September 2017 GSET Commerce Solved Paper, Paper – III, Subject Code: 17

September 2017 GSET Commerce Solved Paper

Paper – III (Commerce)

Subject Code: 17

Marks: 150

Time: 2.30 Hours

Note: This paper contains Seventy Five (75) multiple choice/assertion/reasoning/matching questions. Each question carrying TWO (2) marks. Attempt All the questions.

1. Shareholders, Employees, Customers are known as _______ of the company.

(A) Owners.

(B) Borrowers.

(C) Creditors.

(D) Stakeholders.

Ans: (D) Stakeholders.

2. In the recently revised tax structure, GST stands for the _______.

(A) General Structure of Tax.

(B) Goods and Services Tax.

(C) Genuine Standard Tax.

(D) Goods Plus Service Tax.

Ans: (B) Goods and Services Tax.

3. The Consumer Protection Act came into force in the year:

(A) 1984.

(B) 1985.

(C) 1986.

(D) 1988.

Ans: (C) 1986.

4. The process of reducing the Equity Participation in the Public Sector Company by the Government is known as:

(A) Globalisation.

(B) Privatisation.

(C) Liberalisation.

(D) Modernisation.

Ans: (B) Privatisation.

5. The Re-named Planning Commission “NITI Ayog”, NITI stands for _______.

(A) National Institute of Transparent India.

(B) National Institute of Training in India.

(C) National Institute of Transforming India.

(D) None of the above.

Ans: (D) None of the above.

6. A company issued shares of Rs. 10, on which Rs. 6 is called up and a shareholder has not paid the call of Rs. 3. The amount credited to share capital in respect of such share will be:

(A) Rs. 10.

(B) Rs. 7.

(C) Rs. 6.

(D) Rs. 3.

Ans: (C) Rs. 6.

7. After the debentures are redeemed, the balance in the sinking fund account is transferred to:

(A) Debenture A/c.

(B) General Reserve.

(C) Profit and Loss Appropriation Account.

(D) Capital Reserve.

Ans: (B) General Reserve.

8. Advance Payment of Tax is in the nature of:

(A) Revenue Expenses.

(B) Prepaid Income.

(C) Liability.

(D) Prepaid Expenses.

Ans: (D) Prepaid Expenses.

9. _______ is an example of direct cost.

(A) Secondary packaging.

(B) Primary packaging.

(C) Carriage outward.

(D) Stationery expenses.

Ans: (B) Primary packaging.

10. When amalgamation is in the nature of merger, the accounting method to be followed is:

(A) Consolidated method.

(B) Purchase method.

(C) Equity method.

(D) Pooling of interests method.

Ans: (D) Pooling of interests method.

11. The economist who defined economics as “The science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.”

(A) Lionel Robbins.

(B) E.A.G. Robinson.

(C) Alfred Marshall.

(D) J.M. Keynes.

Ans: (A) Lionel Robbins.

12. If demand is inelastic and price increases, then:

(A) total revenue will fall.

(B) total revenue will be unchanged.

(C) total revenue will increases.

(D) total revenue will change

Ans: (C) total revenue will increases.

13. Which one is a related statement?

(A) Organisation and interest.

(B) Land and rent.

(C) Labour and profits.

(D) Capital and wages.

Ans: (B) Land and rent.

14. Assertion (A): A monopoly firm’s revenue curve is downward sloping from left to right.

Reason (R): The monopoly firm does not enjoy the freedom both, to fix the price to be charge and the quantity to be sold according to its whims and fancies.

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

(B) Both (A) and (R) are false.

(C) (A) is false, but (R) is true.

(D) (A) is true, but (R) is false.

Ans: (A) Both (A) and (R) are true.

15. Product differentiation is:

(A) a form of price competition.

(B) a form of non-price competition.

(C) a form of price discrimination.

(D) none of the above.

Ans: (B) a form of non-price competition.

16. Which one is the correct order of statistical data?

(A) Collection, Analysis, Presentation and Interpretation of data.

(B) Interpretation, Analysis, Presentation and Collection of data.

(C) Collection, Presentation Analysis and Interpretation of data.

(D) Analysis, Collection, Interpretation and Presentation of data.

Ans: (C) Collection, Presentation Analysis and Interpretation of data.

17. Questionnaire technique of data collection can be used when the respondents are:

(A) Literates.

(B) Illiterates.

(C) Liberates and illiterates.

(D) None of the above.

Ans: (A) Literates.

18. If the sample size increases, the sampling error:

(A) Increases,

(B) Decreases.

