MP State Eligibility Test 2017 Papers -Commerce

(Commerce) CTET = MP State Eligibility Test - 2017 - Final Model Answer Key

Q.No: 1 Internal Rate of Return means

A Project earn more than cost of capital
B Net Present value of project is positive
C Rate of discount which makes NPV zero
D Rate of return after recovery cost of capital

Q.No: 2 One key assumption of the miller and Modigliani dividend irrelevance argument is that:

A New shares are sold at fair price
B Future stock prices are certain
C There are no capital gains taxes
D All investments are risk – free

Q.No: 3 Standard error is estimated as

A Average annual rate of return divided by the square root of the number of observations
B Standard deviation of returns divided by the square root of the number of observations
C Variance divided by the number of observations
D None of these are correct

Q.No: 4 Equity in case of limited company means

A Equity share capital
B Total assets of the company
C Net worth of the company
D Total funds applied by the company

Q.No: 5 X machine has starting time 6 hours & Y machine has time 2 hours. X machine produces 50 units per hour while Y machine produces 25 units per hour. At which level of production both machines will have produced equal products?

A 120 units
B 200 units
C 500 units
D 100 units

Q.No: 6 Gifts received by an assessee are not taxable

A They are received from spouse of the assesse
B If they are received from a close friend
C If they are received from brother of father in law/mother in law
D They are received on occasion of assesse's marriage

Q.No: 7 If a business concern wants to compare its sales of any two years which adjustment will be necessary?

A Adjustment for change in cost
B Adjust for price change
C Adjustment in profit
D Adjustment in quantity sold

Q.No: 8 The term cost of capital for a project depends on

AThe use to which the capital is put, i.e, the project
B The company's cost of capital
C The industry cost of capital
D All of these are correct

Q.No: 9 Which are the two accounting books by Maintaining them all accounting transactions can be recorded by any business concern

A Cash book & Bank Book
B Purchase register & sales register
C Journal & Ledger
D Purchase return & sales return book

Q.No: 10 Matching concept in accounting means

A Ensuring all expenses and income of all business activities are accounted for
B Income and expenses are matched
C Only realized incomes are considered
D Excess of income over expenses is ensured

Q.No: 11 Standard costing can be applied : :

A If budgetary control is there
B If Job costing is used
C If process costing is used
D All of these are correct

Q.No: 12 The term Opportunity Cost refers to

A Variable Cost
B Short-run cost
C The cost forgone in favour of production of another product
D Cost related to an optimum level of production

Q.No: 13 If a product, having demand 10000 units has following requirements per unit, [1] Raw material 3 k.g [2] Power 5 units [3] Labour 10 hours and availability is under Raw material 27000 k.g, power 60000 units labour hour 6000. How many units will be produced?

A 9000 9000
B 10000 10000
C 12000 12000
D 600 600

Q.No: 14 What is the characteristic of a purely competitive market?

A Large number of buyers and sellers
B A few sellers
C A few buyers
D Abnormal profit

Q.No: 15 Industry prefers IRR criteria to NPV criteria as

A IRR considers Investment made in project
B NPV criteria is considered advanced by academicians
C NPV requires cost of capital
D IRR is simple to understand

Q.No: 17 If a business concern maintains bank book

A It cannot have account of any bank in ledger
B It may have some bank accounts of its choice in ledger
C It will have all bank accounts in ledger
D It will have accounts of all banks in ledger except banks whose accounts are not brought in bank book

Q.No: 18 The interview is used as a method of determining …

A The personality of the candidate
B The degree of fit between the applicant and the demand of the job
C His/Her age
D Physical attributes

Q.No: 19 Which of the following is not a function normally performed by the HR. Department

A Employee relation
B Training and Development
C Accounting
D Recruitment

Q.No: 20 Successful managers are:

A Efficient & Effective
B Strict to employees
C Wrong policy makers
D Wrong decision makers

Q.No: 21 Which of the following statements most accurately defines human resource management?

