Karnataka 2020 Commerce – Paper II

  1. Assertion (A) : India’s balance of payments is always in disequilibrium.
    Reason (R) : The demand for foreign exchange is more than its supply.
    Codes :
    (a) Both (A) and (R) are correct and (R) is the correct explanation of (A)
    (b) Both (A) and (R) are correct but (R) is not the correct explanation of (A)
    (c) (A) is correct but (R) is incorrect
    (d) (A) is incorrect but (R) is correct
  2. Assertion (A) : India’s trade policies are still inward looking.
    Reason (R) : The focus of EXIM policy is more on export promotion measures.
    Codes :
    (a) Both (A) and (R) are correct and (R) is the correct explanation of (A)
    (b) Both (A) and (R) are correct but (R) is not the correct explanation of (A)
    (c) Both (A) and (R) are incorrect
    (d) (A) is incorrect but (R) is correct
  3. Foreign Investment Promotion Board is under the ministry of
    (a) External affairs
    (b) Industry
    (c) Finance
    (d) PMO
  4. The European Union is a
    (a) Political Union
    (b) Common Union
    (c) Customs Union
    (d) Economic Union
  5. Match the following :
    List – I List – II
    a. IBRD  i. Help developing countries reduce poverty
    b. IDA  ii. Concessional loans to the world’s poorest countries
    c. IFC  iii. Finance to the private sector
    d. MIGA iv. Promotes FDI into developing countries

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

  6. FDI into fresh production facilities is known as
    (a) Greenfield investment
    (b) Brownfield investment
    (c) Horizontal investment
    (d) Vertical investment
  7. ‘Mysore Silk’ can be included under
    (a) Patent
    (b) Copyright
    (c) Trademark
    (d) Geographical indication
  8. The correct expansion of the acronym BIMSTEC
    (a) Bay of Bengal Initiative for multi-sectoral technical and economic co-operation
    (b) Bay of Bengal Initiative for multi-sectoral trade and economic co-operation
    (c) Bangladesh Initiative for multi-sectoral trade and economic co-operation
    (d) Bangladesh Institute for multi-sectoral trade and economic co-operation
  9. The main objective of UNCTAD is
    (a) To deal with only trade
    (b) To deal with trade and development
    (c) To deal with trade, investment and development of developing countries
    (d) To deal with trade, investment and development of least developed countries
  10. A system based on the licensing of the right to duplicate a successful business format in foreign markets is known as
    (a) Partnering
    (b) Licensing
    (c) Franchising
    (d) Contract manufacturing
  11. Consolidated financial statements are prepared when a parent subsidiary relationship exists in recognition of the accounting concept of
    (a) Materiality
    (b) Going concern
    (c) Objectivity
    (d) Entity
  12. Which of the following should be included in general and administrative expenses ?
    Interest Advertising
    (a) Yes No
    (b) Yes Yes
    (c) No No
    (d) No Yes
  13. The title of AAS2 issued by council of ICAI is
    (a) Objective and scope of financial statements audit
    (b) Objective and scope of the financial statements
    (c) Objective and scope of the audit of financial statements
    (d) Objective and scope of business of an entity
  14. Formation of Accounting Standards Board in India is during
    (a) August 1987
    (b) January 1987
    (c) June 1977
    (d) April 1977
  15. To achieve a reasonably objective basis, financial forecasts and projection should be prepared
    i. In accordance with GAAP.
    ii. Using information that is in accordance with the plans of the entity.
    iii. With due professional care.
    Codes :
    (a) i and iii
    (b) i, ii and iii
    (c) ii and iii
    (d) i and ii
  16. Match the following :
    List – I List – II
    (HRAccounting Model)  (Proponents)
    a. Replacement andcost-based approach i. Giles Robinson
    b. Opportunity cost model ii. Flanholtz
    c. Human asset multiplier method iii. Likert
    d. A model on valuation of human and organisation  iv. Hekimain Jones

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

  17. Assertion (A) : Fixed budget is concerned with budgeting of fixed assets.
    Reason (R) : Cost centre and responsibility centre are not homogeneous terms.
    Codes :
    (a) Both (A) and (R) are correct
    (b) Both (A) and (R) are incorrect
    (c) (A) is correct, but (R) is incorrect
    (d) (A) is incorrect, but (R) is correct
  18. Capacity ratio 􀂪 efficiency ratio =
    (a) Activity ratio
    (b) Profitability ratio
    (c) Solvency ratio
    (d) Liquidity ratio
  19. Continuous examination of books of accounts throughout the year is called
    (a) Occational audit
    (b) Internal audit
    (c) Periodic audit
    (d) Perpetual audit
  20. Match the following :
    List – I List – II
    a. Segment reporting i. AS-26
    b. Intangible assets  ii. AS-19
    c. Accounting investments iii. AS-17
    d. Leases  iv. AS-13

