October 2014 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. One element of the following items is not related with Consumer Right:
(A) Right against exploitation by unfair trade practices.
(B) Right to a physical environment enhancing quality of life.
(C) Right to Express.
(D) Right to choose the best from the variety of offers.
Ans: (C) Right to Express.
2. Match the items of the List I and Items of the List II and choose the correct option from the codes given below:
|
List I |
List II |
|
(a) Privatisation. (b) Open Market Operations. (c) Minimum Support Price. (d) Liberalisation. |
(1) Agricultural Price Policy. (2) Phasing out trade barriers. (3) Purchase and Sale of Govt. Securities. (4) Encourages entrepreneurship. |
Codes:
(A) (a)-(1), (b)-(2), (c)-(3), (d)-(4).
(B) (a)-(2), (b)-(3), (c)-(4), (d)-(1).
(C) (a)-(3), (b)-(1), (c)-(2), (d)-(4).
(D) (a)-(4), (b)-(3), (c)-(1), (d)-(2).
Ans: (D) (a)-(4), (b)-(3), (c)-(1), (d)-(2).
3. Assertion (A): The Structural Adjustment Programme (SAP) has been forced on the economy.
Reason (R): Excess of consumption and expenditure over the revenue,
resulting in heavy government borrowing.
(A) Reason given is not an appropriate explanation.
(B) (R) is one of the reasons for (A).
(C) (A) and (R) are not at all related.
(D) (R) is not appropriate measure for structural adjustment of economy.
Ans: (B) (R) is one of the reasons for (A).
4. Drivers of globalisation include:
(1) Establishment of W.T.O.
(2) Regional Integration.
(3) Private Law.
(4) Growth in FDI.
(5) Growth of MNCs.
Select the appropriate set of drivers:
(A) (1), (5), (3).
(B) (1), (2), (4), (5).
(C) (2), (3), (4).
(D) (1), (3), (4), (5).
Ans: (B) (1), (2), (4), (5).
5. Which inventory issue pricing method assumes that the inventory units available for sale are homogeneous?
(A) Specific identification method.
(B) Last-in, First-out method.
(C) First-in, First-out method.
(D) Weightage-average cost method.
Ans: (D) Weightage-average cost method.
6. The Journal is called:
(1) Day Book.
(2) Book of Principal Entry.
(3) Book of Primary Entry.
(4) Book of Original Entry.
Select the correct answer from the codes given below:
(A) (2), (3) and (4).
(B) (1), (3) and (4).
(C) (1), (2) and (3).
(D) (1) (2) and (4).
Ans: (B) (1), (3) and (4).
7. Cash Flow Statement is prepared for:
(A) determining the net working capital between two balance sheet dates.
(B) determining the net fund between two balance sheet dates.
(C) determining the net cash flow between two balance sheet dates.
(D) determining the net operating profit between two balance sheet dates.
Ans: (C) determining the net cash flow between two balance sheet dates.
8. Marginal cost is also known as:
(A) Period cost.
(B) Variable cost.
(C) Fixed cost.
(D) Absorption cost.
Ans: (B) Variable cost.
9. Margin of safety is the difference between _______.
(A) Marginal Revenue and Marginal Cost.
(B) Expected Sales and Actual Sales.
(C) Expected sales and BEP Sales.
(D) Actual Sales and BEP Sales.
Ans: (D) Actual Sales and BEP Sales.
10. The elasticity of demand over the demand curve is:
(A) Different at each point.
(B) Same on each point.
(C) Constant for each demand curve.
(D) Zero.
Ans: (A) Different at each point.
11. If for a firm the sunk cost of a machinery is Rs. 6 crores, its opportunity cost would be:
(A) Rs. 6 crores.
(B) More than Rs. 6 crores.
(C) Less than Rs. 6 crores.
(D) Zero.
Ans: (D) Zero.
12. A monopolist discriminates between two markets and charges Rs. 10 per unit in Market ‘A’ and Rs. 15 per unit in the market ‘B’, then price elasticity of demand is:
(A) More elastic in Market ‘A’ and less elastic in Market ‘B’.
