Test 1  : Basic Accounting Principles

1. Rebate on bills discounted is
   (a) An item of income
   (b) A liability
   (c) Income received in advance
   (d) None of the above
2.  A secret reserve can be created through
   (a) Undervaluation of assets and liabilities
   (b) Undervaluation of current assets and undervaluation of current liabilities
   (c) Undervaluation of assets and liabilities
   (d) Overvaluation of assets and under valuation of liabilities
3. Liability for bill discounted is a————
   (a) Current liability
   (b) Contingent liability
   (c) Fixed liability
   (d) None of the three
4. When interest is charged on drawings which of the following is true with respect of accounting equation?
   (a) Both assets and capital will increase with the same amount
   (b) Liabilities will decrease and capital will increase with the same amount
   (c) Capital will increase and decrease with the same amount
   (d) Liabilities will increase and capital will decrease with the same amount
5. A fixed asset originally acquired for Rs. 20, 000 is replaced by a new asset costing Rs. 50,000. But the estimated cost of replacement of the original asset is Rs. 30,000. Hence, the capital charge equals
   1. Rs. 50,000.
   2. Rs. 20,000.
   3. Rs. 30,000.
   4. Rs. 40,000.
6. Which of the following statements is false ?
   1. Debit balance of bank column of Cash Book is an Asset
   2. Credit side total of Discount column of Cash Book is an income
   3. Credit balance of Bank Pass book is an overdraft
   4. Debt balance of Cash column of Cash Book is an Asset
7. When a fixed Asset is obtained as a gift, the account to be credited is
   1. Capital Reserve A/c
   2. Goodwill A/c
   3. General Reserve A/c
   4. Donor’s A/c
8. Money receiving from customers for products to be delivered in the future is recorded as:
   (a) Revenue and an assets
   (b) An assets and a liability
   (c) Revenue and a liability
   (d) Neither revenue nor liability

Test 2  : Concepts and Postulates

Test 3 : Partnership Accounts

Test 4 (a)  : Issue, Forfeited and Reissue of Forfeited Shares

Test 4 (b)  : Redemption of Preference Shares

Test 5: Acquisition, Merger, Amalgamation and Reconstruction of Companies

Test 6  : Holding Companies Accounts

Test 7 : Profit Volume Ratio

Test  8 : Budget

Test No. 9 : Standard Costing

Test No. 10 : Process Costing

Test No. 11 : Activity Based Costing (ABC)

Test No. 12 : Costing for Decision Making

Test No. 13 : Life Cycle costing, Target Costing, Kaizen Costing and JIT

Test No. 14 : Ratio Analysis

Test No. 15 : Cash Flow Statement

Test No. 16 : Fund Flow Statement

Test No. 17  : Human Resource Accounting

Test No. 18  : Inflation Accounting & Environmental Accounting 

Test No. 19  :  Indian Accounting Standards and IFRS 

Test No. 20  : Auditing

1. The Mercantilists consider trade as a
   (a) Positive sum game
   (b) Zero sum game
   (c) Negative sum game
   (d) Infinite sum game
2. A reciprocal flow of goods or services valued and settled in monetary terms is known as
   (a) Counter purchase
   (b) Countertrade
   (c) Counterfeiting
   (d) Barter
3. Which of the following is not a member country of SAARC?
   (a) Indonesia
   (b) Bangladesh
   (c) Afghanistan
   (d) Maldives
4. Which of the following is an advanced factor of production, according to Porter’s theory of national competitive advantage?
   1. Capital
   2. Land
   3. Labour
   4. Infrastructure
5. Which of the following is a non-equity mode of entry in international business?
   (a) Licensing
   (b) Foreign direct investment
   (c) International joint venture
   (d) Portfolio investment