(C) Remains constant.

(D) May increase or decrease or remain constant.

Ans: (B) Decreases.

19. We can estimate the value of ‘Y’ for a given value of ‘X’ by:

(A) the regression equation of Y on X.

(B) the regression equation of X on Y.

(C) the regression equation of Y and X.

(D) the regression equation of X or Y.

Ans: (A) the regression equation of Y on X.

20. The E-Commerce domain that involves business activity initiated by the consumer and targeted to business is known as:

(A) Business to Consumer (B2C).

(B) Consumer to Business (C2B).

(C) Consumer to Consumer (C2C).

(D) Business to Business (B2B).

Ans: (B) Consumer to Business (C2B).

21. Management means forecasting planning, organising, directing, coordinating and controlling. Who said this?

(A) Peter F. Drucker.

(B) Henri Fayol.

(C) Parkins.

(D) F.W. Taylor.

Ans: (B) Henri Fayol.

22. _______ refers to those needs satisfaction of which lead to self-confidence and prestige.

(A) Self-actualization needs.

(B) Safety needs.

(C) Esteem needs.

(D) Physiological needs.

Ans: (C) Esteem needs.

23. Plan made in the light of competitors plan is known as:

(A) Policy.

(B) Procedure.

(C) Strategy.

(D) Undercover plan.

Ans: (C) Strategy.

24. Grapevine is associated with:

(A) Formal Communication.

(B) Informal Communication.

(C) Horizontal Communication.

(D) Vertical Communication.

Ans: (B) Informal Communication.

25. Which one is the most important principle of Business Ethics?

(A) Principle of unity of direction.

(B) Principle of proportional judgement.

(C) Principle of scalar chain.

(D) Principle of Span of Control.

Ans: (B) Principle of proportional judgement.

26. In a broader sense, marketing communication includes _______.

(A) Product.

(B) Price.

(C) Place.

(D) All of the above.

Ans: (D) All of the above.

27. What is relevant to place variable of marketing mix?

(A) Branding.

(B) Price Penetration.

(C) Sales Personnel Motivation.

(D) None of the above.

Ans: (C) Sales Personnel Motivation.

28. Branding decisions are based on:

(A) Market Research.

(B) Assessment of customer’s need.

(C) Cost of product.

(D) Both (A) and (B).

Ans: (D) Both (A) and (B).

29. Which is used for short-term sales achievement?

(A) Personnel Selling.

(B) Advertising.

(C) Sales Promotion.

(D) Public Relations.

Ans: (C) Sales Promotion.

30. the method for achieving maximum market response from limited marketing resources by reorganizing differences in the response characteristics of various parts of the market is known as:

(A) Market Targeting.

(B) Market Positioning.

(C) Market Segmentation.

(D) Market Strategy.

Ans: (C) Market Segmentation.

31. Capital Budgeting Decisions are:

(A) Reversible Decisions.

(B) Strategic Investment Decisions.

(C) Short-term Investment Decisions.

(D) Tactical Investment Decisions.

Ans: (B) Strategic Investment Decisions.

32. Generally if the risk involved in a firm is higher:

(A) Cost of capital will be lower.

(B) Cost of capital will be higher.

(C) Cost of capital will be neutral.

(D) None of the above.

Ans: (B) Cost of capital will be higher.

33. Long-term sources of finance also required for _______ of working capital.

(A) Economical.

(B) Costly.

(C) Beneficial.

(D) None of the above.

Ans: (A) Economical.

34. According to which of the following, the firm’s market value is not affected by capital structure?

(A) M.M. Hypothesis.

(B) Net Income Approach.

(C) The Traditional View.

(D) None of the above.

Ans: (A) M.M. Hypothesis.

35. Match the following:

(1) Convertible Debentures.

(2) Secured Debentures.

(3) Interest on the Debentures.

(4) Irredeemable Debentures.

(i) Holders have the right to recover their money from the sale of Assets.

(ii) Deducted from the profits of the company.

(iii) Permanent Liability on the company.

(iv) The holders of such debentures are given the option to exchange them for share.


(A) (1)-(i), (2)-(ii), (3)-(iii), (4)-(iv).

(B) (1)-(ii), (2)-(iv), (3)-(i), (4)-(iii).

(C) (1)-(iv), (2)-(i), (3)-(iii), (4)-(ii).

(D) (1)-(iii), (2)-(iv), (3)-(ii), (4)-(i).

