PAPER 3_COMMERCE_JAN 2017

#1. Identify the correct statement from the following:

The liability of the Karta is limited.

A joint Hindu family business continues to exist on the death of a co-partner.

A joint Hindu family business ceases to exist on the death of the Karta.

A joint Hindu family business comes into existence by Hindu law.

#2. Which of the following is not true?

When all the forfeited shares are not reissued, the forfeited shares account will also show as credit balance equal to gain on forfeiture of shares not yet reissued.

Loss on reissue of shares cannot be more than gain on forfeiture of those shares.

At the time of forfeiture of shares, securities premium is debited along with share capital when premium has not been received.

When forfeited shares are issued at premium, the premium amount is credited to Capital Reserve Account.

#3. Preparation of consolidated Balance Sheet of Holding Company and its subsidiary company is done as per

AS 11

AS 21

AS 22

AS 23

#4. Amount due to outgoing partner is shown in the balance sheet as his

Liability

Asset

Capital

Loan

#5. In which one of the following market situations, the pricing above the prevailing market price is used as a more common practice?

Markets where the selling firms face perfect competitive situations.

Markets where the selling firms want to gain popularity of the products having high cross elasticity of their demand.

Markets where sellers rely on their customers’ high propensity to consume a prestigious commodity.

Markets where the selling firms have entered into the stages of maturity and saturation.

#6. Which one of the following statements is false regarding normal distribution?

Mean, Median and Mode always coincide.

Within ± 1.96 σ limits from Mean value, the area under the distribution is 99 percent of the total area.

The area under the normal curve represents probabilities for the normal random variable and the total area for the normal probability distribution is one.

For every pair of values of Mean and Standard deviation, the curve of the distribution is bell-shaped and symmetric.

#7. If unexplained variation between variables X and Y is 36%, what is the coefficient of correlation between the variables?

0.36

0.64

0.60

0.80

#8. A researcher wants to test the significance of the difference between the average performance of the two small sized samples when the information of the population standard deviation is not available, which one of the following hypothesis-testing is suitably used?

Z-test

Chi-square test

F-test

t-test

#9. Creating the capability of making purchases directly from a firm’s website is known a

Electronic Networking

Electronic Transactions

Electronic Data Interchange

Electronic Information Transfer

#10. In integrating specialist functions of product management with the line function of sales as major challenge to top management can be achieved by which type of marketing organization?

Functional organization

Territorial organization

Matrix organization

None of the above

#11. In certainty-equivalent approach, risk adjusted cash flows are discounted at

Accounting Rate of Return

Internal Rate of Return

Hurdle Rate

Risk-free Rate

#12. ‘That personal leverage can replace corporate leverage’ is assumed by

Traditional Approach

M M Model

Net Income Approach

Net Operating Income Approach

#13. Which council was established in India by Government of India in the year 1966 to promote safety consciousness among workers in industries?

Factory Advise Council

National Safety Council

National Industrial Council

Safety Regulations Council

#14. With a view to encourage newer classes of entrepreneurs and bringing about wider dispersal of ownership and control of industrial undertakings, IDBI operates a special scheme for supplementing the equity contribution to projects made by small and new entrepreneurs. This scheme is known as

Bridge Loan Scheme

Soft Loan Scheme for Modernisation

Technical Development Fund Scheme

Seed Capital Assistance Scheme

#15. Which one of the following is not the objective of UTI?

To give everyone a chance to indirectly own shares and securities in a large number of select companies.

To maximise mobilisation of people’s savings by making insurance linked savings adequately attractive.

To channelize the pooled savings into productive outlets.

To mobilise savings of the community by offering savers the triple benefits of safety, liquidity and profitability of investments.

#16. Under which of the following schemes, the IFCI procures equipment for an actual-user industrial concern by making payment to the machinery/equipment supplier, and then resells/transfers the equipment to the actual-user-industrial concern at the same cost, subject, however, to any liability arising out of taxes and other levies, being put to the account of the actual user industrial concern?

Equipment Credit Scheme

Equipment Procurement Scheme

Equipment Finance Scheme

Scheme of Equipment Leasing

#17. Which of the following correctly depicts differences between a merger and an acquisition of stock?

An acquisition of stock results in the total absorption of a firm whereas a merger does not.

In case of a merger, the firm can deal directly with the shareholders of the acquired firm but not in the case of acquisition of stock.

Shareholders of the acquired or target firm vote by their response to a tender offer in an acquisition of stock but cast a formal vote in a merger situation.

A formal vote by the acquired firm’s shareholders is required for an acquisition of stock but not for a merger.

#18. Lease which includes a third party (a lender) is known as

Direct lease

Sales and lease-back

Leveraged lease

Inverse lease

#19. Which of the following statements is correct?

The oldest stock exchange of India is OTCEI.

