CPT Mock Test – 3rd
Test Booklet No. – 110020
Duration : 2 Hours
Date: - 05.10.2015 Total Marks : 100
(1) Ans. c
Sale has an effect of increasing gross profits whereas purchases decreases the gross profit. Sales of Rs. 5000 would have increased G.P. by Rs. 5000 but it has been recorded as purchases, which has reduced G.P. by Rs. 5000. The net effect of this error will be that gross profit will be reduced by Rs. 10000
(2) Ans. a
Explanation:
Accounts of A&B
Correct Entry
Cash A/c Dr. 200
To A’s A/c
Wrong Entry passed
Cash A/c
To B’s A/c
Dr. 200
200
200
Rectification Entry
B’s A/c
To A’s A/c
Dr. 200
200
As Per Rectification entry, A/C of A& B affected from given error.
(3) Ans. c
Explanation:
Purchase A/c Dr. 500
To Suspense A/c 500
As purchases was under cast by Rs. 500 so purchases Account will be debited and earlier suspense account was debited for the difference which will now be credited.
(4) Ans. b
Explanation :
Compensating Errors
Because under compensating errors both the sides of trial balance will agree.
As the name suggests, compensating error means an error under which one error completely offsets the effect of other error.
(5) Ans. b
Explanation :
Error of principle
When a transaction is recorded in contravention of accounting principles such an error is known as error of principle. And treating revenue expenses as a capital expenditure is contravention of accounting principle.
(6) Ans. b
Explanation :
As per AS-2 on valuation of inventories, stock are valued at cost or NRV whichever is low.
Item Cost NRV Valuation Amt.
A
B
C
10,000
12,000
15,000
9,500
13,000
14,000
NRV
Cost
NRV
9,500
12,000
14,000
35,500
(7) Ans. b
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Explanation :
Determination of cost of chair
Actual Cost
(+)
(+)
500
Freight per chair
Insurance in transit
200
200
200
=
=
=
Rs. 300
Rs. 2.5
Rs. 1.00
(+) Cartage
100
= 0.50
200
Rs. 304 per chair
And net realizable value per chair is Rs. 350 so valuation would be made at cost or
NRV whichever is less, i.e. cost. So value of unsold stock, i.e. 200 – 150 = 50 chairs.
= 50 304
= Rs. 15,200
Note: - Godown rent is recurring exp. So not included in the value of unsold stock.
(8) Ans. b
Explanation :
Given that company sells good at cost 33.33% so gross profit on sales would be 25%
To opening stock
To purchases
TRADING ACCOUNT
40,000
80,000
By Sales 1,00,000
(-) Lost by fire (30,000)
To gross profit C/d (100000
By closing stock (B/F) 15,000
(9) Ans. c
Explanation :
Cost of Goods = Rs. 5,000
50,000
 25%) 25,000
1,15,000 1,15,000
(+) Profit = Rs. 2,500 (5,000 
50% )
(-) Trade Discount = Rs. (1,125) [ 7500 15% ]
Purchase price before cash discount = Rs. 6,375
(10) Ans. c
Explanation :
Cost of goods sold = Sales - G.P.
= 1,10,000 – 27,500
G.P. = 110000  25% = 27500
= Rs. 82,500
Cost of goods sold = opening stock + purchases + direct exp – closing stock
82,500 = 2,00,000 – Closing Stock
Closing Stock = Rs. 1,17,500
Assuming there is no opening stock and no direct exp.
(11) Ans. b
Explanation:
The amt to be paid without any discount will be : 7,000
(-) paid on 30/06/2006
Discount = 200
1,800

10
90
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Total amt. =
1800 200
 
2, 000

(-) paid on 30/09/2006
Discount = 150
(2850 x 5/95 )
Total amt = 2850 + 150 = 3,000
Amount to be paid in final settlement = 7000 – 2000 – 3000 = Rs. 2,000
(12) Ans. c
Explanation:
Profit before charging managerial remuneration = Rs. 44,000
Managerial remuneration on profit after charging commission = 44000 x 10 / 110 =
Rs.4000
(13) Ans. a
Explanation:
Profit = (Sales – Sales return) – (purchase - purchase return)
= (40000 – 5000) – (30000 – 5000) = Rs. 10000
(14) Ans. b
Explanation:
Amt. of accrual interest

10, 000 12%

2

200
12
(15) Ans. d
Explanation:
Purchase cost =
(+) Shipping and forecasting charges =
(+) Import duty =
(+)Carriage Inwards =
(+) Repair Charges =
(+) Installation Charges =
(+) Brokerage =
(+) Iron Paid =
Rs. 50,000
2,000
1,000
1,000
500
200
400
100
55,200
(16) Ans. a
Explanation:
Interest on capital will be paid to the partners if provided in the agreement but only from profit.
(17) Ans. b
Explanation:
If fixed amount withdraw end of each month then interest on drawings is change for
5.5 months.
200 12