Ans: (C) (1)-(iv), (2)-(i), (3)-(iii), (4)-(ii).

36. Career progress largely depends on:

(A) Performance.

(B) Experience.

(C) Qualifications.

(D) All of the above.

Ans: (A) Performance.

37. Match the following:

List I (State regulations of Wages)

List II (Features)

(a) Minimum Wages Act, 1948.

(b) The Payment of Wages Act, 1936.

(c) The Payment of Bonus Act, 1965.

(d) Wages Boards.

(1) It has to study various factors before making any recommendations.

(2) The minimum bonus to be paid has been raised from 4% to 8.33%.

(3) It did not define minimum wages nor specified any norms for its determination.

(4) Its objective is to provide for regular payment of wages without any authorised reduction.


(A) (a)-(4), (b)-(1), (c)-(2), (d)-(3).

(B) (a)-(3), (b)-(4), (c)-(2), (d)-(1).

(C) (a)-(2), (b)-(3), (c)-(4), (d)-(1).

(D) (a)-(1), (b)-(2), (c)-(3), (d)-(4).

Ans: (B) (a)-(3), (b)-(4), (c)-(2), (d)-(1).

38. Condition essential for sound industrial relation is/are:

(A) Existence of strong will organised and democratic employees unions.

(B) Existence of sound and organised employees union.

(C) Spirit of collective bargaining and willingness to resort to voluntary negotiation.

(D) All of the above.

Ans: (D) All of the above.

39. “Morale is a readiness to co-operate warmly in the tasks and purposes of a given group or organisation” is the statement given by:

(A) Alldrich.

(B) Vitels.

(C) Ackoof.

(D) Peter F. Drucker.

Ans: None of the above (EFL Brech)

40. Workers compensation programmes have a serious defect. They are these laws attempt to compensate employees for accidents and illness that have:

(A) Occurred.

(B) Claimants.

(C) Will occur.

(D) Proofs.

Ans: (A) Occurred.

41. Which bank merged with ICICI Bank in the year 2010?

(A) Punjab National Bank.

(B) Bank of Rajasthan.

(C) J&K Bank.

(D) None of the above.

Ans: (B) Bank of Rajasthan.

42. SIDBI Act was passed in the year _______.

(A) 1989.

(B) 1990.

(C) 1991.

(D) 1992.

Ans: (A) 1989.

43. Match the items of List I with the List II:

List I (Institution)

List II (Year of Establishment)





(1) 1948.

(2) 1955.

(3) 1962.

(4) 1964.


(A) (I)-(3), (II)-(2), (III)-(4), (IV)-(1).

(B) (I)-(4), (II)-(1), (III)-(2), (IV)-(3).

(C) (I)-(2), (II)-(3), (III)-(1), (IV)-(4).

(D) (I)-(1), (II)-(4), (III)-(3), (IV)-(2).

Ans: (D) (I)-(1), (II)-(4), (III)-(3), (IV)-(2).

44. Match the items of List I with List II:

List I (Functions of RBI) 

List II (Illustration)

(I) Central Banking Function. 

(II) Prohibitory Function.

(III) General Banking Function.

(IV) Development Function.

(1) Lending of Money.

(2) Bank cannot pay interest on its deposits.

(3) Deposit Insurance.

(4) Regulation of Foreign Exchange.


(A) (I)-(4), (II)-(2), (III)-(1), (IV)-(3).

(B) (I)-(1), (II)-(3), (III)-(2), (IV)-(4).

(C) (I)-(2), (II)-(4), (III)-(3), (IV)-(1).

(D) (I)-(3), (II)-(1), (III)-(4), (IV)-(2).

Ans: (A) (I)-(4), (II)-(2), (III)-(1), (IV)-(3).

45. Match the items of List I with List II:

List I

List II

(I) Commercial Bank. 

(II) Industrial Bank.

(III) Agricultural Bank.

(IV) Savings Bank.

(1) Post Office.


(3) State Finance Corporation.

(4) Canara Bank.


(A) (I)-(3), (II)-(4), (III)-(1), (IV)-(2).

(B) (I)-(1), (II)-(2), (III)-(4), (IV)-(3).

(C) (I)-(4), (II)-(3), (III)-(2), (IV)-(1).

(D) (I)-(2), (II)-(1), (III)-(3), (IV)-(4).

Ans: (C) (I)-(4), (II)-(3), (III)-(2), (IV)-(1).

46. The Apex body for the Export Promotion of the country is:

(A) Indian Institute of Foreign Trade.