(B) More elastic in Market ‘B’ and less elastic in Market ‘A’.
(C) Equal elastic in Market ‘A’ and ‘B’.
(D) Unit elastic in Market ‘A’ and perfectly inelastic in Market ‘B’.
Ans: (A) More elastic in Market ‘A’ and less elastic in Market ‘B’.
13. In a monopoly market it was found that the price elasticity of demand was – 0.75. Then the monopoly power would be:
(A) 1.33.
(B) 7.5.
(C) 1.
(D) 75.
Ans: (A) 1.33.
14. Match List I with List II and choose the correct option from the codes given below it:
|
List I |
List II |
|
(1) Different items having common characteristics are brought together. (2) Systematic arrangement of statistical data in columns and rows. (3) Classification of data as number of males and females in sample. (4) Classification of number of students according to height. |
(a) Quantitative classification. (b) Qualitative classification. (c) Tabulation of data. . (d) Classification of Data. |
Codes:
(A) (1)-(a), (2)-(b), (3)-(c), (4)-(d).
(B) (1)-(b), (2)-(a), (3)-(d), (4)-(c).
(C) (1)-(c), (2)-(d), (3)-(a), (4)-(b).
(D) (1)-(d), (2)-(c), (3)-(b), (4)-(a).
Ans: (D) (1)-(d), (2)-(c), (3)-(b), (4)-(a).
15. Match List-I with List-II and select the correct answer from the codes given below it:
|
List I |
List II |
|
(1) Lottery method of selection of sample. (2) Selecting sample from complete list and first item to be selected randomly and thereafter to be selected with evenly spaced interval. (3) Sample to be selected from particular state of predetermined house-holds. |
(a) Multi-stage sampling. (b) Simple random sampling. (c) Systematic random sampling. |
Codes:
(A) (1)-(a), (2)-(b), (3)-(c).
(B) (1)-(b), (2)-(c), (3)-(a).
(C) (1)-(c), (2)-(a), (3)-(b).
(D) (1)-(a), (2)-(c), (3)-(b).
Ans: (B) (1)-(b), (2)-(c), (3)-(a).
17. If in a regression line y = a + bx, where b is zero, then the regression line will:
(A) pass through the origin.
(B) be parallel to X-axis.
(C) be parallel to Y-axis.
(D) have the same intersection point on X-axis as well as Y-axis.
Ans: (B) be parallel to X-axis.
18. Which one of the following software is used for research analysis?
(A) SAP.
(B) ERP.
(C) SPSS.
(D) TALLY.
Ans: (C) SPSS.
19. The main advantage of functional organisation is:
(A) Specialisation.
(B) Simplicity.
(C) Expert advice.
(D) Experience.
Ans: (B) Simplicity.
20. Delegation of Authority is linked with:
(A) Managerial planning.
(B) Management co-ordination.
(C) Management control.
(D) Scientific management.
Ans: (C) Management control.
21. Techniques of management control are useful in:
(A) Selection of plant location.
(B) Identifying appropriate technology.
(C) Profit planning.
(D) Conducting shareholders’ meetings.
Ans: (C) Profit planning.
22. Motivational process and not the motivators as such is associated with the:
(A) Need-hierarchy theory.
(B) Two-factors theory.
(C) ERG-theory.
(D) Expectancy theory.
Ans: (D) Expectancy theory.
23. Magazines and Journals are suitable for advertising products of _______ type purchased by only a particular section of society.
(A) Special.
(B) Specific.
(C) General.
(D) None of the above.
Ans: (B) Specific.
24. Role of Marketing has become vital because of changes are increased:
(A) Technology.
(B) Competition.
(C) Both (A) and (B).
(D) None of the above.
Ans: (C) Both (A) and (B).
25. Informing the buyers of new brand and new package is the _______ of sales promotion.
(A) Objective.
(B) Method.
(C) Application.
(D) None of the above.
Ans: (A) Objective.
26. Producers of garments often organise _______ shoes to promote their products.
(A) Charity.
(B) Orchestra.
(C) Fashion.
(D) Movie.
Ans: (C) Fashion.
