MCQOPTIONS
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MCQOPTIONS
This section includes 100 Mcqs, each offering curated multiple-choice questions to sharpen your Common Proficiency Test (CPT) - ICAI knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Money includes: |
| A. | Currencies and demand deposits |
| B. | Bonds, government securities |
| C. | Equity shares |
| D. | All of the above |
| Answer» E. | |
| 2. |
Inflation can be controlled by: |
| A. | Fiscal measures |
| B. | Monetary measures |
| C. | Control of investments |
| D. | All of the above |
| Answer» E. | |
| 3. |
____ refers to that portion of total deposits of a commercial bank whichit has to keep with RBI in the form of cash reserves. |
| A. | CRR |
| B. | SLR |
| C. | Bank Rate |
| D. | Repo Rate |
| Answer» B. SLR | |
| 4. |
Profitability ratio of commercial banks has not improved much due to _____ |
| A. | Low interest on Government borrowings from banks |
| B. | Subsidization of credit to priority sector |
| C. | Increasing expenditure due to over staffing |
| D. | All of the above |
| Answer» E. | |
| 5. |
_____ is the official minimum rate at which central bank of a country is prepared to rediscount approved bills held by commercial banks. |
| A. | Repo rate |
| B. | Reverse repo rate |
| C. | Bank rate |
| D. | CRR |
| Answer» D. CRR | |
| 6. |
Who is called the ‘Bank of Issue’? |
| A. | RBI |
| B. | SBI |
| C. | IDBI |
| D. | ICICI |
| Answer» B. SBI | |
| 7. |
BPO stands for _____ |
| A. | Bharat Petroleum Organization |
| B. | Business Process Outsourcing |
| C. | Big Portfolio Outstanding |
| D. | Business Profit Organization |
| Answer» C. Big Portfolio Outstanding | |
| 8. |
______ is the apex bank for agriculture credit in India. |
| A. | RBI |
| B. | SIDBI |
| C. | NABARD |
| D. | ICICI |
| Answer» D. ICICI | |
| 9. |
On the basis of end use, industries are classified into: |
| A. | Consumer Goods, Free Goods, Large scale industries |
| B. | Intermediate Goods, Consumer goods, Small scale industries |
| C. | Capital Goods, Basic Goods, Intermediate Goods |
| D. | consumer Goods, Large scale industries |
| Answer» D. consumer Goods, Large scale industries | |
| 10. |
Right of children to free and compulsory education Act {RTE Act) 2009, has made free education for all children between the age of ______ fundamental right. |
| A. | 5 and 14 years |
| B. | 6 and 14 years |
| C. | 7 and 14 years |
| D. | 8 and 14 years |
| Answer» C. 7 and 14 years | |
| 11. |
Work force refers to that part of: |
| A. | Labour force which is employed |
| B. | Population which is unemployed |
| C. | Population which is forced to work |
| D. | Labour force which is unemployed |
| Answer» B. Population which is unemployed | |
| 12. |
_____ Unemployment is caused by decline in demand. |
| A. | Structural |
| B. | Technological |
| C. | Disguised |
| D. | Chronic |
| Answer» B. Technological | |
| 13. |
In the theory of demographic transition in the last stage: |
| A. | Birth rate rises, death rate rises. |
| B. | Birth rate rises, death rate falls |
| C. | Birth rate falls, death rate rises. |
| D. | Birth rate falls, death rate falls |
| Answer» E. | |
| 14. |
Which of the following is not a cause of under – developed country? |
| A. | Unemployment & poverty |
| B. | Over population |
| C. | Income inequalities |
| D. | Dominance of mass consumption |
| Answer» E. | |
| 15. |
In which economic system all the means of production are owned and controlled by private individuals for profit? |
| A. | Socialism |
| B. | Mixed economy |
| C. | Mixed economy |
| D. | Communism |
| Answer» C. Mixed economy | |
| 16. |
Lionel Robbins said the following except: |
| A. | Scarce means |
| B. | Limited ends |
| C. | Alternative Uses |
| D. | Economics is science |
| Answer» C. Alternative Uses | |
| 17. |
Who among the following gave the definition of Economics as “Science which deals with wealth”? |