Sensex is an index number of 30 scrips.

In book-building process, the price of the security is announced by the company.

Futures and options in shares are traded at all stock exchanges of India.

#20. The concept of achieving maximum profits through increased consumer satisfaction for raised market share focuses on

Product

Selling

Customer

Production

#21. Which of the following is not a measure for quality of service for consumer?

Responsiveness

Competition

Empathy

Tangibility

#22. A descriptive thought that a person holds about something is called

Belief

Learning

Attitude

Perception

#23. Deferment, Autonomy of object, use of the common place, involvement/detachment and use of metaphor are description of which of the following technique?

Brainstorming

Synectics

Forced Relationship

Attribute listing

#24. Which of the following statements relating to incentive payments is correct?

In Halsey incentive plan, bonus paid to a worker is equal to 50 percent of time saved divided by rate per hour.

In Rowan incentive plan, bonus paid to employee is equal to the proportion of the time saved to the standard time.

In Taylor’s differential piece rate system, a worker whose output exceeds standard output is paid 100 per cent of piece rate and a worker whose output falls short of standard is paid only 50 percent of piece rate.

The Rowan incentive plan is the base of all other incentive, payment plans.

#25. Which one of the following industrial relations approach believes in state intervention via legislation and the creation of industrial tribunals as supporting management’s interest rather than ensuring a balance between the competing groups?

Unitary approach

Pluralistic approach

Marxist approach

Judiciary approach

#26. What is the term coined for the system of communication and consultation, either formal or informal, by which workers of an organization are kept informed, as and when required, about the affairs of the undertaking and through which they express their opinion and contribute to decision-making process of management?

Collective Bargaining

Empowerment

Workers’ participation in management

Welfare state

#27. What is the popular term used for that type of option in Foreign Exchange Market which provides the holder the right to purchase or sell foreign currency at the most favorable exchange rate realized over the life of the option?

Forward reversing option

Preference option

Look back option

Basket option

#28. What is the term used popularly for the situation when a speculator, being dominant in the market, expects a drop in the value of a particular currency and he begins selling it forward?

International Fisher Effect

Bandwagon Effect

Interest Rate Parity Effect

Relative Version Effect

#29. Identify the correct statement.

The Maastricht Treaty signed in February 1992 renamed European Community (EC) as European Economic Community (EEC).

The main objective of the formation of ASEAN Free Trade Area in 1993 was to soften the restrictions on the movement of professionals in the region and helping poorer countries.

The SAARC is a regional grouping scheme among Six South Asian Countries.

The European Union, including European Monetary Union, was the biggest and most important regional integrative scheme.

#30. What is the situation referred to as, amongst the following, when intra-region trade is duty free but there is variation in tariff structure for import from a third country?

Customs Union

Common Market

Free Trade Area

Economic Union

#31. Which of the following statements is not correct relating to comparison of FDI with trade?

Only one market can better be served with differentiated products.

FDI overcomes tariff and transport cost involved in trade.

It reduces financial risk through greater diversification.

It creates harmonious political relations.

#32. An equipment was acquired at a cost of ₹ 10 lacs and was put to use in Scientific Research. After one year of research the equipment was brought into another business of the assessee. For charging depreciation, Block of Assets shall be increased by

₹ 10 lacs.

Market value of the equipment on the date it was brought into another business.

Cost or market value of the equipment, whichever is less.

NIL.

#33. If an assessee is engaged in the business of growing and manufacturing tea in India, the portion of agricultural income in that case shall be

100%

60%

50%

40%

#34. Which of the following statements is not correct?

X is an individual assessee. He pays a monthly rent of ₹ 10,000 pm. He cannot deduct tax at source.

On salaries, tax is deducted at source according to provisions of Sec. 192.

No tax is deducted at source in respect of interest on securities issued by a domestic company.

Bank will deduct tax at source @ 10% if bank fixed deposit’s interest credit is more than ₹ 10,000 in a year.

#35. X donated ₹ 20,000 to a charitable institution, which is eligible for deduction u/s 80 G, during the financial year 2015-16. His total income during the period was ₹ 1,50,000. How much deduction he can claims u/s 80 G?

₹ 7,500

₹ 10,000

₹ 15,000

₹ 20,000

#36. X is employed in a private company at a salary of ₹ 70,000 per month and ₹ 10,000 per month as dearness pay. He received ₹ 2,000 per month as house rent allowance. He paid ₹ 2,500 per month as house rent. What is the exempted portion of house rent allowance?

₹ 2,500

NIL

#37. Surcharge is payable by an individual where the total income exceeds

₹ 10 lacs

₹ 1 crore

#38. Which one of the following statements is not correct?

A person may not have assessable income but still be an assessee.

In some cases, the assessment year and the previous year can be same.

An Indian company is always resident assessee.

Surcharge is additional tax calculated on total income.