27. Salesman creates more _______ which makes planned and regular mass production possible.
(A) Demand.
(B) Sales.
(C) Price.
(D) Consumer.
Ans: (A) Demand.
28. Match List-I with List-II and choose the correct option from the codes given below it:
|
List-I |
List-II |
|
(1) Net Income approach. (2) Net operating income approach. (3) Traditional theory. (4) M.M. approach. |
(a) Ke is rising with increase in debt. (b) Ke and Kd remain constant irrespective of proportion of debt. (c) Arbitrage process. (d) Optimal capital structure. |
Codes:
(A) (1)-(b), (2)-(a), (3)-(d), (4)-(c).
(B) (1)-(a), (2)-(b), (3)-(c), (4)-(d).
(C) (1)-(c), (2)-(d), (3)-(b), (4)-(a).
(D) (1)-(d), (2)-(c), (3)-(a), (4)-(b).
Ans: (A) (1)-(b), (2)-(a), (3)-(d), (4)-(c).
30. Match List-I with List-II and choose the correct option from the codes given below it:
|
List-I |
List-II |
|
(1) Pay-back method. (2) NPV method. (3) IRR method. (4) Profitability Index method. |
(a) Shareholder wealth maximisation is directly examined. (b) There can be more than one outcome even in single calculation. (c) Useful in case of capital rationing. (d) Useful in case where rate of technological obsolescence is fast. |
Codes:
(A) (1)-(a), (2)-(d), (3)-(c), (4)-(b).
(B) (1)-(b), (2)-(c), (3)-(d), (4)-(a).
(C) (1)-(c), (2)-(b), (3)-(a), (4)-(d).
(D) (1)-(d), (2)-(a), (3)-(b), (4)-(c).
Ans: (D) (1)-(d), (2)-(a), (3)-(b), (4)-(c).
31. In the Miller-Orr model of optimum cash balance, return point value is:
(A) inversely related to interest rate.
(B) inversely related to holding cost.
(C) inversely related to transaction cost.
(D) inversely related to cash flow variance.
Ans: (A) inversely related to interest rate.
32. According to the Gordon Model, the price of the share is dependent on:
(A) Dividend pay-out ratio and earnings per share.
(B) The required rate of return by shareholders and expected rate of return on investment by firms.
(C) EPS at the end of the year, dividend pay-out ratio, rate of return required by shareholders and expected rate of
return on investment by firm.
(D) Target pay-out ratio and EPS.
Ans: (C) EPS at the end of the year, dividend pay-out ratio, rate of return required by shareholders and expected rate of return on investment by firm.
33. The Basket training method means:
(A) Development of decision skilled.
(B) Development of resources.
(C) Development of production.
(D) Development of institute.
Ans: (A) Development of decision skilled.
34. Which one of the following is not included under functions of Human Resource Management?
(A) Planning.
(B) Organising.
(C) Profitability.
(D) Recruitment.
Ans: (C) Profitability.
35. “Rage Committee” is related to:
(A) Individual differences in Indian industry.
(B) Working conditions in Indian industry.
(C) Social security in Indian industry.
(D) None of the above.
Ans: (B) Working conditions in Indian industry.
36. Match List-I with List-II and select the correct option from the codes given below is:
|
List-I |
List-II |
|
(a) E.F.L. Brech. (b) Keith Davis. (c) Chester I. Barnard. (d) L.F. Urwick. |
(1) Human Behaviour at Work. (2) Principles and Practice of Management. (3) The Elements of Administration. (4) The Functions of the Executive. |
Codes:
(A) (a)-(4), (b)-(3), (c)-(2), (d)-(1).
(B) (a)-(1), (b)-(2), (c)-(3), (d)-(4).
(C) (a)-(4), (b)-(1), (c)-(3), (d)-(2).
(D) (a)-(2), (b)-(1), (c)-(4), (d)-(3).
Ans: (D) (a)-(2), (b)-(1), (c)-(4), (d)-(3).
37. The Universal banking covers:
(A) Banking across the globe.
(B) Banking for all the customers.
(C) Providing all banking services.
(D) Banking for Universe.