A Human resource management  contributes to business strategy and plays an important role in the implementation of business strategy
B Human resource management is an approach to managing people
C Human resource management seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural and personnel techniques
D Human resource management focuses on people as the source of competitive advantage

Q.No: 22 Human resource Management aims to maximize employees as well as Organizational

A Effectiveness
B Economy
C Efficiency
D Performativity

Q.No: 23 The number of people hired for a particular job compared t the number of individuals in the applicant pool is often expressed as

A Applicant Ratio
B Recruitment Ratio
C Selection Ratio
D Employment Ratio

Q.No: 24 Which of the following is NOT true about Capital Expenditure?

A Creates future benefits
B Incurred to acquire fixed assets
C Incurred to increase the economic life of existing fixed asstes
D Reduce the profit of the concern

Q.No: 25 Agency cost consists of :

A Binding
B Monitoring
C Opportunity and structure cost
D All of these are correct

Q.No: 26 Non-profit organizations prepare all of the following accounts except the

A Receipts and payment accounts
B Income and Expenditure accounts
C Income Statement
D Balance sheet

Q.No: 27 Which of the following is another term for debtor control account?

A Sales account
B Receivable account
C Creditor control Account
D Sales ledger control account

Q.No: 28 Which kind of theory Utilitarianism has?

A Conceptual
B Ethical
C Behavioural
D None of these are correct

Q.No: 29 Which of the following includes conveying a decision to those and getting their commitment to it?

A Selecting an alternative
B Evaluation of decision effectiveness
C Implementation of the alternativeness
D Developing alternatives

Q.No: 30 Also known as beta error, _____ occurs when the sample results lead to the nonrejection of a null hypothesis that is in fact false.

A Type I error -I
B Type - tailed error -
C Type II error - II
D One- tailed error -

Q.No: 31 Hypothesis tests can be related________.

A Tests of strength
B Tests of association
C Tests of differences
D (Tests of association) and (Tests of differences) are correct

Q.No: 32 What classical principle was stressed by Foyol?

A Unity of command
B Equal authority and responsibility
C Limited Span of control
D Delegation of routine matters

Q.No: 33 Consumer surplus is

A Excess of consumer satisfaction over cost paid by consumer
B Excess of marginal satisfaction over marginal cost
C Excess sales revenue over cost
D Excess marginal utility over price

Q.No: 34 Objectives of an organization must be ----

A Flexible
B Specific
C Universal
D Profit-oriented -

Q.No: 35 _____ is not a qualitative research technique _____

A Depth interview
B Word association
C Focus group
D Conclusive research

Q.No: 36 In a study the researcher was investigating attitudes toward airlines among male middle managers . Each airline attribute, such as  wide-body aircrafts, was probed (why do you like to travel in wide- body aircrafts?) to determine why it was important (I can get more work done) and then that reason was probed (I accomplish more), and so on(I feel good about myself).The depth interview techniques used in study is called

A Hidden issue questioning
B Symbolic analysis
C Laddering
D None of the these are correct

Q.No: 37 Big Bazar is Powerful -:-:-:-:-X-:-:-:Weak Unreliable-:-:-:-:-:-X-:-: Reliable The above scale is an example of a____ scale.

A Continuous rating
B Semantic differential
C Stapel
D Likert

Q.No: 38 When utilizing univariate techniques, for metric data, when there is (are)____, oneway analysis of variance (one - way ANOVA)can be used.

A Only one sample
B Two independent samples
C More than two independent samples
D Two or more related samples

Q.No: 39 If price elasticity of demand for a product is 2 and its price falls from Rs 10 to Rs. 8. Then its demand which was 500000 units at price Rs. 10, will be_____

A 1000000
B 700000
C 600000
D 400000

Q.No: 40 Motivational process is basically ----

A Intellectual Process
B Physiological Process
C Psychological Process
D Emotional Process

Q.No: 41 Which statement about hypothesis is not true?

