2016 SSC CGL Tier 2
2 Dec Shift – 3
Question Paper with Answer Key
1. Creating provision for bad & doubtful debts is an application of which of the following principles /concepts :
1) Realisation Principle
2) Full Disclosure
4) Money Measurement
2. A company has a machinery costing Rs. 5,00,000. Depreciation is charged as follows :
Yr 2010 – Rs. 50,000
Yr 2011 – Rs. 30,000
Yr 2012, 2013 – Rs. 50,000
Which principle is violated?
2) Substance over form
3) Consistency Principle
3. If a liability is decreased, then for the asset to be constant, there will be a corresponding :
1) Increase in Capital
2) Decrease in Capital
3) Decrease in Profit
4) Decrease in Asset
4. Withdrawal of goods from stock by the owner of the business for personal use should be recorded by
1) Debiting Stock Account and Crediting Capital Account
2) Debiting Capital Account and Crediting Drawing Account
3) Debiting Drawing Account and Crediting Stock Account
4) Debiting Stock Account and Crediting Drawing Account
5. A second hand car was purchased for Rs. 2,00,000 and depreciation is charged @ 10 % on written down value method and car is sold after 2 years for Rs. 1,40,000. Find the profit or loss on the sale of the car.
1) Loss of Rs. 20,000
2) Loss of Rs. 22,000
3) Loss of Rs. 11,000
4) Profit of Rs. 11,000
6. Which of the following is true ?
1) Payment of liability Causes an increase in Owners equity
2) The Collection of an Account Receivable will cause total assets to increase
3) The accounting equation is Assets + Liability = Owner’s equity
4) Purchase of an assets either in cash or Credit, does not change the owners equity
7. Which of the following is true when debtor pays his dues ?
1) Asset side of The Balance sheet will decrease
2) Asset side of The Balance sheet will increase
3) The liability side of The Balance sheet will increase
4) There is no change in total asset or total liabilities
8. Only significant events which affect the business must be recorded as per the principle of
1) Separate Entity
4) Going Concern
9. Treatment of Goods given as free samples are
1) Added to Carriage Inward
2) Added to Bad Debts
3) Deducted from Advertisement Expenses
4) Deducted from Purchases
10. Shyam bought goods having the list price of Rs. 50,000 from Ram less 20% trade discount & 2% cash discount and paid 40% by cheque. What is the amount paid by Shyam?
1) Rs. 16,000
2) Rs. 15,680
3) Rs. 19,600
4) Rs. 15,600
11. Which of the following is true ?
1) Bank Account is a Personal Account.
2) Stock of Stationery Account is a Nominal Account
3) Return Inward Account is a personal Account.
4) Outstanding Rent Account is a Nominal Account.
12. Periodic total of Purchase day book is posted to
1) Creditor Account
2) Debtor Account
3) Purchase Account
4) Purchase Memorandum Account
13. Which of the following statements is true ?
1) Bank charges increase debit balance shown as per Bank column of the cash Book
2) Bank charges increase debit balance as per Bank pass Book
3) A cash sale of a non-trading asset is recorded in the Journal proper
4) Cash discount allowed by the business will appear on the debit side of the debtors account
14. After the preparation of Ledgers, the next step is the preparation of
1) Trading Account
2) Trial Balance
3) Profit and Loss Account
4) Balance sheet
15. Total of Sale Book was not posted to the ledger. What is the kind of error?
1) Error of omission
2) Error of commission
3) Error of principle
4) Compensating error
16. Which of the following statements is correct ?
1) Inventory valuation affects only the Income Statement
2) Under casting or Over casting of subsidiary Book is an error of commission.
3) Capital expenditure wrongly treated as revenue expenditure is error of commission.
4) inventory should be valued at lower of historical cost and current replacement cost
17. Match the following:
List – I
A) Trial Balance
B) Suspense Account
C) Sale of Rs. 1,150 to Rajesh entered in Books as Rs. 1,510
D) Sale of old furniture treated as sale of goods
1) Error of Principle
2) Error of Commission
3) Summary of ledger Accounts
4) One-sided errors
1) A-3, B-2, C-1, D-4
2) A-3, B-2, C-4, D-1
3) A-3, B-4, C-2, D-1
4) A-3, B-4, C-1, D-2
18. Which of the following is true relating to a trial balance?
1) If a trial balance tallies, no transaction is omitted.
