Karnataka 2016 Commerce – Paper II

  1. A business environment which is increasingly complex and turbulent displays
    (a) An orderly competition
    (b) A stable growth in the business
    (c) Product obsolescence risk is less
    (d) Increased speed of innovation
  2. Removal of poverty was strongly emphasized during
    (a) Fourth Five Year Plan
    (b) Fifth Five Year Plan
    (c) Sixth Five Year Plan
    (d) First Five Year Plan
  3. Assertion (A) : Scanning is the process of analysing the environment for identifying the factors which have an impact on the business.
    Reasoning (R) : Because analysis of external environment enables a business to identify its strengths and weaknesses.
    Codes :
    (a) Both (A) and (R) are correct
    (b) (A) is correct and (R) is incorrect
    (c) Both (A) and (R) are incorrect
    (d) (A) is incorrect and (R) is correct
  4. Match the following :
    List – A List – B
    (a) MRTP Act i. 2002
    (b) FERA ii. 1999
    (c) FEMA  iii. 1971
    (d) Competition Act  iv. 1969

    Codes :
    (a) (b) (c) (d)
    (a) iv, iii, ii, i
    (b) i, ii, iii, iv
    (c) ii, iii, iv, i
    (d) iii, i, ii, iv

  5. Withdrawal of state from an industry or sector partially or fully is called
    (a) Liberalisation
    (b) Globalisation
    (c) Privatisation
    (d) Modernisation
  6. Share Capital Suspense Account is opened when
    (a) Some shares are forfeited
    (b) Dividend is declared but not claimed
    (c) Application money is received but Balance Sheet is prepared before allotment of shares
    (d) Balance Sheet does not tally
  7. Which of the following statements are true ?
    (a) In marginal costing, fixed costs are treated as product costs.
    (b) Marginal costing is not an independent system of costing.
    (c) Marginal costing is not a technique of cost analysis.
    (d) In marginal costing, all costs are divided into fixed and variable.
    Codes :
    (a) (i) and (ii)
    (b) (ii) and (iii)
    (c) (i) and (iv)
    (d) (ii) and (iv)
  8. Statement A : Usefulness, objectivity and feasibility are the three basic norms generally found in accounting principles.
    Statement B : Losses from the sale of capital assets need not be deducted from revenue to ascertain the net income.
    Codes :
    (a) Both the statements are true
    (b) Both the statements are wrong
    (c) Statement (A) is correct and (B) is wrong
    (d) Statement (A) is wrong and (B) is correct
  9. Match the following :
    List – I  List – II
    (a) Statement of Financial Accounting Standards i) XBRL
    (b) Accounting standards  ii) IASB
    (c) International Financial Reporting Standards iii) FASB
    (d) Extensible Business Reporting Language  iv) ICAI

    Codes :
    (a) (b) (c) (d)
    (a) iv, iii, ii, i
    (b) i, ii, iii, iv
    (c) iii, iv, ii, i
    (d) iv, ii, i, iii

  10. Statement (A) : Under accounting standard, unexpired insurance premium usually considered to be non-current asset.
    Statement (B) : Certain cost of doing business capitalised when incurred and then depreciated or amortised over subsequent accounting periods to match operating costs with revenues earned.
    Codes :
    (a) Statement (A) is wrong and (B) is correct
    (b) Statement (A) is correct and (B) is wrong
    (c) Both the statements are correct
    (d) Both the statements are wrong
  11. To determine whether two goods are substitutes or complements an economist would estimate the
    (a) Price elasticity of demand
    (b) Income elasticity of demand
    (c) Cross elasticity of demand
    (d) Point elasticity of demand
  12. Assertion (A) : Giffin paradox rarely occurs in the real world.
    Reasoning (R) : Inferior goods are narrowly defined for which suitable substitutes are available.
    Codes :
    (a) Both (A) and (R) are incorrect
    (b) (A) is correct and (R) is incorrect
    (c) Both (A) and (R) are correct
    (d) (A) is incorrect and (R) is correct
  13. Match the following :
    List – I  List – II
    (a) Perfect competition i) No substitutes
    (b) Pure monopoly ii) Homogenous Product
    (c) Monopolistic competition  iii) Price rigidity
    (d) Oligopoly  iv) Product differentiation