2400

5

5.5

100 12
55Ans.
(18) Ans. c
Explanation:
As per section 37 of Indian partnership act the executor would be entitled @ 6% P.A. interest.
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(19) Ans. a
Explanation:
Capital 50000 + Reserve  15000
5
6000
++Good will 30000
5
12000 + Profit share 7050
(20) Ans. c
Explanation:
5
2820 B’s Loan a/c = 70820
C’s Capital a/c debited by 150000 25000
6
(21) Ans. a
Explanation:
(a) If Accumulated profit Distributed in OPSR i.e , 5 : 3 : 2
24000 – 6000 = 18000 X Y Z
(b)
9000 5400 3600
In future it will be distributed in the ratio of 2 : 3 : 5
Accumulated profit Rs. 18000 X Y Z
Net Credit to X A/c
Net Debit to be made to Z A/c
(22) Ans. b
Z A/c Dr.
To X A/c
Explanation:
Share of A & B
Adj : Capital of A&B
3600 5400 9000
5400 Cr.
5400 Dr.
5400
5400
= 80 %
= 300000
Total Capital of Firm =
30000

375000 Rs.
.80
C ‘s Share of Capital = 375000 × 20 % = 75000 Rs.
(23) Ans. b
Explanation:
Change in total Assets is based on Amount brought in by new Partner.
(24) Ans. d
Explanation:
New Ratio = Old Ratio + Profitable Ratio
Q
1



2

2
4 4 3



 
4

3 4

7
4 12 12 12
R
1



2

1
4 4 3



 
2

3 2

5
4 12 12 12
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New ratio is 7:5
(25) Ans. b
Explanation:
Profit during accounting year 2005 – 06 = 24000 Rs.
Profit for 3 months =
24000

3 = 6000 Rs.
12
Hari’s Share of Profit for April 2006 to June 2006 will be distributed on the basis of
Profits of Last year.
6000

