal.
(C) the consumer gets full satisfaction from the consumption.
(D) the consumer feels satisfied with his expenditure on the various goods.
Answer:(B)
13. Match the items of the following two lists and suggest the correct code :
List – I List – II
a. Zero Income Elasticity i. Substitute goods
b. Unit Cross Elasticity ii. Complementary goods
c. Positive Cross Elasticity iii. Indifferent goods
d. Negative Cross Elasticity iv. Independent goods
Choose the correct option :
Codes :
a b c d
(A) iii ii i iv
(B) ii iii iv i
(C) iii iv i ii
(D) iv i ii iii
Answer:(C)
14. Statement (A) : The isoquant curves are drawn convex to the origin due to diminishing
technical rate of substitution.
Statement (B) : The lesser the convexity of the isoquant curve the greater the possibility
of the complementarity of the two inputs.
Codes :
(A) Statements (A) and (B) both are correct.
(B) Statement (A) is correct but (B) is incorrect.
(C) Statement (A) is incorrect but (B) is correct.
(D) Statements (A) and (B) both are incorrect.
Answer:(B)
15. Match the items of the List – I with those of List – II and suggest the correct code :
List – I List – II
a. Constant average cost over a i. Economic capacity
range of output
b. Average cost becomes constant ii. Reserve capacity
momentarily
c. Normal average cost is a iii. Production and Managerials
U-shaped curve costs effects
d. Modern Long-run average cost is iv. Economies and Diseconomies
L-shaped
Codes :
a b c d
(A) i ii iii iv
(B) ii iii iv i
(C) iii iv ii i
(D) ii i iv iii
Answer:(D)
16. Which one of the following is not probability sampling method ?
(A) Simple Random Sampling (B) Cluster Sampling
(C) Judgemental Sampling (D) Systematic Sampling
Answer:(C)
17. The research carried out to expand the knowledge of a particular field is known as
(A) Applied research (B) Qualitative research
(C) Quantitative research (D) Basic research
Answer:(D)
18. In univariate data analysis t-test is used when the data are in the form of
(A) Metric data with one sample
(B) Non-metric data
(C) Non-metric data with independent variable
(D) Metric data with independent two sample
Answer:(D)
19. To show the trend for a variable, which one of the presentation method is used ?
(A) Histogram (B) Frequency polygon
(C) Line graph (D) Scatter graph
Answer:(C)
20. Which one of the following objectives is not the objective of secondary data collection ?
(A) Identify the problem
(B) Test the hypotheses of the relevant present problem
(C) Better define the problem
(D) Interpret primary data more insightfully
Answer:(B)
21. The structure of an organisation in which there is separation of ownership and
management is called
(A) Sole proprietorship (B) Partnership
(C) Company (D) Cooperative society
Answer:(C)
22. When a person transacts with a company on matters which is beyond the power of the
company, the person will be governed by the Doctrine of
(A) Management by Exception (B) Constructive Notice
(C) Indoor Management (D) Self Management
Answer:(B)
23. Assertion (A) : MBO is effective way of planning and organizing the work.
Reason (R) : Employees participate in setting the objectives.
Codes :
(A) Both (A) and (R) are true.
(B) Both (A) and (R) are false.
(C) (A) is true, but (R) is false.
(D) (A) is false, but (R) is correct.
Answer:(C)
24. The appropriate sequence of the formation of a company are in the following order :
(A) Promotion, commencement of business and incorporation
(B) Promotion, incorporation, capital subscription and commencement of business
(C) Capital subscription, promotion, incorporation and commencement of business
(D) Incorporation, capital subscription, commencement of business and promotion
Answer:(B)
25. Delegation of authority makes the size of the organization :
(A) Smaller organization
(B) Larger organization
(C) Very big organization
(D) It does not affect the size of the organization
Answer:(B)
26. Managerial Grid suggests the following as the best leader behaviour :
(A) High structure and high consideration
(B) Low structure and low consideration
(C) High concern both for production and people
(D) Low concern both for production and people
Answer:(C)
27. Marketing strategy development is also known as
(A) Marketing Control (B) Marketing Exercise
(C) Marketing Planning (D) Situation Analysis
Answer:(C)
28. For most people, the purchase of cheese for daily use can be described as a
(A) Completely novel buy (B) Modified re-buy
(C) Routine re-buy (D) High involvement product
Answer:(C)
29. The promotion mix of a company consists of these –
(A) Marketing communication, promotion decisions
(B) Personal selling, product objectives
(C) Advertising, personal selling, sales promotion , publicity and public relations
(D) Consumer psychology, buyers motives, brand equity
Answer:(C)
30. Rational buying motives that determine purchase decisions are mostly based on
(A) Price factor (B) Psychological factors
(C) Quality of product (D) Advertisement
Answer:(B)
31. Statement – I : Capital structure refers to composition of long-term funds.
Statement – II : These include equity share capital, preference share capital, debentures,
all debts and all reserves.
(A) Both Statements I and II are correct.
(B) Statement I is correct but Statement II is incorrect.
(C) Statement I is incorrect but Statement II is correct.
(D) Both statements are incorrect.