Test : 1

1. Statement I: The subject matter of business economics is mobilisation of resources and to put them to use.
   Statement II: The resources can be put to diverse uses for satisfaction of wants.
   Code :
   A Both the statements are correct.
   B Both the statements are incorrect.
   C Statement (I) is correct while statement (II) is incorrect.
   D Statement (I) is incorrect while statement (II) is correct
2. Sales Maximization Concept is given by:
   A Adam Smith
   B Samuelson
   C Marshall
   D Baumol
3. If two commodities are complementary, then a rise in the price of one commodity will induce
   A A rise in the price of the other commodity
   B An upward shift of demand curve
   C No shift in demand for the other commodity
   D A backward shift in demand for the other commodity
4. Match the items in List I with those in List II and choose the correct code:
   List I
   (a) Demand for Normal goods
   (b) Demand for Giffen goods
   (c) Demand for Veblen goods
   (d) Demand for Inferior goods
   List II
   (i) Partially follows the Law of demand
   (ii) Does not follow the Law of demand
   (iii) Positively related to the consumer’s income
   (iv) Negatively related to the consumer’s income
   Codes:
   (a) (b) (c) (d)
   A (i) (ii) (iii) (iv)
   B (ii) (iii) (iv) (i)
   C (iii) (ii) (i) (iv)
   D (iv) (iii) (i) (ii)
5. Along a rectangular hyperbola shaped demand curve the consumer:
   A Spends lesser as he moves down the demand curve
   B Spends the same amount as he moves down the demand curve
   C Spends more as he moves down the demand curve
   D None of these
6. The price elasticity of demand for any product in the long run
   A is more than its short run value.
   B is less than its short run value.
   C is same as its short run value.
   D None of the above.
7. The elasticity of demand is greater than unity, when
   A Percentage change in demand is equal to the percentage change in price.
   B Percentage change in demand is more than the percentage change in price.
   C Percentage change in demand is less than the percentage change in price.
   D There is change in price.
8. Which of the following is not a determinant of demand?
   A Income of the consumer
   B Prices of related goods
   C Price of the product itself
   D Elasticity of Demand
9. If a commodity is used for multiple purposes then the demand for it is known as
   A Joint Demand
   B Composite Demand
   C Direct Demand
   D Autonomous Demand
10. The Cobb Douglas production function Q = 4 K0.6L0.3 exhibits
    A Constant returns to scale
    B Increasing returns to scale
    C Decreasing returns to scale
    D None of the above
11. Which of the following is not the method of forecasting demand
    A Collective opinion method
    B Total outlay method
    C Expert option method
    D Controlled opinion method
12. As per indifference curve and price line, a consumer will not be in equilibrium when
    A Ratios of marginal utilities and price of the respective goods are equal
    B Ratio of marginal utilities of the two goods is equal to the ratio of their respective prices
    C The marginal rate of substitution is equal to the ratio of prices of the two goods.
    D The marginal rate of substitution is decreasing.
13. When marginal utility is negative then total utility
    A Increase
    B Decrease
    C is zero
    D is negative
14. Match the items in List I with those in List II and choose the correct code:
    List I (Type of Good)
    (a) Goods with zero utility on x-axis
    (b) Competitive Goods
    (c) Goods with negative utility on x-axis
    (d) Complementary goods
    List II (Shape of Indifference Curve)
    (i) U-shaped
    (ii) L-shaped
    (iii) Vertical
    (iv) Negatively sloped straight line
    (v) Positively sloped straight line
    (vi) Horizontal
    Codes:
    (a) (b) (c) (d)
    A (iii) (iv) (ii) (i)
    B (iv) (v) (iii) (vi)
    C (v) (vi) (i) (ii)
    D (vi) (iv) (i) (ii)
15. Dhruv likes prefers reading a book over watching a movie, then his indifference curve between number of books
    (measured along x-axis) and number of movies (measured along y-axis) will:
    A have vertical bias
    B have horizontal bias
    C be vertical
    D be horizontal
16. Assertion (A) : The Giffen goods exhibit negative price effect.
    Reason (R) : A stronger substitution effect results in negative price effect.
    Codes:
    A (A) is correct but (R) is not correct.
    B (A) is not correct but (R) is correct.
    C Both (A) and (R) are correct and (R) offers full explanation of (A).
    D Both (A) and (R) are correct but (R) does not offer full explanation of (A).
17. Total production will be maximum when
    A Marginal production is maximum
    B Average production is maximum
    C Marginal production is zero
    D Average production is equal to the marginal production
18. The theory of Revealed preference was propounded by
    A A. Marshall
    B P.F. Drucker
    C Paul Samuelson
    D J. R. Hicks
19. Which among the following is an example of external economies?
    A Low salary of staff
    B Tax exemption for the industry
    C High staff salary for the industry
    D Cordial relation between Labour and management
20. Total product, average product and marginal product for first unit of labour are:
    A Zero
    B Identical
    C Different
    D Unable to determine
21. Match the items in List I with those in List II and choose the correct code:
    List I
    (a) Average Product is rising
    (b) Average Product is maximum
    (c) Total Product is declining
    (d) Total Product is increasing at a decreasing rateList II
    (i) Average Product and Marginal Product are identical
    (ii) Marginal Product is rising
    (iii) Marginal Product exceeds Average Product
    (iv) Average Product exceeds Marginal Product
    (v) Marginal Product is negative
    (vi) Marginal Product is decliningCodes:
    (a) (b) (c) (d)
    A (iii) (v) (ii) (vi)
    B (iii) (i) (v) (vi)
    C (iv) (vi) (iii) (ii)
    D (vi) (i) (v) (ii)
22. MRTS along the lower ridge line is:
    (a) Zero
    (b) Infinity
    (c)  Either A or B
    (d)  None of the above
23. Statement I: Price and demand are positively correlated in case of giffen goods.
    Statement II: Income and demand are negatively correlated in case of inferior goods.
    Statement III: Demand for a good is negatively correlated to the price of its substitute.
    Statement IV: If the consumption of a good can be postponed, its demand is elastic.
    Codes:
    Which of the above statements are false?
    (a) I, II and IV
    (b) only I
    (c) only III
    (d) only IV
24. Match the items in List I with those in List II and choose the correct code:
    List I
    (1) Backward sloping Price Consumption Curve
    (2) Backward sloping Income Consumption Curve
    (3) Downward sloping Income Consumption Curve
    (4) Upward sloping Income Consumption CurveList II
    (i) Giffen Goods
    (ii) Necessities
    (iii) Inferior Goods
    (iv) Luxuries
    Codes:
    (1) (2) (3) (4)
    (a) (i) (iii) (iv) (ii)
    (b)  (i) (iv) (iii) (ii)
    (c)  (i) (ii) (iii) (iv)
    (d)  (i) (iv) (ii) (iii)
25. When a consumer increases units of X-commodity by giving up some units of Y-commodity and even to attain the same level of satisfaction, the marginal rate of substitution, will be calculated by :
    (a) Change in X-Commodity divided by change in Y-commodity
    (b) Change in X-commodity divided by marginal utility of Y-commodity
    (c) Change in Y-Commodity divided by change in X-commodity
    (d) Change in Y-Commodity divided by marginal utility of X-Commodity

