UPHESC 2021 ASSISTANT PROFESSOR COMMERCE ANSWER KEY

toran verma

This is an expected solution of the UPHESC-Commerce paper held on 30/10/2021. The answer key is UNOFFICIAL and it is made for information purposes only.

31. Which of the following statement is correct in regards to economic policy

  1. Fiscal policy is enacted by a national government.
  2. Monetary policy is enacted by a central bank.

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

C. Both 1 and 2 are correct.

Fiscal policy is related with the budget (government spendings) and taxation. It is formulated by the central government. Monetary policy is framed by the central bank of a country to maintain the money flow and liquidity in the economy. In India, monetray policy is framed by the RBI.

32. Which of the following statement is not correct in regards to Foreign Portfolio Investment?

  1. It involves stocks
  2. It involves ADRs
  3. It involves GDRs
  4. It involves SDRs
4. It involves SDRs.

foreign portfolio investments involves stocks, bonds, mutual funds, exchange traded funds, American depositary receipts (ADRs), and global depositary receipts (GDRs). oreign portfolio investments does not involve SDR. SDR is Special Drawing Rights which is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves. It has nothing to do with the Foreign portfolio investments.

33. Match the List

         List-IList-II
1. McDonald(i) Franchising
2. V I (ii) Merger
3. Master Card (iii) Alliance
4. Nestle (iv) Licensing
A. McDonald-Franchising, VI (Voda Idea)-Merger, Master Card-Alliance, Nestle-Licensing

McDonald allows to open its franchises all over the world. Vodafone and Idea merged to create Voda Idea. Master Card was created by an alliance of many regional bankcard associations like eurocard, access card, everything card etc. Nestle was recently in news for its licensing agreement with Starbucks.

34. Which of the following statement is correct in regards to tariff barrier?

  1. It affects the price of imported goods.
  2. It affects the quantity of imported goods.

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

A. Only 1

Tariff barrier is a tax imposed on the price by one country on the goods and services imported from another country. Whereas the restrictions set on the quantity of the goods is known as quota.

35. With reference to Balance of Payments, which of the following statement is correct?

  1. Current account monitors the flow of funds from goods and services.
  2. Capital account monitors the flow of international transactions.

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

C. Both 1 and 2

The current account monitors the flow of funds from goods and services trade which includes money received or spent on manufactured goods and raw materials. Whereas, The capital account monitors the flow of international capital transactions which includes transactions including the purchase or disposal of non-financial assets (for example, land) and non-produced assets.

36. Which of the following statement is correct in regards to Ad Valorem tariffs?

  1. It is fixed fees levied on imported value
  2. It is levied based on the item value.

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

C. Both 1 and 2

An ad valorem tariff is levied as a ‘fixed’ percentage of the ‘value’ of the commodity imported.

37. Which of the following is prominent international organization that promotes trade liberalization and brought major reduction in trade barriers?

  1. NAFTA
  2. WTO
  3. Europian Union
  4. World Bank
2. WTO

The World Trade Organization (WTO) is an international organization of 164 members that deals with the rules of trade between nations. Trade liberalization is a cardinal principle of the World Trade Organization (WTO) and it has brought major reduction in trade barriers

38. Which of the following is correct in regards to Kaijen costing?

  1. It is a system of cost reduction
  2. It is a system of continuous improvement without negative effects on the quality, staff and security.

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

C. Both 1 and 2

Kaizen costing is a system of cost reduction through continuous improvement. Kaijen is used to maintain present cost levels for products currently being manufactured via systematic efforts to achieve the desired cost level. The word kaizen is a Japanese word meaning continuous improvement.

39. If the average stock of a firm is Rs. 40,000 and its opening stock is Rs. 5,000 less than the closing stock, what would be the value of opening stock?

  1. 42,000
  2. 40,000
  3. 35,000
  4. 37,500
4. 37,500

let the value of closing stock be x, then the value of opening stock will be x-5000. Put these values in the farmula of Average stock i.e. opening stock+closing stock/2. You will get the answer 37,500

40. Which of the following statement is correct in regards to life-cycle costing

  1. It analyses the process of evaluating product profitability.
  2. It helps planners to control costs more effectively.

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

B. (2) Only

life-cycle costing is not related with the profitability of the product but it is related with the costing of an asset. With the help of life-cycle costing the planner can assess the cost incurred in purchasing and maintaining an asset throught its lifetime. life-cycle costing definitely helps in minimising the cost on an asset.

