KSET Commerce Solved Paper 2020 [Paper II]

KSET Solved Question Paper Commerce

[Time: 2 hour , 120 Minutes; Maximum Marks: 200]

Note: This paper contains hundred (100) multiple choice questions, each carrying Two (2) marks. Attempt All questions.

In this post you will get KSET Commerce Solved Paper 2020 [Paper III]with Proper Explanation. K-SET General Paper 1 Solutions will also be available very soon on our website.

KSET Exam is conducted every year by the Karnataka Exam Authority (). Question Papers of KSET Exam is tough as compared to UGC NET Exam question paper. Syllabus of KSET Exam and UGC NET exam is similar. You can refer KSET Commerce syllabus for 2025 here.

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:

(A) Both (A) and (R) are correct and (R) is the correct explanation of (A).

(B) Both (A) and (R) are correct but (R) is not the correct explanation of (A).

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

Ans: (A) Both (A) and (R) are correct and (R) is the correct explanation of (A).

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:

(A) Both (A) and (R) are correct and (R) is the correct explanation of (A).

(B) Both (A) and (R) are correct but (R) is not the correct explanation of (A).

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

Ans: (B) Both (A) and (R) are correct but (R) is not the correct explanation of (A).

3. Foreign Investment Promotion Board is under the ministry of

(A) External affairs.

(B) Industry.

(D) PMO.

Ans: (C) Finance.

4. The European Union is a

(A) Political Union.

(B) Common Union.

(D) Economic Union.

Ans: (D) Economic Union.

5. Match the following:

List – I

List – II

(a) IBRD.

(b) IDA.

(d) MIGA.

(1) Help developing countries reduce poverty.

(2) Concessional loans to the world’s poorest countries.

(3) Finance to the private sector.

(4) Promotes FDI into developing countries.

Codes:

(A) (a)-(2), (b)-(1), (c)-(4), (d)-(3).

(B) (a)-(1), (b)-(2), (c)-(4), (d)-(3).

(D) (a)-(1), (b)-(2), (c)-(3), (d)-(4).

Ans: (D) (a)-(1), (b)-(2), (c)-(3), (d)-(4).

6. FDI into fresh production facilities is known as

(A) Greenfield investment.

(B) Brownfield investment.

(D) Vertical investment.

Ans: (A) Greenfield investment.

7. ‘Mysore Silk’ can be included under

(A) Patent.

(B) Copyright.

(D) Geographical indication.

Ans: (D) Geographical indication.

8. The correct expansion of the acronym BIMSTEC

(A) Bay of Bengal Initiative for multi-sectoral technical and economic co-operation.

(B) Bay of Bengal Initiative for multi-sectoral trade and economic co-operation.

(D) Bangladesh Institute for multi-sectoral trade and economic co-operation.

Ans: (A) Bay of Bengal Initiative for multi-sectoral technical and economic co-operation.

9. The main objective of UNCTAD is

(A) To deal with only trade.

(B) To deal with trade and development.

(D) To deal with trade, investment and development of least developed countries.

Ans: (C) To deal with trade, investment and development of developing countries.

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

(A) Partnering.

(B) Licensing.

(D) Contract manufacturing.

Ans: (C) Franchising.

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

(A) Materiality.

(B) Going concern.

(D) Entity.

Ans: (D) Entity.

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

(A) Interest-Yes, Advertising-No

(B) Interest-Yes, Advertising-Yes

(D) Interest-No, Advertising-Yes

Ans: (C) Interest-No, Advertising-No

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

(A) Objective and scope of financial statements audit.

(B) Objective and scope of the financial statements.

(D) Objective and scope of business of an entity.

Ans: (C) Objective and scope of the audit of financial statements.

14. Formation of Accounting Standards Board in India is during

(A) August 1987.

(B) January 1987.

(D) April 1977.

Ans: (D) April 1977.

15. To achieve a reasonably objective basis, financial forecasts and projection should be prepared

(1) In accordance with GAAP.

(2) Using information that is in accordance with the plans of the entity.

(3) With due professional care.

Codes:

(A) (1) and (3).

(B) (1), (2) and (3).

(D) (1) and (2).

Ans: (B) (1), (2) and (3).

16. Match the following:

List – I

(HR Accounting Model)

List – II

(Proponents)

(a) Replacement cost-based approach.

(b) Opportunity cost model.