    Codes :
    (a) (b) (c) (d)
    (a) ii, i, iv, iii
    (b) i, ii, iii, iv
    (c) ii, iii, iv, i
    (d) iii, ii, iv, i

  14. Which of the following is (are) correct ?
    (a) TC = TFC + TVC
    (b) MC = ( ΔTC)/ΔQ
    (c) MTC = AVC + AFC
    (d) MC = ( TFC)/Q
    Codes :
    (a) i, iii, and iv
    (b) ii, iii, and iv
    (c) i, ii, and iii
    (d) i, ii, and iv
  15. Which of the following is not an assumption of Break-even-analysis ?
    (a) Elements of cost cannot be divided into different groups
    (b) Fixed cost remains constant from zero production to full capacity
    (c) Behaviour of different costs is linear
    (d) Selling price remains constant
  16. For the given set of data : 4, 4, 5, 6, 6 which of the following is true ?
    (a) Mean = Mode
    (b) Median = Mode
    (c) Mean = Median
    (d) Mean < Median
  17. List – I List – II
    (a) Type I error  i) Small standard error
    (b) Large sample  ii) Non-parametric
    (c) Multiple regression  iii) False positive
    (d) Chi-square test iv) One dependent variable

    Codes :
    (a) (b) (c) (d)
    (a) iv, i, ii, iii
    (b) ii, i, iv, ii
    (c) ii, iii, i, iv
    (d) iii, iv, i, ii

  18. Statement ( A) : A sample from population does not have to share the same characteristics as the population.
    Statement (B) : The difference between a sample statistic and its corresponding population parameter is called sampling error.
    Codes :
    (a) Statement (A) is correct and (B) is incorrect
    (b) Statement (A) is incorrect and (B) is correct
    (c) Both the statements are correct
    (d) Both the statements are incorrect
  19. The classification method in which the upper limit of interval is the same as of lower limit class interval is called
    (a) Mid-point method
    (b) Exclusive method
    (c) Inclusive method
    (d) Ratio method
  20. In a normal distribution, the increased spread and decreased height represents
    (a) Larger value of standard deviation
    (b) Smaller value of variance
    (c) Larger value of variance
    (d) Smaller value of standard deviation
  21. Which one of the following statements is false ?
    (a) Leadership is a part of management, but not all of it
    (b) Leadership is the process of getting things done through and with the people
    (c) People become leaders by birth
    (d) Leadership is an interpersonal process excercised by the leader on the followers in a given situation
  22. Identify which one of the following factors does not come under job context factors of Herzberg’s two-factor theory of motivation ?
    (a) Company policy
    (b) Personal achievement
    (c) Relationships with co-workers
    (d) Working conditions
  23. Match the items of List-I with items of List-II :
    List – I  List – II
    (a) Max Weber  1) 4-systems Management
    (b) Douglas McGregor 2) Managerial Grid model
    (c) Rensis Likert 3) Ideal Bureaucracy
    (d) Blake and Mouton  4) Theory X and Theory Y

    Codes :
    (a) (b) (c) (d)
    (a) 3 4 1 2
    (b) 2 1 3 4
    (c) 4 3 2 1
    (d) 1 2 4 3

  24. Assertion (A) : Authority is distributed at orgnisations in line, staff and functional forms.
    Reasoning (R) : Functional authority is a kind of staff authority that in certain cases is combined with line authority.
    Codes :
    (a) (A) is correct, but (R) is incorrect
    (b) (A) is incorrect, but (R) is correct
    (c) Both (A) and (R) are correct
    (d) Both (A) and (R) are incorrect
  25. Arrange the steps involved in the process of communication in the sequential order
    (a) Sender – decoding – receiver – encoding – feedback
    (b) Sender – decoding – receiver – feedback – encoding
    (c) Sender – encoding – receiver – feedback – decoding
    (d) Sender – encoding – receiver – decoding – feedback
  26. Which of the following reflects the marketing concept ?
    (a) “We are in the business of making and selling superior products”
    (b) “When it is profits versus customers’ needs profits will always win out”
    (c) “You won’t find a better deal”
    (d) “We don’t have marketing department, we have a customer department”
  27. Match the following :
    List – I  List – II
    (a) Geographic  i) Education
    (b) Demographic  ii) Loyalty status
    (c) Psychographic  iii) Rural and semi urban
    (d) Behavioural  iv) Life style