2) A trial balance does not tally if a transaction is omitted.
3) It is mandatorily prepared to ensure correctness of a Balance sheet _
4) A trial balance is a summary of the General Ledger Balances outstanding on a particular date.
19. Which of the following errors will be revealed by the Trial Balance?
1) Compensating error
2) Errors of omission
3) Errors of principle
4) Wrong balancing of accounts
20. Prepaid expenses are valued in Balance sheet at
1) Replacement Cost
2) Current Cost
3) Cost of acquire less accumulated amortization
4) Cost less expired portion
21. Which of the following equations is correct?
1) Gross Profit + Sales + Direct expenses + Purchases + Closing balance = Opening Stock
2) Gross Profit + Sales + Direct Expenses + Purchases – Closing stock = Opening Stock
3) Gross Profit + Opening stock + Direct Expenses + Purchases – Closing stock = Sales
4) Gross Profit – Opening stock + Direct Expenses + Purchases + Closing stock = Sales
22. At the time of finalization of accounts, bad debt recovered account will be transferred to
1) Debtors Account
2) Profit and Loss Account
3) Profit and Loss Adjustment Account
4) Profit and Loss Appropriation Account
23. Contingent Liabilities are shown :
1) Credit side of balance sheet
2) Profit & Loss Appropriation Account
3) Both Profit & Loss Account & Balance sheet
4) None of the options
24. If outside liability and owners equity are added we get:
1) Total Liabilities
2) Net Worth
3) Share Holders Fund
4) Gross Block
25. XYZ send goods worth Rs 1,00,000 to Y on consignment basis at 20% above the cost price. The goods were sold by the consignee on a mark up of 15% on invoice price. Find the total mark up % over the cost of the goods.
26. Which of the following statements Is true ?
1) Provision for doubtful debts represents the amount that cannot be collected.
2) The distinction between Capital and revenue items is important because it is of fundamental importance to the determination of profit
3) Goods lost by fire need not to be accounted for since they are not sales.
4) Free samples received are business gain
27. When benefit of an expense (which is generally of revenue nature) extend beyond an accounting year, it is called
1) Revenue expenditure
2) Capital expenditure
3) Deferred Revenue Expenditure
4) Recurring Profit
28. Wages paid to workers for erecting machinery is:
1) Revenue Expenditure
2) Capital Expenditure
3) Deferred Revenue Expenditure
4) Wages Expenditure
29. Which of the following is an external cause of depreciation
1) Revenue repair and maintenance
4) Wear and tear
30. Underestimation of useful life of a depreciable asset will lead to
1) overstatement of profit
2) excess charging of depreciation every year
3) overvaluation of asset in Balance sheet
4) short charging of depreciation every year
31. A firm has a policy of charging depreciation @ 10% on plant and machinery under Written Down Value (WDV) method. If the book value of the same was Rs 81,000 on 31.3.16. Find the original cost, if the same was purchased on 01.04.2014.
1) Rs 1,10,000
2) Rs 1,00,000
3) Rs 81,000
32. What is included in an Inventory?
1) Raw Material
2) Stores & Spares
3) Loose tools
4) All of the above
33. Opening stock Rs 15,000, Closing stock Rs 6,000 and total purchase during the year was Rs 30,000. It was found that opening stock inadvertently included postage stamp of Rs 1,500. Find the cost of the good sold.
1) Rs 40,000
2) Rs 39,000
3) Rs 37,500
4) Rs 36,000
34. Average inventory is Rs 12,000 and dosing inventory is Rs 3,000 more than opening inventory. The value of closing inventory?
1) Rs 12,000
2) Rs 24,000
3) Rs 10,500
4) Rs 13,500
35. Revenue is said to have been earned when
1) sale is made
2) cash is received
3) goods are manufactured
4) it is accounted for
36. A firm commenced business on 1st January 2015, purchased goods costing Rs 90,000. A sum of Rs 6,000 was spent on freight inwards. At the end of the year, the cost of goods still unsold was Rs 12,000. Sales during the year Rs. 1,20,000. What is the Gross Profit earned by the firm?
1) Rs 36,000
2) Rs 30,000
3) Rs 42,000
4) Rs 38,000
37. The receipts and payments account for an non-profit organization is a
1) Nominal Account
2) Real Account
3) Income Statement Account
4) Financial Account
38. What amount should be credited to the Income & expenditure Account as Subscriptions as given in the following information:
In 2015, Subscriptions received Rs. 21,000 Including Rs. 400 for 2014 and Rs. 500 for 2016. On 31 December 2015, Subscriptions due but not received Rs. 700.