| A. | Frachild |
| B. | A.C Pigou |
| C. | Adam Smith |
| D. | J.B. Say |
| Answer» E. | |
| 18. |
Freedom of choice is an advantage of: |
| A. | Capitalist economy |
| B. | Mixed economy |
| C. | Socialist economy |
| D. | Communist economy |
| Answer» B. Mixed economy | |
| 19. |
Which of the following is another name of Production possibilities curve? |
| A. | Deamand curve |
| B. | Indifference curve |
| C. | Transformation curve |
| D. | Supply curve |
| Answer» D. Supply curve | |
| 20. |
Which of the following is false regarding Monopoly? |
| A. | Unique Product |
| B. | Unique Product |
| C. | Single Seller |
| D. | None of the above |
| Answer» E. | |
| 21. |
Which is the first order condition for the profit of a firm to be maximum? |
| A. | AC= MR |
| B. | MC= MR |
| C. | MR=AR |
| D. | AC=AR |
| Answer» C. MR=AR | |
| 22. |
Which of the following markets has the concept of group equilibrium in long – run? |
| A. | Monopoly |
| B. | Perfect competition |
| C. | Monopolistic competition |
| D. | Oligopoly |
| Answer» D. Oligopoly | |
| 23. |
The price discrimination under monopoly will be possible under which of the following coditions? |
| A. | The seller has no control over the supply of his product |
| B. | The market has the same conditions all over |
| C. | The price elasticity of demand is different in different markets |
| D. | The price elasticity of demand is uniform |
| Answer» D. The price elasticity of demand is uniform | |
| 24. |
Average revenue rs also known as? |
| A. | Supply curve |
| B. | Demand curve |
| C. | Marginal revenue |
| D. | Average cost |
| Answer» C. Marginal revenue | |
| 25. |
In a perfect competition, who set the prices : |
| A. | Buyers |
| B. | Sellers |
| C. | Both buyers and sellers |
| D. | Government |
| Answer» D. Government | |
| 26. |
The market for ultimate consumers is known as _____ |
| A. | Whole sale market |
| B. | Retail market |
| C. | Unregulated market |
| D. | Regiulated market |
| Answer» C. Unregulated market | |
| 27. |
If TVC = 100, TFC = 400, then calculate ATC at 5 units. |
| A. | 280 |
| B. | 250 |
| C. | 150 |
| D. | 300 |
| Answer» B. 250 | |
| 28. |
A firm’s average fixed cost is Rs. 20 at 6 units of output. What will it be at 4 units of output? |
| A. | 60 |
| B. | 30 |
| C. | 40 |
| D. | 20 |
| Answer» C. 40 | |
| 29. |
Average cost of Producing 50 units of a Commodity is Rs 250 & fixed cost is Rs. 1000 . What will be the average fixed cost of producing 100 units of the Commodity? |
| A. | 10 |
| B. | 30 |
| C. | 20 |
| D. | 5 |
| Answer» B. 30 | |
| 30. |
Suppose the first four units of a variable input generate corresponding total outputs of 150, 200, 350 and 550. The marginal product of the third unit of input is: |
| A. | 50 |
| B. | 100 |
| C. | 150 |
| D. | 200 |
| Answer» D. 200 | |
| 31. |
Average Product raises due to an increase in variable input, then Marginal Product is : |
| A. | More than AP |
| B. | Less than AP |
| C. | Equal to AP |
| D. | None |
| Answer» B. Less than AP | |
| 32. |
Which is not a characteristic of labour? |
| A. | Labour is not separable from labourer |
| B. | Labour is not a mobile factor |
| C. | Labour is not a mobile factor |
| D. | Labour is an active factor |
| Answer» D. Labour is an active factor | |
| 33. |
which among the following is not a characterstic of land? |
| A. | Land is an active factor |
| B. | Its power is indestructible |
| C. | Variety of uses |
| D. | Its supply is limited |
| Answer» B. Its power is indestructible | |
| 34. |
Concept of consumer surplus is based on : |
| A. | Law of Diminshing Marginal utility |
| B. | Law of Equi-Marginal utility |
| C. | Law of Diminshing returns |
| D. | Engel’s law |
| Answer» B. Law of Equi-Marginal utility | |
| 35. |
Elasticity of supply refers to to the percentage change in supply divided by ____ |
| A. | Percentage change in income |