Chapter 1 : Basic Concepts

1. Special Rates of Tax are given in
   (a) Income Tax Act
   (b) Income Tax Rules
   (c) Finance Act
   (d) Companies Act
2. Any decision given by Supreme Court becomes a law which will be binding on —
   I. Appellate Tribunals
   II. Income Tax Authorities
   III. All the assessees
   IV. All the Courts
   Codes:
   (a) I II III
   (b) I II IV
   (c) II III IV
   (d) I II III IV
3. Maximum amount which is not chargeable to Income Tax for different assessee is Nil:
   I. Artificial Judicial Person
   II. Firm
   III. Local Authorities
   IV. Co-operative Society
   V. Company
   Codes:
   (a) I II III IV V
   (b) II IV V
   (c) II III IV V
   (d) I III
4. Any person discontinuing any business or profession shall give to Assessing officer notice of such discontinuance within:
   (a) 30 days
   (b) 60 days
   (c) 15 days
   (d) no need to give notice
5. A person may not have his own assessable income but may still be ——
   (a) Person
   (b) Assessee
   (c) An Individual
   (d) Not an assessee
6. Flat Rate of Tax is applicable:
   I. Local Authorities
   II. Artificial Judicial Person
   III. Firm
   IV. Co-operative Society
   V. Company
   Codes:
   (a) I II III IV V
   (b) II IV V
   (c) I III V
   (d) I III
7. The following assessee is charged to income tax in the assessment year following the previous year.
   (a) A non-resident business firm which shipped goods on 1/5/2018, at Vishakhapatnam port in Andhra Pradesh
   (b) An employee left India to USA on 1/8/2018 with no intention of returning.
   (c) ABC firm which discontinued its business on 1/9/2018
   (d) An employee assessee of college who worked during 1/4/2018 to 31/3/2019
8. Match the following
   List I
   A. Individual more than 80 years age
   B. Individual age between 60 to 80 years
   C. Individual age below than 60 years
   D. Innovative Ltd.
   List II
   1. Nil
   2. 5,00,000
   3. 3,00,000
   4. 2,50,000
   Codes:
   A B C D
   (a) 1 4 3 2
   (b) 2 4 3 1
   (c) 2 3 4 1
   (d) 1 4 2 3
9. The provision of AMT in case of Individual, HUF, AOP and BOI and Artificial Judicial Person (AJP) is applicable if the adjusted total income of such person exceed from —-
   (a) 10 Lakh
   (b) 20 Lakh
   (c) 50 Lakh
   (d) 1 Crore
10. MAT is calculated on —- @ 18.5%
    (a) Total Income
    (b) Adjusted Total Income
    (c) Gross Total Income
    (d) Book Profit
11. AMT is calculated on —- @ 18.5%
    (a) Total Income
    (b) Adjusted Total Income
    (c) Gross Total Income
    (d) Book Profit
12. Surcharge is calculated on
    (a) Total Taxable Income
    (b) Basic Tax Liability
    (c) Tax Liability
    (d) Gross Total Income
13. The basic source of income-tax law is –
    (a) Income-tax Act, 1961
    (b) Circulars/Notifications issued by CBDT
    (c) Judgments of Courts
    (d) None of the above
14. The rates of income tax are mentioned in –
    (a) The Income-tax Act, 1961 only
    (b) The Annual Finance Act
    (c) Both in the Income-tax Act, 1961 and the Annual Finance Act
    (d) Income-tax Rules, 1962.
15. The provision of AMT shall apply to a person who has claimed any deduction under:
    I. Section 80 C to 80 U other than 80 P
    II. Section 80IA to 80 U
    III. Section 10AA
    IV. Section 80 IA- to 80 RRB
    Codes:
    (a) I II III IV
    (b) I II IV
    (c) I III
    (d) I II III IV
16. Maximum number of members in CBDT is
    (a) 6
    (b) 21
    (c) 5
    (d) 26
17. Income Tax Act was passed in which year?
    (a) 1961
    (b) 1971
    (c) 1951
    (d) 1981
18. Who is not an assessee?
    (a) A person who files the self-assessment return
    (b) A person who files the return of income on behalf of minor
    (c) A person who has to take refund of income tax from IT Department
    (d) A person whose income is below the exemption limit
19. Additional surcharge (Health and Education Cess) of 4 %  per cent is payable on
    (a) Income tax
    (b) Income tax plus surcharge if any
    (c) Surcharge
    (d) Total Income
20. Describe the status of the following person (i.e. individual, HUF, Firm, Company etc.) X and Y are legal heirs of Z. Z died in 2018 and X and Y carry on his business without entering into a partnership.
    (a) Firm
    (b) Limited Liability Partnership
    (c) Company
    (d) Body of Individual
21. In case of a female individual, who is of 59 years of age, what is the maximum exemption limit for AY 2019-20:
    (a) Rs. 2,00,000
    (b) Rs. 2,50,000
    (c) Rs. 5,00,000
    (d) Nil
22. Calculate the amount of rebate under section 87A in case of a resident individual having total income of Rs. 3,00,000.
    (a) Rs. 30,000
    (b) Rs. 10,000
    (c) Rs. 2,500
    (d) Rs. 5,000
23. The first income tax act was introduced in the year
    (a) 1918
    (b) 1860
    (c) 1861
    (d) 1886
24. X is an individual of 65 years of age having gross total income Rs. 3,50,000. What is the tax liability for assessment year 2019-20 ?
    (a) Rs. 5,000
    (b) Rs . 2,500
    (c) Nil
    (d) Rs. 3,000
25. In which of the following cases, Assessing Officer has the discretion to assess the income of previous year in previous year itself or in the subsequent assessment year:
    (a) Shipping business of non-residents
    (b) Assessment of Association of Persons or Body of Individuals formed for a particular event or purpose
    (c) Assessment of persons likely to transfer property to avoid tax
    (d) Discontinued business

