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PART A: FINANCE AND ACCOUNTS

1. Which of the following is not a Non- Current 12. Depletion method of depreciation is used
Assets ? in case of :
(A) Building (A) Live stocks
(B) Furniture and fixtures (B) Mines, Quarries etc.
(C) Plant & machinery (C) Machinery, Building etc.
(D) Bank Balance (D) Books
2 Purchase refers to the buying of – 13. As per schedule VI of the companies Act
(A) Stationary for office use 1956, the forfeiture share Account will be –
(B) Asset for office (A) Deducted from Capital reserve
(C) Goods for resale (B) Shown as Revenue Expenditure
(D) Investment (C) Added as Capital Reserve
3. Normally an asset has a balance of- (D) Deducted from Called Up Capital
(A) Debit (B) Credit 14. Goods destroyed by fire should be credited
(C) Balancing figure (D) All of the above to –
4. Which of the following account is not a (A) Capital Loss A/C
liability account ? (B) Expense A/C
(A) Account Payable (C) Trading A/C
(B) Accrued Expenses (D) Sales A/C
(C) Notes Payable
(D) Preliminary expenses 15. Ledger posting of goods sold for ` 1050 is
5. Capital account is classified under – posted as ` 1500 is –
(A) Personal Account (B) Real Account (A) Error of Principle
(C) Nominal Account (D) None of these (B) Error of commission
6. The account format that displays debits, (C) Error of omission
credits, balances and headings – (D) Compensating error
(A) General Journal (B) Ledger account 16. If the Trial Balance agrees, it implies that–
(C) General ledger (D) T-account (A) There is no error in the books
7. The accrual basis of accounting records (B) There may be one sided error in the books
revenues when they are – (C) There may be two sided error in the books
(A) collected (D) There may be both one or two sided error
(B) readily available for use in the books.
(C) earned 17. Balance sheet reflects –
(D) Contracted (A) Gross profit of the business
8. Accounting for Intangible Assets are related (B) Net profit of the business
to – (C) Financial position of the business
(A) AS-10 (B) AS-12 (D) All of these
(C) AS-24 (D) AS-26 18. Goodwill comes under the head in balance
9. Recording of capital contributed by the sheet –
owner as liability ensures the adherence (A) Non-current assets
of principle of – (B) Fictitious assets
(A) Going concern (B) Separate entity (C) Current assets
(C) Materiality (D) Accrual (D) Tangible assets
10. The principle providing ‘anticipate no profit 19. ‘Deferred tax’ is a/an –
and provide for all possible losses’ suggests (A) Asset (B) Liability
under : (C) Asset or liability (D) None of these
(A) Convention of Consistency 20. Unpaid or unrecorded expenses are called-
(B) Convention of Disclosure (A) Prepaid expenses
(C) Convention of Conservatism (B) Accrued expenses
(D) Convention of Materiality (C) Additional expenses
11. Which of the following errors are not
(D) None of these
disclosed by Trial Balance ?
21. A cash purchase from supplier would –
(A) Errors of Principle
(A) Decrease in liabilities
(B) Errors of Omission
(B) Decrease in owner’s equity.
(C) Errors of Duplication
(C) Increase in liabilities
(D) All the three
(D) Has no effect on total assets.
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22. Quick asset includes except - 32. If opening stock is ` 10,000, Net Purchases
(A) Cash
(B) Marketable securities ` 70,000, Wages ` 2,500 Carriage inward
(C) Inventories ` 500 and Closing stock ` 15,000, What is
(D) Account receivables. manufacturing cost ?
23. Net income plus operating expenses is (A) ` 65,000 (B) ` 83,000
equal to –
(C) ` 68,000 (D) ` 73000
(A) Net sales (B) Cost of goods sold
(C) Goodwill (D) Gross profit 33. Statement of financial position generated
24. Deferred revenue is a/an – from incomplete accounting record is
(A) liability (B) Asset commonly known as –
(C) Either (A) or (B) (D) None of these (A) Statement of affairs
25. An error due to wrong allocation as (B) Cash flow statement
expenditure between capital and revenue (C) Statement of financial operations
is regarded as – (D) Balance sheet
(A) Error of commission 34. The receipts and payments account of a non
(B) Error of principle profit organization is a -
(C) Error of omission (A) Personal account
(D) Compensating error (B) Real account
26. Interest on loan taken for the purchase of (C) Nominal account
Non-Current assets is a- (D) Income statement account
(A) Revenue Expenditure
35. If a firm has not recorded the bad debts by
(B) Capital Expenditure
mistake. Which of the following is the effect
(C) Deferred Revenue Expenditure
(D) Capital Loss of bad debts omission ?
