1|Page [Link] Query? hello@[Link].

in 8146207241
Q.1) Suppose a company named as XYZ LTD took the loan of amount $2,00,000 on 1st
December. Currently the exchange rate between Dollar and Rupee is 74.43. However, on
31st March, the forward exchange rate stands at 76.78. Calculate the profit or loss of the
company.

Is this question covered in the EduTap course – Yes

Subject – Commerce and Accounts
Difficulty Level – Moderate
Topic – Accounting Standard for foreign Exchange Transactions
Options:

(a) 1,70,000
(b) 4,70,000
(c) 5,78,000
(d) 5,88,000
(e) 6,88,000

Answer: (b)

Explanation:

This question is based on the concept of foreign Exchange Transactions. In the given
question XYZ LTD company has taken loan of $2,00,000 on 1st December and the current
exchange rate between dollar to rupee is 74.43, which means that, value of 1 Rupee unit
will be 74.43 Dollars.

So, if the company takes a loan of $2,00,000 on 1st December, then total outlay would have
been 1,48,86,000 (2,00,000*74.43)

Moving forward the exchange rate between dollar to rupee moved to 76.78, therefore if
the company takes the loan of $2,00,000 on 31st March, then the total outlay will be
1,53,56,000

Therefore, total loss booked by the company will be 1,48,86,000 - 1,53,56,000 = (4,70,000)

Alternatively (Short-cut method)

You can easily see that, the currency value of the dollar has appreciated vis-à-vis Rupee,
which means company will be bearing a loss of the difference in the exchange rate, which
will be 2.35 (76.78 - 74.43)

Total Loss booked by the company will be 2.35*2,00,000 = 4,70,000.

Hence the correct answer will be option B.

2|Page [Link] Query? hello@[Link] 8146207241

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.2) The ex-rights price is the price of the shares trading in the market post the issue of
new rights share. In the same regard, calculate the ex-right price of the company, if the
company opts for right issue at Rs. 120 and the current market prices of the company is
Rs. 240. Its given that, company offered 1 right share for every 2 existing shares.

Is this question covered in the EduTap course – Yes

Subject – Commerce and Accounts
Difficulty Level – Moderate
Topic – Accounting for bonus share and rights shares
Options:

(a) 100
(b) 400
(c) 300
(d) 200
(e) 500

Answer: (d)

Explanation:

This question is testing your concepts of the rights issue. In the question, 1 extra share
has been issued for every 2 existing shares, which means the rights issue is being done in
the ratio of 1:2 and the issue price of rights share is Rs. 120 and the current existing price
is 240

We can calculate ex-rights price with the help of following formula

3|Page [Link] Query? hello@[Link] 8146207241

Ex-Rights value per share = Rights shares*Issue Price + Value of Existing shares / Existing
Number of shares + Number of Rights shares.

Ex-Rights value per share = 1*120+2*240/1+3 = 120+480/3 = 600/3 = 200

Therefore, the value of Ex-Rights value per share will be 200 and hence the correct answer
will be option D.

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.3) There are multiple accounting concepts and principles which brings uniformity in
various accounting procedure. In the same manner, which of the following accounting
principle is followed and practiced while passing adjustment entries in the books of
accounts and it further says that revenue and expenses incurred to earn these revenues
must belong to the same accounting period ?

Is this question covered in the EduTap course – Yes

Subject – Commerce and Accounts
Difficulty Level – Moderate
Topic – Miscellaneous topics (Theory Base of Accounting)
Options:

(a) Entity Concept

(b) Accrual Concept
4|Page [Link] Query? hello@[Link] 8146207241
(c) Going Concept
(d) Matching Concept
(e) Revenue Recognition Concept

Answer: (D)

Explanation:

Matching Concept states that expenses incurred in an accounting period should be

matched with revenues during that period. Only those costs/expenses shall be considered
which have been used to generate revenue.

This concept tries to ensure that there are no over or under revenue or expenses records
in the financial statements. If the revenue or expenses are recorded inconsistently, then
there will be over or under income or expenses.

Matching Concept works in sync with Accrual Concept and Periodicity Concept. This
means that matching concept can only work when Accrual concept and Periodicity concept
is being applied. As, we have to match the cost with the expenses within a specific period.
The period is defined under the periodicity concept. And to include expenses and revenues
as and when they are realized is done as per the Accrual concept.

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.4) Currently a public company has issued 2,00,000 shares in the open market and on
31st march the company decided to further issue additional 2,00,000 shares. Assuming
that company earned the profit of Rs. 4,00,000. You are required to calculate weighted
average Earning Per Share (EPS).

Is this question covered in the EduTap course – No

Subject – Finance

5|Page [Link] Query? hello@[Link] 8146207241

 Difficulty Level – Tough
Topic – Primary and Secondary Markets (Equity Markets)
Options:

(a) 2.33 Per share

(b) 1.14 Per share
(c) 6.33 Per share
(d) 7.33 Per share
(e) 8.33 Per share

Answer: (b) 1.14 Per Share

Explanation:

Earnings per share (EPS) is calculated as a company's profit divided by the outstanding
shares of its share capital. The resulting number serves as an indicator of a company's
profitability. However this is the basic approach wherein the company assumes that they
will issue share only once in the year.

But what if company issues share throughout the year ?

Then we use the weighted average Earnings per share (EPS)

Weighted average Earnings per share (EPS) approach says that If shares were issued during
the financial period, they should be included in the EPS calculation at the weighted
average for the entire year.

Let’s understand this approach with the help of example

• We have 1,000 shares outstanding at 1 January

• We issue 800 shares on 1 April.
• So, for the remaining nine months of the year there are 1,800 shares outstanding.
• When we look at the 800 issued shares and multiply them by 3/12 (because only three
months are left in the year now), we get 450 shares
• and add them to the 1,000 outstanding at the start of the year,
• So, at the end, we will get 1,450 average shares in the year.
• In nutshell, shares should be weighted from the date money was received from the
shareholder, once the funds are received they can start contributing towards earnings.

In the given question, company already has 2,00,000 shares, however on 31st march
additional 2,00,000 shares were issued. Therefore, we will take the weighted average of
the additional 2 lakh shares which were issued on 31st march.

6|Page [Link] Query? hello@[Link] 8146207241

 Now, shares are issued on 31st march, which means we will have 9 months left in the year,
thereby we will multiple 9/12*2,00,000 = 1,50,000

Total average shares = 2,00,000 (existing shares) + 1,50,000 = 3,50,00

Profits of the year = 4,00,000

Weighted average EPS = Total profits/Average Shares = 4,00,000/3,50,00 = 1.14

Hence the correct answer will be option B

Q.5) The objective of IND-AS 16 Standard is to prescribe the accounting treatment for
property, plant and equipment so that users of the financial statements can discern
information about an entity's investment in its property, plant and equipment and the
changes in such investment. In the same regard, which of the following component is not
covered in IND-AS 16 ?

Is this question covered in the EduTap course – Yes

Subject – Commerce and Accounts
Difficulty Level – Moderate
Topic – Accounting Standard for Property Plant and Equipment
Options:

(a) Directly Attribute Cost

(b) Purchase Price
(c) Trade Discount
(d) Restoration Cost
(e) None of the above

Answer: (c)

Explanation:

Generally, discount is an allowance provided to the customers in specific circumstances. In

business, there are two main types of discounts, i.e. trade discounts and cash discounts.

While trade discount is the reduction in the list price of the product, whereas cash
discount is offered by the firms to its customers to encourage early payments.

The main difference between trade discount and cash discount is that a separate ledger
account for discounts allowed is opened in the books of the seller and discount received in
the books of the buyer for a cash discount, but no such account is created in case of a
trade discount. Therefore, please note that, Trade Discount is not entered in the books
of accounts.

7|Page [Link] Query? hello@[Link] 8146207241

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.6) Indian Accounting Standard 113 (Ind-AS 113) helps companies with a unified
procedure to define the fair value of assets while declaring their financing statements.
As per Ind-AS – 113, which of the following are the features of Market participants
operating in the principal or most advantageous market.