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

  21. Assertion (A) : Giveaways and buy-one, get-one (BoGo) sales are examples for penetration pricing.
    Reason (R) : The manufacturer temporarily loses money, but does so in the hope of creating interest in the new product.
    Codes :
    (a) Both (A) and (R) are true and (R) is the correct explanation of (A)
    (b) Both (A) and (R) are true but (R) is not the correct explanation of (A)
    (c) (A) is correct, but (R) is incorrect
    (d) (A) is incorrect, but (R) is correct
  22. The major objection of economists to monopolies is
    (a) The lack of technological progress in such industries
    (b) The dangerous impact on demographic government
    (c) The instability in an industry where there is a single producer
    (d) The tendency to restrict output and charge higher price
  23. Match the following :
    List – I  List – II
    a. Accounting view point  i. Implicit cost
    b. Economic view point  ii. Outlay cost
    c. Timing iii. Direct cost
    d. Traceability iv. Historical cost

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

  24. Which of the following is/are the characteristic(s) of Business Economics ?
    i. Business economics is micro economic in character.
    ii. It is positive in nature.
    iii. It is both conceptual and metrical.
    iv. Its contents are based mainly on the theory of firm.
    Codes :
    (a) i, ii and iii
    (b) only iv
    (c) i, iii and iv
    (d) i, ii and iv
  25. Which of the following is not the property of indifference curves ?
    (a) Downward sloping
    (b) Concave to origin
    (c) Show different combinations of the two goods yielding the same level of utility
    (d) Don’t touch is other
  26. Marginal rate of technical substitution is constant when two goods are
    (a) Perfect substitutes
    (b) Perfect complements
    (c) Normal goods
    (d) Giffen goods
  27. We can say with certainty that when the demand for TVs increases in the long-run, prices
    (a) Will go down
    (b) Will go up
    (c) Stay at the original level
    (d) Cannot be predicted without the knowledge of elasticity of demand
  28. When the change in price and total revenue are in the same direction, price elasticity is equal to
    (a) > 1
    (b) < 1
    (c) 0
    (d) 1
  29. When MR is negative, price elasticity is
    (a) > 1
    (b) < 1
    (c) 0
    (d) 1
  30. Price elasticity is
    (a) The slope of the demand curve
    (b) Usually greater than unity
    (c) Usually less than unity
    (d) A ratio of relative change between a dependent variable and an independent variable
  31. Match the following :
    List – I List – II
    a. NI model  I. Cost of equity increase rapidly under extreme leverage
    b. NOI model II. Cost of equity decrease under extreme leverage
    c. Traditional hypothesis III. Cost of equity is constant for all leverage
    d. MM’s hypothes IV. Cost of equity is increase with increase in leverage
    V. Cost of equity decrease with an increase in leverage

    Codes :
    a b c d
    (a) V IV I II
    (b) III IV II I
    (c) III IV I II
    (d) IV III I II