41. With reference to margin of safety, which of the following will improve it?

  1. By lowering BEP through reduction of fixed cost.
  2. By adopting a better profitable product mix.

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

C. Both 1 and 2

Margin of safety will increase when the BEP is reduced by any means. Adopting a better profitable product mix would increase the sales and thus will increase the margin of safety.

42. With reference to angle of incidents, which of the following statement is correct?

  1. It shows the profit earning capacity of business
  2. it represents the angle between sales and total cost lines

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

C. Both 1 and 2

The Angle of Incidence shows the profit earning capacity of business. A large angle of incidence means the company is making profits at a higher rate and vice-versa. Angle of Incidence is formed when the sales line crosses the cost line from below in the break-even chart. So, It shows the profit earning capacity of business. it represents the angle between sales and total cost lines.

43. If current ratio of a company is 2:1. Which of the following transactions would improve the ratio?

  1. Issue of bonus shares
  2. Issue of warrant
  3. Purchase of goods for cash
  4. Payment of current liabilities
4. Payment of current liabilities

44. Match the list

         List-IList-II
1. Financial Leverage(i) Efficiency
2. Quick Ratio (ii) Profitability
3. Stock turnover (iii) Risk
4. Margin of Safety (iv) Liquidity
A. 1- (iii), 2-(iv), 3-(i), 4-(ii) Financial leverage is related with the risk, Quick Ratio is relateed with the Liquidity, Stock turnover is related with Efficiency, Margin of Safety is related with Profitability

Financial leverage signifies the risk associated with the inability to pay fixed financial charges. The quick ratio includes quick assets and current liability which signifies the liquidity position of the firm. Stock turnover ratio shows how quickly the stock is sold by the firm, it shows the efficiecy in coverting the stock into cash by prompt selling. Margin of Safety shows the profitability of a firm. higher the margin of safet, higher the profitability.

45. Monopolist may charge higher price to maximize the profit under which of the following conditions?

  1. When elasticity of demand is highly elastic
  2. When elasticity of demand is less elastic
  3. When elasticity of demand is perfectly elastic
  4. When elasticity of demand is equal to unity
B. When elasticity of demand is less elastic

46. Which of the following is not an objective of penetration pricing?

  1. To increase maximum sales volume
  2. To increase market share
  3. To increase customers
  4. To maximize short term profits
4. To maximize short term profits

Penetration pricing is a pricing strategy that is used to quickly gain market share by setting an initially low price to attract customers. It is focused on maximizing the long term profits by acquiring more customers and market shares.

47. Which of the following statement is correct in regards to pricing?

  1. Price skimming relies on high upfront price to maximize short-term profits.
  2. Penetration price relies on low upfront price to attract customers.

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

C. Both 1 and 2 are correct

Under Price skimming, high prices are charged initially to maximize short-term profits whereas in penetration pricing, low prices are charged initially to gain market share.

48. Which of the following is correct in regard to imperfect competition?

  1. AR Curve is horizontal straight line parallel to X-axis
  2. MR curve is equal to AR curve
  3. MR curve is higher than AR curve
  4. MR curve depends upon the elasticity of AR curve
4.MR curve depends upon the elasticity of AR curve

Under imperfect competition, the MR curve remains below the AR curve and true relationship between the AR curve and its corresponding MR curve depends upon the elasticity of the AR curve.

49. Which of the following curve shows the firms lowest cost per unit at each level of output?

  1. Long run average cost curve.
  2. Short-run average cost curve.
  3. Long-run marginal cost curve.
  4. Long-run total fixed cost curve.
1. Long run average cost curve

The long-run average cost (LRAC) curve shows the firm’s lowest cost per unit at each level of output, assuming that all factors of production are variable.

50. Average cost curve falls

  1. When the MC curve is less than AC curve
  2. When the AC curve is less than MC curve
  3. When the AC curve is equa to MC curve
  4. When the MC curve is greater than AC curve
1. When the MC curve is less than AC curve

51. The behaviour of the Average total cost curve is jointly determined by :

  1. Average Fixed cost and Average Variable cost
  2. Total Fixed cost and Average Variable cost
  3. Average Fixed cost and Total Variable cost
  4. Total Fixed cost and Total Variable cost
1. Average Fixed cost and Average Variable cost

ATC = AFC+AVC

52. Which of the following statement is correct in regards to exchange rate risk of a firm importing goods?

  1. If home currency weakens, the firm incurs a loss.
  2. If home currency strengthens, the firm incurs a loss.

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

A. Only 1 is corerect

If home currency weakens, the firm incurs a loss. This is because the importer will have to pay more price than the previous price. Like if a firm in India is importing goods worth $50 and the value of $1 is Rs.73, it would cost 3650 (50*73 per dollar). If the rupee weakens to Rs.75 per dollar, the importer will have to pay more 3750 (50*75). Contrary to that, If the home currency strengthens, the firm will gain.