Is this question covered in the EduTap course – No

Subject – Commerce and Accounts
Difficulty Level – Tough
Topic – Miscellaneous topics - Out of syllabus (Measuring Fair Value - InD AS 113)
Options:

(a) All market participants are independent of one another

(b) All market participants are knowledgeable and have reasonable understanding about
the asset/liability
(c) They are able/willing to enter into a transaction for the asset or liability
(d) All Market participants obtain all the information through usual and customary due
diligence.
(e) All of the above

Answer: (e)

Explanation:

Indian Accounting Standard 113 (Ind AS 113) helps companies with a unified procedure to
define the fair value of assets while declaring their financing statements. The standard,
apart from setting a single framework for measuring fair value, also prescribes the methods
of disclosures of fair value measurements.
8|Page [Link] Query? hello@[Link] 8146207241
Market participants according to the standard include the sellers and buyers in the
principal or most advantageous market, for the asset/liability that have all the
characteristics listed below:

• They are independent of one another, although the price in a related-party

transaction can be used to gauge fair value measurement, if the entity has evidence
that the transaction was at market terms. Therefore statement A is correct
• They are knowledgeable and have reasonable understanding about the asset /
liability and the transaction, through all available information, including information
obtained through usual and customary due diligence. Therefore statement B and C
are correct
• They are able / willing to enter into a transaction for the asset or liability and they
are not forced or otherwise compelled to do so. Therefore statement D is also
correct
• Hence the correct answer will option E.

Q.7) Assuming that a company took one single asset on operating lease and the company
paid an amount of Rs. 1,00,000 straightforwardly. The lease term is of 15 years, and later
it was decided that company will transfer Rs. 4,50,000 for yearly lease payments. As per
IND AS 17, what will be the accounting treatment for Rs. 1,00,000 which was paid
straightforwardly.

Is this question covered in the EduTap course – No

Subject – Commerce and Accounts
Difficulty Level – Tough
Topic – Miscellaneous topics - Out of syllabus (Accounting for leases - Ind AS 17)
Options:

a) Write-off the amount of Rs. 1,00,000 in the first two year of lease period
b) Amortized the amount of Rs. 1,00,000 over the first 2 years of lease period
c) Write-off the amount of Rs. 1,00,000 in the very first year of lease period
d) Amortized the amount of Rs. 1,00,000 over the lease period
9|Page [Link] Query? hello@[Link] 8146207241
e) None of the above

Answer: (d)

Explanation:

This question is based on the core concept of Ind AS 17, which clearly says Ind AS 17
requires that a lessor should present assets subject to operating leases in their balance
sheets according to the nature of the asset. In most cases, this means that the asset will
be recorded as property plant and equipment or investment property.

Lease income from operating leases should be recognized in income on a straight-line basis
over the lease term, irrespective of when the payments are due.

Hence the correct answer will be option D.

Q.8) Study the following financial data and thereafter calculate trade payables turnover
ratio

• Cash purchases= 1,00,000

• Opening creditors= 25,000
• Closing bill payables= 25,000
• Purchase returns= 7,000
• Total purchases= 4,07,000
• Closing creditors= 50,000
• Opening bill payables= 20,000

This is a re-created question, the numerical value can differ, however the overall essence
and theme remains the same

10 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

 Is this question covered in the EduTap course – Yes
Subject – Commerce and Accounts
Difficulty Level – Moderate
Topic – Ratio Analysis
Options:

(a) 3
(b) 5
(c) 6
(d) 7
(e) 8

Answer: (b)

Explanation:

Trade Receivables turnover ratio (Which is also called as Creditors Turnover Ratio) is the
proportion of net credit purchases to average trade payables (i.e. creditors and Bill
payables).

Trade Receivables The turnover ratio = Net Credit Purchases / Average Trade Payables

Average Trade Payables = (Opening Creditors + Opening Bill Payables + Closing Creditors +
Closing Bills Payables) / 2

= (25,000 + 20,000 + 50,000 + 25,000) / 2

= 60, 000

Net purchases = Total purchases – Purchase returns

= 407000 – 7000 = 400000

Net credit purchases = Net purchases – cash purchases

= 4,00,000 – 1,00,000

= 3,00,000

Trade Payables Turnover Ratio = 3,00,000 / 60,000 = 5

Hence the correct answer will be option B

Screenshot directly taken from our main course/lectures/marathon session

11 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Q.9) Pradhan Mantri Vaya Vandana Yojana (PMVVY) is an insurance policy-cum-pension
scheme that provides security to senior citizens. In the same regard, what is the
maximum amount of loan which can be availed by an applicant under PMVVY

Is this question covered in the EduTap course – Yes

Subject – Pension
Difficulty Level – Easy
Topic – Types of retirement schemes
Options:

(a) 45% of the purchase price

(b) 65% of the purchase price
(c) 55% of the purchase price
(d) 65% of the purchase price
(e) 75% of the purchase price

Answer: (e)

Explanation

Pradhan Mantri Vaya Vandana Yojana (PMVVY)was launched in the year 2017. PMVVY
aims to protect elderly persons aged 60 years and above, against a future fall in their
interest income due to the uncertain market conditions.

Following are the key details of PMVVY

• Implementing Agency: Life Insurance Corporation

• Minimum Entry Age: 60 years (completed)
• Maximum Entry Age: No limit
• Nodal Ministry: Ministry of Finance

Policy Term and other Conditions:

12 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

 • Policy Term: 10 years
• Investment limit: Rs 15 lakh per senior citizen (Note: Originally the investment limit
is Rs 7.5 lakh which was doubled in 2018)
• Minimum Investment Limit: The minimum investment in the scheme to avail
Rs.1000 per month is Rs.1.5 lakh.
• Minimum Pension: Rs 1,000 per month
• Maximum Pension: Rs 10,000 per month
• Scheme provides an assured return of 8% p.a. payable monthly (equivalent to 8.30%
p.a. effective) for 10 years.
• Loan up to 75% of Purchase Price shall be allowed after 3 policy years (to meet the
liquidity needs). Loan interest shall be recovered from the pension installments
and loan to be recovered from claim proceeds. Hence the correct answer will be
option E.

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.10) Under Employee Pension Scheme (EPS), on the event of death of the subscriber.
Pension is paid directly to the spouse of the person, additionally, the pension can also be
received by the children of the subscribers, however the pension to children is payable
only up-to the age of ______ years of children.

Is this question covered in the EduTap course – Yes

Subject – Pension
Difficulty Level – Moderate
Topic – Types of Retirement Schemes
Options:

13 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

(a) 10 Year
(b) 25 Year
(c) 15 Year
(d) 20 Year
(e) 18 Year

Answer: (b)

Explanation:

The Central Government had launched Employees’ Pension Scheme (EPS) in the year
1995. The EPS scheme applies to all the employees of factories and other establishments
to which the Employees Provident Funds and Miscellaneous Provisions Act, 1952 applies.

Eligibility Criteria:

1. He should be a member of EPFO.

2. For availing the pension benefits under the EPS 95 Pension scheme the employee
must serve a minimum of 10 years in service.
3. The age of retirement is 58 years.
4. Member can also withdraw his/her EPS at a reduced rate from the age of 50 years.
5. If an employee has completed less than 10 years of service. but more than 6 months’
service, then he/she can withdraw the EPS amount on being unemployed for more
than two months.
6. A member’s family also becomes eligible for Pension benefits in case of death of the
member while in service.

Benefits:

EPFO has offered certain benefits, which are payable to orphans as per the EPS 95 scheme
as mentioned below in brief.

1. Pension amount is 75 per cent of monthly widow pension, with minimum of Rs 750
per month, each for two orphans at a time
2. The pension will be paid till 25 years of age,
3. The pension will be paid lifelong if the person is suffering from any disability

Screenshot directly taken from our main course/lectures/marathon sessions.

14 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Q.11) The EPS (Employee pension scheme) is a scheme run by the Employee’s Provident
Fund Organization (EPFO), which aims at social security. In the same regard, under EPS
contributions are payable on maximum wage celling of ____________.

Is this question covered in the EduTap course – Yes

Subject – Pension
Difficulty Level – Moderate
Topic – Types of Retirement Schemes
Options:

(a) 10,000
(b) 25,000
(c) 15,000
(d) 35,000
(e) 20,000

Answer: (c)

Explanation:

Employees Provident Fund Scheme (EPFS) is a long-term retirement saving scheme

managed by Employees provident fund organization (EPFO) and it is covered under the
Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

Under EPF Scheme, an employee and employer have to pay certain percentage of equal
contribution in the provident fund account and on retirement, an employee gets a lump
sum amount of contribution made by employer and employee with interest on both.