27. Dual Aspect concept results in the following (A) Gross profit would overstate
accounting equation - (B) Gross profit would understate
(A) Revenue = Expenses (C) Net profit would decrease
(B) Capital + Profits = Assets + Expenses (D) Net profit would increase
(C) Assets = Liabilities + Capital 36. ———— are cheques that are issued by the
(D) Owner’s equity = Capital + Drawings business but not yet presented to bank
28. When a business is purchased, any amount (A) Uncredited cheques
paid in excess of the total of assets, minus (B) Outstanding cheques
the liabilities taken, is called : (C) Uncollected cheques
(A) Goodwill (D) Bounced cheques
(B) Share Premium 37. Which of the following is Personal Account ?
(C) Capital loss (A) Investment
(D) Capital employed
(B) Share premium
29. A journal entry in which two or more
(C) Outstanding expenses
account is debited or credited is referred
as - (D) Salary
(A) Journal entry 38. Closing stock appearing in the trial Balance
(B) Multi entry is shown in -
(C) Additional entry (A) Trading Account only
(D) Compound entry (B) Balance sheet only
30. Postdated cheques are considered as - (C) Both in trading A/C & Balance Sheet
(A) Cash Balance (D) None of thes
(B) Bank Balance 39. Which among of following account will be
(C) Accounts receivable credited if goods are given as charity ?
(D) None of these (A) Cash A/C (B) Charity A/C
31. Receipts and payments account is prepared (C) Purchase A/C (D) Sales A/C
by – 40. Which of following specialized Journals will
(A) Manufacturing concerns record “Goods returned by the business” ?
(B) Non-trading concerns
(A) Sales Journal
(C) Trading concerns
(B) Purchase Journal
(D) Companies registered under Companies
Act 1956. (C) Return Inward
(D) Return outward
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PART B: ECONOMICS AND GOVERNANCE

41. In India, the Comptroller and Auditor 48. The slope of production possibility curve is
General of Accounts presents a detailed (A) Convex to the origin
analytical review of Union Government (B) Concave to the origin
Accounts to the Finance Ministry every- (C) A straight line
(A) Year (D) None of these
(B) Six months 49. If as a result of rise in the price of good-X,
(C) Three months demand for good-Y increases, then what is
(D) Month the name of these goods ?
42. Economics is what Economists do’ is (A) Substitute goods
given by (B) Complementary goods
(A) Jacob Viner (C) Normal goods
(B) Henry Smith (D) Inferior goods
(C) Pigou 50. The law of variable” proportions is drawn
(D) Paul (A) Samuelson under all of the assumptions mentioned
43. At the Zero level of output, total cost (TC) is below except the assumption that:
equal to (A) The technology is changing.
(A) Total variable cost (TVC) (B) There must be some inputs whose
(B) Zero quantity is kept fixed
(C) Total fixed cost (TFC) (C) We consider only physical inputs and
(D) None of these not economically profitability in
44. The second glass of lemonade gives lesser monetary terms.
satisfaction to a thirsty boy. This is a clear (D) The technology is given and stable.
case of 51. Laws of production does not include
(A) Law of demand (A) Returns to scale.
(B) Law of diminishing returns.
(B) Law of diminishing returns to a factor
(C) Law of diminishing marginal utility.
(C) Law of variable proportions.
(D) Law of equi-marginal utility
(D) Least cost combination of factors.
45. Who is the highest civil servent of union
52. John Maynard Keynes Published his famous
government?
book “A Monetary Trap” in the year
(A) Attorney General
(A) 1929 (B) 1923
(B) Cabinet Secretary
(C) 1931 (D) 1927
(C) Home Secretary
53. A movement along the demand curve for
(D) Principal Secretary to the PM
soft drinks is best described as :
46. The price of hot dogs increases by 22% and
(A) An increase in demand
the quantity of hot dogs demanded falls by,
(B) A decrease in demand
25%. This indicates that demand for hot
(C) A change in quantity demanded
dogs is :
(A) Elastic (D) A change in demand
(B) Inelastic 54. Total utility is maximum when :
(C) Unitarily elastic (A) Marginal utility is zero.
(D) Perfectly elastic (B) Marginal utility is at its highest point.
47. Monopolistic competition differs from (C) Marginal utility is equal to average
perfect competition primarily because utility.