53. If the sales and P/V ratio of a firm is Rs. 1000 and 80% respectively and the amount of interest paid is Rs. 400, then the operating leverage of the firm is :

  1. 4
  2. 3
  3. 2
  4. 5
3. Operating leverage is 2

The interest paid for anything related to business operations is considered as fixed operating charge. So, The operating leverage is 2. Operating leverage = Contribution/EBIT. Sales – VC/Sales-VC-FC = Operating leverage. Sales is 1000, Variable cost is 200, Contribution is 800 and fixed cost is 400. if you wonder why interest paid is considered fixed cost, you can verify here corporatefinanceinstitute.com

54. Which of the following issue is the costliest source of finance?

  1. Issue of debenture at par
  2. Issue of debenture at discount
  3. Issue of debenture at par premium
  4. Issue of debenture at discount and redeem at premium
4. Issue of debenture at discount and redeem at premium

Issue of debenture at discount and redeem at premium is most costlier.

55. If the cost of equity share and cost of debt is 20% and 12% respectively and the cost of debt-equity ratio is 0.6. then what would be the weighted average cost of capital.

  1. 19%
  2. 18.4%
  3. 18.1%
  4. 12%
None of the option is correct. The correct answer is 17%.

56. Techniques of capital budgeting is applied to evaluate:

  1. Investment in financial assets
  2. Investment in fixed assets
  3. Investment in current assets
  4. Investment in wasting assets
2. Investment in fixed assets

Techniques of capital budgeting is applied to evaluate investment in fixed assets like plant and machinary. The capital budgeting decisions are ganerally long term in nature and are irreversible.

57. Which of the following is correct in regards to hedging?

  1. It minimizes the risk through options
  2. It minimizes the risk through futures
  3. It minimizes the risk through options and futures
  4. It is a short straddle type of strategy
3. It minimizes the risk through options and futures

Both futures and options are often used by traders to hedge their positions. It is done with an intention of reducing the risk of adverse price movements in any asset.

58. With reference to Capital Asset Pricing Model, which of the following is correct

  1. It is one factor model
  2. it is two-factor model
  3. it is multifactor model
  4. it does not follow a normal distribution
1. It is one factor model.

CAPM has only a single factor in the equation i.e. market risk. While The Fama and French Three-Factor Model included three factor which were size risk, value risk and market risk.

59. Spearman’s rank correlation explores relationship between :

  1. two ordinal data
  2. two interval data
  3. two ratio data
  4. two nominal data
1.two ordinal data .

Use of Spearman’s correlation is for data that follow curvilinear, monotonic relationships and for ordinal data. Statisticians also refer to Spearman’s rank order correlation coefficient as Spearman’s ρ (rho)

60. Which of the following is related to positive association of attributes?

  1. Health and hygiene
  2. Honesty and Boldness
  3. Vaccination and occurence of disease
  4. Health and honesty
1.Health and hygiene .

In positive association, the presence of one attribute is accompanied by the presence of other attribute. For example, health and hygiene are positively associated.

61. Which of the following is a non-parametric test?

  1. F test
  2. t test
  3. Z test
  4. Chi-square test
4. Chi-square test .

The Chi-square test is a non-parametric statistic, also called a distribution free test.

62. The fourth moment of poison distribution is ?

  1. m+m
  2. m+3m2
  3. m+2m2
  4. 3m+1
2. m+3m2 .

Copy and visit this link and read the page no. 8 http://shiacollege.org/uploads/econtent/Poisson%20Distribution.pdf

63. Non-parametric test is valid when sample size is :

  1. Large
  2. Small
  3. Large and small
  4. None of these
2. Small .

Non-parametric tests are most useful for small studies. Using non-parametric tests in large studies may provide answers to the wrong question.

64. Goodness of fit of a distribution is tested by

  1. t test
  2. F test
  3. Z test
  4. Chi-square test
4. Chi-square test.

The most common goodness-of-fit test is the chi-square test, typically used for discrete distributions. The chi-square test is used exclusively for data put into classes (bins), and it requires a sufficient sample size to produce accurate results.