(d) A model on valuation of human organisation.

(1) Giles and Robinson.

(2) Flanholtz.

(3) Likert.

(4) Hekimain and Jones.

Codes:

(A) (a)-(4), (b)-(1), (c)-(3), (d)-(2).

(B) (a)-(2), (b)-(4), (c)-(1), (d)-(3).

(D) (a)-(3), (b)-(2), (c)-(4), (d)-(1).

Ans: (B) (a)-(2), (b)-(4), (c)-(1), (d)-(3).

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.

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

Ans: (C) (A) is correct, but (R) is incorrect.

18. Capacity ratio efficiency ratio =

(A) Activity ratio.

(B) Profitability ratio.

(D) Liquidity ratio.

Ans: (A) Activity ratio.

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

(A) Occational audit.

(B) Internal audit.

(D) Perpetual audit.

Ans: (D) Perpetual audit.

20. Match the following:

List – I

List – II

(a) Segment reporting.

(b) Intangible assets.

(d) Leases.

(1) AS-26.

(2) AS-19.

(3) AS-17.

(4) AS-13.

Codes:

(A) (a)-(3), (b)-(1), (c)-(4), (d)-(2).

(B) (a)-(1), (b)-(3), (c)-(2), (d)-(4).

(D) (a)-(1), (b)-(4), (c)-(2), (d)-(3).

Ans: (A) (a)-(3), (b)-(1), (c)-(4), (d)-(2).

21. Assertion (A): Giveaways and buy-one, get-one (BoGo) sales are examples for penetration pricing.

Reason (R): The manufacturer temporarily loses money, but does so in the hope of creating interest in the new product.

Codes:

(A) Both (A) and (R) are true and (R) is the correct explanation of (A).

(B) Both (A) and (R) are true but (R) is not the correct explanation of (A).

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

Ans: (A) Both (A) and (R) are true and (R) is the correct explanation of (A).

22. The major objection of economists to monopolies is

(A) The lack of technological progress in such industries.

(B) The dangerous impact on demographic government.

(D) The tendency to restrict output and charge higher price.

Ans: (D) The tendency to restrict output and charge higher price.

23. Match the following:

List – I

List – II

(a) Accounting view point.

(b) Economic view point.

(d) Traceability.

(1) Implicit cost.

(2) Outlay cost.

(3) Direct cost.

(4) Historical cost.

Codes:

(A) (a)-(1), (b)-(2), (c)-(4), (d)-(3).

(B) (a)-(2), (b)-(1), (c)-(3), (d)-(4).

(D) (a)-(1), (b)-(2), (c)-(3), (d)-(4).

Ans: (C) (a)-(2), (b)-(1), (c)-(4), (d)-(3).

24. Which of the following is/are the characteristic(s) of Business Economics?

(1) Business economics is micro economic in character.

(2) It is positive in nature.

(3) It is both conceptual and metrical.

(4) Its contents are based mainly on the theory of firm.

Codes:

(A) (1), (2) and (3).

(B) Only (4).

(D) (1), (2) and (4).

Ans: (C) (1), (3) and (4).

25. Which of the following is not the property of indifference curves?

(A) Downward sloping.

(B) Concave to origin.

(D) Don’t touch is other.

Ans: (B) Concave to origin.

26. Marginal rate of technical substitution is constant when two goods are

(A) Perfect substitutes.

(B) Perfect complements.

(D) Giffen goods.

Ans: (A) Perfect substitutes.

27. We can say with certainty that when the demand for TVs increases in the long-run, prices

(A) Will go down.

(B) Will go up.

(D) Cannot be predicted without the knowledge of elasticity of demand.

Ans: (D) Cannot be predicted without the knowledge of elasticity of demand.

28. When the change in price and total revenue are in the same direction, price elasticity is equal to

(A) > 1.

(B) < 1.

(D) 1.

Ans: (B) < 1.

29. When MR is negative, price elasticity is

(A) > 1.

(B) < 1.

(D) 1.

Ans: (B) < 1.

30. Price elasticity is

(A) The slope of the demand curve.

(B) Usually greater than unity.

(D) A ratio of relative change between a dependent variable and an independent variable.

Ans: (D) A ratio of relative change between a dependent variable and an independent variable.

31. Match the following:

List – I

List – II

(a) NI model.

(b) NOT model.

(d) MM’s hypothesis.

