September 2013 GSET Commerce Solved Paper, Paper – II, Subject Code: 17

September 2013 GSET Commerce Solved Paper

Paper – II (Commerce)

Subject Code: 17

Marks: 100

Time: 75 Minutes (1.25 Hours)

Note: This paper contains FIFTY (50) multiple choice/assertion/reasoning matching questions. Each question carrying TWO (2) marks. Attempt All the questions.

1. Which of the following statements is not correct?

(A) Privatisation may mean that the management of a Public Enterprise can be privatized.

(B) Privatisation may mean that the enterprise operations can be privatized.

(C) Privatisation necessarily means that the public enterprise is to be sold to the private sector.

(D) Privatisation may mean marketisation of economic transactions.

Ans: (C) Privatisation necessarily means that the public enterprise is to be sold to the private sector.

2. Which from the following is one of the second generation reforms?

(A) Agricultural reforms.

(B) Privatisation.

(C) Abolition of licensing.

(D) Foreign Exchange Reforms.

Ans: (A) Agricultural reforms.

3. The Disinvestment Policy was initiated by:

(A) Atal Bihari Vajpayee’s Government.

(B) Narasimha Rao’s Government.

(C) Chandrasekhar’s’ Government.

(D) Sonia Gandhi’s Government.

Ans: (C) Chandrasekhar’s’ Government.

4. A corporate unit which has gone global is known as:

(A) Euro Unit.

(B) Foreign Corporation.

(C) U.S. Corporation.

(D) Multinational Corporation.

Ans: (D) Multinational Corporation.

5. For small scale industries, credit facilities are provided by:

(A) State Financial Corporation.

(B) Commercial Banks.

(C) State Industrial Development Corporation.

(D) All of the above.

Ans: (D) All of the above.

6. Which one of the following conventions is usually followed by the accountant for the policy of “Playing Safe”?

(A) Conservatism.

(B) Consistency.

(C) Full Disclosure.

(D) Materiality.

Ans: (A) Conservatism.

7. Partnership agreement should specify all of the following except:

(A) Payment of dividend.

(B) Distribution of profits.

(C) Procedure for admission of a new partner.

(D) Amount of capital invested by each partner.

Ans: (A) Payment of dividend.

8. Discount on issue of shares is a:

(A) Capital loss.

(B) Revenue loss.

(C) Trading loss.

(D) Financial loss.

Ans: (A) Capital loss.

9. Balance-sheet of a company indicates that its current ratio is 1.5. The company’s net working capital is Rs. 1 crore. The current assets would amount to:

(A) Rs. 1 crore.

(B) Rs. 3 crore.

(C) Rs. 4 crore.

(D) Rs. 2.5 crore.

Ans: (B) Rs. 3 crore.

10. Absorption Costing is called _______.

(A) Conventional Costing.

(B) Full Costing.

(C) Direct Costing.

(D) (A) and (B) both.

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

11. A subject which deals in economic theories, logic, tools and analysis that are widely applied to business management is named as:

(A) Micro-economics.

(B) International Economics.

(C) Demand and Supply Economics.

(D) Business Economics.

Ans: (D) Business Economics.

12. Read the following statements are thereafter selects the correct alternative about these statements:

(a) Revenue – Direct Expenses – All Indirect Expenses = Profit.

(b) Profit is indispensable for the survival of a business unit.


(A) (a) is incorrect.

(B) (b) is incorrect but (a) is correct.

(C) (a) and (b) both are correct.

(D) Only (b) is correct.

Ans: (C) (a) and (b) both are correct.

13. In production unit, the fundamental objective of _______ is to identify and analyse the basic determinants of consumer needs and wants. Which one of the following will complete the statement in correct way?

(A) Market Demand Function.

(B) Demand Analysis.

(C) Wealth Maximisation Process.

(D) Profit Maximisation.

Ans: (B) Demand Analysis.

Screenshot 20220804 2135142

15. When in a firm the productive services are increased in a certain proportion and by that the production enhances in the same proportion, then that law is known as:

(A) Law of constant returns.