  32. ____________ assumes that the debt market is divided into several segments based on maturity of debt.
    (a) Liquidity theory
    (b) Segmented market theory
    (c) Expectation theory
    (d) Liquidity premium theory
  33. A condition when promises to creditors of a company are broken or honoured with great difficulty, is known as
    (a) Problem of solvency
    (b) Problem of liquidity
    (c) Financial distress
    (d) Problem of insolvency
  34. The compound average annual rate that is calculated with a reinvestment rate different than the projects IRR is called
    (a) Implicit rate of return
    (b) Modified internal rate of return
    (c) Differential rate of return
    (d) Reinvestment rate of return
  35. Which of the following is/are merits of IRR criteria ?
    a. Provides multiple IRRs for mixed NCFs.
    b. It is independent of discount rate.
    c. It considers time value of money.
    Codes :
    (a) only a
    (b) only b
    (c) a and b
    (d) b and c
  36. Risk arising from the unique uncertainties of individual securities is known as
    (a) Systematic risk
    (b) Unsystematic risk
    (c) Market risk
    (d) Total risk
  37. The currency having highest weightage in the determination of the value of SDR is
    (a) British Pound
    (b) Euro
    (c) US Dollar
    (d) Yen
  38. The form of assistance that members of World Bank get is
    (a) Technical and economic
    (b) Political and financial
    (c) Technical and financial
    (d) Political and economic
  39. Foreign exchange rates have an impact on firms which is referred to as
    (a) Economic exposure
    (b) Balance sheet exposure
    (c) Transaction exposure
    (d) Operating exposure
  40. Assertion (A) : Wealth maximisation is considered as supervisor to profit maximisation.
    Reason (R) : This is because wealth is precisely defined as net present value and it accounts for time value of money and risk.
    Codes :
    (a) Both assertion and reasoning are correct
    (b) Both assertion and reasoning are not correct
    (c) Assertion is correct and reasoning is not correct
    (d) Assertion is not correct and reasoning is correct
  41. Median, quartiles and percentiles are considered as measures of
    (a) Deviation averages
    (b) Mathematical averages
    (c) Positional averages
    (d) Central averages
  42. When deviations from mean are squared and divided by the total number of observations, the resultant is
    (a) Standard deviation
    (b) Variance
    (c) Dispersion
    (d) Deviation
  43. _____________ deals with the symmetry of the distribution of collected data on both sides of central value.
    (a) Skewness
    (b) Kurtosis
    (c) Moments
    (d) Dispersion
  44. Statement (a) : In a scatter diagram, the independent variable is shown on the X-axis while the dependent variable is shown on the Y-axis.
    Statement (b) : The coefficient of rank correlation has the same units as the Pearsonian coefficient of correlation.
    Codes :
    (a) Both statements (a) and (b) are true
    (b) Both statements (a) and (b) are false
    (c) Statement (a) is true, but statement (b) is false
    (d) Statement (a) is false, but statement (b) is true
  45. Match the following :
    List – I  List – II
    a. R. A. Fisher I. Rank correlation
    b. Karl Pearson  II. Anova
    c. Spearman  III. Student’s t distribution
    d. Gosset IV. Correlation

    Codes :
    a b c d
    (a) IV III I II
    (b) III IV II I
    (c) III I IV II
    (d) II IV I III

  46. If A speaks truth in 20 per cent cases and B speaks truth in 40 per cent cases, what is the probability that they would contradict in a particular case ?
    (a) 0.8
    (b) 0.12
    (c) 0.32
    (d) 0.44
  47. Research method which is concerned with exploring the effect of one variable on another is known as
    (a) Dependent research
    (b) Causal research
    (c) Exploratory research
    (d) Contemporary research
  48. The list of voters, number of students in a university and the telephone directory are some of the examples of
    (a) Sampling frames
    (b) Sampling unit
    (c) Systematic sampling
    (d) Cluster sampling
  49. Match the following :
    List – I  List – II
    a. Random sampling  I. Secondary data
    b. Non-random sampling II. Information system
    c. Census report III. Cluster sampling
    d. Data processing IV. Stratified sampling

    Codes :
    a b c d
    (a) III IV II I
    (b) IV I II III
    (c) II III IV I
    (d) IV III I II

  50. The list of technical terms used is called
    (a) Abbreviations
    (b) Glossary
    (c) References
    (d) Appendix
  51. Carl Jung in his theory, explains that the personality has the following dimension/s.
    i. Personality includes logical reasoning.
    ii. Personality deals with perception of things in general sense.
    iii. Personality is based on unconscious inner perception of the things.
    Codes :
    (a) i, ii and iii
    (b) i and ii
    (c) i and iii
    (d) ii and iii
  52. Path-goal theory of leadership was developed by
    (a) Paul Hersey
    (b) Blake and Mouton
    (c) Robert House
    (d) Fielder
  53. Assertion (A) : Stress is not simply anxiety or nervous, tension.
    Reason (R) : Stress is not always due to overwork.
    Codes :
    (a) Both (A) and (R) are correct
    (b) Both (a) and (R) are incorrect
    (c) (A) is correct, but (R) is incorrect
    (d) (A) is incorrect, but (R) is correct
  54. Match the following :
    List – I List – II
    a. Contingency school  i. Kaith Davis
    b. Systems school ii. Herbert A. Simon
    c. Human behavior school  iii. Joan Woodward
    d. Decision theory school  iv. R. A. Johnson