(1) Cost of equity increase rapidly under extreme leverage.

(2) Cost of equity decrease under extreme leverage.

(3) Cost of equity is constant for all leverage.

(4) Cost of equity increase with increase in leverage.

(5) Cost of equity decrease with an increase in leverage.

Codes:

(A) (a)-(5), (b)-(4), (c)-(1), (d)-(2).

(B) (a)-(3), (b)-(4), (c)-(2), (d)-(1).

(D) (a)-(4), (b)-(3), (c)-(1), (d)-(2).

Ans: (C) (a)-(3), (b)-(4), (c)-(1), (d)-(2).

32. ________ assumes that the debt market is divided into several segments based on maturity of debt.

(A) Liquidity theory.

(B) Segmented market theory.

(D) Liquidity premium theory.

Ans: (B) Segmented market theory.

33. A condition when promises to creditors of a company are broken or honoured with great difficulty, is known as

(A) Problem of solvency.

(B) Problem of liquidity.

(D) Problem of insolvency.

Ans: (C) Financial distress.

34. The compound average annual rate that is calculated with a reinvestment rate different than the projects IRR is called

(A) Implicit rate of return.

(B) Modified internal rate of return.

(D) Reinvestment rate of return.

Ans: (B) Modified internal rate of return.

35. Which of the following is/are merits of IRR criteria?

(a) Provides multiple IRRs for mixed NCFs.

(b) It is independent of discount rate.

Codes:

(A) only (a).

(B) only (b).

(D) (b) and (c).

Ans: (D) (b) and (c).

36. Risk arising from the unique uncertainties of individual securities is known as

(A) Systematic risk.

(B) Unsystematic risk.

(D) Total risk.

Ans: (B) Unsystematic risk.

37. The currency having highest Weightage in the determination of the value of SDR is

(A) British Pound.

(B) Euro.

(D) Yen.

Ans: (C) US Dollar.

38. The form of assistance that members of World Bank get is

(A) Technical and economic.

(B) Political and financial.

(D) Political and economic.

Ans: (C) Technical and financial.

39. Foreign exchange rates have an impact on firms which is referred to as

(A) Economic exposure.

(B) Balance sheet exposure.

(D) Operating exposure.

Ans: (D) Operating exposure.

40. Assertion (A): Wealth maximisation is considered as supervisor to profit maximisation.

Reason (R): This is because wealth is precisely defined as net present value and it accounts for time value of money and risk.

Codes:

(A) Both assertion and reasoning are correct.

(B) Both assertion and reasoning are not correct.

(D) Assertion is not correct and reasoning is correct.

Ans: (A) Both assertion and reasoning are correct.

41. Median, quartiles and percentiles are considered as measures of

(A) Deviation averages.

(B) Mathematical averages.

(D) Central averages.

Ans: (C) Positional averages.

42. When deviations from mean are squared and divided by the total number of observations, the resultant is

(A) Standard deviation.

(B) Variance.

(D) Deviation.

Ans: (B) Variance.

43. ________ deals with the symmetry of the distribution of collected data on both sides of central value.

(A) Skewness.

(B) Kurtosis.

(D) Dispersion.

Ans: (A) Skewness.

44. Statement (A): In a scatter diagram, the independent variable is shown on the X-axis while the dependent variable is shown on the Y-axis.

Statement (B): The coefficient of rank correlation has the same units as the Pearsonian coefficient of correlation.

Codes:

(A) Both statements (A) and (B) are true.

(B) Both statements (A) and (B) are false.

(D) Statement (A) is false, but statement (B) is true.

Ans: (A) Both statements (A) and (B) are true.

45. Match the following:

List – I

List – II

(a) R. A. Fisher.

(b) Karl Pearson.

(d) Gosset.

(1) Rank correlation.

(2) Anova.

(3) Student’s t distribution.

(4) Correlation.

Codes:

(A) (a)-(4), (b)-(3), (c)-(1), (d)-(2).

(B) (a)-(3), (b)-(4), (c)-(2), (d)-(1).

(D) (a)-(2), (b)-(4), (c)-(1), (d)-(3).

Ans: (D) (a)-(2), (b)-(4), (c)-(1), (d)-(3).

46. If A speaks truth in 20 per cent cases and B speaks truth in 40 per cent cases, what is the probability that they would contradict in a particular case?