A A hypothesis is an unproven statement or proposition about a factor or phenomenon that is of interest to the researcher
B Hypothesis are declarative and can be tested empirically
C It is possible to formulate hypothesis in all situations
D An important role of a hypothesis is to suggest variables to be included in the research design

Q.No: 42 ______ refers to an extraneous variable that occurs test units with extreme scores move closer to the average score during the course of the experiment.

A Instrumentation
B Statistical regression
C Selection bias
D None of the these are correct

Q.No: 43 A measure of central tendency given as the value above which half of the values fall is the ____.

A Mean
B Mode
C Range
D Median

Q.No: 44 Which of the following is not a form of non probability sampling?

A Convenience sampling
B Cluster sampling
C Quota sampling
D Snowball sampling

Q.No: 45 The mission of an organization is :

A Basic purpose of its establishment
BA statement guiding an organization performance standards
C Its basic long - term economic objectives
D Optimum utilization of recourses

Q.No: 46 The mean squared deviation of all the values from the maen is the ____.

A Standard deviation
B Variance
C Coefficient of variation
D Interquartile range :

Q.No: 49 There are three methods of assigning probabilities

(i) Classical method of assigning probabilities
(ii) Subjective probability and
(iii) _____________

A Continuous frequency of Occurrence
B Subjective frequency of Occurrence
C Relative frequency of Occurrence
D Judgmental frequency of Occurrence

Q.No: 50 If everyone who is faced with a similar situation responds in the same way, attribution theory states that the behaviour shows

A Consensus
B Similarity
C Reliability
D Consistency


Q.No: 1 If Business purchase method of accounting is followed in case of business takeover of a company by a company

A Assets & liabilities taken over recorded by purchasing company at book value
B Assets and liabilities taken over recorded by purchasing company at market value
C Assets and liabilities taken over recorded by purchasing company at agreed value
D Assets and liabilities taken over recorded by purchasing company at per its choice

Q.No: 2 Which of the following statements is most correct? ?

A Stock repurchases can be used by firms to defend against hostile takeovers since they increase the proportion of debt in a firms capital structure.
B After a 3-for-1 stock split, a company's price per share value will fall and its number of shares outstanding will rise
C Investors can interpret a stock repurchase by a firm as a signal that the firm's manager believe the stock is underpriced.
D All are correct

Q.No: 3 If a person of age 58 years, has agriculture income Rs.2,00,000 and non- agricultural income Rs.5,00,000 with no deductions under sec 80C-80U Income tax payable [excluding education cess] will be

A Rs.50,000
B Rs.20,000
C Rs.45,000
D Rs.25,000

Q.No: 4 An individual has to pay income tax on his all income if he is

A Resident
B Resident but not ordinary resident
C Non resident
D Resident and ordinary resident

Q.No: 5 If profit is Rs.4,00,000 & fixed cost is Rs.6,00,000 with PV ratio 40% sales at BEP must be

A Rs.25,00,000
B Rs.10,00,000
C Rs.6,00,000
D Rs.15,00,000

Q.No: 6 Heavy use of Off-balance sheet lease financing will tend to

A Make a company appear more risky than it actually is because its stated debt ratio will appear higher
B Make a company appear less risky than it actually is because its stated debt ratio will appear lower
C Have no effect on either cash flows or risk because the cash flows are already reflected in the income statement
D None of these are correct

Q.No: 7 If the standard deviation is 13.4% and the number of observations is 10, what is the standard error?
A 4.23%
B 2.4%
C 0.47%
D None of these are correct

Q.No: 8 For an individual, to become resident, his stay in India in the previous year has to be at least -----[ if he has not been in India for at least 365 days in four years previous to previous year]

A 180 days
B 181 days
C 182 days
D 365 days

Q.No: 9 Surety get discharged ,

A If debtor does not pay
B If creditor gives time to debtor at his request of his friend
C If the creditor sales security given to him
D If creditor discharges the debtor

