UGC NET JRF Commerce Mock Test -2

  1. How should a company treat fixed costs that are uncontrollable by the manager of a cost center in a responsibility accounting system?
    (a) Allocate them based on departmental usage
    (b) Exclude them from the performance evaluation of the cost center manager
    (c) Allocate them equally across all departments
    (d) Treat them as variable costs in the performance reports
    (e) None of the above
  2. If the production of a company reaches break-even point, operating income will increase by the
    (a) Fixed costs per unit for each additional unit sold
    (b) Variable costs per unit for each additional unit sold
    (c) Net margin per unit for each additional unit sold
    (d) Contribution margin per unit for each additional unit sold
    (e) None of the above
  3. Which of the following best describes the tax treatment of dividend income at source from Indian equity for Resident Indians and Non-Resident Indians (NRIs)?
    (a) Both Resident Indians and NRIs have same TDS rate on dividend income from Indian equity
    (b) Resident Indians have higher TDS rate compared to NRIs on dividend income from Indian equity
    (c) NRIs have higher TDS rate compared to Resident Indians on dividend income from Indian equity
    (d) Dividend income from Indian equity is exempt from TDS for both Resident Indians and NRIs
    (e) None of the above
  4. The technique of marginal costing is based upon which of the following assumption:
    A. Fixed cost will tend to remain constant or unchanged for the entire volume of production
    B. Variable cost remains constant per unit of output irrespective of the level of output
    C. There will not be any change in pricing policy due to change in volume, completion, etc.
    D. Operating efficiency of the firm may increase or decrease
    Choose the correct answer from the options given below:
    (a) A, B and C Only
    (b) A and D Only
    (c) A, B, C and
    (d) A, B and D Only
    (e) None of the above
  5. Match Set I with Set II
    Set I
    (Person non-resident Indian)    		 Set II
    (Rate of deduction of tax at source)
    A. On income from Dividend 1 30%
    B. On income by way of short-term capital gain referred to in section 111A 2 10%
    C. On income by way of winning from horse race 3 20%
    D. On income by way of royalty or fees for technical services payable by Government 4 15%

    Choose the correct answer from the options given below:
    (a)  A-1, B-2, C-3, D-4
    (b) A-2, B-3, C-1, D-4
    (c)  A-3, B-4, C-1, D-2
    (d) A-4, B-3, C-1, D-2
    (e) None of the above

  6. An ABC (Activity Based Costing) cost allocation system excludes consideration of
    (a) Variable non-manufacturing costs
    (b) Direct costs of materials
    (c) Committed fixed costs
    (d) Costs allocated
    (e) None of the above
  7. Match the two sets and give your answer from the code which follows
    List I List II
    A. Market Segmentation 1 Pricing high of a new product initially
    B. Skimming Price 2 Process of disagree gating a market into a number of sub-markets
    C. Multilevel Marketing 3 Translation of the marketing plan into marketing performance
    D. Sales Management 4 Modified version of direct marketing

    (a) A-2, B-1, C-4, D-3
    (b) A-3, B-1, C-2, D-4
    (c) A-1, B-2, C-3, D-4
    (d) A-4, B-2, C-3, D-1
    (e) None of the above

  8. Which of the following t-tests is appropriate for comparing the means of two independent groups when the sample sizes are unequal?
    (a) Paired sample t-test
    (b) One-sample t-test
    (c) Welch’s t-test
    (d) Mann-Whitney U test
    (e) None of the above
  9. Which of the following is a condition for claiming Input Tax Credit under GST?
    (a) Possession of a tax invoice or debit note issued by a registered supplier
    (b) Receipt of the goods or services
    (c) Tax charged has been actually paid to the government by the supplier
    (d) All of the above
    (e) None of the above
  10. What is the primary risk assessed by credit rating agencies when assigning ratings to sovereign debt?
    (a) The risk of currency fluctuations impacting the debt repayment
    (b) The risk of changes in the country’s political leadership
    (c) The risk of the country’s ability to generate enough revenue to meet debt obligations
    (d) The risk of fluctuations in the global commodity markets
    (e) None of the above
  11. Which of the following is not an advantage of stratified random sampling over simple random sampling?
    (a) When done correctly, a stratified random sample is less biased than a simple random sample.