Answer:(B)
32. Match the items of the following two lists and suggest the correct code :
List – I List – II
a. Pay-back Rate of Return i. Discounted Cash Flow Technique
b. Internal Rate of Return ii. Compounded values of investments
and returns
c. Benefit Cost Ratio iii. Crude method for project evaluation
d. Net Terminal Value Method iv. Varying sized projects evaluation
Codes :
a b c d
(A) ii iii i iv
(B) iii i iv ii
(C) i iv ii iii
(D) iv ii iii i
Answer:(B)
33. Match the items of the following two lists and suggest the correct code :
List – I List – II
a. Realised yield method i. Cost of equity share capital
b. Taxation ii. Cost of equity capital
c. Cost of total capital employed iii. Cost of debt capital
d. Dividend growth is a consideration iv. Weighted cost of capital
Codes :
a b c d
(A) iv iii ii i
(B) ii iv i iii
(C) ii iii iv i
(D) i ii iii iv
Answer:(C)
34. Cash Flow Management involves :
I. Lock-box system
II. Marketable securities
III. Playing the float
IV. Concentration Bank Account
Codes :
(A) I, II and III only (B) II, III and IV only
(C) I, III and IV only (D) I, II and IV only
Answer:(C)
35. Dividend capitalisation model was developed by
(A) Ezra Solomon (B) Myron J. Gordon
(C) James E. Walter (D) Merton H. Miller and Franco Modigliani
Answer:(B)
36. The process of narrowing a large number of candidates to a smaller field is called
(A) Rushing (B) Recruitment
(C) Selection (D) Enrollment
Answer:(C)
37. According to which theory, people are motivated to the extent to which they expect that
their actions will help in achievement of goals ?
(A) Vroom’s Vector Valence Theory (B) Need Theory
(C) Z Theory (D) X Theory
Answer:(A)
38. Match the items of List – I with List – II and select the correct code :
List – I List – II
a. Getting Effective Leadership in the i. Dale Yoder
Industrial Organization
b. The Nature of Leadership, ii. Alford and Beatty
Organization and Management
c. Industrial Management iii. Douglas McGregor
d. Personnel Management iv. Chester I. Bernard
Codes :
a b c d
(A) i ii iii iv
(B) iii iv ii i
(C) iii iv i ii
(D) iv iii ii i
Answer:(B)
39. Match the items of List – I with List – II :
List – I List – II
a. AITUC i. Indian National Congress
b. BMS ii. Socialists
c. INTUC iii. Rashtriya Swayamsevak Sangh
d. CITU iv. Communist Party of India
Identify the correct combination :
Codes :
a b c d
(A) iv iii ii i
(B) iv i ii iii
(C) iv iii i ii
(D) iv i iii ii
Answer:(C)
40. The main characteristics of Weber’s bureaucracy are :
(A) Specialization (B) Hierarchy of authority
(C) System of rules (D) All of the above
Answer:(D)
41. Match the items of List – I with List – II :
List – I List – II
a. RBI Nationalization i. 1964
b. Imperial Bank Nationalization ii. 1949
c. Nationalization of 14 Commercial Banks iii. 1955
d. Establishment of IDBI iv. 1969
Identify the correct combination :
Codes :
a b c d
(A) i ii iii iv
(B) ii iii i iv
(C) iii ii iv i
(D) ii iii iv i
Answer:(D)
42. As per the RBI Act, 1934, the following functions are described as the functions of a
Central Bank :
(i) Banking functions
(ii) Advisory functions
(iii) Supervisory functions
(iv) Promotional functions
Identify the correct combination :
(A) (i), (iii) and (iv) (B) (i), (ii) and (iv)
(C) (ii), (iii) and (iv) (D) Only (i) and (iii)
Answer:(A)
43. Phishing is an attempt to acquire :
(A) Loan from unauthorized firms
(B) Sensitive information such as username, password, etc.
(C) Personal information from banks
(D) None of the above
Answer:(B)
44. What is Call Money ?
(A) Money borrowed or lent for a day or overnight.
(B) Money borrowed for more than one day but upto 3 days.
(C) Money borrowed for more than one day but upto 7 days.
(D) Money borrowed for more than one day but upto 14 days.
Answer:(A)
45. The Regulatory Authority of Regional Rural Banks is
(A) NABARD (B) Central Government
(C) State Government (D) Sponsor Bank
Answer:(A)
46. Which of the following is not ensured to the consumer in the globalization ?
(A) Lower prices (B) Better selection
(C) Clear origin of goods and services (D) Improved services
Answer:(C)
47. In international trade which of the following is a non-tariff trade barrier ?
(A) Quotas (B) Import bans
(C) Export controls (D) Anti dumping laws
Answer:(B)
48. Match the items of List – I with items in List – II and select a correct code :
List – I List – II
a. Current Account i. Official Capital
b. Capital Account ii. Reserves from foreign countries
c. Unilateral Payments iii. Reparations
d. Official Statement Account iv. Visible Exports and Imports
Codes :
a b c d
(A) i iii ii iv
(B) iv i ii iii
(C) iv i iii ii
(D) iii ii i iv
Answer:(C)
49. Match the items of List – I with the items in List – II and select a correct code :
List – I List – II
a. Vishesh Krishi Upaj Yojana i. Scheme intended to reduce difficulties
of exporters
b. EPCG ii. Duty Entitlement Pass Book
c. DFRC iii. To boost exports of fruits, vegetables,
flowers, minor forest produce etc.
d. DEPB iv. Relating to import of duty free fuel
Codes :
a b c d
(A) iv i ii iii
(B) iv iii i ii
(C) iii iv ii i
(D) iii i iv ii
Answer:(D)
50. Which of the following is not the agency of World Bank ?
(A) MIGA (B) ICSID
(C) ADB (D) IDA
Answer:(C)
Commerce 2014 December Paper 2 Solved
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