Q.No: 10 Budgetary control means

A Preparing budgets
B Comparing actual with budjet and analyses & follow up of variance,
C Revising budget
D Finding variances

Q.No: 11 If budgeted production over heads are Rs.80000/- and budgeted production is 10,000 units while actual over heads are Rs.70000 and actual production is 11000 units its is a case of

A Over absorption Rs.3000
B Over absorption of Rs.70000
C Under absorption of Rs.30000
D Over absorption of Rs.18000

Q.No: 12 Self assessment is done under sec -------- of income tax act----

A 144
B 147
C 140
D 142

Q.No: 13 Separate entity concept means

A Business concern is a legally recognized person
B Owners of business concern and business concern both are separate from each other
C Business concern separate from its customers
D Business concern separate from its suppliers

Q.No: 14 The tax shield would result in

(i) Increase in tax liability
(ii) increase in EPS
(iii) decrease in EPS
(iv) decrease in tax liability

A (ii) and (iv)
B (i) and (iii)
C (i) and (iv)
D (iii) and (iv)

Q.No: 15 Venture capital funds are generally organized as

A Proprietorships
B Corporations
C Limited private partnerships
D None of these are correct

Q.No: 16 Implied warranties and conditions in contract of a sale are applicable : :

A In all contracts of sale -
B In only those contract of sale where they are included in the contract
C In all contract of sale even if they are excluded as per the terms of contract -
D In all contract under sale of goods act unless they are specifically excluded as per terms of contract

Q.No: 17 A derivative is a financial instrument whose value is determined by:

A A regulatory body such as the FTC
B An underlying asset
C Hedging a risk
D Speculation

Q.No: 18 Which is the most suitable base for deciding production over head recovery rate?

A Raw material consumption cost
B Prime cost
C Production cost
D Hours of machinery working / direct labour hour working

Q.No: 19 Willingness to pay minus actual payment is called

A Consumer's surplus
B Producer's surplus
C Utility surplus
D Supplier's surplus

Q.No: 20 Joint products will be further processed if

A They are easily salable after further process
B Total sales proceeds are more than cost
C Value added by further processing is more than further process cost
D If price rise is expected

Q.No: 21 The though and detailed study regarding jobs within an organization is represented by;

A Job analysis
B Job description
C Job specification
D Job evaluation

Q.No: 22 The process of choosing individuals who have relevant qualifications to fill existing or projected job openings is____

A Screening process
B Selection process
C Interview process
D Pre-screening process -

Q.No: 23 Why are employers interested in employee engagement?

A To encourage employees to trust their manager
B To make a quick profit
C To make employees work harder for less
D Because engaged employees are more motivated and prepared to give their best to make the firm succeed

Q.No: 24 Firing the non-performing employees, HR manager is said to perform the

A Interpersonal role
B Informational role
C Supportive role
D Decisional role

Q.No: 25 Which of the following component of attitude represents a person's opinions knowledge, and information?

A Affective component
B Cognitive component
C Behavioural component
D Objective component

Q.No: 26 What is meant by the term 'management by objectives'?

A A system of giving the authority to carry out certain jobs by those lower down the management hierarchy
B The system of management that is based on bringing together experts into a team
C The setting of objectives to bring about the achievement of the cooperate goals
D The control of the Organization by those in the 'head office'

Q.No: 27 Which of the following test indicates the person's inclination towards a particular occupation that provides satisfaction to that individuals?

A Vocational interest test
B Cognitive aptitude test
C Personality test
D Psychomotor abilities test

Q.No: 28 Which of the following is a key HR role?

A Personal administrator
B Business ally
C - Payroll advisor
D Organization geographer

Q.No: 29 Executive recruiters are also called _______

A Head hunters -
B Staffers
C Alternative staffing companies
D Contract technical recruiters

Q.No: 30 Which of the following is not true of the activity known as job analysis?