39. Early payment of Bill of exchange is called
40. Drawee for bills of exchange is the person who Options:
1) draws a bill of exchange
2) presents the bill of exchange for payment
3) accepts the Bill of exchange
4) holds the bill of exchange till maturity
41. All reports are submitted by the Comptroller and Auditor General of India to the
1) Prime Minister
3) President and Governors of State.
4) Finance Minister
42. Which Committee of Parliament in India examines the Audit Report of Comptroller and Auditor General ?
1) Estimates Committee
2) Committee on Public Audit
3) Assurance Committee
4) Public Accounts Committee
43. Which of the following duties is not performed by the Comptroller and Auditor General of India ?
1) To audit and report on all expenditure from the consolidated fund of India.
2) To audit and report on all expenditure from the Contingency Funds & Public Accounts
3) To audit and report on all trading manufacturing and profit & loss accounts
4) To control the receipt and issue of public Money
44. The Finance Commission recommends
1) Distribution of financial resources between the various ministries
2) Distribution of financial resources between the Union & the State
3) Distribution of financial resources from the states to various Panchayat Raj
4) Distribution of financial resources from the Union to various plan heads
45. Under which Article of the Constitution Finance Commission is constituted?
1) Article 315
2) Article 280
3) Article 148
4) Article 76
46. Which is the constitutional authority in India to decide the share of the states from the proceeds of taxes levied and collected by the Union?
1) Planning Commission
2) Finance Commission
3) Finance Minister of Govt of India.
4) Union Cabinet
47. When a rational person mates a choice, the concept of opportunity cost enters, thus opportunity cost is defined as
1) the benefit gained in terms of the next best alternative foregone when a choice is made
2) the benefit lost in terms of the next best alternative foregone when a choice is made
3) the benefit lost in terms of the next best alternative gained when a choice is made
4) the benefit lost in terms of the next best alternative foregone when there is no choice at all
48. The three main features of the capitalist economies are:
1) Prices, Patents and Property rights
2) Prices, Profit and Property rights
3) Prices, Profits and Patents
4) Patents, Profit and Property rights
49. In a centrally planned economy the factor of production
1) Are owned by the govt and the welfare of the people are left to the market process.
2) Are owned by the govt and the welfare of the people is the prime concern.
3) Are owned by the people and the market process determines the welfare of the people.
4) Are determined by the market process and the welfare of the people are determined by the Govt.
50. There is no time lag in the production and consumption of
1) Capital goods
3) Single use goods
4) Durable goods
51. Which of the following is a reason for the negative slope of the Production Possibility Curve.
1) The inverse relationship between the use of technology and the use of natural resources
2) Scarcity at any point of time due to limited amount of productive resources
3) Resource specialisation
4) Increasing opportunity costs
52. The law of demand indicates:
1) The relationship between the increase of a consumer and the quantity demanded
2) The relationship between the price of a commodity and the quantity demanded
3) The relationship between price of one commodity and the price of substitute
4) The relationship between prices of two commodities
53. If the demand for a good is price-elastic, a fall in its price will lead to
1) A rise in total demand for the good
2) A fall In Its sales
3) A fall in total demand
4) No change in total demand
54. Which of the following is not a characteristic of Indifference Curves?
1) They are convex to the origin
2) They slope downwards from left to right
3) They can never intersect each other
4) They can touch either axis
55. When marginal utility declines and is positive
1) Total utility increases at a decreasing rate
2) Total Utility increases at an increasing rate
3) Total utility is constant
4) Total utility is decreasing
56. Which of the following is the correct formula for measuring income elasticity of demand ?
1) % Change in quantity demanded /% Change in income
2) Change in income /Change in quantity demanded
3) % Change in price /% Change in income
4) Change in price /Change in quantity demanded
57. A good is termed as an inferior good if
1) Its consumption increases with a rise in income
2) Its consumption reduces with a rise in Income
3) Its consumption reduces with a rise in price
4) Its consumption remains the same with a rise in price
58. A consumer increases its demand for a commodity from 40 to 50 units when its price falls by 10%. The price elasticity of demand is
59. Contraction of demand is the result of
1) Decrease in the number of consumers.