(B) Law of proportionate returns.

(C) Law of equimarginal returns.

(D) Law of diminishing returns.

Ans: (A) Law of constant returns.

Screenshot 20220804 2135292

17. When the hypothesis is false and out test rejects it, the decision will be:

(A) incorrect decision.

(B) having type-I error.

(C) correct decision.

(D) having type-II error.

Ans: (C) correct decision.

Screenshot 20220804 2135432

19. The organised process or set of steps that needs to be followed to develop an information system is known as:

(A) The analytical cycle.

(B) The design cycle.

(C) The program specification.

(D) The system development life cycle.

Ans: (D) The system development life cycle.

20. In a Chi-Square analysis, the table has 5 columns, and 4 rows. The degrees of freedom will be equal to:

(A) 12.

(B) 20.

(C) 16.

(D) 8.

Ans: (A) 12.

21. Which of the following is not an element of planning?

(A) Programme.

(B) Procedure.

(C) Policy.

(D) Information.

Ans: (D) Information.

22. The process of delegation is

(A) Top to Bottom.

(B) Bottom to Top.

(C) Horizontal.

(D) Circular.

Ans: (A) Top to Bottom.

23. Which is the oldest form of organisation?

(A) Functional Organisation.

(B) Life Organisation.

(C) Line and Staff Organisation.

(D) Committee Organisation.

Ans: (B) Life Organisation.

24. Deciding in advance, what is to be done in future, is known as:

(A) Management.

(B) Co-ordination.

(C) Planning.

(D) Decentralisation.

Ans: (C) Planning.

25. The term ‘Strategy’ is related to:

(A) Planning.

(B) Motivating.

(C) Decentralisation.

(D) Co-operation.

Ans: (A) Planning.

26. “A marketing policy is a statement of a course of action which will be followed under a given set of circumstances.” Who said it?

(A) William J. Stanton.

(B) Philip Kotler.

(C) Cundiff and Still.

(D) J.R. Betty.

Ans: (A) William J. Stanton.

27. Today marketing is:

(A) Product oriented activities.

(B) Consumer oriented activities.

(C) Profit oriented activities.

(D) Cost-oriented activities.

Ans: (B) Consumer oriented activities.

28. Which of the following is durable product?

(A) Milk and Ghee.

(B) Bread.

(C) Television and Furniture.

(D) None of the above.

Ans: (C) Television and Furniture.

29. Pricing decision is affected by:

(A) Objectives of the manufacturer.

(B) Cost of the product.

(C) Competition.

(D) All of the above.

Ans: (D) All of the above.

30. Sales promotion is a:

(A) Short-term device.

(B) Long-term device.

(C) Highly long-term device.

(D) Company strategy.

Ans: (A) Short-term device.

31. Which of the following does not explain relationship between capital structure and the value of the firm?

(A) Net Income Approach.

(B) Net Operating Income Approach.

(C) Net Operating Leverage Approach.

(D) Modigliani-Miller Hypothesis.

Ans: (C) Net Operating Leverage Approach.

32. If EBIT = Rs. 15,00,000, Interest Rs. 1,50,000, and Corporate tax = 40%, then degree of financial leverage shall be:

(A) 1.11.

(B) 1.21.

(C) 1.31.

(D) 1.41.

Ans: (A) 1.11.

33. The balance of debtors is not influenced by:

(A) Level of sales.

(B) Collection policy.

(C) No. of employees in Credit Dept.

(D) Credit terms.

Ans: (C) No. of employees in Credit Dept.

34. Which of the following is not a determinant of dividend policy?

(A) Legal constraints and liquidity of the firm.

(B) Financial position of the shareholders.

(C) Retention policy and future financing.

(D) Business cycle and inflation.

Ans: (B) Financial position of the shareholders.

35. For discounted cash-flow methods, the discount rate used is

(A) fixed arbitrarily.

(B) equivalent to bank rate.