    (b) When done correctly, a stratified random sampling process has less variability from sample to sample than a simple random sample.
    (c) When done correctly, a stratified random sample can provide, with a smaller sample size, an estimate that is just as reliable as that of a simple random sample with a larger sample size.
    (d) A stratified random sample provides information about each stratum in the population as well as an estimate for the population as a whole, and a simple random sample does not.
    (e) None of the above
  12. Which of the following is the non-random method of selecting samples from a given population?
    (a) Stratified Sampling
    (b) Systematic Sampling
    (c) Quota Sampling
    (d) Multi-Stage Sampling
    (e) None of the above
  13. Which sampling method is best suited for studying hidden or hard-to-reach populations where subjects recruit future subjects from among their acquaintances?
    (a) Judgmental Sampling
    (b) Snowball Sampling
    (c) Quota Sampling
    (d) Systematic Sampling
    (e) None of the above
  14. What is the place of supply for GST purposes in the case of services provided to an individual recipient, where the location of the recipient is known and registered under GST?
    (a) Location of the recipient
    (b) Location of the supplier
    (c) Location where the services are performed
    (d) Location where the payment is received
    (e) None of the above
  15. SEP Ltd., has invested a capital of Rs.10,00,000. The company expects a 15% rate of return on capital. The company is currently producing and selling 25,000 units of products at total cost of Rs.4,00,000. What would the desired selling price per unit, if the company uses Return on Investment (ROI) pricing policy?
    (a) Rs.8.40
    (b) Rs.22.00
    (c) Rs.16.00
    (d) Rs.6.00
    (e) None of the above
  16. A business has been discontinued in the previous year 2023-24. The business loss
    (a) Can be carried forward and set off against profit gain of business and profession
    (b) Can be set-off against income from business or profession or income under any other head
    (c) Can be carried forward and set off for indefinite period, whether business is carried or discontinued
    (d) Can be carried forward and set of for six years, whether business is carried or discontinued
    (e) None of the above
  17. Under Ind AS 21, The Effects of Changes in Foreign Exchange Rates, how should an entity account for a non-monetary item that is measured at fair value in a foreign currency?
    (a) Translate using the exchange rate at the date when the fair value was determined
    (b) Translate using the closing rate at the end of the reporting period
    (c) Translate using the exchange rate at the date of the initial transaction
    (d) Translate using an average exchange rate over the reporting period
    (e) None of the above
  18. A favorable materials price variance coupled with an unfavorable materials usage variance would most likely result from
    (a) The purchase of lower than standard quality materials
    (b) The purchase and use of higher than standard quality materials
    (c) Product mix production changes
    (d) Machine efficiency problems
    (e) None of the above
  19. Which of the following statements relating to the sampling theory are correct?
    I. The values of the statistical measures based on the sampled units are called values of statistic.
    II. In the simple random sampling technique, the element of the population and the unit of the sample are different.
    III. Snow-ball sampling technique is a probability-based sampling technique.
    IV. The law of statistical regularity and the law of large numbers are in the main bases of the sample to become representative of the population.
    Choose the correct answer from the code given below:
    (a) II and III
    (b) I and IV
    (c) II, III, and IV
    (d) I, II and IV
    (e) None of the above
  20. Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R
    Assertion A: Cross listing can potentially increase the stock price and lower the cost of capital
    Reason R: Cross listing facilitates wider stock ownership and expands investor base for a firm’s stock
    In the light of the above statements, choose the most appropriate answer from the options given below
    (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 not correct
    (d) A is not correct but R is correct
    (e) None of the above
  21. Under Ind AS 115, Revenue from Contracts with Customers, which of the following statements regarding the recognition of revenue is TRUE?