Chapter 2 : Residential Status

1. Income of a person leaving India who has no present intention of returning to India is charged to tax in the previous year itself. In this case, the total income of such individual up to _______________ shall be charged to tax in that assessment year.
   (a) The probable date of his departure from India
   (b) The end of the assessment year
   (c) The end of the previous year
   (d) The end of the previous year in which he leaves India
2. A person is said to be an ordinarily Resident when the person is satisfying ________________.
   (a) Both basic and additional
   (b) Only basic
   (c) Only additional
   (d) Not basic and additional conditions
3. A person is said to be a non resident when the person is _______________.
   (a) Not fulfilling any one of the basic conditions
   (b) Not basic conditions
   (c) Only additional conditions
   (d) Both basic and additional conditions
4. Under the income- tax act, the incidence of taxation depends on ___________.
   (a) The citizenship of the tax-payer.
   (b) The age of the taxpayer
   (c) The residential status of the tax-payer.
   (d) The gender of the taxpayer
5. Past untaxed income brought to India is taxable in the hands of.
   (a) Resident but not ordinarily resident.
   (b) Resident and ordinarily resident.
   (c) Non-resident.
   (d) None of these.
6. Determine the residential status of a HUF if HUF’s control and management is wholly situated in India and Karta of HUF is a Non-resident in India for that previous year.
   (a) Resident and Ordinary Resident (ROR)
   (b) Resident but not ordinary resident (RNOR)
   (c) Non-Resident (NR)
   (d) ROR or RNOR
7. X, after about 25 years stay in India returns to America on January 29, 2016. He returns to India in 10th June 2018 to join in American company as its India branch manager. Determine his residential status for the assessment year 2019-20:
   (a)  Resident and ordinarily resident
   (b)  Resident but not ordinarily resident
   (c)  Non-resident
   (d)  None of the above
8. X Ltd. is registered in  USA. The control and management of its affairs is situated wholly in India X Ltd. shall be:
   (a) Resident in India
   (b) None-resident
   (c) Not ordinarily resident in India
   (d) None of the above
9. On the basis of residence, assesses are dividend in
   (a) Indian and foreigners
   (b) Resident and non-resident Indians
   (c) Ordinary resident, not ordinary resident and non-resident
   (d) Persons, firms and companies
10. Ms. Jothi (aged 23) got married and left India to join her husband in the United Kingdom on 10.06.2018. She had never left India earlier. Her residential status for the assessment year 2019-20 is:
    (a) Resident and ordinarily resident
    (b) Resident but not ordinarily resident
    (c) Non-resident
    (d) None of the above

Chapter 3 : Exempted Income

1. In which of the following section of Income Tax Act exempted income have been mention
   (a)  Section 80IA
   (b) Section 88
   (c) Section 10
   (d) Section 80

Chapter 4 : Income from Salary

1. Mr. Raju is getting salary of Rs 10,000 per month . His salary is due on last day of every month. Salary of March 2019 was paid on 7 April, 2019. Compute his taxable salary income for the PY 2018-19.
   1. Rs. 1,20,000
   2. Rs. 1,00,000
   3. Rs. 1,10,000
   4. Rs. 90,000
2. Mr. Raju is getting salary of Rs 10,000 per month from 1st October 2018 after allowing 500 increment this date . His salary is due on last day of every month. Salary of March 2019 was paid on 7 April, 2019. Compute his taxable salary income for the PY 2018-19.
   1. Rs. 1,20,000
   2. Rs. 1,17,000
   3. Rs. 1,23,000
   4. Rs. 90,000
3. Mr. Raju is getting salary of Rs 10,000 per month from 1st October 2018 after allowing 500 increment this date . His salary is due on first day of next following  month. Salary of March 2019 was paid on 7 April, 2019. Compute his taxable salary income for the PY 2018-19.
   1. Rs. 1,20,000
   2. Rs. 1,17,000
   3. Rs. 1,23,000
   4. Rs. 1,16,500
4. The tax levied by Local Governments i.e. Municipal Corporations and municipalities is———-
   1. Income Tax
   2. House Tax
   3. Wealth Tax
   4. Gift Tax
5. While computing income under the head ‘Salaries’, exemption under House Rent Allowance is available to an employee when:
   1. The employee pays rent which does not exceed 10% of salary
   2. The employee pays rent which exceeds 10% of salary
   3. The employee lives in a house for which he does not pay rent
   4. The employee lives in his own house
6. While computing income under the head ‘Salaries’, exemption under House Rent Allowance is not available to an employee when:
   1. The employee pays rent which does not exceed 10% of salary
   2. The employee pays rent which exceeds 10% of salary
   3. The employee lives in a house for which he pay rent Rs.5,000 p.a.
   4. None of the above
7. An employee who was not entitled to gratuity got 30% of his total pension commuted in the past. He wishes to commute another 25% of his total pension in the previous year. How many percentages to the extent of his total pension are commuted?
   (a) Nil
   (b) 10%
   (c) 25%
   (b) 40%
8. R, who claimed the exemption of gratuity in the past to the extent of Rs. 3,00,000, was entitled to the gratuity from the present / second employer amounting to Rs. 8,00,000 in the previous year 2017-18 as he retired on 25.10.2017. R shall be entitled to exemption to the maximum extent of:
   (a) Rs. 7,00,000
   (b) Nil
   (c) Rs. 6,00,000
   (d) Rs. 10,00,000
9. Interest credit in Recognised Provident Fund is exempted up to
   (a) 8%
   (b) 9%
   (c) 9.5%
   (d) 10%
10. Encashment of earned leave is fully taxable, if encashed
    (a) after retirement
    (b) after death
    (c) during the period of employment or after reitrement
    (d) during the period of service
11. In the case of Government employees, the Entertainment Allowance is allowed as deduction to the extent
    (a) Rs 5,000
    (b) Rs 5,000 or 1/5th of salary whichever is less
    (c) Rs 5,000 or 1/4th of salary whichever is less
    (d) No deduction
12. For an employee in receipt of hostel expenditure allowance for his four children, the maximum annual allowance exempt under section 10(14) is
    (a) Rs.300 per month
    (b) Rs.100 per month
    (C) Rs.3,600
    (b) Rs.7,200
13. Y received children education allowance of Rs. 500 pm for his children.
    Calculate taxable amount of children education allowance for the assessment year 2018-19 if entire Rs. 500 is spent by Y.
    (a) Nil
    (b) Rs. 4,800
    (c) Rs. 6,000
    (d) Rs. 3,600
14. Employer provides a car (below 1.6 Ltr. capacity) alongwith a driver to X partly for official and partly for personal purpose. The expenses incurred by the company are:
    running and maintenance expenses – Rs. 32,000
    driver’s salary – Rs. 36,000
    Taxable value of perquisite is:
    (a) Rs. 21,600
    (b) Rs. 10,800
    (c) Rs. 32,400
    (d) Rs. 39,600
15. Mr. Raju is getting salary of Rs.10,000 per month. His salary is due on last day of every month. Salary of March 2019 was paid on 7 April, 2019. Compute his taxable salary income for the P Y 2017-18.
    (a) Rs.1,20,000
    (b) Rs.1,00,000
    (c) Rs. 1,10,000
    (d) Rs.90,0000