4 = 1500 Rs.
16
(26) Ans. d
Explanation
JOURNAL ENTRY
Machinery Account Dr. 2000
To Cash A/c 2000
(Correct Amount is Rs. 2000 not Rs. 20000)
(27) Ans. d
Explanation:
Following entries made for transaction
Wages A/c Dr.
(28) Ans. d
1000
To O/s wages A/c
So, O/s wages A/c is credited.
1000
Explanation:
To Capital
To Sales
To Debtors
CASH ACCOUNT
10000 By Purchases
5000 By Creditors
35000 By Salaries A/c
By Rent A/c
By Stationary
10000
15000
3000
2400
900
(29) Ans. c
By Drawings
By Miscellaneous
Expenses
By Machinery
______ By Balance C/d
4000
1000
8000
5700
Explanation :
Because one current Assets stock Increase and one current Assets cash decrease so no change in the total assets.
(30) Ans.
(C)
Credit side of Trial balance is increase by (650-560) Rs. 90, and credit side total of
Trial Balance is 90+21440=21530
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(31) Ans. c
Explanation: Communication is must both at the time of making, or, revocation of offer and acceptance.
(32) Ans. b
Explanation: because Silence cannot be treated as acceptance unless it was liability of party to speak.
(33) Ans. a
Explanation: Because as per Sec. 17(3) promise mode with intention of not to perform will be fraud.
(34) Ans. d
Explanation: Rule regarding acceptance is that it must be unconditional and unqualified. If it is conditional or qualified then it leads to counter offer.
(35) Ans. a
Explanation: As per Sec. 15 "Coercion" is the committing, or threatening to commit any act forbidden by Indian penal code, or the unlawful detaining or threatening to detain any property, to the prejudice of any person (1) whatever with the intention of coursing any person to enter into an agreement. And suicide comes under
"Coercion".
(36) Ans. a
Explanation: The burden of proof that the consent was obtained by Coercion lies on the person who wants to relieve himself of the consequences of coercion.
(37) Ans. b
Explanation: As per sec. 16, A contract is said to be induced by "Undue influence".
Where the relations subsisting between parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage of the other. A person is deemed to be in a position to dominate the will of the other, when he holds authority real or apparent authority over the other, or when he stands in a fiduciary relation to the other.
(38) Ans. c
Explanation: The agreement is not enforceable because it is forbidden by law due to unlawful of consideration as well as object in the agreement.
(39) Ans. b
Explanation: Agreement based on personal skill cannot be enforceable after the death of the party. Hence, it lapses for both the parties.
(40) Ans. a
Explanation: Contract which involve the exercise of personal skill or diligence, or which are founded on personal confidence between the parties must be performed by the promisor himself.
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(41) Ans. b
Explanation: The Partnership Act, 1932 came into force on 1 st day of October 1932.
(42) Ans. d
Explanation: According to the Partnership Act, the term "Business" includes trade, occupation and profession.
(43) Ans. a
Explanation: The ratio in which partners share profits and losses are based on agreement. And in absence of any information in the agreement, such are shared equally.
(44) Ans. d
Explanation: To form a partnership, the partners should share profits and losses. But some partners may get a share only in the profits subject to the provision inserted in the partnership deed.
(45) Ans. b
Explanation: As there is no maximum number limit on membership in HUF.
(46) Ans. a
Explanation: While forming partnership, partners may mutually decides the terms and conditions of it in the partnership deed and if the provisions of such deed is lawful, then such are valid and enforceable. So, if there is a contract that the partner shall not carry on the business other than that of the firm while he is a partner, such contract is valid.
(47) Ans. a
Explanation: A company
(48) Ans. b
Explanation: Nudum Pactum
(49) Ans. a
Explanation: Can sue conditionally
(50) Ans. b
Explanation: Maintenance.
(51) Ans. d
Explanation: Since the industrial sector faced the process of retrogression and deceleration during 1965-1980.
(52) Ans. b
Explanation: BPO stands for Business Process Outsourcing.
(53) Ans. a
Explanation: Per capita national income means NNP ÷ population.
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(54) Ans. a
Explanation: Since Personal income tax is a direct tax among the above.
(55) Ans. b
Explanation: Nationalisation of banks aimed at all of the following except provision of credit to big industries only.
(56) Ans. b
Explanation: In terms of deposit mobilisation Maharashtra leads other states
(57) Ans. a
Explanation: At present, SLR is 22 per cent. (September, 2014)
(58) Ans. b
Explanation: In order to control credit in the country, the RBI may sell securities in the open market.
(59) Ans. a
Explanation: During depression, it is advisable to Lower Bank Rate and purchase securities in the market.
(10) Ans. c
Explanation:
At the zero level of output, the values of TC and TFC are equal to each other.
(61) Ans. b
Explanation:
Law of returns to a factor is also known as “Law of variable proportions”.
(62) Ans. a
Explanation:
MR = AR× e-1 e
(i)
(ii) e > 1 ;MR = Positive
(iii)
(63) Ans. a e = 1 ; MR = 0 e < 1 ; MR = Negative
Explanation:
When Supply > Demand then market price will decrease.
(64) Ans. a
Explanation:
The elasticity of demand curve above the point of price-rigidity will be e > 1 (Highly
Elastic)
(65) Ans. c
Explanation:
HDI is generally used which is the composite of three basic indications of humandevelopment-longevity, knowledge and standard of living.
(66) Ans. c
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Explanation:
Value of second hand car which is sold or purchased because the value of second hand car has been already calculated in that year in which it was produced.
(67) Ans. b
Explanation:
Income method may be most suitable for developed economies where people file their income tax returns properly.
(68) Ans. b
Explanation:
Government announced the nationalization of 14 commercial banks in 1969 and 6 more banks were nationalised in 1980. Two banks were merged in 1993.So at present there are 19 nationalised banks.
(69) Ans. c
Explanation:
The RBI is the apex monetary institution of highest authority in India. Consequently, it plays an important role in strengthening, developing and diversifying the country’s economic and financial structure.
(70) Ans. b
Explanation: Periods of less than full employment correspond to points inside the
PPF.
(71) Ans. d
Explanation: Choice is created by the scarcity of resources.
(72) Ans. b
Explanation: The economic system in which all the means of production are owned and controlled by private individuals for profit is called capitalism.
(73) Ans. a
Explanation: Scarcity is a situation in which wants exceed the resources available to satisfy them.
(74) Ans. d
Explanation: Production Possibilities curve is also known as transformation curve.
(75) Ans. c
Explanation: Since in monopoly there is restriction in entry of a new firm.
(76) Ans: (a)
Explanation: n(A − B) = n(A) − n(A ∩ B)
47 = 115 − n(A ∩ B) n(A ∩ B) = 68 n(A ∪ B) = n(A) + n(B) − n(A ∩ B)
= 115 + 326 - 68 = 373
(77) Ans: (d)
Explanation:
(a, a), (b, b), (c, c) ℇ R
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So R is a reflexive relation
But (𝑎, 𝑏)ℇ R and (b, a) ∉ R
Thus, R is not a symmetric relation.
Also, (a, b), (b, c) ℇ R ⇒ (a, c) ∉ R
Hence R is not a transitive relation
(78) Ans: (a)
Explanation:
S = 9 + 99 + 999+ ---
= (10 − 1) + (10
(10 + 10 2 + 10 3
2 − 1) + (10 3
+ − − +10 100
− 1) + ---
) − (1 + 1 + 1 + − − +100 times)
=
10(10
100
−1)
−100
10−1
=
10
(10 100
9
(79) Ans: (c)
− 1) −100
Explanation:
Here a=1, 𝑙 =16, n=5 𝑙 =ar n-1
16=1.r
4
⇒ r=2 x = 1.r = 2, y = 1. r 2 = 4 z = 1. r 3 = 8 x + y + z = 2 + 4 + 8 = 14
(80) Ans: (c)
Explanation:
T n
= 3n + 7
S n
= ∑ T n
= ∑(3n + 7)
3 ∑ n + 7 ∑ 1
=
3n(n+1)
+ 7n
2
= n [
3n+3+14
2
]
S n
= n [
3n+17
2
]
S
50
= 50 [
3 x 50+17
2
] = 4175
(81) Ans: (c)
Explanation: r n 