(A) 0.8.

(B) 0.12.

(D) 0.44.

Ans: (D) 0.44.

47. Research method which is concerned with exploring the effect of one variable on another is known as

(A) Dependent research.

(B) Causal research.

(D) Contemporary research.

Ans: (B) Causal research.

48. The list of voters, number of students in a university and the telephone directory are some of the examples of

(A) Sampling frames.

(B) Sampling unit.

(D) Cluster sampling.

Ans: (A) Sampling frames.

49. Match the following:

List – I

List – II

(a) Random sampling.

(b) Non-random sampling.

(d) Data processing.

(1) Secondary data.

(2) Information system.

(3) Cluster sampling.

(4) Stratified sampling.

Codes:

(A) (a)-(3), (b)-(4), (c)-(2), (d)-(1).

(B) (a)-(4), (b)-(1), (c)-(2), (d)-(3).

(D) (a)-(4), (b)-(3), (c)-(1), (d)-(2).

Ans: (D) (a)-(4), (b)-(3), (c)-(1), (d)-(2).

50. The list of technical terms used is called

(A) Abbreviations.

(B) Glossary.

(D) Appendix.

Ans: (B) Glossary.

51. Carl Jung in his theory explains that the personality has the following dimension/s.

(1) Personality includes logical reasoning.

(2) Personality deals with perception of things in general sense.

(3) Personality is based on unconscious inner perception of the things.

Codes:

(A) (1), (2) and (3).

(B) (1) and (2).

(D) (2) and (3).

Ans: (A) (1), (2) and (3).

52. Path-goal theory of leadership was developed by

(A) Paul Hersey.

(B) Blake and Mouton.

(D) Fielder.

Ans: (C) Robert House.

53. Assertion (A): Stress is not simply anxiety or nervous, tension.

Reason (R): Stress is not always due to overwork.

Codes:

(A) Both (A) and (R) are correct.

(B) Both (A) and (R) are incorrect.

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

Ans: (A) Both (A) and (R) are correct.

54. Match the following:

List – I

List – II

(a) Contingency school.

(b) Systems school.

(d) Decision theory school.

(1) Kaith Davis.

(2) Herbert A Simon.

(3) Joan Woodward.

(4) R. A. Johnson.

Codes:

(A) (a)-(3), (b)-(2), (c)-(4), (d)-(1).

(B) (a)-(3), (b)-(4), (c)-(1), (d)-(2).

(D) (a)-(4), (b)-(3), (c)-(2), (d)-(1).

Ans: (B) (a)-(3), (b)-(4), (c)-(1), (d)-(2).

55. Method/s available for settling disputes

(A) Collective bargaining.

(B) Arbitration.

(D) All the above.

Ans: (D) All the above.

56. Which one of the following is not the objective of job evaluation?

(A) To know the worth of each job of the organisation.

(B) To determine fair and equitable wage structure in the plant, industry and place.

(D) To make the system complex and cannot be easily understood by non-supervisory staff.

Ans: (D) To make the system complex and cannot be easily understood by non-supervisory staff.

57. According to Bernard, the elements of organisation are

(1) Communication

(2) Willingness to serve

(3) Common purpose.

Codes:

(A) (1), (2) and (3) are correct.

(B) (1) and (2) are correct.

(D) (1), (2) and (3) are incorrect.

Ans: (A) (1), (2) and (3) are correct.

58. ‘Esprit de corps’ means

(A) Treat employees with ‘kindness’.

(B) Thinking out and execution of a plan.

(D) There should be one head and one plan for a group.

Ans: (C) This is the principle of ‘Union is Strength’.

59. Assertion (A): Social responsibility may be taken to mean intelligent and objective concern for the welfare of the society.

Reason (R): Social responsibility has gradually developed and has become widely not accepted notion in the business world.

Codes:

(A) (A) and (R) are correct.

(B) (A) and (R) are incorrect.

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

Ans: (C) (A) is correct, but (R) is incorrect.

60. Match the following leadership styles on the grid:

List – I

List – II

(a) Impoverished.

(b) Country club.

(d) Team.

(1) 1, 9.

(2) 9, 9.

(3) 1, 1.

(4) 9, 1.

Codes:

(A) (a)-(2), (b)-(4), (c)-(1), (d)-(3).

(B) (a)-(3), (b)-(2), (c)-(4), (d)-(1).