    (a) Revenue should be recognized when goods are transferred to the customer.
    (b) Revenue should be recognized when the performance obligation is satisfied.
    (c) Revenue should be recognized when the customer makes payment.
    (d) Revenue should be recognized when the contract is signed.
    (e) None of the above
  22. In responsibility accounting, a centre’s performance is measured by controllable costs. Controllable costs are best described as including
    (a) Direct material and direct labour, only
    (b) Only discretionary costs
    (c) Only committed costs
    (d) Only those costs that the manager can influence in the current time period
    (e) None of the above
  23. According to IFRS, which of the following criteria is NOT necessary for an entity to classify a lease as a finance lease?
    (a)The lease transfers ownership of the asset to the lessee by the end of the lease term.
    (b) The lease contains a bargain purchase option.
    (c) The lease term is for the major part of the economic life of the asset.
    (d) The present value of the lease payments amounts to substantially all of the fair value of the leased asset.
    (e) None of the above
  24. Target pricing
    (a) Is more appropriate when applied to mature and long-established products
    (b) Considers the variable costs and excludes fixed costs
    (c) Is often used when costs are difficult to control
    (d) Is a pricing strategy used to create competitive advantage
    (e) None of the above
  25. Under which of the following approaches, the cost of equity is assumed to increase linearly with leverage, i.e., the average cost of capital remains constant with increased use of leverage?
    (a) Net Operating Income Approach
    (b) Net Income Approach
    (c) Traditional Approach
    (d) Walter Approach
    (e) None of the above
  26. Which of the following statements are CORRECT?
    A. The critical value of Z for two tailed test with α = 0.5 is 1.96
    B. The critical value of Z for two tailed test with α = 0.01 is 2.575
    C. The critical value of Z for one tailed test with α = 0.05 is 1.96
    D. The critical value of Z for a left – tailed test with α = 0.01 is -2.33
    Choose the correct answer from the options given below:
    (a) A and B only
    (b) A, B and C only
    (c) A, B and D only
    (d) B, C and D Only
    (e) None of the above
  27. Who proposed a model to apply economic order quantity concept of inventory management to determine the optimum cash holding in a firm?
    (a) Keith V Smith
    (b) Miller and Ore
    (c) William J Baumol
    (d) JM Keynes
    (e) None of the above
  28. Which of the following institutions are included in the “World Bank Group”?
    A. International Finance Corporation
    B. International Monetary Fund
    C. World Trade Organisation
    D. Multilateral Investment Guarantee Agency
    E. International Development Association
    Choose the correct answer from the options given below
    (a) A, B and C only
    (b) A, B and D only
    (c) A, B, D and E only
    (d) A, D and E only
    (e) None of the above
  29. Arrange the following steps in the process of hypothesis testing in proper sequence:
    A. Select the level of significance
    B. Setup null and alternative hypothesis
    C. Establish the decision rule
    D. Performance computations
    E. Select test statistics
    F. Draw conclusion
    Choose the correct answer from the options given below:
    (a) A, B, C, D, E, F
    (b) A, B, E, D, C, F
    (c) B, A, C, D, E, F
    (d) B, A, E, C, D, F
    (e) None of the above
  30. In Securitization when no assets are acquired and the collateral is fixed for the life of the asset, the type of a structure is called as:
    (a) Revolving structure
    (b) Amortized structure
    (c) Collateralized structure
    (d) Self-liquidating structure
    (e) None of the above
  31. Which of the following statements about the dual problem in linear programming is FALSE?
    (a) The dual problem involves maximizing a function subject to constraints.
    (b) The objective function coefficients of the primal problem become constraints in the dual problem.
    (c) The feasible region of the dual problem is bounded.