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

  55. Method/s available for settling disputes
    (a) Collective bargaining
    (b) Arbitration
    (c) Conciliation
    (d) All the above
  56. Which one of the following is not the objective of job evaluation ?
    (a) To know the worth of each job of the organisation
    (b) To determine fair and equitable wage structure in the plant, industry and place
    (c) To ensure utmost job satisfaction to all employees
    (d) To make the system complex and cannot be easily understood by non-supervisory staff
  57. According to Bernard, the elements of organisation are
    i. Communication
    ii. Willingness to serve
    iii. Common purpose.
    Codes :
    (a) i, ii and iii are correct
    (b) i and ii are correct
    (c) ii and iii are correct
    (d) i, ii and iii are incorrect
  58. ‘Esprit de corps’ means
    (a) Treat employees with ‘kindness’
    (b) Thinking out and execution of a plan
    (c) This is the principle of ‘Union is Strength’
    (d) There should be one head and one plan for a group
  59. Assertion (A) : Social responsibility may be taken to mean intelligent and objective concern for the welfare of the society.
    Reason (R) : Social responsibility has gradually developed and has become widely not accepted notion in the business world.
    Codes :
    (a) (A) and (R) are correct
    (b) (A) and (R) are incorrect
    (c) (A) is correct, but (R) is incorrect
    (d) (A) is incorrect, but (R) is correct
  60. Match the following leadership styles on the grid :
    List – I List – II
    a. Impoverished i. 1, 9
    b. Country club  ii. 9, 9
    c. Task  iii. 1, 1
    d. Team iv. 9, 1

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

  61. The existence of a parallel economy
    (a) Ensures increasing productive investment
    (b) Ensures a better distribution of income and wealth
    (c) Makes the monetary policies less effective
    (d) Makes the economy more competitive
  62. Assertion (A) : “The problem of rural credit is not primarily one of rural credit, it may be said to be one of rural minded credit”.
    Reason (R) :The Indian economy has yet to come out of rural mentality.
    Codes :
    (a) (A) is correct, but (R) is incorrect
    (b) Both (A) and (R) are incorrect
    (c) Both (A) and (R) are correct
    (d) (R) is correct, but (A) is incorrect
  63. Match the following :
    Column A Column B
    1. Nationalisation of 14 major Commercial Banks  a. 1950
    2. Nationalisation of more Commercial Banks 6  b. 1991
    3. India embarks on planned economic development c. 1980
    4. India faces balances of payment crisis pledges gold to shore up reserves  d. 1969

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

  64. Match the items of Column – I with the items in Column – II and suggest the correct code :
    Column – I  Column – II
    a. Interbank call market i. Money market
    b. Commercial bills  ii. Promissory note
    c. Commercial paper market  iii. Short-term maturity
    d. Treasury bills iv. Government papers

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

  65. Which of the following risk is/are covered by BASEL – I ?
    i. Credit risk
    ii. Market risk
    iii. Reputation risk
    iv. Operational risk
    Select the correct answer from the following options :
    (a) Only i and ii
    (b) Only i and iv
    (c) Only i, iii and iv
    (d) All are correct
  66. Match the following List – I with List – II :
    List – I List – II
    (Name of securities)  (Type of securities)
    a. Bonds of Land Development Banks  i. Semi-government securities
    b. Treasury Bills  ii. First order securities
    c. Shares of a Public Ltd. Co.  iii. Personal securities

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

  67. Assertion (A) : The EXIM policy is liberal, market-oriented and favours global trade.
    Reason (R) : GATT has played a significant role in the liberalization of the economy.
    Codes :
    (a) Both (A) and (R) are true and (R) is the correct explanation of (A)
    (b) Both (A) and (R) are true, but (R) is not a correct explanation of (A)
    (c) (A) is true, but (R) is false
    (d) (A) is false, but (R) is true
  68. Lead Bank System was started on the recommendation of
    (a) Raja Challaiah Committee
    (b) Kelkar Committee
    (c) Nariman Committee
    (d) Malhotra Committee
  69. According to 14th Report of 2nd ARC which of the following is/are the core principle/s of Financial System in India ?
    a. Focus on results
    b. Adopting modern financial management practices
    c. Budgeting to realistic
    d. Transparency and simplicity
    Select the correct answer by using code given below :
    (a) a, d
    (b) b, c, d
    (c) a, c, d
    (d) a, b, c, d
  70. Capital adequacy norm helps the banks :
    i. For strengthening capital base of banks.
    ii. For sanctioning more loan.
    Codes :
    (a) Both i and ii are correct
    (b) Both i and ii are incorrect
    (c) i is correct, but ii is incorrect
    (d) ii is correct, but i is incorrect
  71. The practice of going after a large share of a smaller market is
    (a) Undifferentiated marketing
    (b) Differentiated marketing
    (c) Concentrated marketing
    (d) Turbo marketing
  72. Match the following :
    Part – A Part – B
    1. Advertising  a. Print Ads
    2. Sales promotion b. Couponing
    3. Personal selling  c. Tele marketing
    4. Publicity d. Print Media