(D) (a)-(4), (b)-(1), (c)-(2), (d)-(3).

Ans: #

61. The existence of a parallel economy

(A) Ensures increasing productive investment.

(B) Ensures a better distribution of income and wealth.

(D) Makes the economy more competitive.

Ans: (C) Makes the monetary policies less effective.

62. Assertion (A): “The problem of rural credit is not primarily one of rural credit, it may be said to be one of rural minded credit”.

Reason (R): The Indian economy has yet to come out of rural mentality.

Codes:

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

(B) Both (A) and (R) are incorrect.

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

Ans: (A) (A) is correct, but (R) is incorrect.

63. Match the following:

Column A

Column B

(1) Nationalisation of 14 major Commercial Banks.

(2) Nationalisation of 6 more Commercial Banks.

(3) India embarks on planned economic development.

(4) India faces balances of payment crisis pledges gold to shore up reserves.

(a) 1950.

(b) 1991.

(d) 1969.

Codes:

(A) (1) – (a), (2) – (b), (3) – (c), (4) – (d).

(B) (1) – (d), (2) – (c), (3) – (a), (4) – (b).

(D) (1) – (b), (2) – (a), (3) – (c), (4) – (d).

Ans: (B) (1) – (d), (2) – (c), (3) – (a), (4) – (b).

64. Match the items of Column – I with the items in Column – II and suggest the correct code:

Column – I

Column – II

(a) Interbank call market.

(b) Commercial bills.

(d) Treasury bills.

(1) Money market.

(2) Promissory note.

(3) Short-term maturity.

(4) Government papers.

Codes:

(A) (a)-(1), (b)-(2), (c)-(4), (d)-(3).

(B) (a)-(3), (b)-(1), (c)-(2), (d)-(4).

(D) (a)-(4), (b)-(3), (c)-(2), (d)-(1).

Ans: (B) (a)-(3), (b)-(1), (c)-(2), (d)-(4).

65. Which of the following risk is/are covered by BASEL – I?

(1) Credit risk

(2) Market risk

(3) Reputation risk

(4) Operational risk

Select the correct answer from the following options :

(A) Only (1) and (2).

(B) Only (1) and (4).

(D) All are correct.

Ans: (A) Only (1) and (2).

66. Match the following List – I with List – II:

List – I

(Name of securities)

List – II

(Type of securities)

(a) Bonds of Land Development Banks.

(b) Treasury Bills.

(1) Semi-government securities.

(2) First order securities.

(3) Personal securities.

Codes:

(A) (a)-(1), (b)-(2), (c)-(3).

(B) (a)-(2), (b)-(1), (c)-(3).

(D) (a)-(1), (b)-(3), (c)-(2).

Ans: (A) (a)-(1), (b)-(2), (c)-(3).

67. Assertion (A): The EXIM policy is liberal, market-oriented and favours global trade.

Reason (R): GATT has played a significant role in the liberalization of the economy.

Codes:

(A) Both (A) and (R) are true and (R) is the correct explanation of (A).

(B) Both (A) and (R) are true, but (R) is not a correct explanation of (A).

(D) (A) is false, but (R) is true.

Ans: (B) Both (A) and (R) are true, but (R) is not a correct explanation of (A).

68. Lead Bank System was started on the recommendation of

(A) Raja Challaiah Committee.

(B) Kelkar Committee.

(D) Malhotra Committee.

Ans: (C) Nariman Committee.

69. According to 14^thReport of 2^ndARC which of the following is/are the core principle/s of Financial System in India?

(a) Focus on results.

(b) Adopting modern financial management practices.

(d) Transparency and simplicity.

Select the correct answer by using code given below :

(A) (a), (d).

(B) (b), (c), (d).

(D) (a), (b), (c), (d).

Ans: (D) (a), (b), (c), (d).

70. Capital adequacy norm helps the banks:

(1) For strengthening capital base of banks.

(2) For sanctioning more loan.

Codes:

(A) Both (1) and (2) are correct.

(B) Both (1) and (2) are incorrect.

(D) (2) is correct, but (1) is incorrect.

Ans: (C) (1) is correct, but (2) is incorrect.

71. The practice of going after a large share of a smaller market is

(A) Undifferentiated marketing.

(B) Differentiated marketing.

(D) Turbo marketing.

Ans: (A) Undifferentiated marketing.