    (d) Strong duality theorem guarantees that the optimal values of the primal and dual problems are equal
    (e) None of the above
  32. Which one of the following training methods is most suitable for developing problem-solving skills?
    (a) Case study
    (b) Lecture
    (c) Role playing
    (d) Sensitivity training
    (e) None of the above
  33. What does the acronym “FTSE” stand for in the context of international stock exchanges?
    (a) Financial Times Stock Exchange
    (b) Federation of Trading and Securities Exchanges
    (c) Foreign Trade and Stock Exchange
    (d) Foundation of Traders and Stockbrokers Europe
    (e) None of the above
  34. Who among the following is eligible to opt for the Composition Scheme under GST?
    (a) A service provider with an annual turnover of up to Rs. 2 crores
    (b) A manufacturer with an annual turnover of up to Rs. 1.5 crores
    (c) An interstate seller with an annual turnover of up to Rs. 1 crores
    (d) An e-commerce operator
    (e) None of the above
  35. Which of the following is the primary objective of Ind AS 115, Revenue from Contracts with Customers?
    (a) To provide a framework for recognizing revenue from all types of transactions and events
    (b) To establish principles for reporting financial instruments
    (c) To specify the accounting treatment of government grants and disclosure of government assistance
    (d) To ensure that entities recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services
    (e) None of the above
  36. Which of the following statements are true? Indicate the correct code
    i. Tax shield on depreciation and interest is an important valuable both for lessor and lessee.
    ii. A lessee may evaluate the lease options as against the buying g option.
    iii. Sale and lease back and leveraged lease are types of financial lease.
    iv. Lease or financing a type of a capital budgeting decision from the point of view of the lessee.
    Select the correct answer by using the codes given below:
    (a) i, ii and iv
    (b) ii, iii and iv
    (c) i, iii and iv
    (d) i, ii and iii
    (e) None of the above
  37. Which of the following activities is likely to be classified as a batch-level activity in an Activity-Based Costing (ABC) system?
    (a) Machine setup for production runs.
    (b) Renting factory space.
    (c) Direct labor costs for assembling products.
    (d) General administrative salaries.
    (e) None of the above
  38. In a transportation problem with m sources and n destinations, the shipping costs from sources to destinations are given by a cost matrix C. The transportation simplex method is used to find the optimal solution. If there are multiple optimal solutions, which of the following statements is TRUE?
    (a) All optimal solutions must have the same total transportation cost.
    (b) The transportation problem must be degenerate.
    (c) The cost matrix C must be a degenerate matrix.
    (d) The total supply must equal the total demand.
    (e) None of the above
  39. Which of the following best describes the term “carry” in the context of venture capital?
    (a) The interest paid on the capital invested by the venture capital firm
    (b) The fixed fee charged by the venture capital firm for managing the investment
    (c) The share of profits that the general partners of a venture capital firm receive as compensation
    (d) The amount of capital that is reinvested into the startup during successive funding rounds
    (e) None of the above
  40. Which of the following statements is false?
    (a) The use of budget by management to monitor and control a company’s operations is called budgetary control
    (b) The first financial budget prepared is the cash budget
    (c) In a fixed budgetary control system, the master budget is based on a single prediction for sales or production volume
    (d) Successful budget should have adequate flexibility to meet changing business conditions
    (e) None of the above
  41. Which of the following statements are correct about Chi-Square test?
    A. The only parameter of a Chi-Square distribution is its number of degrees of freedom.
    B. The null hypothesis in given Chi-Square test is rejected when calculated value of variable exceed its critical value.
    C. The rejection region in a goodness of fit test lies only in the right tail of the distribution.
    D. The Chi-Square test is a parametric test.
    Choose the most appropriate answer from the options given below:
    (a) A, B, D, Only
    (b) A, C, D ONLY
    (c) A, B, C Only
    (d) B, C, D Only
    (e) None of the above
  42. The included explanatory variable in the linear model is irrelevant if
    (a) The estimate of the regression coefficient of explanatory variable I less than one.