A The rate of pay for the job is fixed.
B The job elements are rated in terms such as frequency of use or amount of time involved
C It aims to describe the purpose of a job and the conditions under which it is performed
D Jobs are broken into elements such as information required or relations with other people

Q.No: 31 The objective of wealth maximization takes into account ----

A Amount of returns expected
B Timing of anticipated returns
C Risk associated with uncertainty of returns
D All are correct

Q.No: 32 If the normal rate of interest is 10% per annum and there is quarterly compounding the effective rate of interest will be:

A 10% per annum
B 10.10% per annum
C 10.25% per annum
D 10.38% per annum

Q.No: 33 Risk of two securities with different expected return can be compared with

A Coefficient of Variation
B Standard deviation of securities
C Variance of Securities
D None of these are correct

Q.No: 34 Required rate of return > Coupon rate, the bond will be valued at

A Premium
B Par value
C Discount
D None of these are correct

Q.No: 35 Net operating profit ratio determines _________ while net profit ratio determines-----

A Overall efficiency of the business, working efficiency of the management ,
B working efficiency of the management, Overall efficiency of the business
C Overall efficiency of the external market, working efficiency of the internal management
D None of these are correct

Q.No: 36 Higher the ratio , the more favourable it is , doesn't stands true for

A Operating ratio
B Liquidity ratio
C Net profit ratio
D Stock turnover ratio

Q.No: 37 Which of the following are sources of funds? a. Issue of bonus shares b. Issue of shares against the purchase of fixed assets c.Conversion of debentures into shares d. Conversion of loans into shares

A a and c
B a and d
C a, b, c and d
D None of these are correct

Q.No: 38 Using equation method, Break-even point is calculated as

A Sales = Variable expenses + Fixed expenses + Profit
B Sales = Variable expenses + Fixed expenses - Profit
C Sales = Variable expenses - Fixed expenses + Profit
D None of these are correct

Q.No: 39 In which year Justice Department charged the accounting firm of Arthur ANderson for obstruction of justice?

A 2000
B 2001
C 2002
D 2003

Q.No: 40 This is not the characteristic of a good test market

A Representativeness
B Self-contained media
C Market isolation
D Expanded trading area

Q.No: 41 This strategy involves selling a product from a home base, usually without any product modification.

A Exporting
B Licensing
C Joint venture
D Manufacturing

Q.No: 42 This marketing component is most likely to be standardized

A advertising
B brand
C price
D distribution

Q.No: 43 The most important reason behind the utilization of market segmentation is

A market heterogeneity
B positioning
C test marketing
D product life cycle

Q.No: 44 Which of the following is not a brand's function?

A creating identification
B guaranteeing quality level
C helping with promotion
D lowering production cost

Q.No: 45 This function is not performed by the IMF.

A Regulatory
B consultative
C elective
D financial

Q.No: 46 Standard error is estimated as _____

A Average annual rate of return divided by the square root of the number of observations
B Standard deviation of the returns divided by the square root of the number of observations
C Variance divided by the number of observations
D None of these are correct

Q.No: 47 _____ are about organizations seeking gaps in broad market segments or finding gaps in competitors product ranges

A Market niche strategies
B Differentiation
C Cost leadership
D Focus strategies

Q.No: 48 Which of the following is an advantage of a brand less product?

A Product differentiation
B repeat sales
C quality flexibility
D premium pricing

Q.No: 49 Knowledge which is difficult to define and codify is known as:

A Explicit
B Tangible
C Tacit
D Random

Q.No: 50 Diversification into many unrelated areas is an example of :

A Risk Management
B Good Management
C Uncertainty Reduction
D Sustainability

Q.No: 51 Match List I (Financial Statements and Accounts) with List II (special matters associated with statements and accounts) and select the correct answer using the codes given below the lists:

A a-II, b-I, c- IV, d-III
B a-III, b-II, c-IV, d-I
C a-II, b-I, c- III, d-IV
D a-I, b-II, c- IV, d-III

Q.No: 52 International Bank for Reconstruction and Development is:

B World Bank

Q.No: 53 CRISIL promoted by ____

D Ministry of Finance

Q.No: 54 Match the following

A a-III, b-II, c- IV, d-I
B a-III, b-IV, c- I, d-II
C a-II, b-IV, c- III, d-I
D a-IV, b-I, c-III, d-II

Q.No: 55 The least profitable entry strategy is द

A Licensing
B Joint Venture
C Manufacturing
D Foreign direct investment

Q.No: 56 Which of the following is odd one?