Chapter 5 : Income from Other Source 

1. Dividend received by a shareholder from an Indian company is exempt. Interest or any
   other expenditure incurred for earning such dividend income shall:
   (a) Be allowed as deduction
   (b) Not be allowed as deduction
   (c) Be allowed as deduction subject to certain conditions
   (d)Be allowed only if AO is satisfied that it is only interest expenditure
2. Which of the following is not an income taxable as income from other sources?
   (a) family pension
   (b) Casual income
   (c) director’s sitting fee for attending board meetings
   (d) Rent received for house property including use of plant and machinery, where rent is
   separable between rent for house property and rent for use of plant and machinery.
3. M’s property was compulsorily acquired. He received enhanced compensation on
   15.11.2018 which includes Rs. 2,30,000 as interest on such enhanced compensation.
   Compute the taxable amount of interest.
   (a) Rs. 2,30,000
   (b) Nil
   (c) Rs. 1,15,000
   (d) Rs. 2,00,000

Chapter 6 : Deduction from Gross Total Income

1. Purchase NSCs (VIII issue) on 15.3.2017 for 10,000 and on 15.3.2018 for Rs. 20,000. He also purchases National relief bonds worth Rs. 30,000 on 13.3.2018. State the amount of deduction he can claim under section 80C for the assessment year 2019 -20. Interest accruing on NSCs of Rs. 100 denomination for first year is Rs. 8.16 and for second year it is Rs. 8.83
   (a) Rs. 30,000
   (b) Rs. 33,398
   (c) Rs. 2,515
   (d) Rs. 31,766
2. Under Section 80 TTA of IT Act, the maximum amount of deduction allowed is
   (a) Rs 1,000
   (b) Rs 3,000
   (c) Rs. 5,000
   (d) Rs 10,000
3.  The sum of various heads is called as
   (a) Taxable income
   (b) Gross total income
   (c) Total income
   (d) Adjusted income
4. X donated Rs. 20,000 to a charitable institution, which is eligible for deducting u/s 80 G, and Rs. 10,000 to Government for purpose of promoting Family Planning during the previous year. His total income during the period was Rs. 2,50,000. How much deduction he can claims u/s 80G?
   (a) Rs. 17,500
   (b) Rs 10,000
   (c) Rs. 15,000
   (d) Rs. 20,000
5. X donated Rs. 5,000 to a charitable institution, which is eligible for deducting u/s 80 G, His total income during the period was Rs. 1,50,000. How much deduction he can claims u/s 80 G?
   (a) Rs. 17,500
   (b) Rs 10,000
   (c) Rs. 15,000
   (d) Rs. 2,500
6. X donated Rs. 20,000 to a charitable institution, which is eligible for deducting u/s 80 G, and Rs. 5,000 to Government for purpose of promoting Family Planning during the previous year. His total income during the period was Rs. 1,00,000. How much deduction he can claims u/s 80G?
   (a) Rs. 7,500
   (b) Rs 10,000
   (c) Rs. 15,000
   (d) Rs. 20,000
7. Match the items of List – I with those of the List – II and indicate the correct code:
   List – I
   a. Section 80 C
   b. Section 80 CCC
   c. Section 80 CCD
   d. Section 80 CCG
   List – II
   i. Employer Contribution to Pension Fund
   ii. Pension fund of UTI
   iii.Pension fund of Central Government
   iv. Pension fund of LIC
   Codes:
   a b c d
   (a) i ii iii iv
   (b) ii iv iii i
   (c) iii i iv ii
   (d) i iii iv ii
8. Match the items of List – I with those of the List – II and indicate the correct code:
   List – I
   a. 100 % Deduction without any Qualifying Limits
   b. 50 % Deduction without any Qualifying Limits
   c. 100 % Deduction subject to Qualifying Limits
   d. 50 % Deduction subject to Qualifying Limits
   List – II
   i. Donation to Charitable Trust
   ii. Donation for Family Planning
   iii.Prime Ministers Drought Relief Fund
   iv. Prime Ministers National Relief Fund
   Codes:
   a b c d
   (a) i ii iii iv
   (b) ii iv iii i
   (c) iii i iv ii
   (d) iv iii ii i
9. Which of the following deductions under Chapter VI A of Income Tax Act, 1961, cannot be claimed by a partnership firm?
   (i) Sec. 80-G
   (ii) Sec. 80-C
   (iii) Sec. 80-U
   (iv) Sec. 80-IB
   Codes:
   (a) (ii), (iii) and (iv)
   (b) (i) and (iii)
   (c) (i), (ii) and (iii)
   (d) (ii) and (iii)
10. Amount of deduction in case of a person with severe disability under section 80-U will be:
    (a) Rs. 50,000
    (b) Rs. 75,000
    (c) Rs. 1,25,000
    (d) Rs. 1,50,000
11. Deduction in respect of contribution to political party will:
    (a) be allowed in respect of sum paid by way of cash
    (b) not be allowed if payment made in cash
    (c) This type of deduction is not allowed whether payment is in cash or not.
    (d) be allowed if payment made in cash, subject to certain conditions
12. A pays (through any mode other than cash) during the previous year medical insurance premia as under:
    (i) Rs. 40,000 to keep in force an insurance policy on his health and on the health of his wife and dependent children;
    (ii) Rs. 35,000 to keep in force an insurance policy on the health of his parents where his
    father is a senior citizen.
    Calculate deduction under section 80D.
    (a) Rs. 50,000
    (b) Rs. 60,000
    (c) Rs. 75,000
    (d) Rs. 55,000
13. Aggregate amount of deduction under section 80C, 80CCC and 80CCD (1) cannot exceed from :
    (a) Rs. 1,00,000
    (b) Rs. 2,00,000
    (c) Rs. 1,50,000
    (d) Rs. 1,25,000
14. Deduction under section 80C to 80U cannot exceed from:
    (a) Gross Total Income
    (b) Total Income
    (c) Income from business or profession
    (d) Income from house property
15. Mr. A (60 years) submits the following information for the Assessment year 2019-20:
    Gross salary – Rs. 8,80,000
    Income from other sources – Rs. 60,000
    Contribution to PPF- Rs. 70,000
    Compute the tax liability of A.
    (a) Rs. 99,000
    (b) Rs. 97,240
    (c) Rs. 87,360
    (d) Rs. 90,800