1 p ( n , r ) r !
= r n 

1
1 r !
n !
 n
 r

!
= r n 

1 nc r

2 n 
1
(82) Ans: (b)
Explanation:
Number of diagonals in polygon = nc
2
=
= n(n−1)
− n
2 n(n−3)
2
− n
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(83) Ans: (b)
Explanation:
Number of ways when one specified book is included = 9c
4 m = 126
= m and number of ways when one specified book is excluded = 9c n = 126 m = n
5
= n
(84) Ans: (d)
Explanation:
CI = P [(I + r
100
) n
2100 = P [(I +
− 1]
10
100
)
2
− 1]
P = Rs. 10000
SI =
10000 x 10 x 2
100
= Rs. 2000
(85) Ans: (c)
Explanation:
Given:
9 < 4𝑥 − 1 ≤ 19
9 < 4𝑥 − 1 and 4x − 1 ≤ 19 x >
5
2
and x ≤ 5
5
2
< 𝑥 ≤ 5
(86) Ans: (b)
Explanation:
a: b = c: d = a b
x b c
2
3
9
x
5 c d
:
:
1
3
7
10
=
= 2: 3, b: c =
2
3
= 6: 7
(87) Ans: (c)
x
4
5
x
6
7
=
16
35
2
7
:
5
14
= 4: 5
= 16: 35
Explanation:
50
100
(P + Q)x
20 = (P − Q) x
100
2P + 2Q = 5P − 5Q
7Q = 3P
P: Q = 7: 3
(88) Ans: (d)
Explanation:
√a −1 b x b −1 c x c −1 a = 1
(89) Ans: b
Explanation:
6 th No. = 11 x 30 – 5 x 25 – 5 x 28 = 65
(90) Ans: c
Explanation
A = 2, n = 50 ∑ d = 10, ∑ d 2 = 180
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x = 2 +
10
50
= 2.5
σ = √
∑ d 2 n
= √
180
50
= 1.897
Coef. of variation =
σ x
(91) Ans: a
100 = 86.24%
Explanation:
The revised Total salary = 50 x 5850 – 8600 – 5400 – 6800 – 4500 = 289800
The revised average salary =
289800
50
= 5796
(92) Ans: c
(93) Ans: b
Explanation: 𝑟 2 = 𝑏 𝑦𝑥
x 𝑏 𝑥𝑦 b xy
= r
2
=
(0.8) 2 b yx
(94) Ans: b
Explanation:
1.2
= 0.53
r =
∑ 𝑑𝑥 2 𝑛
0.5 =
120 𝑛.√
90 𝑛
8 n = 10
(95) Ans. b
Explanation : Given
P(x=2)
=
P(x=3)
0.4362
0.2181
10p
2 q
3
10p
3 q
2
=
0.4362
0.2181
q = 2p p + 2p = 1 p =
1
3
(96) Ans. d
Explanation : m=np=500 x 0.001 = 0.5
P(x ≥ 2) = 1 − [P(x = 0) + P(x = 1)] e
−0.5
(0.5)
0
= 1 − |
0!
= 1 − 0.9097
= 0.0902
+ e
−0.5
(0.5)
1
1!
|
Hence, the approx, number of boxes containing atleast 2 defective bottles.
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(97) Ans. a
125 x 0.0902
=11, approx.
Explanation : P (
X ≤60
) =
X>50 p(x ≤60) ∩p(x >50) p(x >50)
= p(0<𝑍<1)
1− Φ (0)
=
Φ (1)− Φ (0)
1− Φ (0)
=
0.8413−0.5
= 0.6826
1−0.5
x = 2, MD y = 1 x
= 0.6
2x + 3y − 7 = 0
MD
y
|
2
3
|
M.D of Y
= x 100
y
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