Karnataka SET 2020 Solved Paper

toran verma

1.

Assertion (A) : India’s balance of payments is always in disequilibrium.

Reason (R) : The demand for foreign exchange is more than its supply.

Codes :

  1. Both (A) and (R) are correct and (R) is the correct explanation of (A)
  2. Both (A) and (R) are correct but (R) is not the correct explanation of (A)
  3. (A) is correct but (R) is incorrect
  4. (A) is incorrect but (R) is correct
1. Both (A) and (R) are correct and (R) is the correct explanation of (A)

The import in India is more than exports from India, this is the reason why the balance of payment remains in disequilibrium and the e demand for foreign exchange is more than its supply

2.

Assertion (A): India’s trade policies are still inward-looking

Reason (R): The focus of EXIM policy is more on export promotion measures.

Codes :

  1. Both (A) and (R) are correct and (R) is the correct explanation of (A)
  2. Both (A) and (R) are correct but (R) is not the correct explanation of (A)
  3. (A) is correct but (R) is incorrect
  4. (A) is incorrect but (R) is correct
2. Both (A) and (R) are correct but (R) is not the correct explanation of (A)

Both the statements are independently true but they do not explain each other.

3. Foreign Investment Promotion Board is under the ministry of

  1. External affairs
  2. Industry
  3. Finance
  4. PMO
3. Finance

The Foreign Investment Promotion Board (FIPB), housed in the Department of Economic Affairs, Ministry of Finance, is an inter-ministerial body, responsible for processing of FDI proposals and making recommendations for Government approval.

4. The European Union is a

  1. Political Union
  2. Common Union
  3. Customs Union
  4. Economic Union
4. Economic Union

According to Karnataka SET the Europian union is economic union. But if we get into the details, the European Union is a unique economic and political union between 27 EU countries that together cover much of the continent. It was created as European Economic Community (EEC) in 1958 with six member countries including Belgium, Germany, France, Italy, Luxembourg and the Netherlands.

(D) i ii iii iv

https://commercestudyguide.com/the-world-bank-group/

6. FDI into fresh production facilities is known as

  1. Greenfield investment
  2. Brownfield investment
  3. Horizontal investment
  4. Vertical investment
Greenfield investment

FDI into fresh production facilities is known as Greenfield investment. FDI into existing production facilities is known as Brownfield investment. Horizontal foreign direct investment refers to the overseas manufacturing of products and services similar to those the company produces and manufactures in its home market. It is called horizontal because the company duplicates its business activities of its home country in different countries. In a vertical investment, a business acquires a complementary business in another country

7.‘Mysore Silk’ can be included under

  1. Patent
  2. Copyright
  3. Trademark
  4. Geographical indication
4. Geographical indication

geographical indication (GI) is a name or sign used on products which corresponds to a specific geographical location or origin (e.g., a town, region, or country). The use of a geographical indication, as an indication of the product’s source, acts as a certification that the product possesses certain qualities, is made according to traditional methods, or enjoys a good reputation due to its geographical origin.

8. The correct expansion of the acronym BIMSTEC

  1. Bay of Bengal Initiative for multi-sectoral technical and economic co-operation.
  2. Bay of Bengal Initiative formulti-sectoral trade and economic co-operation.
  3. Bangladesh Initiative for multisectoral trade and economic co-operation
  4. Bangladesh Institute for multisectoral trade and economic co-operation
1. Bay of Bengal Initiative for multi-sectoral technical and economic co-operation.

The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is a regional organization comprising seven Member States lying in the littoral and adjacent areas of the Bay of Bengal constituting a contiguous regional unity. This sub-regional organization came into being on 6 June 1997 through the Bangkok Declaration. It constitutes seven Member States: five deriving from South Asia, including Bangladesh, Bhutan, India, Nepal, Sri Lanka, and two from Southeast Asia, including Myanmar and Thailand. Initially, the economic bloc was formed with four Member States with the acronym ‘BIST-EC’ (Bangladesh, India, Sri Lanka and Thailand Economic Cooperation). Following the inclusion of Myanmar on 22 December 1997 during a special Ministerial Meeting in Bangkok, the Group was renamed ‘BIMST-EC’ (Bangladesh, India, Myanmar, Sri Lanka and Thailand Economic Cooperation). With the admission of Nepal and Bhutan at the 6th Ministerial Meeting (February 2004, Thailand), the name of the grouping was changed to ‘Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation’ (BIMSTEC).

9. The main objective of UNCTAD is

  1. To deal with only trade
  2. To deal with trade and development
  3. To deal with trade, investment and development of developing countries
  4. To deal with trade, investment and development of least developed countries
3. To deal with trade, investment and development of developing countries.