(A) In monopolistic competition, firms can (D) Average utility is maximum.
differentiate their products. 55. An indifference curve slopes down towards
(B) In perfect competition, firms can accept right since more of one commodity and less
the price. of another result in :
(C) In monopolistic competition, entry into (A) Same satisfaction.
the industry is blocked. (B) Greater satisfaction.
(D) In monopolistic competition, there are (C) Maximum satisfaction.
relatively few barriers to entry. (D) Decreasing expenditure.

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56. In the case of a Giffen good, the demand 64. When average product (output) increases,
curve will be : marginal product is
(A) Horizontal. (A) Equal to average product
(B) Downward-sloping to the right. (B) More than average product
(C) Vertical. (C) Less than average product
(D) Upward-sloping to the right. (D) Zero
57. By consumer surplus economists mean
65. What is meant by real cost?
(A) The area inside the budget line.
(A) Monetary expenditure
(B) The area between the average revenue
and marginal revenue curves. (B) Monetary income
(C) The different between the maximum (C) Effects and sacrifice undergone in
amount a person is willing to pay for a production
good and its market price. (D) Income from next best alternative use
(D) None of the above. 66. Who was the Chairman of 13 th Finance
58. Which of the following is a property of an Commission?
indifference curve? (A) K. C Pant
(A) It is convex to the origin. (B) C. Rangrajan
(B) The marginal rate of substitution is (C) Dr. Vijay Kelkar
constant as you move along an (D) Dr. Y.V.Reddy
indifference curve. 67. Identify the correct statement :
(C) Marginal utility is constant as you move (A) The average product is at its maximum
along an indifference curve. when marginal product is equal to
(D) Total utility is greatest where the 45
average product.
degree line cuts the indifference curve.
(B) The law of increasing returns to scale
59. The effect of increase CRR will be reduced if :
(A) Bank rate is reduced. relates to the effect of changes in factor
(B) Securities are sold in the open market. proportions.
(C) SLR is increased. (C) Economies of scale arise only because
(D) People do not borrow from non-banking of indivisibilities of factor proportions.
institutions. (D) Internal economies of scale can accrue
60. In order to control credit only to the exporting sector.
(A) CRR should be increased and Bank Rate 68. The cost of one thing in terms of the
should be decreased. alternative given up is known as:
(B) CRR should be reduced and Bank Rate (A) Production cost.
should be reduced. (B) Physical cost.
(C) CRR should be increased and Bank Rate (C) Real cost.
should be increased. (D) Opportunity cost.
(D) CRR should be reduced and Bank Rate 69. The Income Theory is also known as
should be increased.
(A) Macro Economics
61. If, as people’s income increases, the
(B) Micro Economics
quantity demanded of a good decreases, the
good is called (C) Fiscal Economics
(A) A substitute (D) Managerial Economics
(B) A normal good 70. Which of the following statements is correct ?
(C) An inferior good (A) When the average cost is rising, the
(D) A complement marginal cost must also be rising.
62. Comforts lies between the (B) When the average cost is rising, the
(A) Inferior goods and necessaries marginal cost must be falling.
(B) Luxuries and inferior goods (C) When the average cost is rising, the
(C) Necessaries and luxuries marginal cost is above the average cost.
(D) None of the above (D) When the average cost is falling, the
63. At higher prices people demand more of marginal cost must be rising.
certain goods not for their worth but for 71. Who is called the Guardian of Public Purse?
their prestige value - This is called
(A) President
(A) Veblen effect
(B) Comptroller and Auditor General of India
(B) Giffens paradox
(C) Parliament
(C) Speculative effect
(D) None of the above (D) Council of Members

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72. In the perfect competition, price of the 80. An example of ‘positive’ economic analysis
commodity is ` 25, then what will be the would be :
value of Marginal Revenue? (A) An analysis of the relationship between
the price of food and the quantity
(A) ` 25 (B) ` 5
purchased
(C) Zero (D) can’t determined
(B) Determining how much income each
73. In the long run, under perfect competition
person should be guaranteed
which of the following conditions is/are
(C) Determining the ‘fair’ price for food
correct?
(D) Deciding how to distribute the output of
(A) TR = TC
the economy.
(B) Firms operate at minimum of LAC
81. If the price of a substitute Y of good-X
(C) There is no barrier for exit or entry of
increases, what impact does it have on the
the firms
equilibrium price and quantity of good-X?
(D) All the above
(A) Equilibrium price and quantity of good-
74. A sick industrial unit is one
X both will increase
(A) Where most of the employees are sick.
(B) Equilibrium price and quantity of good-
(B) Which is unable to perform its normal
X both will fall
functions and activities of production of
(C) Equilibrium price of good-X will increase
goods and services at a reasonable profit
while its quantity will fall
on a sustained basis.
