COMMERCE
PAPER – II
Note : This paper contains fifty (50) objective type questions of two (2) marks each. All questions are compulsory.
1. From the following statements of Assertion (A) and Reasoning (R), indicate the correct code :
Assertion (A) : Industrial liberalisation became an imperative condition for the growth of forces of competition leading to high efficiency and productivity in Indian industries.
Reasoning (R) : Industrial development and curbing of poverty is only possible through government intervention.
Code :
(1) (A) and (R) both are not correct.
(2) (A) is correct but (R) is not the correct explanation of (A).
(3) (A) is correct and (R) is correct explanation of (A).
(4) (A) is not correct but (R) is correct.
2. Which of the following statements are not correct ?
Statement (I) : Sustainable development means an attempt to achieve the balance between economic growth and conservation / protection of environment.
Statement (II) : Sustainable development means meeting the needs of industries without compromising the needs of import – export balancing.
Statement (III) : Sustainable development means creation of sufficient surplus budgets through stock of capital assets including land.
Code :
(1) Statements (I) and (III)
(2) Statements (II) and (III)
(3) Statements (I) and (II)
(4) Statements (I), (II) and (III)
3. Match items of List – I with List – II relating to macro environment of business and indicate the code of correct matching :
4. For which one of the basic reasons, the “Structural Adjustment Programme” was undertaken in India in 1991 ?
(1) Curbing competition among private sector
(2) Establishing predominant role of public sector
(3) Establishing a free market economy
(4) Regional balancing through planning and licensing
5. Match the items of List – I with List – II and indicate the correct code of matching :
6. Assertion (A) : Debt – equity ratio indicates the long term solvency of a company.
Reasoning (R) : It measures the ability of the company to pay off its long term liabilities.
Select the correct answer from the code given below :
(1) Both (A) and (R) are correct and (R) is the correct reason for (A).
(2) Both (A) and (R) are correct but (R) does not explain (A) correctly.
(3) (A) is correct but (R) is wrong.
(4) (A) is wrong but (R) is correct.
7. The balance of property at cost has been Rs. 20,000 and Rs. 17,000 in 2015 and 2016, respectively. The profit on the sale of property of Rs. 2,000 is credited to Capital Reserve Account. New property costing Rs. 5,000 was bought in 2016. Determine the sale proceeds from property.
(1) Rs. 3,000
(2) Rs. 7,000
(3) Rs. 10,000
(4) Rs. 15,000
8. Goodwill of a firm of X and Y is valued at Rs. 30,000. It is appearing in the books at Rs. 12,000. Z is admitted for 1/4 share. What amount he is supposed to bring for goodwill ?
(1) Rs. 3,000
(2) Rs. 4,500
(3) Rs. 7,500
(4) Rs. 10,500
9. A Ltd. issued a prospectus inviting applications for 2,000 shares. Applications were received for 3,000 shares and pro-rata allotment was made on the applications of 2,400 shares. If A has been allotted 40 shares, how many shares he must have applied for ?
(1) 40
(2) 44
(3) 48
(4) 52
10. Which one of the following receipts is of revenue nature ?
(1) Amount realised from the sale of investments
(2) Dividend received on investment
(3) Amount borrowed from a bank
(4) Compensation received from municipal corporation for the acquisition of land for the construction of road.
11. Statement (I) : Business decision makers deal with the complex, rather chaotic, business conditions of the real world and have to find the way to their destination, i.e, achieving the goal that they set for themselves.
Statement (II) : Even without application of economic logic and tools of analysis, business decisions are always rational and real and are not counter productive.
Code :
(1) Both the statements are correct.
(2) Both the statements are incorrect.
(3) Statement (I) is correct while statement (II) is incorrect.
(4) Statement (I) is incorrect while statement (II) is correct.
12. Which one of the following statements is true ?
(1) Pure profit is the return in excess of the opportunity cost
(2) Accounting profit is the excess of total revenue over and above the explicit and implicit costs
(3) Profit maximization is the sole objective of the modern firms
(4) Profit is maximum when the difference between marginal revenue and marginal cost is maximum
13. Which one of the following is not the assumption on which the theory of consumer behaviour is based on the cardinal utility approach ?
(1) Rationality
(2) Constant marginal utility from successive units
(3) Constant marginal utility of money
(4) Utility is measurable
14. Statement (I) : Point price elasticity of demand in terms of marginal and average revenues can be measured with the following formula :
Statement (II) : The point price elasticity of demand is the product of the slope of the demand function and the ratio between corresponding price and quantity.
Code :
(1) Both the statements are correct.
(2) Both the statements are incorrect.
(3) Statement (I) is correct while statement (II) is incorrect.
(4) Statement (I) is incorrect while statement (II) is correct.
