COMMERCIAL TAX OFFICER FEBRUARY 2,2015 FULL SOLVED PAPER

COMMERCIAL TAX OFFICER

EXAM DATE:07-02-2015

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1.A project requires an initial investment of Rs.8,00,000 with annual cash inflow of Rs.2,00,000 for five years.Its pay back period is:

A.4 years*

B.5 years

C.3 years

D.3 ½ years

Ans:A

2.Assets sold by a fim in the capital marketto raise fund is called:

A.Real assets

B.Fictitious assets

C.Financial assets*

D.Current assets

Ans:C

3.Capital gearing refers to the relationship between equiy capital and:

A.Creditors

B.Reserves

C.Short term debts

D.Long term debts*

Ans:D

4.Profitability index is a method of:

A.Preparing an index

B.Ascertaining profitability

C.Evaluation of investment projects*

D.Ascertaining the financial position

Ans:C

5.Working capital is also known as---------capital

A.Circulating*

B.Fixed

C.Period

D.All of these

Ans:A

6.The method which recognize the time value of money by combining pay back with the net present value is:

A.Pay back reciprocal

B.Discounted pay back period*

C.Pay back profitability

D.ARR

Ans:B

7.The funds invested in total current assets is termed as:

A.Working capital

B.Positive working capital

C.Networking capital

D.Gross working capital*

Ans:D

8.The quality of management is not directly disclosed in the books of accounts because of:

A.Going concern concept

B.Cost concept

C.Money measurement concept*

D.Realization concept

Ans:C

9.Amont withdrawnby the proprietor for personal use reduces both:

A.Liabilities and capital

B.Assets and owners equity*

C.Expenses and liabilities

D.None of these

Ans:B

10.Cost of equity share is influenced by:

A.Dividend growth rate

B.Growth rate of earnings

C.Both A and B*

D.None of these

Ans:C

11.-----------represents minimum requirements for extending credit to a customer.

A.Credit standard

B.Credit rating*

C.Credit evaluation

D.Credit cards

Ans:B

12.The difference between the total present value of a stream of cash flow of a given rate of discout and the initial capital outlay is known as:

A.IRR

B.ARR

C.Net working capital

D.NPV*

Ans:D

13.According to -------------approach,the total value of the firm remains constant irrespective of the debt equity mix

A.Net operating income*

B.Net income

C.Traditional

D.None of these

Ans:A

14.The arbitrage process is the  operational justification of:

A.Derivatives

B.MM hypothesis*

C.FCCB

D.ADR

Ans:B

15.---------refers to that EBIT level at which EPS remains the same irrespective of the Debt-Equity mix

A.Optimum capital structure

B.Under capitalization

C.Overcapitalization

D.Point of indifference*

Ans:D

16.In case of -----------factoring ,the factor assumes the risk of bad debts.

A.Advance

B.Recourse

C.Non Recourse*

D.None of these

Ans:C

17.In case of firms having r>k,the optimum dividend policy requires----------pay out ratio

A.100%

B.50%

C.0%*

D.1%

Ans:C

18.--------committee suggested inventory and receivable norms for 15major industries.

A.Rangarajan

B.Tandon*

C.Chore

D.Marathe

Ans:B

19.JIT inventory system was pioneered in:

A.Japan*

B.USA
C.Canad

D.China

Ans:A

20.Depreciation is included in costs in case of ---------method

A.Payback

B.IRR

C.NPV

D.ARR*

Ans:D

21.-------------is a form of equity financing designed specially for funding high risk and high reward project

A.Venture capital*

B.Seed capital

C.Bridge capital

D.Sweat equity

Ans:A

22.Operating lease is favoured by lessee in respect of assets which depreciate in value on account of:

A.Wear and tear

B.Exhaustion

C.Obsolescence*

D.None of these

Ans:C

23.Stock split is a remedy for:

A.Under capitalization*

B.Over capitalization

C.Capital gearing

D.Leasing

Ans:A

24.The accept-reject result of NPV and IRR is the same if:

A.Projects are mutually exclusive

B.Projects are independent*

C.Both(A)and(B)

D.None of these

Ans:B

25.In India,the issue of commercial papers came into being after the recommendations of:

A.Tandon committee

B.Chore committee

C.Kannan committee

D.Vaghul committee*

Ans:D

26.The loss incurred on an incomplete contract is transferred to---------account

A.Contract

B.Profit and loss*

C.Work-in-progress

D.Inventory

Ans:B

27.--------is a selective inventory control technique

A.FSN analysis

B.LED analysis

C.Perpetual inventory

D.ABC analysis*

Ans:D

28.The guidance and regulation of the cost of operating by executive action is called:

A.Cost control*

B.Cost audit

C.Cost reduction

D.Cost manipulation

Ans:A

29.---------is that segment of activity of a business which is responsible for both revenue and expenses.