To whom the EPF Scheme is applicable?

15 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

This scheme is applicable to every establishment in which 20 or more persons are
employed other than excluded employees and in certain cases organisation employing less
than 20 persons are also covered, subject to certain conditions and exceptions.

However, excluded employees can also become the member of EPF Scheme, if the
Assistant PF Commissioner granted permission to them.

Here, “excluded employees” means employees drawing wages exceeding INR 15,000 per
month.

Hence the correct answer will be option C

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.12) Under Atal Pension Yojana, if a subscriber wants to change the tenure and mode
of auto debit facility, then he or she can do so, how many times in a year ?

Is this question covered in the EduTap course – No

Subject – Pension
Difficulty Level – Tough
Topic – Atal Pension Yojana (APY)
Options:

(a) Only once in a year in March

(b) Only once in a year in April
(c) Only once in a year in June
(d) Only once in a year in December
16 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241
(e) Only once in a year in any month

Answer: (e)

Explanation:

Atal Pension Yojana (APY) is a pension scheme for citizens of India with a focus on workers
in the unorganized sector. Under APY , a guaranteed minimum pension of Rs 1,000/- or
Rs 2,000/- or Rs 3000/- or Rs 4000 or Rs 5000/- per month at the age of 60 years will be
given on the basis of contribution by the subscribers.

Contributions can be made on Monthly or Quarterly or Half yearly basis through auto debit
facility from savings Bank account.

However, the subscriber can change the mode (monthly/ quarterly/half yearly) of auto
debit Facility once in a year. Hence the correct answer will be option E.

Q.13) In the most general sense, the gratuity shall be payable to an employee only if an
employee has rendered a continuous service for _________ years.

Is this question covered in the EduTap course – No

Subject – Pension
Difficulty Level – Moderate
Topic – Types of retirement schemes

Options:

(a) 6 Years
(b) 5 Years
(c) 3 Years
(d) 4 Years
(e) 2 Years

Answer: (b)

Explanation:

The Payment of Gratuity Act, 1972 is an act that makes the payment of gratuity mandatory
for employers to their employees. Employees working in mines, oilfields, railways,
factories, ports, and shops or establishments are covered under this Act and stand to
benefit from its provisions. The Act was passed by the Parliament of India on 21st August
1972, while it came into force on 16th September 1972.

Eligibility

17 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

1. An employee, contractual worker, or temporary individual has to work for at least 5
continuous years to be eligible for gratuity.
2. This also includes service that is interrupted due to leave, accident, sickness, lockout,
strike, layoff, termination of work not caused by the employee, and absence from duty
without leave.
3. As per the Act, for the calculation of these 5 years, 1 year means 240 working days for
those working in any institution that does not involve work underground. For those
working below the ground, in mines and other such conditions, it is 190 working days.

Hence the correct answer will be option B

Q.14) ____________ is a biometric enabled Aadhaar-based Digital Life Certificate for

pensioners. Pensioners of Central Government, State Government or any other
Government organization can take benefit of this facility.

Is this question covered in the EduTap course – Yes

Subject – Pension
Difficulty Level – Easy
Topic – Types of retirement schemes
Options:

(a) Jeevan Suraksha

(b) Jeevan Pramaan
(c) Jeevan Raksha
(d) Jeevan Certificate
(e) None of the above

Answer: (b)

Explanation:

Jeevan Pramaan is a biometric enabled digital service for pensioners. Pensioners of

Central Government, State Government or any other Government organization can take
benefit of this facility.

It is expected to benefit over a crore (10 million) pensioners who receive pensions from
central or state governments or other government organisation’s.

An electronic Jeevan Praaman certificate can be obtained by a pension beneficiary using

this software with a fingerprint or iris scan, using the Aadhaar platform for authentication.
The certificate can then be made available electronically to the Pension Disbursing Agency

Hence the correct answer will be option B

18 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.15) Pradhan Mantri Vaya Vandana Yojana (PMVVY) was launched in the year 2017,
PMVVY aims to protect elderly persons aged 60 years and above, against a future fall in
their interest income due to the uncertain market conditions. In the same regard, what
is the limit of maximum investment in PMVVY.

Is this question covered in the EduTap course – Yes

Subject – Pension
Difficulty Level – Easy
Topic – Types of retirement schemes
Options:

(a) 10,00,000
(b) 20,00,000
(c) 15,00,000
(d) 5,00,000
(e) 25,00,000

Answer: (C)

Explanation:

Pradhan Mantri Vaya Vandana Yojana (PMVVY)was launched in the year 2017. PMVVY
aims to protect elderly persons aged 60 years and above, against a future fall in their
interest income due to the uncertain market conditions.

Following are the key details of PMVVY

• Implementing Agency: Life Insurance Corporation

• Minimum Entry Age: 60 years (completed)
• Maximum Entry Age: No limit
19 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241
 • Nodal Ministry: Ministry of Finance

Policy Term and other Conditions:

• Policy Term: 10 years

• Investment limit: Rs 15 lakh per senior citizen (Note: Originally the investment limit
is Rs 7.5 lakh which was doubled in 2018). Hence the correct answer will be option
C
• Minimum Investment Limit: The minimum investment in the scheme to avail
Rs.1000 per month is Rs.1.5 lakh.
• Minimum Pension: Rs 1,000 per month
• Maximum Pension: Rs 10,000 per month
• Scheme provides an assured return of 8% p.a. payable monthly (equivalent to 8.30%
p.a. effective) for 10 years.

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.16) From the following information, calculate the value of projected sales.

• Sales = Rs. 3,00,000

• Fixed Cost = Rs. 90,000
• Profit for this year = Rs. 60,000
• Loss expected in the next or coming year = Rs. 30,000

20 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

 Is this question covered in the EduTap course – No
Subject – Costing
Difficulty Level – Moderate
Topic – Marginal Costing
Options:

(a) Rs. 5,00,000

(b) Rs. 1,10,000
(c) Rs. 1,00,000
(d) Rs. 5,60,000
(e) Rs. 1,20,000

Answer: (e)

Explanation:

The given question is based on the concept of marginal costing. To begin with first we will
calculate the contribution, which we will Profit plus the fixed cost, therefore we can say,
contribution will be 1,50,000 (60,000 + 90,000).

Now, after calculating contribution, we can calculate PV ratio, which is given by

Contribution divided by sales.

PV ratio = Contribution/Sales = 1,50,000/3,00,000 = 50%

Now, we have the PV ratio as 50%, however the question is demanding the value of
projected sales and in the question, its clearly given that, we are expecting the loss of Rs.
30,000

Indirectly the question is asking us to calculate the level of sales, at which the losses of
the company are limited to 30,000

Therefore, projected sales = Fixed cost – loss expected/ PV ratio = 90,000 – 30,000 / 50%

Projected Sales = 60,000/50% = 1,20,000

Hence the correct answer will be option E.

Q.17) Budgetary control is a system for monitoring an organization's process in monetary

terms. In the same regard, which of the following statement is correct regarding
budgetary control

Is this question covered in the EduTap course – Yes

Subject – Costing
Difficulty Level – Moderate

21 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

 Topic – Budget and Budgetary Control.
Options:

(a) Budgetary Control System over looks the manufacturing operations

(b) Budgetary Control System decreases coordination between departments as the results
and costs are interrelated.
(c) Budgetary Control System is not a Time-consuming and costly process
(d) Budgetary Control is used to compare actual results against the budget
(e) None of the above

Answer: (D)

Explanation:

Budgetary control is a system of procedures used to ensure that an organization's actual

revenues and expenditures adhere closely to its financial plan. The system typically
involves setting personal goals for managers that are based on the budget, along with a
set of rewards that are triggered when the goals are attained. Budgetary Control System
carefully understands the manufacturing operations. Therefore statement A is incorrect

Advantages of Budgetary Control

1. An effective tool for performance measurement of departments, individuals, and

cost centers
2. Identification of areas for reduction and efficiency improvement;
3. Increased efficiency and cost reduction result in profit maximization;
4. It also helps in introducing incentive schemes based on performance.
5. Cost reduction is always the primary target.
6. Improves coordination between departments as the results and costs are
interrelated. Therefore statement B is incorrect
7. It provides insight for in-depth analysis and any corrective action.
8. Helpful in achieving an organization’s long-term goal.