65. Which of the following is restricted non-probability based sampling method?

  1. Stratified sampling
  2. Quota sampling
  3. Cluster sampling
  4. Systematic sampling
2. Quota sampling.

Quota sampling is a non-probability samping. other mentioned are probability sampling methods.

66. Which of the following theories of leadership assumes as ‘leaders are made, rather than born’ ?

  1. Trait theories
  2. Behavioural theories
  3. Contingency theories
  4. Situational theories
2. Behavioural theories

Behavioral Theory of leadership is a big leap from Trait Theory, in that it assumes that leadership capability can be learned, rather than being inherent.

67. Theories of learning describes how managers can facilitate

  1. Employee learning
  2. Customer learning
  3. Student learning
  4. All of the above
1.Employee learning

with the help of theories of learning, the managers can facilitate the learning of employees.

68. Our personality shapes

  1. Our character
  2. Our behaviour
  3. Our Value
  4. Our nature

69. Who coined the word POSDCORB to indicate the functions of management ?

  1. Henry Fayol
  2. Luther Gulik
  3. Ernest Dale
  4. F.W. Taylor
2. Luther Gulik

POSDCORB which stand for: Planning, Directing, Coordinating, Reporting, and Budgeting was firstly coined by Luther Gulick

70. 360 degree performance appraisal is a method to evaluate

  1. Employee performance
  2. Manager performance
  3. Owner performance
  4. Customer performance
1. Employee performance

The 360 degree performance appraisal system is a way to make sure the appraisal is done in a full-fledged way considering all the elements surrounded to the employee.

71. With reference to the formal organisation, which of the following statement is correct?

  1. Authority is defined by the profile and managerial positions.
  2. Communication flows through the hierarchy

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

C. both 1 and 2 are correct

In any formal organisation, the authority is well defined on the vertue of profile and managerial position. The communication flows through proper channel in a heirarchy.

72. Which of the following statement is correct in regards to span of control

  1. Narrow span of control gives rise to a tall organisational structure
  2. wide span of control gives rise to a flat organisational structure

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

C. both 1 and 2 are correct

Wide span of control means a single manager or supervisor oversees a large number of subordinates. This gives rise to a flat organizational structure. When the work and authority is divided amongst many subordinates and a manager supervises and controls a small group of people, then narrow span of control exists. It adds more layers or levels of management and so leads to tall organization.

73. BHIM app can be used by anyone who has

  1. A valid bank account
  2. a mobile number
  3. debit card
  4. All of the above
4. All of the above

BHIM app can be used by anyone who has a valid bank account, a mobile number and a debit card. All three are required to operate BHIM UPI.

74. Assets which has remained NPA for a period less than or equal to 12 months is called as

  1. Substandard assets
  2. Loss assets
  3. Doubtfull assets
  4. None of these
1. Substandard assets

Substandard assets are Assets which has remained NPA for a period less than or equal to 12 months.

75. Credit control is an important tool of

  1. Commercial Bank
  2. EXIM Policy
  3. Fiscal Policy
  4. Monetary Policy
4. Monetary Policy

Monetary policy refers to the use of monetary instruments under the control of the central bank to regulate magnitudes such as interest rates, money supply etc. Credit control is a quantitative method of controlling the money supply the cental bank

76. With reference to Financial inclusion, which of the following statement is correct ?

  1. It focuses on providing financial solutions to the economically underpriviledged classes.
  2. It is a method of offering banking services to individuals.

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

C. both 1 and 2 are correct

Financial inclusion is defined as the availability and equality of opportunities to access financial services. It refers to a process by which individuals and businesses can access appropriate, affordable, and timely financial products and services. These include banking, loan, equity, and insurance products.

77. Which of the following is a short-term debt obligation of a National Governemnt that are issued to mature in 3 to 12 months?

  1. Commercial Paper
  2. Bonds
  3. Certificate of Deposaits
  4. Treasury Bills
4. Treasury Bills

A treasury bill (T Bill) is a short term government debt obligation. The Reserve Bank of India issues it. It has a maturity of one year or less. T-bills are resently issued in three tenors, namely, 91 day, 182 day and 364 day.

78. With reference to mutual funds, which of the following statements is correct?

  1. open-ended funds are always open to investment.
  2. open-ended funds are always open to redemption.
  3. open-ended funds are always open to investment and redemption.
  4. It is an investment in equity shares.
3. open-ended funds are always open to investment and redemption.

open-ended funds are always open to investment that is why they are called open-ended funds. These funds do not have any lock-in period or maturities; therefore, it is open perennially. While open ended funds can be bought or sold anytime, the closed ended funds can be bought only during their launch and can be redeemed when the fund investment tenure is over.