Chapter 7 : Income under the head House Property

Chapter 8 : Income under the head Capital Gain

1. X purchased a piece of land on 4.1.1998 for Rs.4,00,000. This land was sold by him on 2.9.2018 for Rs.20,00,000. The market value of the land as on 1.4.2001 was Rs.5,11,200. Expenses on transfer were 2 % of the sale price. Compute the capital gain for the assessment year 2019-20.
2. X purchased a piece of land on 5.6.2006 for Rs.8,00,000. This land was sold by him on 2.9.2018 for Rs.22,00,000. The market value of the land as on 1.4.2001 was Rs.5,11,200. Expenses on purchase were 2 % of the purchase price. Compute the capital gain for the assessment year 2019-20
3. X acquired the property in the previous year 2002-03 for Rs. 20,40,000 and paid Rs.60,000 as registration charges. X died on 15.9.2013 and the property was transferred to his son Y through inheritances. The market value of property as on 15.09.2013 is Rs.10,00,000 Y sold this property on 31.5.2018 for Rs.70,00,000. Compute the capital gain for the assessment year 2019-20
4. E purchased a house on 28.6.2005 for Rs.4,10,000 and paid Rs.10,000 for getting the property registered in his name. On 15.6.2006 he spent Rs. 1,80,000 on improvement of the house. The house was sold on 21.10.2018 for Rs.25,00,000. Commission of Rs. 45,000 was paid on the sale of the house. Compute the capital gain for the assessment year 2019-20
5. Cost of Acquisition in case of bonus shares allotted before 1.4.2001 will be:
   (a) Nil
   (b) FMV as on 1.4.2001
   (c) Rs. 10,000
   (d) Cost of Original shares on the basis of which bonus shares are allotted.
6. Indexation benefit on Cost of acquisition is available on the long term capital asset. However, in certain cases, indexation benefit is not available. In which of the following cases, indexation benefit is allowed?
   (a) Debentures issued by a company
   (b) Self generated goodwill of a business
   (c) Bonus shares allotted on 1.4.2000
   (d) Jewellery
7. For availing exemption under section 54, which amount is eligible for availing
   exemption?
   (a) Purchase/Construction of a residential house property upto due date of return of income
   only
   (b) Deposit in capital gain account scheme upto due date of return of income only
   (c) Purchase/Construction of a residential house property upto due date of return of income
   and deposit in capital gain account scheme upto due date of return of income
   (d) Purchase / construction after three years from the transfer date
8. Amount unutilized in the capital gain scheme for which exemption was claimed u/s 54 shall be treated as long-term capital gain of:
   (a) Previous year in which period of 2 years has expired from the date of deposit
   (b) In which period of 2 years has expired from the date of transfer
   (c) In which period of 3 years has expired from date of deposit
   (d) In which period of 3 years has expired from the date of transfer
9. The income from the sale of a machinery used in business is treated as:
   (a) Income from business and profession
   (b) Short-term capital gain
   (c) Long-term capital gain
   (d) Income from other sources
10. Exemption u/s 54 D is available if there is a compulsory acquisition of :
    (a) Any land and building used by an industrial undertaking
    (b) Land and building which has been used by the industrial undertaking for atleast 2 years
    (c) Long-term capital gain
    (d) Income from other sources

Chapter 9 : Income under the head Business & Profession

Chapter 10 : Clubbing of Income

Chapter 11 : Set off or Carry Forward and Set off of Losses

Chapter 12 : Agricultural Income and Its Tax Treatment

Chapter 13 : Assessment of Individuals

Chapter 14 : 

Chapter 15 : 

Chapter 16 : 

Chapter 17 : 

Chapter 18 : 