72. Match the following:

Part – A

Part – B

(1) Advertising.

(2) Sales promotion.

(3) Personal selling.

(4) Publicity.

(a) Print Ads.

(b) Couponing.

(d) Print Media.

Codes:

(A) (1)-(a), (2)-(b), (3)-(c), (4)-(d).

(B) (1)-(c), (2)-(a), (3)-(b), (4)-(d).

(D) (1)-(d), (2)-(c), (3)-(b), (4)-(a).

Ans: (A) (1)-(a), (2)-(b), (3)-(c), (4)-(d).

73. Which of the following steps of purchase decision process is in sequence?

(1) Problem recognition

(2) Search for alternatives

(3) Evaluation of alternatives

(4) Purchase action

(5) Post purchase action

Codes:

(A) (1)(3)(2)(4)(5).

(B) (1)(2)(4)(3)(5).

(D) (1)(2)(3)(4)(5).

Ans: (D) (1)(2)(3)(4)(5).

74. Assertion (A): High customer expectations lead to dissatisfaction as product performance never matches them.

Reason (R): Product performance is always customer specific.

Codes:

(A) Both (A) and (R) are correct.

(B) Both (A) and (R) are incorrect.

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

Ans: (B) Both (A) and (R) are incorrect.

75. The process of gathering, filtering and analyzing information relating to marketing environment is known as

(A) Marketing research.

(B) Marketing intelligence.

(D) Environmental analysis.

Ans: (A) Marketing research.

76. Match the following List – I with those of List – II and indicate the correct combination from the codes given below:

List – I

List – II

(a) Everitt M. Rogers.

(b) J. D. Power.

(d) Gronroos.

(1) Service quality model.

(2) Three types of marketing for services.

(3) Quality rating of automobiles.

(4) Diffusion of innovation.

Codes:

(A) (a)-(3), (b)-(2), (c)-(1), (d)-(4).

(B) (a)-(1), (b)-(2), (c)-(3), (d)-(4).

(D) (a)-(4), (b)-(3), (c)-(1), (d)-(2).

Ans: (D) (a)-(4), (b)-(3), (c)-(1), (d)-(2).

77. Consider the following statements and find out the correct alternative from the codes given below:

(1) The product management system often turns out to be costly.

(2) When customers belong to different user groups with distinct buying preferences and practices, a market segmentation organization is not suitable.

(3) Advertising department has the closest interface with the finance department of the company.

Codes:

(A) (1) and (2) are correct.

(B) (2) and (3) are correct.

(D) All are correct.

Ans: (C) Only (1) is correct.

78. DAGMAR approach in marketing is used to measure

(A) Public relations.

(B) Advertising results.

(D) Consumer satisfaction.

Ans: (B) Advertising results.

79. Statements:

(1) Most of the big companies outsource their marketing research activities.

(2) Unprofitable customers who defect to a competitor should be encouraged to do so.

Codes:

(A) Both are correct.

(B) Both are incorrect.

(D) (2) is correct, (1) is incorrect.

Ans: (D) (2) is correct, (1) is incorrect.

80. Demographic segmentation includes

(a) Age and life cycle

(b) Income and social class

(d) Geography and income

Codes:

(A) (a), (b) and (c) only.

(B) (a) and (b) only.

(D) (b), (c) and (d) only.

Ans: (A) (a), (b) and (c) only.

81. An agreement to do an impossible act is

(A) Illegal.

(B) Voidable at the option of the promisor.

(D) Void.

Ans: (D) Void.

82. The responsibility of the finder of goods is the same as of a

(A) Owner.

(B) Bailee.

(D) Pledgee.

Ans: (B) Bailee.

83. Match the following:

List – I

List – II

(a) Sec. 124 of Contract Act.

(b) Sec. 126 of Contract Act.

(d) Sec. 184 of Contract Act.

(1) Bailment.

(2) Qualification of agent.

(3) Contract of Guarantee.

(4) Contract of Indemnity.

Codes:

(A) (a)-(3), (b)-(4), (c)-(1), (d)-(2).

(B) (a)-(2), (b)-(1), (c)-(3), (d)-(4).

(D) (a)-(1), (b)-(2), (c)-(4), (d)-(3).

Ans: (C) (a)-(4), (b)-(3), (c)-(1), (d)-(2).