A.Conversion centre

B.Cost centre

C.Profit centre*

D.Production centre

Ans:C

30.Bonds issued without any rate of interest is called:

A.NCD

B.Zero coupon bond*

C.FCCB

D.Flexibond

Ans:B

31.When the same transaction is recorded twice in the books of accounts,the error is called:

A.Error of duplication*

B.Error of principle

C.Error of commission

D.Error of compensation

Ans:A

32.Carriage outward is an item of----------overhead

A.Production

B.Selling

C.Administration

D.Distribution*

Ans:D

33.----------------refers to excess of absorbed overhead over the actual overhead

A.Under absorption

B.Over absorption*

C.Full absorption

D.Over trading

Ans:B

34.Operating cycle is:

A.Inventory conversion period only

B.Inventory conversion period minus debtors conversion period

C.Inventory conversion period plus debtors conversion period*

D.None of these

Ans:C

35.If the debentures carry interest @ 10% per annum and corporate tax rate is @30%,cost of debt is:

A.10%

B.5%

C.3%

D.7%*

Ans:D

36.Balance sheet shows:

A.Dynamic financial position

B.Fund flow position

C.Static financial position*

D.None of these

Ans:C

37.Cash payment as interest on debentures and loans is a--------------activity

A.Operating

B.Financing*

C.Lending

D.Investing

Ans:B

38.The portion of the value of work that the architect of the contractee agrees as to have been done is:

A.Work retained

B.Work completed

C.Work uncertified

D.Work certified*

Ans:D

39.Works on cost is otherwise called:

A.Works overhead*

B.Works cost

C.Cost of production

D.Prime cost

Ans:A

40.In funds flow statement,fund means:

A.Total capital

B.Total assets

C.Total cash and bank

D.Working capital*

Ans:D

41.Dividend declared in between two annual  general meeting is:

A.Internal dividend

B.Interim dividend*

C.Final dividend

D.Scrip dividend

Ans:B

42.The discount on reissue of forfeited shares should not exceed:

A.The amount paid by the original holder*

B.The amount unpaid by the original holder

C.The called up value of shares

D.The face value of shares

Ans:A

43.Production budget is a---------------Budget

A.Master

B.Fixed

C.Functional*

D.None of these

Ans:C

44.-----------is an application of fund.

A.Depreciation

B.Sale of fixed asset

C.Purchase of fixed asset*

D.Fund from operation

Ans:C

45.------------cost is also known as period cost.

A.Variable

B.Fixed*

C.Product

D.All of these

Ans:B

46.Piece meal distribution is in connection with:

A.Incorporation of firm

B.Consignment

C.Joint venture

D.Dissolution of firm*

Ans:D

47.-----commission is given for bearing risk of bad debts

A.Delcredere*

B.Overriding

C.Special

D.Brokerage

Ans:A

48.Debit note is prepared in connection with:

A.Credit sale

B.Credit purchase

C.Return inwards

D.Return outwards*

Ans:D

49.--------------system is a method of accelerating the cash inflows.

A.JIT

B.Lockbox*

C.ABC

D.Factoring

Ans:B

50.A buffer to meet the un anticipated increase in the usage of material is called:

A.Minimum stock

B.Maximum stock

C.Safety stock*

D.Danger level stock

Ans:C

51.Section----------of sale of Goods Act,1930,enumerates the doctrine of ‘Nemo dat quod non habet’.

A.Section 26

B.Section 27*

C.Section 16

D.Section 17

Ans:B

52.The term’Mercantile agent’defined under sale of Goods Act means an agent having in the customary course of business as such agent authorized to:

A.Raise money on the security of goods

B.Buy goods

C.Sell goods or consign goods for the purpose of sale

D.Either A or B or C*

Ans:D

53.A contract of sale under Section 4 of the sale of goods may be:

A.Absolute

B.Conditional

C.Either absolute or conditional*

D.None of the above

Ans:C

54.The unpaid seller of goods can waive his right to lien

A.Expressly or impliedly*

B.Expressly only

C.Impliedly only

D.Right cannot be waved

Ans:A

55.Conditions and warranties are defined in section----------of the sale of Goods Act