The main goals of UNCTAD are to expand the capabilities of developing countries in the sphere of trade, investment and development, to assist them in overcoming the difficulties arisen as a result of globalization and to integrate on an equal footing into the world economy.

10. A system based on the licensing of the right to duplicate a successful business format in foreign markets is known as

  1. Partnering
  2. Licensing
  3. Franchising
  4. Contract manufacturing
3. Franchising

Franchising is a form of marketing and distribution in which the owner of a business system (the franchisor) grants to an individual or group of individuals (the franchisee) the right to run a business selling a product or providing a service using the franchisor’s business system. Franchisees are also given permission to use the franchisor’s branding, trademarks, and identifying marks under specified guidelines. https://www.franchisedirect.com/what-is-franchising-definition/

11. Consolidated financial statements are prepared when a parent-subsidiary relationship exists in recognition of the accounting concept of

  1. Materiality
  2. Going concern
  3. Objectivity
  4. Entity
4. Entity

Consolidated financial statements are presented by a parent (also known as holding enterprise) to provide financial information about the economic activities of its group. These statements are intended to present financial information about a parent and its subsidiary(ies) as a single economic entity to show the economic resources controlled by the group, the obligations of the group and results the group achieves with its resources. https://www.mca.gov.in

12. Which of the following should be included in general and administrative expenses?

Interest Advertising

(A) Yes No
(B) Yes Yes
(C) No No
(D) No Yes

C. No No

General and Administrative (G&A) expenses are the day-to-day costs a business must pay to operate, whether or not it manufactures products or generates revenue. Typical G&A expenses include rent, utilities, insurance payments, and wages and salaries for administrative and management staff other than salespeople. https://www.netsuite.com

13. The title of AAS2 issued by council of ICAI is

  1. Objective and scope of financial statements audit
  2. Objective and scope of the financial statements
  3. Objective and scope of the audit of financial statements
  4. Objective and scope of business of an entity
C. Objective and scope of the audit of financial statements

This Standard describes the overall objective and scope of the audit of general purpose financial statements of an enterprise by an independent auditor. The Standards deals with the following important aspects of an audit: Objective of an Audit: expression of opinion, the concept of true and fair view Responsibility for Financial Statements: responsibility of the management vis a vis auditor Scope of Audit: factors determining scope, reliability and sufficiency of audit evidence, disclosure aspects, undiscovered material misstatements, etc. The Standard is effective for all audits relating to accounting periods beginning on or after April 1, 1985. http://icai.org/post.html?post_id=456

14. Formation of Accounting Standards Board in India is during

  1. August 1987
  2. January 1987
  3. June 1977
  4. April 1977
4. April 1977

On 21st April 1977, the Institute of Chartered Accountants of India as the premier accounting body in our country, set up “Accounting Standard Board” (ASB) to harmorize the diverse accounting policies and practice prevalent in our country. https://www.yourarticlelibrary.com/accounting/accounting-standards/indian-accounting-standards-history-and-accounting-standards-asb/68186

B. i, ii, and iii

B. ii, iv, i, iii

https://www.yourarticlelibrary.com/accounting/human-resource-accounting/human-resources-accounting-hra-2-major-aspects-financial-analysis/67507

17.

Assertion (A) : Fixed budget is concerned with budgeting of fixed assets.

Reason (R) : Cost centre and responsibility centre are not homogeneous terms.

Codes :

(A) Both (A) and (R) are correct
(B) Both (A) and (R) are incorrect
(C) (A) is correct, but (R) is incorrect
(D) (A) is incorrect, but (R) is correct

D. (A) is incorrect, but (R) is correct

Fixed budget are static budget which remains constant , irrespective of the level of activity i.e budget is prepared on a standard volume of output. Cost centers are responsibility centers that focus only on expenses. Discretionary cost centers are responsibility centers that focus only on controllable expenses. Revenue centers are responsibility centers that focus on revenues. Profit centers are responsibility centers that focus on revenues and expenses.

18. Capacity ratio * efficiency ratio =

  1. Activity ratio
  2. Profitability ratio
  3. Solvency ratio
  4. Liquidity ratio
1. Activity ratio

An activity ratio is a type of financial metric that indicates how efficiently a company is leveraging the assets on its balance sheet, to generate revenues and cash.

19. Continuous examination of books of accounts throughout the year is called

  1. Occational audit
  2. Internal audit
  3. Periodic audit
  4. Perpetual audit
4. Perpetual audit

Continuous Audit is done throughout the year in real-time. https://accountlearning.com/continuous-audit-advantages-disadvantages-steps-for-effectiveness/

A. iii, i, iv, ii

follow the link https://cleartax.in/accounting-standards/

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