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

  73. Which of the following steps of purchase decision process is in sequence ?
    1. Problem recognition
    2. Search for alternatives
    3. Evaluation of alternatives
    4. Purchase action
    5. Post purchase action
    Codes :
    (a) 1 3 2 4 5
    (b) 1 2 4 3 5
    (c) 2 1 3 5 4
    (d) 1 2 3 4 5
  74. Assertion (A) : High customer expectations lead to dissatisfaction as product performance never matches them.
    Reason (R) : Product performance is always customer specific.
    Codes :
    (a) Both (A) and (R) are correct
    (b) Both (A) and (R) are incorrect
    (c) (A) is correct, but (R) is incorrect
    (d) (R) is correct, but (A) is incorrect
  75. The process of gathering, filtering and analyzing information relating to marketing environment is known as
    (a) Marketing research
    (b) Marketing intelligence
    (c) Environmental scanning
    (d) Environmental analysis
  76. Match the following List – I with those of List – II and indicate the correct combination from the codes given below :
    List – I  List – II
    a. Everitt M. Rogers i. Service quality model
    b. J. D. Power  ii. Three types of marketing for services
    c. Parasuraman, Zeithml and Berry iii. Quality rating of automobiles
    d. Gronroos iv. Diffusion of innovation

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

  77. Consider the following statements and find out the correct alternative from the codes given below :
    i. The product management system often turns out to be costly.
    ii. When customers belong to different user groups with distinct buying preferences and practices, a market segmentation organization is not suitable.
    iii. Advertising department has the closest interface with the finance department of the company.
    Codes :
    (a) i and ii are correct
    (b) ii and iii are correct
    (c) Only i is correct
    (d) All are correct
  78. DAGMAR approach in marketing is used to measure
    (a) Public relations
    (b) Advertising results
    (c) Selling volume
    (d) Consumer satisfaction
  79. Statements :
    I. Most of the big companies outsource their marketing research activities.
    II. Unprofitable customers who defect to a competitor should be encouraged to do so.
    Codes :
    (a) Both are correct
    (b) Both are incorrect
    (c) I is correct, II is incorrect
    (d) II is correct, I is incorrect
  80. Demographic segmentation includes
    a. Age and life cycle
    b. Income and social class
    c. Generation and gender
    d. Geography and income
    Codes :
    (a) a, b and c only
    (b) a and b only
    (c) c and b only
    (d) b, c and d only
  81. An agreement to do an impossible act is
    (a) Illegal
    (b) Voidable at the option of the promisor
    (c) Voidable at the option of the promisee
    (d) Void
  82. The responsibility of the finder of goods is the same as of a
    (a) Owner
    (b) Bailee
    (c) Trustee
    (d) Pledgee
  83. Match the following :
    List – I List – II
    a. Sec. 124 of Contract Act I. Bailment
    b. Sec. 126 of Contract Act II. Qualification of agent
    c. Sec. 148 of Contract Act  III. Contract of Guarantee
    d. Sec. 184 of Contract Act IV. Contract of Indemnity

    Codes :
    a b c d
    (a) III IV I II
    (b) II I III IV
    (c) IV III I II
    (d) I II IV III