Ans: (C) Providing all banking services.
38. NABARD is a:
(A) Rural Bank.
(B) Refinancing Institution.
(C) Commercial Bank.
(D) Policy Making Bank.
Ans: (B) Refinancing Institution.
39. The SARFESAI Act 2005 empowers banks to:
(A) increase NPAs.
(B) Offload NPAs on others.
(C) recover NPAs.
(D) dilute Assets.
Ans: (C) recover NPAs.
40. Which of the following is not a source of funds for State Financial Corporations?
(A) Income from investment.
(B) Refinancing.
(C) International markets.
(D) Reserve Bank of India.
Ans: (C) International markets.
41. In terms of ‘GDP’ world’s largest free trade area is:
(A) NAFTA.
(B) SAARC.
(C) ASEAN.
(D) EU.
Ans: (A) NAFTA.
42. To join IFC, a country _______.
(A) Must first be a member of the WB.
(B) Have signed IFC’s AOA.
(C) Have deposited instrument of acceptance of the AOA.
(D) All of the above.
Ans: (D) All of the above.
43. Which one of these is not an original/founder member of “ASEAN”?
(A) Indonesia.
(B) Malaysia.
(C) Korea.
(D) Singapore.
Ans: (C) Korea.
44. Match the following of List I and List II and choose the correct option from the codes given below:
|
List-I (Concepts) |
List-II (Disadvantages) |
|
(a) Joint Venture. (b) Foreign Trade. (c) Fixed Exchange Rate. (d) Flexible Exchange Rate. |
(1) It may exhaust resources. (2) Unnecessary capital movement. (3) The amount of profit potential are reduced. (4) Transient nature. |
Codes:
(A) (a)-(3), (b)-(1), (c)-(4), (d)-(2).
(B) (a)-(2), (b)-(1), (c)-(4), (d)-(3).
(C) (a)-(4), (b)-(3), (c)-(2), (d)-(1).
(D) (a)-(1), (b)-(2), (c)-(3), (d)-(4).
Ans: (A) (a)-(3), (b)-(1), (c)-(4), (d)-(2).
45. Product life cycle theory of ‘FDI’ was propounded by _______.
(A) Adam Smith.
(B) Raymond Vernon.
(C) F.W. Taussig.
(D) Heckscher-Ohlin.
Ans: (B) Raymond Vernon.
46. Which of the following is not basic function of Packaging?
(A) Protection.
(B) Performance.
(C) Production.
(D) Promotion.
Ans: (C) Production.
47. Which of the following is not a party of buying behaviour?
(A) Influencer.
(B) User.
(C) Decider.
(D) Government.
Ans: (D) Government.
48. The technique of measuring life styles of consumers is called:
(A) Demographics.
(B) Geographic.
(C) Psychographics.
(D) Photographic.
Ans: (C) Psychographics.
49. A point of comparison for an individual in the matter of forming values, attitudes and behaviour is called:
(A) Reference group.
(B) Celebrity.
(C) Personality.
(D) T. Group.
Ans: (A) Reference group.
50. Societal concept of marketing is for:
(A) Large scale selling and promotional efforts.
(B) Production as per consumer needs.
(C) Product improvement.
(D) Improvement of people’s well being.
Ans: (D) Improvement of people’s well being.
51. The big difference between advertising and publicity is that:
(A) Publicity is free and advertising is paid for.
(B) The sponsor of the advertising is openly identified.
(C) Publicity is limited to sales of services and advertising is used for products and services.
(D) All of the above.
Ans: (A) Publicity is free and advertising is paid for.
52. How many entities are involved in regulating the financial sector in India?
(A) 3.
(B) 5.
(C) 10.
(D) 1.
Ans: (B) 5.
53. Which one of the following is not credit rating agency?
(A) CRISIL.
(B) Moody’s.
(C) IRDA.
(D) ICRA.
Ans: (C) IRDA.
54. Global depository receipts (GDRs) are issued in _______ market.
(A) Indian capital.
(B) US capital.
(C) Euro.
(D) Australian capital.
Ans: (C) Euro.