79. With reference to digital payment system, which of the following statement is correct?

  1. The payer and the payee both use electronic medium to exchange money.
  2. It takes place in the premises of a bank.
  3. It requires a cheque book.
  4. It needs credit card.
1. The payer and the payee both use electronic medium to exchange money.

In digital payment system, payer and the payee both use electronic medium to exchange money. Other things mentioned in the options are not necessary.

80. CRM is a combination of strategies that helps to build long-term relationship:

  1. Between companies and directors
  2. Between managers and customers
  3. Between employees and customers
  4. Between companies and customers
4. Between companies and customers

Customer Relationship Management (CRM) helps the companies to stay connected to customers, streamline processes, and improve profitability.

81. Which of the following is the objective of market positioning?

  1. To establish the image of the brand.
  2. To establish the identity of the brand.
  3. To establish the image of the product.
  4. To establish the image or identity of the brand and product.
4.To establish the image or identity of the brand and product.

Market positioning is a strategic exercise we use to establish the image of a brand or product in a consumer’s mind. This is achieved through the four Ps: promotion, price, place, and product. The more detailed the positioning strategy is at defining the Ps, the more effective the strategy will be.

82. Which of the following mode is not an example of direct marketing ?

  1. Kiosk marketing
  2. Social media marketing
  3. Cataloues
  4. Tele marketing
2. Social media marketing.

Social media marketing is not a method of direct marketing. Emails, online adverts, flyers, database marketing, promotional letters, newspapers, outdoor advertising, phone text messaging, magazine adverts, coupons, phone calls, postcards, websites, and catalog distribution are some examples of direct marketing strategies.

83. Which of the following is not a form of promotion?

  1. Publicity
  2. Advertisement
  3. Free sample
  4. Donation
4. Donation

84. “Marketing is creation and delivery of standard of living to society” who gave this definition?

  1. Kotler and levy
  2. American Marketing Association
  3. Paul Mazur
  4. Stanton
3. Paul Mazur

Paul Mazur states, “Marketing is the delivery of standard of living”. Professor Malcolm McNair has further added that “Marketing is the creation and delivery of standard of living to the society”.

85. Which of the following is not a part of social marketing mix?

  1. Product
  2. People
  3. Price
  4. Place
2.People

The four Ps are the four essential factors involved in marketing a good or service to the public. These are the four Ps: the product (the good or service), the price (what the consumer pays), the place (the location where a product is marketed), and promotion (the advertising).

86. Consumer contest is a part of

  1. Advertising
  2. Indirect Sales
  3. Personnel Selling
  4. Sales Promotion
4. Sales Promotion

A consumer contest is an example of Sales promotion. Sales promotion is the process of persuading a potential customer to buy the product.

87. With reference to self prospectus, which of the following statement is correct?

  1. It is issued by companies making multiple issues of bonds for raising funds.
  2. It can be filed only by companies issuing non-convertible debt bonds.

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

C. Both 1 and 2 are correct

A shelf prospectus is a type of prospectus issued by companies making multiple issues of bonds for raising funds. A prospectus is a notice, advertisement or any other document inviting the public to subscribe for securities. A shelf prospectus can be filed only by companies issuing non-convertible debt bonds (these are bonds which cannot later be converted into share capital). The procedure for raising funds using a shelf prospectus is the same as for raising debt funds. The only additional requirement is to file an Information Memorandum. https://www.indiafilings.com/learn/shelf-prospectus/

88. How many taxes can be charged in the invoice under GST?

  1. 2
  2. 3
  3. 4
  4. 5
C. 4

It is not clear whether they are asking about the slabs or the type of GST. If it is about the slabs, the taxes can be charged under four tax slabs of 5%, 12%, 18% and 28% in a GST invoice. if it is about the types, The 4 types of taxes charged in the invoice are: SGST (State Goods and Services Tax) CGST (Central Goods and Services Tax) IGST (Integrated Goods and Services Tax) UGST (Union Territory Goods and Services Tax). follow this link and read page no. 2 contents of invoice- point K https://www.cbic.gov.in/resources//htdocs-cbec/gst/tax-invoice-efliers.pdf;jsessionid=97CFBA7E88B3A47FB65E90E875C99F0C

89. Ordinary resolution is required for

  1. Alteration of authorized capital of the company
  2. Change the registered office of the company
  3. Reduce the share capital of the company
  4. Alter the objectives clause of memorandum of association
1. Alteration of authorized capital of the company

Alteration of authorized capital of the company is done by the ORDINARY RESOLUTION UNDER SECTION 144 (1) of the companies act 2013. Other three matters are taken in the special resolution.