| B. | Percentage change in price |
| C. | Percentage change in demand |
| D. | Percentage change in cost |
| Answer» C. Percentage change in demand | |
| 36. |
Supply is a ___ concept. |
| A. | Flow |
| B. | Stock |
| C. | Both Flow & Stock |
| D. | Qualitative |
| Answer» B. Stock | |
| 37. |
If income increases by 10% and demand increases by 5%, then income elasticity of demand is: |
| A. | +0.5 |
| B. | -0.5 |
| C. | +0.05 |
| D. | -0.05 |
| Answer» B. -0.5 | |
| 38. |
In case of a straight line demand curve meeting the two axes, the price elasticity of demand at the Y-axis of the line would be: |
| A. | Infinity |
| B. | Equal to 1 |
| C. | Zero |
| D. | Less than 1 |
| Answer» B. Equal to 1 | |
| 39. |
A relative price is _____ |
| A. | Price expressed in terms of money |
| B. | What you get paid for baby sitting your cousin |
| C. | The ratio of one money price to another |
| D. | Equal to a money price |
| Answer» D. Equal to a money price | |
| 40. |
Conspicuous goods are also called as: |
| A. | Veblen |
| B. | Snob |
| C. | Prestigious |
| D. | All of the above |
| Answer» E. | |
| 41. |
Which method is an exception to non-historical cost methods |
| A. | Adjusted selling price |
| B. | Latest purchase price |
| C. | Standard Cost |
| D. | Weighted average price |
| Answer» E. | |
| 42. |
Value of physical inventory on 15-04-2016 was Rs.3,00,000. Sales amounting to Rs.1,00,000 and purchases worth Rs.50,000 were held between 31-03-2016 to 15-4-2016. Goods are sold at 20% profit on sales. Value of inventory as on 31-3-2016 is |
| A. | Rs. 3,50,000 |
| B. | Rs. 2,70,000 |
| C. | Rs. 3,00,000 |
| D. | Rs. 3,30,000 |
| Answer» E. | |
| 43. |
Average inventory is Rs.28,000. Closing inventory is Rs.6,000 more than opening inventory. Then find the value of closing inventory. |
| A. | Rs.31,000 |
| B. | Rs.28,000 |
| C. | Rs.27,000 |
| D. | Rs.34,000 |
| Answer» B. Rs.28,000 | |
| 44. |
Errors are rectified by using Suspense A/c |
| A. | Before the preparation of Trial Balance |
| B. | After the preparation of Trial Balance |
| C. | Before and after the preparation of Trial Balance |
| D. | None of these |
| Answer» C. Before and after the preparation of Trial Balance | |
| 45. |
The cost of machinery is Rs.60,000. Descreciation is charged at 20% p.a. under SLM. In the 2nd year it is decided to change the method and adopt WDV [email protected] 20% p.a. If the meachine was sold for Rs.30,000 at the end of the 3rd year, calculate the amount of loss. |
| A. | Loss 4,720 |
| B. | Loss 4,560 |
| C. | Loss 720 |
| D. | Loss 560 |
| Answer» D. Loss 560 | |
| 46. |
A Machinery was purchased by X Ltd. on 01- 01-13. Depreciation was charged at 15% p.a. under SLM. With effect from the 2nd year depreciation was charged under WDV method at the same rate. The WDV of the machinery on 01-01-15 was Rs.3,68,475. Find the original cost of the machinery? |
| A. | Rs.5,10,000 |
| B. | Rs.5,10,000 |
| C. | Rs.6,00,000 |
| D. | Rs.4,23,500 |
| Answer» C. Rs.6,00,000 | |
| 47. |
The assets which were earlier revalued upward and now revalued downward, to the extent of earlier upward revaluation amount should be. |
| A. | Debited to Revaluation Reserve A/c |
| B. | Debited to Revaluation Reserve A/c |
| C. | Debited to P & L A/c |
| D. | Debited to P & L A/c |
| Answer» C. Debited to P & L A/c | |
| 48. |
Out of the following, which is not related to joint ventures |
| A. | Account Sales |
| B. | Account Current |
| C. | Del credere Commission |
| D. | All of the above |
| Answer» E. | |
| 49. |
The profit on joint venture is _____ |
| A. | Rs. 7,000 |
| B. | Rs. 7,375 |
| C. | Rs. 8,875 |
| D. | Loss Rs.1,500 |
| Answer» C. Rs. 8,875 | |
| 50. |
The sales made by A & B were |
| A. | Rs. 30,000 & Rs. 39,375 |
| B. | Rs. 40,500 & Rs. 39,375 |
| C. | Rs. 40,500 & Rs. 35,625 |
| D. | Rs. 41,250 & Rs. 24,375 |
| Answer» B. Rs. 40,500 & Rs. 39,375 | |