    (b) The estimate of the regression coefficient of explanatory variable is greater than one.
    (c) The calculated t-statistic of the regression coefficient of explanatory variable is greater than one.
    (d) The calculated t-statistic of the regression coefficient of explanatory variable is less than one
    (e) None of the above
  43. Arrange the following legislations in primary and secondary market in ascending order of its enactment.
    A. Mutual fund regulations
    B. Credit rating agencies Regulations
    C. Credit rating regulations
    D. SEBI intermediaries’ regulations
    E. Sweat equity regulations
    Choose the correct answer from the options given below:
    (a) B, C, A, D, E
    (b) C, D, E, A, B
    (c) A, B, C, D, E
    (d) A, B, E, D, C
    (e) None of the above
  44. Match the two sets and give your answer from the code which follows:
    Set – I
    Income Tax Act, 1961    		 List – II
    Coverage of the Section
    A Section 80 TTA 1 Deduction in respect of payment of interest on loan taken for higher education
    B Section 80 CCD 2 Deduction in respect of interest on loan taken for residential house property
    C Section 80 E 3 Deduction in respect of interest on deposits in savings account
    D Section 80 EE 4 Deduction in respect of contribution to national pension system

    (a) A-3, B-4, C-1, D-2
    (b) A-3, B-4, C-2, D-4
    (c) A-3, B-1, C-2, D-4
    (d) A-1, B-2, C-3, D-4
    (e) None of the above

  45. What is the significance of the Green Shoe Option in an IPO?
    (a) It allows underwriters to sell more shares than originally planned
    (b) It allows investors to buy shares at a discounted price
    (c) It allows the company to repurchase shares from the market
    (d) It ensures that the IPO is environmentally sustainable
    (e) None of the above
  46. Sequence the following steps in the process of securitisation.
    A. Special purpose vehicle (SPV) issue tradable securities to find the purchase of pool of assets
    B. SPV subcontracts (outsource) the originator for collection of interest and Principle payments on the pool of assets
    C. SPV repay the funds to the investor or cash flow arise on the pool of assets
    D. Originator maker a pool of assets and sold it to the SPV
    E. SPV pays the funds the origination for the pool of assets
    Chose the correct answer from the options given below:
    (a) B, D, A, C, E
    (b) D, E, B, A, C
    (c) D, B, A, E, C
    (d) E, A, B, D, C
    (e) None of the above
  47. Who coined the term “Collective Barraging?
    (a) Reed Richardson
    (b) Kurt Lewin
    (c) WE Deming
    (d) Sydney Webb and Beatrice Webb
    (e) None of the above
  48. In linear programming, the shadow price associated with a constraint represents:
    (a) The change in the objective function value per unit change in the right-hand side of the constraint.
    (b) The value of the objective function when the constraint is relaxed.
    (c) The maximum allowable increase in the right-hand side of the constraint without changing the optimal solution.
    (d) The minimum allowable increase in the right-hand side of the constraint without violating feasibility
    (e) None of the above
  49. Which of the following best identifies the decision-making relationship between cost drivers, cost objects and accumulated cost?
    (a) Cost objects are used to allocate estimated accumulated cost to cost drivers
    (b) Cost objects are used to allocate actual accumulated cost to cost drivers
    (c) Cost drivers are used to allocate estimated accumulated cost to cost objects
    (d) Cost drivers are used to allocate actual accumulated cost to cost objects
    (e) None of the above
  50. Which of the following statements is false?
    (a) Accounting principle is general law or rule followed in the preparation of financial statements
    (b) Usefulness, objectivity and feasibility are the three basic norms generally found in accounting principles
    (c) The entity concept does not consider the business and the proprietor as distinct from each other
    (d) In accountancy all business transactions are recorded as having dual aspect
    (e) None of the above