2) Increase in the price of the good consumed.
3) Increase in the price of other related goods
4) Decrease in the income of the purchasers.
60. Chicken and fish are substitutes. If the price of chicken increases, the demand for fish will
1) Increase or decrease but the demand curve for chicken will not change
2) Increase and the demand curve for fish will shift rightwards
3) Not change but there will be movement along the demand curve for fish
4) Decrease and the demand curve for fish will shift leftwards
61. The opportunity cost of a factor of production is
1) What has to be paid to retain it in its present use.
2) What it is earning its present uses.
3) What it can earn in total other uses.
4) What it can earn in the long period.
62. Which one of the following is not a characteristic of labour as a factor of production?
1) Labour is inseparable from the labourer
2) Labour has high bargaining power
3) Labour is perishable
4) Labour differs from labourer to labourer
63. Short Run Total Cost Curve can never be less than Long Run Total Cost Curve.
1) Always True
2) Often True
3) Sometimes True
4) Never True
64. Marginal cost is defined as:
1) the change in total cost due to one unit change in output.
2) total cost divided by total output
3) change in output due to one unit change in input
4) total product divided by quantity of inputs.
65. Production function explains the relationship between
1) initial inputs and ultimate output
2) inputs and ultimate consumption
3) output and consumption
4) output and exports
66. In the initial stages of production, generally the increasing returns to scale operate because
1) Input is increased
2) Capital equipment is new
3) Economies of scale operate
4) Absence of bottlenecks in production
67. If we have constant returns to scale and we increase the quantity of labour used per unit of time by 10% but keep the amount of capital constant, output will
1) Increase by 10%
2) Decrease by 10%
3) Increase by more than 10%
4) Increase by less than 10%
68. In the context of oligopoly, the kinked demand hypothesis is designed to explain
1) Price and output determination
2) Price Rigidity
3) Price leadership
4) Collusion among rivals
69. Price Discrimination exists when
1) The same product is sold at the same price to different buyers
2) The same product is sold at different prices to different buyers
3) Different product is sold at different prices to different buyers
4) None of the options
70. Which of the following statements is incorrect ?
1) Under monopoly, there is no difference between a firm and an industry
2) A monopolist may restrict output and raise prices
3) Commodities offered for sales under perfect competition will be heterogeneous
4) Product differentiation is peculiar to monopolistic competition
71. Which of the following statement is true for a perfectly competitive firm
1) In the long run all firms earn super normal profits
2) In the long run all firms are making losses
3) In the long run all firms in the market earn only normal profit
4) In the long run all firms have slowly increased profits
72. A decrease in demand with the supply curve remaining constant leads to
1) An increase in both equilibrium price and quantity
2) A fall in both equilibrium price and quantity
3) An increase in equilibrium price and a fall in quantity
4) An fall in equilibrium price but increase in quantity
73. Identify a characteristic of a monopolistic competitive market from the following:
1) Existence of large number of buyers and sellers
2) Individual firms are price-takers
3) Heavy costs are incurred to attract customers
4) No barriers to entry /exit of firms
74. An increase in output in a perfectly competitive and constant cost industry which is in the long run equilibrium, will come
1) entirely from new firms
2) entirely from existing firms
3) either entirely from new firms or entirely from existing firms
4) partly from new firms and from existing firms
75. The Ministry of Statistics and Programme Implementation has revised the base year of national income estimation from 2004-05 to
76. Trickle Down theory of development holds that
1) Global prosperity spreads to domestic Economy.
2) Development spreads down wards throughout the economy and in all sectors.
3) Rats of growth of an economy is inversely proportional to the rates of taxation.
4) Rate of growth of on economy is independent of the rate of taxation.
77. Liberalisation of trade by the government means
1) Removal of export credit only
2) Removal of import credit only
3) Removal of tariff, subsidies and other restrictions on flow of goods and services
4) Exporting of only goods and not services
78. The highest share in power generation in India is of
1) Atomic power
2) Hydro power
3) Thermal power
4) Wind power
79. Which one of the following is not the consequence of high population growth in India?
1) Ecological degradation
2) Unemployment and unproductive consumers.
3) Insufficient per capita availability of food grains
4) Adverse balance of payments
80. Which one of the following is not correct about the Saansad Adarsh Gram Yojana ?
1) It was launched by Prime Minister, on the birth anniversary of Lok Nayak Jai Prakash Narain.