84. Assertion: A minor can be admitted only to the benefits of a partnership firm.

Reasoning: A minor cannot be a full-fledged partner in a partnership firm.

Codes:

(A) Both assertion and reasoning are correct.

(B) Both assertion and reasoning are not correct.

(D) Assertion is not correct, but reasoning is correct.

Ans: (A) Both assertion and reasoning are correct.

85. Competition Act is the successor of

(A) FERA.

(B) MRTP Act.

(D) Competition Council Act.

Ans: (B) MRTP Act.

86. What is the fee to be paid by information seeker under RTI Act?

(A) Rs. 100.

(B) Rs. 1,000.

(D) Rs. 10.

Ans: (D) Rs. 10.

87. The use of information and ideas protected by IPR are of

(A) Cultural value.

(B) Social value.

(D) Moral value.

Ans: (C) Commercial value.

88. A bill of exchange contains a/an

(A) Conditional undertaking.

(B) Conditional order.

(D) Unconditional order.

Ans: (D) Unconditional order.

89. Minimum paid up share capital in case of a private company is

(A) Rs. 1 lakh.

(B) Rs. 10 lakh.

(D) Rs. 100 lakh.

Ans: (A) Rs. 1 lakh.

90. What is the term of copyright for an author of a book?

(A) 100 years.

(B) The life of the author.

(D) The life of the author plus 50 years.

Ans: (C) The life of the author plus 60 years.

91. Statement 1: The objective of corporate taxation is to maximize corporate wealth.

Statement 2: Providing tax deductions, tax exemptions and tax rebate under corporate taxation increases tax avoidance. Indicate whether the statements are true or false.

(A) Both the statements are true.

(B) Both the statements are false.

(D) Statement ‘1’ is false, but ‘2’ is true.

Ans: (B) Both the statements are false.

92. The problem of ‘Double Taxation’ in International Trade can be overcome by

(A) Bilateral agreement.

(B) Unilateral agreement.

(D) Market agreement.

Ans: (A) Bilateral agreement.

93. Income which is not chargeable to tax under the head “Income from other sources” is

(A) Income from dividend.

(B) Rental income on hired machinery or furniture.

(D) Interest received on fixed deposits in public sector banks.

Ans: (B) Rental income on hired machinery or furniture.

94. Personal Income Tax is the example of

(A) Proportional tax.

(B) De-gressive tax.

(D) Regressive tax.

Ans: (C) Progressive tax.

95. Income deemed to accrue or arise in India is taxable in case of

(A) Resident only.

(B) Both ordinarily resident and NOR.

(D) Ordinarily resident.

Ans: #

96. Which of the following is not a capital expenditure?

(A) Salary paid to the Government Employees.

(B) Purchase of a machine from outside India.

(D) Interest paid on National debt.

Ans: (A) Salary paid to the Government Employees. (D) Interest paid on National debt.

97. Which taxes come under the divisible pool, to distribute the tax revenue to the state governments as per the recommendations of the Finance Commission of India?

(A) All indirect taxes only.

(B) All direct taxes only.

(D) Personal income tax and corporate income tax.

Ans: (C) Both direct and indirect taxes.

98. Cess under Income Tax Act is not levied on

(A) With specific objective to overcome the problem.

(B) Should not be more than 5%.

(D) By reducing the gap between haves and have-nots.

Ans: (D) By reducing the gap between haves and have-nots.

99. Statement A: According to Section 145, income chargeable under income from other sources shall be computed only on cash basis of accounting.

Statement B: Income from machinery let out on hire is taxable under income from other sources.

(A) Statement A is true, but B is false.

(B) Statement A is false, but B is true.

(D) Both the statements are true.

Ans: (B) Statement A is false, but B is true.

100. Match the following:

List – I

List – II

(a) Long term capital asset.

(b) Capital gain exemption.

(d) Capital gain on transfer of agricultural land.

(1) Section 48.

(2) Section 2(29A).

(3) Section 10.

(4) Section 54B.

Codes:

(A) (a)-(2), (b)-(3), (c)-(1), (d)-(4).

(B) (a)-(2), (b)-(3), (c)-(4), (d)-(1).

(D) (a)-(1), (b)-(3), (c)-(4), (d)-(2).

Ans: (A) (a)-(2), (b)-(3), (c)-(1), (d)-(4).

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KSET Commerce Solved Paper 2020 [Paper II]