(C) equivalent to firm’s average cost of capital.

(D) equivalent to final rate of dividend.

Ans: (C) equivalent to firm’s average cost of capital.

36. Which is/are the source/sources of recruitment in India?

(A) Employee Reference.

(B) College Recruitment.

(C) Employment Exchange.

(D) All of the above.

Ans: (D) All of the above.

37. The practice of placing a candidate at the right job is:

(A) Placement.

(B) Selection.

(C) Interview.

(D) None of the above.

Ans: (B) Selection.

38. Which among the following is not a voluntary method for prevention and settlement of disputes?

(A) Collective Bargaining.

(B) Standing Orders.

(C) Joint Consultation.

(D) Works Committee.

Ans: (D) Works Committee.

39. Management is bound for labour welfare:

(A) Within the factory only.

(B) Outside the factory only.

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

(D) None of the above.

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

40. Social Security (Minimum Standards) Convention covers:

(A) Medical care.

(B) Sickness benefit.

(C) Unemployment benefit.

(D) All of the above.

Ans: (D) All of the above.

41. Statement I: RBI occupies the central position because it regulates and controls the credit supply of the nation.

Statement II: Indian Money Market is still unorganised money market.

After reading these two statements select the correct answer from the following:

(A) Both I and II are true.

(B) Only I is true and II is false.

(C) Only II is true and I is false.

(D) In fact, both I and I are false.

Ans: (B) Only I is true and II is false.

42. Which one of the following banks was nationalised on April 15, 1980?

(A) Bank of India.

(B) Punjab National Bank.

(C) Bank of Baroda.

(D) Corporation Bank.

Ans: (D) Corporation Bank.

43. The credit and financial facilities to the small and marginal farmers, agricultural labour, artisans, small entrepreneurs and persons of small means engaged to productive activities in rural areas are provided by:

(A) Deposit Banks.


(C) Rural Banks.

(D) Urban Co-operative Banks.

Ans: (C) Rural Banks.

44. Bank Rate, Repo and Reserve Repo rates are determined by:

(A) State Bank of India (SBI).

(B) Bank of Saurashtra.

(C) Bank of Baroda.

(D) Reserve Bank of India (RBI).

Ans: (D) Reserve Bank of India (RBI).

45. Merchant Banking covering public issues and underwriting of securities is regulated by one of the following:

(A) RBI.

(B) Securities Act, 1956.


(D) Guidelines of Ministry of Finance.

Ans: (D) Guidelines of Ministry of Finance.

46. Which one of the following is not the type of “Balance of Payments”?

(A) Current A/c.

(B) Capital A/c.

(C) Commodity A/c.

(D) Current and Capital Accounts.

Ans: (C) Commodity A/c.

47. _______ is not the component of International Liquidity. Which one of the following will be used correctly to complete the sentence?

(A) Gold held by Central Banks.

(B) Gold held by State Bank of India.

(C) Euros held by RBI.

(D) Canadian Dollars held by RBI.

Ans: (B) Gold held by State Bank of India.

48. Bretton Woods Conference recommended the establishment of:

(A) International Euro Fund.

(B) International Bail-out Fund.

(C) International Monetary Fund.

(D) WTO.

Ans: (C) International Monetary Fund.

49. World Trade Organisation was formed in 1994 on the basis of:

(A) Tariffs and Safeguards Suggestions.

(B) Dunkel Proposals.

(C) GATT’s Liquidation.

(D) Bretton Woods Proposals.

Ans: (B) Dunkel Proposals.

50. Statement I: EXIM Bank in India was set up in 1982.

Statement II: FDI stands for ‘Foreign Direct Investment’.

Statement III: Administering trade agreements is one of the functions of WTO.

Now, on the basis of reading of above statements, select the correct answer from the following four choices.

(A) I, II and III are correct.

(B) I and II are correct and III is false.

(C) Only II and III are correct.

(D) Only I is correct.

Ans: (A) I, II and III are correct.


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