Disadvantages of Budgetary Control

1. Budgeted numbers often need revision as future prediction is difficult.

2. Time-consuming and costly process, need people and resources Budgetary control
processes. Therefore statement C is incorrect
3. This process sometimes requires coordination between various departments and is
a difficult task.
4. This process requires approval and support from top senior management.

22 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

 5. Always comparing the actuals with a budget is detrimental to employees’
motivation.

Hence the correct answer will be option D

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.18) In an organisation, there are 4 employees receiving Rs. 20,000 each for a specific
job. Moreover, the overall overheads were valued at Rs. 40,000 but only 25% of the total
overheads were allocated to this concerned job and a total of 125 units of the production
was produced and finalized. You are required to calculate the per unit cost.

Is this question covered in the EduTap course – No

Subject – Costing
Difficulty Level – Moderate
Topic – Miscellaneous Topic (Overhead Cost)
Options:
(a) Rs. 350
(b) Rs. 125
(c) Rs. 720
(d) Rs. 600
(e) Rs. 650

Answer: (C)

Explanation:

23 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

This question is based on the concept of allocation of overhead, its clearly given in the
question that out of total overheads (40,000) only 25% is allocated to the concerned job,
which means only 10,000 will be allocated as overheads.

Moreover, there are total of 4 employees who are receiving 20,000 each, which total
amount paid to the employees will be 20,000*4 = 80,000

Which means your total cost including overhead will be 90,000 (80,000 + 10,000)

Now, to calculate per unit cost we will be using following formula

Per unit cost = Total Cost/Number of units

Total cost = 90,000 and Number of Units = 125

Per Unit Cost = 90000/125 = 720

Hence the correct answer will be option C

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.19) From the following given information, calculate economic batch quantity

• Annual demand of the product = 5000 Products

• Carrying cost per unit = 10
• Initial installation cost or set-up cost = Rs 1000

Is this question covered in the EduTap course – Yes

Subject – Costing
Difficulty Level – Moderate
Topic – Job Costing and Batch Costing
Options:

(a) 1054Units
(b) 1000 Units
(c) 1058 Units
(d) 1060 Units
(e) None of the above

Answer: (B)

Explanation:

In inventory management, Economic Batch Quantity (EBQ), also known as Optimum

Batch Quantity (OBQ) is a measure used to determine the quantity of units that can be
produced at the minimum average costs in a given batch.

24 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

We will be using the following formula

As per the question, Annual Demand (A) = 5000, Carrying Cost = 10 and Set up cost or
installation cost is given as 1000

Apply all the values in the formula –

2*5000*1000/10 = 10,00,000

Take the Square-root of 10,00,000 and you will get your answer as 1000

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.20) Total Productive Maintenance (TPM) started as a method of physical asset

management focused on maintaining and improving manufacturing machinery, in order
to reduce the operating cost to an organization. In the same regard, which of the
following is the main objective of TPM?

25 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

 Is this question covered in the EduTap course – Yes
Subject – Costing
Difficulty Level – Easy
Topic – Lean System and Innovation
Options:
(a) Safer Working Environment
(b) Zero defects, Zero Breakdowns, Zero Accidents
(c) Early Management of New Equipment
(d) Education & Training of employees
(e) None of the above

Answer: (b)

Explanation:

Total Productive Maintenance (TPM) is a systematic approach to eliminate waste

associated with production equipment and machinery.

TPM focuses on involving machine operator in the routine checks and cleaning of the
machine to detect problems earlier.

Other areas of emphasis include minimizing machine "downtime" resulting from

unexpected breakdowns, fully utilizing a machine's capabilities, and tracking life cycle cost.

TPM has three main goals: zero unplanned failures, zero product defects, and zero
accidents.

With the adoption of TPM, enterprise can benefit from the following aspects:

• Involve machine operators in basic daily maintenance tasks

• Earlier detection of factors critical to maintaining equipment "uptime"
• Attacks the manufacturing equipment losses of breakdowns, set-ups, adjustments,
reduced speed, scrap and rework.
• Measure impact of defects, sub-optimal performance, and downtime using OEE
(Overall Equipment Effectiveness)
• Reduce capital expenditure through equipment refurbishment and capacity
improvements

Screenshot directly taken from our main course/lectures/marathon sessions.

26 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Q.21) In the field of costing, which of the following type of cost is/are categorized on
behavioral basis.

Is this question covered in the EduTap course – Yes

Subject – Costing
Difficulty Level – Moderate
Topic – Miscellaneous Topic (Overhead Cost)

Options:
(a) Manufacturing Cost
(b) Total Cost
(c) Marginal Cost
(d) Variable cost
(e) None of the above

Answer: (D)

Explanation:

A variable cost is a corporate expense that changes in proportion to how much a company
produces or sells. Variable costs increase or decrease depending on a company's
production or sales volume—they rise as production increases and fall as production
decreases.

Examples of variable costs include a manufacturing company's costs of raw materials and
packaging—or a retail company's credit card transaction fees or shipping expenses, which
rise or fall with sales. A variable cost can be contrasted with a fixed cost .

A variable cost is an expense that changes in proportion to production output or sales.

When production or sales increase, variable costs increase; when production or sales
decrease, variable costs decrease.

27 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.22) In an organisation, total units produced in an organisation is 16000 and 18000 units
respectively, therefore the total cost incurred increased from Rs. 22,00,000 to Rs.
24,00,000. You are required to calculate per unit variable cost.

Is this question covered in the EduTap course – Yes

Subject – Costing
Difficulty Level – Moderate
Topic – Marginal Costing
Options:

(a) Rs. 80
(b) Rs. 95
(c) Rs. 188
(d) Rs. 185
(e) Rs. 100

Answer: (e)

Explanation:

This question is based on the concept of variable cost.

28 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Variable costs are expenses that vary in proportion to the volume of goods or services that
a business produces. In other words, they are costs that vary depending on the volume of
activity.

The costs increase as the volume of activities increases and decrease as the volume of
activities decreases.

To calculate per unit variable cost, we will be using following formula

• Per Unit Variable cost = Change in Total variable Cost/Change in the production level
• Change in total variable Cost = 24,00,000 – 22,00,000 = 2,00,000
• Change in the production level = 18000 – 16000 = 2000
• Per Unit Variable cost = 2,00,000/2,000 = 100

Hence the correct answer will be option E

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.23) The central government accepted the 15th Finance Commission’s

recommendation to maintain the States’ share in the divisible pool of taxes to 41% for
the five-year period starting 2021-22. In the same regard, for devolution of funds,
_________% of the weightage has been assigned to Income Distance.

Is this question covered in the EduTap course – Yes

Subject – Finance
Difficulty Level – Easy
Topic – Finance Commission
Options:

29 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

(a) 41.5%
(b) 40%
(c) 43%
(d) 35%
(e) 45%

Answer: (e)

Explanation:

The Finance Commissions are commissions periodically constituted by the President of

India under Article 280 of the Indian Constitution to define the financial relations between
the central government of India and the individual state governments.

The 15th Finance Commission proposed following recommendations –

• Vertical Devolution - 41% of the divisible pool to be devolved to the States in the
year 2020-21.
• Horizontal devolution is done primarily to enable the States to provide basic public
goods and services with equivalent tax effort. The various criteria to be considered
for horizontal devolution are classified into three broad groups as follows.
o Need-based criteria: Population (15%), area (15%) and forest & ecology (10%)
form the need-based criteria. This is needed to address the fiscal gap of States
existing due to the structural mismatch between the States’ resources and their
expenditure liabilities.
o Equity-based criterion: Income distance (45%) forms the equity-based criterion
to ensure fiscal equalization given the large differences in the resource base
available and status of development within the country.
o Performance-based criteria: Demographic performance (12.5%) and tax
effort (2.5%) are part of the performance-based criteria that is framed to reward
and incentivize States to perform better, in terms of utilization of resources
available to them.

Screenshot directly taken from our main course/lectures/marathon sessions.

30 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Q.24) As per section 123 of the companies act, companies are required to deposit the
amount of dividend, including the interim dividend, in the bank account of a schedule
commercial bank, within how many days ?