1. R is employed with G Ltd., at a salary of Rs.25,000 p.m. As G Ltd., was in financial crisis, it paid the salary of January 2018 to March 2019 to R only in July 2017. The gross salary of R for assessment year 2019-20 shall be:
   (a) Rs.3,00,000
   (b) Rs.2,25,000
   (c) none of these two
2. The Government of India announced increase in the D.A on 15.3.2018 with retrospective effect from 1.5.2013 and the same were paid on 6.4.2018. The arrears of D.A. shall be taxable in the previous year:
   (a) 2017-18
   (b) 2018-19
   (c) In respective previous years to which these relate
3. Gratuity shall be fully exempt in the case of:
   (a) Central and State Government employee
   (b) Central and State Government employees and employees of local authorities
   (c) Central and State Government employee, employee of local authorities and employee of statuary corporation
4. R, who claimed the exemption of gratuity in the past to the extent of Rs.3,00,000, was entitled to the gratuity from the present/second employer amounting to Rs.6,00,000 in the previous year 2018-19 as he retired on 25.10.2018. R shall be entitled to exemption to the maximum extent of:
   (a) Rs.7,00,000
   (b) Nil
   (c) Rs.6,00,000
5. For purpose of calculating exemption of gratuity for other employee, salary shall include:
   (a) fixed commission
   (b) commission if it is a fixed percentage on turnover
   (c) none of these two
6. An employee was also entitled to gratuity. He got 60% of his pension commuted and received a sum of Rs.12,00,000 as commuted pension. The exemption in his case shall be:
   (a) Rs.12,00,000
   (b) Rs.4,00,000
   (c) Rs.6,66,667
   (d) Rs.8,00,000
   (e) Rs. 10,00,000
7. An employee who was not entitled to gratuity, got 30% of his total pension commuted in the past. He wishes to commute another 25% of his total pension in the previous year. He shall be allowed exemption to the extent of:
   (a) Nil
   (b) 20%
   (c) 25%
8. Salary for exemption of leave encashment shall be taken as:
   (a) Last drawn Salary
   (b) Average Salary of 10 months immediately preceding the month of retirement
   (c) Average Salary of 10 months immediately preceding the date of retirement.
9. A is entitled to Children education allowance @ Rs.80 p.m. per child for 3 children amounting Rs.240 p.m. It will be exempt to the extent of:
   (a) Rs.200 p.m.
   (b) Rs.160 p.m.
   (c) Rs.240 p.m.
10. Match the exemption in the following case:
    Table-1
    1. Children education allowance
    2. Hostel expenditure allowance
    3. Tribal area allowance
    4. Allowance to transport employee
    Table-2
    A. Rs.300 per month per child maximum of two children for
    B. Rs.100 per month per child maximum two children for
    C. Rs.200 p.m.
    D. 70% of allowance maximum Rs.10,000 p.m.
    Codes:
    (a) 1 – A; 2 – D; 3 -C; 4 -B
    (b) 1 – B; 2 – A; 3 -C; 4 -A
    (c) 1 – B; 2 – D; 3 -C; 4 -B
    (d) 1 – B; 2 – D; 3 -C; 4 -B
11. During the previous year, the employee was reimbursed Rs.24,000 as medical expenses incurred by him which includes Rs.7,000 spent in Government hospital. The taxable perquisite in this case shall be:
    (A) Rs.9,000
    (B) Nil
    (C) Rs.2,000
    (D)Rs.24,000
12. The employee is provided with furniture costing Rs.1,50,000 alongwith house w.e.f. 1.7.2018. The value of the furniture to be included in the valuation of unfurnished house shall be:
    (A) Rs.11,250
    (B) Rs.15,000
    (C) Rs.22,500
    (D) Rs.16,875
13. R Ltd. provides the facility of cook to its employee for which it paid Rs.1,000 p.m. as salary to the cook. The valuation of this perquisite shall be:
    (A) Rs.120 p.m.
    (B) Rs.1,000 p.m.
    (C) Rs.60 p.m.
14. Employer’s contribution to unrecognized provident fund shall be:
    (A) fully taxable (B) fully exempt
    (C) exempt upto 12% of Salary
    (D) neither exempt nor taxable in the year of contribution.
15. Interest credited to unrecognized provident fund shall be:
    (A) fully taxable (B) fully exempt
    (C) exempt upto 9.5% p.a.
    (D) neither exempt nor taxable in the year of accrual.
16. Payment from statutory fund and public provident fund shall be:
    (A) taxable
    (B) fully exempt
    (C) taxable to the extent of employer’s contribution and interest thereon
17. R is provided with a rent free accommodation in Delhi which has been taken on rent by the employer. The value of this perquisite shall be:
    (A) 15% of salary
    (B) 15% of salary or rent paid or payable whichever is lower
    (C) 20% of salary or rent paid or payable whichever is lower
    (D) 7.5% of salary or rent paid or payable whichever is less
18. The employer X Ltd. gives a gift (in kind) on the marriage of the son of the employee. Gift so made shall not be perquisite if the value of the gift is:
    (A) Rs.6,000 or less
    (B) Below Rs.5,000
    (C) Rs.10,000 or less
    (D) Below Rs.10,000
    (E) any amount
19. An employer has made a gift of Titan Watch worth Rs.12,000 to his employee. Such gift shall:
    (A) be a perquisite in the hands of the employee and the value of such perquisite shall be Rs.12,000
    (B) be a perquisite and the value of such perquisite shall Rs.7,000
    (C) not be a perquisite Write True or False
20. Dividend declared by a domestic company is:
    (A) fully exempt in the hands of shareholders except when it is chargeable to tax under the provisions of section 115BBDA
    (B) fully exempt in the hands of shareholders
    (C) fully taxable in the hands of shareholders
    (D) taxable but a deduction is allowed under section 80L on account of such dividend.
21. Dividends declared by Unit Trust of India or mutual fund is:
    (A) fully exempt in the hands of unit holders
    (B) fully taxable in the hands of unit holders
    (C) taxable but deduction is allowed under section 80L
22. The lottery, crossword puzzle, races, card games incomes, etc. are taxable at:
    (A) normal slab rate of income tax like any other income
    (B) flat rate of 20% plus education cess @ 2% plus SHEC @1%
    (C) flat rate of 30% plus surcharge if applicable plus education cess @ 2% plus SHEC @1%
23. An individual has received a gift of Rs.30,000 each during the previous year from his two friends, the amount taxable under the head income from the other sources shall be:
    (A) Rs.10,000
    (B) Rs.60,000
    (C) Nil
24. Gift received by HUF from its members shall be:
    (A) Fully exempt
    (B) Fully Taxable
    (C) Taxable to the extent it exceeds Rs.50,000