(B) Indian Institute of Export Trade.

(C) Indian Institute of Export Promotion.

(D) Federation of Indian Export Organisation.

Ans: (D) Federation of Indian Export Organisation.

47. Special Drawing Rights (SDRs) are issued by the:

(A) World Bank.

(B) R.B.I.

(C) I.D.A.

(D) I.M.F.

Ans: (D) I.M.F.

48. Foreign Exchange and Foreign Currencies in India are governed by:

(A) R.B.I.

(B) Banking Regulation Act.

(C) FEMA (Act).

(D) SEBI Act.

Ans: (C) FEMA (Act).

49. A current account surplus represents:

(A) Net Foreign investments.

(B) Net Foreign drain.

(C) Disinvestment Abroad.

(D) None of the above.

Ans: (A) Net Foreign investments.

50. Match the following and find the appropriate choice from options:



(I) Overlapping Product Ranges.

(II) Product Cycle Theory. 

(III) Internal and External theories of scale.

(IV) Competitive advantages of Nation.

(1) Michael Porter.

(2) Paul Krugman.

(3) Raymond Vernon.

(4) Linder.


(A) (I)-(1), (II)-(3), (III)-(4), (IV)-(2).

(B) (I)-(4), (II)-(3), (III)-(2), (IV)-(1).

(C) (I)-(1), (II)-(2), (III)-(3), (IV)-(4).

(D) (I)-(3), (II)-(4), (III)-(2), (IV)-(1).

Ans: (B) (I)-(4), (II)-(3), (III)-(2), (IV)-(1).

51. Commercial paper is issued by firms to raise _______.

(A) Long-term funds.

(B) Medium-term funds.

(C) Short-term funds.

(D) None of the above.

Ans: (C) Short-term funds.

52. The most common sources of Euro issues include:

(A) American Depository Receipts.

(B) Global Depository Receipts.

(C) Both (A) and (B).

(D) None of the above.

Ans: (C) Both (A) and (B).

53. _______ is Capital Market Regulator in India.

(A) Bombay Stock Exchange.

(B) National Stock Exchange.

(C) Ministry of Corporate Affairs.

(D) Securities and Exchange Board of India.

Ans: (D) Securities and Exchange Board of India.

54. Working capital is also known as:

(1) Revolving Capital.

(2) Circulating Capital.

(3) Equity Capital.

(4) Debt Capital.

Select the correct answer from the following:

(A) (3) and (4).

(B) (1) and (2).

(C) Only (3).

(D) (1) and (3).

Ans: (B) (1) and (2).

55. Bonus shares are usually issued out of:

(A) Accumulated Profits.

(B) Reserved created for specific purpose.

(C) Reserved created out of revaluation of assets.

(D) None of the above.

Ans: (A) Accumulated Profits.

56. What is customer value?

(A) Ratio between the customer’s perceived
benefits and the resources used to obtain these benefits.

(B) Excess of satisfaction over expectation.

(C) Post purchase dissonance.

(D) None of the above.

Ans: (A) Ratio between the customer’s perceived benefits and the resources used to obtain these benefits.

57. Which element of the promotion mix do wholesalers primarily rely on to achieve their promotional objectives?

(A) Advertising.

(B) Trade Promotion.

(C) Personal Selling.

(D) Direct Marketing.

Ans: (B) Trade Promotion.

58. What is the basis for segmenting vitamin market?

(A) Age.

(B) Place of distribution.

(C) Formulation.

(D) All of the above.

Ans: (A) Age.

59. Needs for goods and services are more homogeneous in:

(A) Industrial Market.

(B) Consumer Market.

(C) Domestic Market.

(D) None of the above.

Ans: (A) Industrial Market.

60. Customers being able to buy product and services on the Internet is a result of:

(A) e-business.

(B) e-marketing.

(C) e-commerce.

(D) e-purchasing.

Ans: (B) e-marketing.

61. Training is a:

(A) Current process.

(B) Temporary process.

(C) Regular process.

(D) Continuous process.

Ans: (D) Continuous process.

62. Match the following:

List I (Concepts)

List II (Objectives)

(a) Wages and Salary Administration.

(b) Succession Planning.

(c) Fringe Benefit.

(d) High Morale.

(1) Engage the leadership in supporting the development of high potential leaders.

(2) To reduce employee grievance.

(3) To retain the present employees.

(4) To improve human relations.


(A) (a)-(4), (b)-(3), (c)-(2), (d)-(1).

(B) (a)-(2), (b)-(1), (c)-(4), (d)-(3).