55. FCCBs stands for:
(A) Foreign Capital Convertible Bonds.
(B) Foreign Currency Convertible Bonds.
(C) Foreign Currency Capital Bonds.
(D) Foreign Capital Currency Bonds.
Ans: (B) Foreign Currency Convertible Bonds.
56. SEBI is _______.
(A) Stock Exchange.
(B) Credit Rating Agency.
(C) Regulatory Agency.
(D) Bank.
Ans: (C) Regulatory Agency.
57. Which one of the following is not money market instrument?
(A) Certificate of Deposit.
(B) Commercial Paper.
(C) Treasury Bill.
(D) Debenture.
Ans: (D) Debenture.
58. A written statement of the human qualification, education and experience needed to perform a job is referred to as:
(A) Job design.
(B) Job description.
(C) Job specification.
(D) Job enrichment.
Ans: (D) Job enrichment.
59. The Differential Piece Wage Plan is related to:
(A) Joseph Scanlon.
(B) F.W. Taylor.
(C) Harold Koontz.
(D) James Rowan.
Ans: (B) F.W. Taylor.
60. “Human Relations Approach Theory” to management was originated by:
(A) F.W. Taylor.
(B) Peter F. Drucker.
(C) Elton Mayo.
(D) Henry Fayol.
Ans: (C) Elton Mayo.
61. VRS (Voluntary Retirement Scheme) may be used in _______.
(A) Training Policy.
(B) Exit Policy.
(C) Import Policy.
(D) Export Policy.
Ans: (B) Exit Policy.
62. Dexterity tests are used to judge the _______.
(A) Training of the candidate.
(B) Proficiency of the candidate.
(C) Physical movements of the candidate.
(D) None of the above.
Ans: (C) Physical movements of the candidate.
63. The practice of placing a candidate at the right job is:
(A) Selection.
(B) Recruitment.
(C) Placement.
(D) Interview.
Ans: (C) Placement.
64. SDR’s are allocated by the:
(A) WTO.
(B) IMF.
(C) RBI.
(D) IFC.
Ans: (B) IMF.
65. Match the following items of List I with the items of List II and choose the correct option from the codes given below it:
|
List-I |
List-II |
|
(a) Ethnocentric. (b) Polycentric Approach. (c) Regiocentric Approach. (d) Geocentric Approach. |
(1) Companies view foreign market as an extension of domestic market. (2) Companies establish foreign subsidiary and empowers its executives. (3) Subsidiaries consider regional environment for policy formulation. (4) Companies view the entire world as a single country. |
Codes:
(A) (a)-(1), (b)-(2), (c)-(3), (d)-(4).
(B) (a)-(2), (b)-(3), (c)-(1), (d)-(4).
(C) (a)-(4), (b)-(3), (c)-(2), (d)-(1).
(D) (a)-(1), (b)-(3), (c)-(2), (d)-(4).
Ans: (A) (a)-(1), (b)-(2), (c)-(3), (d)-(4).
66. Which one of the following is not an advantage of the fixed exchange rate?
(A) Protection from the risk of uncertainty.
(B) Maintenance of monetary discipline.
(C) Convenience.
(D) Transient nature.
Ans: (D) Transient nature.
67. The theory of comparative advantage assumes single factor of production i.e.,:
(A) Land.
(B) Labour.
(C) Capital.
(D) Machinery.
Ans: (B) Labour.
68. Match the items of List I with the items of List II and choose the correct option from the codes given below it:
|
List-I |
List-II |
|
(a) Importing. (b) Marketing. (c) Sales expansion. (d) Economic forces. |
(1) Mode of International Business. (2) Functions of International Business. (3) Objectives of International Business. (4) External Influence. |
Codes:
(A) (a)-(3), (b)-(1), (c)-(4), (d)-(2).
(B) (a)-(4), (b)-(2), (c)-(3), (d)-(1).
(C) (a)-(1), (b)-(2), (c)-(3), (d)-(4).
(D) (a)-(4), (b)-(3), (c)-(2), (d)-(1).
Ans: (C) (a)-(1), (b)-(2), (c)-(3), (d)-(4).