A.Section 11

B.Section 12*

C.Section 21

D.Section 22

Ans:B

56.The principle of caveat emptor is enunciated under section -------------of the sale of Goods Act

A.Section16*

B.Section 18

C.Section 28

D.Section 32

Ans:A

57.The term ‘Person’defined under  the Kerala value added tax includes:

A.An individual

B.A local authority

C.Central government

D.All the above*

Ans:D

58.The turnover on which  a dealer shall be liable to pay tax after making the deductions from his total turnover,is called:

A.Sale price

B.Taxable turnover*

C.Total turnover

D.Zero rate sale

Ans:B

59.Every dealer whose total turnover in any year is not less than-------------should get compulsory registration

A.10 lakh rupees*

B.Five lakh rupees

C.Two lakh rupees

D.Twenty lakh rupees

Ans:A

60.”No tax shall be levied or collected except by authority of law”,This is provided under:

A.Article 283

B.262 of the constitution

C.Article 265*

D.Article 285

Ans:C

61.Sale under Section 3 of the Central Sales Act means,any transfer of goods by one person to another

A.For cash alone

B.For deferred payment

C.On hire purchase

D.Either(A)or (B)or(C)*

Ans:D

62.The term goods under Section 2(d)of the Central Sales Tax Act 1956 includes:

A.All movable properties*

B.Including actionable claims and shares and stocks

C.Both(A)and(B)

D.Either (A) or (B)

Ans:A

63.An Indian company is always:

A.Resident in India*

B.Resident but not ordinarily resident in India

C.Non-resident

D.Either(A)or(B)or(C)

Ans:A

64.According to Section 2(34) of the Income Tax Act 1961.Previous year means,year:

A.Starting from July 1st to June 30th of Next year*

B.March 1st to April 30th of next year

C.April 1st to March 31st of next year

D.January 1st to December 31st of the same year

Ans:A

65.The term Assessee means:

A.A person by whom any tax or any other sum of money payable

B.Every person who is deemed to be an assessee in default

C.Every person who is deemed to be assessee

D.All the above*

Ans:D

66.The essentials of a valid contract is provided under,--------------of the Indian Contract Act

A.Section 10*

B.Section 17

C.Section 25

D.Section 18

Ans:A

67.A contract without consideration is:
A.Valid

B.Voidable

C.Illegal

D.Void*

Ans:D

68.A minor’s contract was held to be void in the case:

A.Scarf V Jardine

B.Carlill V Carbolic Smoke ball company

C.Mohoribibi V Dharmodas Ghosh*

D.Cox V.Hickman

Ans:C

69.Section 13(f)of the Indian Partnership Act provides for:

A.Indemnity in favour of the partner against the firm

B.Indeminity in favour of the firm against a partner*

C.Indemnity in favour of third parties against the firm

D.None of the above

Ans:B

70.Which is correct about the following statements?

(1)A counter offer terminates the original offer

(2)Quotation of price is an offer

(3)Acceptance to an offer is like a lighted match to a train of gun powder

A.1 and 3 are correct*

B.2 and 3 are correct

C.1,2 and 3 are correct

D.Only 3 is correct

Ans:A

71.When goods are displayed in a shop window with price tags attached to them,it amounts to:

A.An offer

B.Invitation to an offer*

C.Counter offer

D.Acceptance

Ans:B

72.The damages under Section 73 of the Indian Contract Act are:

A.Liquidated

B.Penal

C.Compensatory*

D.None of the above

Ans:C

73.Which Section of the Indian Contract Act,deals with agreement in restraints of legal proceedings?

A.Sec.27

B.Sec.29

C.Sec.30

D.None of the above*

Ans:D

74.A partner has no implied authority:

A.To borrow money in case of a commercial firm

B.To enter into partnership with other person in other business

C.Neither(A)nor(B)

D.Both(A)and(B)*

Ans:D

75.Where one of the parties is under a mistake as to matter of fact,the contract is?

A.Voidable

B.Valid*

C.Illegal

D.Void

Ans:B

76.A property belonging to a partner on entering into a partnership and used for the purposes of partnership

A.Becomes the property of the partners in their profit sharing ratio

B.Becomes the property of the firm*

C.Remain the property of the partner

D.Either A or B

Ans:B

77.Section 40 of Indian Partnership Act provides for:

A.Compulsory dissolution

B.Dissolution by court

C.Dissolution by notice

D.Dissolution by agreement*

Ans:D

78.Which one of the following does not  amount to fraud?