15. Which one of the following is not the basic property of indifference curves ?
(1) Negative slope
(2) Indifference curves of two imperfect substitutes are concave to the point of origin
(3) The indifference curves do not intersect nor are they tangent to one another
(4) Upper indifference curves indicate a higher levels of satisfaction
16. The scale of measurement which has no order, distance and unique origin is known as which one of the following ?
(1) Nominal scale
(2) Ordinal scale
(3) Interval scale
(4) Ratio scale
17. The formula to determine the number of classes given by Sturge’s Rule is which one of the following ?
(1) K=1+3.322(log N)
(2) K=(log N)1.322
(3) 
(4) 
Where : K = Number of classes
N = Total number of observations
(log N) = Logarithm of the total number of observations
18. Which one of the following is not the characteristics of normal distribution ?
(1) Bell – shaped and symmetric
(2) Mean, Median and Mode of the distribution are equal
(3) The total area under the curve for the normal probability distribution is one
(4) The two tails of the distribution in both the directions touches the horizontal axis
19. Assertion (A) : A reasonably sized sample drawn randomly from large sized population contains almost all the characteristics which exist in the population.
Reasoning (R) : The theory of sampling is based on the two important laws of statistics, viz., Law of statistical Regularity and law of inertia of large numbers.
Code :
(1) Both (A) and (R) are correct and (R) is the complete explanation of (A).
(2) Both (A) and (R) are correct but (R) is not the complete explanation of (A).
(3) (A) is not correct while (R) is correct.
(4) Both (A) and (R) are not correct.
20. Statement (I) : If the alternative hypothesis is as Ha : μ ¹ μ0 ; a researcher requires two – tailed test in hypothesis – testing.
Statement (II) : The mean of the sampling distribution of mean is not equal to the parametric value of mean.
Code :
(1) Both the statements are true.
(2) Both the statements are false.
(3) Statement (I) is true, while statement (II) is false.
(4) Statement (I) is false, while statement (II) is true.
21. Match the items of List – I with List – II ; and choose the correct code of combination :
22. Statement (I) : Management is not just a creature of the economy; it is a creator as well.
Statement (II) : He who can manage, can manage anything.
Code :
(1) Statement (I) is correct but (II) is incorrect.
(2) Statement (II) is correct but (I) is incorrect.
(3) Both the statements (I) and (II) are incorrect.
(4) Both the statements (I) and (II) are correct.
23. Assertion (A) : Due to these experiments (Time, Motion and Fatigue Studies ) a factory does not remain a factory, it is converted into a laboratory.
Reasoning (R) : Management succeeds or fails as human relations in business are intelligently or unintelligently handled.
Code :
(1) Both (A) and (R) are correct and (R) is the right explanation of (A).
(2) Both (A) and (R) are correct but (R) is not the right explanation of (A).
(3) (A) is correct but (R) is not correct.
(4) (R) is correct but (A) is not correct.
24. Who among the following is not associated with theories of motivation ?
(1) A.H. Maslow
(2) Cris Argyris
(3) Frederick Herzberg
(4) Peter F. Drucker
25. As per the Herzberg’s Hygiene Theory of motivation, which among the following is not a motivational factor ?
(1) Recognition
(2) Working Conditions
(3) Responsibility
(4) Achievements
26. When Walt Disney World’s Magic kingdom lets customers visit a fairy kingdom, a pirate ship, or a haunted house, then what is marketed in this example ?
(1) Services
(2) Events
(3) Experiences
(4) Ideas
27. Which one of the following statements is true according to VALS framework of psychographic segmentation ?
(1) The consumers who are primarily motivated by ideals are guided by knowledge and principles.
(2) The consumers who are motivated by achievement look for knowledge and principles.
(3) The consumers who are motivated by self expression don’t desire social or physical activity, variety, and risk.
(4) The consumers who are motivated by achievement desire social or physical activity, variety, and risk.
28. From the following two statements of Assertion (A) and Reason (R), indicate the correct code :
Assertion (A) : A transformational appeal of communication elaborates on a non-product related benefit or image.
Reasoning (R) : Transformational appeals often do not attempt to stir up emotions that will motivate purchase.
Code :
(1) (A) and (R) both are correct.
(2) (A) is correct (R) is not correct.
(3) (A) is not correct (R) is correct.
(4) (A) and (R) both are incorrect.
29. Select the correct sequence for Hierarchy-of-effects model related to marketing communication :
(1) Awareness→ Knowledge → Liking → Preference→ Conviction → Purchase
(2) Knowledge → Awareness → Liking → Conviction → Preference → Purchase
(3) Awareness → Liking → Knowledge → Conviction → Preference → Purchase
(4) Liking → Awareness → Knowledge → Preference → Conviction → Purchase
30. Match the items of List – I with the items of List – II and denote the code of correct matching :
31. Which of the following statements is false ?
(1) The opportunity cost of an input is considered in capital budgeting
(2) Capital budgeting decisions are reversible in nature
(3) Cash flows and accounting profits are different
(4) An expansion decision is a capital budgeting decision
32. Match the items of List – I with those of List – II and indicate the correct code :
33. Main objective of employing Financial Leverage is to :
(1) Reduce the risk associated with profits
(2) Maintain the stability in profits
(3) Decrease the cost of debt capital
(4) Magnify the return on equity share capital
34. Which one of the following is not a method of calculating cost of equity capital ?
(1) Dividend yield method
(2) Dividend yield plus growth method
(3) Yield to maturity method
(4) Earnings yield method
35. Which one of the following equates the present value of cash out flows and the present value of expected cash inflows from a project ?