(C) (a)-(3), (b)-(1), (c)-(4), (d)-(2).

(D) (a)-(4), (b)-(1), (c)-(2), (d)-(3).

Ans: (C) (a)-(3), (b)-(1), (c)-(4), (d)-(2).

63. Strike undertaken without the consent of the unions is called:

(A) General Strike.

(B) Sympathetic Strike.

(C) Unofficial Strike.

(D) Bumper Strike.

Ans: (C) Unofficial Strike.

64. Performance appraisal is:

(A) Morale boosting.

(B) Training and development activity.

(C) Job analysis.

(D) All of the above.

Ans: (D) All of the above.

65. How can accidents be reduced in industry?

(A) By proper training.

(B) By installation of safety equipments.

(C) By safety programme.

(D) All of the above.

Ans: (D) All of the above.

66. In India _______ has predominant share in the debt market.

(A) Government Securities.

(B) Corporate Deposits.

(C) Corporate Equity.

(D) Global Depository Receipts.

Ans: (A) Government Securities.

67. Bill of lading is issued by:

(A) Indian Commercial Banks.

(B) Foreign Banks.

(C) Shipping Company.

(D) Exporters.

Ans: (C) Shipping Company.

68. The Devaluation of Currency of Country is down when:

(I) It has adverse balance of payment.

(II) It has favourable balance of payment.


(A) Both (I) and (II) are correct.

(B) Both (I) and (II) are incorrect.

(C) Only (I) is correct.

(D) Only (II) is correct.

Ans: (C) Only (I) is correct.

69. India is not associated with:




(D) None of the above.

Ans: (B) NAFTA.

70. The IMF derives its finance from:

(A) General Resource Account.

(B) Special Disbursement Account.

(C) ESAF Trust.

(D) All of the above.

Ans: (D) All of the above.

71. Statement 1: Tax planning aims at reducing tax liability to the minimum.

Statement 2: Tax management aims at complying the provisions of law.

Which one of the following is true:

(A) Statement 1 is true and Statement 2 is false.

(B) Statement 2 is true and Statement 1 is false.

(C) Both the statements 1 and 2 are true.

(D) Both the statements 1 and 2 are false.

Ans: (C) Both the statements 1 and 2 are true.

72. Which section of Income Tax Act deals with penalties due to failure to keep and maintain information and documents in respect of international transactions?

(A) 221(1).

(B) 221(2).

(C) 271CA.

(D) 271AA.

Ans: (D) 271AA.

73. Match the items of List I with List II:

List I

List II

(I) Section-10A.

(II) Section-80IE.

(III) Section-10AA.

(IV) Section-10B.

(1) Tax incentives in case of a newly established 100% Export-Oriented Undertakings (EOU).

(2) Tax incentives in case of newly established units in Special Economic Zone (SEZ).

(3) Tax incentives in case of newly established industrial undertakings in Free Trade Zone (FTZ)

(4) Tax incentives in case of profits and gains of certain undertakings in North Eastern States.


(A) (I)-(4), (II)-(1), (III)-(3), (IV)-(2).

(B) (I)-(2), (II)-(3), (III)-(1), (IV)-(4).

(C) (I)-(3), (II)-(4), (III)-(2), (IV)-(1).

(D) (I)-(1), (II)-(2), (III)-(4), (IV)-(3).

Ans: (C) (I)-(3), (II)-(4), (III)-(2), (IV)-(1).

74. Match the items List I with List II:

List I

List II

(I) Tax Evasion.

(II) Tax Avoidance.

(III) Tax Administration.

(IV) Tax Planning.

(1) Availing deductions under section 10A of Income Tax Act. 

(2) Understatement of Income.

(3) Misinterpreting the provisions of the Income Tax Act.

(4) Making suitable arrangements of TDS.


(A) (I)-(1), (II)-(2), (III)-(3), (IV)-(4).

(B) (I)-(2), (II)-(3), (III)-(4), (IV)-(1).

(C) (I)-(3), (II)-(4), (III)-(1), (IV)-(2).

(D) (I)-(4), (II)-(1), (III)-(2), (IV)-(3).

Ans: (B) (I)-(2), (II)-(3), (III)-(4), (IV)-(1).

75. Section 80E of Income Tax Act deals with:

(A) Donations to charitable institutions.

(B) Donations for Scientific Research.

(C) Medical Insurance Premier.

(D) Repayment of loan taken for higher

Ans: (D) Repayment of loan taken for higher education. 


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