    Codes :
    (a) (b) (c) (d)
    (a) iv, ii, iii, i
    (b) iii, i, iv, ii
    (c) iii, iv, ii, i
    (d) ii, iii, i, iv

  28. An increasingly a large number of firms are changing their organisation focus from
    (a) Brand management to customer relationship management
    (b) Product management to functional management
    (c) Product management to territory management
    (d) Territory management to functional management
  29. Assertion (A) : Companies unveiling a new technology favour setting high prices.
    Reason (R) : They do so to stall the entry of competitors into the market.
    Codes :
    (a) Both (A) and (R) are incorrect
    (b) Both (A) and (R) are correct
    (c) (A) is correct and (R) is incorrect
    (d) (A) is incorrect and (R) is correct
  30. Sales promotion to customers is
    (a) An incentive to buy
    (b) A reason to buy
    (c) A reason to reject the good or service
    (d) A reason to postpone the purchase
  31. Long-term objective of financial management is to
    (a) Maximise return on investment
    (b) Maximise market share
    (c) Maximise the value of firm’s common stock
    (d) Maximise earnings per share
  32. Match the following :
    (a) Treasury bills i) Operating cycle
    (b) Beta  ii) Time value of money
    (c) Capital budgeting iii) Risk free rate
    (d) Working capita l iv) Systematic risk

    Codes :
    (a) (b) (c) (d)
    (a) iv, iii, i, ii
    (b) iv, i, ii, iii
    (c) iii, iv, ii, i
    (d) iii, i, ii, iv

  33. Statement A : A critical assumption of the net operating income approach to valuation is that debt and equity levels remain unchanged.
    Statement B : A firm’s degree of operating leverage depends primarily upon its level of operating costs.
    Codes :
    (a) Both statements are correct
    (b) Both statements are wrong
    (c) Statement (A) is correct and (B) is wrong
    (d) Statement (A) is wrong and (B) is correct
  34. M.I.C.R. stands for
    (a) Magnetic Ink Character Reader
    (b) Magnetic Ink Code Reader
    (c) Micro Ink Code Reader
    (d) Micro Ink Character Reader
  35. Which of the following is important while taking up a project ?
    (a) Research costs
    (b) Investment in fixed and working capital
    (c) Continuation value
    (d) Historical costs
  36. Span of control concept was given by
    (a) McGregor
    (b) Elton Mayo
    (c) Peter F. Drucker
    (d) Graicuna
  37. Adding of more jobs to the existing job is termed as
    (a) Job rotation
    (b) Job enlargement
    (c) Job enrichment
    (d) Job evaluation
  38. Match the following Acts in List I with the years they are enacted in List II :
    List-I List – II
    (a) Payment of Bonus Act  (i) 1923
    (b) Workman Compensation Act  (ii) 1972
    (c) Minimum Wages Act (iii) 1948
    (d) Payment of Gratuity Act (iv) 1965

    Codes :
    (a) (b) (c) (d)
    (a) iv, i, iii, ii
    (b) ii, iii, i, iv
    (c) i, ii, iv, iii
    (d) iii, iv, ii, i