  84. Assertion : A minor can be admitted only to the benefits of a partnership firm.
    Reasoning : A minor cannot be a full-fledged partner in a partnership firm.
    Codes :
    (a) Both assertion and reasoning are correct
    (b) Both assertion and reasoning are not correct
    (c) Assertion is correct, but reasoning is not correct
    (d) Assertion is not correct, but reasoning is correct
  85. Competition Act is the successor of
    (a) FERA
    (b) MRTP Act
    (c) POTA
    (d) Competition Council Act
  86. What is the fee to be paid by information seeker under RTI Act ?
    (a) Rs. 100
    (b) Rs. 1,000
    (c) Rs. 50
    (d) Rs. 10
  87. The use of information and ideas protected by IPR are of
    (a) Cultural value
    (b) Social value
    (c) Commercial value
    (d) Moral value
  88. A bill of exchange contains a/an
    (a) Conditional undertaking
    (b) Conditional order
    (c) Unconditional undertaking
    (d) Unconditional order
  89. Minimum paid up share capital in case of a private company is
    (a) Rs. 1 lakh
    (b) Rs. 10 lakh
    (c) Rs. 25 lakh
    (d) Rs. 100 lakh
  90. What is the term of copyright for an author of a book ?
    (a) 100 years
    (b) The life of the author
    (c) The life of the author plus 60 years
    (d) The life of the author plus 50 years
  91. Statement 1 : The objective of corporate taxation is to maximize corporate wealth.
    Statement 2 : Providing tax deductions, tax exemptions and tax rebate under corporate taxation increases tax avoidance.
    Indicate whether the statements are true or false.
    (a) Both the statements are true
    (b) Both the statements are false
    (c) Statement ‘1’ is true, but ‘2’ is false
    (d) Statement ‘1’ is false, but ‘2’ is true
  92. The problem of ‘Double Taxation’ in International Trade can be overcome by
    (a) Bilateral agreement
    (b) Unilateral agreement
    (c) Group country agreement
    (d) Market agreement
  93. Income which is not chargeable to tax under the head “Income from other sources” is
    (a) Income from dividend
    (b) Rental income on hired machinery or furniture
    (c) Income from winning lotteries/crossword puzzles
    (d) Interest received on fixed deposits in public sector banks
  94. Personal Income Tax is the example of
    (a) Proportional tax
    (b) De-gressive tax
    (c) Progressive tax
    (d) Regressive tax
  95. Income deemed to accrue or arise in India is taxable in case of
    (a) Resident only
    (b) Both ordinarily resident and NOR
    (c) Non-resident
    (d) Ordinarily resident
  96. Which of the following is not a capital expenditure ?
    (a) Salary paid to the Government Employees
    (b) Purchase of a machine from outside India
    (c) Repayment of loan taken from the IMF
    (d) Interest paid on National debt
  97. Which taxes come under the divisible pool, to distribute the tax revenue to the state governments as per the recommendations of the Finance Commission of India ?
    (a) All indirect taxes only
    (b) All direct taxes only
    (c) Both direct and indirect taxes
    (d) Personal income tax and corporate income tax
  98. Cess under Income Tax Act is not levied on
    (a) With specific objective to overcome the problem
    (b) Should not be more than 5%
    (c) Is only for a short period of time
    (d) By reducing the gap between haves and have-nots
  99. Statement A : According to Section 145, income chargeable under income from other sources shall be computed only on cash basis of accounting.
    Statement B : Income from machinery let out on hire is taxable under income from other sources.
    (a) Statement A is true, but B is false
    (b) Statement A is false, but B is true
    (c) Both the statements are false
    (d) Both the statements are true
  100. Match the following :
    List – I  List – II
    a. Long term capital asset  i. Section 48
    b. Capital gain exemption ii. Section 2(29A)
    c. Cost of inflation index iii. Section 10
    d. Capital gain on transfer of agricultural land  iv. Section 54B

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

    Answer Key

    1 (a) 2 (b) 3 (c) 4 (d) 5 (d) 6 (a) 7 (d) 8 (a) 9 (c) 10 (c) 11 (d) 12 (c) 13 (c) 14 (d) 15 (b) 16 (b) 17 (c) 18 (a) 19 (d) 20 (a) 21 (a) 22 (d) 23 (c) 24 (c) 25 (b) 26 (a) 27 (d) 28 (b) 29 (b) 30 (d) 31 (c) 32 (b) 33 (c) 34 (b) 35 (d) 36 (b) 37 (c) 38 (c) 39 (d) 40 (a) 41 (c) 42 (b) 43 (a) 44 (a) 45 (d) 46 (d) 47 (b) 48 (a) 49 (d) 50 (b) 51 (a) 52 (c) 53 (a) 54 (b) 55 (d) 56 (d) 57 (a) 58 (c) 59 (c) 60 (#) 61 (c) 62 (a) 63 (b) 64 (b) 65 (a) 66 (a) 67 (b) 68 (c) 69 (d) 70 (c) 71 (a) 72 (a) 73 (d) 74 (b) 75 (a) 76 (d) 77 (c) 78 (b) 79 (d) 80 (a) 81 (d) 82 (b) 83 (c) 84 (a) 85 (b) 86 (d) 87 (c) 88 (d) 89 (a) 90 (c) 91 (b) 92 (a) 93 (b) 94 (c) 95 (#) 96 (a/d) 97 (c) 98 (d) 99 (b) 100 (a)