Is this question covered in the EduTap course – Yes

Subject – Companies Act
Difficulty Level – Easy
Topic – Chapter VIII - Declaration and Payment of Dividend
Options:

(a) 7 Days
(b) 6 Days
(c) 3 Days
(d) 2 Days
(e) 5 Days

Answer: (e) 5 Days

Explanation:

As per Section 123 of the Companies Act, 2013, The amount of the dividend, including the
interim dividend, shall be deposited in a scheduled bank in a separate account within five
days from the date of declaration of such dividend.

Hence option E is the correct answer.

The screenshot is directly taken from our main course/lectures/marathon sessions.

31 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Q.25) As per section 39 of the companies Act, 2013 what is the minimum application
money which a company should receive on the issue of security or securities ?

Is this question covered in the EduTap course – Yes

Subject – Companies Act
Difficulty Level – Easy
Topic – Chapter III - Prospectus & Allotment of Securities
Options:

(a) 10% of the nominal amount of security

(b) 1% of the nominal amount of security
(c) 15% of the nominal amount of security
(d) 5% of the nominal amount of security
(e) 25% of the nominal amount of security

Answer: (d)

Explanation:

Section 39(2) - The amount payable on application on every security shall not be less than
five percent. of the nominal amount of the security or such other percentage or amount,
as may be specified by the Securities and Exchange Board by making regulations in this
behalf.

Hence Option D is the correct answer.

The screenshot is directly taken from our main course/lectures/marathon sessions.

32 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Q.26) As per companies act 2013 (Section 152), a person can be appointed as the director
of the company until and unless he or she gives his or her consent to hold the office as
director and the consent received has to be submitted to the Registrar of Companies
(Roc) within how many days?

Is this question covered in the EduTap course – Yes

Subject – Companies Act
Difficulty Level – Easy
Topic – Chapter XI - Appointment and Qualification of Directors
Options:

(a) 18 Days
(b) 30 Days
(c) 45 Days
(d) 50 Days
(e) 12 Days

Answer: (B)

Explanation:

Section 152 - Appointment of directors

Section 152 (5) - A person appointed as a director shall not act as a director unless he gives
his consent to hold the office as director and such consent has been filed with the Registrar
within thirty days of his appointment in such manner as may be prescribed. Hence Option
B is the correct answer.

The screenshot is directly taken from our main course/lectures/marathon sessions.

33 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Q.27) The Central Government has constituted National Company Law Tribunal (NCLT)
under section 408 of the Companies Act, 2013. In the same regard, the president of the
NCLT can be a high court judge having an experience of how many years?

Is this question covered in the EduTap course – Yes

Subject – Companies Act
Difficulty Level – Easy
Topic – Chapter XXVII - National Company Law Tribunal and Appellate
Tribunal
Options:

(a) 2 Year
(b) 3 Year
(c) 5 Year
(d) 1 Year
(e) None of the above

Answer: (c) 5 years

Explanation:

Explanation:

Section 409 - Qualification of President and Members of Tribunal. —

1. The President shall be a person who is or has been a Judge of a High Court for five
years. Hence option C is the answer.
2. A person shall not be qualified for appointment as a Judicial Member unless he—
a) is, or has been, a judge of a High Court; or
b) is, or has been, a District Judge for at least five years; or
has, for at least ten years been an advocate of a court.
34 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241
The screenshot is directly taken from our main course/lectures/marathon sessions.

Q.28) As per section 141, there are various entities who can be appointed as the auditors
of the company, in the same way, Limited Liability Partnership (LLP) can also be
appointed as an auditor of the company, however in the case of LLP, only those partners
who are _____________ can sign for the LLP.

Is this question covered in the EduTap course – Yes

Subject – Companies Act
Difficulty Level – Easy
Topic – Chapter X - Audit and Auditors
Options:
(a) Charted Accountants
(b) Company Secretaries
(c) Lawyers
(d) Major Partners
(e) Minor Partners

Answer: (a)

Explanation:

Section 141 - Eligibility, qualifications, and disqualifications of auditors

Section 141 (1) - A person shall be eligible for appointment as an auditor of a company
only if he is a chartered accountant:

Provided that a firm whereof majority of partners practising in India are qualified for
appointment as aforesaid may be appointed by its firm name to be auditor of a company.

35 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Section 141 (2) - Where a firm including a limited liability partnership is appointed as an
auditor of a company, only the partners who are chartered accountants shall be
authorized to act and sign on behalf of the firm. Hence option A is the correct answer.

The screenshot is directly taken from our main course/lectures/marathon sessions.

Q.29) As per Companies Act, 2013, when can any third person be termed as the beneficial
owner of the company ?

Is this question covered in the EduTap course – No

Subject – Companies Act
Difficulty Level – Tough
Topic – Miscellaneous topic (Out of the Syllabus – Chapter VI)
Options:

(a) If he/she holds more than 5% of the voting rights

(b) If he/she holds more than 15% of the voting rights
(c) If he/she holds more than 10% of the voting rights
(d) If he/she holds more than 7% of the voting rights
(e) If he/she holds more than 17% of the voting rights

Answer: (C) If he/she holds more than 10% of the voting rights

Explanation:

Section 90 - Register of significant beneficial owners in a company

“Significant beneficial owner” in relation to a reporting company means an individual

referred to in subsection (1) of Section 90, who acting alone or together, or through one
or more persons or trust, possesses one or more of the following rights or entitlements in
such reporting company, namely:

I. holds indirectly, or together with any direct holdings, not less than ten percent, of
the shares.

36 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

 II. holds indirectly, or together with any direct holdings, not less than ten percent, of
the voting rights in the shares. Hence Option C is the correct answer.
III. has the right to receive or participate in not less than ten percent, of the total
distributable dividend, or any other distribution, in a financial year through indirect
holdings alone, or together with any direct holdings.
IV. has right to exercise, or actually exercises, significant influence or control, in any
manner other than through direct holdings alone.

Q.30) Capital in business refers to the sum of financial assets that are required to produce
goods or services. In the same regard, which of the following are the types of share
capital which can be issued by the companies, as per section 43 of the companies Act
2013.

Is this question covered in the EduTap course – Yes

Subject – Companies Act
Difficulty Level – Easy
Topic – Chapter IV - Share Capital and Debentures
Options:

(a) Bonds
(b) External Commercial Borrowings
(c) Equity Share Capital
(d) Preference Share Capital
(e) Both option C and D

Answer: (E) Both option C and D

Explanation:

Section 43 - Kinds of share capital.

The share capital of a company limited by shares shall be of two kinds, namely: —

a) equity share capital—

I. with voting rights; or
II. with differential rights as to dividend, voting, or otherwise in accordance with such
rules as may be prescribed; and
b) Preference share capital:

Hence Option E is the correct answer.

Explanation. —For the purposes of this section, —

37 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

I. “Equity share capital ‘‘, with reference to any company limited by shares, means all
share capital which is not preference share capital.
II. “Preference share capital “, with reference to any company limited by shares, means
that part of the issued share capital of the company which carries or would carry a
preferential right with respect to—
a) payment of dividend, either as a fixed amount or an amount calculated at a fixed
rate, which may either be free of or subject to income tax; and
b) repayment, in the case of a winding up or repayment of capital, of the amount of
the share capital, paid up or deemed to have been paid up, whether or not, there is
a preferential right to the payment of any fixed premium or premium on any fixed
scale, specified in the memorandum or articles of the company.

The screenshot is directly taken from our main course/lectures/marathon sessions.

Q.31) Social Stock Exchange (SSE) is a bourse meant to serve the private and non-profit
sectors and will help them in raising funds through the exchange. Recently, SEBI has
released the guidelines on the framework to establish SSE. In the same regard, what is
the minimum amount of spending on social cause required by the Non-Profit
Organisation (NPO) to register as an SSE.

Is this question covered in the EduTap course – Yes

Subject – Current Affairs
Difficulty Level – Tough
Topic – Finance Current Affairs
Options:

(a) 10 Lakh
(b) 20 Lakh
(c) 50 Lakh

38 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

(d) 65 Lakh
(e) None of the above

Answer: (C)

Explanation:

Social Stock Exchanges (SSEs) are regulated funding platforms like bourse or stock
exchanges for For-Profit Social Enterprises (FPEs) and not-for-profit organizations (NPO)
such as social enterprises, voluntary and welfare organisation’s with a social purpose to
raise funds.