90. A foreign company can constitute CSR committee with a minimum of

  1. 4 directors
  2. 3 directors
  3. 2 directors
  4. 1 directors

91. The principle of ‘Caveat emptor’ is governed by which of the following act?

  1. Indian Contract Act, 1872
  2. Sales of Goods Act, 1930
  3. Indian Partnership Act, 1932
  4. Negotiable Instrument Act, 1881
2. Sales of Goods Act, 1930

The phrase Caveat Emptor means “let the buyer beware.” The doctrine of caveat emptor is enshrined in Section 16 of the Sale of Goods Act, 1930.

92. With reference to Intellectual Property Right, which of the following statement is correct?

  1. It is a legal right that protects creations and inventions.
  2. It includes patents, copyrights and trade marks.

Select the correct answers from the codes given below:

A. 1 only

B. 2 Only

C. Both 1 and 2

D. Neither 1 or 2

C. Both 1 and 2

Intellectual Property Rights (IPRs) are legal rights that protect creations and/or inventions resulting from intellectual activity in the industrial, scientific, literary or artistic fields. The most common IPRs include patents, copyrights, marks and trade secrets.

93. The bailment of goods as security for payment of debt of performance or a promise is called

  1. Bailment
  2. Pledge
  3. Contract of Indemnity
  4. Quasi Contract
2. Pledge

The bailment of goods as security for payment of a debt or performance of a promise is called “pledge”. The bailor is in this case called the “pawnor”.

94. Which of the following investment or payments is not eligible for deduction u/s 80C of income-Act Act 1961 ?

  1. Life insurance premium paid on the life of spouse.
  2. Life insurance premium paid on the life of son.
  3. Life insurance premium paid on the life of daughter.
  4. Life insurance premium paid on the life of sister.
4.Life insurance premium paid on the life of sister.

Deduction under u/s 80C is allowed for Life insurance premium paid on the life of self, spouse and children. .

95. Interest on excess refund is not payable if the amount of refund is :

  1. Less than Rs.10,000
  2. More than Rs. 10,000
  3. More than Rs. 11,000
  4. More than Rs. 15,000
A.Less than Rs.10,000

96. Ram is super senior citizen and non-resident Indian. The income tax exemption limit for Ram is

  1. 5,00,000
  2. 4,00,000
  3. 3,00,000
  4. 2,50,000
4. 2,50,000

The exemption limit for an NRI is 2,50,000. The age does not matter.

97. Which of the following statement is correct in regards to health and education cess?

  1. Amount of income tax shall be increased by health and education cess.
  2. Amount of income tax and surcharge shall be increased by health and education cess.

Select the correct answers from the codes given below:

A. 1 only

B. 2 only

C. Both 1 and 2

D. Neither 1 or 2

B. 2 only

Health and education cess is calculated on the total amount of Income tax + surcharge.

98. Under alternate tax regime, which of the following statement is correct?

  1. Individual assessee can opt for the alternative tax regime u/s115 BAC.
  2. Total income is computed without availing of blocked incentives.

Select the correct answers from the codes given below:

A. 1 only

B. 2 only

C. Both 1 and 2

D. Neither 1 or 2

C. Both 1 and 2

Both the statements are correct.

99. Which of the following is correct in regards to interest on excess refund?

  1. The interest rate is 1% per month.
  2. The interest rate is 0.5% per month.
  3. The interest rate is 1.5% per month.
  4. The interest rate is 0.25% per month.
2. The interest rate is 0.5% per month.

The rate of interest under Section 234D in regards to interest on excess refund is levied at 0.5% per month or a part of the month on the refund amount recoverable from the taxpayer. The interest is calculated from the date of granting the refund under Section 143(1) until the date of regular assessment.

100. In regards to tax planning, which of the following is correct?

  1. It is tax avoidance.
  2. It is tax evasion.
  3. it is reduction of tax liability to manimum.
  4. Both A & B
3. it is reduction of tax liability to manimum.

Tax planning is the analysis of a financial situation or plan to ensure that all elements work together to allow you to pay the lowest taxes possible. A plan that minimizes how much you pay in taxes is referred to as tax efficient.

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