  39. Assertion (A) : H.R. managers perform both line and staff functions.
    Reasoning (R) : H.R. managers advise the line managers in the decision-making process of an orgnisation.
    Codes :
    (a) (A) is incorrect, but (R) is correct
    (b) (A) is correct, but (R) is incorrect
    (c) Both (A) and (R) are correct
    (d) Both (A) and (R) are incorrect
  40. Which one of the following does not come under off-the-job training method ?
    (a) Programmed instruction
    (b) Lecture method
    (c) Grid training
    (d) Internship training
  41. _________Governs the transactions through cheques.
    (a) RBI Act, 1934
    (b) Negotiable Instruments Act, 1881
    (c) Banking Regulation Act, 1949
    (d) Indian Contract Act, 1872
  42. Match the following :
    List – I  List – II
    (a) RBI  i) Governing Debentures
    (b) FEMA  ii) Bank rate
    (c) Company Law iii) Mutual Funds
    (d) SEBI  iv) Forex activities

    Codes :
    (a) (b) (c) (d)
    (a) iv, iii, ii, i
    (b) ii, iv, i, iii
    (c) ii, iii, i, iv
    (d) iii, iv, ii, i

  43. Banking Ombudsman has been constituted under
    (a) Banking Regulation Act
    (b) COPRA
    (c) RBI Act
    (d) Negotiable Instruments Act
  44. Statement (A) : Statutory Liquidity Ratio is maintained as a percentage of net demand and time liabilities.
    Statement (B) : Bill market system was introduced during the year 1955.
    Codes :
    (a) Statement (A) is right (B) is wrong
    (b) Statement (A) is wrong (B) is right
    (c) Both the statements are right
    (d) Both the statements are wrong
  45. Which bank took over the entire undertaking of the ARDC ?
    (a) RBI
    (b) SBI
    (c) NABARD
    (d) SEBI
  46. ‘Currency Swap’ in International Business refers to
    (a) A state of affairs when external value of a currency falls
    (b) A market for currency derivatives
    (c) Exchange of cash flows in two different currencies for a predetermined period of time
    (d) A market where currencies are bought and sold for their delivery on a future date
  47. Who stated that multinationalism and expanding world trade are two sides of the same coin ?
    (a) World Trade Organisation
    (b) Peter F. Drucker
    (c) International Labour Organisation
    (d) C. K. Prahallad
  48. “An area designated by the Govt. where goods are manufactured with the help of duty-free inputs and are (a) exported to foreign markets” is called
    (a) Export Processing Zone
    (b) Special Economic Zone
    (c) Free Market Zone
    (d) Import-Export Zone
  49. Match the following theories of international trade in List-I with their propounders in List-II :
    List – I List – II
    (a) Mercantilism theory  1) Michael Porter
    (b) Theory of absolute cost advantage  2) David Hume
    (c) National competitive advantage theory 3) Eli Heckscher
    (d) Factor endowment theory  4) Adam Smith

    Codes :
    (a) (b) (c) (d)
    (a) 1, 3, 4, 2
    (b) 3, 2, 1, 4
    (c) 2, 4, 1, 3
    (d) 4, 1, 2, 3

  50. Assertion (A) : Expropriation and confiscation are one and the same.
    Reasoning (R) : Expropriation is taking over the assets of a company by the Govt. by paying compensation while confiscation is forced acquisition a company’s assets without paying compensation.
    Codes :
    (a) (A) is correct, but (R) is incorrect
    (b) (A) is incorrect, but (R) is correct
    (c) Both (A) and (R) are incorrect
    (d) Both (A) and (R) are correct

    Answer Key

    1 (d) 2 (b) 3 (b) 4 (a) 5 (c) 6 (c) 7 (d) 8 (c) 9 (c) 10 (a) 11 (c) 12 (b) 13 (a) 14 (c) 15 (a) 16 (c) 17 (b) 18 (b) 19 (b) 20 (a) 21 (c) 22 (b) 23 (a) 24 (c) 25 (d) 26 (d) 27 (b) 28 (a) 29 (c) 30 (a) 31 (c) 32 (c) 33 (b) 34 (a) 35 (b) 36 (d) 37 (b) 38 (a) 39 (a) 40 (d) 41 (b) 42 (b) 43 (a) 44 (a) 45 (c) 46 (c) 47 (b) 48 (a) 49 (c) 50 (b)