It allows the listing of FPEs and NPOs on stock exchanges, providing them with an
alternative fund-raising structure.

The fund-raising under SSEs is proposed through several instruments such as social venture
funds, zero-coupon-zero-principal bonds and mutual funds.

Some of the most prominent SSEs are Canada (Social Venture Connexion), UK (Social Stock
Exchange), Singapore (Impact Investment Exchange), South Africa (South African Social
Investment Exchange).

Key Highlights of the SEBI Framework for SSE

• SSE should have a valid 80G registration under the Income Tax Act. Their minimum
spending in the last fiscal should be Rs 50 lakh, and a minimum funding of Rs 10 lakh
in the past financial year.
• Hence the correct answer will be option C
• The social enterprises (SEs) eligible to participate in the SSE will be entities—non-
profit organisation’s (NPOs) and for-profit social enterprises—having social intent and
impact as their primary goal.
• NPOs interested in getting listed on SSEs should be registered as a charitable entity, and
the registration certificate must be valid for the next 12 months.
• NPOs should have a "minimum of three years" to get registered on SSEs and they are
required to declare whether they are owned by the government or held privately

The screenshot is directly taken from our main course/lectures/marathon sessions.

39 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Q.32) As per RBI directions, banks are required to disclose the divergence when the Gross
Non Performing Assets (GNPA) as accessed by the RBI exceeds what percentage of the
reported profits ?

Is this question covered in the EduTap course – Yes

Subject – Current Affairs
Difficulty Level – Moderate
Topic – Finance Current Affairs (RBI notifications)
Options:

(a) 10%
(b) 5%
(c) 15%
(d) 20%
(e) 25%

Answer: (B) 5%

Explanation:

RBI has recently decided to introduce the requirements regarding disclosure of divergence
in asset classification and provisioning for Primary (Urban) Co-operative Banks (UCBs) and
revise the specified thresholds for commercial banks.

40 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

For the financial statements for the year ending March 31, 2023, banks shall make suitable
disclosures if either or both of the following conditions are satisfied:

1. The additional provisioning for non-performing assets (NPAs) assessed by the RBI
exceeds 10 per cent of the reported profit before provisions and contingencies for
the reference period
2. The additional Gross NPAs identified by the RBI exceed 10 per cent of the reported
incremental Gross NPAs for the reference period.

The screenshot is directly taken from our main course/lectures/marathon sessions.

Q.33) For a company registered in India, book value of the share is more than the market
value of the share and currently, the Price to Book Value (P/B Ratio) of the company is
less than 1, then generally it is said that the shares of company are currently __________

Is this question covered in the EduTap course – Yes

Subject – Finance
Difficulty Level – Moderate
Topic – Primary and Secondary Markets (Equity markets)
Options:

(a) Over-valued
(b) Under-Valued
(c) Its in Equilibrium (Neither overvalued nor undervalued)
(d) Sightly over-valued
(e) None of the above
41 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241
Answer: (b) Under-Valued

Explanation:

This question is based on the concept of Price to Book Value concept.

Price-to-book value (P/B) is the ratio of the market value of a company's shares (share
price) over its book value of equity. The book value of equity, in turn, is the value of a
company's assets expressed on the balance sheet

• Formula of Price to Book Value is given by -> Current Market Price/Book Value
• Book value = Assets – Liabilities /Number of Shares

Key learning - If the market price of the stock were lower than the book value and the
Price to Book Value ratio is less than one, the stock may be undervalued.

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.34) In the most general language, as per supply law curve, what is the relationship
between supply and prices of a particular commodity ?

Is this question covered in the EduTap course – Yes

Subject – Economics
Difficulty Level – Easy
Topic – Introduction to Economics, Demand and Supply
Options:

(a) Negative
(b) Positive
(c) Supply and prices are not related
(d) Sightly Negative
(e) None of the above

Answer: (b)

42 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Explanation:

The Law of Supply states that there is a positive relation between the price of a good and
the supply of the good, other things being constant. The Law of supply depicts the
producer’s behavior at the time of changes in the prices of goods and services.

When the price of a good rises, the supplier increases the supply in order to earn profit
because of higher prices. When the Price of a good falls, the supplier decreases the supply
as profits are less.

Thus, The law of supply is the microeconomic law that states that, all other factors being
equal, as the price of a good or service increases, the quantity of goods or services that
suppliers offer will increase, and vice versa.

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.35) The Reserve Bank of India (RBI) uses headline inflation for Inflation Targeting
Framework. In the same regard, headline inflation is based on which of the following
type of inflation

Is this question covered in the EduTap course – Yes

43 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241
 Subject – Finance
Difficulty Level – Easy
Topic – Inflation
Options:

(a) Whole-Sale Price Index (WPI)

(b) Consumer Price Index (CPI)
(c) Index of Industrial Production (IIP)
(d) Housing Price Index (HPI)
(e) None of the above

Answer: (b) Consumer Price Index

Explanation:

In general, headline inflation reflects the rate of change in prices of all goods and services
in an economy over a period of time.

Every country has its own set of commodity basket to track inflation. While some countries
use Wholesale Price Index (WPI) as their official measure of inflation, most others use the
Consumer Price Index (CPI).

• Up until March 2014, Reserve Bank of India (RBI) had given more weightage to
Wholesale Price Index (WPI) than CPI as the key measure of inflation for all policy
purposes.
• Since April 2014, RBI has adopted the new Consumer Price Index (CPI) (combined) as
the key measure of inflation. This was done in accordance with the recommendations
of Urjit Patel Committee. Therefore CPI-combined is the measure of headline inflation
in India now.

Hence the correct answer will be option B

Screenshot directly taken from our main course/lectures/marathon sessions.

44 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Q.36) In the field of economics, what is the correct formula to calculate Net National
Product ?

Is this question covered in the EduTap course – Yes

Subject – Economics
Difficulty Level – Easy
Topic – National Income
Options:

(a) Gross National Product - NFIA

(b) Gross National Product – Depreciation
(c) Gross National Product + Depreciation
(d) Gross National Product – Indirect Taxes + Subsidies
(e) Gross National Product + NFIA

Answer: (B)

Explanation:

Net National Product = Gross National Product – Depreciation. National is same in RHS
and LHS, thus we have only Gross to convert to net. To convert Gross to net we deduct
depreciation.

The monetary value of an asset decreases over time due to use, wear and tear or
obsolescence. This decrease is measured as depreciation.

When the net is to be converted to Gross, depreciation is added and when the gross is to
be converted to net, depreciation is deducted.

National Product refers to the total value of all the goods and services produced by the
normal residents of a country, irrespective of their location.

Screenshot directly taken from our main course/lectures/marathon sessions.

45 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Q.37) Its generally said that, too much money chasing too few goods will the reason of
increase in _________

Is this question covered in the EduTap course – Yes

Subject – Economics
Difficulty Level – Easy
Topic – Inflation and Phillips Curve
Options:

(a) Capital Investment

(b) Budget Expenditure
(c) Inflation
(d) Foreign Portfolio Investment (FPI)
(e) Subsidies

Answer: (C)

Explanation:

Demand-Pull or excess demand inflation is a situation often described as “too much money
chasing too few goods.”

According to this theory, an excess of aggregate demand of goods over the aggregate
supply of goods will generate an inflationary rise in prices.

The goods are very less in supply and the demand is very high thus the money chases the
few goods due to which, there is inflation in the economy caused by greater demand.

Screenshot directly taken from our main course/lectures/marathon sessions

46 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Q.38) IS-LM curve can be derived from the Keynesian theory from its analysis of money
market equilibrium. In the same regard, there will be a rightward shift in IS-LM in which
of the following situations ?

Is this question covered in the EduTap course – Yes

Subject – Economics
Difficulty Level – Difficult
Topic – IS-LM Model
Options:

(a) Decrease in Money Supply

(b) Increase in Demand for Money
(c) Decrease in Government Expenditure
(d) Decrease in Autonomous Consumption
(e) Increase in Money Supply

Answer: (e)

Explanation:

The Increase in Money Supply causes the LM curve to shift rightwards from Lm0 to LM1
as shown in the below diagram.