(1) Net Present Value
(2) Internal Rate of Return
(3) Pay back Period
(4) Accounting Rate of Return
36. Which one of the following is not true ?
(1) Material resources are subject to laws of mechanics and they cannot have an output greater than the input.
(2) Human resources are capable of exponential growth and development.
(3) Human resources cannot yield an output that may be far greater than what the value of their input warrants.
(4) In current scenario, gradually, the emphasis has shifted from muscle power to use of mind power.
37. The pluralistic approach of industrial conflict is based on which one of the following basic assumption / premise ?
(1) That conflict occurs when the tendency of industrial society is to treat worker as an isolated individual and deprive him of all control over his environment
(2) That an enterprise contain people with coalition of different interests
(3) That industrial conflict is a part of the broader social conflict between classes
(4) That no consensus is possible, in case of conflicts, because people are with different socio – cultural backgrounds.
38. The Job Description Index (JDI) Technique is used for measuring which one of the following ?
(1) Job attitudes
(2) Job descriptions/definitions
(3) Job analysis records
(4) Job skill requirements
39. From the following two statements of Assertion (A) and Reasoning (R) indicate the correct code :
Assertion (A) : Development in HRM is a short-term educational process with temporary intervention.
Reasoning (R) : It is a educational process utilizing a systematic and organized procedure for development of operative employees performance in current jobs.
Code :
(1) (A) is correct and (R) is correct explanation of (A).
(2) (A) is correct, but (R) is not correct explanation of (A).
(3) (A) is not correct, but (R) is correct.
(4) (A) and (R) both are not correct.
40. Match items of List – I with List – II relating to methods of performance appraisal and indicate the correct code of matching.
41. Match the following items of List – I with the items of List – II and indicate the code of correct matching :
42. Statement (I) : Capital adequacy norms help banks in strengthening their capital base.
Statement (II) : Capital adequacy norms help banks in sanctioning more loans.
Code :
(1) Both the Statements (I) and (II) are correct.
(2) Both the Statements (I) and (II) are incorrect.
(3) Statement (I) is correct but (II) is incorrect.
(4) Statement (I) is incorrect but (II) is correct.
43. What is Hawala ?
(1) Tax evasion
(2) Illegal trading in stock exchanges
(3) Bank robbery
(4) Illegal transactions of foreign exchange
44. Read the following events :
(i) Capital adequacy norms for commercial banks
(ii) Establishment of IDBI
(iii) Allowing convertibility of rupee at the market rate in the current account.
(iv) Nationalisation of general insurance business
Arrange the events in the ascending order of their occurrance :
(1) (i), (ii), (iii), (iv)
(2) (iv), (iii), (ii), (i)
(3) (iv), (ii), (i), (iii)
(4) (i), (ii), (iv), (iii)
45. Assertion (A) : The future will see mostly the electronic money clearance through satellite networking.
Reasoning (R) : RBI is encouraging e-banking.
Code :
(1) (A) is true but (R) is false.
(2) (A) is false but (R) is true.
(3) Both (A) and (R) are true and (R) is the correct explanation of (A).
(4) Both (A) and (R) are true but (R) does not support (A).
46. Statement (I) : Developing countries can borrow more than their quota under Extended Fund Facility (EFF) of IMF.
Statement (II) : The Extended Fund Facility (EFF) was created in 1984 to help the developing countries over longer period upto 3 years.
Code :
(1) Statement (I) is correct but (II) is not correct.
(2) Statement (II) is correct but (I) is not correct.
(3) Both the statements (I) and (II) are correct.
(4) Both the statements (I) and (II) are not correct.
47. Match the items of List – I with those of List – II; and choose the correct code of combination :
48. Who among the following has given Absolute Advantage Model of international trade ?
(1) Adam Smith
(2) David Recardo
(3) Hackscher Ohlin
(4) William Petty
49. Which among the following is not an international economic institution ?
(1) IMF
(2) IBRD
(3) ADB
(4) IFRS
50. Assertion (A) : The fall in aggregate expenditure or aggregate demand in the economy works to reduce imports and help in solving the balance of payment problems.
Reasoning (R) : The important way to reduce imports and thereby reduce deficit in balance of payments is to adopt monetary and fiscal policies that aims at reducing aggregate expenditure in the economy.
Code :
(1) (A) and (R) both are correct and (R) supports (A).
(2) (A) and (R) both are correct but (R) does not support (A).
(3) (A) is correct but (R) is incorrect.
(4) (R) is correct but (A) is incorrect.
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