(D) Equilibrium price of good-X will fall
(C) Which is unable to make profits more
while its quantity will increase
than 10 per cent of its capital employed
82. Which is the first order condition for the
(D) Which borrows money from bank for its
profit of a firm to be maximum?
fixed assets.
(A) MC = MR (B) AC = AR
75. National income differs from net national
(C) MR = AR (D) AC = MC
product at market price by the amount of.
83. Which of the following is not a condition of
(A) Current transfers from the rest of the
Pure competition ?
world
(A) A very large number of firms.
(B) Net indirect taxes.
(B) Free entry and exit of the firms
(C) National debt interest
(C) Identical products
(D) It does not differ.
(D) Perfect Mobility among the factors
76. The market for hand tools (such as
84. Which of the following is not a central
hammers and screwdrivers) is dominated
problem of an economy ?
by Draper, Stanley, and Craftsman. This
(A) Problem of Allocation of Resources
market is best described as
(B) Problem of Distribution
(A) Monopolistically competitive
(C) Problem of Technique
(B) A monopoly
(D) Problem of Unemployment
(C) An oligopoly
85. Economics according to Lionel Robbins is a
(D) Perfectly competitive
(A) normative science
77. The Golden Fibre Revolution relates to
(B) applied science
(A) Wheat (B) Jute
(C) positive science
(C) Horticulture (D) Jowar
(D) experimental science
78. Three steel plants in Bhilai, Rourkela and
86. With the Rise in Income of the Consumer,
Durgapur were set up in the
demand for the …………….. goods also rises?
(A) First plan.
(A) Normal Goods
(B) Second plan.
(B) Giffen Goods
(C) Third plan.
(C) Superior Goods
(D) Fourth plan.
(D) Inferior Goods
79. What implication(s) does resource scarcity
87. In case of supply being perfectly inelastic,
have for the satisfaction of wants?
what will be the effect of increase and
(A) Not all wants can be satisfied
decrease in demand on price and
(B) We will never be faced with the need to
equilibrium quantity?
make choices. X
(A) Price increases or decreases respectively
(C) We must develop ways to decrease our
(B) No effect on equilibrium quantity
individual wants.
(C) Both (A) and (B)
(D) The discovery of new natural resources
(D) None of these
is necessary to increase our ability to
satisfy wants.
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93. Product method of measuring national
88. Monopolistic competition differs from
income is known by which of the following
perfect competition primarily because
names ?
(A) in monopolistic competition, firms can
(A) Value added method
differentiate their products.
(B) Inventory method
(B) in perfect competition, firms can accept
(C) Industrial origin method
the price.
(D) All the above
(C) in monopolistic competition, entry into
94. When was National Income Committee
the industry is blocked.
constituted in India?
(D) in monopolistic competition, there are
(A) 1949 (B) 1950
relatively few barriers to entry.
(C) 1948 (D) 1951
89. The branch of economic theory that deals
95. .................. refers to disposal of public
with the problem of allocation of resources
sector’s units in the equity market.
is
(A) Globalisation (B) Privatisation
(A) Micro-economic theory.
(C) Investmwnt (D) Liberalisation
(B) Macro-economic theory.
96. SEZ Act came into effect in
(C) Econometrics.
(A) 2002 (B) 2003
(D) None of the above
(C) 2006 (D) 2007
90. Which of the following statement is
97. Who is the official “lender of the last resort”
incorrect?
in India?
(A) The LAC curve is also called the
(A) SBI (B) PNB
planning curve of a firm
(C) RBI (D) OBC
(B) Total revenue = price per unit x number
98. In the present context, total money stock
of units sold
in India refers to
(C) Opportunity cost is also called
(A) M1 (B) M2 .
alternative cost
(C) M3 (D) M4
(D) If total revenue is divided by the number
99. Broad money refers to
of units sold we get marginal revenue.
(A) M1 (B) M2
91. The Kinked demand hypothesis is designed
(C) M3 (D) M4
to explain in the context of oligopoly
100. Select the correct alternative
(A) Price and output determination
(A) price determination is not a subject of
(B) Price rigidity
microeconomics
(C) Price leadership
(B) microeconomics is concerned with the
(D) Collusion among rivals.
aggregates of the economy
92. Which year is known as year of great divide
(C) economic problem does not exist in
for India’s population?
every economy
(A) 1911 (B) 1921
(D) there is close relationship between
(C) 1931 (D) 1941
scarcity and choice

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