Test 1 : Scope and Source of finance 

1. The main objective of Financial Management is to:
   (a) Management of Liquidity,
   (b) Maximization of Profit
   (c) Maximization of Shareholders’ Wealth,
   (d) Management if Fixed Assets
2. Which of the following in not a function of a finance manager?
   (a) Procurement of Fund,
   (b) Allocation of Fund,
   (c) Maintaining balance between Risk and Return,
   (d) Manoeuvering the Shares Price.
3. ………. would be an example of a principal, while ………….would be an example of an agent.
   (a) Shareholder; manager
   (b) Manager; owner
   (c) Accountant; bondholder
   (d) Shareholder; bondholder
4. The market price of a share of common stock is determined by:
   (a) The board of directors of the firm.
   (b) The stock exchange on which the stock is listed.
   (c) The president of the company.
   (d) Individuals buying and selling the stock
5. Which of the following represents the financing decision?
   (a) Designing Optimal Capital Structure,
   (b) Declaring Dividend,
   (c) Paying Interest on Loans,
   (d) None of the above.
6. Which of the following variables defines and explains the concepts of finance?
   (a) Inflation,
   (b) Capital Structure,
   (c) Risk-free Rate of interest,
   (d) Risk and Return.
7. Investment means
   (a) Net additions made to the nation’s wealth
   (b) Person’s commitment to buy a Building
   (c) Employment of funds on assets to earn returns
   (d) Employment of funds on goods and services that are used in production process

Test 2 : Lease Financing

Capital Budgeting

Capital structure

Test – West Bengal SET 2020

31. Match the items of List-1 with those of List-2 and indicate the correct code.

                   List-1                                                                                  List-2

(a) Acid Test Ratio                                                     (1) Profitability analysis

(b) Return on Investment                                     (2) Activity analysis

(c) Debt Equity Ratio                                                (3) Liquidity analysis

(d) Inventory Turnover Ratio                               (4) Long-term solvency analysis

         Codes:

(a)                  (b)          (c)           (d)

(A)           (2)                  (1)          (3)          (4)

(B)           (2)                  (3)          (4)          (1)

(C)           (3)                  (4)          (1)          (2)

(D)           (3)                  (1)          (4)          (2)

32. 32. Assertion (A): The primary motive of a company in using financial leverage is to magnify shareholders ‘ return under favourable  economic conditions.

Reason (R):   To magnify shareholders’ return fixed charged funds can be obtained at a cost higher than the firm’s rate of return on net assets.

        Codes:

(A) (R) is correct but (A) is wrong

(B) (A) is correct but (R) is wrong

(C) (A) is correct and (R) is the correct explanation of (A)

(D) Both (A) and (R) are wrong

33. Debt financing is a cheaper source of finance because of

(A) Time value of money

(B) Rate of interest

(C) Tax deductibility of interest

(D) Dividends are not payable to lenders

34. Lease which includes a third party (a lender) is known as

(A)  Operating Lease

(B)  Sale and Lease-back

(C)  Leveraged Lease

(D)  Cross-border Lease.

35. Which one of the following equals the present value of cash outflows and the present value of expected cash inflow from a project?

(A) Net Present Value

(B) Internal rate of Return

(C) Pay Back Period

(D) Accounting Rate of Return

36. Operating leverage and financial leverage of a firm are 3 and 2 respectively. If sales increases by 5%, then earnings before tax will rise by

(A) 15%

(B) 10%

(C) 30%

(D) 25%

37. Match the items of list-1 with those of list-2 and indicate the correct code:

                 List-1                                                                      List-2

(a) Net Income Approach                                      (1) Working Capital Management

(b) Profitability Index                                              (2) Over-Capitalization

(C) Concentration Banking                                    (3) Capital Structure Planning

(d) Lower Rate of Return                                       (4) Capital Budgeting Decision

        Codes:

(a)                  (b)          (c)           (d)

(A)          (3)                  (4)          (1)          (2)

(B)          (3)                  (4)          (2)          (1)

(C)          (4)                  (2)          (3)          (1)

(D)          (2)                  (3)          (1)          (4)

38. To maintain international liquidity the Smithsonian agreement was inked on December 18, 1971 by a group of countries known as

(A) Group of Eight

(B) Group of Twenty

(C) Group of Ten

(D) Group of Forty-four

39. Which one of the following is not a method of calculating cost of equity capital?

(A) Dividend-Growth Model

(B) Capital Asset Pricing Model

(C) Yield to Maturity Method

(D) Earning Price Approach

40. In Covered interest arbitrage

(A) Foreign exchange risk is covered

(B) Interest fluctuation is covered

(C) Cross country fluctuation in capital movement is covered.

(D) Interest differential is eliminated.

Test 1 

CHAPTERS
1. DATA: TYPES, COLLECTION & ANALYSIS
2. MEASURES OF CENTRAL TENDENCY
3. MEASURES OF DISPERSION
4. MOMENTS, SKEWNESS & KURTOSIS

Please open the attachment for Test Questions.

TEST CH 1 TO 4

Test 2

CHAPTERS

PROBABILITY CONCEPTS

PROBABILITY DISTRIBUTIONS

SAMPLING & SAMPLING DISTRIBUTION

ESTIMATION & CONFIDENCE INTERVALS

For Test Questions Click here