A.A promise made without any intention of performing it

B.Active concealment of a fact

C.Suggestion of a fact of that which is not true by one who does not believe it to be true

D.A representation made without knowing it to be false,honestly believing it to be true*

Ans:D

79.Which one of the following is a contract?

A.An undertaking in writing duly signed to pay the time barred debt*

B.An agreement to do a lawful act by an unlawful means

C.An agreement in restraint of trade

D.A wagering agreement

Ans:A

80.The liability of a partner:

A.Joint only

B.Joint and several*

C.Several only

D.Either joint or several

Ans:B

81.The concept of basic,structure was adopted from the Constitution of:

A.Canada

B.Germany

C.Austria

D.United States*

Ans:D

82.Two provisions in the Indian Constitution that are connected to the right to education are:

A.Art 21A and 49

B.Art 21A and 47

C.Art 21A and 51A*

D.Art 21A and 52

Ans:C

83.Which of the following is not specifically mentioned as eligible for appointment as judge of the Supreme Court under Article 124?

A.Advocate of a High Court

B.Advocate of the Supreme Court*

C.Judge of a High Court

D.Distinguished Jurist

Ans:B

84.In one of the following cases Mr.A.B.Vajpayee,before he became the Prime Minister of India,was a respondent.The case was:

A.Hindutva Case

B.Habeas Corpus Case*

C.Fundamental Rights Case

D.None of the above

Ans:B

85.In R.C.Cooper V.Union of India,the Supreme Court declared as unconstitutional one of the following Constitution(Amendment)Acts,which is:

A.Fifth Amendment Act

B.Fourteenth Amendment Act

C.Seventh Amendment Act

D.Fourth Amendment Act*

Ans:D

86.What is the maximum age fixed by the Food Security Act for providing nutritional entitlements to children of school –going age?

A.14*

B.16
C.18

D.21

Ans:A

87.The Maximum number of Judicial Members excluding the Chairperson Green Tribunal is:

A.Ten

B.Fifteen

C.Six*

D.Twenty

Ans:C

88.Any man who follows a woman and contacts repeatedly despite a clear indication of disinterest by such woman is punishable under Section 354D of the Indian Penal code for the offence of:

A.Voyeurism

B.Sexual harassment

C.Stalking*

D.None of the above

Ans:C

89.Disbursement of wages of a worker under the National Rural Employment Guarntee Act has to be made on:

A.Every ten days

B.Weekly or fortnightly basis*

C.Monthly basis

D.Quarterly basis

Ans:B

90.The Wild Life Protection Act was enacted in the year:

A.1971

B.1970

C.1974

D.1972*

Ans:D

91.The leader of ‘Narmada Bachao Andolan’agitation is:

A.Irom Chanu Sharmila

B.Medha Padkar*

C.Aung San Suukyi

D.Sonia Gandhi

Ans:B

92.The headquarters of International Court of Justice is at:

A.Hague*

B.Washington

C.Geneva

D.Vienna

Ans:A

93.GSAT-14 successfully launched from Sriharikotta on

A.31 December 2013

B.30 December 2013

C.5 January 2014*

D.8 January 2014

Ans:C

94.The most important event related to Malabar Rebellion is

A.Khilafat Movement

B.Wagon Tragedy*

C.Nivarthana Agitation

D.Home Rule Movement

Ans:B

95.The fourth all Kerala political conference held at Payyannur presided over by:

A.Jawaharlal Nehru*

B.Lalbahadur Sastri
C.K.Kelappan

D.Mahatma Gandhi

Ans:A

96.Which among the following is ‘World Cancer Day’?

A.March 8

B.January 30

C.December 28

D.February 4*

Ans:D

97.’Vishakanyaka’is the work of:

A.G.Sankarakurup

B.Kesav Dev

C.S.K.Pottakkad*

D.Chandu Menon

Ans:C

98.The credit for taking the first tangible step towards the introduction and diffusion of Western Education goes to:

A.Christian Missionaries*

B.Lord Curzon

C.English East Indian Company

D.Kothari Commission

Ans:A

99.Sree Narayana Guru conducted an uncompromising crusade against:

A.Nivarthana Agitation

B.Caste System*

C.Temple Entry Proclamation

D.Vaikom Satyagraha

Ans:B

100.Which among the following Gandhiji called”a miracle of modern times”?

A.Ezhava memorial

B.Malayalee memorial

C.Vaikom Sathyagraha

D.Temple Entry Proclamation*

Ans:D