69. The W.T.O. is the embodiment of _______ results and the successor to _______.
(A) Uruguay Round, GATT.
(B) Bretton Woods, GATT.
(C) Uruguay Round, GARP.
(D) Bretton Woods, GAAP.
Ans: (A) Uruguay Round, GATT.
70. The income which accrues and arise outside Indian, from sources situated outside India:
(A) is exempt in the hands of all assessees in India.
(B) is chargeable in the hands of all assessees in India.
(C) is chargeable in the hands of resident assessees in India.
(D) is chargeable in the hands of non-resident assessees in India.
Ans: (C) is chargeable in the hands of resident assessees in India.
71. In the case of partnership firm, if certain conditions are satisfied and if the profit of the firm is Rs. 1,50,000, the amount of remuneration paid to partners will be deductible upto _______ in the hands of firm.
(A) Rs. 1,35,000.
(B) Rs. 1,50,000.
(C) Rs. 3,00,000.
(D) Rs. 90,000.
Ans: (B) Rs. 1,50,000.
72. Match the following:
|
Nature of Payment |
Residential status of Recipient |
Tax to be deducted at sources at the Rate |
|
(I) Interest on Securities (other than exceptions) . (II) Interest upto Rs. 10,000 on Bank FDRs. (III) Commission etc. on sale of lottery tickets exceeding Rs. 1,000. (IV) Payment regarding NSS exceeding Rs. 2,500. |
(i) Any person. (ii) Resident person. (iii) Any person. (iv) Resident person. |
(a) 0%. (b) 10%. (c) 20%. (d) 10%. |
Codes:
(A) (I)-(iv-b), (II)-(ii-a), (III)-(iii-d), (IV)-(i-c).
(B) (I)-(ii-a), (II)-(iv-b), (III)-(i-c), (IV)-(iii-d).
(C) (I)-(i-b), (II)-(ii-c), (III)-(iii-a), (IV)-(iv-d).
(D) (I)-(iii-c), (II)-(i-a), (III)-(ii-b), (IV)-(iv-d).
Ans: (A) (I)-(iv-b), (II)-(ii-a), (III)-(iii-d), (IV)-(i-c).
73. Match the following and choose the correct option from the codes given below it:
|
(I) Concealment of income. (II) Art of dodging tax without breaking the law. (III) Reducing tax liability by fulfilling intentions of law. (IV) Compliance with statutory provisions of law. |
(a) Tax Avoidance. (b) Tax Management. (c) Tax Evasion. (d) Tax Planning. |
Codes:
(A) (I)-(a), (II)-(c), (III)-(b), (IV)-(d).
(B) (I)-(b), (II)-(d), (III)-(c), (IV)-(a).
(C) (I)-(c), (II)-(a), (III)-(d), (IV)-(b).
(D) (I)-(d), (II)-(b), (III)-(a), (IV)-(c).
Ans: (C) (I)-(c), (II)-(a), (III)-(d), (IV)-(b).
74. In case of sale and lease back, the actual cost of asset for claiming depreciation in the books of lessor will be:
(A) Amount paid to seller of an asset.
(B) Fair market value of an asset on the date of purchase of an asset.
(C) Written down value of an asset in the books of the seller.
(D) Total amount of the lease rentals receivable over the life of the asset.
Ans: (C) Written down value of an asset in the books of the seller.
75. In case where capital-asset is converted to stock-in-trade, and when stock-in-trade is sold, the amount chargeable to tax will be:
(A) only the amount of difference between sale price and fair market value as on date of conversion under the head Profits and Gains from Business or Profession.
(B) difference between fair market value as on date of conversion and cost of acquisition or indexed cost of acquisition as capital gains and difference between sale price and fair market value as on date of conversion as Profits and Gains from Business or Profession.
(C) Difference between sale price and cost of acquisition as capital gains.
(D) Difference between sale price and cost of acquisition as Profits and Gains from Business or Profession.
Ans: (B) difference between fair market value as on date of conversion and cost of acquisition or indexed cost of acquisition as capital gains and difference between sale price and fair market value as on date of conversion as Profits and Gains from Business or Profession.
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