2) MPs to adopt villages for their holistic development
3) Special emphasis on enabling every poor household to come out of poverty
4) Joining every village with a national highway
81. Fiscal deficit means
1) The excess of total expenditure (only revenue) over the sum revenue receipts excluding borrowing
2) The excess of total expenditure (only revenue) over the sum of revenue receipts including borrowing
3) The excess of total expenditure (capital and revenue) over the sum of revenue and capital receipts excluding borrowing
4) The excess of total expenditure (capital and revenue) over the sum of revenue and capital receipts including borrowing
82. Which of the following cannot be termed as an anti-poverty programme/ scheme?
83. The most important source of capital formation in India has been.
1) Household savings
2) Public sector savings
3) Govt revenue surplus
4) Corporate savings
84. National Income is the same as
1) Net domestic product at market price
2) Net domestic product at factor cost
3) Net national product at market price
4) Net national product at factor cost
85. The Gross Domestic Product (GDP) deflator is measured by
1) Nominal GDP/ Real GDP X 100
2) Real GDP/ Nominal GDP X 100
3) Nominal GDP/Real NNP X 100
4) Nominal NNP/ Real GDP X 100
86. Disguised unemployment refers to
1) Persons with no proper jobs.
2) Unemployment of people above to 60 years of age.
3) More persons employed for a job which less persons can accomplish,
4) Unemployment among rural woman.
87. Consider the following statement about GST bill of India.
1. GST consists of three components such as central- GST (CGST), State- GST (SGST) and Local- GST (LGST)
2. CGST & SGST will apply to all transactions of goods & services
Which of the above statements are correct?
1) Only 1
2) Only 2
3) Both 1 & 2
4) Neither of the two
88. In the post-reforms period, Foreign Exchange Regulation Act was replaced by
1) Foreign Exchange Management Act.
2) Funds Exchange Management Act.
3) Fiscal Exchange Management Act.
4) Foreign Equity Management Act.
89. _____ refers to disposal of public sector unit’s equity in the market
90. Globalisation is a process of increasing economic integration in the world among.
1) Trade organisations
2) Social organisations
4) Financial Institutions
91. UDAY Stands for
1) Unmukt Deficit Assurance Yojna
2) Ujwal Discom Assurance Yojna
3) Unmukt Discom Assurance Yojna
4) Ujjwal deficit Assurance Yojna
92. Reserve Banks Liquidity Adjustment Facility (LAF) refers to
1) Auction of Treasury Bills
2) Rediscounting of Bills of Exchange
3) use of Repo and Reverse Repo site
4) variation in the Statutory Liquidity Rates (SLR)
93. When too much money chases too few goods, the resulting inflation is called.
2) Demand pull inflation
3) Cost push inflation
94. The effect of increase in Cash Reserve Ratio will be reduced or nullified if
1) Bank rate is reduced,
2) Securities are sold in the open market
3) Statutory Liquidity Reserve (SLR) is Increased.
4) People don’t borrow from non- banking Institutions.
95. NABARD’s primary role is –
1) To act as an finance institution
2) To issue shares in the market
3) To underwrite shares of govt agencies
4) To act as a bank
96. Open market operations are
1) activities of SEBI registered Brokers
2) selling of securities by RBI
3) issue of gilt edged securities by government
4) sale of shares by Foreign Institutional Investors
97. An enterprise- wise resource planning (ERP) system integrates the organization’s Computerized subsystems and may also provide links to external parties. Identify the advantage of ERP
1) The re-engineering needed for its implementation should improve business processes
2) Customizing the software to suit the unique needs of the organization of all sizes
3) The comprehensiveness of the system reduces resistance to change
4) It can be installed by organization of all sizes
98. The Rural Infrastructure Development Fund (RIDF) has been created under.
1) Reserve Bank of India
3) Ministry of Agriculture
4) Ministry of Rural Development
99. Which of the following is not a function of the Securities and Exchange Board of India (SEBI)
1) Supervising the working of the stock Exchanges
2) Underwriting new Capital Issues
3) Regulating merchant banks and mutual funds
4) Promoting the development of a healthy Capital market
100. Which of the following are major components of the Information Technology Enabled Services (ITES) industry in India
1) IT services and BPO
2) Manufacturing Services
3) Software Products
4) All the options