When the money supply increases, given the money demand function, it will lower the rate
of interest at the given level of income.

With income fixed, the rate of interest must fall so that demand for money for speculative
motive rises which is a component of Money Demand to make Money Demand equal to
the greater money supply.

With more money supply to the people, they will also increase transactions more

This will cause the LM curve to shift outward to the right.

47 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

The increase in Demand for money and the decrease in money supply leads to a Leftward
shift in LM curve.

The Decrease in Government Expenditure and Decrease in Autonomous Consumption

leads to leftward shift in IS curve

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.39) In the most general language, what is the relationship between interest rates and
investment ?

Is this question Covered in EduTap course – Yes

Subject – Economics
Difficulty Level – Easy
Topic – IS-LM Model

Options:

(a) Negative
(b) Positive
(c) Investment and Interest Rates are not related
(d) Sightly Positive
(e) None of the above

Answer: (a)

Explanation:

Investment is inversely related to interest rates, which are the cost of borrowing and the
reward to lending. Investment is inversely related to interest rates for two main reasons.

48 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Firstly, if interest rates rise, the opportunity cost of investment rises. This means that a rise
in interest rates increases the return on funds deposited in an interest-bearing account, or
from making a loan, which reduces the attractiveness of investment relative to lending.
Hence, investment decisions may be postponed until interest rates return to lower levels.

Secondly, if interest rates rise, firms may anticipate that consumers will reduce their
spending, and the benefit of investing will be lost. Investing to expand requires that
consumers at least maintain their current spending. Therefore, a predicted fall is likely to
discourage firms from investing and force them to postpone their investment decisions.

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.40) Assume that, currently there is a very high level of unemployment in the economy
and there is an upward pressure on the prices of the commodities, then this situation
will be termed as ___________

Is this question Covered in EduTap course – Yes

Subject – Economics
Difficulty Level – Moderate
Topic – Inflation and Phillips Curve
Options:

(a) Boom
(b) Stagflation
(c) Depression
(d) Recession
(e) None of the above

Answer: (B) Stagflation

Explanation:

Stagflation is a period of rising inflation with falling output and rising unemployment.
“Stagflation” is a combination of high inflation and economic stagnation. Stagflation is a

49 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

rare economic state that occurred in the U.S. in the 1970s. The name is derived from two
simultaneous characteristics that can lead to broad-ranging economic turmoil: inflation
and economic stagnation.

There are competing schools of thought regarding what causes stagflation:

Keynesian economists argue that shocks to energy or food supplies, such as increases in
oil prices, cause stagflation.

Monetarists say that stagflation is the result of a rapid expansion of a country’s money
supply.

Supply-side economists believe stagflation is the combination of tight business regulations

and high taxes.

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.41) As per the recent regulations released by RBI for regulation of NBFCs, Non-Deposit
Taking NBFC (wherein the asset size is more than 1000 crore) will be categorized as which
of the following layers of the NBFCs?

50 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

 Is this question Covered in EduTap course – Yes
Subject – Current Affairs
Difficulty Level – Tough
Topic – Finance Current Affairs
Options:

(a) Upper Layer

(b) Base Layer
(c) Middle Layer
(d) Top Layer
(e) None of the above

Answer: (C) Middle Layer

Explanation:

NBFCs have typically enjoyed a less intense regulatory structure as compared to Banks.
However, with the increase in the size, interconnectedness, and complexity of the
operations of NBFCs, this picture is changing.

The Reserve Bank of India is proposing to increase the compliance norms significantly
with reference to the NBFCs.

The Scale Based Regulation (SBR): A Revised Regulatory Framework for NBFCs was issued
on October 22, 2021 to usher in the new era of increased governance.

The Regulations present the most sweeping change in the regulatory structure of the
NBFCs. The Regulations are applicable from October 1, 2022.

Regulatory Structure for NBFCs - Following 4-layers structure has been proposed by RBI

Layer 1 – The Base Layer

It shall comprise of (a) non-deposit taking NBFCs below the asset size of ₹1000 crore and
(b) NBFCs undertaking the following activities- (i) NBFC-Peer to Peer Lending Platform
(NBFC-P2P), (ii) NBFC-Account Aggregator (NBFC-AA), (iii) Non-Operative Financial Holding
Company (NOFHC) and (iv) NBFCs not availing public funds and not having any customer
interface

Layer 2 – The Middle Layer

The Middle Layer shall consist of (a) all deposit taking NBFCs (NBFC-Ds), irrespective of
asset size, (b) non-deposit taking NBFCs with asset size of ₹1000 crore and above and (c)
NBFCs undertaking the following activities (i) Standalone Primary Dealers (SPDs), (ii)

51 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Infrastructure Debt Fund - Non-Banking Financial Companies (IDF-NBFCs), (iii) Core
Investment Companies (CICs), (iv) Housing Finance Companies (HFCs) and (v) Infrastructure
Finance Companies (NBFC-IFCs). Hence the correct answer will be option C

Layer 3 - Upper Layer

The Upper Layer shall comprise of those NBFCs which are specifically identified by the
Reserve Bank. The top ten eligible NBFCs in terms of their asset size shall always reside in
the upper layer, irrespective of any other factor.

Layer 4 – The Top Layer

The Top Layer will ideally remain empty. This layer can get populated if the Reserve Bank
is of the opinion that there is a substantial increase in the potential systemic risk from
specific NBFCs in the Upper Layer. Such NBFCs shall move to the Top Layer from the Upper
Layer.

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.42) In which of the following market model, a person can assume that change in the
pricing strategy of the rival/ competitor company will lead to no change in the prices of
his/her company?

52 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

 Is this question Covered in EduTap course – Yes
Subject – Economics
Difficulty Level – Difficulty
Topic –Market Structure (Theories of Oligopoly)

Options:

(a) Cournot Duopoly Model

(b) Chamberlin Duopoly Model
(c) Sweezy Duopoly Model
(d) Bertrand Duopoly Model
(e) None of the above

Answer: (d)

Explanation:

Bertand’s model assumes that each firm expects that the rival will keep its price constant,
irrespective of its own decision about pricing.

Each firm is faced with the same market demand and aims at the maximization of its own
profit on the assumption that the price of the competitor will remain constant. That is
there is no interdependence.

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.43) Leadership can be defined as the process to guide the employees towards the
achievement of organisational goal. In the same regard, which of the following
leadership style if followed under Laissez Faire leadership ?

53 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

 Is this question Covered in EduTap course – Yes
Subject – Management
Difficulty Level – Easy
Topic – Leadership
Options:

(a) Autocratic Leadership style

(b) Democratic Leadership Style
(c) Delegative Leadership Style
(d) Paternalistic Leadership Style
(e) None of the above

Answer: (C)

Explanation:

Laissez-faire leadership, also known as delegative leadership, is a type of leadership style

in which leaders are hands-off and allow group members to make the decisions.
Researchers have found that this is generally the leadership style that leads to the lowest
productivity among group members.

In this leadership style

1. The manager provides little or no direction and gives staff as much freedom as
possible
2. The superior decides the broad policies and limits of actions and the entire process is
left to the subordinates
3. All authority or power given to the staff and they determine goals, make decisions,
and resolve problems on their own
4. Managers exists as contact man with outsiders to bring for his group the information
and resources it needs to accomplish its job
5. It allows followers a self-rule, while at the same time offering guidance and support
when requested. The laissez-faire leader using guided freedom provides the followers
with all materials necessary to accomplish their goals, but does not directly participate
in decision making unless the followers request their assistance

Screenshot directly taken from our main course/lectures/marathon sessions.

54 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Q.44) Although Motivation and Morale are closely related concepts, however there exist
some different between morale and motivation. In the same regard, which of the
following statement is correct.

Is this question Covered in EduTap course – Yes

Subject – Management
Difficulty Level – Moderate
Topic – Motivation
Options:

(a) High morale essentially results in greatly motivated employees

(b) High Moral always leads to higher productivity
(c) High morale is a primary phenomenon
(d) Morale is concerned with overall attitude of the group towards the Organization and
management
(e) None of the above

Answer: (d)

Explanation:

This question in based on the concept of motivation and morale.

Morale is a psychological concept. It has been defined in many as, but all definitions revolve
around attitude towards work for the accomplishment of organizational goals.