Q.No: 57 Corporate governance is concerned with: ____ :

A Executive remuneration, disclose of information, auditing and accounting procedures, and organizations and management structures
B Elections to the board of directors
C Relationships with national governments
D Corporate - level strategy

Q.No: 58 In terms of the PESTLE analysis, the liberalizing of international trade and tariff regimes could go in which section or sections?

A Political
B Legal
C Political and economic and legal
D Political and environmental

Q.No: 59 If everyone who is faced with a similar situation responds in the same way, attribution theory states that the behavior shows

A Consensus
B Similarity
C Reliability
D Consistency

Q.No: 60 Which of the following is not one of the four management functions?

A Controlling
B Planning
C Staffing
D Organizing

Q.No: 61 Robert Katz identified three essential skills , that managers need to have in order to reach their goals. What are these skills?

A Technical, decisional and interpersonal ,
B Technical, human and conceptual ,
C Interpersonal, informational and decisional ,
D Conceptual, communication and networking

Q.No: 62 For practical purposes, the difference between the concept of international marketing and the concept of multinational marketing is,

A Significant
B Insignificant
C Meaningful
D Adequate

Q.No: 63 A country should export a product that it can produce at a lower cost than other nations can. This is the principle of

A Absolute advantage
B Comparative advantage
C Relative advantage
D Factor endowment

Q.No: 64 This kind of tax is collected at each point in the distribution chain and levied on the total value of a product

A Single- stage sales tax
B Value added tax
C Cascade tax
D Duty

Q.No: 65 This theory states that advanced countries extract surplus value from their lessdeveloped counterparts, thus leaving them undeveloped.

A Multiplicity of politics
B Absolutist system
C Capitalism
D Dependency

Q.No: 66 This is not a characteristic of "centrally planned economics". A

A communist philosophy}
B Market - oriented economy
C An active government role in economic planning
D Bureaucratic political/economic system ,

Q.No: 67 The duties stated as a fixed percentage of the invoice are ____

A Specific duties
B Ad valorem duties
C Compound duty
D Combined rates

Q.No: 68 This law system spells out the law on all legal questions and does not rely on previous court decisions.

A Code law
B Common law
C Muslim law
D Civil law

Q.No: 69 This is not a characteristic of a good test market.

A Representativeness
B Self-contained media
C Expanded trading area
D Market isolation

Q.No: 70 The Base of Signimicants of Industrial Market.

A Kind of Business
B Usual Purchasing Processing
C Size of Consumers
D All of these are correct

Q.No: 71 This entry strategy involves having an agreement that permits a foreign company to use industry property, technical knowledge, or engineering design in a foreign market.

A Exporting
B Licensing
C Joint venture
D Manufacturing

Q.No: 72 Terms of International Trade are :

A Net Barter terms of trade
B Income terms of trade
C Double-factor terms of trade
D All of these are correct

Q.No: 73 This product characteristic explains why carpet or vacuum cleaners are not needed in countries, which people like to sweep and mop floor daily.

A Relative advantage
B Compatibility
C Observation
D Complexity

Q.No: 74 The innovating firm's sales and export volumes are kept stable in this stage of IPLC.

A overseas innovation
B Maturity
C World wide imitation
D Reversal

Q.No: 75 Every year the residential status of an assessee :

A Will certainly change
B will not change
C May change
D None of all these

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