55 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Morale (also known as esprit de corps) is the capacity of a group's members to maintain
belief in an institution or goal, particularly in the face of opposition or hardship. Morale is
usually assessed at a collective, rather than an individual level. Therefore, statement D
is correct.

Though motivation and morale are closely related concepts, they are different in following ways:

Motivation Morale
Motivation is concerned with needs of an Morale is concerned with overall attitude
individual. Thus, motivation takes into of the group towards the Organization
consideration the individual differences among and management.
the employees

High Motivation is driving force which induces High Moral might not always lead to
higher productivity higher productivity.

Higher motivation often leads to higher morale High morale does not essentially result in
of employees greatly motivated employees

Motivation acquires primary concern in every High morale is a secondary phenomenon

organization because high motivation because high morale may not necessarily
essentially leads to higher productivity, lead to higher productivity

Screenshot directly taken from our main course/lectures/marathon sessions.

56 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Q.45) Which of the following function of Human Resource Management (HRM) explains
that employees should be given enough freedom in their respective domains of working
or expertise.

Is this question covered in the EduTap course – Yes

Subject – Management
Difficulty Level – Easy
Topic – Human Resource Development
Options:

(a) Principle of Potential Maximization

(b) Principle of Development of Organization wide capabilities
(c) Principle of Autonomy
(d) Principle of Proper Delegation
(e) None of the above

Answer: (C)

Explanation:

HRD is basically concerned with the development of human resources in the organization
for improving the existing capabilities and acquiring new capabilities for achievement of
the corporate and individual goals. HRD should help employees increasing their
knowledge, skills, and capabilities and create positive attitude towards work.

Following are some Principles of HRD

1. Principle of Development of Organization wide capabilities: HRD function should

take care that there is development of capabilities of all employees and organization
as a whole
2. Principle of Potential Maximization: HRD must enable the employees to identify
their hidden potential and realize their potential to the maximum
3. Principle of Autonomy: Employees must be given autonomy at work to discharge
their duties. Hence the correct answer will be option C.
4. Principle of Proper Delegation: There should be proper delegation of responsibility
and authority on the organization
5. Principle of Participative decision making: Everyone must participate in decision
making
6. Principle of change management: HRD must develop competency to adapt in the
changing environment

57 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

 7. Principle of Periodic Review: There should be periodic review of HRD functions like
career planning, training, and development etc. and necessary changes be made
after the review

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.46) Leadership is the art of motivating a group of people to act toward achieving a
common goal. There are different leadership styles, in the same regard, identify the
leadership style wherein a leader consults and invite the suggestions from the fellow
team members.

Is this question covered in the EduTap course – Yes

Subject – Management
Difficulty Level – Easy
Topic – Leadership
Options:

(a) Democratic Leadership Style

(b) Servant Leadership Style
(c) Narcissism Leadership Style
(d) Autocratic Leadership
(e) None of the above

Answer: (a)

Explanation:

Democratic Leadership Style (Participative Style) - This leadership style is also called
Shared Leadership or Consultative style

In this leadership style,

➢ Leader Encourages staff to be a part of the decision making

58 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241
 ➢ Leader Keeps staff informed about everything that affects their work and shares
decision making and problem-solving responsibilities
➢ Employees like the trust they receive and respond with cooperation, team spirit,
and high morale.
➢ The idea is to give equal treatment to everyone with Social Equality
➢ Delegation of authority up to a limit to subordinates to implement decisions
➢ The Goals of staff are set by themselves
➢ Achievement is recognized and encouragement is given
➢ There is decentralized authority

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.47) Which of the following role does a manager plays in Human Resource
Development, when the manager helps the employee to handle the problems of the
employee and this role also increases the productivity of the employees

Is this question covered in the EduTap course – Yes

Subject – Management
Difficulty Level – Moderate
Topic – Human Resource Development
Options:

(a) Career Anchors

(b) Career Orientation
(c) Career Path
(d) Career Counselling
(e) Career ladder

Answer: (d)

Explanation:

59 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Many employees face pressure and stress in their careers. The basic objective of
counselling in organizational context is to bring an employee back to his normal position
from a position in which he is experiencing a problem or to enhance the self-image of the
employee.

Career counselling involves advising and guiding employees in their possible career paths
and the direction in which they ought to be heading. Career Counselling helps in following
ways

1. Helps them cope with pressure

2. Helps them in self-understanding
3. Positive thinking and Motivation

Screenshot directly taken from our main course/lectures/marathon sessions.

Q.48) Which of the following theories of management talks about the integration of core
concepts of the classical model with social/behavioral science theory of management ?

Is this question covered in the EduTap course – No

Subject – Management
Difficulty Level – Moderate
Topic – General Management
Options:

(a) Period Theory

(b) Social Theory
(c) Learning Theory
(d) Traditional Theory
(e) Modern Theory

Answer: (e)

Explanation:

60 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Management theories are ideas about how people manage employees in an organization.
Management theories explain what motivates employees and how leaders can use these
motivators to control and guide them. Management theories provide management
strategies, frameworks, and guidelines that employers can implement in the office.

Modern Management Theory was created in direct response to the Classical

Management Theory that states employees are only motivated by money. The Modern
Management Theory recognizes that workers are complex and have many reasons for
wanting to succeed in their job. The Modern Management Theory also believes that rapidly
changing technology can both cause and solve many problems in the workplace.

Hence the correct answer will be option E.

Q.49) Suppose in an organisation, employees have good communication skills, there is a

high level of mutual trust and every employee respects the every other employee, such
situation will lead to which of the following scenarios ?

Is this question covered in the EduTap course – Yes

Subject – Management
Difficulty Level – Moderate
Topic – Communication
Options:

(a) Effective Communication will leader to an argumentative situation

(b) Effective Communication will increase the time taken to complete the work
(c) There will be less inter-change of thoughts and partaking of ideas
(d) There will be an increase in the management efficiency
(e) None of the above

Answer: (d)

Explanation:

Communication is one of the main principles of organization. It has been considered as an

effective tool for achieving the goals of an organization.

All organizations may be small or big, simple, or complex, general, or technical, have the
necessity of communication network. It plays a vital role, as functioning of all other
Important principles of the organization depends upon its availability and effectivity.
Effective Communication is considered as foundation of sound management. Chester
Barnard a famous American executive once remarked “The first executive function is to
develop and maintain a system of communication”

61 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Ineffective communication has been identified as the root cause of many problems in the
world. The concept of communication is interrelated with concepts such as motivation,
coordination, leadership, structure; and decision making in organizations.

The term communication is, generally applied in the sense of imparting knowledge or
transmitting information, however, in its wider connotation, it includes inter-change of
thoughts, partaking of ideas and a sense of participating and sharing.

Screenshot directly taken from our main course/lectures/marathon sessions

Q.50) Identify the role of the leader, wherein the leader established a two-way
communication between Management and employees and the manager motivates the
employee by making them believe that they can contribute towards betterment of the
society. This role gives credibility towards the task

Is this question covered in the EduTap course – Yes

Subject – Management
Difficulty Level – Moderate
Topic – Role of Managers (General Management)
Options:

(a) Balancing Role

(b) Developmental Role
(c) Performance Management
(d) Link Building
(e) None of the above

Answer: (D)

62 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

Explanation:

Apart from Henry Mintzberg’s role, there are some other lesser known roles played by
Managers. Some of them are discussed below

1. Balancing Role - The manager balances the needs of the team members by bringing
harmony in project goal and individual goal. For example, if somebody wants to learn
new technology then the manager might give him a role where he can be useful for the
company by learning new technologies.

2. Developmental Role - This role is related to career planning, training, and development
of employees so that individual development takes place and benefits both the
organization and the individual. The manager helps employees to enhance their skills
and upgrade their existing knowledge for them to contribute more effectively towards
the success of an organization.

3. Performance Management - In this role the manager duly recognizes his employees,
provides training and development, provides feedback, and monitors the work.

4. Link Building - Link Building is a two-way communication between Management and

employees where a proper handover of information and assets takes place. The
manager motivates the employee by making them believe that they contribute towards
betterment of the society. This role gives credibility towards the task. Hence the correct
answer will be option D

Screenshot directly taken from our main course/lectures/marathon sessions

63 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241

64 | P a g e w w w . e d u t a p . c o . i n Query? hello@[Link] 8146207241